Document:

Exhibit 10.1

 

AMENDMENT NO. 2 TO CREDIT AGREEMENT

 

AMENDMENT NO. 2 TO CREDIT

AGREEMENT, dated as of August 13, 2002 (this “Amendment”), among

NORTHWESTERN CORPORATION a Delaware corporation (the “Borrower”), the

several banks and other financial institutions from time to time party hereto

and CREDIT SUISSE FIRST BOSTON, as Administrative Agent (in such capacity the “Administrative

Agent”).

 

A.             Reference is made to that certain Credit

Agreement, dated as of January 14, 2002, among the Borrower, the several banks

and other financial institutions from time to time party thereto (each, a “Lender”

and, collectively, the “Lenders”), Credit Suisse First Boston, ABN AMRO

Bank N.V., CIBC Inc. and Barclays Capital (each a “Co-Arranger” and,

collectively, the “Co-Arrangers”), and the Administrative Agent (as the

same has been or may be further amended, supplemented or otherwise modified

from time to time, the “Credit Agreement”), pursuant to which the

Lenders have extended and agreed to extend credit to the Borrower on the terms

and subject to the conditions set forth therein.

 

B.             The Borrower has requested that the Credit

Agreement be amended on the terms set forth herein.

 

C.             Accordingly, 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

hereby agree as follows:

 

SECTION

1.             Definitions.  Unless otherwise

specifically defined herein, capitalized terms used herein shall have their

respective meanings assigned to such terms in the Credit Agreement.

 

SECTION

2.             Amendment.  Subject to the

effectiveness of this Amendment in accordance with Section 4 hereof, the Credit

Agreement is hereby amended as follows:

 

(a)             Section 1.1 of the Credit Agreement is

hereby amended by inserting the following new definitions in their respective

alphabetical locations:

 

““Cornerstone Entities”

means Cornerstone Propane, L.P., Cornerstone Propane Partners, L.P.,

Cornerstone Propane GP, Inc., SYN Inc., Claremont Gas Corp., Coast Energy Group

division, and their subsidiaries.”

 

““Discontinued Operations”

means all net profits or losses determined in accordance with GAAP relating to

the discontinued operations of the Cornerstone Entities.”

 

(b)             Section 1.1 of the Credit Agreement is

hereby amended by (i) at the end of the definition of “Consolidated Recourse

Interest Expense,” inserting the following: “provided, however,

with respect to any period which includes the first fiscal quarter ended

immediately after the Closing Date, the Consolidated Recourse Interest Expense

for such period shall be adjusted to give pro forma effect to the Acquisition

and the financing thereof as if the Acquisition and the financing thereof had

occurred on January 1, 2002” and (ii) at the end of the definition of “Utility

Business EBITDA,” deleting the proviso thereto and inserting the following in

place thereof: provided, however, with respect to any period which

includes the first fiscal quarter ended immediately after the Closing Date, the

Utility Business EBITDA for such period shall be adjusted to give pro forma

effect to the Acquisition and the financing thereof as if the Acquisition and

the financing thereof had occurred on January 1, 2002”.

 

(c)             Section 5.3 of the Credit Agreement is

hereby amended by adding the  following

words at the beginning of such section, “Except with respect to the  Cornerstone Entities,” and by changing the

uppercase letter P in the word  Perform

which follows such insertion to a lowercase p.

 

(d)             Section 6.1(b) of the Credit Agreement is

hereby deleted in its entirety and replaced with the following in place

thereof:

 

“(b) Total Capitalization. 

Permit the ratio (expressed as a percentage) of Funded Debt to Total Capital on

the last day of any fiscal quarter of the Borrower to exceed (i) for any

quarter ending prior to the Termination Date, 72% for such quarter and (ii) for

any quarter ending after the Termination Date, 68% for such quarter; provided;

however, that any net profits or losses relating to the Discontinued

Operations that are incorporated in the Borrower’s financial statements shall,

in each case, be excluded from Total Capital solely for the purposes of the

calculation of the ratio in this Section 6.1(b).”

