Document:

Exhibit

10.1

 

THIRD AMENDMENT TO CREDIT AGREEMENT

 

THIS THIRD AMENDMENT TO CREDIT AGREEMENT (the “Amendment”), is made and

entered into as of the 28th day of March, 2003 by and among MAGNETEK, INC., a

Delaware corporation (the “Borrower”), J-TEC, INC., an Ohio corporation

(“J-Tec”), MAGNETEK MONDEL HOLDINGS, INC., a Delaware corporation (“Mondel”),

MAGNETEK ADS POWER, INC., a Delaware corporation, (“Power”), MAGNETEK LEASING

CORPORATION, a Delaware corporation (“Leasing), MXT Holdings, Inc., an Illinois

corporation (“MXT” and, together with J-Tec, Mondel, Power and Leasing,

collectively, the “Guarantors”; the Borrower and the Guarantors hereinafter

collectively referred to as the “Obligors”), BANK ONE, KENTUCKY, NA, a national

banking association having an office in Louisville, Kentucky (“Bank One”), as

Administrative Agent for itself and other lenders party to the Credit Agreement

(defined below) (in such capacity, the “Administrative Agent”), WACHOVIA BANK,

NATIONAL ASSOCIATION (“Wachovia”), and THE PROVIDENT BANK (“Provident”) (herein

Bank One, Wachovia and Provident are collectively referred to as the

“Lenders”).

RECITALS:

 

A.            The Borrower and the Lenders entered into that certain

Credit Agreement dated as of June 17, 2002, as amended pursuant to that certain

First Amendment to Credit Agreement dated as of August 12, 2002 and that

certain Second Amendment to Credit Agreement dated as of September 17, 2002 (as

amended, the “Credit Agreement”).

 

B.            As of the close of the Borrower’s fiscal quarter ending

December 31, 2002, the Borrower was not in compliance with Sections 6.26.1 and

6.26.2 of the Credit Agreement.

 

C.            The Obligors have requested that the Lenders waive their

rights and remedies available under the Loan Documents, on account of (1) the

Existing Defaults, (2) any Default or Unmatured Default that may exist or occur

at any time during the Waiver Period (defined below) under Section 6.27 of

the Credit Agreement and, (3) any Default that may occur under

Section 6.26.1 on March 31, 2003 (together, the “Waivers”).

 

D.            The Lenders have agreed, subject to the terms,

conditions, and understandings expressed in this Amendment, to make the

Waivers, provided that, among other things, the Borrower executes and delivers

this Amendment.

 

NOW, THEREFORE, in consideration of the premises, the mutual covenants

and agreements set forth in this Amendment, and for other good and valuable

consideration, the mutuality, receipt and sufficiency of which are hereby

acknowledged, the parties hereby agree as follows:

 

1.             Defined Terms. 

Each capitalized term used herein, unless otherwise expressly defined in

this Amendment, shall have the meanings ascribed thereto in the Credit

Agreement.

 

 

2.             The definition of “ Consolidated EBITDA” in

Article I of the Credit Agreement is hereby amended as follows:

 

EBITDA.  Shall mean, with respect to the applicable

period, the net income (without regard to extraordinary items) for such period,

plus all amounts deducted therefrom in accordance with GAAP on account of

“Interest Expense” (defined herein), taxes in respect of income or excess

profits, depreciation and amortization expense minus or plus, respectively, any

non-cash gains or losses from i) impairment charges related to the Borrower’s

telecom business incurred by the Borrower in its fiscal quarter ending 12/31/02

up to a maximum of $39,037,000.00; ii) non-recurring gain realized by Borrower

in its fiscal quarter ending 09/30/02 from termination of Borrower’s retiree

medical plan in the amount of $27,771,000.00 and charges incurred by Borrower

in relation to its recognition of required derivative hedging accounting

treatment up to a maximum of $3,900,000.00. 

For the purposes herein, Interest Expense shall mean, with respect to

the applicable period, the aggregate amount, determined in accordance with

GAAP.

 

3.             Amendments. 

The Credit Agreement is hereby amended as set forth below:

 

(a)           Schedule 5 to the Credit Agreement is

hereby amended and replaced in its entirety by Schedule 5 to this Amendment,

which is attached hereto and made a part hereof.

 

(b)           Section 2.1.2(c) of the Credit

Agreement is hereby amended by adding the following language thereto:

 

“It is further provided that from and after the 28th day of March,

2003, with each requested Advance, the Borrower shall deliver to the Agent and

each Lender a completed Borrowing Base Certificate with the following

additional certification included therein:

 

The undersigned, as

                          

of the Borrower, hereby certifies (i) that the Borrower is in compliance with

all covenants contained in the Credit Agreement, and (ii) that no Default or

Event of Default has occurred and is continuing.

 

With reference to its North American

operations, the Borrower shall submit to the Agent and each Lender an updated

Borrowing Base Certificate, with current Accounts receivable information only,

on the Business Day on or next immediately preceding the 20th and the last day

of each month during the term of this Agreement; provided, however, in

submitting requests for Advances, the Borrower may submit the most recent

Borrowing Base

 

 

Certificate delivered to the Agent and each Lender in accordance with

the terms hereof .”

 

(c)           Immediately following

Section 6.1(xi) of the Credit Agreement, a new Section 6.1(xii) is

hereby added thereto which shall read in its entirety as follows:

 

“(xii)        On the Business Day

on or next immediately preceding the 20th day and the last day of

each respective month during the term of this Agreement, the Borrower shall

deliver to the Agent and each Lender, a written aging report in respect of its

North American operations, setting forth for each of Borrower’s North American

business units:  (a) Accounts receivable

owed to the Borrower, and (b) Accounts payable of the Borrower, each of which

shall arise from transactions of the Borrower properly categorized as accounts

receivables or accounts payable, as the case may be, under GAAP.”

