Exhibit 10.1


 


EXCHANGE
AGREEMENT


 


This Exchange Agreement (this “Agreement”) is dated as of April 16,
2003, and is by and among (1) Elgar Holdings, Inc., a Delaware corporation
(“EHI”),
(2) J.F. Lehman Equity
Investors I, L.P. (“JFL”),
(3) each of the parties listed on Exhibit A hereto under the
heading “Consenting Shareholders” (each, a “Consenting Shareholder”) which
beneficially own in the aggregate (a) 10,000 shares (subject to increase
as a result of the issuance of additional shares in payment of dividends) of
EHI’s Series A 10% Cumulative
Redeemable Preferred Stock (the “Series A Preferred Stock”), (b) 679
shares of EHI’s Series B 6%
Cumulative Convertible Preferred Stock (“Series B Preferred Stock”) and
(c) 543 shares of EHI’s Series C
6% Cumulative Convertible Preferred Stock (“Series C Preferred Stock”),
and (4) OCM Principal Opportunities Fund II, L.P. (“POF”) and OCM/GFI
Power Opportunities Fund, L.P. (“Power”, and together with POF, the “Consenting Noteholders”),
which together beneficially own $66,050,000 in aggregate principal amount of
EHI’s 9-7/8% Senior Notes due 2008 (the “Existing Notes”) issued under that certain
indenture dated as of February 3, 1998 (as amended or supplemented, the “Indenture”), between
JFL-EEC Merger Sub Co., a Delaware corporation and predecessor to EHI, and The
Bank of New York (as successor trustee to United States Trust Company of New
York), as trustee (the “Trustee”),
as modified and amended by that certain First Supplemental Indenture dated as
of February 3, 1998, by and among EHI, subsidiaries of EHI listed on the
signature pages thereto and the Trustee and that certain Second Supplemental
Indenture dated as of May 29, 1998, by and among EHI, subsidiaries of EHI
listed on the signature pages thereto and the Trustee.  For purposes hereof, the Consenting
Shareholders and the Consenting Noteholders shall collectively be referred to
as the “Consenting
Holders” and each individually shall be referred to as a “Consenting Holder”.


 


RECITALS


 


A.                                   EHI, JFL and the Consenting Holders have
engaged in good faith negotiations with the objective of reaching an agreement
with regard to a financial restructuring of EHI involving the Existing Notes
and its outstanding equity securities.


 


B.                                     EHI, JFL and the Consenting Holders now desire
to implement a financial restructuring (the “Financial Restructuring”) of EHI on
substantially the terms set forth herein and in the term sheet (the “Term Sheet”) attached
hereto as Exhibit B.  Unless
this Agreement otherwise requires, the term “Financial Restructuring” shall not
include the transactions described in paragraph C below.


 


C.                                     In connection with the Financial
Restructuring, POF, Power, EHI and JFL desire that certain bridge financing be
provided to Elgar Electronics Corporation, a wholly owned subsidiary of EHI (“Elgar”), through:


 


(1)                                  the extension by POF and Power of bridge
loans in an aggregate amount of $25,000,000 to Elgar evidenced by bridge notes
(the “Bridge Notes”)
issued pursuant to a loan agreement, the form of which loan agreement is
attached as Exhibit C hereto, and the application of the proceeds
from the Bridge Notes for (i) the repayment in full of outstanding revolver and term loan borrowings
under Elgar’s senior secured credit facility with Ableco Finance, LLC (the “Cerberus Credit Facility”),
(ii) the payment of $250,000 in renewal and other
fees under the Cerberus Credit Facility, (iii) the payment of funding fees to POF and Power on account of the Bridge
Notes, (iv) the payment or
reimbursement of certain reasonable and documented third party legal and
accounting


 

















 


expenses of POF, Power, JFL and EHI on
account of work up to and including the date of the Bridge Notes and (v) the remaining balance to be applied to
Elgar’s cash reserves and working capital, in each case, as described herein
and in the Term Sheet (the “Bridge Loans”); and


 


(2)                                  in connection with and as an inducement to
the issuance of the Bridge Notes (i) the deposit by JFL or its affiliate of up
to $6,000,000 in cash or such other amount as described in Section 8(c) below
(the “Collateral”)
in an account for the benefit of the holders of the Bridge Notes in support of
a guaranty of the Bridge Notes, and (ii) to the extent that the fees paid or
payable under the Cerberus Credit Facility as described in clause (1)(ii) of this Recital C exceed $250,000 (the “Excess Cerberus Liabilities”),
and to the extent that the amount of the Collateral is less than $5,700,000 as
of the business day immediately prior to the date of commencement of the
Exchange Offer, as more fully described in Section 8(c) below (the “Collateral Shortfall”
and, together with the Excess Cerberus Liabilities, the “JFL Obligation”), JFL
shall, or shall cause its affiliate to, purchase additional New Notes, Series D
Preferred Stock and New Common Stock (each as defined below) in the same
proportions as, and as part of, the New JFL Investment (as defined below) for
cash in an aggregate amount equal to the sum of the Excess Cerberus Liabilities
and the Collateral Shortfall, in each case, as described herein and in the Term
Sheet.


 


D.                                    EHI, JFL and the Consenting Holders desire
to consummate the Financial Restructuring through:


 


(1)                                  an exchange offer as described herein and in
the Term Sheet by EHI for all $90,000,000 of the Existing Notes in exchange for
(i) $60,000,000 of EHI’s 9% Senior Notes due February 1, 2008 (the “New Notes”), with the
principal terms as described in Exhibit D hereto, (ii) $30,000,000 in
stated liquidation value of EHI’s Series D 10.5% Senior Cumulative
Redeemable Preferred Stock, due February 1, 2008 (the “Series D Preferred Stock”) and
(iii) 750,000 shares of new Class A Common Stock of the Company, par value
$0.01 per share (the “New
Common Stock”), representing 75% of the New Common Stock to be outstanding upon
consummation of the Financial Restructuring but without giving effect to the
New JFL Investment and assuming no Existing Notes are purchased pursuant to the
Cash Alternative (as defined below) (the “Exchange
Offer”); provided that the Exchange Offer may offer
holders of Existing Notes the option to exchange their Existing Notes for cash
in amounts as may be determined by the Consenting Noteholders (the “Cash Alternative”); provided
further that holders of Existing Notes who participate in the Exchange
Offer shall not be entitled to receive interest accrued on the Existing Notes
from February 1, 2003, and no
value shall be paid in respect of such accrued interest with respect to holders
who elect to accept the Cash Alternative;


