EXHIBIT
10.73(a)
SECOND AMENDMENT TO CREDIT AND GUARANTY AGREEMENT
SECOND AMENDMENT , dated as of February 14, 2008 (this
“ Amendment ”), to the Credit and Guaranty
Agreement, dated as of October 26, 2007, by and among
SYNTAX-BRILLIAN CORPORATION , a Delaware corporation
(“ Company ”), SYNTAX-BRILLIAN SPE, INC.,
a Delaware corporation (“ SPV ”, and together
with the Company, each a “ Borrower ” and
collectively, the “ Borrowers ”) and CERTAIN
SUBSIDIARIES OF COMPANY , as Guarantors, the Lenders party
hereto from time to time and SILVER POINT FINANCE, LLC
(“ Silver Point ”), as Administrative Agent (in
such capacity, “ Administrative Agent ”),
Collateral Agent (in such capacity, “ Collateral Agent
”), and Lead Arranger (in such capacity, the “ Lead
Arranger ”).
At the
request of Credit Parties, Agents and Lenders have agreed to amend
certain provisions of the Credit Agreement, subject to the terms
and conditions set forth herein.
1.
Definitions . All terms used herein which are defined in the
Credit Agreement and not otherwise defined herein are used herein
as defined therein.
2.
Amendments to Credit Agreement .
(a)
Section 1.1 of the Credit Agreement is hereby amended by
adding the definitions of the following terms thereto, in
appropriate alphabetical order, to read in their entirety as
follows:
“‘
Budget ’ as defined in Section 5.23.”
“‘
Operational Advisor ’ means collectively, an
operational advisor to Company, together with its supporting staff,
which operational advisor and supporting staff are satisfactory to
Agents; provided that FTI Consulting, Inc. shall be deemed
satisfactory to Agents.”
“‘
Second Amendment ’ means the Second Amendment to
Credit and Guaranty Agreement, dated as of February 14, 2008,
by and among the Credit Parties, the Lenders and the
Agents.”
“‘
Second Amendment Effective Date ’ has the meaning
ascribed to the term ‘Amendment Effective Date’ in the
Second Amendment.”
“‘
Second Amendment Fee Letter ’ means the letter
agreement dated as of the Second Amendment Effective Date between
Company and Administrative Agent.”
“‘
Specified Deposit Account ’ as defined in
Section 6.17.”
“‘
Third Amendment ’ means an amendment to this Agreement
in form and substance satisfactory to the Agents and the Credit
Parties, which may take the form of an amended and restated credit
agreement, and which shall include, but not be limited to, a
covenant
requiring compliance with the Borrowing Base and certain excess
Availability requirements, which covenant shall be satisfactory to
Administrative Agent.”
(b)
Section 1.1 of the Credit Agreement is hereby amended by
amending and restating the definition of the term “Applicable
Margin” contained therein to read in its entirety as
follows:
“‘
Applicable Margin ” means (i) with respect to
LIBOR Rate Loans, a percentage, per annum, equal to nine percent
(9.0%); and (ii) with respect to Base Rate Loans, a
percentage, per annum, equal to eight percent (8.0%).”
(c)
Section 1.1 of the Credit Agreement is hereby amended by
adding the phrase “Second Amendment Fee Letter,”
immediately following the phrase “Fee Letter,” in the
definition of the term “Credit Documents” contained
therein.
