ARC Group Worldwide 8-K [arc-8k_062414.htm]

 

Exhibit 10.32

 

FIRST AMENDMENT TO CREDIT AGREEMENT

 

This FIRST AMENDMENT TO CREDIT AGREEMENT (this “Amendment”), is entered into as
of June 25, 2014, by and among ARC Group Worldwide, Inc., a Utah corporation
(the “Parent”), the Lenders (as defined below) party hereto, and RBS Citizens,
N.A., as Administrative Agent (as defined below).

 

RECITALS:

 

WHEREAS, the Parent, the Borrowers party thereto, the lenders from time to time
party thereto (the “Lenders”), and RBS Citizens, N.A., as administrative agent
(in such capacity, the “Administrative Agent”) and Collateral Agent, are parties
to the Credit Agreement, dated as of April 7, 2014 (as in effect from time to
time, the “Credit Agreement”). Capitalized terms used but not defined herein
shall have the meanings given to them in the Credit Agreement; and

 

WHEREAS, the Parent and the Borrowers wish to amend the Credit Agreement on the
terms set forth herein; and

 

WHEREAS, the Administrative Agent and the Lenders party hereto are willing to
amend, or consent to the amendment of, the Credit Agreement, all as provided
herein.

 

NOW THEREFORE, in consideration of the premises and the agreements herein and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto agree as follows:

 

Section 1. Interpretation.

 

1.1              Interpretation. This Amendment shall be construed and
interpreted in accordance with the rules of construction set forth in Sections
1.02, 1.03, 1.04, 1.05 and 1.06 of the Credit Agreement.

 

Section 2. Amendments to Credit Agreement.

 

2.1              Amendment of Section 1.01 (Defined Terms).

 

(a)                Addition of New Definition. Section 1.01 of the Credit
Agreement is hereby amended by adding the following definition in the proper
alphabetical order:

 

““Kecy Acquisition” means the acquisition by ARC Metal Stamping, LLC, a Delaware
limited liability company and a wholly owned subsidiary of the Parent (“AMS”),
of substantially all of the assets of Kecy Corporation, a Michigan corporation
(“Kecy”), pursuant to that certain Asset Purchase Agreement, dated as of June
25, 2014, by and among Kecy, AMS, Munson Holding, LLC, a Michigan limited
liability company, and, in a limited capacity, the Parent.”

 

First Amendment to Credit Agreement

 

(b)               Amendments of Existing Definition. (i) The definition of
“Consolidated EBITDA” set forth in Section 1.01 of the Credit Agreement is
hereby amended by adding the following sentence at the end of the last paragraph
thereof:

 

“In addition, in calculating Consolidated EBITDA for any Test Period that
includes the fiscal quarter in which the Kecy Acquisition is consummated,
Consolidated EBITDA shall be calculated on a pro forma basis to reflect cost
savings, not to exceed $1,202,000 in the aggregate, relating to payments to
Raymond Cox and David Zerbey prior to the Kecy Acquisition (but without
duplication of any item set forth in clauses (b)(i) through (b)(ix) of such
definition, and only to the extent the items reflected in such cost savings had
been included in the calculation of Consolidated Net Income for such Test
Period).”

 

(ii)               The definition of “Permitted Acquisition” set forth in
Section 1.01 of the Credit Agreement is hereby amended by adding the words
“other than in the case of the Kecy Acquisition” at the beginning of
clause (v)(b)(ii) of such definition.

 

(c)                Amendment of Section 7.03(k) (Investments). Section 7.03(k)
of the Credit Agreement is hereby amended by replacing the words “a Borrower”
with the words “the Parent”.

 

(d)               Amendment of Subsection 7.03(c) (Indebtedness). Clause (ii) of
Section 7.03(c) of the Credit Agreement is hereby restated in its entirety to
read as follows:

 

“(ii) the Loan Parties and any Subsidiaries of the Parent that are not Loan
Parties, in an aggregate principal amount not to exceed $500,000 at any time
outstanding to such Subsidiaries that are not Loan Parties; provided that all
such Indebtedness of any Loan Party to a Person that is not a Loan Party shall
be subject to the Intercompany Subordination Agreement.”

 

(e)                Schedule 6.17 (Post-Closing Actions). Schedule 6.17 of the
Credit Agreement is hereby replaced with Schedule 6.17 hereto.