 

(d)           Section 6.10 of the Credit Agreement

is hereby amended and restated in its entirety to read as follows:

 

“6.10       Dividends.  The Borrower will not, nor will it permit

any Subsidiary to, declare or pay any dividends or make any distributions on

its capital stock (other than dividends payable in its own capital stock) or

redeem, repurchase or otherwise acquire or retire any of its capital stock at

any time outstanding.”

 

(e)           Section 6.14(iii) is hereby amended

and restated to read in its entirety as follows:

 

“(iii)        Permitted

Acquisitions (with one hundred percent (100%) approval of Lenders).”

 

Section 6.26.3 is hereby amended and restated as follows:

 

“As of March 31, 2003, the Borrower shall maintain a minimum “Tangible

Net Worth” of $52,600,000.00.  As used

herein, Tangible Net Worth shall mean (a) shareholders’ equity minus, (b)

goodwill and other intangible assets, in each case calculated on a consolidated

basis for Borrower and its Subsidiaries, and determined in accordance with

GAAP.”

 

 

(f)            Immediately following Section 6.28

of the Credit Agreement, a new Section 6.29 is hereby added thereto, which

shall read in its entirety as follows:

 

“6.29       Asset Based Lending

Controls.  The Borrower shall implement

a lockbox and a cash collateral account for the benefit of Lenders.”

 

(g)           Immediately following Section 6.29 of

the Credit Agreement, a new Section 6.30 is hereby added thereto, which shall

read in its entirety as follows:

 

“6.30       For March 31, 2003,

the Borrower shall attain, on a rolling four quarter basis, minimum EBITDA of

$2,194,000.00.”

 

(h)           Section 7.4 of the Credit Agreement

is hereby amended and restated to read in its entirety as follows:

 

“7.4         The breach by the

Borrower of any term or provision of this Agreement (other than those covered

by Sections 7.2 or 7.3 above) that is not remedied within five days after the

earlier to occur of (i) written notice thereof has been given to the Borrower

by the Agent or any Lenders or (ii) the Borrower otherwise becomes aware of any

such breach.”

 

(i)            Section 7.21 of the Credit Agreement

is hereby deleted and replaced with the following Section 7.21, which Section

7.21 shall read in its entirety as follows:

 

“7.21       Failure to pay the

Maintenance Fees (as defined in that certain Third Amendment to Credit

Agreement dated March 28, 2003 by and among the parties hereto) immediately

when due.”

 

(j)            Sections 6.26.1 and 6.26.2 will not

be tested for the quarter ending March 31, 2003.

 

4.             Commitment Reduction.  Currently, the Aggregate Commitment is Forty Million Dollars

($40,000,000).  The parties have agreed

to reduce, and hereby do reduce, the Aggregate Commitment to Sixteen Million

Dollars ($16,000,000).  In connection

with the reduction of the Aggregate Commitment, each Lender’s Commitment shall

be an aggregate amount not exceeding the amount set forth opposite each

Lender’s name:

 

	

  Bank One

  	

   

  	

  $

  	

  7,000,000.00

  
	

  Wachovia

  	

   

  	

  $

  	

  6,000,000.00

  
	

  Provident

  	

   

  	

  $

  	

  3,000,000.00.

  

 

5.             Maintenance. 

Unless all Obligations have been paid in full and the Commitments and

all Letters of Credit have been terminated on or before June 1, 2003, the

Borrower shall pay to the Lenders in immediately available funds a nonrefundable

fee in the amount of $63,750 due

 

 

and

payable on June 1, 2003 (the “First Payment Date”) with subsequent payments of

$35,000 each, every 30 days thereafter with the first such payment due and

payable on the 30th day following the First Payment Date and with each fee

payment thereafter due and payable on the 30th day following the date the last

payment was due.  All such fees (the

“Maintenance Fees”) shall be fully earned when paid.  Acceptance of Maintenance Fees shall not preclude the declaration

by the Administrative Agent of a Default then or thereafter existing.

 

6.             Conditions. 

In addition to the conditions precedent contained in Article IV of the

Credit Agreement, the Lenders’ continuing obligations under the Credit

Agreement and this Amendment shall be subject to the following conditions

precedent:

 

(a)           Attorneys’ Fees.  Each Lender shall have received from the

Borrower upon execution of this Amendment, the reasonable attorneys’ fees

incurred by such Lender’s counsel in connection with the Existing Defaults and

the review, negotiation and preparation of this Amendment and all other

documents in connection herewith.

 

(b)           Amendment Fee.  Each Lender shall have received from the

Borrower its pro rata share of an amendment fee equal to .50% of $16,000,000.00.

 

(c)           Resolution/Incumbency Certificates.  The execution and delivery of appropriate

resolutions and certificates of the Borrower and the Guarantors, authorizing

the execution of this Amendment.

 

(d)           Budget.  The Lenders shall have received from the Borrower

a proposed itemized monthly budget through December 31, 2003.

 

(e)           ERISA.  The Lenders shall have received from the

Borrower an estimate of the FMV and ABO as of December 31, 2002 with respect to

the Single Employer Plans.  The Borrower

shall make no cash contributions to its Single Employer Plans (other than

contributions deducted from employees’ salaries or as required by law) in the

absence of receipt by the Borrower of prior written consent from the

Administrative Agent.

