0001104659-14-073217.txt : 20141023 0001104659-14-073217.hdr.sgml : 20141023 20141023083910 ACCESSION NUMBER: 0001104659-14-073217 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 17 CONFORMED PERIOD OF REPORT: 20141017 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20141023 DATE AS OF CHANGE: 20141023 FILER: COMPANY DATA: COMPANY CONFORMED NAME: UniTek Global Services, Inc. CENTRAL INDEX KEY: 0000826773 STANDARD INDUSTRIAL CLASSIFICATION: RADIO TELEPHONE COMMUNICATIONS [4812] IRS NUMBER: 752233445 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-34867 FILM NUMBER: 141168857 BUSINESS ADDRESS: STREET 1: 1777 SENTRY PARKWAY WEST STREET 2: GWYNEDD HALL, SUITE 302 CITY: BLUE BELL STATE: PA ZIP: 19422 BUSINESS PHONE: 267-464-1700 MAIL ADDRESS: STREET 1: 1777 SENTRY PARKWAY WEST STREET 2: GWYNEDD HALL, SUITE 302 CITY: BLUE BELL STATE: PA ZIP: 19422 FORMER COMPANY: FORMER CONFORMED NAME: BERLINER COMMUNICATIONS INC DATE OF NAME CHANGE: 20050919 FORMER COMPANY: FORMER CONFORMED NAME: NOVO NETWORKS INC DATE OF NAME CHANGE: 20010104 FORMER COMPANY: FORMER CONFORMED NAME: EVENTURES GROUP INC DATE OF NAME CHANGE: 19990902 8-K 1 a14-22689_18k.htm 8-K

 

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 


 

FORM 8-K

 

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported):  October 17, 2014

 

UniTek Global Services, Inc.

(Exact Name of Registrant as Specified in Charter)

 

Delaware
(State or Other Jurisdiction
of Incorporation)

 

000-34867
(Commission File Number)

 

75-2233445
(IRS Employer Identification No.)

 

1777 Sentry Parkway West, Blue Bell, PA
(Address of Principal Executive Offices)

 

19422
(Zip Code)

 

Registrant’s telephone number, including area code:  (267) 464-1700

 

Not applicable
(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

o                                    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o                                    Soliciting material pursuant to Rule 14a-12(b) under the Exchange Act (17 CFR 240.14a-12(b))

 

o                                    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o                                    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 



 

Item 1.01                                           Entry into a Material Definitive Agreement.

 

On October 17, 2014, UniTek Global Services, Inc. (the “Company”) announced that it has entered into a plan support agreement (the “Plan Support Agreement”) with: (i) its U.S. subsidiaries, including DirectSAT USA, Inc. (“DirectSAT”) (collectively with the Company, the “Debtors”); (ii) Apollo Investment Corporation (“Apollo”), as agent for the lenders under the ABL Credit Agreement (as defined below); (iii) the undersigned lenders under the ABL Credit Agreement (the “ABL Consenting Lenders”); (iv) the undersigned lenders under the Term Loan Credit Agreement (as defined below); and (v) DIRECTV, LLC (“DIRECTV” and collectively with the parties listed in clauses (i) through (iv) above, the “Plan Support Parties”), regarding a voluntary Chapter 11 pre-packaged plan of reorganization of the Debtors (the “Plan”).

 

The Plan Support Parties represent 100% of the ABL Lenders (as defined below) and Term Lenders (as defined below) holding 59% of the indebtedness under the Term Loan Credit Agreement.

 

The following description of the Plan Support Agreement, including the term sheets attached thereto, is qualified in its entirety by reference to the Plan Support Agreement and related exhibits attached as Exhibit 99.1 to this Current Report on Form 8-K.  Certain capitalized terms used but not defined in this Current Report on Form 8-K have the meanings set forth in the Plan Support Agreement.

 

The “Term Loan Credit Agreement” means that certain Credit Agreement, dated as of April 15, 2011 and as amended since such date, among the Company, the several banks and other financial institutions or entities from time to time parties thereto (collectively, the “Term Lenders”), and Cerberus Business Finance, LLC, as administrative agent.  The “ABL Credit Agreement” means that certain Revolving Credit and Security Agreement, dated as of July 10, 2013 and as amended since such date, among the Debtors, the several banks and other financial institutions or entities from time to time parties thereto (collectively, the “ABL Lenders”), and Apollo, as agent.

 

Pursuant to the Plan Support Agreement, and subject to certain conditions contained therein and generally described below, each of the Plan Support Parties has agreed, among other things, to vote (in the case of Plan Support Parties entitled to so vote) in favor of and to generally support confirmation of the Plan by the United States Bankruptcy Court for the District of Delaware consistent with the terms and conditions set forth in the term sheets attached to the Plan Support Agreement and the Debtors have agreed to use their reasonable best efforts to support and complete the transactions contemplated by such term sheets, including seeking confirmation of the Plan consistent therewith.

 

In addition, DIRECTV has agreed that, while the Plan Support Agreement is effective, it shall not issue a termination for convenience notice under its 2012 Home Services Provider Agreement, dated as of October 15, 2012, with the Company (the “HSP Agreement”), so long as certain conditions, including the following, are met:

 

·                  DirectSAT maintains adequate funding to enable it to perform its obligations under the HSP Agreement and satisfy its other financial obligations as they come due in the ordinary course of business, with such funding measured based on the Debtors’ unrestricted cash and cash equivalents, marketable securities and availability under their various credit facilities, in an amount of at least $10 million;

·                  DirectSAT remains current (i.e., within applicable terms) on all undisputed payments to vendors, employees and former employees (including severance) and provides projections to DIRECTV, based upon reasonable assumptions of DirectSAT’s management, indicating that it will continue to

 

2



 

be current (i.e., within applicable terms), except to the extent DirectSAT may be prohibited from doing so pursuant to any provision of the Bankruptcy Code after the commencement of the Chapter 11 Cases or pursuant to a budget in connection with the DIP Facility or the Debtors’ use of cash collateral;

·                  Certain DirectSAT personnel remain employed by DirectSAT, or are replaced with the approval of DIRECTV in its reasonable discretion;

·                  Debtors shall give DIRECTV notice of certain litigation commenced against them, if any;

·                  DirectSAT operational performance under the HSP Agreement remains at substantially the same level of performance; and

·                  DirectSAT provides DIRECTV with certain reporting and projections and keeps DIRECTV updated as to certain matters.

 

The Plan Support Agreement is subject to certain termination events, including:

 

·                  solicitation of votes on the Plan is not commenced on or before October 21, 2014;

·                  the Chapter 11 Cases are not commenced on or before November 11, 2014;

·                  the Bankruptcy Court shall not have entered the Confirmation Order on or before the date that is 66 days from the Petition Date;

·                  the Bankruptcy Court otherwise grants relief that would have a material adverse effect on the Restructuring Transactions;

·                  the Effective Date of the Plan shall not have occurred on or before January 21, 2015;

·                  breach by any Plan Support Party of any of the representations, warranties, or covenants of such breaching Plan Support Party as set forth in the Plan Support Agreement that would have a material adverse effect on the Restructuring Transactions, subject to notice and cure where applicable;

·                  any of the Plan Restructuring Documents shall have been modified without consent in a way that is materially adverse to any Plan Support Party;

·                  the withdrawal, amendment, modification of, or the filing of a pleading by the Debtors seeking to amend or modify the Plan or any other Restructuring Transaction document materially inconsistent with the Plan Support Agreement;

·                  the filing by the Debtors of any motion or other request for relief seeking (i) to voluntarily dismiss any of the Chapter 11 Cases, (ii) to convert any of the Chapter 11 Cases to Chapter 7, or (iii) to appoint a trustee or an examiner with expanded powers in any of the Chapter 11 Cases;

·                  the entry of an order by the Bankruptcy Court (i) dismissing any of the Chapter 11 Cases, (ii) converting any of the Chapter 11 Cases to a case under Chapter 7 of the Bankruptcy Code, or (iii) appointing a trustee or an examiner with expanded powers in any of the Chapter 11 Cases;

·                  prior to the Petition Date, an involuntary bankruptcy case is commenced against any of the Debtors, which is not dismissed or withdrawn within 7 days;

·                  the Bankruptcy Court grants relief terminating, annulling, or modifying the automatic stay (as set forth in section 362 of the Bankruptcy Code), with regard to either any material assets of any Debtor other than DirectSAT or any material assets of DirectSAT, without the prior written consent of certain of the Plan Support Parties;

·                  any court of competent jurisdiction or other competent governmental or regulatory authority shall have issued an order making illegal or otherwise restricting, preventing, or prohibiting the Restructuring Transactions in a way that cannot be reasonably remedied; and

·                  on or before the earlier of November 10, 2014 or the commencement of the Chapter 11 Cases, the Company and certain of its employees shall not have entered into an amended and restated version of the Unitek Global Services Inc. Change in Control Severance Plan (the “Severance Plan”) on

 

3



 

terms and conditions acceptable to the Required ABL Facility Consenting Lenders and the Required Term Loan Consenting Lenders in their respective sole discretion.

 

As agreed to in the Plan Support Agreement, the material terms of the Plan include, among other things, that upon the effective date of the Plan:

 

·                  Subject to the creation of the New Holdco Debt facility as described below, the holders will receive as follows:

·                  Each holder of an allowed claim on account of the ABL Credit Agreement, other than the Last Out Loans (as defined in the ABL Credit Agreement) (the “Senior ABL Claims”), shall receive new first lien debt of the Company (“New First Lien Debt”) in a face amount equal to the total amount of such holder’s claim under the ABL Facility Credit Agreement.  The Senior ABL Claims shall be allowed in the aggregate amount of $38.7 million.