 

1

 

(e)             Section 6.1(c) of the Credit Agreement is

hereby deleted in its entirety and replaced with the following in place

thereof:

 

“(c) Utility Business’

Financial Covenant.  Permit the ratio of (i) Utility Business EBITDA

to (ii) Consolidated Recourse Interest Expense, in each case on the last day of

any fiscal quarter of the Borrower during the fiscal year 2002 for the period

of January 1, 2002 to date (and thereafter on the last day of any fiscal

quarter for the period of four consecutive fiscal quarters then ending), to be

less than 2.00 to 1.00.

 

(f)             Section 6.9 of the Credit Agreement is

hereby amended by deleting the words “BBB by Standard & Poor’s and at least

Baa2 by Moody’s” and by inserting “BBB- by Standard & Poor’s and at least

Baa3 by Moody’s” in place thereof.

 

(g)             Annex A to the Credit Agreement is hereby

amended by deleting the last sentence thereto (inserted in accordance with

Amendment No. 1 to Credit Agreement) and inserting the following in its place:

 

“In addition,

notwithstanding the foregoing, the Applicable Margin for Eurodollar Loans and

the Applicable Margin for Alternate Base Rate Loans, in each case which are RC

Term Loans, shall be the Applicable Margins as set forth in the table above for

each Level plus (i) 200 basis points  on and after

the date of the conversion of Convertible Revolving Credit Loans to RC Term

Loans plus (ii) an additional 75 basis points on and after July 1, 2003 plus

(iii) an additional 75 basis points on and after October 1, 2003 plus (iv) an

additional 75 basis points on and after January 1, 2004.”

 

(h)             The Credit Agreement is hereby amended by

deleting Exhibit E thereof in its entirety and by substituting therefor the new

Exhibit E attached hereto.

 

SECTION

3.             Representations and Warranties. 

The Borrower represents and warrants as of the date hereof to each of the

Administrative Agent and the Lenders that after giving effect to this

Amendment:

 

(a)             The representations and warranties set forth

in the Credit Agreement are true and correct in all material respects except to

the extent such representations and warranties expressly related to an earlier

date;

 

(b)

             The Borrower is in compliance in all

material respects with all other terms and provisions contained in the Credit

Agreement required to be observed or performed;

 

(c)             No Default or Event of Default has occurred

and is continuing;

 

(d)             The Borrower has the corporate power and

authority to execute, deliver and perform this Amendment and has taken all

corporate actions necessary to authorize the execution, delivery and

performance of this Amendment;

 

(e)             This Amendment has been duly executed and

delivered on behalf of the Borrower by a duly authorized officer or

attorney-in-fact of the Borrower;

 

(f)             The execution, delivery and performance of

this Amendment will not violate any Requirement of Law or any material

contractual obligation binding on the Borrower or any of its

 

2

 

 Subsidiaries; and

 

(g)             No consent or authorization of, filing with,

notice to or other act by or in respect of, any Governmental Authority or any

other Person is required in connection with the execution, delivery or

performance by the Borrower of this Amendment.

 

The Borrower acknowledges and agrees that the representations and

warranties set forth above shall survive the execution and delivery hereof.

 

SECTION

4.             Effectiveness.  This Amendment

shall become effective on the date the Administrative Agent receives (i)

counterparts of this Amendment that, when taken together, bear the signatures

of the Borrower and each of the Lenders constituting the Required Lenders, (ii)

for the ratable benefit of the Lenders party hereto, a non-refundable fee in an

amount equal to 25 basis points (0.25%) of the aggregate Commitments of such Lenders,

and (iii) payment of other fees payable and due to the Administrative Agent.

The Administrative Agent shall promptly notify the Borrower and the Lenders of

the effective date hereof, and such notice shall be conclusive and binding on

all parties hereto.