 


(2)                                  the restatement and amendment of EHI’s certificate
of incorporation, the form of which is attached as Exhibit E
hereto, to reclassify EHI’s outstanding
common stock, par value $0.01 per share (the “Old Common Stock”), Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock (collectively,
the “Old Equity
Securities”) into an aggregate of (i) $3,500,000 in stated liquidation value of
Series D Preferred Stock and (ii) 250,000 shares of New Common Stock,
representing 25% of the New Common Stock to be outstanding upon consummation of
the Financial Restructuring but without giving effect to the New JFL Investment
and assuming no Existing Notes are purchased pursuant to the Cash Alternative,
with the holders of


 


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Series A Preferred Stock to be allocated, pro rata, $3,500,000 in stated liquidation
value of the Series D Preferred Stock and 125,000 shares of New Common Stock, and the holders of the Old Common Stock,
Series B Preferred Stock and Series C Preferred Stock to be allocated pro rata, on a fully diluted, as-converted
basis, 125,000 shares of New Common
Stock (the “Charter
Amendment”);


 


(3)                                  the cancellation of all outstanding warrants
(the “Warrants”)
held by the Consenting Shareholders to purchase an aggregate of 707,488 shares
of Old Common Stock;


 


(4)                                  consent solicitations pursuant to which EHI
will seek to obtain consents to (i) certain modifications to the Indenture, the form of which is attached as
Exhibit F hereto (the “Indenture Amendment”) and (ii) a prepackaged bankruptcy of EHI in the event
that the Exchange Offer is not consummated which prepackaged bankruptcy shall
seek to replicate the successful completion of the Financial Restructuring as
contemplated herein and in the Term Sheet (other than the Cash Alternative)
subject to such changes as may be required under applicable Bankruptcy Laws (as
defined below) in order to make the plan of reorganization thereunder
confirmable (the “Contingency
Plan”); provided, that such changes shall be approved by
POF and Power in their sole discretion;


 


(5)                                  the amendment or refinancing of the Bridge
Loans, as described herein and in the Term Sheet (the “Credit Facility Amendment”);


 


(6)                                  implementation of a new management incentive
plan as described in the Term Sheet (the “Management Incentive Plan”); and


 


(7)                                  the transfer of the Collateral to EHI by POF
and Power on JFL’s behalf in exchange for the issuance by EHI to JFL or its
affiliate of up to (i) $8,000,000 of New
Notes, (ii) $4,000,000 in
stated liquidation value of Series D Preferred Stock and (iii) 100,000 shares of New Common Stock as
described herein and in the Term Sheet (the “New JFL Investment”); provided
that to the extent that less than $6,000,000 in cash is deposited as the
Collateral on or prior to the business day immediately prior to the date of
commencement of the Exchange Offer (as described in Section 8(c) below),
the amount of New Notes, Series D Preferred Stock and shares of New Common
Stock to be issued by EHI to JFL or its affiliate as the New JFL Investment shall
be proportionately reduced; and provided  further that the amount
of New Notes, Series D Preferred Stock and shares of New Common Stock to be
issued by EHI to JFL or its affiliate as the New JFL Investment shall be
proportionately increased to the extent that JFL or its affiliate is required
to purchase for cash such New Notes, Series D Preferred Stock and shares of New
Common Stock in an amount equal to the sum of the Excess Cerberus Liabilities
and the Collateral Shortfall as described herein and in the Term Sheet.


 


E.                                      To expedite and ensure the implementation of
the Financial Restructuring, each of POF and Power is prepared to commit, on
the terms and subject to the conditions of this Agreement, to extend the Bridge
Loans and to perform its other obligations hereunder with respect thereto.


 


F.                                      To expedite and ensure the implementation of
the Financial Restructuring, JFL is prepared to commit, on the terms and
subject to the conditions of this Agreement, to deposit the


 


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Collateral,
to make or cause its affiliate to make the New JFL Investment, to vote or cause
its affiliates to vote in favor of the transactions contemplated hereby and to
perform its other obligations hereunder with respect thereto.


 


G.                                     To expedite and ensure the implementation of
the Financial Restructuring, each of the Consenting Noteholders is prepared to
commit, on the terms and subject to the conditions of this Agreement, (i) to deliver, or cause its affiliates to
deliver, a consent with respect to the modifications to the terms of the
Existing Notes pursuant to the Indenture Amendment, (ii) to tender, or cause its affiliates to
tender, for exchange in the Exchange Offer its Existing Notes pursuant to the
terms of the Exchange Offer and (iii) to perform its other obligations hereunder with respect thereto.


 


H.                                    To expedite and ensure the implementation of
the Financial Restructuring, each of the Consenting Shareholders is prepared to
commit, on the terms and subject to the conditions of this Agreement,
(i) to vote in favor of the Charter Amendment, (ii) to become a party
to the new Stockholders Agreement to be entered into upon consummation of the
Financial Restructuring, the form of which is attached as Exhibit G
hereto (the “New Stockholders
Agreement”), (iii) to consent to the termination of the
current Shareholders Agreement (the “Old Shareholders Agreement”), (iv) to
consent to the termination of the Warrants and the related Warrantholder
Registration Rights Agreement and (v) to perform its other obligations
hereunder with respect thereto.


 


I.                                         To expedite and
implement the Financial Restructuring, EHI is prepared to commit to commencing
(i) the Exchange
Offer, (ii) the consent solicitation with respect to the Indenture Amendment, the Charter
Amendment and the Contingency Plan and (iii) the other transactions contemplated hereby
as expeditiously as possible.


 


J.                                        EHI, JFL and the
Consenting Holders are prepared to vote for (or cause their respective
affiliates to vote for) and to implement the Contingency Plan if the Exchange
Offer as contemplated herein is not consummated.