 

7.             Waiver. 

Subject to the terms and conditions contained herein and for so long as

there does not exist a “Default” under the terms of this Amendment (as

hereinafter defined), the Lenders do hereby make the Waivers and hereby waive

(i) the Defaults arising from the violation of Sections 6.26.1 and 6.26.2 for

the fiscal quarter ended December 31, 2002, (2) any continuing Default under

Section 6.27 and (3) any Default that otherwise may occur on March 31,

2003, under Section 6.26.1 or Section 6.26.2 (collectively, the “Waivers”).  The Waivers pertain only to (i) the fiscal

quarters ending December 31, 2002, and March 31, 2003, with respect to

Sections 6.26.1 and 6.26.2, and (ii) on a continuing basis with respect to

Section 6.27.  Such Waivers are limited

solely to the Defaults described in the immediately preceding sentence.  Subject to the foregoing, and hereby

consenting to the continuing nature of the Existing Defaults, the Lenders shall

have no obligation to refrain from exercising or enforcing any of their rights

or remedies at any time hereafter upon the occurrence and during the

continuance of a Default (as hereinafter defined).  The Obligors acknowledge and agree that the Waivers apply to and

govern only the Obligations relating to the Loan Documents, and do not apply to

nor govern any other obligation, liability, or indebtedness of any Obligor or

any other person to any Lender.  Subject

to the Waivers, the Lenders expressly reserve all of their rights and remedies

with respect to any

 

 

other

present or future Default or Unmatured Default arising under the Credit

Agreement.  The Waivers shall be

effective and continue for the period (the “Waiver Period”) from the execution

and delivery of this Amendment by all parties hereto until the earlier of (i)

the occurrence of a Default (as hereinafter defined), (ii) June 30, 2003,

or (iii) the payment in full of all obligations due under the terms of the

Credit Agreement.

 

8.             Acknowledgments, Representations, and Warranties.  In order to induce the Lenders to enter into

this Amendment, each of the Obligors jointly and severally, for itself and for

its successors, and assigns, hereby acknowledges, represents, warrants and

agrees as follows:

 

(a)           The unpaid principal balance of the

Loans as of March 28, 2003 is $4,650,000.00 (ii) unpaid and accrued late

charges in the aggregate amount of $NONE; (iv) unpaid fees and expenses

due and owing to the Lenders in the amount of $80,000.00, (v) unpaid attorneys’

fees and expenses incurred by the Lenders in connection with the collection and

enforcement of the Obligations in the amount of $43,051.21, and (vi)

outstanding exposure on the LC Obligations of $8,690,965.93.  Each of the Obligors acknowledges and agrees

that interest shall continue to accrue on the unpaid principal balance of the

Obligations at the default rate of interest provided in the Notes.

 

(b)           Each Obligor is a corporation duly

organized, validly existing, and in good standing under the laws of the state

of its incorporation and has the power to own its properties and to carry on its

business as now being conducted, and is qualified to do business, and is in

good standing in each jurisdiction in which the character of the properties

owned or leased by it therein or in which the transaction of its business makes

such qualification necessary.

 

(c)           Each Obligor has full power and

authority to enter into this Amendment and to incur and perform all obligations

and covenants contained herein, all of which have been duly authorized by all

proper and necessary corporate action. 

No consent or approval of shareholders of, or lenders to, any Obligor

and no consent, approval, filing, or registration with or notice to any

governmental authority is required as a condition to the validity of this

Amendment or the performance of any of the Obligor’s obligations hereunder.

 

(d)           All of the Obligor’s representations

and all statements of fact concerning the Obligors (including those set forth

in the recitals) contained in this Amendment are true, accurate and complete in

all material respects and no such representation or statement of fact omits or

fails to state or otherwise disclose any material fact or information necessary

to prevent such representation or statement from being false or

misleading.  Each of the Obligors

acknowledges and agrees that the Lenders have been induced in part to enter

into this Amendment based upon the Lender’s justifiable reliance upon the

Obligor’s representations and the statement of fact concerning the Obligors

contained in this Amendment.

 

(e)           Each of the Loan Documents continues

in full force and effect notwithstanding the execution and delivery of this

Amendment.  Each of the Obligors hereby

reissues, ratifies, and confirms the enforceability and validity of all Loan

Documents to which it is a party and agrees that this Amendment and each of the

Loan Documents constitute the legal, valid, and binding obligations of such

Obligor to the extent such Obligor is party thereto, enforceable in accordance

with their respective terms.  In addition,

each of the Obligors acknowledges and agrees that neither the execution and

delivery of this Amendment nor any of

 

 

the

terms, provisions, covenants, or agreements contained in this Amendment shall

in any manner release, impair, lessen, modify, waive, or otherwise affect the

liability and obligations of such Obligor under the terms of the Loan

Documents.

 

(f)            The Lenders and the Administrative

Agent have acted in good faith and have conducted themselves in a commercially

reasonable manner in their relationships with each of the Obligors in

connection with this Amendment and in connection with the Obligations and the

Loan Documents, each of the Obligors hereby waiving and releasing any claims to

the contrary.  The Obligors have no

defenses, affirmative or otherwise, rights of setoff, rights of recoupment,

claims, counterclaims, actions or causes of action of any kind or nature

whatsoever against the Lenders or the Administrative Agent or any past,

present, or future agent, attorney, legal representative, predecessor in

interest, affiliate, successor, assign, employee, director, or officer of any

Lender or the Administrative Agent (collectively, the “Lender Group”), directly

or indirectly, arising out of, based upon, or in any manner connected with, any

transaction, event, circumstance, action, failure to act, or occurrence of any

sort or type, whether known or unknown, which occurred, existed, was taken,

permitted, or begun prior to the execution of this Amendment and occurred,

existed, was taken, permitted, or begun in accordance with, pursuant to, or by

virtue of the Obligations or any of the terms or conditions of the Loan

Documents, or which directly or indirectly relate to or arise out of or in any

manner are connected with the Obligations or any of the Loan Documents; to the

extent of any such defenses, affirmative or otherwise, rights of setoff, rights

of recoupment, claims, counterclaims, actions or causes of action exist or

existed, such defenses, rights, claims, counterclaims, actions and causes of

action are hereby forever waived, discharged and released.  Each of the Obligors hereby acknowledges and

agrees that the execution of this Amendment by the Lenders and the

Administrative Agent shall not constitute an acknowledgment of or admission by

the Lenders and the Administrative Agent or any member of the Lender Group of

the existence of any claims or of liability for any matter or precedent upon

which any claims or liability may be asserted. 

Each of the Obligors further acknowledges and agrees that, to the extent

any such claims may exist, they are of a speculative nature so as to be

incapable of objective valuation and that, in any event, the value to each of

the Obligors of the covenants and obligations of the Lenders contained in this

Amendment and the other documents executed and delivered in connection with

this Amendment substantially and materially exceeds any and all value of any

kind or nature whatsoever of any such claims. 

