Document:

Exhibit 10.1

 

FOURTH AMENDMENT TO

CREDIT AGREEMENT

 

THIS FOURTH AMENDMENT TO CREDIT AGREEMENT
(this “Amendment”) is made and entered into as of December 31, 2004, by
JPMORGAN CHASE BANK, N.A., successor by merger to Bank One, NA (Main Office
Chicago), as Lender (the “Lender”); MAGNETEK, INC., a Delaware
corporation (“MagneTek”) and MAGNETEK ADS POWER, INC., a Delaware
corporation and Subsidiary of MagneTek, as Borrowers; and MAGNETEK LEASING
CORPORATION, a Delaware corporation, MAGNETEK MONDEL HOLDING, INC., a Delaware
corporation, MAGNETEK NATIONAL ELECTRIC COIL, INC., a Delaware corporation and
MONDEL ULC, an unlimited liability corporation organized under the laws of Nova
Scotia, Canada, as Guarantors.

 

Recitals

 

A.                                   The Borrowers, the Guarantors and the Lender
have entered into a Credit Agreement dated as of August 15, 2003, as amended by
the First Amendment to Credit Agreement dated as of November 25, 2003, by the
Second Amendment to Credit Agreement dated as of February 12, 2004, and by the
Third Amendment to Credit Agreement dated as of September 9, 2004 (as amended,
the “Credit Agreement”). 
Capitalized terms used, but not defined, in this Amendment which are
defined in the Credit Agreement will have the meanings given to them in the
Credit Agreement.

 

B.                                     The Borrowers and the Guarantors desire
that the Lender: (i) waive certain Defaults and (ii) agree to certain
amendments to the Credit Agreement, all as contemplated by the terms, and
subject to the conditions, of this Amendment.

 

C.                                     The Lender is willing to waive such
Defaults and amend the Credit Agreement as contemplated by the terms, and
subject to the conditions, of this Amendment.

 

Statement
of Amendment 

 

In consideration of the mutual covenants
and agreements and the conditions set forth in this Amendment, and for other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Lender, the Borrowers, and the Guarantors hereby agree
as follows:

 

1.                                       Waiver of Current Financial Covenant
Defaults.
Based on financial information submitted by the Borrowers to the Lender,
Defaults (collectively, the “Current Covenant Defaults”) have occurred:
(i) under Section 6.29.2 of the Credit Agreement with respect to the
Fixed Charge Coverage Ratio for the Test Period ended September 26, 2004 (a
required 1.25 to 1 opposite an actual result of a negative ratio), (ii) Section
6.29.3 of the Credit Agreement with respect to the EBITDA Covenant for the
Test Period ended September 26, 2004 (a required $2,750,000 opposite an actual
result of ($1,009,000)), and (iii) Section 6.34(c) of the Credit
Agreement with respect to the Operating Profit Covenant of TPG for the Test
Period ended September 26, 2004 (a required maximum loss of ($1,250,000)
opposite an actual result of

 

 

($1,315,000)). The Loan Parties have requested
that the Lender waive the Current Covenant Defaults.  The Lender hereby waives the Current Covenant
Defaults for the specific periods indicated. The waiver provided in this Section
1 will not apply to any other Default or Unmatured Default, whether past,
present, or future, including, without limitation, any violations of the above
described financial covenants as of dates other than that specifically
referenced in this Section 1. The waiver provided in this Section 1,
either alone or together with other waivers which the Lender may give from time
to time, shall not, by course of dealing, implication or otherwise, obligate
the Lender to waive any Default or Unmatured Default, past, present or future,
other than those specifically waived by this Amendment, or reduce, restrict or
in any way affect the discretion of the Lender in considering any future waiver
requested by the Borrowers or any of the other Loan Parties.