 


TERMS


 


NOW, THEREFORE, in consideration of the promises and the mutual
covenants and agreements set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
EHI, JFL and each Consenting Holder hereby agree as follows:


 


1.                                       Means For Effectuating the Bridge Financing
and the Financial Restructuring.  EHI, JFL, Power and POF intend
that the bridge financing for Elgar shall be accomplished by the extension of
the Bridge Loans, the deposit of the Collateral and the agreement of JFL to
purchase or cause its affiliate to purchase additional New Notes, Series D
Preferred Stock and New Common Stock as part of the New JFL Investment for cash
in an aggregate amount equal to the Excess Cerberus Liabilities, if any, on the
terms described herein and in the Term Sheet. 
EHI, JFL and the Consenting Holders intend that the Financial
Restructuring shall be accomplished by (1) the Exchange Offer,
(2) the Charter Amendment, (3) the cancellation of the Warrants,
(4) the Indenture Amendment, (5) the Credit Facility Amendment,
(6) entering into the New Stockholders Agreement, (7) the implementation
of the Management Incentive Plan and (8) the New JFL Investment (including
the Collateral Shortfall, if any, but excluding the Excess Cerberus
Liabilities, if any), all to occur, if at all, substantially contemporaneously,
on the terms described herein and in the Term Sheet.  EHI, JFL and the Consenting Holders further intend


 


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that,
in the event that the Exchange Offer is not consummated, the Financial
Restructuring shall be effected through the Contingency Plan.


 


2.                                       Lockup Period.  For
a period commencing with the date hereof until the earlier to occur of
(i) termination of the applicable Consenting Holder’s obligations under
this Agreement pursuant to Section 9 hereof and (ii) consummation of the
Exchange Offer (such period, the “Lockup Period”), each of the Consenting
Holders hereby agrees not to sell, assign, transfer, hypothecate or otherwise
dispose of, directly or indirectly any Existing Notes, Warrants or Old Equity
Securities beneficially owned by it (including Existing Notes (“Future Notes”) or Old
Equity Securities (“Future
Shares”) acquired by it beneficially after the date hereof,
except as required pursuant to the Financial Restructuring), unless the
transferee thereof agrees in writing for the benefit of the other parties hereto
to be bound by all of the terms of this Agreement and executes a counterpart
signature page of this Agreement and the transferor provides EHI with a copy
thereof.  This Agreement shall in no way
be construed to preclude the Consenting Holders from acquiring additional
Existing Notes and/or Old Equity Securities; provided that any
additional Existing Notes and/or Old Equity Securities so acquired shall
automatically be deemed to be subject to all of the terms and conditions of
this Agreement for so long as this Agreement remains in effect.


 


3.                                       Ownership and Authority; Voting and
Tendering; Confidentiality.


 


a.               Each of the Consenting Holders represents
(as to itself only) that, as of the date hereof, it is the beneficial owner of
the Existing Notes, Old Equity Securities or Warrants, as the case may be, set
forth opposite its name on Exhibit A hereto, and further represents
that such Consenting Holder does not beneficially own any other shares of
capital stock or indebtedness of EHI or its subsidiaries (except, in the case
of POF and Power, the Bridge Notes), and in the case of any Future Notes and/or
Future Shares acquired by it or any of its affiliates, on the date such
Consenting Holder or affiliate acquires such Future Notes and/or Future Shares,
such Consenting Holder will be the beneficial owner of such Future Notes and/or
Future Shares (as the case may be).  The
Existing Notes beneficially owned and any Future Notes beneficially owned by
any particular Consenting Holder are hereinafter sometimes referred to as its “Relevant Notes”;
the Old Equity Securities and any Future Shares beneficially owned by any
particular Consenting Holder are hereinafter sometimes referred to as its “Relevant Shares”;
and the Relevant Notes and the Relevant Shares beneficially owned by any
particular Consenting Holder are hereinafter sometimes referred to as its “Relevant Securities”.


 


b.              Each Consenting Noteholder agrees (as to
itself only), subject to Section 9(b) and to the conditions that
(i) the material terms of the applicable agreements implementing the
Financial Restructuring are the terms set forth herein, (ii) all
conditions precedent to the Financial Restructuring shall have been satisfied
or waived, (iii) other than with respect to the Restructuring Documents
(as defined below) the forms of which are attached as Exhibits hereto (provided
that the terms of the New Notes and the Indenture Amendment attached as
Exhibits D and F, respectively, hereto shall be subject to such changes as may
be reasonably requested by the relevant trustee), the final documents applicable to such Consenting Noteholder and
required to be executed in connection with the Exchange Offer are in a form
reasonably satisfactory to


 


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such Consenting Noteholder and all agreements
required to be executed upon consummation of the Exchange Offer have been
entered into by all applicable parties and have become effective (provided
that this condition shall be deemed satisfied if the only condition to the effectiveness
of any such agreement is the execution and delivery of such agreement by such
Consenting Noteholder) and (iv) this Agreement shall not have been
terminated pursuant to Section 9 hereof, that such Consenting Noteholder
(1) shall deliver a consent with respect to its Relevant Notes to modify
the terms of the Indenture pursuant to the applicable Indenture Amendment,
(2) shall become a party to the New Stockholders Agreement upon
consummation of the Financial Restructuring, (3) shall tender all, and shall not withdraw
any, of its Relevant Notes in the Exchange Offer pursuant to the terms of the
Restructuring Documents in exchange for New Notes, Series D Preferred Stock and
New Common Stock and shall not elect the Cash Alternative and (4) shall deliver a consent with respect to its
Relevant Notes to vote in favor of and to implement the prepackaged bankruptcy
of EHI pursuant to the Contingency Plan in the event that the Exchange Offer is
not consummated.


 


c.               Each Consenting Shareholder agrees (as to itself
only), subject to Section 9(b) and to the conditions that (i) the
material terms of the applicable agreements implementing the Financial
Restructuring are the terms set forth herein, (ii) other than with respect
to the Restructuring Documents the forms of which are attached as Exhibits
hereto (provided that the terms of the New Notes and the Indenture
Amendment attached as Exhibits D and F, respectively, hereto shall be subject
to such
changes as may be reasonably requested by the relevant trustee), the final documents applicable to such
Consenting Shareholder and required to be executed in connection with the
Exchange Offer are in a form reasonably satisfactory to such Consenting
Shareholder and all agreements required to be executed upon consummation of the
Exchange Offer have been entered into by all applicable parties and have become
effective (provided that this condition shall be deemed satisfied if the
only condition to the effectiveness of any such agreement is the execution and
delivery of such agreement by such Consenting Shareholder) and (iii) this
Agreement shall not have been terminated pursuant to Section 9 hereof,
that such Consenting Shareholder (1) shall vote its Relevant Shares to
approve the Charter Amendment, (2) shall become a party to the New
Stockholders Agreement upon consummation of the Financial Restructuring,
(3) shall consent to the termination of the Old Shareholders Agreement,
(4) shall consent to the termination of the Warrants and the related
Warrantholder Registration Rights Agreement and (5) shall deliver a consent with respect to its
Relevant Shares to vote in favor of and to implement the prepackaged bankruptcy
of EHI pursuant to the Contingency Plan in the event that the Exchange Offer is
not consummated.


