exv10w14



 








EXHIBIT 10.14




EXECUTION COPY




AMENDMENT NO. 4 TO

AMENDED AND RESTATED Credit AGREEMENT




     AMENDMENT NO. 4 dated as of March 26, 2007 (“Amendment”) between VIRCO MFG.
CORPORATION, a Delaware corporation (the “Borrower”), and WELLS FARGO BANK, NATIONAL
ASSOCIATION (the “Bank”), and amends the Amended and Restated Credit Agreement dated as of
January 27, 2004 (as amended, restated, supplemented or otherwise modified, the “Credit
Agreement”) between the Borrower and the Bank. Terms defined in the Credit Agreement and not
otherwise defined herein are used herein as therein defined.



     WHEREAS, subject to the satisfaction of the conditions set forth herein, the Borrower and the
Bank have agreed to certain amendments to the Credit Agreement.



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



     Section 1. Amendment to Section 1.1(d) of the Credit Agreement. Section 1.1(d) of the Credit
Agreement hereby is amended and restated in its entirety as follows:




     (d) On the Closing Date, the Bank made a term loan to the Borrower in an original
aggregate principal amount of $12,500,000; on the Second Amendment Effective Date, the Bank
made an incremental term loan to the Borrower in an original aggregate principal amount of
$9,062,500.02; and, on the Trigger Date, the Bank made an additional incremental term loan
to the Borrower in an original aggregate principal amount of $5,000,000. As of the Fourth
Amendment Effective Date, $15,000,000 aggregate principal amount of such term loans remain
outstanding (such term loans, the “Original Term Loan”). On the Fourth Amendment
Effective Date, the Bank agrees to make an additional incremental term loan (the
“Incremental Term Loan”; and, together with the Original Term Loan, the “Term
Loan”) to the Borrower in a single borrowing in an aggregate principal amount not to
exceed $5,000,000. Borrower’s obligation to repay the Term Loan shall be evidenced by a
single promissory note substantially in the form of Exhibit A-2 attached hereto (“Term
Note”), all terms of which are incorporated herein by this reference. Once the Term
Loan has been repaid it may not be reborrowed.



     Section 2. Amendment to Section 4.4(a) of the Credit Agreement. Section 4.4(a) of the Credit
Agreement hereby is amended and restated in its entirety as follows:




     (a) Borrowing Base Reports. Not later than the fifth Business Day following
the end of each month, a detailed calculation of the Borrowing Base (including detail
regarding those Accounts of Borrower that are not Eligible Accounts), in the form of the
Borrowing Base Certificate.




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     Section 3. Amendments to Annex A to the Credit Agreement. (a) The following definitions
hereby are inserted in Annex A to the Credit Agreement in the proper alphanumerical order:




     “Amendment No. 4” means Amendment No. 4 to Amended and Restated Credit
Agreement dated as of March 26, 2007 between the Borrower and the Bank.




     “Fourth Amendment Effective Date” means the first date on which all conditions
set forth in Section 7 of Amendment No. 4 have been satisfied.



     (b) The following definitions set forth in Annex A to the Credit Agreement hereby are amended
and restated in their entirety as follows:




     “Line of Credit Termination Date” means February 15, 2009.




     “Maximum Inventory Amount” means, as of any date of determination, an amount
equal to (a) if such date is on or after March 1 and on or before June 30 of any calendar
year, $30,000,000, (b) if such date is on or after July 1 and on or before July 31 of any
calendar year, $25,000,000 and (c) at all other times, $15,000,000.




     “Maximum Line of Credit Amount” means, as of any date of determination, an
amount equal to (a) if such date is on or after May 1 and on or before August 31 of any
calendar year, $50,000,000 and (b) at all other times, $40,000,000.




     “Term Loan Termination Date” means February 15, 2009.



     Section 4. Restatement of Exhibits. Exhibit A-1 to the Credit Agreement hereby is restated in
its entirety in the form of Restated Exhibit A-1 attached hereto; and Exhibit A-2 to the Credit
Agreement hereby is restated in its entirety in the form of Restated Exhibit A-2 attached hereto.



     Section 5. Consent to Amendments. Each Guarantor hereby acknowledges and consents to this
Amendment, and affirms and acknowledges that the Guaranty and each other Loan Document to which it
is a party remains in full force and effect and that such Person remains obligated thereunder
without defense, offset or counterclaim of any kind whatsoever, as if such Guaranty or other Loan
Document were executed and delivered to the Bank on the date hereof.



     Section 6. Representations and Warranties. To induce the Bank to enter into this Amendment,
the Borrower represents and warrants to the Bank that:




     (a) Representations and Warranties in Credit Agreement. Each of the
representations and warranties of the Borrower and its Subsidiaries contained in the Credit
Agreement, the other Loan Documents or in any document or instrument delivered pursuant to
or in connection with the Credit Agreement (i) were true and correct when made and (ii)
after giving effect to this Amendment, continue to be true and correct on



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the date hereof
(except to the extent that such representations and warranties relate expressly to an
earlier date).