 

SECTION

5.             Miscellaneous.  (a)  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 Lenders or the

Administrative Agent, 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.  Nothing herein

shall be deemed to entitle the Borrower to a consent to, or a waiver,

amendment, modification or other change of, any of the terms, conditions,

obligations, covenants or agreements contained in the Credit Agreement in

similar or different circumstances.  This Amendment shall apply and be

effective only with respect to the provisions of the Credit Agreement

specifically referred to herein.  Upon this Amendment becoming effective

as provided herein, the term “Loan Document” as defined in the Credit Agreement

shall include, without limitation, this Amendment.

 

(b)             As used in the Credit Agreement, the terms

“Agreement,” “herein,” “hereinafter,” “hereunder,” “hereto,” and words of

similar import shall mean, from and after the date hereof, the Credit Agreement

as amended by this Amendment.

 

(c)             Section headings used herein are for

convenience of reference only and are not to affect the construction of, or to

be taken into consideration in interpreting, this Amendment.

 

(d)             THIS AMENDMENT SHALL BE CONSTRUED IN

ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.  The

parties hereto each hereby consents to the non-exclusive jurisdiction of the

state and federal courts of the State of New York and irrevocably waives all

right to trial by jury in any action, proceeding or counterclaim arising out of

or relating to this Amendment.

 

(e)             This Amendment may be executed in any number

of counterparts, each of which shall be an original but all of which, when

taken together, shall constitute but one instrument.  Delivery of an

executed counterpart of this Amendment by fax will be deemed as effective

delivery of an originally executed counterpart.

 

3

 

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 day and year first above

written.

 

	

   

  	

  BORROWER:

  
	

   

  	

   

  
	

   

  	

  NORTHWESTERN CORPORATION

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

  /s/ Kipp D. Orme

  
	

   

  	

   

  	

  Name: Kipp D. Orme

  
	

   

  	

   

  	

  Title: Vice President - Finance and 

  
	

   

  	

  Chief Financial Officer

  
	

   

  	

   

  
	

   

  	

  ADMINISTRATIVE AGENT:

  
	

   

  	

   

  
	

   

  	

  CREDIT SUISSE FIRST BOSTON

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

  /s/ James S. Finch

  
	

   

  	

   

  	

  Name: James S. Finch

  
	

   

  	

   

  	

  Title: Managing Director

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

  /s/ Kevin Smith

  
	

   

  	

   

  	

  Name: Kevin Smith

  
	

   

  	

   

  	

  Title: Managing Director

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  LENDERS

  
	

   

  	

   

  
	

   

  	

  CREDIT SUISSE FIRST BOSTON, CAYMAN ISLANDS BRANCH

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

  /s/ James S. Finch

  
	

   

  	

   

  	

  Name: James S. Finch

  
	

   

  	

   

  	

  Title: Managing Director

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

  /s/ Kevin Smith

  
	

   

  	

   

  	

  Name: Kevin Smith

  
	

   

  	

   

  	

  Title: Managing Director

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  CIBC INC.

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
					

 

4

 

	

   

  	

  ABN AMRO BANK  N.V.

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

  /s/ Dave Bryant

  
	

   

  	

   

  	

  Name: Dave Bryant

  
	

   

  	

   

  	

  Title: Senior Vice President

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

  /s/ Frank TJ van Deur

  
	

   

  	

   

  	

  Name: Frank TJ van Deur

  
	

   

  	

   

  	

  Title: Assistant Vice President

  
					

 

5

 

	

   

  	

  BARCLAYS BANK  PLC

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

  /s/ Sydney G. Dennis

  
	

   

  	

   

  	

  Name: Sydney G. Dennis

  
	

   

  	

   

  	

  Title: Director

  
					

 

6

 

	

   

  	

  BANK OF  SCOTLAND

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

  /s/ Martin Metcalf

  
	

   

  	

   

  	

  Name: Martin Metcalf

  
	

   

  	

   