 


d.              Each Consenting Shareholder agrees to the
terms and conditions of that certain letter agreement, dated January 14,
2003, among JFL and the Consenting Noteholders (the “Confidentiality Agreement”)
attached hereto as Exhibit H and pursuant to which each Consenting
Shareholder agrees, among other things, to keep Confidential Information (as
defined therein) confidential in accordance with the Confidentiality Agreement.


 


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4.                                       Preparation of Documents. 
Promptly upon execution of this Agreement, and to effect the Financial
Restructuring, except as noted below, counsel for EHI and JFL shall prepare
(and counsel for EHI and JFL and counsel for the Consenting Holders shall
negotiate) all of the documentation necessary in the reasonable judgment of
counsel for EHI and JFL and counsel for the Consenting Holders to implement the
Financial Restructuring, including but not limited to the following (in
addition to those the forms of which are attached as Exhibits hereto):


 


a.               the exchange offer and consent solicitation
statement (including the consent and letter of transmittal), providing for the
Exchange Offer and the Indenture Amendment and the Contingency Plan;


 


b.              a plan of reorganization for the Contingency
Plan;


 


c.               an indenture with respect to the New Notes
to be issued to Consenting Noteholders and other holders of Existing Notes who
tender their respective Relevant Notes (or other Existing Notes) in the
Exchange Offer;


 


d.              an agreement with The Bank of New York, or
such other trustee as may be agreed by EHI, JFL and the Consenting Noteholders,
to act as exchange agent for the Exchange Offer;


 


e.               the Management Incentive Plan;


 


f.                 the Credit Facility Amendment; provided
that counsel for POF and Power shall prepare such documents with respect to any
amendment to the Bridge Loans or refinancing thereof by POF, Power or any of
their affiliates;


 


g.              a subscription agreement relating to the New
JFL Investment; and


 


h.              the consent solicitation statement to be
mailed to the holders of Old Equity Securities seeking, among other things,
their approval of the Charter Amendment and the Contingency Plan.


 


The Charter Amendment, the New Stockholders
Agreement, the Indenture Amendment, the Bridge Notes, the documents relating to
the deposit of the Collateral and the New JFL Investment and the other
documents referred to in (a) through (h) above are referred to herein as the “Restructuring Documents”.


 


5.                                       Other Undertakings. 
EHI hereby agrees to use its reasonable best efforts to obtain approval
of the Charter Amendment by its shareholders entitled to vote thereon and to
comply with its obligations hereunder. 
JFL agrees to (a) use its reasonable best efforts to cause EHI to
comply with its obligations hereunder and (b) vote, or cause its affiliates
who own or possess the power to direct the vote of voting shares of stock of
EHI to vote, in favor of the Charter Amendment, to deliver a consent to vote in
favor of and to implement the prepackaged bankruptcy of EHI pursuant to the
Contingency Plan in the event that the Exchange Offer is not consummated and to
provide any other consents, or execute any other documents, certificates or
instruments, or take any other action necessary or appropriate to effectuate
the Financial Restructuring.  EHI shall
keep the Consenting Holders apprised of the status of matters relating to
completion of the Financial Restructuring and the other transactions
contemplated thereby, including promptly furnishing the Consenting Holders with
copies of (i) any amendments or supplements to any of the Restructuring
Documents in advance of any mailing to the applicable


 


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security
holders and (ii) any notice or other material communications received by
EHI from any federal, state or other government, governmental or regulatory
agency or body, court of self-regulatory organization, domestic or foreign,
with respect to the Financial Restructuring and the other transactions
contemplated thereby.


 


6.                                       Timetable.  The parties shall use their
reasonable best efforts so that (i) the Exchange Offer is commenced on or
prior to May 15, 2003 and all Restructuring Documents related to the
Exchange Offer are completed by May 12, 2003 and (ii) the Financial
Restructuring is completed by July 30, 2003 (provided, that
confirmation of the Contingency Plan by the bankruptcy court may occur after
such date so long as the related proceedings with respect thereto shall have
been commenced prior to such time).


 


7.                                       Support of the Financial Restructuring.  EHI,
JFL and each Consenting Holder will use its reasonable best efforts to promptly
consummate the Financial Restructuring on the terms and subject to the
conditions set forth herein.   None of
EHI, JFL or the Consenting Holders shall object to the consummation of the
Financial Restructuring or otherwise commence any proceeding to oppose,
materially delay or alter the Financial Restructuring or any Restructuring
Documents so long as this Agreement is in effect and the Restructuring
Documents contain terms and conditions no less favorable to the Consenting
Holders in any material respect to those contained herein, subject, in the
event of the Contingency Plan, to such changes as may be required under
applicable Bankruptcy Laws to make the plan of reorganization thereunder
confirmable as the same shall be approved by POF and Power in their sole
discretion.


 


8.                                       Bridge Loans; Collateral; New JFL Investment.


 


a.               Each of EHI, JFL, POF and Power will use its
reasonable best efforts to promptly complete and negotiate all Restructuring
Documents required to effectuate the Bridge Loans on the terms and subject to
the conditions set forth herein and in the Term Sheet.