     (b)
Authority. The execution and delivery by the Borrower of this Amendment and the
performance by the Borrower of its obligations under this Amendment (i) are within its power
and authority, (ii) have been duly authorized by all
necessary proceedings, (iii) do not and will not conflict with or result in any breach
or contravention or any provision of law, statute, rule or regulation to which the Borrower
is subject or any judgment, order, writ, injunction, license or permit applicable to the
Borrower so as to materially adversely affect the assets, business or any activity of the
Borrower, (iv) do not conflict with any provision of the certificate of incorporation or
bylaws of the Borrower or any agreement or other instrument binding upon the Borrower, (v)
do not and will not require any waivers, consents or approvals by any of its creditors which
have not been obtained, or (vi) do not and will not require any approval which has not been
obtained.




     (c) Enforceability of Obligations. This Amendment and the Credit Agreement, as
amended hereby, constitute the legal, valid and binding obligations of the Borrower
enforceable against the Borrower in accordance with its terms, except as enforceability is
limited by bankruptcy, insolvency, reorganization, moratorium or other laws relating to or
affecting generally the enforcement of creditors’ rights and except to the extent that
availability of the remedy of specific performance or injunctive relief is subject to the
discretion of the court before which any proceeding therefor may be brought.




     (d) No Event of Default. No Event of Default or Default has occurred and is
continuing.



     Section 7. Conditions to Effectiveness. This Amendment shall become effective on the date
when the following conditions precedent have been satisfied:




     (a) The Borrower, each Guarantor and the Bank shall have delivered an executed
counterpart of this Amendment.




     (b) The Bank shall have received each of the following documents, each duly executed by
the parties thereto and in full force and effect:




               (i) a Line of Credit Note;




               (ii) a Term Note; and




               (iii) a duly executed amendment to the Mortgage delivered on the Closing Date signed by
the record owner of the Real Property Collateral, together with customary Mortgage Related
Documents relating thereto, in each case in form and substance reasonably acceptable to the
Bank and (ii) either mortgage modification endorsements to, or date down endorsements to (or
re-dated title insurance policies which



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replace), the existing title insurance policy issued
on the Closing Date, in any case issued by a nationally recognized title insurance company
reasonably acceptable to the Bank, insuring the Lien of the Mortgage, as amended by such
amendment, as a valid first priority Lien on the Real Property Collateral described therein,
free of any other Liens except as permitted by the Loan Documents.




     (c) The Borrower and each Guarantor shall have delivered to the Bank copies of the
following documents, duly certified, or the following certificates, as applicable:




               (i) With respect to each such Person, resolutions of the Board of Directors of such
Person (A) with respect to the Borrower, authorizing the incurrence of the Incremental Term
Loan and other changes to the Credit Agreement contemplated hereby, (B) with respect to each
Guarantor, confirming and ratifying the continued validity and enforceability of the
Guaranty previously executed by such Guarantor for the benefit of the Bank, and (C) all
other actions to be taken by such Person in connection with this Amendment; and




               (ii) With respect to each such Person, a certificate, signed by the Secretary or
Assistant Secretary of such Person, dated as of the Fourth Amendment Effective Date,
certifying as to the (A) incumbency, and containing the specimen signature or signatures, of
the Person or Persons authorized to execute documents and instruments on behalf of such
Person, together with evidence of the incumbency of such Secretary or Assistant Secretary,
(B) authenticity and completeness of the certificate of incorporation and by-laws of such
Person or, if any such governing document of such Person has not been amended, restated,
supplemented, or otherwise modified since the Closing Date, the absence of any amendments,
restatements, supplements, or modifications to such governing documents of such Person and
(C) the resolutions described in the preceding clause (i).




     (d) No Event of Default or Default shall have occurred and be continuing or would
result after giving effect to the transactions contemplated hereby.




     (e) The representations and warranties set forth in Section 6 hereof shall be true and
correct on the effective date of this Amendment.




     (f) No injunction, writ, restraining order, or other order of any nature prohibiting,
directly or indirectly, the consummation of the transactions contemplated herein shall have
been issued and remain in force by any Governmental Authority against the Borrower, any
Guarantor or the Bank.




     (g) The Borrower shall have paid all reasonable out-of-pocket costs and expenses of the
Bank, to the extent invoices therefor have been presented.




     (h) All other documents and legal matters in connection with the transactions
contemplated by this Amendment shall have been delivered or executed or recorded and shall
be in form and substance satisfactory to the Bank.



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     Section 8. Admissions and Acknowledgments. The Borrower and each Guarantor expressly
acknowledges and agrees with each of the following:




     (a) That such Person does not dispute the validity or enforceability of any of the Loan
Documents or any of their respective obligations under any of the foregoing, or the
validity, priority, enforceability, scope or extent of any charge, Lien, security interest
or any other encumbrance of the Bank in, on or against any of the Collateral in any
judicial, administrative or other proceeding;




     (b) That such Person shall not challenge or dispute the validity of any of its
obligations under the Loan Documents to which it is party or any other obligations incurred
by such Person pursuant to the Loan Documents; and




     (c) That the Indebtedness evidenced by the Loan Documents is secured by first priority,
non-avoidable, perfected, valid and enforceable liens on and security interests in the
Collateral, subject only to Permitted Liens.