Each of the Obligors further acknowledges and agrees that the Lenders

and the Administrative Agent are not in any way responsible or liable for the

previous, current, or future condition or deterioration of the business

operations and/or financial condition of any of the Obligors and that the

Lenders and the Administrative Agent have not breached any agreement or

commitment to loan money or otherwise make financial accommodations available

to the Borrower or to fund any operations of the Borrower at any time.

 

(g)           THE OBLIGORS EACH HEREBY ACKNOWLEDGE

THAT THEY HAVE FREELY AND VOLUNTARILY ENTERED INTO THIS AGREEMENT AFTER AN

ADEQUATE OPPORTUNITY AND SUFFICIENT PERIOD OF TIME TO REVIEW, ANALYZE, AND

DISCUSS: (I) ALL TERMS AND CONDITIONS OF THIS AGREEMENT; (II) ANY AND ALL OTHER

DOCUMENTS EXECUTED AND DELIVERED IN CONNECTION WITH THE TRANSACTIONS

CONTEMPLATED BY THIS AGREEMENT; AND (III) ALL FACTUAL AND LEGAL MATTERS

RELEVANT TO THIS AGREEMENT AND/OR ANY AND ALL SUCH OTHER DOCUMENTS, WITH

COUNSEL FREELY AND INDEPENDENTLY SELECTED BY THE OBLIGORS.  THE OBLIGORS FURTHER

 

 

ACKNOWLEDGE

AND AGREE THAT THEY HAVE ACTIVELY AND WITH FULL UNDERSTANDING PARTICIPATED IN

THE NEGOTIATION OF THIS AGREEMENT AND ALL OTHER DOCUMENTS EXECUTED AND

DELIVERED IN CONNECTION WITH THIS AGREEMENT AFTER CONSULTATION AND REVIEW WITH

THEIR COUNSEL, THAT ALL OF THE TERMS AND CONDITIONS OF THIS AGREEMENT AND THE

OTHER DOCUMENTS EXECUTED AND DELIVERED IN CONNECTION WITH THIS AGREEMENT HAVE

BEEN NEGOTIATED AT ARM’S-LENGTH, AND THAT THIS AGREEMENT AND ANY AND ALL SUCH

OTHER DOCUMENTS HAVE BEEN NEGOTIATED, PREPARED, AND EXECUTED WITHOUT FRAUD, DURESS,

UNDUE INFLUENCE, OR COERCION OF ANY KIND OR NATURE WHATSOEVER HAVING BEEN

EXERTED BY OR IMPOSED UPON ANY PARTY. 

NO PROVISION OF THIS AGREEMENT OR SUCH OTHER DOCUMENTS SHALL BE

CONSTRUED AGAINST OR INTERPRETED TO THE DISADVANTAGE OF ANY PART TO THIS

AGREEMENT BY ANY COURT OR OTHER GOVERNMENTAL OR JUDICIAL AUTHORITY BY REASON OF

SUCH PARTY HAVING OR BEING DEEMED TO HAVE STRUCTURED, DICTATED, OR DRAFTED SUCH

PROVISION.

 

(h)           Except as otherwise disclosed to the

Lenders in writing or described in Borrower’s periodic reports prior to this

Amendment filed under the Securities Exchange Act of 1934 (the “Reports”),

there are no proceedings or investigations pending or, so far as the Obligors

know, threatened before any court or arbitrator or before or by, any

governmental, administrative, or judicial authority or agency, or arbitrator,

against any of the Obligors.

 

(i)            There is no statute, regulation,

rule, order, or judgment, no charter, by-law, or preference stock provision of

any Obligor, and no provision of any mortgage, indenture, contract, or other

agreement binding on any Obligor or any of its or their respective properties,

which would prohibit or cause a default under or in any way prevent the

execution, delivery, performance, compliance, or observance of any of the terms

and conditions of this Amendment and/or any of the other documents executed and

delivered in connection with this Amendment.

 

(j)            The Borrower restates all of its

representations contained in the Credit Agreement and represents that they are

true and correct as of the date of this Amendment, and as of the date any

advance(s) is (are) made under the Notes described in the Credit Agreement,

except (1) to the extent such representations expressly relate only to a

specific prior date and (2) Section 5.5 of such representations is deemed

modified to reflect the matters disclosed in the Reports filed by the Borrower

since March 31, 2002 and prior to the date hereof and this Amendment.  The Borrower reaffirms all of its duties,

obligations, promises and agreements under the Notes and Credit Agreement, and

represents and agrees that no event has occurred and no claim, offset, defense

or other condition exists that would relieve it of any of its obligations to

the Lenders under the Credit Agreement. 

The Borrower represents that, other than as set forth in this Amendment,

no default has occurred under the Credit Agreement as hereby amended or under

any of the other documents, instruments and agreements described therein and/or

executed in connection therewith.

 

(k)           Each Obligor represents that the

individual executing this Amendment on behalf of such Obligor has been duly

authorized by all necessary and proper action on the part of such Obligor and

its directors to execute this Amendment on behalf of such Obligor.

 

 

9.             Covenants. 

The Borrower covenants and agrees that it shall:

 

(a)           Consultant.  The Borrower shall permit a third party

consultant (the “Consultant”) engaged at the Borrower’s expense by the

Administrative Agent (provided that the Borrower should not be required to pay

any amount in excess of $75,000.00 in respect of such engagement) to examine

and make abstracts from the Borrower’s books and records and to discuss the

Borrower’s affairs, finances, and accounts with the Borrower’s officers, employees and independent public

accountants.  The Borrower agrees to

cooperate and assist in such examinations to facilitate the completion of the

Consultant’s examination and the Lenders’ approval of the Borrower’s proposed

budget in respect of the results of such examination within sixty (60) days

from the date of execution of this Amendment.