 

Section 3. Consent.

 

The Required Lenders consent to the repayment of prepayment, in full, by the
Parent of the Indebtedness of the Parent under the Loan Agreement, dated
June 16, 2014 between AFT-Hungary Korlátolt Feleösségü Társaság, as lender, and
the Parent, as Borrower, in the original principal amount of $4,500,000, in
accordance with the terms thereof as in effect on the date hereof,
notwithstanding any provision of the Loan Documents to the contrary, provided
that no such repayment or prepayment may be made if, before or after giving
effect thereto, any Default or Event of Default shall have occurred and be
continuing, including on a Pro Forma Basis after giving effect thereto.

 

First Amendment to Credit Agreement

 

Section 4. Effectiveness.

 

4.1              Conditions Precedent. The effectiveness of this Amendment is
subject to the satisfaction of the following conditions precedent:

 

(a)                this Amendment shall have been (i) executed by the Parent,
the Administrative Agent and the Required Lenders and (ii) acknowledged by each
of the other Loan Parties, and in each case, counterparts hereof as so executed
or acknowledged shall have been delivered to the Administrative Agent,
sufficient in number for distribution to the Administrative Agent, each Lender
and the Parent;

 

(b)               the Administrative Agent shall have received such assurances,
certificates, documents, consents or opinions as the Administrative Agent, the
Issuing Bank or any Lender reasonably may require.

 

(c)                the Loan Parties shall have paid all reasonable legal fees
and expenses of the Administrative Agent in connection with the preparation,
negotiation and execution of this Amendment and the other documents being
executed or delivered in connection therewith, and for which they have received
invoices at least one Business Day prior to the date the other conditions in
this section have been satisfied; and

 

(d)               after giving effect to this Amendment, all of the
representations and warranties set forth in Section 6 below and in the Credit
Agreement will be true and correct in all material respects (without duplication
of any materiality qualifier contained therein) on and as of the date hereof as
though made on and as of the date hereof, except to the extent that such
representations and warranties expressly related to an earlier date, in which
case such representations and warranties shall be true and correct in all
material respects (without duplication of any materiality qualifier contained
therein) as of such earlier date and no Default or Event of Default shall exist.

 

4.2              Amendment Effective Date. This Amendment shall be effective on
the date (the “First Amendment Effective Date”) upon which the conditions
precedent set forth in Section 4.1 above are satisfied.

 

Section 5. Affirmation.

 

The Borrowers and the Guarantors hereby consent and agree to and acknowledge and
affirm the terms of this Amendment. The Borrowers and the Guarantors hereby
further agree that their respective obligations under the Credit Agreement, the
Guarantee and Security Agreement and the other Loan Documents shall remain in
full force and effect and be unaffected hereby.

 

First Amendment to Credit Agreement

 

Section 6. Representations and Warranties. Each Loan Party hereby represents and
warrants to the Administrative Agent and the Lenders party hereto as follows:

 

6.1              Power and Authority. It has all requisite power and authority
to execute and deliver this Amendment and perform its obligations hereunder.

 

6.2              Authorization. It has taken all necessary corporate or limited
liability company action, as applicable, to duly authorize the execution and
delivery of this Amendment and this Amendment has been duly executed and
delivered by its duly authorized officer or officers.

 

6.3              Non-Violation. The execution and delivery of this Amendment and
the performance and observance by it of the provisions hereof (a) do not violate
or contravene its Organization Documents or any applicable Laws or (b) conflict
with or result in a breach or contravention of any provision of, or constitute a
default under, any other agreement, instrument or document binding upon or
enforceable against it.

 

6.4              Validity and Binding Effect. Upon satisfaction of the
conditions set forth in Section 4.1 above, this Amendment shall constitute a
legal, valid and binding agreement of such Loan Party, enforceable against it in
accordance with its terms, except as such enforceability may be limited by
Debtor Relief Laws and by general principles of equity and principles of good
faith and fair dealing.

 

6.5              Representations and Warranties in Credit Agreement. The
representations and warranties of each Loan Party contained in the Credit
Agreement as modified hereby are true and correct in all material respects
(without duplication of any materiality qualifier contained therein) on and as
of the date hereof as though made on and as of the date hereof, except to the
extent that such representations and warranties expressly relate to an earlier
date, in which case such representations and warranties shall be true and
correct in all material respects (without duplication of any materiality
qualifier contained therein) as of such earlier date.