·                  Each holder of an allowed claim on account of the Last Out Loans shall receive New First Lien Debt in a face amount equal to the total amount of such holder’s junior claims under the ABL Credit Agreement. These claims shall be allowed in the aggregate amount of $8.7 million.

·                  Each holder of an allowed claim on account of the Term Loan Credit Agreement (collectively, the “Term Loan Claims”) shall receive its pro rata share of:  (i) New First Lien Debt in a face amount equal to the total amount of the Senior ABL Facility Claims, and (ii) 100% of the common stock of the reorganized Company, subject to dilution by a management incentive equity plan.

·                  To the extent the amount of the New First Lien Debt described above, plus the funded amount under the DIP Facility, plus the funded revolving commitment solely to fund operations of DirectSAT, plus all funded amounts under any outstanding letters of credit under the ABL Facility (collectively, the “Total Debt”) is less than $120 million, the New First Lien Debt facility shall be in an amount equal to the Total Debt.  If the Total Debt is greater than $120 million, the New First Lien Debt facility shall be in an amount equal to $115 million.

·                  If the Total Debt is less than $120 million, the New Holdco Debt facility shall be $0, and if the Total Debt is greater than $120 million, the New Holdco Debt facility shall be in an amount equal to the difference between the Total Debt and $115 million.

 

The holders of the Company’s common stock shall receive no distribution, and their interests shall be discharged, canceled, released, and expunged on the Effective Date.

 

A copy of the Company’s press release announcing, among other things, the Plan Support Agreement is attached as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated herein by reference.

 

As disclosed in its Current Reports on Form 8-K filed on August 13, September 4, September 24, October 3 and October 10, 2014, the Company previously entered into forbearance agreements, dated as of August 8, 2014, with the Company’s lenders under the Term Loan Credit Agreement and ABL Credit Agreement, respectively, which forbearance agreements were amended on September 3, September 23, October 2 and October 9, 2014 to extend through October 23, 2014 the standstill periods contained in such agreements.

 

4



 

Item 5.02                                           Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

On October 19, 2014, the Board of Directors approved reductions of the amounts that the participants in the Severance Plan would receive upon becoming entitled to payment under the Severance Plan.  The changes are to be effective upon the execution by each participant thereunder of an acknowledgement of and agreement to such modifications, such agreement to include a release of any claims against the Company under the Severance Plan, and the approval of the Plan by the Bankruptcy Court.  Pursuant to such reductions, the severance benefits payable under the Severance Plan would be comprised of the following: Mr. Romanella would be entitled to receive a lump sum payment equal to one times his base salary, while the other participants, including Daniel Yannantuono, President of DirectSAT, and Donald W. Gately, the Company’s Chief Operating Officer, would be entitled to receive (i) a lump sum payment equal to 0.75 times their base salary; and (ii) a prorated portion of their target bonus for the year in which they were terminated, not to be less than one-quarter of such target bonus.  Other than the changes to the severance benefits, all other terms of the Severance Plan would remain unchanged.

 

Item 9.01.                                        Financial Statements and Exhibits.

 

(d)           Exhibits

 

Exhibit No.

 

Exhibit Title

99.1

 

Plan Support Agreement, dated as of October 17, 2014.

99.2

 

Press Release of UniTek Global Services, Inc., dated October 21, 2014.

99.3

 

Second Amendment to ABL Credit Agreement, dated as of August 13, 2014

99.4

 

Fifth Amendment to Term Loan Credit Agreement, dated as of August 13, 2014

99.5

 

Forbearance Agreement, dated as of August 8, 2014, to Term Loan Credit Agreement

99.6

 

Forbearance Agreement, dated as of August 8, 2014, to ABL Credit Agreement

99.7

 

First Amendment to Term Loan Credit Forbearance Agreement, dated as of September 3, 2014

99.8

 

First Amendment to ABL Facility Forbearance Agreement, dated as of September 3, 2014

99.9

 

Second Amendment to Term Loan Credit Forbearance Agreement, dated as of September 23, 2014

99.10

 

Second Amendment to ABL Facility Forbearance Agreement, dated as of September 23, 2014

99.11

 

Third Amendment to Term Loan Credit Forbearance Agreement, dated as of October 2, 2014

99.12

 

Third Amendment to ABL Facility Forbearance Agreement, dated as of October 2, 2014

99.13

 

Fourth Amendment to Term Loan Credit Forbearance Agreement, dated as of October 9, 2014

99.14

 

Fourth Amendment to ABL Facility Forbearance Agreement, dated as of October 9, 2014

99.15

 

Subordination Agreement, dated as of August 13, 2014

 

5



 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

UNITEK GLOBAL SERVICES, INC.

 

 

 

 

 

 

Date: October 23, 2014

By:

/s/ Andrew J. Herning

 

 

Andrew J. Herning

 

 

Chief Financial Officer

 

6



 

EXHIBIT LIST

 

Exhibit No.

 

Exhibit Title

99.1

 

Plan Support Agreement, dated as of October 17, 2014.

99.2

 

Press Release of UniTek Global Services, Inc., dated October 21, 2014.

99.3

 

Second Amendment to ABL Credit Agreement, dated as of August 13, 2014

99.4

 

Fifth Amendment to Term Loan Credit Agreement, dated as of August 13, 2014

99.5

 

Forbearance Agreement, dated as of August 8, 2014, to Term Loan Credit Agreement

99.6

 

Forbearance Agreement, dated as of August 8, 2014, to ABL Credit Agreement

99.7

 

First Amendment to Term Loan Credit Forbearance Agreement, dated as of September 3, 2014

99.8

 

First Amendment to ABL Facility Forbearance Agreement, dated as of September 3, 2014

99.9

 

Second Amendment to Term Loan Credit Forbearance Agreement, dated as of September 23, 2014

99.10

 

Second Amendment to ABL Facility Forbearance Agreement, dated as of September 23, 2014

99.11

 

Third Amendment to Term Loan Credit Forbearance Agreement, dated as of October 2, 2014

99.12

 

Third Amendment to ABL Facility Forbearance Agreement, dated as of October 2, 2014

99.13

 

Fourth Amendment to Term Loan Credit Forbearance Agreement, dated as of October 9, 2014

99.14

 

Fourth Amendment to ABL Facility Forbearance Agreement, dated as of October 9, 2014

99.15

 

Subordination Agreement, dated as of August 13, 2014

 

7


EX-99.1 2 a14-22689_1ex99d1.htm EX-99.1

Exhibit 99.1

 

PLAN SUPPORT AGREEMENT

 

This Plan Support Agreement (the “PSA”), dated as of October17, 2014, and effective as of the date on which all parties to this PSA have executed this PSA (the “PSA Effective Date”), is entered into by and among the following parties:

 

i.                  UniTek Global Services, Inc. (“UniTek”), UniTek Holdings, Inc., UniTek Midco, Inc., UniTek Acquisition, Inc., Nex-link USA, UniTek USA, LLC, Pinnacle Wireless USA, Inc., DirectSAT USA, Inc. (“DirectSAT”), FTS USA, LLC, and Advanced Communications USA, Inc. (collectively, the “Debtors”);

 

ii.               Apollo Investment Corporation, as agent for the ABL Facility Lenders(1)  under the ABL Facility Credit Agreement (the “ABL Facility Agent”);

 

iii.            the undersigned ABL Facility Lenders (the “ABL Facility Consenting Lenders”);

 

iv.           the undersigned Term Loan Lenders (the “Term Loan Consenting Lenders” and collectively with the ABL Facility Consenting Lenders, the “Consenting Lenders”); and

 

v.              DIRECTV, LLC (“DIRECTV” and collectively with the parties listed in paragraphs (i) through (iv), the “Plan Support Parties”).

 

RECITALS

 

WHEREAS, the Debtors, the ABL Facility Agent and the Consenting Lenders have negotiated certain restructuring and recapitalization transactions with respect to the Debtors’ capital structure, including the Debtors’ respective obligations under the ABL Facility Credit Agreement and the Term Loan Credit Agreement.

 

WHEREAS, the Debtors intend to commence voluntary reorganization cases (the “Chapter 11 Cases”) under chapter 11 of title 11 of the United States Code, 11 U.S.C. §§101-1532 (the “Bankruptcy Code”), in the United States Bankruptcy Court for the District of Delaware (such court, the “Bankruptcy Court”) to effect restructuring and recapitalization transactions through a prepackaged chapter 11 plan of reorganization consistent with the Plan of Reorganization Term Sheet (the “Plan Term Sheet”) attached as Exhibit A hereto and the New First Lien Debt Term Sheet (the “Debt Term Sheet”) attached as Exhibit B hereto (as may be amended, supplemented or revised from time to time in accordance with this PSA, the “Plan”),

 


(1)         The Plan Term Sheet and the Debt Term Sheet are collectively referred to as the “Term Sheets”.  All capitalized terms used but not defined herein shall have the meanings ascribed to them in the Term Sheets.

 



 

all of which shall be on the terms and conditions described in this PSA (such transactions, the “Restructuring Transactions”).

 

WHEREAS, DIRECTV and DirectSAT are parties to that certain 2012 Homes Services Provider Agreement dated as of October 15, 2012, as amended (the “HSP Agreement”), and each party to the HSP Agreement has the right to terminate the HSP Agreement without cause by giving the other party at least 180 days prior written notice (an “HSP Termination Notice”).