(d)
Section 2.2(a) of the Credit Agreement is hereby amended by
adding the following sentence to the end thereof, to read in its
entirety as follows:
“Notwithstanding anything to the contrary contained herein or
in any other Credit Document, on and after the Second Amendment
Effective Date, (x) each of (i) Collateral Agent, and
(ii) Requisite Class Lenders with respect to the Class of
Lenders having Tranche A Term Loan Exposure and/or Tranche A-1 Term
Loan Exposure, shall have provided prior written consent (which
consent may be provided or withheld in each such Person’s
sole discretion) to the making of any Revolving Loans or the
issuance of any Letters of Credit hereunder, (y) each
Revolving Lender shall have provided its written consent (which
consent may be provided or withheld in the sole discretion of such
Revolving Lender) to the making of the first Revolving Loan to be
made or the first Letter of Credit to be issued (it being
understood that Revolving Loans may be made and Letters of Credit
may be issued without the prior written consent of 100% of the
Revolving Lenders, but that no Revolving Lender shall be required
to make any Revolving Loan or participate in any Letter of Credit
without the prior written consent of such Revolving Lender), and
(z) the Unused Line Fee (as defined in the Fee Letter) shall cease
to accrue until such time as the consents described in clause
(x) above (and to the extent that the consents in clause (y))
are delivered; provided , that for the avoidance of doubt,
to the extent any Revolving Lender does not provide the consent
described in clause (y) above within two (2) Business
Days following the date on which the consents described in clause
(x) above are provided, such Revolving Lender’s
Revolving Commitment shall be deemed to be terminated on such date
and the aggregate amount of the Revolving Commitments shall
be
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reduced by the
amount of such non-consenting Revolving Lender’s Revolving
Commitment.”
(e)
Section 2.7(a) of the Credit Agreement is hereby amended and
restated to read in its entirety as follows:
“(a)
Except as otherwise set forth herein, each Class of Loan shall bear
interest on the unpaid principal amount thereof from the date made
through repayment (whether by acceleration or otherwise) thereof as
follows:
(i) if a
Base Rate Loan, at the greater of (A) the Base Rate plus the
Applicable Margin, and (B) 15.5%; or
(ii) if a
LIBOR Rate Loan, at the greater of (A) the Adjusted LIBOR Rate
plus the Applicable Margin, and (B) 13.5%.”
(f)
Section 2.13(i) of the Credit Agreement is hereby amended and
restated to read in its entirety as follows:
“(i)
Proceeds from Factor . Any funds received by Borrowing Base
Agent from (i) Factor, pursuant to the Factoring Agreement, or
(ii) in connection with any receivables management agreement
or other similar arrangement that Credit Parties may enter into
from time to time, shall be applied to reduce the Revolving Loans
on a daily basis; provided , that if an Event of Default
shall have occurred and be continuing, such funds shall be applied
pursuant to Section 2.15(h); provided further ,
that (x) prior to the effective date of the Third Amendment,
if no Revolving Loans are outstanding Borrowing Base Agent shall
retain such funds on behalf of Collateral Agent until such time as
Collateral Agent instructs Borrowing Base Agent to transfer all or
a portion of such funds to an account designated by Collateral
Agent, whereupon Borrowing Base Agent agrees to transfer such funds
in accordance with the instructions provided by Collateral Agent
(it being understood and agreed by each Credit Party, each Lender
and each Agent that Collateral Agent shall be entitled to apply
such funds to the Obligations or to retain such funds as cash
collateral or to release such funds to the Credit Parties in its
sole discretion) and (y) after the effective date of the Third
Amendment, all such funds shall be applied in accordance with the
terms of the Third Amendment.”
(g)
Section 2.13 of the Credit Agreement is hereby amended by
adding the following new section to the end thereto to read in its
entirety as follows:
“(k) On
February 19, 2008, the Company shall be required to prepay the
Term Loans in an amount sufficient to cause the
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principal
amount of the Term Loans to be not more than an amount equal to (i)
$120,000,000 minus (ii) an amount up to the amount of any
principal payments made on or after the Second Amendment Effective
Date (other than certain payments that Collateral Agent and Company
have agreed to exclude from such calculation), such prepayment to
be made together with the Make-Whole Amount as required pursuant to
the terms of the Fee Letter (it being understood that on the date
on which the Third Amendment becomes effective, the Lenders having
Tranche A Term Loan Exposure and Tranche A-1 Term Loan Exposure
will provide a revolving facility to the Company in the aggregate
principal amount of $20,000,000, subject to the terms and
conditions contained in the Third Amendment).”