 

6.6              No Consent. No consent, exemption, authorization or approval
of, registration or filing with, or any other action by, any Governmental
Authority is required in connection with this Amendment or the execution,
delivery, performance, validity or enforceability of this Amendment, except
consents, exemptions, authorizations, approvals, filings and actions which have
been obtained or made and are in full force and effect.

 

6.7              No Event of Default. No Default or Event of Default exists
before, nor will occur immediately after, giving effect to this Amendment or as
a result of observing any provision hereof.

 

First Amendment to Credit Agreement

 

Section 7. Miscellaneous.

 

7.1              Successors and Assigns. This Amendment shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns.

 

7.2              Survival of Representations and Warranties. All representations
and warranties made hereunder shall survive the execution and delivery of this
Amendment.

 

7.3              Severability. Any provision of this Amendment that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

 

7.4              Headings. The headings, captions and arrangements used in this
Amendment are for convenience only and shall not affect the interpretation of
this Amendment.

 

7.5              Loan Documents Unaffected. Each reference to the Credit
Agreement in any Loan Document shall hereafter be construed as a reference to
the Credit Agreement as modified hereby. Except as herein otherwise specifically
provided, this Amendment shall not by implication or otherwise limit, impair,
constitute a waiver of, or otherwise affect the rights and remedies of any party
under, the Credit Agreement or any other Loan Document, nor alter, modify, amend
or in any way affect any provision of the Credit Agreement or any other Loan
Document, including, without limitation, the guarantees, pledges and grants of
security interests, as applicable, under each of the Collateral Documents, all
of which are ratified and affirmed in all respects and shall continue in full
force and effect. This Amendment is a Loan Document.

 

7.6              Entire Agreement. This Amendment, together with the Credit
Agreement and the other Loan Documents, integrates all the terms and conditions
mentioned herein or incidental hereto and supersede all oral representations and
negotiations and prior writings with respect to the subject matter hereof.

 

7.7              Acknowledgments. Each Loan Party hereby acknowledges that:

 

(a)                it has consulted and been advised by its own legal counsel in
the negotiation, execution and delivery of this Amendment and the other Loan
Documents and it has consulted its own accounting, regulatory and tax advisors
to the extent it has deemed appropriate;

 

(b)               it is capable of evaluating, and understands and accepts, the
terms, risks and conditions of the transactions contemplated by this Amendment
and by the other Loan Documents;

 

First Amendment to Credit Agreement

 

(c)                neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to any Loan Party arising out of or in
connection with this Amendment or any of the other Loan Documents, and the
relationship between the Administrative Agent and the Lenders, on one hand, and
the Loan Parties, on the other hand, in connection herewith or therewith is
solely that of debtor and creditor;

 

(d)               the Lenders have no obligation to the Loan Parties or any of
their respective Affiliates with respect to the transactions contemplated by
this Amendment and by the other Loan Documents, except any obligations expressly
set forth in this Amendment and in the other Loan Documents;

 

(e)                the Lenders and their Affiliates may be engaged in a broad
range of transactions that involve interests that differ from those of the Loan
Parties and their respective Affiliates, and the Lenders have no obligation to
disclose any of such interests to the Loan Parties or any of their respective
Affiliates; and

 

(f)                no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated hereby
among the Lenders or among the Loan Parties and the Lenders.

 

7.8              Counterparts. This Amendment may be executed by the parties
hereto separately in one or more counterparts, each of which when so executed
shall be deemed to be an original, but all of which when taken together shall
constitute one and the same agreement. Transmission by a party to another party
(or its counsel) via facsimile or electronic mail of a signed copy of this
Amendment (or a signature page of this Amendment) shall be as fully effective as
delivery by such transmitting party to the other parties hereto of a counterpart
of this Amendment that had been manually signed by such transmitting party.

 

7.9              Governing Law. THIS AMENDMENT AND THE OTHER LOAN DOCUMENTS AND
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE
CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES (OTHER THAN SECTION 5-1401 OF THE
NEW YORK GENERAL OBLIGATIONS LAW). TO THE FULLEST EXTENT PERMITTED BY LAW, THE
PARENT, EACH BORROWER, AND EACH GUARANTOR BY ITS ACKNOWLEDGMENT HEREOF HEREBY
UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY
JURISDICTION OTHER THAN THE STATE OF NEW YORK GOVERNS THIS AMENDMENT OR ANY OF
THE OTHER LOAN DOCUMENTS.