 

NOW, THEREFORE, in consideration of the covenants and agreements contained herein, and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each of the Plan Support Parties, intending to be legally bound hereby, agrees as follows:

 

AGREEMENT

 

Definitive Documentation

 

1.                                      The definitive documentation and agreements governing the Restructuring Transactions (collectively, the “Plan Restructuring Documents”) shall consist of: (a) the Plan (and all exhibits thereto); (b) the Confirmation Order and all pleadings in support of confirmation of the Plan; (c) the Disclosure Statement and the other solicitation materials in respect of the Plan (such materials, the “Solicitation Materials”); (d) the combined motion for entry of an order (i) scheduling a combined hearing on approval of the Disclosure Statement and confirmation of the Plan, (ii) establishing procedures for objecting to the Disclosure Statement and Plan, (iii) approving the Solicitation Materials, and (iv) granting related relief; (e) the DIP Facility Credit Agreement and related documents and the interim and final orders approving same; (f) the motion for approval of or authority to assume the PSA; and (g) all other documents that will comprise the Plan Supplement.  The Plan Restructuring Documents remain subject to negotiations and completion and shall, upon completion, contain terms, conditions, representations, warranties and covenants consistent with the terms of this PSA and shall otherwise be in form and substance reasonably acceptable to each of the Debtors, the ABL Facility Agent and the Term Loan Consenting Lenders holding at least 50.1% in principal amount of the aggregate amount of the Term Loan Facility Claims held by the Term Loan Consenting Lenders (the “Required Term Loan Consenting Lenders”), and the Plan shall be in form and substance reasonably acceptable to each of the Plan Support Parties.

 

Commitments Regarding the Restructuring Transactions

 

2.                                      During the period beginning on the PSA Effective Date and ending on a Termination Date (as defined herein) (such period, the “Effective Period”):

 

(a)                                 each of the Consenting Lenders that is entitled to accept or reject the Plan pursuant to its terms agrees that it shall, subject to the receipt by such Consenting Lender of the Disclosure Statement and the Solicitation Materials (x) vote each of its Claims to accept the Plan by delivering its duly executed and completed Ballot accepting the Plan on a timely basis following commencement of the solicitation and its actual receipt of the Solicitation Materials

 

2



 

and Ballot; and (y) not change or withdraw such vote (or cause such vote to be changed or withdrawn);

 

(b)                                 each Plan Support Party agrees that it shall not directly or indirectly (x) object to, delay, impede, or take any other action to interfere with the acceptance, implementation, or consummation of the Restructuring Transactions, (y) propose, file, support or vote for any restructuring, workout, plan of arrangement, or plan of reorganization for the Debtors other than the Restructuring Transactions, or (z) in the case of the Term Loan Consenting Lenders, direct or authorize Cerberus Business Finance, LLC, in its capacity as successor administrative agent under the Term Loan Credit Agreement (the “Term Loan Agent” and collectively with the ABL Facility Agent, the “Agents”) to take any action contemplated in (x) or (y) of this paragraph;

 

(c)                                  upon the commencement by the Debtors of the Chapter 11 Cases, the automatic stay under the Bankruptcy Code shall be invoked, and each of the ABL Facility Agent and the Consenting Lenders agrees that, except to the extent expressly contemplated under the Plan, this PSA and the Plan Restructuring Documents, it will not, and, with respect to the Consenting Lenders, will not direct the ABL Facility Agent or the Term Loan Agent, as applicable to, exercise any right or remedy for the enforcement, collection, or recovery of any of the Claims against the Debtors, and any other claims against any direct or indirect subsidiaries of the Debtors that are not Debtors; provided, however, that notwithstanding anything to the contrary in this PSA, nothing shall limit the rights and remedies of any Consenting Lender under the DIP Facility Credit Agreement or related documents or orders;

 

(d)                                 each Plan Support Party agrees to support and take all necessary steps to effectuate the Restructuring Transactions, including timely providing all requisite consents and approvals as required in order for the Debtors to commence the Chapter 11 Cases;

 

(e)                                  the Debtors shall (i) seek Bankruptcy Court approval of or authority to assume this PSA on a first-day motion basis; (ii) take all steps necessary or desirable to obtain orders of the Bankruptcy Court in respect of the Restructuring Transactions, including obtaining entry of the Confirmation Order; (iii) support and take all steps reasonably necessary or desirable to consummate the Restructuring Transactions in accordance with this PSA, including the preparation and filing within the time-frame provided herein of the Plan Restructuring Documents; (iv) execute and deliver any other required agreements to effectuate and consummate the Restructuring Transactions; (v) obtain any and all required regulatory and/or third-party approvals for the Restructuring Transactions; (vi) complete the Restructuring Transactions within the time-frame provided herein; (vii) operate their business in the ordinary course, taking into account the Restructuring Transactions; and (viii) not object to, delay, impede or take any other action this is materially inconsistent with, or is intended or is likely to interfere in a material way with the acceptance or implementation of the Restructuring Transactions; and

 

(f)                                   the Plan shall provide that the Debtors will provide DIRECTV with a monthly report regarding the Shared Services Agreement with the following information, (i) the total aggregate charges under the Shared Services Agreement; (ii) how the charges under the Shared Services Agreement were allocated among the DirectSAT Business and the Other

 

3



 

Business; and (iii) the method of ascribing the charges to the DirectSAT Business and the Other Business.

 

3.                                      Notwithstanding anything to the contrary herein, nothing in this PSA shall require the board of directors, board of managers, or similar governing body of a Debtor to take any action, or refrain from taking any action, with respect to the Restructuring Transactions to the extent such board of directors, board of managers, or similar governing body determines, based on the advice of counsel, that taking such action, or refraining from taking such action, as applicable, is required to comply with applicable law or its fiduciary obligations or duties under applicable law.

 

Transfers of Claims

 

4.                                      During the Effective Period, no Consenting Lender shall transfer any Claim to any person or entity that is not a Plan Support Party (a “Third-Party Transferee”); provided, however, a Consenting Lender may transfer a Claim to a Third-Party Transferee if such Third-Party Transferee agrees to be bound by this PSA in a writing in form and substance reasonably acceptable to each of the remaining Plan Support Parties. Any transfer made in violation of this paragraph shall be void ab initio. For the avoidance of doubt, the Fourth Amendment to the Term Loan Credit Agreement, effective July 28, 2014, remains in full force and effect including any restrictions or prohibitions on the Term Loan Consenting Lenders’ ability to transfer any Claims, including Term Loan Claims.  This Agreement shall in no way be construed to preclude the Consenting Lenders from acquiring additional Claims; provided, however, that (i) any Consenting Lender that acquires additional Claims, as applicable, after the PSA Effective Date shall promptly notify the Debtors of such acquisition including the amount of such acquisition and (ii) such acquired Claims shall automatically and immediately upon acquisition by a Consenting Lender, as applicable, be deemed subject to the terms of this Agreement (regardless of when or whether notice of such acquisition is given to the Debtors).

 

Representations and Warranties of Consenting Lenders

 

5.                                      Each Consenting Lender, severally, and not jointly, represents and warrants that:

 

(a)                                 it is the beneficial owner of the face amount of the Claims, or is the nominee, investment manager, or advisor for beneficial holders of the Claims, as reflected in such Consenting Lender’s signature block to this PSA, which amount each Plan Support Party understands and acknowledges is proprietary and confidential to such Consenting Lender (such Claims, with respect to each such Consenting Lender, the “Owned Claims”);

 

(b)                                 it has the full power and authority to act on behalf of, vote and consent to matters concerning the Owned Claims;

 

(c)                                  the Owned Claims are free and clear of any pledge, lien, security interest, charge, claim, equity, option, proxy, voting restriction, right of first refusal, or other limitation on disposition, transfer, or encumbrances of any kind, that would adversely affect in any way such Consenting Lender’s ability to perform any of its obligations under this PSA at the time such obligations are required to be performed; and

 

4



 

(d)                                 as of the date hereof, it has no actual knowledge of any event that, due to any fiduciary or similar duty to any other person or entity, would prevent it from taking any action required of it under this PSA.

 

Mutual Representations, Warranties, and Covenants

 

6.                                      Each of the Plan Support Parties represents, warrants, and covenants to each other Plan Support Party:

 

(a)                                 it is validly existing and in good standing under laws of the state of its organization, and this PSA is a legal, valid, and binding obligation of such Plan Support Party, enforceable against it in accordance with its terms, except as enforcement may be limited by applicable laws relating to or limiting creditors’ rights generally or by equitable principles relating to enforceability;

 

(b)                                 except as expressly provided in this PSA, the Plan Restructuring Documents or the Bankruptcy Code, no consent or approval is required by any other person or entity in order for it to effectuate the Restructuring Transactions contemplated by, and perform the respective obligations under, this PSA;

 

(c)                                  except as expressly provided in this PSA, it has all requisite corporate or other power and authority to enter into, execute, and deliver this PSA and to effectuate the Restructuring Transactions contemplated by, and perform its respective obligations under, this PSA;

 

(d)                                 except as expressly set forth herein and with respect to the Debtors’ performance of this PSA (and subject to necessary Bankruptcy Court approval and/or regulatory approvals associated with the Restructuring Transactions), the execution, delivery, and performance by it of this PSA does not, and shall not, require any registration or filing with consent or approval of, or notice to, or other action to, with or by, any federal, state, or other governmental authority or regulatory body; and

 

(e)                                  the execution, delivery, and performance of this PSA does not and shall not: (i) violate any provision of law, rules or regulations applicable to it or any of its subsidiaries in any material respect; (ii) violate its certificate of incorporation, bylaws, or other organizational documents or those of any of its subsidiaries; or (iii) conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under any contractual obligation to which it is a party, which conflict, breach or default would have a material adverse effect on the Restructuring Transactions.