  	

  Title: Associate Director

  
					

 

7

 

	

   

  	

  CoBANK, ACB

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
					

 

8

 

	

   

  	

  MALAYAN BANKING  BERHAD

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
					

 

 

9EXHIBIT

10.1

WAIVER AND FOURTH AMENDMENT

TO CREDIT AGREEMENT

 

 

 

                This WAIVER AND FOURTH AMENDMENT TO CREDIT AGREEMENT

(“Amendment”) is dated as of August 13, 2002  and is entered into by and among Cherokee

International, LLC, a California limited liability company (“Borrower”), Heller

Financial, Inc., in its capacity as Agent for the Lenders party to the Credit

Agreement described below (“Agent”), and the Lenders which are signatories

hereto.

 

                WHEREAS, Agent,

Lenders and Borrower are parties to a certain Credit Agreement dated as of

April 30, 1999, as amended by that certain Consent, Waiver and First Amendment

to Credit Agreement dated as of June 15, 2000, as further amended by that

certain Second Amendment to Credit Agreement dated as of March 30, 2001, and as

further amended by that certain Waiver and Third Amendment to Credit Agreement

dated as of September 26, 2001 (as such agreement may be further amended,

restated, supplemented or otherwise modified and in effect from time to time,

the “Agreement”);  and

 

                WHEREAS, the Borrower has requested a waiver of

compliance with the provisions set forth on Exhibit A and any Event of

Default relating to such failure to comply (together with any notification or

certification obligations with respect thereto, the “Waived Provisions”); and

 

                WHEREAS, the Borrower has requested that the Lenders

waive the Waived Provisions, and the Lenders are willing to waive the Waived

Provisions upon the terms, and subject to the conditions, set forth herein; and

 

                WHEREAS, the

parties desire to amend the Agreement  as hereinafter set forth.

 

                NOW THEREFORE, in

consideration of the mutual conditions and agreements set forth in the

Agreement and this Amendment, and other good and valuable consideration, the

receipt and sufficiency of which are hereby acknowledged,  the parties hereto hereby agree as follows:

 

                1.             Definitions. 

Capitalized

terms used in this Amendment, unless otherwise defined herein, shall have the

meaning ascribed to such terms in the Agreement.

 

                2.             Amendments.  Subject to the conditions set

forth below, the Agreement is amended as follows:

 

(a)           The Term Loan A Scheduled

Installments and the Term Loan B Scheduled Installments set forth in subsection

1.1(A) are each amended by deleting all dates and amounts occurring after

December 31, 2003 and replacing such dates and amounts with the following, as

applicable.

For the Term Loan A Scheduled Installments:

January 8, 2004                     The

remaining unpaid balance of the Term Loan A

1

 

For the Term Loan B Scheduled Installments:

January 8, 2004                     The

remaining unpaid balance of the Term Loan B

(b)           Subsection 1.1(B)(1) is amended by

deleting the “$25,000,000” figure therein and substituting “$20,000,000” in

lieu thereof.

(c)           Subsection 1.1(B)(2) is amended by

deleting the last two sentences of such subsection and adding in their place

the following sentences to the end of such subsection:

The Lenders agree to provide Overadvance Revolving Loans to the

Borrower during the period from the Third Amendment Effective Date through

December 31, 2002 in an amount not to exceed $2,500,000, subject to the terms

of this Agreement; provided that, the first, second, and third sentences

of this subsection will not apply to such Overadvance Revolving Loans through

and including December 31, 2002.  The

Maximum Revolving Loan Balance shall be deemed increased by the amount of such

Overadvance Revolving Loans from time to time outstanding.  Notwithstanding anything contained in this

