Exhibit 99.1
AMENDMENT
NO. 8 AND WAIVER dated as of March 10, 2005 (this
“Amendment”), to the Credit Agreement dated as of
June 28, 1999, as amended and restated as of July 21,
1999, as amended (the “Credit Agreement”), among
Knowles Electronics Holdings, Inc., formerly known as Knowles
Electronics, Inc., a Delaware corporation (the “Parent
Borrower”); the financial institutions party thereto as
Lenders (the “Lenders”); JPMorgan Chase Bank, N.A., as
successor to The Chase Manhattan Bank, as administrative agent (in
such capacity, the “Administrative Agent”) and Morgan
Stanley Senior Funding, Inc., as Syndication Agent.
A. The
Lenders and the Issuing Bank have extended credit to the Parent
Borrower, and have agreed to extend credit to the Parent Borrower,
in each case pursuant to the terms and subject to the conditions
set forth in the Credit Agreement.
B. The
Parent Borrower has requested that the Required Lenders agree to
amend and waive certain provisions of the Credit Agreement as set
forth herein. The Required Lenders are willing to agree to such
amendments and waivers pursuant to the terms and subject to the
conditions set forth herein.
C. Capitalized
terms used but not defined herein have the meanings assigned to
them in the Credit Agreement as amended and waived hereby.
Accordingly,
in consideration of the mutual agreements herein contained and
other good and valuable consideration, the sufficiency and receipt
of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION
1. Amendments. The Credit Agreement is hereby amended as
follows:
(a) Section 6.01
of the Credit Agreement is hereby amended by deleting the amount
“$10,000,000” appearing in clause (a)(xi) thereof and
substituting in lieu thereof the amount
“$20,000,000”.
(b) Section 6.13
of the Credit Agreement is hereby amended by deleting the table set
forth therein and substituting in lieu thereof the following:
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Ratio |
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December 31,
2004 — December 30, 2005
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7.00:1.00 |
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December 31,
2005 — March 30, 2006
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6.75:1.00 |
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March 31,
2006 — December 30, 2006
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6.50:1.00 |
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December 31,
2006 and thereafter
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6.00:1.00 |
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SECTION
2. Waivers. (a) The undersigned Lenders hereby waive
compliance by the Parent Borrower with the provisions of the Credit
Agreement and the other Loan Documents, including without
limitation Section 5 of the Pledge Agreement,
Section 6.08(a) of the Credit Agreement and Section 6.11
of the Credit Agreement, solely to the extent necessary (i) to
permit a reduction of capital of Knowles Electronics Taiwan Ltd.
(“KET”) (in an amount not to exceed the U.S. dollar
equivalent of $3,500,000) effected ratably (a “KET Capital
Reduction”, the percentage by which the total outstanding
capital of KET is so reduced, the “Reduced
Percentage”), provided that KET is a wholly owned Subsidiary
of the Parent Borrower and (ii) to permit the Parent Borrower
and/or its wholly owned Subsidiaries to use the proceeds of a KET
Capital Reduction for general working capital.
(b) The
undersigned Lenders acknowledge that simultaneously with any KET
Capital Reduction, (i) the number of shares of KET capital
stock that are Pledged Stock (as defined in the Pledge Agreement)
equal to the Reduction Percentage multiplied by the total number of
shares of KET capital stock that are Pledged Stock shall be
released from the pledge created by the Pledge Agreement for
cancellation pursuant to the KET Capital Reduction (and the Parent
Borrower hereby agrees that the remaining shares of KET capital
stock that are Pledged Stock shall remain subject to such pledge)
and