 

(b)           Field Audit.  The Borrower shall cooperate with the

Administrative Agent, which shall conduct a “Field Audit” with reference to all

accounts, inventory, equipment and other assets deemed appropriate by the

Administrative Agent.  The Borrower

shall provide reasonable access to such accounts, inventory, equipment, records

and personnel deemed appropriate by the Administrative Agent to facilitate

completion of such Field Audit within sixty (60) days from the date of

execution of this Amendment.

 

(c)           March 31, 2003 Financials. The

Borrower shall submit to the Administrative Agent not later than May 15, 2003,

its financial statement for the period ending March 31, 2003.

 

10.           Default.  The occurrence of one or more of the

following events or occurrences shall constitute a “Default” under this

Amendment:

 

(a)           the failure of any of the Obligors to

observe, perform, or comply with any of the terms, conditions, or provisions of

this Amendment and/or any other document executed and delivered in connection

with this Amendment, as and when required;

 

(b)           if any recital, representation, or

warranty made herein, in any document executed and delivered in connection

herewith, or in any report, certificate, financial statement, or other

instrument or document previously, now or hereafter furnished by or on behalf

of any of the Obligors in connection with this Amendment or any other document

executed and delivered in connection with this Amendment, shall prove to have

been false,

incomplete, or misleading  in

any material respect on the date as of which it was made;

 

(c)           the occurrence of a Default under the

Credit Agreement; or

 

(d)           if any of the Obligors commences,

institutes, or otherwise intervenes in any proceeding or action against any

Lender or any member of the Lender Group in connection with any of the

Obligations, any of the Loan Documents, this Amendment, or any of the documents

executed and delivered in connection with this Amendment.

 

11.           Remedies.  Subject to the provisions of Section 10

herein above, immediately upon the occurrence of any Default, the obligations,

amendments, and commitments of the Lenders set forth in this Amendment shall

immediately and automatically terminate and be of no further force or effect

without further notice to or consent of any of the Obligors, and the Lenders

shall have the right to exercise and enforce any and all rights and remedies

available to the

 

 

Lenders

under this Amendment, under any and all documents executed and delivered in

connection with this Amendment, under any and all Loan Documents, and under

applicable laws to the same extent as though this Amendment had never been

executed, without regard to any notice or otherwise available under applicable

laws.  All rights and remedies available

to the Lenders under this Amendment, under any documents executed and delivered

in connection with this Amendment, under any and all of the Loan Documents, and

under applicable laws, may be asserted, enforced, and exercised concurrently,

cumulatively, or successively from time to time and at any time until such time

as all of the Obligations have been paid in full.

 

12.           Expenses.  The Lenders shall be entitled to obtain at

the reasonable expense of the Obligors, such appraisals, reports, record

searches, and legal and other opinions and advice as the Lenders may from time

to time reasonably deem necessary with respect to any or all collateral and

security now or hereafter securing any of the Obligations.  The Obligors agree jointly and severally to

pay all reasonable costs, fees, and expenses of the Lenders in connection with

the preparation, execution, and delivery of this Amendment and any and all other

documents executed and delivered in connection with this Amendment and all

other reasonable costs, fees, and expenses, incurred by, or on behalf of the

Lenders in connection with the enforcement preservation, or collection of the

Obligations and/or this Amendment, including, without limitation, attorneys

fees and expenses, and recordation and filing fees and taxes (collectively, the

“Enforcement Costs”).  Such Enforcement

Costs shall be deemed to be part of the Obligations and shall be payable upon

demand.

 

13.           WAIVER OF JURY TRIAL.  THE OBLIGORS AND THE LENDERS EACH HEREBY

WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO WHICH ANY OR ALL OF THE

OBLIGORS AND THE LENDERS MAY BE PARTIES, ARISING OUT OF OR IN ANY WAY

PERTAINING TO: (A) THIS AMENDMENT; (B) ANY OF THE DOCUMENTS EXECUTED AND DELIVERED

IN CONNECTION WITH THIS AMENDMENT; (C) ANY OF THE OBLIGATIONS; AND (D) ANY OF

THE FINANCING DOCUMENTS.  IT IS AGREED

AND UNDERSTOOD THAT THIS WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL

CLAIMS AGAINST ALL PARTIES TO SUCH ACTIONS OR PROCEEDINGS, INCLUDING CLAIMS

AGAINST PARTIES WHO ARE NOT PARTIES TO THIS AMENDMENT.

 

THIS WAIVER IS KNOWINGLY, WILLINGLY, AND VOLUNTARILY MADE BY THE

OBLIGORS AND THE LENDERS, AND THE OBLIGORS AND THE LENDERS EACH HEREBY

REPRESENT AND WARRANT THAT NO REPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE

BY ANY INDIVIDUAL TO INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN ANY WAY

MODIFY OR NULLIFY ITS EFFECT, THE OBLIGORS FURTHER REPRESENT THAT THEY HAVE

BEEN REPRESENTED IN THE SIGNING OF THIS AMENDMENT AND IN THE MAKING OF THIS

WAIVER BY INDEPENDENT LEGAL COUNSEL, SELECTED OF THEIR OWN FREE WILL, AND THAT

THEY HAVE HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.

 

14.           Successors and Assigns.  This Amendment shall be binding upon and

inure to the benefit of the Obligors, the Lenders, and each of their respective

successors, and assigns.  None of the

Obligors shall, however, assign any of their respective rights or obligations

under this Amendment.

 

 

15.           Time of Essence.  Time is of the essence of this Amendment

with respect to each of the Obligors.

 

16.           Counterparts.  This Amendment may be executed in any number

of duplicate originals or counterparts, each of such duplicate originals or

counterparts shall be deemed to be an original, and all taken together shall

constitute but one and the same instrument. 

The Obligors agree that the Lenders may rely on a telecopy of any

signature of any Obligor.  The Lenders

agree that the Obligors may rely on a telecopy of this Amendment executed by

the Lenders.

 

17.           Notices.  All notices, requests, demands, and other

communications required or permitted hereunder shall be made in the manner

prescribed in the Credit Agreement or to such other address as any party hereto

may designate for itself by notice to the other parties hereto.