     Section 9. Reference to and Effect on Loan Documents.




     (a) Upon the effectiveness of this Amendment, on and after the date hereof, each
reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof” or words of
like import, and each reference in the other Loan Documents to the Credit Agreement, shall
mean and be a reference to the Credit Agreement as amended hereby.




     (b) Except as expressly set forth herein, this Amendment shall not by implication or
otherwise limit, impair, constitute a waiver of, or otherwise affect the rights and remedies
of the Bank under the Credit Agreement or any other Loan Document, and shall not alter,
modify, amend or in any way affect any of the terms, conditions, obligations, covenants or
agreements contained in the Credit Agreement or any other Loan Document, all of which are
ratified and affirmed in all respects and shall continue in full force and effect.




     (c) Nothing herein shall be deemed to entitle the Borrower or any Guarantor to a
waiver, amendment, modification or other change of any of the terms, conditions,
obligations, covenants or agreements contained in the Credit Agreement or any other Loan
Document in similar or difference circumstances.




     (d) This Amendment shall be a Loan Document for all purposes.



     Section 10. Benefits of Amendment. The terms and provisions of this Amendment shall be
binding upon and inure to the benefit of the parties hereto and their respective successors and
assigns to the extent contemplated by the Credit Agreement.



     Section 11. Interpretation. The Article and Section headings used in this Amendment are for
convenience of reference only and shall not affect the construction hereof.



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     Section 12. Execution in Counterparts. This Amendment may be executed in any number of
counterparts, each of which counterparts, when so executed and delivered, shall be deemed to be an
original and all of which counterparts, taken together, shall constitute but one and the same
Amendment. Faxed signatures of this Amendment shall be binding for all purposes.



     Section 13. Severability. If any provision of this Amendment shall be held to be invalid,
illegal or unenforceable under applicable law in any jurisdiction, such provision shall be
ineffective only to the extent of such invalidity, illegality or unenforceability, which shall not
affect any other provisions hereof or the validity, legality and enforceability of such provision
in any other jurisdiction.



     Section 14. Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of California. The arbitration provisions of Section 7.11 of the Credit
Agreement are incorporated herein by reference.



     Section 15. Expenses. The Borrower agrees to pay the reasonable out-of-pocket expenses of the
Bank, including but not limited to the reasonable fees, charges and disbursements, including but
not limited to the fees, charges and disbursements of Gibson, Dunn & Crutcher LLP, special counsel
for the Bank, incurred in connection with the preparation, negotiation, execution and delivery of
this Amendment and any subsequent waiver, amendment or modification of the Credit Agreement or any
other Loan Document and the security arrangements in connection herewith or therewith.



     Section 16. No Course of Dealing. The execution and delivery of this Amendment shall not
establish a course of dealing among the Bank, the Borrower and the Guarantors or in any other way
obligate the Bank to hereafter provide any further amendments, waivers, or consents of any kind to
the Borrower and the Guarantors.



     Section 17. Arm’s Length Agreement. Each of the parties to this Amendment agrees and
acknowledges that this Amendment has been negotiated in good faith, at arm’s length, and not by any
means forbidden by law.



     Section 18. Entire Agreement. This Amendment together with all other instruments, agreements,
and certificates executed by the parties in connection herewith or with reference thereto, embody
the entire understanding and agreement between the parties hereto and thereto with respect to the
subject matter hereof and thereof and supercede all prior agreements, understandings, and
inducements, whether express or implied, oral or written.



[Signature Pages Follow]





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     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered
as of the date first set forth above.



	 	 	 	 	 	 	 	 	 
	 	 	VIRCO MFG. CORPORATION,

   as the Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Robert E. Dose	 	 
	 

	 	 	 	Title:
	 	Vice President — Finance, Secretary and

Treasurer	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	VIRCO, INC.,

   as a Guarantor	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Robert E. Dose	 	 
	 

	 	 	 	Title:
	 	Vice President — Finance, Secretary and

Treasurer	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	VIRCO MGMT. CORPORATION,

   as a Guarantor	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Robert E. Dose	 	 
	 

	 	 	 	Title:
	 	Vice President — Finance, Secretary and

Treasurer	 	 






Signature Page to Amendment No. 4

Virco Mfg. Corporation




 









 








	 	 	 	 	 	 	 	 	 
	 	 	WELLS FARGO BANK, NATIONAL ASSOCIATION	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Art Brokx	 	 
	 

	 	 	 	Title:
	 	Senior Vice President	 	 






Signature Page to Amendment No. 4

Virco Mfg. Corporation





 









 








RESTATED EXHIBIT A-1

FORM OF LINE OF CREDIT NOTE





 









 








RESTATED EXHIBIT A-2

FORM OF TERM NOTE