 


b.              Upon satisfactory completion of such
Restructuring Documents required to effectuate the Bridge Loans and the
satisfaction or waiver of any conditions thereunder to the funding of the
Bridge Loans, (i) POF and Power shall extend the Bridge Loans to Elgar, and EHI
shall cause Elgar to issue the Bridge Notes and to apply the proceeds from the
Bridge Notes in accordance with the terms set forth herein and in the Term
Sheet; provided that as a condition to the making of the Bridge Loans:
(1) EHI shall have received a draft audit report for the fiscal year ended
December 28, 2002 from EHI’s current auditor (a copy of which shall be
delivered to POF and Power) on or before the issuance of the Bridge Notes which
draft shall be satisfactory in all respects to POF and Power, and POF and Power
shall
have had, and be satisfied in all respects with, discussions with EHI’s current
auditor regarding the content and delivery thereof; provided, that as
soon as available, but not later than three business days after the issuance of
the Bridge Notes, a copy of the signed audit report relating to the financial
statements for the fiscal year ending December 28, 2002, substantially in the
form of the draft previously submitted, shall be delivered to POF and Power and (2) POF and Power shall have received a
certificate of the Chief Executive Officer and Chief Financial Officer of EHI
with respect to the receipt of commitments to deliver the requisite consents
from the holders of Old Equity Securities to


 


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effectuate the Charter Amendment and (ii) JFL
shall, or shall cause its affiliate to, deposit the Collateral to be held in
accordance with the terms set forth herein and in the Term Sheet, including the
transfer of the Collateral to EHI upon consummation of the Exchange Offer to
effectuate the New JFL Investment, and POF and Power shall have received a
certificate of a managing member of the sole general partner of JFL setting
forth the amount of the Collateral and the method of determination thereof.


 


(c)          Notwithstanding anything herein to the contrary, to the extent that JFL
is unable to obtain consents from its limited partners in order provide the
full $6,000,000 in cash of Collateral (which shall be evidenced in the
certificate referenced in clause (b)(ii) above), the obligation of JFL to
deposit the Collateral shall be deemed to be satisfied if JFL or its affiliate
provides not less than $4,800,000 in cash of Collateral (in which event the New
JFL Investment (other than pursuant to the JFL Obligation) shall be reduced to
an amount equal to the Collateral so provided and the New Notes, Series D
Preferred Stock and New Common Stock to be issued by EHI in connection with the
New JFL Investment (other than pursuant to the JFL Obligation) shall be
proportionately reduced). 
Notwithstanding the foregoing, JFL or its affiliate shall be entitled
to, but shall not be obligated to, increase the amount of Collateral on or
prior to the business day immediately prior to the date of commencement of the
Exchange Offer up to the full $6,000,000, in which case the New JFL Investment
(other than pursuant to the JFL Obligation) and the New Notes, Series D
Preferred Stock and New Common Stock issuable in connection therewith shall be
proportionately increased; provided, however, that if the total
amount of Collateral on the business day immediately prior to the date of
commencement of the Exchange Offer is less than $5,700,000, such Collateral
Shortfall shall be added to the Excess Cerberus Liabilities and, upon the
issuance of the Bridge Notes, by execution of this Agreement, JFL shall be
deemed to have committed to purchase, or to cause its affiliate to purchase,
additional New Notes, Series D Preferred Stock and New Common Stock in the same
proportions as, and as part of, the New JFL Investment for cash in an aggregate
amount equal to the sum of the Excess Cerberus Liabilities and the Collateral
Shortfall, if any, provided that such subsequent purchase of New Notes,
Series D Preferred Stock and New Common Stock may be deferred by JFL or its
affiliate until cash interest (if any) in excess of (a) $324,000 in the twelve
months following the closing of the Exchange Offer; (b) $340,000 in the twelve
months commencing on the one-year anniversary of the closing of the Exchange
Offer; (c) $356,000 in the twelve months commencing on the two-year anniversary
of the closing of the Exchange Offer; (d) $376,000 in the twelve months
commencing on the three-year anniversary of the closing of the Exchange Offer;
and (d) $400,000 in the twelve months commencing on the four-year anniversary
of the closing of the Exchange Offer (such amounts the “Tax Thresholds”), has
been actually paid to JFL or its affiliate on account of the New Notes
initially acquired by such parties as part of the New JFL Investment, in which
cases, only the amount of such cash interest actually paid to JFL or its
affiliate in excess of the applicable Tax Thresholds shall be applied during
the applicable period for such subsequent purchases.


 


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9.                                       Conditions; Termination.


 


a.               The obligations of JFL or EHI, as
applicable, to consummate the Financial Restructuring are subject to
satisfaction (or waiver by JFL in its discretion) of the following
conditions:  (i) the Consenting
Holders shall have performed in all material respects their respective
obligations hereunder, (ii) there shall not have occurred and be continuing any
order, decree or ruling by any court or governmental body having jurisdiction
which restrains or enjoins the consummation of or renders illegal the
transactions contemplated hereby or any action, proceeding, claim or
counterclaim by any governmental body or before any court, authority, agency or
tribunal (other than any action, proceeding, claim or counterclaim by the party
seeking to terminate its obligations hereunder) that challenges any transaction
contemplated by the Financial Restructuring which would reasonably be expected
to prohibit, prevent or materially restrict, limit or delay the consummation of
such transaction or any other transaction contemplated by the Financial Restructuring
(an “Adverse
Governmental Ruling”) and (iii) no other person
shall have filed a petition or commenced a proceeding against EHI or any of its
subsidiaries under any provision of any applicable bankruptcy or insolvency
laws, whether state, federal or foreign (collectively, “Bankruptcy Laws”).  In
the event of failure of one or more of the foregoing conditions, JFL may, by
written notice to the Consenting Holders, terminate this Agreement; provided,
that such right to terminate shall not be available to JFL if the Contingency
Plan would be required to be implemented pursuant to this Agreement and the
Term Sheet or if JFL or EHI has breached in any material respect its
obligations under this Agreement, which breach shall have proximately
contributed to the occurrence of the failure of the Financial Restructuring to
be consummated.