Agreement to the contrary, the Base Rate Margin and the LIBOR Margin applicable

to such Overadvance Revolving Loans shall be equal to 2% in excess of the Base

Rate Margin and LIBOR Margin otherwise applicable to Revolving Loans in

accordance with the Pricing Table set forth in Subsection 1.2(A) hereof.  Unless an earlier maturity is provided for

herein, such Overadvance Revolving Loans shall be due and payable on December

31, 2002.  From and after the Fourth

Amendment Effective Date, each outstanding or new Overadvance Revolving Loan

shall begin accruing interest from and after (i) the date such Overadvance

Revolving Loan was advanced, if such Overadvance Revolving Loan is made

pursuant to the affirmative request of the Borrower, or (ii) in all other

cases, the date on which the Borrower delivers (or was required to deliver

pursuant to the terms of this Agreement) a Borrowing Base Certificate which

indicates the amount of outstanding Revolving Loans exceeds the Maximum

Revolving Loan Balance, in which case the Borrower shall, subject to the amount

limitation set forth above, be deemed to have requested such an Overadvance

Revolving Loan bearing interest at the Base Rate plus 2% in excess of the Base

Rate Margin or LIBOR plus 2% in excess of the LIBOR Margin, as applicable, on

the date such Borrowing Base Certificate is delivered.  Notwithstanding anything in this subsection

to the contrary, in no event may the aggregate principal amount of all

Revolving Loans and all Overadvance Revolving Loans exceed the amount of the

Revolving Loan Commitment less outstanding Risk Participation Liability.

(d)           Subsection 1.3(C) is amended by

adding the following sentence to the end of such subsection:

Without limiting the generality of the foregoing, Borrower agrees to

pay, solely in connection with the Fourth Amendment, all reasonable fees, costs

2

 

and expenses (including those of attorneys) incurred by each Lender

consenting to the Fourth Amendment.

(e)           A new Subsection 2.10 is inserted

into the Agreement in proper numerical order, which Subsection shall read as

follows:

2.10         Subordinated Notes

Restructuring.   On or prior to

August 15, 2002, Borrower shall deliver to Agent a preliminary term sheet for

the restructuring of the Subordinated Notes, which restructuring shall provide,

among other things, for a reduction in the cash interest required to be paid on

the Subordinated Notes, and/or the conversion into preferred equity or

redemption of a percentage to be determined of the Subordinated Notes (the “Restructuring”).

 On

or prior to September 15, 2002, Borrower shall deliver to Agent a final term

sheet with respect thereto.  Borrower

shall cause the Restructuring to be completed on or prior to October 15, 2002

on terms reasonably acceptable to the Agent and to the Requisite Lenders.  Borrower’s failure to comply with any of the

terms contained in this Section 2.10 shall constitute an Event of Default.

(f)            Subsection 4.6(F) is amended by

adding the following sentence to the end of such subsection:

Borrower will deliver to Agent a preliminary Borrowing

Base Certificate within (15) days after the end of each month if at such time

Borrower has not delivered the financial statements and Borrowing Base

Certificate described in the immediately preceding sentence.  Without limiting the generality of Section

6.1(C), Borrower’s failure to comply with any of the terms of this Section

4.6(F) shall constitute an Event of Default.

(g)           Subsection 4.8 is amended and

restated in its entirety to be and to read as follows:

4.8           Sponsor

Obligations. The parties agree that the Sponsor Guaranties and the Sponsor

Collateral constitute Security Documents. 

Any proceeds obtained by Agent or Borrower from the Sponsor Guaranties

and the Sponsor Collateral shall be applied in the following order of

priority:  (i) $2,215,089.52 to be

applied to reduce the outstanding Overadvance Revolving Loans, (ii) $150,301.73

to repay outstanding Revolving Loans, (iii) $2,033,848.37 to be applied against

the September 30, 2002 Scheduled installments of both Term Loans, and (iv)

$4,298,928.72 shall be applied pro rata between both Term Loans as a pro rata

reduction of the remaining Scheduled Installments.  The parties further acknowledge and agree that the $1,801,831.66

payment received by Agent under the Sponsor Guaranties on July 1, 2002 was

applied against the June 30, 2002 Scheduled Installments of both Term Loans.