 

Acknowledgement

 

7.                                      Notwithstanding any other provision herein, this PSA is not and shall not be deemed to be an offer with respect to any securities or solicitation of votes for the acceptance of a plan of reorganization for purposes of §§1125 and 1126 of the Bankruptcy Code. Any such offer or solicitation will be made only in compliance with all applicable securities laws and provisions of the Bankruptcy Code.

 

5



 

PSA Termination Events

 

8.                                      This PSA shall terminate two business days after the delivery to the Plan Support Parties, in accordance with paragraph 31 hereof, of a written notice (a “PSA Termination Event Notice”) by, as applicable: (i) the Debtors, solely with respect to section (f) hereof; (ii) DIRECTV; (iii) ABL Facility Agent; (iv) ABL Facility Consenting Lenders holding at least 50.1% in principal amount of the aggregate amount of the ABL Facility Claims held by the ABL Facility Consenting Lenders (the “Required ABL Facility Consenting Lenders”); or (v) Required Term Loan Consenting Lenders, in each case, in the exercise of their discretion, upon the occurrence of any of the following events (a “PSA Termination Event”):

 

(a)                                 the Debtors shall not have commenced solicitation of votes on the Plan on or before October 21, 2014;

 

(b)                                 the Debtors shall not have commenced the Chapter 11 Cases on or before November 11, 2014;

 

(c)                                  the Bankruptcy Court shall not have entered the Confirmation Order on or before the date that is 66 days from the Petition Date;

 

(d)                                 the Bankruptcy Court otherwise grants relief that would have a material adverse effect on the Restructuring Transactions;

 

(e)                                  the Effective Date of the Plan (“Plan Effective Date”) shall not have occurred on or before January 21, 2015;

 

(f)                                   the breach by any Plan Support Party of any of the representations, warranties, or covenants of such breaching Plan Support Party as set forth in this PSA that would have a material adverse effect on the Restructuring Transactions; provided, however, that any PSA Termination Event Notice based on this paragraph shall expressly detail any such breach and, if such breach is capable of being cured, the breaching Party shall have twenty (20) business days after receiving such PSA Termination Event Notice to cure such breach;

 

(g)                                  any of the Plan Restructuring Documents shall have been modified in a way that is materially adverse to any Plan Support Party and such Plan Support Party has not given its prior written consent to such modification;

 

(h)                                 the withdrawal, amendment, modification of, or the filing of a pleading by the Debtors seeking to amend or modify, the Plan or any other Restructuring Transaction document materially inconsistent with the PSA;

 

(i)                                     the filing by the Debtors of any motion or other request for relief seeking (i) to voluntarily dismiss any of the Chapter 11 Cases, (ii) to convert any of the Chapter 11 Cases to chapter 7, or (iii) to appoint a trustee or an examiner with expanded powers in any of the Chapter 11 Cases;

 

6



 

(j)                                    the entry of an order by the Bankruptcy Court (i) dismissing any of the Chapter 11 cases, (ii) converting any of the Chapter 11 cases to a case under Chapter 7 of the Bankruptcy Code, or (iii) appointing a trustee or an examiner with expanded powers in any of the Chapter 11 cases;

 

(k)                                 prior to the Petition Date, an involuntary bankruptcy case is commenced against any of the Debtors, which is not dismissed or withdrawn within 7 days;

 

(l)                                     the Bankruptcy Court grants relief terminating, annulling, or modifying the automatic stay (as set forth in section 362 of the Bankruptcy Code) with regard to (i) any material assets of any Debtor other than DirectSAT, without the prior written consent of the ABL Facility Agent, and the Required Term Loan Consenting Lenders or (ii) any material assets of DirectSAT, without the prior written consent of the ABL Facility Agent, the Required Term Loan Consenting Lenders, and DIRECTV.

 

(m)                             any court of competent jurisdiction or other competent governmental or regulatory authority shall have issued an order making illegal or otherwise restricting, preventing, or prohibiting the Restructuring Transactions in a way that cannot be reasonably remedied;

 

(n)                                 on or before the earlier of November 10, 2014 or the commencement of the Chapter 11 Cases, the Debtors and all Tier 1 and Tier 2 Participants under, and as defined in, that certain Unitek Global Services Inc. Change in Control Severance Plan (the “Severance Plan”) shall not have entered into an amended and restated version of the Severance Plan on terms and conditions acceptable to the Required ABL Facility Consenting Lenders and the Required Term Loan Consenting Lenders in their respective sole discretion; or

 

(o)                                 the Debtors’ exclusive right to file a plan is terminated or expires.

 

9.                                      Any PSA Termination Event may be waived and any date described in the prior paragraph may be extended by written consent of (x) the ABL Facility Agent, on behalf of itself and the ABL Facility Consenting Lenders, (y) the Required Term Loan Consenting Lenders, and (z) DIRECTV.

 

10.                               Any Debtor may terminate this PSA as to all Plan Support Parties upon five business days’ prior written notice, delivered in accordance with paragraph 30 hereof, if and when the board of directors, board of managers, or such similar governing body of any Debtor determines based on advice of counsel that proceeding with any of the Restructuring Transactions would be inconsistent with the exercise of its fiduciary duties.

 

11.                               This PSA and the obligations of all Plan Support Parties hereunder may be terminated by mutual agreement among the following: (i) each of the Debtors; (ii) DIRECTV; (iii) the ABL Facility Agent; (iv) the Required ABL Facility Consenting Lenders; and (v) the Required Term Loan Consenting Lenders.

 

12.                               This PSA shall terminate automatically without any further required action or notice on the Plan Effective Date.

 

7



 

13.                               No Plan Support Party, may terminate this PSA if such party failed to perform or comply in all material respects with the terms and conditions of this PSA, with such failure to perform or comply causing, or resulting in, the occurrence of one or more termination events specified herein, including any PSA Termination Event described in paragraph 8 hereof, provided, however, that the failure of a Plan Support Party to perform or comply in any material respects with the terms and conditions of this PSA shall be deemed waived and not prevent such Plan Support Party from terminating this PSA unless notice is given to such Plan Support Party seeking to terminate the PSA within five days of the date upon which the other Plan Support Parties obtained actual knowledge, or should have obtained actual knowledge, of such failure.  Further, the Plan Support Party shall have the opportunity to contest the existence of such a failure and to cure such a failure. The date on which termination of this PSA is effective in accordance with paragraphs 8 through 12 herein shall be referred to as a “Termination Date.” Except as set forth below, upon the occurrence of a Termination Date, this PSA shall be of no further force and effect, and each Plan Support Party shall be released from its commitments, undertakings, and agreements under or related to this PSA and shall have the rights and remedies that it would have had, had it not entered into this PSA, and shall be entitled to take all actions, whether with respect to the Restructuring Transactions or otherwise, that it would have been entitled to take had it not entered into this PSA. Upon the occurrence of a Termination Date, any and all consents or ballots tendered by the Plan Support Parties subject to such termination before a Termination Date shall be deemed, for all purposes, to be null and void from the first instance and shall not be considered or otherwise used in any manner by the Plan Support Parties in connection with the Restructuring Transactions, this PSA or otherwise.  Notwithstanding anything to the contrary in this PSA, the foregoing shall not be construed to prohibit the Debtors or any other Plan Support Party from contesting whether any such termination is in accordance with the terms of this PSA or seeking enforcement of any rights under this PSA that arose or existed before a Termination Date.

 

No Violation of the Automatic Stay

 

14.                               The automatic stay applicable under §362 of the Bankruptcy Code shall not prohibit (i) a Plan Support Party from taking any action necessary to effectuate the termination of this PSA pursuant to the terms hereof, including the delivery of a PSA Termination Event Notice, or (ii) DIRECTV from delivering a HSP Condition Notice (as defined herein).

 

DIRECTV Matters

 

15.                               Upon the occurrence of the PSA Effective Date, all HSP Termination Notices, if any, shall be automatically revoked and deemed null and void.

 

16.                               During the Effective Period, DIRECTV shall not issue an HSP Termination Notice so long as the following conditions (the “HSP Conditions”) are met:

 

(a)                                 DirectSAT maintains adequate funding to enable it to perform its obligations under the HSP Agreement and satisfy its other financial obligations as they come due in the ordinary course of business, with such funding measured based on the Debtors’ unrestricted cash and cash equivalent, marketable securities and availability under their various credit facilities, in an amount of at least $10 million;

 

8



 

(b)                                 DirectSAT remains current (i.e. within applicable terms) on all undisputed payments to vendors, employees and former employees (including severance) and provides projections to DIRECTV, based upon reasonable assumptions of DirectSAT’s management, indicating that it will continue to be current (i.e. within applicable terms), except to the extent DirectSAT may be prohibited from doing so pursuant to any provision of the Bankruptcy Code after the commencement of the Chapter 11 Cases or pursuant to a budget in connection with the DIP Facility or the Debtors’ use of cash collateral;

 

(c)                                  none of the DirectSAT personnel holding the following positions working on the DIRECTV business shall have terminated his or her employment with DirectSAT unless within 15 days after such termination DirectSAT shall have appointed as a replacement of such personnel a person or persons acceptable to DIRECTV in its reasonable discretion: (i) President; (ii) Vice President of Operations; (iii) Supervisor of Supply Chain; (iv) Supervisor of Analytics; (v) Regional Directors of Operation; and (vi) Manager of Finance.  DirectSAT shall use commercially reasonable best efforts to retain the personnel, including but not limited to technicians, necessary to perform the DIRECTV business;

 

(d)                                 Debtors shall give DIRECTV notice of any litigation commenced against them within 14 days after Debtors are served with such litigation and no new, nonfrivolous litigation, including adversary proceedings in the Chapter 11 Cases, is filed against UniTek or DirectSAT that (a) DIRECTV considers in its reasonable discretion to be reasonably likely to have a material adverse effect on the Debtors’ ability to consummate the Restructuring Transactions, taken as a whole, and (b) is not withdrawn or dismissed within 20 business days after DIRECTV has notified UniTek and DirectSAT in writing that it has provided the Plan Support Parties notice of the determination referenced in clause (a);

 

(e)                                  DirectSAT operational performance under the HSP Agreement remains at substantially the same level of performance in all DIRECTV markets as measured by the average contractual incentive/chargeback metrics over the prior rolling three month period, as determined by DIRECTV in its sole discretion.