 

2.                                       Amendments to the Credit Agreement.

 

2.1                                 The definition of “Reserves” in Section
1.1 of the Credit Agreement is hereby amended in its entirety by
substituting the following in its stead:

 

“Reserves”
means any and all reserves which the Lender deems necessary, in its Permitted
Discretion, to maintain (including reserves resulting from any Defaults, for
cost testing, aged credits, accrued and unpaid interest on the Secured
Obligations, Banking Services Reserves, reserves for rent at locations leased
by any Loan Party and for warehousemen’s and bailee’s charges, reserves for
dilution of Accounts, reserves for Inventory shrinkage, reserves for customs
charges and shipping charges related to any Inventory in transit, reserves for
Rate Management Transactions, reserves for contingent liabilities of any Loan
Party, reserves for uninsured losses of any Loan Party and reserves for taxes,
fees, assessments, and other governmental charges) with respect to the
Collateral or any Loan Party.  Without
limiting the generality of the forgoing, Borrowers expressly agree that Reserves
include (a) a reserve for the amount then due and owing to Lender or an
Affiliate of Lender under the Equipment Leases, as determined by Lender from
time to time, (b) a reserve for Lender’s automated clearinghouse exposure as it
respects Borrowers, as determined by Lender from time to time and (c) a fixed
availability reserve in the amount of Seven Million Dollars ($7,000,000) (the “Availability
Reserve”).

 

2.2                                 Section 6.29.2 of the Credit Agreement is hereby
amended in its entirety by substituting the following in its stead:

 

6.29.2.               Minimum Fixed Charge Coverage Ratio. The Borrowers will not permit the Fixed
Charge Coverage Ratio (“Fixed Charge Coverage Ratio Covenant”) for any
Test Period ending on the dates set forth below to be less than the ratio set
forth below opposite such Test Period ending on such date:

 

2

 

 

	
  Test Period

  	
   

  	
  Minimum Fixed Charge

  Coverage Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Fiscal Quarter
  beginning March 28, 2005 and ending on June 26, 2005

  	
   

  	
  1.250:1.0

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Four Consecutive Fiscal
  Quarters ending September 26, 2006 and each Four Consecutive Fiscal Quarters
  thereafter

  	
   

  	
  1.250:1.0

  	
   

  

 

2.3                                 Sections 6.29.3 and 6.29.4 of the Credit Agreement each is hereby
amended in their entirety by substituting the following in their stead:

 

6.29.3. Minimum EBITDA. The
Borrowers shall not permit Consolidated EBITDA (“EBITDA Covenant”) to be
less than the amounts set opposite the Test Periods set forth below:

 

	
  Test Period

  	
   

  	
  Minimum EBITDA

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Fiscal Quarter
  beginning March 28, 2005 and ending on June 26, 2005

  	
   

  	
  $

  	
  1,050,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Four Consecutive Fiscal
  Quarters ending September 26, 2006 and each Four Consecutive Fiscal Quarters
  thereafter

  	
   

  	
  $

  	
  5,500,000

  	
   

  

 

6.29.4. Minimum Availability. The
Borrowers shall maintain, at all times and under all circumstances,
Availability of not less than $500,000 in the aggregate; providedthat if Availability is less than
$1,000,000 in the aggregate for two consecutive Business Days (“Availability
Condition”), then, within 30 days after each Availability Condition, the
Borrowers will incur additional unsecured Subordinated Indebtedness, unsecured
Debt For Borrowed Money from SPA, or cause equity to be contributed to MagneTek
in cash in an aggregate amount at least equal to $1,000,000 with respect to the
occurrence of each such Availability Condition. 
Notwithstanding the foregoing, so long as the Availability Reserve is in
effect, Borrowers shall not be required to maintain any minimum Availability
under this Section 6.29.4.

 

2.4                                 Section 6.34(a) of the Credit Agreement is hereby
amended in its entirety by substituting the following in its stead:

 

3

 

(a)                 ICG:

 

	
  Test Period

  	
   

  	
  Minimum Operating Profit of ICG

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Fiscal Quarter
  beginning March 28, 2005 and ending on June 26, 2005

  	
   

  	
  $

  	
  2,325,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Four Consecutive Fiscal
  Quarters ending September 26, 2006 and each Four Consecutive Fiscal Quarters
  thereafter

  	
   

  	
  $

  	
  7,000,000

  	
   

  

 