 


b.              The obligations of each Consenting Holder to
consummate the Financial Restructuring are subject to satisfaction (or waiver
by such Consenting Holder in its discretion) of the following conditions:
(i) there shall not have occurred since December 28, 2002 and prior to
closing of the Financial Restructuring any material adverse change in the
business, financial condition, properties, assets or prospects of EHI and its
subsidiaries taken as a whole, (ii) EHI, JFL and each other Consenting
Holder shall have performed in all material respects their respective
obligations hereunder, including entering into the New Stockholders Agreement,
the making of the New JFL Investment and terminating all outstanding Warrants,
as applicable, (iii) the Financial Restructuring shall have received the
requisite corporate approvals by the shareholders of EHI to the Charter
Amendment, (iv)  the Credit Facility Amendment shall have become effective,
(v) 100% of the Existing Notes shall be validly tendered and not withdrawn
in the Exchange Offer and consents to the Indenture Amendment shall be
delivered with respect to all such Existing Notes, (vi) the Charter
Amendment shall have become effective, (vii) there shall be no material
adverse effect on EHI for tax purposes related to the Exchange Offer (it being
understood that a reduction in net operating losses and tax basis in assets is
acceptable but that a material cash tax liability related to the transaction
would not be acceptable), (viii) no Adverse Governmental Ruling shall have
occurred and be continuing, (ix) neither EHI nor any of its subsidiaries shall have
filed a petition or


 


10

















 


commenced a proceeding under any provision of any
applicable Bankruptcy Laws, and no other person shall have filed a petition or
commenced a proceeding against EHI or any of its subsidiaries under any
provision of any applicable Bankruptcy Law, (x) the Restructuring Documents shall be
reasonably satisfactory to the Consenting Holders and shall not provide for or
be modified in a manner that is materially adverse to the Consenting Holders or
materially inconsistent with any of the material terms or conditions of this
Agreement or the Term Sheet, (xi) EHI shall not have withdrawn or revoked
the Exchange Offer or have announced publicly its intention not to pursue the
Exchange Offer, (xii) the Management Incentive Plan shall have been
approved and implemented, (xiii) the Financial Restructuring shall have
received any other material necessary consents from third parties,
(xiv) EHI shall have received an opinion with respect to its solvency from
a nationally recognized investment banking or accounting firm or such other firm
acceptable to POF and Power and (xv) EHI and its subsidiaries shall have
operated their businesses in the ordinary course since December 28, 2002,
except as contemplated hereby, consistent with past practices, through and
including the closing of the Exchange Offer. 
In the event of failure of one or more of such conditions applicable to
a Consenting Holder, such Consenting Holder may, by written notice to JFL,
terminate this Agreement; provided, that such right to terminate shall
not be available to a Consenting Holder if the Contingency Plan would be
required to be implemented pursuant to this Agreement and the Term Sheet or if
such Consenting Holder has breached in any material respect its obligations
under this Agreement, which breach shall have proximately contributed to the
occurrence of the failure of the Financial Restructuring to be consummated.


 


c.               Any party hereto may terminate its
obligations hereunder if the Financial Restructuring is not completed on or
before July 30, 2003; provided, that confirmation of the
Contingency Plan by the bankruptcy court may occur after such date so long as
the related proceedings with respect thereto shall have been commenced prior to
such time.


 


d.              In the event of termination of this
Agreement by EHI or JFL pursuant to this Section 9, the Financial Restructuring
shall also be terminated. In the event of the termination of this Agreement by
a Consenting Holder pursuant to this Section 9, the Financial
Restructuring shall also be terminated unless the remaining parties hereto
reasonably determine in good faith that the requisite consents are nonetheless
reasonably obtainable in order to effect the Financial Restructuring on the
terms and conditions described herein, in which case this Agreement shall not
terminate as to the non-terminating parties. 
Subject to the preceding sentence, upon the termination of this
Agreement, the obligations of JFL, EHI and each Consenting Holder shall cease
and no nonbreaching party will have any liability to any other party hereunder;
provided, however, that no such termination shall relieve any
party from liability for any willful breach of this Agreement prior to the
effectiveness of such termination.  Upon
the termination of this Agreement by a party hereto after which, upon agreement
of the remaining parties, this Agreement nonetheless continues in effect, the
obligations of the terminating party and the other parties in respect of the
terminating party shall cease and the terminating party will not have any
liability to any other party hereunder


 


11

















 


and the other nonbreaching parties shall not
have any liabilities to the terminating party; provided, however,
that no such termination shall relieve the terminating party from liability for
any willful breach of this Agreement prior to the effectiveness of such
termination.


 


10.                                 Representations and Warranties; Covenants. 
Each of EHI, JFL and each Consenting Holder represents and warrants to
each other that the following statements are true, correct and complete, as to
itself, as of the date hereof:


 


a.               Power and Authority.  It
has all requisite power and authority to enter into this Agreement and to carry
out the transactions contemplated by, and perform its respective obligations
under, this Agreement.


 


b.              Authorization. 
The execution and delivery of this Agreement and the performance of its
obligations hereunder have been duly authorized by all necessary action on its
part.


 


c.               Consents.  The execution, delivery and
performance by it of this Agreement do not and shall not require any
registration or filing with, consent or approval of, or notice to, or other
action to, with or by, any national, federal, state or other governmental
authority or regulatory body, except, in the case of effecting the Contingency
Plan, such filings as may be required by applicable Bankruptcy Laws.  EHI represents and warrants to JFL and each
Consenting Holder that (i) the consents of the Consenting Shareholders and JFL
and its affiliates constitute all the consents necessary to effectuate the
Charter Amendment, and (ii) it has no outstanding securities other than the Old
Equity Securities, the Warrants and the Existing Notes.


 


d.              Binding Obligation. 
This Agreement is the legally valid and binding obligation of it, enforceable
against it in accordance with its terms, except as enforcement may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or limiting creditors’ rights generally or by equitable principles
relating to enforceability.


 


e.               Representation by Counsel. 
Each party hereby acknowledges that it has been represented by counsel
in connection with this Agreement and the transactions contemplated by this
Agreement.


 


f.                 Investment Intent and Status.  Such Consenting Holder
is acquiring the securities it receives in the Financial Restructuring (the “Applicable Securities”)
for its own account for investment only and not with a view to, or for resale
in connection with, any public sale or distribution thereof in violation of
applicable securities laws.  Such
Consenting Holder is (A) a “qualified institutional buyer” as defined in Rule
144A under the Securities Act of 1933, as amended (the “Securities Act”), or
(B) an institutional “accredited investor” as defined in subparagraph (1),
(2), (3) or (7) of Rule 501(a) under the Securities Act.