 

(f)                                   DirectSAT provides DIRECTV with the same reporting and projections it provides to the Agents at substantially the same time as it provides such reporting and projections to the Agents;

 

(g)                                  DirectSAT, so long as requested by DIRECTV, holds bi-weekly conference calls with DIRECTV to review DirectSAT’s financial condition; and

 

(h)                                 DIRECTV receives full copies of any UniTek or DirectSAT financing documentation within three business days after the execution of such documentation.

 

17.                               Notwithstanding anything in this PSA,

 

(a)                                 DIRECTV may exercise its rights to terminate the HSP Agreement with cause or based on a material noncurable breach according to the terms of the HSP Agreement other than a breach of a kind specified in section 365(b)(2) (A), (B) or (D).of the Bankruptcy Code.

 

9



 

(b)                                 If a Termination Date (as defined herein) (other than the occurrence of the Effective Date) occurs and DIRECTV delivers, prior to the Effective Date, a notice in writing in accordance with paragraph 31 to the Debtors, the ABL Facility Agent, and the Consenting Lenders that it has elected to terminate the HSP Agreement, then the HSP Agreement shall terminate automatically on the first business day that is 180 days from the PSA Effective Date, without the requirement of an HSP Termination Notice or any other further notice or action or the necessity of obtaining relief from the stay.

 

(c)                                  If DIRECTV delivers a notice (an “HSP Condition Notice”) in writing in accordance with paragraph 31 hereof to the Debtors, the ABL Facility Agent, and the Consenting Lenders that one or more HSP Conditions has been materially breached and such material breach is not cured within 20 business days of receipt of such HSP Condition Notice, then the HSP Agreement shall terminate automatically on the first business day that is 180 days from the PSA Effective Date. In the case of any termination of the HSP Agreement by DIRECTV for cause, the HSP Agreement shall terminate immediately, or after any cure period where DirectSAT fails to timely cure, without the requirement of an HSP Termination Notice or any other further notice or action or the necessity of obtaining relief from the stay.

 

(d)                                 To the extent it is necessary or advisable for DIRECTV to seek relief from the automatic stay under § 362 of the Bankruptcy Code in order to terminate the HSP Agreement for cause, the other Plan Support Parties agree to consent to and not oppose such relief; provided, however, each Plan Support Party retains its rights to contest (i) the validity of any underlying breach of the HSP Agreement or this PSA alleged by DIRECTV and/or (ii) whether cause existed or exists for DIRECTV, pursuant to its rights under the HSP Agreement, to terminate the HSP Agreement.

 

(e)                                  Notwithstanding the foregoing, the Plan Support Parties acknowledge and agree that no cause is needed for DIRECTV to issue a HSP Termination Notice to terminate the HSP Agreement on 180 days’ notice at any point during the Effective Period.

 

Amendments

 

18.                               This PSA may not be modified, amended or supplemented in any manner except in writing signed by all of the following or their respective counsel: (i) each of the Debtors; (ii) DIRECTV; (iii) the Required ABL Facility Consenting Lenders; and (iv) the Required Term Loan Consenting Lenders.

 

Confidentiality and Disclosure

 

19.                               The Debtors shall keep strictly confidential and shall not, without the prior written consent of the applicable Consenting Lender, disclose publicly, or to any person the holdings of any Consenting Lender in any public manner, including in the Solicitation Materials, the Plan or any related press release; provided, however, that (x) the Debtors may disclose such names or amounts to the extent that, upon the advice of counsel, it is required to do so by any governmental or regulatory authority or court of competent jurisdiction, in which case the Debtors, prior to making such disclosure, shall allow the Consenting Lender(s) to whom such disclosure relates reasonable time at its own cost to seek a protective order with respect to such

 

10



 

disclosures, (y) the Debtors may disclose the existence and material terms of this PSA, including the execution of this PSA by the ABL Facility Agent, the Consenting Lenders, and DIRECTV, and (z) the Debtors may disclose the aggregate percentage or aggregate principal amount of Claims held by the Consenting ABL Facility Lenders and the Term Loan Consenting Lenders, respectively.

 

Miscellaneous

 

20.                               The Debtors shall pay or reimburse when due professional fees and expenses for legal advisors and financial advisors for:  (a) the ABL Facility Agent and ABL Lenders; and (b) the Term Loan Consenting Lenders.

 

21.                               Subject to the other terms of this PSA, the Plan Support Parties agree to execute and deliver such other instruments and perform such acts, in addition to the matters herein specified, as may be reasonably appropriate or necessary, or as may be required by order of the Bankruptcy Court, from time to time, to effectuate the Restructuring Transactions.

 

22.                               Notwithstanding anything herein to the contrary, if an official committee is appointed in the Chapter 11 Cases and a Consenting Lender or the ABL Facility Agent is appointed to and serves on such official committee, then the terms of this PSA shall not be construed to limit such party’s exercise of its fiduciary duties in its role as a member of such committee; provided, however, that serving as a member of such committee shall not relieve the party of any obligations under this Agreement; provided, further, that nothing in the PSA shall be construed as requiring any Plan Support Party to serve on any official committee in these Chapter 11 Cases.

 

23.                               This PSA constitutes the entire agreement among the Plan Support Parties with respect to the subject matter hereof and supersedes all prior agreements, oral or written, other than the HSP Agreement, among the Plan Support Parties with respect thereto.

 

24.                               The headings of all paragraphs of this PSA are inserted solely for the convenience of reference and are not part of and are not intended to govern, limit, or aid in the construction or interpretation of any term or provision hereof.

 

25.                               This PSA is to be governed by and construed in accordance with the laws of New York applicable to contracts made and to be performed in New York, without giving effect to the conflict of laws principles thereof. Each Plan Support Party agrees that it shall bring any action or proceeding in respect of any claim arising out of or related to this PSA, to the extent possible, (i) before the commencement of the Chapter 11 Cases, in the United States District Court for the District of Delaware and (ii) after the commencement of the Chapter 11 Cases, in the Bankruptcy Court.

 

26.                               Each Party hereto irrevocably waives any and all right to trial by jury in any legal proceeding arising out of or relating to this PSA or the transactions contemplated herein.

 

27.                               This PSA may be executed and delivered in any number of counterparts and by way of electronic signature and delivery, and each such counterpart, when executed and

 

11



 

delivered, shall be deemed an original, and all of which together shall constitute the same agreement. Except as expressly provided in this PSA, each individual executing this PSA on behalf of a Plan Support Party has been duly authorized and empowered to execute and deliver this PSA on behalf of said Plan Support Party.

 

28.                               This PSA is the product of negotiations between and among the Plan Support Parties and, in the enforcement or interpretation hereof, is to be interpreted in a neutral manner, and any presumption with regard to interpretation for or against any Plan Support Party by reason of such party having drafted or caused to be drafted this PSA, or any portion hereof, shall not be effective in regard to the interpretation hereof. The Plan Support Parties were each represented by counsel during the negotiations and drafting of this PSA and continue to be represented by counsel. In addition, this PSA shall be interpreted in accordance with § 102 of the Bankruptcy Code.

 

29.                               This PSA is intended to bind and inure to the benefit of the Plan Support Parties and their respective successors and permitted assigns, as applicable. There are no third-party beneficiaries under this PSA, and the rights or obligations of any Plan Support Party under this PSA may not be assigned, delegated, or transferred to any other person or entity.

 

30.                               The Debtors will provide the Consenting Lenders and their respective attorneys, consultants, accountants, and other authorized representatives reasonable access, upon reasonable notice during normal business hours, to relevant properties, books, contracts, commitments, records, management personnel, lenders, and advisors of the Debtors.

 

31.                               All notices hereunder shall be deemed given if in writing and delivered, if sent by electronic mail, courier, or registered or certified mail (return receipt requested) to the following address (or at such other addresses as shall be specified by like notice):

 

If to the Debtors:

 

UniTek Global Services, Inc.

1777 Sentry Parkway West

Gwynedd Hall, Suite 302

Attn:  Office of the General Counsel

Blue Bell, PA 19422

Phone: (267) 464-1700

 

with copies to:

 

Morgan, Lewis & Bockius LLP

1701 Market Street

Philadelphia, PA 19103-2921

Attention: Justin W. Chairman and Michael J. Pedrick

Facsimile: (215) 963-5001

E-mail: jchairman@morganlewis.com and mpedrick@morganlewis.com

 

-and-

 

12



 

Morgan, Lewis & Bockius LLP

101 Park Avenue

New York, NY 10178

Attention: Neil E. Herman and Patrick D. Fleming

Facsimile: (212) 309-6001

E-mail: nherman@morganlewis.com and pfleming@morganlewis.com

 

If to DIRECTV:

 

2230 East Imperial Highway

El Segundo, CA 90245

Attn:  Office of the General Counsel

Facsimile: 310-964-0838

 

-and-

 

Honigman Miller Schwartz and Cohn LLP

660 Woodward Ave., Suite 2290

Detroit, MI 48226

Attention:  Judy B. Calton

Facsimile:  (313) 465-7345

E-mail:  jcalton@honigman.com

 

If to the ABL Facility Agent:

 

Kirkland & Ellis LLP

601 Lexington Avenue

New York, NY 10022

Attention:  Joshua A. Sussberg, Yongjin Im

Facsimile: (212) 446-4900

E-mail: joshua.sussberg@kirkland.com, yongjin.im@kirkland.com

 

-and-

 

Kirkland & Ellis LLP

300 North LaSalle

Chicago, Illinois 60654

Attention:  Steven N. Serajeddini

Facsimile:  (312) 862-2200

E-mail: steven.serajeddini@kirkland.com

 

If to the Term Loan Consenting Lenders:

 

Latham & Watkins LLP

330 North Wabash Avenue, Suite 2800

 

13



 

Chicago, IL 60611

Attention:  Richard A. Levy, Matthew L. Warren

Facsimile: (312) 993-9767

E-mail: richard.levy@lw.com, matthew.warren@lw.com

 

32.                               Each Plan Support Party hereby confirms that its decision to execute this PSA has been based upon its independent investigation of the operations, businesses, financial and other conditions, and prospects of the Debtors.