3.                                       Reaffirmation
of Security.  The Borrowers,
Guarantors and the Lender hereby expressly intend that this Amendment shall not
in any manner (i) constitute the refinancing, refunding, payment or
extinguishment of the Obligations evidenced by the existing Loan Documents;
(ii) be deemed to evidence a novation of the outstanding balance of the
Obligations; or (iii) affect, replace, impair, or extinguish the creation,
attachment, perfection or priority of the Liens on the Collateral granted
pursuant to the Loan Documents evidencing, governing or creating a Lien on the
Collateral.  The Borrowers and Guarantors
ratify and reaffirm any and all grants of Liens to the Lender on the Collateral
as security for the Obligations, and the Borrowers and Guarantors acknowledge
and confirm that the grants of the Liens to the Lender on the Collateral: (a)
represent continuing Liens on all of the Collateral, (b) secure all of the
Obligations, and (c) represent valid, first and best Liens on all of the
Collateral except to the extent, if any, of the Permitted Liens.

 

4.                                       Representations.  To induce the Lender to accept this Amendment,
the Borrowers and the Guarantors hereby represent and warrant to the Lender as
follows:

 

4.1                                 Each
Borrower and Guarantor has full power and authority to enter into, and to
perform its obligations under, this Amendment, and the execution and delivery
of, and the performance of its obligations under and arising out of, this
Amendment have been duly authorized by all necessary corporate action.

 

4.2                                 This
Amendment constitutes the legal, valid and binding obligations of each Borrower
and Guarantor enforceable in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization or
similar laws affecting creditors’ rights generally.

 

4.3                                 Each
of the Borrower’s and each of the Guarantor’s representations and warranties
contained in the Loan Documents are complete and correct as of the date of this
Amendment (other than a representation or warranty that is stated to relate
solely to an earlier date) with the same effect as though such representations
and warranties had been made again on and as of the date of this Amendment,
subject to those changes as are not prohibited by, or do not constitute a
Default under, the Loan Documents.

 

4

 

4.4                                 No
Default or Unmatured Default has occurred and is continuing, other than the
Current Covenant Defaults specified under Section 1 of this Amendment.

 

6.                                       Costs
and Expenses; Fee.  The Borrowers will promptly on demand pay or
reimburse the Lender for the reasonable costs and expenses incurred by the
Lender in connection with this Amendment. 
The Borrowers will pay to the Lender an amendment and waiver fee in the
amount of $25,000 upon Borrowers’ and Guarantors’ execution of this Amendment.

 

7.                                       Release.  The Borrowers and the Guarantors hereby
release the Lender from any and all liabilities, damages and claims arising
from or in any way related to the Loans or any of the Loan Documents, other
than such liabilities, damages and claims which arise after the execution of
this Amendment.  The foregoing release
does not release or discharge, or operate to waive performance by, the Lender
of its express agreements and obligations stated in the Loan Documents on and
after the date of this Amendment.

 

8.                                       Continuing
Effect of Credit Agreement.  Except as expressly amended hereby, all of the
provisions of the Credit Agreement are ratified and confirmed and remain in
full force and effect.

 

9.                                       One
Agreement; References; Fax Signature.  The Credit Agreement, as amended by this
Amendment, will be construed as one agreement. 
All references in any of the Loan Documents to the Credit Agreement will
be deemed to be references to the Credit Agreement as amended by this
Amendment.  This Amendment may be signed
by facsimile signatures, and if so signed, (i) may be relied on by each party
as if the document were a manually signed original and (ii) will be binding on
each party for all purposes.

 

10.                                 Captions.  The headings to the Sections of this Amendment
have been inserted for convenience of reference only and shall in no way modify
or restrict any provisions hereof or be used to construe any such provisions.

 

11.                                 Counterparts.  This Amendment may be executed in multiple
counterparts, each of which shall be an original but all of which together
shall constitute one and the same instrument.

 

12.                                 Entire
Agreement.  This Amendment,
together with the Credit Agreement and the other Loan Documents, sets forth the
entire agreement of the parties with respect to the subject matter of this Amendment
and supersedes all previous understandings, written or oral, in respect of this
Amendment.

 

13.                                 Governing
Law.  This Amendment shall
be governed by and construed in accordance with the internal laws of the State
of Ohio (without regard to Ohio conflicts of law principles).