 


g.              Adequate Information. 
Such Consenting Holder has adequate information concerning the business,
finances and operations, condition (financial and otherwise), results of
operations, properties, plans and prospects of EHI to


 


12

















 


make an informed decision regarding the
making of the Bridge Loans, the sale of the Existing Notes, or the
reclassification of Old Equity Securities, as the case may be, in exchange for
the Applicable Securities, and has independently and without reliance upon EHI
made its own analysis and decision with respect thereto.  Such Consenting Holder and its advisors have
such knowledge and experience in financial and business matters that they are
capable of evaluating the merits and risks of an investment in the Applicable
Securities, have all information deemed by them to be necessary or appropriate
to evaluate the risks and merits of an investment in the Applicable Securities,
and have received all information requested by them from EHI.  Such Consenting Holder has been afforded the
opportunity to ask questions of EHI and has received satisfactory answers to
any such inquiries.  Such Consenting
Holder understands that its investment in the Applicable Securities involves a
high degree of risk.


 


h.              No General Solicitation.  No
form of general solicitation or general advertising (within the meaning of
Regulation D under the Securities Act) will be used by such party or any of its
representatives in connection with the Financial Restructuring, including, but
not limited to, articles, notices or other communications published in any
newspaper, magazine or similar medium or broadcast over television or radio, or
any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising.


 


i.                  No Litigation. 
There is no action, claim, suit, demand, hearing, notice of violation or
deficiency, or proceeding, domestic or foreign, pending, or, to the knowledge
of such party threatened, against or that affects such party that would
reasonably be expected to prevent the consummation of or materially impair or
materially delay any of the transactions contemplated by the Financial
Restructuring.


 


j.                  No Registration. 
Assuming the accuracy of the representations in Sections 10(f) and 10(h) above, EHI represents and
warrants that it is not, and will not be, necessary in connection with the
offer, sale and delivery of the securities by EHI in any of the transactions
contemplated by the Financial Restructuring to register any such securities
under the Securities Act.


 


k.               Disclosure.  Each of EHI and JFL represents
and warrants that to their actual knowledge, there is no fact or condition that
materially adversely affects or threatens the assets, business, prospects,
financial condition, or results of operations of EHI and its subsidiaries (on a
consolidated basis), or the consummation of the transactions contemplated by
this Agreement, that has not been disclosed in writing to the Consenting
Noteholders.  In addition, each of EHI
and JFL covenants to and agrees with each Consenting Noteholder that no
Restructuring Document (including any document incorporated by reference therein)
provided to any holder of EHI’s securities in connection with the offering of
any securities or the solicitation of any consents will contain any untrue
statement of a material fact or will omit to state a material fact necessary to
make the statements made therein, in light of the circumstances under which
they were made, not misleading.


 


13

















 


l.                  Restricted Securities.  Such Consenting
Holder acknowledges that the Applicable Securities will not be registered under
the Securities Act by reason of their issuance in a transaction exempt from the
registration requirements of the Securities Act and that they must be held
indefinitely unless a subsequent disposition thereof is registered under the
Securities Act or is exempt from registration.


 


11.                                 Effectiveness. 
This Agreement shall not become effective and binding on the parties
hereto unless and until counterpart signature pages hereto shall have been
executed and delivered by the parties hereto.


 


12.                                 Amendments.  This Agreement may not be
modified or amended except in writing signed by EHI, JFL and each Consenting
Holder.


 


13.                                 Governing Law; Jurisdiction. 
This Agreement shall be construed in accordance with, and this Agreement
and all disputes hereunder shall be governed by, the laws of the State of New
York, including
without limitation, Sections 5-1401 and 5-1402 of the New York General
Obligations Laws and Rule 327(b) of the New York Civil Practice Laws and Rules.  By
its execution and delivery of this Agreement, each party hereto hereby irrevocably
and unconditionally agrees for itself that any legal action, suit or proceeding
against it with respect to any matter under or arising out of or in connection
with this Agreement or for recognition or enforcement of any judgment in any
such action, suit or proceeding, shall be brought in any federal or state court
of competent jurisdiction in the Borough of Manhattan of the City of New York.


 


14.                                 Specific Performance.  It
is understood and agreed by each of the parties hereto that money damages would
not be a sufficient remedy for any breach of this Agreement by any party and
each non-breaching party shall be entitled to specific performance and
injunctive or other equitable relief as a remedy of any such breach.


 


15.                                 Survival.  Upon the closing of the
Financial Restructuring or the termination of this Agreement in accordance with
Section 9 hereof, the respective representations, warranties, covenants
and agreements of the parties hereto shall terminate and shall not survive the
termination of this Agreement.


 


16.                                 Headings.  The headings of the Sections,
paragraphs and subsections of this Agreement are inserted for convenience only
and shall not affect the interpretation hereof.


 


17.                                 Limitation on Assignment; Successors and
Permitted Assigns; Several Obligations.  None of the parties hereto may
assign any of their respective rights or obligations under this Agreement.  This Agreement is intended to bind and inure
to the benefit of the parties and their respective successors, permitted
assigns, heirs, executors, administrators and representatives.  The agreements, representations and
obligations of each of EHI, JFL and each of the Consenting Holders under this
Agreement are, in all respects, several and not joint.


 


18.                                 Notice.  Notices given under this agreement
shall be to:


 


If to JFL or EHI:


 


c/o J.F. Lehman & Company, Inc.

450 Park Avenue


 


14

















 


New York, NY 
10022

Attn:  Stephen L. Brooks

Fax:  212-634-1155


 


with a copy to:


 


Gibson Dunn & Crutcher LLP

200 Park Avenue, 47th Floor

New York, NY  10166

Attn:  Conor D. Reilly

Fax:  212-351-4035


 


If to the Consenting Noteholders:


 


Oaktree Capital Management, LLC

333 South Grand Avenue

Los Angeles, CA  90071

Attn:  Jordan Kruse

Fax:  (213) 830-6394


 


with copies to:


 


Oaktree Capital Management, LLC

1301 Avenue of the Americas, 34th Floor

New York, NY  10019

Attn:  Vincent Cebula

Fax:  (212) 284-1949


 


GFI Energy Ventures, LLC

11611 San Vincente Boulevard, # 710

Los Angeles, CA  90049

Attention:  Mr. Ian A. Schapiro

Fax:  (310) 442-0540


 


and


 


Skadden, Arps, Slate, Meagher & Flom LLP 

300 South Grand Avenue

Los Angeles, CA  90071

Attn:  Jeffrey H. Cohen

Fax:  (213) 687-5600


 


If to the Consenting Shareholders:


 


PPM America, Inc.