 

33.                               If the Restructuring Transactions are not consummated, or if this PSA is terminated for any reason, the Plan Support Parties fully reserve any and all of their rights. Pursuant to Federal Rule of Evidence 408 and any other similar, applicable rule of evidence, this PSA and all negotiations relating hereto shall not be admissible into evidence in any proceeding other than a proceeding to enforce the terms hereof or pursue the consummation of the Restructuring Transactions, or for the payment of damages to which a Plan Support Party may be entitled under this PSA.

 

34.                               It is understood and agreed by the Plan Support Parties that money damages would be an insufficient remedy for breach of this PSA by any Plan Support Party and each non-breaching Plan Support Party shall be entitled to specific performance and injunctive or other equitable relief (without the posting of any bond and without proof of actual damages) as a remedy of any such breach, including an order of the Bankruptcy Court or other court of competent jurisdiction requiring any Plan Support Party to comply promptly with any of its obligations hereunder.

 

35.                               The agreements, representations, warranties, and obligations of the Plan Support Parties under this PSA are, in all respects, several and not joint.

 

36.                               If any provision of this PSA shall be held by a court of competent jurisdiction to be illegal, invalid, or unenforceable, then the remaining provisions shall remain in full force and effect if essential terms and conditions of this PSA for each Plan Support Party remain valid, binding and enforceable.

 

37.                               All rights, powers, and remedies provided under this PSA or otherwise available in respect hereof at law or in equity shall be cumulative and not alternative, and the exercise of any right, power, or remedy thereof by any Plan Support Party shall not preclude the simultaneous or later exercise of any other such right, power or remedy by such party.

 

IN WITNESS WHEREOF, the Plan Support Parties have executed this PSA on the day and year first above written.

 

[REMAINDER OF PAGE INTENTIONALLY OMITTED]

 

14



 

IN WITNESS WHEREOF, the parties hereto have caused this Plan Support Agreement to be duly executed as of the day and the year first above written.

 

 

UniTek Global Services, Inc.

 

UniTek Holdings, Inc.

 

UniTek Midco, Inc.

 

UniTek Acquisition, Inc.

 

Nex-link USA, UniTek USA, LLC

 

Pinnacle Wireless USA, Inc.

 

DirectSAT USA, Inc.

 

FTS USA, LLC

 

Advanced Communications USA, Inc.

 

 

 

 

 

 

 

By:

/s/ Andrew J. Herning

 

Name:

Andrew J. Herning

 

Title:

CFO and Treasurer

 

15



 

IN WITNESS WHEREOF, the parties hereto have caused this Plan Support Agreement to be duly executed as of the day and the year first above written.

 

 

DIRECTV, LLC

 

 

 

 

 

By:

/s/ David W. Baker

 

Name:

David W. Baker

 

Title:

Senior Vice President

 

16



 

IN WITNESS WHEREOF, the parties hereto have caused this Plan Support Agreement to be duly executed as of the day and the year first above written.

 

 

Apollo Investment Corporation, as ABL Facility Agent and ABL Facility Consenting Lender

 

 

 

By: Apollo Investment Management, L.P., as Advisor

 

By: ACC Management, LLC, as its General Partner

 

 

 

 

By:

/s/ Ted Goldthorpe

 

Name:

Ted Goldthorpe

 

Title:

Authorized Signatory

 

17



 

IN WITNESS WHEREOF, the parties hereto have caused this Plan Support Agreement to be duly executed as of the day and the year first above written.

 

 

New Mountain Finance Corporation

 

New Mountain Finance Holdings, L.L.C.

 

as Term Loan Consenting Lenders

 

 

 

 

 

 

 

By:

/s/ John R. Kline

 

Name:

John R. Kline

 

Title:

EVP — COO

 

18



 

IN WITNESS WHEREOF, the parties hereto have caused this Plan Support Agreement to be duly executed as of the day and the year first above written.

 

 

Cetus Capital II, LLC

 

Littlejohn Opportunities Master Fund LP

 

SG Distressed Fund, LP

 

as Term Loan Consenting Lenders

 

 

 

 

By:

/s/ Robert E. Davis

 

Name:

Robert E. Davis

 

Title:

Managing Director

 

19



 

Exhibit A

 

UniTek Global Services, Inc.

 

PLAN OF REORGANIZATION TERM SHEET

 

This term sheet (this “Term Sheet”) describes the material terms of a proposed restructuring transaction (the “Restructuring”) pursuant to which UniTek Global Services, Inc. (“Unitek” and as reorganized, the “Reorganized Holdco”)), and its affiliated debtors and debtors in possession (collectively, the “Debtors” and as reorganized, the “Reorganized Debtors”), will restructure their capital structure through a joint prepackaged plan of reorganization (the “Plan”) filed in the Debtors’ chapter 11 cases (the “Chapter 11 Cases”) in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”).   

 

This Term Sheet is not legally binding, is not a complete list of all material terms and conditions of the potential transactions described herein, is subject to material change, and is being distributed by the ABL Agent, for discussion purposes only.  This Term Sheet shall not constitute an offer or a legally binding obligation to buy or sell, nor does it constitute a solicitation of an offer to buy or sell, any of the securities referred to herein.  Furthermore, nothing herein constitutes a commitment to lend funds to the company or any other party, or to negotiate, agree to, or otherwise participate in any plan of reorganization, including the Plan, nor does this Term Sheet constitute a solicitation of the acceptance or rejection of the Plan for purposes of sections 1125 and 1126 of the Bankruptcy Code.

 

This Term Sheet shall remain strictly confidential and may not be shared with any other person without the consent of the ABL Agent. 

 

 

PLAN OVERVIEW

 

Debt to be Restructured

 

(a)         Revolving Credit and Security Agreement dated as of July 10, 2013 (as amended, supplemented or otherwise modified from time to time, the “ABL Credit Agreement”), by and among Unitek and certain subsidiaries thereof as borrowers, the financial institutions from time to time party thereto as lender (the “ABL Lenders”) and Apollo Investment Corporation as administrative and collateral agent (the “ABL Agent”) for the ABL Lenders.

 

(b)         Credit Agreement dated as of April 15, 2011 (as amended, supplemented or otherwise modified from time to time, the “Term Credit Agreement”) by and among Unitek, as borrower, the Lenders, Cerberus Business Finance, LLC as administrative agent for the Term Lenders (the “Term Agent”) and FBR Capital Markets LT, Inc., as documentation agent and as syndication agent.

 

 

 

Sources of Consideration and Effective Date

 

The Plan will be funded through a combination of Reorganized HoldCo interests, the New First Lien Debt, the New Holdco Debt, and the Debtors’ existing cash on hand.

 



 

Treatment of Claims and Interests

 

The Plan shall provide for the following treatment of allowed claims and interests:

 

(a)         DIP Claims — Each holder of an allowed claim on account of funded and unfunded amounts under the DIP Facility shall receive Tranche A New First Lien Debt (as defined in the New First Lien Debt Term Sheet) in a face amount equal to the amount of such allowed claim on the Effective Date, and such holder shall remain committed to fund the unfunded portion of its commitment under the DIP Facility in accordance with the terms of the New First Lien Debt Facility.

 

(b)         Administrative and Priority Claims — Allowed administrative and priority claims shall be satisfied in full in cash on the Effective Date or receive such other treatment permitted under the Bankruptcy Code.

 

(c)          Senior ABL Facility Claims — Each holder of an allowed claim on account of the ABL Credit Agreement, other than the Last Out Loans (as defined in the ABL Credit Agreement) (collectively, the “Senior ABL Facility Claims”), shall receive: (i) Tranche B New First Lien Debt (as defined in the New First Lien Debt Term Sheet) in a face amount equal to: (a) the total amount of such Senior ABL Facility Claim, multiplied by (b) the First Lien Rollover Ratio; and (ii) New HoldCo Debt in a face amount equal to: (a) the total amount of such Senior ABL Facility Claim, multiplied by (b) the HoldCo Rollover Ratio. The Senior ABL Facility Claims shall be allowed in the amount of $38.7 million.(1)

 

(d)         Junior ABL Facility Claims — Each holder of an allowed claim on account of the Last Out Loans (collectively, the “Junior ABL Facility Claims”) shall receive: (i) Tranche B New First Lien Debt in a face amount equal to: (a) the total amount of such Junior ABL Facility Claims, multiplied by (b) the First Lien Rollover Ratio and (ii) New HoldCo Debt in a face amount equal to: (a) the total amount of such Junior ABL Facility Claims, multiplied by (b) the HoldCo Rollover Ratio. The Junior ABL Facility Claims shall be allowed in the amount of $8.7 million.(2)

 

(e)          Term Loan Claims — Each holder of an allowed claim on account of the Term Loan Agreement (collectively, the “Term Loan Claims”) shall receive its pro rata share of: (i) Tranche B New First Lien Debt in a face amount equal to (a) the total amount of the Senior ABL Facility Claims, multiplied by (b) the First Lien Rollover Ratio; (ii) New HoldCo Debt in a face amount equal to: (a) the total amount of the Senior ABL Facility Claims, multiplied by (b) the HoldCo Rollover Ratio; and (iii) 100% of the New Common Stock, subject to dilution by a management incentive equity plan to

 


(1)         Claim amount to include all unpaid principal, interest at the default rate, fees, expenses, or any other ABL Obligations (as defined in the ABL Credit Agreement), other than Last Out Loans.