 

14.                                 Reaffirmation
of Guaranties.  The Guarantors
hereby each reaffirm their respective Guaranty and acknowledge and agree that
no Guarantor is released from its obligations under its Guaranty by reason of
this Amendment and that the obligations of the

 

5

 

Guarantors under their respective Guaranties extend to the
Credit Agreement and the other Loan Documents as amended by this
Amendment.  This reaffirmation of
Guaranty shall not be construed, by implication or otherwise, as imposing any
requirement that the Lender notify or seek the consent of any of the Guarantors
relative to any past or future extension of credit, or modification, extension
or other action with respect thereto, in order for any such extension of credit
or modification, extension or other action with respect thereto to be subject
to the Guaranties, it being expressly acknowledged and reaffirmed that the
Guarantors have under each respective Guaranty consented, among others things,
to modifications, extensions and other actions with respect thereto without any
notice thereof or consent thereto.

 

15.                                 Other
Documents.  With the signing of
this Amendment, the Borrowers and Guarantors will deliver to the Lender such
other documents, instruments, and agreements deemed necessary or desirable by
the Lender to effect the amendments to the Borrowers’ credit facilities with
the Lender contemplated by this Amendment.

 

[REMAINDER INTENTIONALLY LEFT BLANK]

 

6

 

IN WITNESS WHEREOF, the Borrowers and the
Guarantors have executed this Amendment to be effective as of the date set
forth in the opening paragraph of this Amendment.

 

	
   

  	
  THE BORROWERS:

  
	
   

  	
   

  
	
   

  	
  MAGNETEK, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David P. Reiland

  	
   

  
	
   

  	
   

  	
  David P. Reiland, Executive Vice

  President and Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
  MAGNETEK ADS POWER, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David P. Reiland

  	
   

  
	
   

  	
   

  	
  David P. Reiland, President

  
	
   

  	
   

  
	
   

  	
  THE GUARANTORS:

  
	
   

  	
   

  
	
   

  	
  MONDEL ULC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David P. Reiland

  	
   

  
	
   

  	
   

  	
  David P. Reiland, President

  
	
   

  	
   

  
	
   

  	
  MAGNETEK MONDEL HOLDING, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David P. Reiland

  	
   

  
	
   

  	
   

  	
  David P. Reiland, President

  
	
   

  	
   

  
	
   

  	
  MAGNETEK LEASING CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David P. Reiland

  	
   

  
	
   

  	
   

  	
  David P. Reiland, President

  
	
   

  	
   

  
	
   

  	
  MAGNETEK NATIONAL ELECTRIC COIL, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David P. Reiland

  	
   

  
	
   

  	
   

  	
  David P. Reiland, President

  
									

 

7

 

	
  Accepted at Cincinnati, Ohio,

  as of December 31, 2004

  	
   

  
	
   

  	
   

  
	
  JPMORGAN CHASE BANK, N.A.

  	
   

  
	
  (successor by merger to Bank One, NA (Main Office
  Chicago))

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Jeffrey W. Swartz

  	
   

  	
   

  
	
   

  	
  Jeffrey W. Swartz, Vice President

  	
   

  
				

 

8Exhibit
4.1

 

EXECUTION
COPY

 

SERVICING
ASSUMPTION AGREEMENT

 

THIS SERVICING ASSUMPTION AGREEMENT (this “Agreement”),
dated as of February 7, 2005, is by and among GE MONEY BANK (formerly
known as GE Capital Consumer Card Co.), a federal savings bank organized under
the laws of the United States (“GE Money Bank”), as successor in
interest to Monogram Credit Card Bank of Georgia, a limited-purpose credit card
bank organized under the laws of the state of Georgia (“Monogram”), in
favor of the parties to and third party beneficiaries expressly identified in
the Servicing Agreement, dated as of June 27, 2003, between Monogram, in
its capacity as initial Servicer, and GE Capital Credit Card Master Note Trust
(the “Trust”), as Successor Owner (the “Assumed Agreement”).