 

First Amendment to Credit Agreement

 

7.10          Jury Trial Waiver. EACH OF THE PARTIES TO THIS AMENDMENT HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AMENDMENT OR ANY OF THE OTHER
LOAN DOCUMENTS (INCLUDING, WITHOUT LIMITATION, ANY AMENDMENTS, WAIVERS OR OTHER
MODIFICATIONS RELATING TO ANY OF THE FOREGOING), OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.

 

[Signature page follows]

 

First Amendment to Credit Agreement

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed and delivered by their proper and duly authorized officers as of the
date first above written.

 

    ARC GROUP WORLDWIDE, INC.           By: /s/ Drew Kelley     Name: Drew
Kelley     Title: Chief Financial Officer

First Amendment to Credit Agreement

 

    RBS CITIZENS, N.A., as Administrative Agent, Collateral Agent, Sole Lead
Arranger, Sole Bookrunner and as a Lender           By: /s/ Clifford Mellor    
Name: Clifford Mellor     Title: Senior Vice President

First Amendment to Credit Agreement

 

    CAPITAL ONE, NATIONAL ASSOCIATION, as Syndication Agent and as a Lender    
      By: /s/ Andrew J. Bella     Name: Andrew J. Bella     Title: Sr. Vice
President

First Amendment to Credit Agreement

 

    TD BANK, N.A., as a Lender           By: /s/ Eric Sebille     Name: Eric
Sebille     Title: Vice President

First Amendment to Credit Agreement

 

Acknowledged and agreed:

 

 

ADVANCED FORMING TECHNOLOGY, INC.,

 

as a Borrower

 

                By: /s/ Drew Kelley   Name: Drew Kelley   Title: Chief Financial
Officer  

First Amendment to Credit Agreement

 

 

ARC WIRELESS, INC.,

 

as a Borrower

 

                By: /s/ Drew Kelley   Name: Drew Kelley   Title: Chief Financial
Officer  

First Amendment to Credit Agreement

 

 

flomet llc,

 

as a Borrower

 

                By: /s/ Drew Kelley   Name: Drew Kelley   Title: Chief Financial
Officer  

First Amendment to Credit Agreement

 

 

 

GENERAL FLANGE & FORGE LLC,

 

as a Borrower

 

                By: /s/ Drew Kelley   Name: Drew Kelley   Title: Chief Financial
Officer  

First Amendment to Credit Agreement

 

tekna seal llc,

 

as a Borrower

 

                By: /s/ Drew Kelley   Name: Drew Kelley   Title: Chief Financial
Officer  

First Amendment to Credit Agreement

 

3d material technologies, llc,

 

as a Borrower

 

                By: /s/ Drew Kelley   Name: Drew Kelley   Title: Chief Financial
Officer  

First Amendment to Credit Agreement

 

ARC GROUP WORLDWIDE, INC.,

 

                By: /s/ Drew Kelley   Name: Drew Kelley   Title: Chief Financial
Officer  

First Amendment to Credit Agreement

 

ARC WIRELESS, llc,

 

                By: /s/ Drew Kelley   Name: Drew Kelley   Title: Chief Financial
Officer  

First Amendment to Credit Agreement

 

Thixoforming LLC,

 

                By: /s/ Drew Kelley   Name: Drew Kelley   Title: Chief Financial
Officer  

First Amendment to Credit Agreement

 

Arc mETAL sTAMPING, llc,

 

                By: /s/ Drew Kelley   Name: Drew Kelley   Title: Chief Financial
Officer  

First Amendment to Credit Agreement

 

ADVANCE TOOLING CONCEPTS, LLC,

 

                By: /s/ Drew Kelley   Name: Drew Kelley   Title: Chief Financial
Officer  

First Amendment to Credit Agreement

 

QUADRANT METALS TECHNOLOGIES LLC,

 

                By: /s/ Drew Kelley   Name: Drew Kelley   Title: Chief Financial
Officer  

First Amendment to Credit Agreement

 

Schedule 6.17

 

First Amendment to Credit Agreement