 

(2)         Claim amount to include all unpaid principal, interest at the default rate, fees, expenses, or any other ABL Obligations (as defined in the ABL Credit Agreement) arising on account of Last Out Loans.

 

2



 

 

 

be adopted by the Reorganized Debtors’ board of directors.

 

(f)           General Unsecured Claims — Unless the holder of an allowed general unsecured claim agrees to less favorable treatment, each holder of an allowed general unsecured claim shall receive either: (i) payment in the ordinary course; or (ii) cash on the Effective Date.

 

(g)          Subordinated Claims — Unless the holder of an allowed subordinated claim agrees to less favorable treatment, each holder of an allowed subordinated claim shall receive no distribution and such claims shall be discharged, canceled, released, and expunged on the Effective Date.

 

(h)         Existing Unitek Interests — Each holder of an allowed existing Unitek interest shall receive no distribution, and such Interests shall be discharged, canceled, released, and expunged on the Effective Date.

 

 

 

Reorganized Holdco

 

UniTek Global Services, Inc. as reorganized

 

 

 

Intercompany Claims and Intercompany Interests

 

Intercompany claims and interests shall be reinstated, compromised, or cancelled on the Effective Date by agreement of the Debtors, the ABL Agent, and Cetus Capital, LLC (“Cetus”) and New Mountain Capital, LLC (“New Mountain” and together with Cetus, the “Specified Term Lenders”)).

 

OTHER TERMS OF THE RESTRUCTURING

 

DIP Facility

 

The debtor-in-possession facility (the “DIP Facility”) to be provided in the Chapter 11 Cases, with certain commitments to be funded 50% by the ABL Lenders (other than ABL Lenders with respect to their Last Out Loans), and 50% by the Specified Term Lenders and any other participating Term Lenders that have executed and delivered the Plan Support Agreement prior to the conclusion of the prepetition solicitation period,, with an interest rate of LIBOR + 8.50% (with a 1.00% LIBOR floor), of which 1% shall be paid in kind, and on the terms otherwise set forth in Exhibit [X] to this Term Sheet consisting of:

 

(a)         an up to $43 million credit facility (the “Initial Commitment”);

 

(b)         a $10 million revolving credit facility solely to fund operations of DirectSAT USA, LLC (“DirectSAT”) (the “Revolving Commitment”); and

 

(c)          a committed incremental facility to repay the ABL Agent any amount drawn under the $3.7 million letter of credit issued to secure certain obligations of the Other Businesses under ABL Credit Agreement, if and when such letter of credit is drawn (the “L/C Commitment”); and

 

(d)         a roll up of all outstanding letters of credit under the ABL Facility existing as of the Petition Date (the “L/C Roll Up”).

 

Each ABL Lender and Term Lender participating in the DIP Facility shall receive at the closing thereof its ratable share of a closing fee equal

 

3



 

 

 

to 1% of the aggregate DIP Facility commitment. Each Term Lender that executes and delivers the Plan Support Agreement prior to the conclusion of the prepetition solicitation period shall be entitled to subscribe to its ratable share of the Term Lender portion of the DIP Facility pursuant to procedures approved by the Specified Term Lenders, and any unsubscribed portion shall be backstopped by the Specified Term Lenders on a ratable basis.

 

 

 

Rollover Ratios

 

First Lien Rollover Ratio” to equal (a) the total amount of the Tranche B New First Lien Debt Facility divided by (b) the sum of (i) two times the total amount of Senior ABL Facility Claims, plus (ii) the total amount of Junior ABL Facility Claims (such sum referenced in clause (b), the “Rollover Debt”).

 

HoldCo Rollover Ratio” to equal one minus the First Lien Rollover Ratio.

 

 

 

New First Lien Debt Facility

 

Up to $120(3) million new first lien senior secured debt and letter of credit facility (the “New First Lien Debt Facility”) issued by the Reorganized Debtors on the terms set forth in Exhibit 1 to this Term Sheet (the “New First Lien Debt Term Sheet”).

 

 

 

New Holdco Debt

 

Up to $15(4) million new subordinated payment-in-kind debt issued by Reorganized Holdco on the terms set forth in Exhibit [X] to this Term Sheet, which shall be in all respects junior and subordinate to the New First Lien Debt.

 

 

 

New Common Stock

 

The new common stock, preferred stock, or some combination thereof of Reorganized Holdco.

 

 

 

Shared Services

 

The reorganized Debtors shall use commercially reasonable efforts to transfer to UniTek Services Co. (as defined in the New First Lien Debt Term Sheet) as soon as practicable on or after the Effective Date, all assets and employees related to shared services of the Debtors. Thereafter, UniTek Services Co. will provide shared services to the other Reorganized Debtors as set forth in the New First Lien Debt Term Sheet.

 

 

 

Releases, Exculpations, and Injunctions

 

The Plan shall provide for customary release, exculpation, and injunction provisions subject to approval by Apollo and the Specified Term Lenders.

 

 

 

Fees and Expenses

 

The Plan will provide for payment of all accrued and unpaid professional fees and expenses for the legal and financial advisors of the ABL Agent

 


(3)         If the Rollover Debt plus the amount of the Initial Commitment plus all funded amounts as of the Effective Date under the Revolving Commitment plus all funded amounts as of the Effective Date under the L/C Commitment plus all funded amounts as of the Effective Date under the L/C Roll Up (the “Total Debt”) is less than $120 million, amount to equal the Total Debt and, if the Total Debt is greater than $120 million, amount to equal $115 million.

 

(4)         If the Total Debt is less than $120 million, amount to equal $0 and, if the Total Debt is greater than $120 million, amount to equal Total Debt less $115 million.

 

4



 

 

 

and the Specified Term Lenders in cash on the Effective Date.

 

 

 

Corporate Governance

 

The documentation evidencing the corporate governance for the Reorganized Debtors, including charters, bylaws, operating agreements, shareholder agreements or other organization documents, as applicable (“Organizational Documents”), shall be reasonably acceptable to the Debtors, the ABL Agent, and the Specified Term Lenders; provided, however, the Organizational Documents for Reorganized DirectSAT, shall contain standard bankruptcy remoteness protections and non-consolidation provisions (described in the New First Lien Debt Term Sheet) with respect to the assets, liabilities, rights, and obligations of the Other Business, including the appointment of an independent director who shall be selected, and replaced, in the sole discretion of Apollo and the Specified Term Lenders, whose approval shall be required to authorize the commencement of any form of insolvency proceeding or to approve any material intercompany transactions (except as otherwise permitted in the New First Lien Debt Term Sheet); provided further, however, that the Organizational Document provisions set forth in the previous proviso shall have no further force and effect upon the exit of all or substantially all of the assets and operations of the Other Business.

 

On or before the Effective Date, the Other Business (as defined in the New First Lien Debt Term Sheet) will appoint a manager whose identity, compensation and scope of duties (which in all events shall be limited to the Other Business and not extend to the DirectSAT Business) will be reasonably acceptable to the Debtors, the ABL Agent, and the Specified Term Lenders.

 

 

 

Other Plan Terms

 

The Plan shall contain all other customary terms otherwise acceptable to the Debtors, the ABL Agent, and the Specified Term Lenders.

 

5



 

EXHIBIT B

 

UniTek Global Services, Inc.

 

NEW FIRST LIEN DEBT TERM SHEET

 

This term sheet sets forth certain material terms of the New First Lien Debt Facility as defined in the UniTek Global Services, Inc. Plan of Reorganization Term Sheet (“Plan Term Sheet”).  This term sheet is subject to qualifiers set forth in the Plan Term Sheet.  Capitalized terms not otherwise defined herein shall have the meanings set forth in the Plan Term Sheet.

 

Administrative Agent

 

Apollo Investment Corporation (in such capacity, the “Administrative Agent”)

 

 

 

Facilities

 

A first lien credit facility (the “New First Lien Debt” or the “New First Lien Debt Facility”) consisting of the following:

 

 — A first priority tranche (the “Tranche A New First Lien Debt”) in an initial aggregate principal amount equal to the sum of (A) (1) the principal amount of all outstanding term loan advances under the Initial Commitments of up to $43.0 million under the DIP Facility (as each such term is defined in the Plan Term Sheet) (it being understood that such term loans may be funded prior to and/or on the Closing Date), which shall include amounts drawn to fund the Initial Pinnacle Cash (as defined below), and (2) funded drawings outstanding as of the Closing Date under letters of credit issued under the ABL Credit Agreement (which are included in the DIP Facility), (B) the $10.0 million Revolving Commitments (as defined in the Plan Term Sheet) under the DIP Facility (the “New First Lien Revolving Commitments”), including any amounts funded under such Revolving Commitments prior to the Closing Date (it being understood that the New First Lien Revolving Commitments are included in the Tranche A New First Lien Debt in addition to the amounts set forth in the immediately preceding clause (A)), of which New First Lien Revolving Commitments up to $5.0 million may be used (so long as such usage does not conflict with liquidity requirements in effect under agreements between the Borrowers and DIRECTV under the Plan Support Agreement or otherwise) for the issuance of letters of credit for the benefit of the Other Business (as defined below) (the “L/C Subfacility”), (C) the commitment under the DIP Facility to fund amounts to reimburse drawings, if any, under the $3.7 million letter of credit issued under the ABL Credit Agreement (such letter of credit, the “WTC Letter of Credit”) to secure certain obligations of the Other Business, including any amounts funded under such commitment prior to the Closing Date, and (D) all unfunded letters of credit issued under the ABL Credit Agreement (other than the WTC Letter of Credit) outstanding on the Closing Date in an aggregate undrawn face amount of approximately $17,900,000 (including renewals, extensions (including auto-extensions) and amendments of such existing letters of credit) (collectively, the “Letters of Credit”), and all amounts funded under such Letters of Credit following the Closing Date.