 

BACKGROUND

 

1.                                       On
February 7, 2005, pursuant to a Merger Agreement and Plan of Merger, dated
as November 15, 2004, among Monogram and GE Capital Consumer Card Co., a
federal savings bank organized under the laws of the United States (the “FSB”),
and the transactions contemplated thereby, Monogram was merged with and into
the FSB, with the FSB being the surviving entity.

 

2.                                       On
February 7, 2005, the FSB amended its Charter and By-Laws to change its
name to GE Money Bank, by filing a Notice for Charter and By-Law Amendments
with the Office of Thrift Supervision.

 

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

 

SECTION 1.  Definitions.  Capitalized terms used in this Agreement and
not otherwise defined herein shall have the meanings assigned thereto in the
Assumed Agreement.

 

SECTION 2. Assumptions.  From and after the
date hereof, GE Money Bank hereby agrees to be bound by all of the terms and
conditions of the Assumed Agreement and unconditionally assumes the performance
of every covenant and obligation of Monogram, as Servicer, under the Assumed
Agreement.

 

SECTION 3.  Representations and Warranties.  GE Money Bank represents and warrants that
the execution, delivery and performance by it of this Agreement has been duly
authorized by all necessary corporate action on its part and that this
Agreement constitutes the legal, valid and binding obligation of such party
enforceable against it in accordance with its terms.

 

SECTION 4.  Effect of Agreement.  (a)  From
and after the date hereof, (i) this Agreement shall be a part of the Assumed
Agreement amended hereby, and (ii) each reference in such amended Assumed
Agreement to “this Agreement” or “hereof”, “hereunder” or words of like import,
and each reference in the Assumed Agreement to such Assumed Agreement shall
mean and be a reference to such amended Assumed Agreement.

 

 

(b)  Except as
provided herein, all references in the Assumed Agreement to “Monogram Credit
Card Bank of Georgia”, “Monogram” and “Servicer” shall be deemed to be
references to “GE Money Bank”.

 

SECTION 5.  Further Assurances.   GE Money Bank hereby agrees that it shall
execute, deliver and file all such documents, agreements and instruments the
parties to and third party beneficiaries expressly identified in the Assumed
Agreement may reasonably request in order to evidence the assumptions hereunder
or more effectively carry out the intent of this Agreement.

 

SECTION 6.  No Proceedings.  From and after the date hereof and until the
date one year plus one day following the date on which the Outstanding Balances
of all Transferred Receivables have been reduced to zero, GE Money Bank shall
not, directly or indirectly, institute or cause to be instituted against the
Trust a case under any Debtor Relief Law; provided
that the foregoing shall not in any way limit GE Money Bank’s right to pursue
any other creditor rights or remedies that GE Money Bank may have under any
applicable law.

 

SECTION 7.  Miscellaneous.  THIS AGREEMENT SHALL BE GOVERNED AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT
REFERENCE TO THE CONFLICTS OF LAW PRINCIPLES THEREOF OTHER THAN SECTION 5-1401
OF THE NEW YORK GENERAL OBLIGATIONS LAW). 
This Agreement contains the final and complete integration of all prior
expressions by GE Money Bank with respect to the subject matter hereof and
shall constitute the entire Agreement of GE Money Bank with respect to the
subject matter hereof superseding all prior oral or written understandings. If
any one or more of the covenants, agreements, provisions or terms of this
Agreement shall for any reason whatsoever be held invalid or unenforceable,
then such covenants, agreements, provisions or terms shall be deemed severable
from the remaining covenants, agreements, provisions and terms of this
Agreement and shall in no way affect the validity or enforceability of the
provisions of this Agreement.  This
Agreement may not be amended, supplemented or waived except pursuant to a
writing signed by the party to be charged. 
This Agreement may be executed in counterparts, and by the different
parties on different counterparts, each of which shall constitute an original,
but all together shall constitute one and the same agreement.

 

[Signature pages follow]

 

 

IN WITNESS WHEREOF, GE Money Bank has
executed this Agreement by its duly authorized officer as of the date first
above written.

 

	
   

  	
  GE MONEY BANK

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ DONALD R. RAMON

  	
   

  
	
   

  	
  Name: Donald R. Ramon

  
	
   

  	
  Title: President and CEO

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