3

 

(h)           Subsection 10.1 is amended by

inserting the following definitions in their proper alphabetical order, or,

where applicable, replacing an existing definition with the applicable below

definition:

“Expiry Date” means the earlier of (a) the suspension (subject to

reinstatement) of the Lenders’ obligations to make Revolving Loans pursuant to

subsection 6.2, (b) the acceleration of the Obligations pursuant to subsection

6.3, or (c) January 8, 2004.

“Fourth Amendment” means that certain Waiver and Fourth Amendment to

Credit Agreement dated as of the Fourth Amendment Effective Date among Borrower,

Agent and the Lenders party thereto.

 “Fourth Amendment Effective

Date” means August 13, 2002.

“Maximum Revolving Loan Balance” will be the lesser of (a) the

“Borrowing Base” (as calculated on Exhibit 4.6(F), the “Borrowing Base

Certificate”) less outstanding Risk Participation Liability or (b) the

Revolving Loan Commitment less outstanding Risk Participation Liability.

                3.             Waiver.  Agent and Lenders hereby waive compliance with

the Waived Provisions.  This waiver

shall not be deemed to constitute a waiver of any Event of Default (other than

Borrower’s failure to comply with the Waived Provisions) or any future breach

of the Agreement or any of the other Loan Documents.

 

4.             Conditions.  The effectiveness of this Amendment is subject to the

following conditions precedent (unless specifically waived in writing by

Agent):

 

(a)           Borrower, Agent and Requisite Lenders

shall have executed and delivered this Amendment,   and such other documents and instruments as Agent may reasonably

require shall have been executed and/or delivered to Agent;

 

(b)           All proceedings taken in connection

with the transactions contemplated by this Amendment and all documents,

instruments and other legal matters incident thereto shall be reasonably

satisfactory to Agent, its legal counsel and the Lenders consenting to this

Amendment;

 

(c)           No Default or Event of Default shall

have occurred and be continuing after giving effect to this Amendment;

 

(d)           Borrower shall have paid Agent, for

the benefit of the Lenders consenting to this Amendment, an amendment fee in

the amount of $93,403.17, to be paid to each consenting Lender based upon their

respective Pro Rata Share (determined in accordance with clause (c) of the

definition thereof);

 

(e)           Agent shall have received payments in

an aggregate amount equal to at least $10,500,000 under the Sponsor Guarantees,

including any payments made on July 1, 2002,

 

4

 

which payments have been

or will be applied in accordance with Section 4.8 of the Agreement, as amended

hereby; and

 

(f)            Agent shall have received financial

statements and/or such other information as it shall request demonstrating to

Agent’s satisfaction that Borrower has adequate liquidity to maintain its

normal business operations through September 30, 2002.

 

                5.             Representations and Warranties.      To

induce Agent and Lenders to enter into this Amendment, Borrower represents and

warrants to Agent and Lenders:

 

                                (a)           that the execution, delivery and

performance of this Amendment has been duly authorized by all requisite limited

liability company action on the part of Borrower and that this Amendment has

been duly executed and delivered by Borrower;

 

                                (b)           that each of the representations and

warranties set forth in Section 5 of the Agreement (other than those that, by

their terms, specifically are made as of certain date prior to the date hereof)

are true and correct in all material respects as of the date hereof (after

giving effect to this Amendment); and

 

                                (c)           there is no Default or Event of Default

other than those resulting from Borrower’s failure to comply with the Waived

Provisions.

 

                6.             Severability.         Any provision of this

Amendment held by a court of competent jurisdiction to be invalid or

unenforceable shall not impair or invalidate the remainder of this Amendment

and the effect thereof shall be confined to the provision so held to be invalid

or unenforceable.

 

                7.             References.          Any reference to the Agreement contained

in any  document, instrument or

agreement executed in connection with the Agreement shall be deemed to be a

reference to the Agreement as modified by this Amendment.