(h)
Section 5.1(a) of the Credit Agreement is hereby amended and
restated to read in its entirety as follows:
“(a)
Monthly Reports . As soon as available, and in any event
within thirty (30) days after the end of each month (or in the
case of reports required to be delivered between the Second
Amendment Effective Date and the date that is 180 days
following the Second Amendment Effective Date, for any month that
is also the end of a quarter, within forty-five (45) days
after the end of such month), the consolidated and consolidating
balance sheet of Company and its Subsidiaries as at the end of such
month and the related consolidated (and with respect to statements
of income, consolidating) statements of income, stockholders’
equity and cash flows of Company and its Subsidiaries for such
month and for the period from the beginning of the then current
Fiscal Year to the end of such month, setting forth in each case in
comparative form the corresponding figures for the corresponding
periods of the previous Fiscal Year (commencing with the comparison
of the 2009 Fiscal Year to the 2008 Fiscal Year of the Company and
its Subsidiaries) and the corresponding figures from the Financial
Plan for the current Fiscal Year, all in reasonable detail,
together with a Financial Officer Certification and a Narrative
Report with respect thereto and any other operating reports
prepared by management for such period.”
(i)
Section 5.1(u)(D) of the Credit Agreement is hereby amended
and restated in its entirety as follows:
“(D)
provide the Administrative Agent and its third party consultants
within two (2) Business Days of a request by the
Administrative Agent or such third party consultants such other
information and data with respect to Company or any of its
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Subsidiaries as
from time to time may be reasonably requested by Administrative
Agent or such third party consultant.”
(j)
Section 5.1 of the Credit Agreement is hereby amended by
adding the following new clauses to the end thereof to read in
their entirety as follows:
“(v)
Reconciliations with Budget . At all times on and after
February 19, 2008, on Wednesday of each week, in each case,
after review and approval of the Operational Advisor and in form
and substance satisfactory to the Administrative Agent provide
(i) a reconciliation of the actual cash receipts,
disbursements, net cash, and Availability of Credit Parties for the
most recently-ended week (on a weekly and cumulative basis) to the
amount set forth in each budgeted line item in the Budget for such
week (and on a cumulative basis), (ii) a narrative detailing
any discrepancies between the actual results for such week (and on
a cumulative basis) and the Budget for such week (and on a
cumulative basis), and (iii) an outline of actions to be taken
by Credit Parties to eliminate any adverse discrepancies, if any,
and to return to compliance with the Budget.”
(w) Weekly
Cash Reports . At all times on and after February 19,
2008, on Wednesday of each week (or, more frequently if so
requested by Administrative Agent), a report which has been
reviewed and approved by the Operational Advisor, and is in form
and substance satisfactory to Administrative Agent, identifying
(i) the funds received into and disbursed from each Deposit
Account maintained by any Credit Party during the immediately
preceding week, and (ii) the total amount of funds on deposit
in each such Deposit Account as of the last Business Day of such
immediately preceding week.”