 

18.           Amendments.  This Amendment may be amended, modified, or

supplemented only by written agreement of the parties hereto.  No provision of this Amendment may be waived

except in writing, signed by the party against whom such waiver is sought to be

enforced.

 

19.           Entire Agreement.  This Amendment sets forth the final and

entire agreement and understanding of the parties hereto, superseding all prior

representations, understandings, and agreements, written or oral, not expressly

set forth in this Amendment or in any other documents executed and delivered in

connection herewith.

 

20.           No Other Amendment.  Except as expressly amended by this

Amendment, the Credit Agreement is and shall be unchanged and all of the terms,

provisions, agreements, duties, obligations, schedules, exhibits,

representations and warranties set forth in the Credit Agreement shall remain

and continue in full force and effect and are hereby incorporated by reference,

and hereby ratified, reaffirmed and confirmed by the Borrower, the Obligors and

the Lenders in all respects on and as of the date of this Amendment.  The Borrower acknowledges and agrees that

the Loan Documents and all liens, security interests and pledges granted to the

Lenders prior to the date hereof, including without limitation, all liens,

security interests and pledges granted to Bank One, as Administrative Agent,

shall remain in full force and effect, and nothing herein is intended to, nor

shall it, release, diminish or waive any rights of the Lenders under the Credit

Agreement or any other document executed in connection therewith.

 

21.           Governing Law.  Notwithstanding anything contained herein or

elsewhere to the contrary, the Credit Agreement, including all amendments

thereof, shall be governed by and construed in accordance with the laws of the

State of New York.

 

22.           Severability.  In case one or more provisions contained in

this Amendment shall be invalid, illegal, or unenforceable in any respect under

any law, the validity, legality, and enforceability of the remaining provisions

contained herein shall remain effective and binding and shall not be affected

or impaired thereby.

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be

duly executed as of the day and year first above written.

 

	

   

  	

  MAGNETEK, INC

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Title:

  	

   

  	

   

  
					

 

	

   

  	

  J-TEC INC.

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Title:

  	

   

  	

   

  
					

 

	

   

  	

  MAGNETEK MONDEL HOLDIINGS, INC

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Title:

  	

   

  	

   

  
					

 

	

   

  	

  MAGNETEK, ADS POWER, INC.

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Title:

  	

   

  	

   

  
					

 

	

   

  	

  MAGNETEK, LEASING CORPORATION

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Title:

  	

   

  	

   

  
					

 

	

   

  	

  MXT HOLDINGS, INC.

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Title:

  	

   

  	

   

  
					

 

	

   

  	

  WACHOVIA BANK, NATIONAL 

  ASSOCIATION

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Title:

  	

   

  	

   

  
					

 

	

   

  	

  BANK ONE, KENTUCKY, NA

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Title:

  	

   

  	

   

  
					

 

	

   

  	

  THE PROVIDENT BANK

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Title:

  	

   

  	

   

  
					

 

 

SCHEDULE 5

 

PRICING

SCHEDULE

 

LIBOR plus

3.75% or Prime plus 1.75%, retroactive to January 1, 2003.

 

Commitment Fee

Rate:  0.50%

 

Letter of

Credit Fee:  3.75%Exhibit 10.01

 Letter of Intent - Assignment of Interest in North Fork 14 Mining Joint Venture

                              Platinum Works, Inc.
                               6600 Ambrosia Lane
                                    Suite 229
                         Carlsbad, California, 92009 USA

August 20, 2002

Americana Gold and Diamond Holdings, Inc.
4790 Caughlin Parkway,
Suite 171
Reno, Nevada  89509-0907
Attention: Mr. David A. Bending

Re: Letter of Intent - Assignment of Interest in North Fork 14 Mining Joint Venture

Dear David;

         This letter of intent ("Letter") confirms our understanding and sets
forth an outline of certain preliminary terms of a proposed transaction
("Transaction") between Platinum Works, Inc., a Florida corporation ("PWI") and
Americana Gold and Diamond Holdings, Inc., a Delaware corporation ("AGD"). In
this Letter, PWI and AGD are sometimes collectively called the "Parties,"

         Upon execution of this Letter by the Parties, it is intended that this
Letter will provide a framework for a Definitive Agreement (as defined below).
Any obligation to proceed with the Transaction as outlined herein is expressly
subject, among other things, to the execution and delivery of a written
Definitive Agreement by the Parties. It is expressly understood and agreed by
the Parties that the provisions contained in paragraph 1 and its subparagraphs
of this Letter are an expression of interest only and are not binding; provided,
however, that the provisions contained in Sections 5, 6, 7, 8, 10, 11, 12, 13,
14 and 15 hereof shall be binding on the Parties notwithstanding the termination
of this Letter for any reason ("Binding Provisions").

1.  TRANSACTION

         The Parties will promptly, subject to the terms and conditions of this
Letter, pursue negotiations of the specific terms of the Definitive Agreement.
To facilitate the negotiation and finalization of a Definitive Agreement, the
Parties request that PWI's counsel prepare an initial draft. The execution of
any such Definitive Agreement would be subject to the satisfactory completion of
the Parties' ongoing investigation of the other Party's business, and would also
be subject to approval by the respective Parties' boards of directors within
five (5) business days of the execution of this Letter. Based on the information
currently known to PWI, it is proposed that the Definitive Agreement include the
following terms:

a.  Basic Transaction

         PWI would sell and/or  assign 49% of its interest in the North Fork 14
         Joint Venture ("Joint Venture") to AGD ("PWI's Interests") at the price
         (the "Purchase Price") set forth in Paragraph 1b below. The closing of
         this Transaction (the "Closing") would occur as soon as possible after
         the satisfaction or waiver of all other closing conditions; but in no
         event later than September 30, 2002. The Parties shall endeavor to
         structure the Transaction so that it will minimize the Parties' tax
         liability under the Internal Revenue Code.