 

                8.             Counterparts.  This Amendment may be executed by

facsimile and in one or more counterparts, each of which shall constitute an

original, but all of which taken together shall be one and the same instrument.

 

                9.             Ratification.  The terms and provisions set

forth in this Amendment shall modify and supersede all inconsistent terms and

provisions of the Agreement and shall not be deemed to be a consent to the

modification or waiver of any other term or condition of the Agreement.  Except as expressly modified and superseded

by this Amendment, the terms and provisions of the Agreement are ratified and

confirmed and shall continue in full force and effect.

 

[remainder of page intentionally left

blank]

 

5

 

                IN WITNESS WHEREOF, the parties hereto have caused

this Amendment to be duly executed under seal and delivered by their respective

duly authorized officers on the date first written above.

 

 

 

	

  HELLER FINANCIAL, INC.,

  as Agent and Lender

  	

   

  	

  CHEROKEE INTERNATIONAL, LLC

  
	

   

  
	

  By:

  	

   

  	

  By:

  	

   

  
	

  Title:

  	

   

  	

  Title:

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

  BANK  AUSTRIA

  CREDITANSTALT

  CORPORATE

  FINANCE, INC.

  	

   

  	

   

  
	

   

  
	

  By:

  	

   

  
	

  Title:

  	

   

  
	

   

  	

   

  
	

  FLEET CAPITAL CORPORATION

  
	

   

  
	

   

  
	

  By:

  	

   

  
	

  Title:

  	

   

  
	

   

  	

   

  
	

  U.S. BANK

  
	

   

  
	

   

  
	

  By:

  	

   

  
	

  Title:

  	

   

  
	

   

  	

   

  
	

  GSC

  RECOVERY II, L.P.

  
	

   

  	

   

  
	

  By:

  	

   

  
	

  Title:

  	

   

  
	

   

  	

   

  
	

   

  	

   

  
	

  FINOVA CAPITAL CORPORATION

  
	

   

  
	

   

  
	

  By:

  	

   

  
	

  Title:

  	

   

  

 

6

 

CONSENT AND REAFFIRMATION

 

                The undersigned

(“Guarantor”) hereby (i) acknowledges receipt of a copy of the foregoing Waiver

and Fourth Amendment to Credit  Agreement; (ii) consents to Borrower’s

execution and delivery thereof; (iii) agrees to be bound thereby; and (iv)

affirms that nothing contained therein shall modify in any respect whatsoever

its guaranty of the obligations of Borrower to Agent and Lenders pursuant to

the terms of that certain Guaranty dated as of April 30, 1999, (the “Guaranty”)

and reaffirms that the Guaranty is and shall continue to remain in full force

and effect.  Although Guarantor has been

informed of the matters set forth herein and has acknowledged and agreed to

same, Guarantor understands that Agent and Lenders have no obligation to inform

Guarantor of such matters in the future or to seek Guarantor’s acknowledgment

or agreement to future amendments or waivers, and nothing herein shall create

such a duty.

 

                IN WITNESS

WHEREOF, the undersigned has executed this Consent and Reaffirmation on and as

of the date of such Amendment.

 

	

  CHEROKEE INTERNATIONAL FINANCE,

  INC., a

  California corporation

  
	

   

  
	

  By:

  	

   

  
	

  Name:

  	

   

  
	

  Title:

  	

   

  

 

7

EXHIBIT A TO

AMENDMENT

LIST OF WAIVED

PROVISIONS UNDER THE AGREEMENT

 

1.                                       Section 1.5(B) of the Agreement for the

fiscal year ending December 31, 2001.

2.                                       Section 4.3 of the Agreement for the

fiscal quarter ending June 30, 2002.

3.                                       Section 4.4 of the Agreement for the

fiscal quarter ending June 30, 2002.

4.                                       Section 4.5 of the Agreement for the

fiscal quarter ending June 30, 2002.

8

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