(k)
Section 5.6 of the Credit Agreement is hereby amended and
restated to read in its entirety as follows:
“ 5.6
Books and Records; Inspections . Each Credit Party will, and
will cause each of its Subsidiaries to, (a) keep adequate
books of record and accounts in which full, true and correct
entries are made of all dealings and transactions in relation to
its business and activities and (b) permit any representatives
designated by Administrative Agent or any Lender (including
employees of Administrative Agent, any Lender or any consultants,
auditors, accountants, lawyers and appraisers retained by
Administrative Agent) to visit and inspect any of the properties of
any Credit Party and any of its respective Subsidiaries, to conduct
audits, valuations and/or field examinations of any Credit Party
and any of its respective Subsidiaries, to inspect, copy and take
extracts from its
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and their
financial and accounting records, and to discuss its and their
affairs, finances and accounts with its and their officers and
independent accountants, auditors and advisors, in each case,
promptly upon the request of Collateral Agent (and in any event,
not less than one Business Day following any such request) and as
often as may be requested and by this provision the Credit Parties
authorize such accountants, auditors and advisors to discuss with
Administrative Agent and Lender and such representatives the
affairs, finances and accounts of Company and its Subsidiaries. The
Credit Parties agree to pay the (i) the examiner’s
out-of-pocket costs and expenses incurred in connection with all
such visits, audits, inspections, valuations and field examinations
and (ii) the costs of all visits, audits, inspections,
valuations and field examinations conducted by a third party on
behalf of the Agents, Borrowing Base Agent and the Lenders. The
Credit Parties acknowledge that Administrative Agent, after
exercising its rights of inspection, may prepare and distribute to
the Lenders certain reports pertaining to the Credit Parties and
their assets for internal use by Administrative Agent and the
Lenders. After the occurrence and during the continuance of any
Event of Default, each Credit Party shall provide Administrative
Agent and each Lender with access to its customers and suppliers.
Promptly upon the request of Collateral Agent (and in any event,
not less than one Business Day following any such request), each
Credit Party shall provide Collateral Agent (and each
representative of Collateral Agent, and all advisors, whether
retained by Agents or by one or more Credit Parties at the request
of any Agent) with access to its customers and suppliers (it being
understood that other than during the continuance of a Default or
an Event of Default, a representative of Company shall be given the
opportunity to be present for any communication with customers and
suppliers).”
(l)
Clause (b) of Section 5.15 of the Credit Agreement is
hereby amended by adding the following sentence to the end thereof
to read in its entirety as follows:
“Notwithstanding anything to the contrary contained herein or
in any other Credit Document, each Credit Party requests, and each
Lender and each Agent hereby acknowledges that (x) on the
Second Amendment Effective Date, (A) the Collateral Agent
shall direct that all funds in the Company’s Deposit Account
No. 4121652663 maintained at Wells Fargo Bank, National
Association be sent to the Collateral Agent (it being understood
that none of the funds in the Company’s Deposit Account
No. 4121652440 or 4121668487 maintained at Wells Fargo Bank,
National Association shall be sent to Collateral Agent on the
Second Amendment Effective Date), (B) the Borrowing Base
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Agent shall
transfer to Collateral Agent all funds received from Factor
pursuant to the Factoring Agreement (excluding $2,000,000, which
may remain with Factor), and all funds in Borrowing Base
Agent’s Deposit Account No. 304-670588 located at
JPMorgan Chase Bank to the Collateral Agent, and (C) all funds
received by the Collateral Agent pursuant to clauses (A) and
(B) above shall be applied as follows (except in the case of
clauses (1) and (3), to the extent previously paid):
(1) in the amount of $4,540,625 for application to the payment
of interest due and payable in respect of the Term Loans,
(2) in the amount necessary to pay the Initial Payment (as
defined in the Second Amendment Fee Letter) for application to the
Amendment Fee (as defined in the Second Amendment Fee Letter) in
accordance with the terms of the Second Amendment Fee Letter,
(3) in the amount of $254,286.71 for out of pocket expenses
incurred by the Collateral Agent, (4) in the amount necessary
to cash collateralize any Letters of Credit, if any, outstanding on
the Second Amendment Effective Date, and (5) the remainder to
repay principal of the Term Loans and the Make-Whole Amount as
required in connection with such repayment pursuant to the terms of
the Fee Letter and (y) all other funds received by Borrowing
Base Agent whether received from a Credit Party, in respect of
Collateral, or otherwise, including, from Wells Fargo Bank,
National Association and Factor pursuant to the Factoring Agreement
following the Second Amendment Date shall be retained or
transferred by Borrowing Base Agent pursuant to the terms contained
in Section 2.13(i), and (z) Collateral Agent may instruct any
financial institution maintaining a Deposit Account on behalf of
any Credit Party to transfer such funds to Collateral Agent,
whereupon Collateral Agent may transfer all or a portion of such
funds to Company, retain all or a portion of such funds as cash
collateral, and/or apply all or a portion of such funds to the
Obligations, in each case, at such times and in such amounts as
Collateral Agent may deem appropriate in its business judgment).