225 West Wacker Drive, Suite 1200

Chicago, IL  60606

Attn:  Joseph Dimberio

Fax:  (312) 634-0044


 


15

















 


and


 


Indosuez Capital

666 Third Avenue, 9th Floor

New York, NY  10017

Attn:  Curt Lueker

Fax:  (646) 658-2203


 


with copies to:


 


Schwartz, Cooper, Greenberger & Krauss

180 North LaSalle Street, Suite 2700

Chicago, IL  60601

Attn:  James Greenberger

Fax:  (312) 782-8416


 


19.                                 Prior Negotiations; Exhibits. 
This Agreement, together with all Exhibits hereto, supersede all prior
negotiations and written and oral understandings and agreements with respect to
the subject matter hereof and is intended as the final and complete expression
of the parties’ agreement.  If there are
any inconsistencies between the terms contained in this Agreement and in the
Term Sheet, this Agreement shall control. 
In the event of any inconsistency between the terms set forth in this
Agreement or in the Term Sheet, on the one hand, and in any other Exhibit
attached hereto, on the other hand, such Exhibit shall control.


 


20.                                 Counterparts. 
This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original and all of which shall constitute one and the
same Agreement.  Faxed signatures shall
be valid and binding for all purposes.


 


21.                                 No Third Party Beneficiaries. 
Unless expressly stated herein, this Agreement shall be solely for the
benefit of the parties hereto and no other person or entity.


 


22.                                 Fees.  Other than fees and expenses
relating to the Bridge Notes, the Credit 
Facility Amendment, the Exchange Offer and for legal, tax and accounting
work, no fees will be paid by EHI to JFL, POF or Power.  Accrued fee balances owing to JFL by EHI
shall be cancelled for no consideration. 
All of JFL, POF and Power shall be entitled to reimbursement for reasonable
and customary out of pocket expenses (including fees and expenses of
counsel).  Other than as specifically
set forth in this Section 22, each party shall pay its own fees and expenses,
including those of its counsel, incurred in the negotiation, preparation and
consummation of this Agreement and the transactions contemplated hereby.


 


[the remainder of this page is intentionally
left blank]


 


16

















 


IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed and delivered by its duly authorized officer as of the
date first above written.


 


	
   

  	
  ELGAR
  HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ John P. Mei

  	
   

  
	
   

  	
   

  	
  Name:  John P. Mei

  
	
   

  	
   

  	
  Title:

  	
  Vice President, Finance, and
  Chief

  Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  J.F. LEHMAN
  EQUITY INVESTORS I, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  J.F.L. Investors, L.L.C., its
  general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Donald Glickman

  	
   

  
	
   

  	
   

  	
  Name:  Donald Glickman

  
	
   

  	
   

  	
  Title:  Managing Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Consenting Shareholders:

  
	
   

  	
   

  	
   

  
	
   

  	
  JACKSON NATIONAL LIFE INSURANCE COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  PPM America, Inc., its Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joseph E. Dimberio

  	
   

  
	
   

  	
   

  	
  Name:  Joseph E. Dimberio

  
	
   

  	
   

  	
  Title:  Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  OLD HICKORY
  FUND I, L.L.C.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:  PPM America, Inc., as Manager

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joseph E. Dimberio

  	
   

  
	
   

  	
   

  	
  Name:  Joseph E. Dimberio

  
	
   

  	
   

  	
  Title:  Partner

  
					



 


17

















 


	
   

  	
  INDOSUEZ
  ELECTRONICS PARTNERS

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Indosuez
  CM  II, Inc., its Managing

  General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thierry de Vergnes

  	
   

  
	
   

  	
   

  	
  Name:  Thierry de Vergnes

  
	
   

  	
   

  	
  Title:  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael Malcolmson

  	
   

  
	
   

  	
   

  	
  Name:  Michael Malcolmson

  
	
   

  	
   

  	
  Title:  Vice President and Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Consenting Noteholders:

  
	
   

  	
   

  	
   

  
	
   

  	
  OCM PRINCIPAL
  OPPORTUNITIES FUND II, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Oaktree
  Capital Management, LLC,

  its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Stephen A. Kaplan

  	
   

  
	
   

  	
   

  	
  Name:  Stephen A. Kaplan

  
	
   

  	
   

  	
  Title:  Principal

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Vincent J. Cebula

  	
   

  
	
   

  	
   

  	
  Name:  Vincent J. Cebula

  
	
   

  	
   

  	
  Title:  Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
  OCM/GFI POWER
  OPPORTUNITIES FUND, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  GFI
  Energy Ventures LLC,

  its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ian Schapiro

  	
   

  
	
   

  	
   

  	
  Name:  Ian Schapiro

  
	
   

  	
   

  	
  Title:  Chief Financial Officer

  



 


18

















 


Exhibit A


 


Consenting
Shareholders


 


	
   

  	
   

  	
  Number of Shares of Stock Beneficially
  Owned

  as of the Date Hereof

  (Excluding Accrued Dividends on Series A)

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Series A

  	
   

  	
  Series B

  	
   

  	
  Series C

  	
   

  	
  No. of Warrants

  	
   

  
	
  Jackson
  National Life Insurance Company

  	
   

  	
  7,880

  	
   

  	
  525

  	
   

  	
  420

  	
   

  	
  557,500

  	
   

  
	
  Old
  Hickory Fund I, L.L.C.

  	
   

  	
  120

  	
   

  	
  8

  	
   

  	
  6

  	
   

  	
  8,490

  	
   

  
	
  Indosuez
  Electronics Partners

  	
   

  	
  2,000

  	
   

  	
  146

  	
   

  	
  117

  	
   

  	
  141,498

  	
   

  



 


Consenting
Bondholders


 


	
  Beneficial
  Owner

  	
   

  	
  Principal Amount of
  Existing Notes

  Beneficially Owned as of the Date Hereof

  	
   

  
	
  OCM
  Principal Opportunities Fund II, L.P.

  	
   

  	
  $

  	
  16,950,000

  	
   

  
	
  OCM/GFI
  Power Opportunities Fund, L.P.

  	
   

  	
  $

  	
  49,100,000

  	
   

  



 


19