b.  Purchase Price

         AGD agrees to issue 20,000,000 units ("AGD Units") with each unit
         consisting of one (1) restricted share of its common stock ("AGD
         Shares") and one (1) warrant ("AGD Warrants") to PWI for PWI's
         Interests (subject to adjustment as described below) ("Purchase
         Price"). The Parties agree that the value of the AGD Units will be
         $0.10 per AGD Unit. AGD Warrants shall entitle PWI or their assigns the
         right to acquire one (1) AGD Share at the following exercise prices
         based on the following time periods after AGD resumes trading on the
         OTC Bulletin Board:

                o   Exercise price of $0.50 per share prior to 120 days after
                    resumption of listing on the OTCBB;
                o   Exercise Price of $1.00 per share between 121 and 270 days
                    after resumption of listing; and an
                o   Exercise Price of $2.00 per share between 271 days and 730
                    days after resumption of listing.

c.  Registration Rights

         PWI shall be entitled to unlimited piggyback registration rights,
         provided that any request for piggyback registration must be made in
         writing by PWI or its assigns. Registration rights are transferable
         with a transfer of the AGD Shares and/or the AGD Warrants.

d.  Other Terms

         The Parties would make comprehensive representations and warranties to
         each other and would provide comprehensive covenants, indemnities and
         other protections for the benefit of each other. The consummation of
         the Transaction by the Parties would be subject to the satisfaction of
         various conditions, including the condition that PWI shall be
         authorized by the Joint Venture to assign PWI's Interest to AGD and
         that all appropriate federal and state securities laws and regulations
         shall be complied with by the Parties.

e.  Put Right.

         Beginning on the one year anniversary of the Closing, PWI will be have
         the option to: (i) sell the AGD Shares issued to them in the
         Transaction to AGD at the original valuation, as determined at Closing
         ("PWI's Put Right") or (ii) transfer the AGD Shares to AGD and in
         return AGD shall promptly transfer all of PWI's Interest, subject to
         prorating, in the Joint Venture back to PWI. PWI shall simultaneously
         transfer the AGD Shares to AGD and PWI shall retain the AGD Warrants.
         The AGD interest in the Joint Venture transferred to PWI will be
         prorated if PWI transfers less than 20,000,000 shares to AGD. PWI's
         Put Right shall expire on the three-year anniversary of the Closing.

f.  Unwinding of Transaction.

         In the event that AGD is not trading on the OTC Bulletin Board within
         twelve (12) months from the Closing, PWI may, at any time after twelve
         (12) months from the Closing and prior to twenty-four (24) months after
         the Closing, terminate and unwind the Transaction upon written notice
         to AGD. Upon receipt of such written notice of termination and unwind,
         AGD shall promptly transfer all of PWI's Interest, subject to
         prorating, in the Joint Venture back to PWI. PWI shall simultaneously
         transfer the AGD Shares to AGD and PWI shall retain the AGD Warrants.
         The AGD interest in the Joint Venture transferred to PWI will be
         prorated if PWI transfers less than 20,000,000 shares to AGD. Following
         such termination, unwinding and transfers, the Parties shall have no
         further obligations under the Letter or the Definitive Agreement,
         except for the Binding Provision.

g.  Prohibition of Transfer of PWI's Interest

         During the twenty-four (24) months after the Closing, AGD shall not
         transfer, sell or otherwise encumber PWI's Interest, without PWI's
         written approval, PWI's. The Parties agree that this condition shall be
         nullified as and when AGD is fully trading on the OTC:BB and maintained
         as current in SEC required filings and reporting.

h.  Definitive Agreements

         The Parties will consult with their respective attorneys, accountants,
         investment bankers and other professional advisors, as they deem
         necessary and appropriate, for the purpose of negotiating and entering
         into a definitive agreement setting forth the rights and obligations of
         the Parties with respect to the Transaction (the "Definitive
         Agreement"), together with any other necessary or appropriate
         agreements or instruments.

2.  ACCESS

         During the period from the date this Letter is signed by the Parties
(the "Signing Date") until the date on which either Party provides the other
Party with written notice that negotiations toward a Definitive Agreement are
terminated (the "Termination Date"), the Parties will afford each other full and
free access to their respective personnel, properties, contracts, books and
records, and all other documents and data during business hours and upon
reasonable notice.

3.  EXCLUSIVE DEALINGS

         Until the later of (i) 30 days after the Signing Date or (ii) the
Termination Date:

         a. The Parties will not directly or indirectly, through any
            representative or otherwise, solicit or entertain offers from,
            negotiate with or in any manner encourage, discuss, accept, or
            consider any proposal of any other person relating to the
            Transaction, whether directly or indirectly, through purchase,
            merger, consolidation, or otherwise; and

         b. The Parties will immediately notify the other regarding any contact
            between either Party or their respective representatives and any
            other person regarding any such offer or proposal or any related
            inquiry.

4.  CONDUCT OF BUSINESS

         During the period from the Signing Date until the earlier of the
Termination Date or the execution of a Definitive Agreement, the Parties will
operate their respective business in the ordinary course and agree to refrain
from entering into any extraordinary transactions, unless otherwise approved by
the other party, in writing, such approval shall not unreasonably withheld.