Following the making of the transfers described in clauses
(A) and (B) above, and the application of such funds in
accordance with the terms of clause (C) above on the Second
Amendment Effective Date, the Collateral Agent shall make an Agent
Advance to the Company in the amount of $2,730,000 (it being
understood and agreed that (1) the making of such Agent
Advance (or any other Agent Advance) or the release of any cash
collateral (whether on the Second Amendment Effective Date or on
any other occasion) shall not obligate any Agent or any Lender to
make any further Agent Advances or to release any cash collateral
to any Credit Party, and (2) the Agents and the Lenders
reserve all rights in connection with the making of any and all
Agent Advances and the
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release of any
and all cash collateral and with respect to all Defaults and Events
of Default.”
(m)
Section 5.17 of the Credit Agreement is hereby amended and
restated to read in its entirety as follows:
“ 5.17
Post Closing Matters . Company shall, and shall cause each of
the Credit Parties to, satisfy each of the following requirements
(that were originally set forth on Schedule 5.17) by the date
specified in each item below:
a. Satisfactory
evidence of the release of all Liens of record on file in the
Patent and Trademark Office in favor of Wells Fargo Foothill, Inc.
with respect to certain of the Company’s intellectual
property by not later than February 19, 2008.
b. Merger of
Syntax Corporation into Syntax Groups Corporation by not later than
February 19, 2008.
c. Pledge of
65% of the shares of each of Vivitar France S.A. and Vivitar (Asia)
Limited (Hong Kong) and delivery of stock certificate(s) evidencing
such shares by not later than February 19, 2008.
d. Either
(a) dissolve Vivitar (Europe) Limited (U.K.), or
(b) pledge 65% of the shares of Vivitar (Europe) Limited
(U.K.) and deliver stock certificate(s) evidencing such shares by
not later than February 19, 2008.
e. Dissolution
of Vivitar Japan Co., Ltd. (Japan) by not later than May 31,
2008.
f. Delivery of
liability insurance policy endorsements in favor of Collateral
Agent, in form and substance satisfactory to Collateral Agent by
not later than February 19, 2008.
g. Delivery of
Landlord Subordination Agreements in favor of the Collateral Agent
from each landlord, with respect to each lease listed on Schedule
4.13, except for such property located at 5490 Conestoga Court,
Boulder, CO 80301, by not later than February 19, 2008.
h. Delivery of
the resignations, letters of authority and undertaking and
resolutions required by Schedules 3, 4 and 5 of the Hong Kong Share
Charge by not later than February 19, 2008.”
(n)
Section 5.18 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
“ 5.18
Key Man Insurance . Commencing on February 19, 2008,
Company shall maintain with one or more responsible insurance
8
companies
“key man” life insurance with respect to James Ching
Hua Li (or any individual who may replace him is his capacity as an
officer of the Company) in the amount of (i) at least
$10,000,000 by the Second Amendment Effective Date, and
(ii) such other amount that is reasonably acceptable to the
Collateral Agent (up to $25,000,000 in the aggregate) that can be
obtained through use of the Company’s reasonable best efforts
by March 15, 2008, in each case, pursuant to policies
reasonably satisfactory to the Collateral Agent and with proceeds
payable to Collateral Agent, pursuant to collateral assignments of
life insurance policies, in form and substance acceptable to
Collateral Agent.
(o)
Section 5.20 of the Credit Agreement is hereby amended and
restated to read in its entirety as follows:
“ 5.20
Projections . By n
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