5.  CONDITIONS TO CONSUMMATION

         The consummation of the Transaction shall be subject, among other
things, to:

         a.  Completion of the due diligence satisfactory to each Party in its
             sole discretion;

         b.  Receipt of all necessary consents and approvals of governmental
             entities and any other third parties;

         c.  Execution and delivery of the Definitive Agreement approved by the
             Board of Directors of each Party;

         d.  Clearance by the Securities and Exchange Commission of the
             Company's  proxy statement for use in connection with a special
             meeting of stockholders relating to the Transaction, if applicable;

         e.  Approval of the principal terms of the Transaction by the
             affirmative vote of holders of the necessary outstanding shares of
             AGD Common Stock (pursuant to the Company's articles of
             incorporation, bylaws or state statute) at a duly held special
             meeting of stockholders, if applicable;

         f.  Approval of the principal terms of the Transaction by the
             affirmative vote of holders of the necessary outstanding shares of
             the capital stock of PWI (pursuant to the Company's articles of
             incorporation, bylaws or state statute) at a duly held special
             meeting of stockholders, if applicable;

         g.  Declaration by the Securities and Exchange Commission of the
             effectiveness of the Company's registration statement registering
             the AGD Stock under the Securities Act of 1933, as amended, if
             applicable;

         h.  Compliance with all other applicable laws and regulations,
             including blue sky laws, and the absence of a "stop order" or an
             injunction seeking to prevent the Transaction;

         i.  Absence of any material adverse change in the business, financial
             condition, assets, prospects or operations of either Party since
             the effective date of the Definitive Agreement (or other such
             date(s) as the Parties may agree).

6.  CONFIDENTIALITY

         Except as and to the extent required by law, the Parties will not
disclose or use, and will direct its representatives not to disclose or use to
the detriment of the other Party, any Confidential Information (as defined
below) furnished, or to be furnished, by either Party or their respective
representatives at any time or in any manner other than in connection with its
evaluation of the Transaction proposed in this Letter. For purposes of this
Paragraph, "Confidential Information" means any information about the Parties
stamped "confidential" or identified in writing as such to the other Party
promptly following its disclosure, unless (i) such information is already known
to the Party or its representatives or to others not bound by a duty of
confidentiality or such information becomes publicly available through no fault
of the Party or its representatives, (b) the use of such information is
necessary or appropriate in making any filing or obtaining any consent or
approval required for the consummation of the Transaction, or (c) the furnishing
or use of such information is required by or necessary or appropriate in
connection with legal proceedings. Upon the written request of the Party, the
other Party will promptly return to the Party or destroy any Confidential
Information in its possession and certify in writing to the Party that it has
done so.

7.  DISCLOSURE

         Except as and to the extent required by law, without the prior written
consent of the other Party, neither Party will, and each will direct its
representatives not to make, directly or indirectly, any public comment,
statement, or communication with respect to, or otherwise to disclose or to
permit the disclosure of the existence of discussions regarding, a possible
transaction between the Parties or any of the terms, conditions, or other
aspects of the transaction proposed in this Letter. If a Party is required by
law to make any such disclosure, it must first provide to the other Party the
content of the proposed disclosure, the reasons that such disclosure is required
by law, and the time and place that the disclosure will be made.

8.  COSTS

         The Parties will be responsible for and bear all of its own costs and
expenses (including any broker's or finder's fees and the expenses of its
representatives) incurred at any time in connection with pursuing or
consummating the Transaction.

9.  CONSENTS

         During the period from the Signing Date until the earlier of the
Termination Date or the execution of a Definitive Agreement, the Parties will
cooperate with each other and proceed, as promptly as is reasonably practical,
to obtain all consents of third parties necessary in order to consummate the
Transaction.

10.  ENTIRE AGREEMENT

         The Binding Provisions constitute the entire agreement between the
parties, and supersede all prior oral or written agreements, understandings,
representations and warranties, and courses of conduct and dealing between the
parties on the subject matter hereof including the June 18, 2002 letter of
intent agreement. Except as otherwise provided herein, the Binding Provisions
may be amended or modified only by a writing executed by all of the parties.

11.  GOVERNING LAW

         The Binding Provisions will be governed by and construed under the laws
of the State of Florida without regard to conflicts of laws principles.

12.  JURISDICTION: SERVICE OF PROCESS

         Any action or proceeding seeking to enforce any provision of, or based
on any right arising out of, this Letter may be brought against any of the
parties in the courts of the State of Florida, County of Broward, or, if it has
or can acquire jurisdiction, in the United States District Court for the
Southern District of Florida, and each of the parties consents to the
jurisdiction of such courts (and of the appropriate appellate courts) in any
such action or proceeding and waives any objection to venue laid therein.
Process in any action or proceeding referred to in the preceding sentence may be
served on any party anywhere in the world.

13.  TERMINATION

         The Binding Provisions will automatically terminate on September 30,
2002 and may be terminated earlier upon written notice by either party to the
other party unilaterally, for any reason or no reason, with or without cause, at
any time; provided, however, that the termination of the Binding Provisions will
not affect the liability of a party for breach of any of the Binding Provisions
prior to the termination. Upon termination of the Binding Provisions, the
parties will have no further obligations hereunder, except as stated in
Paragraphs 5, 6, 7, 8, 10, 11, 12, 13, 14 and 15 of this Letter, which will
survive any such termination.

14. COUNTERPARTS

         This Letter may be executed in one or more counterparts, each of which
will be deemed to be an original copy of this Letter and all of which, when
taken together, will be deemed to constitute one and the same agreement.

15.  NO LIABILITY

         Paragraph 1 and its subparagraphs of this Letter do not constitute and
will not give rise to any legally binding obligation on the part of either
Party. Moreover, except as expressly provided in the Binding Provisions (or as
expressly provided in any binding written agreement that the Parties may enter
into in the future), no past or future action, course of conduct, or failure to
act relating to the Transaction, or relating to the negotiation of the terms of
the Transaction or any Definitive Agreement, will give rise to or serve as a
basis for any obligation or other liability on the part of the Parties.
Notwithstanding the foregoing, the Sellers and the Company agree to enter into a
Definitive Agreement embodying the terms set forth in this letter if so
requested by the Buyer within six months after the date hereof.

         If you are in agreement with the foregoing, please sign and return one
copy of this Letter, which thereupon will constitute our agreement with respect
to its subject matte

                                      Very truly yours,

                                      Platinum Works, Inc.

                                      By:  /s/ Jerry G. Mikolajczyk
                                               Jerry G. Mikolajczyk
                                      Its:

Duly executed and agreed as to the Binding Provisions on August 20, 2002.

Americana Gold and Diamond Holdings, Inc.

/s/ David A. Bending
Mr. David A. Bending,
Its:

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