 



 

 

 

 — A second priority tranche (the “Tranche B New First Lien Debt”) in an initial aggregate principal amount up to $120.0 million(1). The Tranche B New First Lien Debt shall consist of pro rata portions of the following amounts set forth in clauses (A), (B) and (C): (A) the principal amount of all outstanding “Advances” (as such term is defined in the ABL Credit Agreement) under the ABL Credit Agreement, but excluding any such advances consisting of drawings under letters of credit and “Last Out Loans” (as such term is defined in the ABL Credit Agreement) made thereunder; (B) the principal amount of all such outstanding “Last Out Loans”; and (C) term loans outstanding under the Prepetition Term Credit Agreement in a principal amount equal to the amount specified in clause (A).

 

No borrowings shall be made after the closing date of the New First Lien Debt Facility (the “Closing Date”) other than under the New First Lien Revolving Commitments, and other than the letters of credit outstanding on the Closing Date (including renewals, extensions (including auto-extensions) and amendments of such existing letters of credit), no additional letters of credit shall be issued under the New First Lien Debt Facility other than under the New First Lien Revolving Commitments. The renewal, extension (including auto-extension) and amendment provisions relating to the letters of credit under the New First Lien Debt and the provisions relating to drawings, reimbursements and funding of participations shall be on terms substantially similar (taken as a whole) to the ABL Credit Agreement, with such modifications thereto as are reasonably acceptable to Apollo and the Specified Term Lenders; provided, however, that the holders of New First Lien Debt (other than lenders holding participation and reimbursement obligations with respect to Letters of Credit immediately prior to the Closing Date, and their successors and assigns) shall have no reimbursement or indemnification obligations with respect to any Letters of Credit, and any amounts paid in respect of any drawing under any Letter of Credit shall be deemed to be an equivalent advance of Tranche A New First Lien Debt.

 

 

 

First Priority Tranche

 

The Tranche A New First Lien Debt shall have customary “first out” priority as against the Tranche B New First Lien Debt.

 

 

 

Obligors

 

On the Closing Date, each of the “Borrowers” and “Guarantors” (as those terms are defined in the ABL Credit Agreement) (collectively, the “Loan Parties”), in each case where applicable, as reorganized under the Plan, shall assume, and be bound by, the New First Lien Debt Facility documentation,

 


(1)         Actual amount of Tranche B New First Lien Debt will be determined as follows:  (a) if the Total Debt (as defined in the Plan Term Sheet) is less than $120 million, amount to equal the Total Debt minus the Initial Commitment (as defined in the Plan Term Sheet) under the DIP Facility minus any funded amounts as of the Closing Date under the Revolving Commitments (as defined in the Plan Term Sheet) minus any funded amounts as of the Closing Date under the L/C Commitment (as defined in the Plan Term Sheet) minus any funded amounts as of the Closing Date under the L/C Rollup (as defined in the Plan Term Sheet); and (b) if the Total Debt is greater than $120 million, amount to equal $115 million minus the Initial Commitment under the DIP Facility minus any funded amounts as of the Closing Date under the Revolving Commitments minus any funded amounts as of the Closing Date under the L/C Commitment minus any funded amounts as of the Closing Date under the L/C Rollup.

 

2



 

 

 

and for the avoidance of doubt, all of such Borrowers and Guarantors shall remain jointly and severally liable for all of the obligations included in the New First Lien Debt Facility.

 

 

 

Fees

 

The New First Lien Debt shall include (without limitation) (i) an annual administration fee payable to the Administrative Agent in the amount of $50,000 (except that if Apollo is not the Administrative Agent, such fee shall be the administration fee of the relevant third party administrative agent), payable on the Closing Date and each anniversary thereof, (ii) an unused line fee of 0.50% per annum on the unused portion of the New First Lien Revolving Commitments, (iii) an upfront “rollover” fee of 1.0% on the entire principal amount of the New First Lien Debt (including the unfunded New First Lien Revolving Commitments) other than the unfunded commitment with respect to the WTC Letter of Credit and the amount of any Letters of Credit, payable on the Closing Date, and (iv) a fronting fee of 0.25% per annum on the face amount of any outstanding Letters of Credit, payable quarterly in arrears to the issuer thereof.

 

The Tranche B New First Lien Debt shall also include a repayment premium on the initial principal amount of the Tranche B New First Lien Debt, equal to 0.0% in the first 18 months following the Closing Date, and 2.0% thereafter. Such repayment premium shall be payable to the lenders upon any prepayment of the Tranche B New First Lien Debt other than required prepayments from excess cash flow as described below (solely on the principal amount so prepaid) and on repayment in full, maturity (by acceleration or otherwise) or termination of the Tranche B New First Lien Debt (with respect to any remaining unpaid amounts of such repayment premium).

 

 

 

Interest Rates

 

The initial interest rates under the New First Lien Debt will be the Eurodollar Rate (as defined in the ABL Credit Agreement) plus (x) 8.50% per annum (for the Tranche A New First Lien Debt), with 1.0% per annum of such amount payable in kind, or (y) 7.50% per annum (for the Tranche B New First Lien Debt), or, at the Borrowers’ election, the Alternate Base Rate (as defined in the ABL Credit Agreement) plus (i) 7.50% per annum (for the Tranche A New First Lien Debt), with 1.0% per annum of such amount payable in kind, or (ii) 6.50% per annum (for the Tranche B New First Lien Debt). The initial letter of credit fees (excluding the fronting fee payable to the issuer thereof) payable to all lenders holding participations with respect to the Letters of Credit shall equal 7.50% per annum on the face amount of any such outstanding Letters of Credit, payable quarterly in arrears. The initial letter of credit fees (excluding the fronting fee payable to the issuer thereof) payable to all lenders holding participations with respect to letters of credit issued under the New First Lien Revolving Commitments shall equal 8.00% per annum on the face amount of any such outstanding letters of credit, payable quarterly in arrears.

 

The interest rates set forth above for the Tranche B New First Lien Debt, and the letter of credit fees set forth above with respect to Letters of Credit, shall each increase by 1.0% per annum on the second anniversary of the Closing Date.

 

3



 

 

 

The Borrowers may elect interest periods of 1, 2 or 3 months for Eurodollar Rate borrowings.

 

The Eurodollar Rate floor shall be 1.0% per annum.

 

The interest rates payable with respect to obligations under the New First Lien Debt (and the Letter of Credit fee) shall increase by 2.0% per annum during the existence of an event of default.

 

 

 

Maturity

 

The fourth anniversary of the Closing Date.

 

 

 

Prepayments

 

The Borrowers may optionally prepay amounts outstanding under the New First Lien Debt, together with accrued interest thereon.

 

Mandatory prepayments of the New First Lien Debt shall be required with net cash proceeds from asset sales outside the ordinary course of business, casualty or loss events, issuances of debt, equity issuances, and other events to be agreed, subject to baskets and reinvestment provisions to be mutually agreed upon by Apollo and Specified Term Lenders.

 

The New First Lien Debt shall also be required to be repaid on an annual basis with 75% of excess cash flow of the DirectSat Business (as defined below) and UniTek Services Co. (as defined below) for such fiscal year. Notwithstanding the foregoing, (i) only 50% of the annual cash flow for 2015 shall be required to be applied to repay the New First Lien Debt, and (A) such 50% shall be calculated after excluding the first $2.0 million of such excess cash flow for such fiscal year, which may be used to fund intercompany advances to the Other Entities, but solely for purposes of funding capital expenditures of the Other Business, (B) the remaining 50% of such annual excess cash flow (calculated in accordance with immediately preceding clause (A)) not required to be applied to repay the New First Lien Debt may be used to fund intercompany advances to the Other Entities, but solely for purposes of funding restructuring, wind down or exit costs of the Other Business, and (C) the amounts permitted to be advanced to the Other Entities pursuant to the preceding clause (A) shall be reduced by gross cash received after the Closing Date on account of accounts receivable of the Other Business outstanding on the Closing Date, to the extent such gross cash received exceeds the aggregate amount of accounts payable of the Other Business that are current and outstanding as of the Closing Date; and (ii) with respect to the annual excess cash flow for 2016, if the Other Business (as defined below) shall not have been exited or wound down prior to 2016, the Borrowers may reduce, by up to $5.0 million in the aggregate, the excess cash flow of the DirectSat Business for such fiscal year and apply the amount of such reductions to the wind down or exit costs of the Other Business rather than to prepay the New First Lien Debt, and the 75% of excess cash flow for such fiscal year required to be applied to repay the New First Lien Debt (and the 25% of such excess cash flow not required to be applied to make prepayments) shall be calculated after giving effect to such reduction. The 25% of excess cash flow of the DirectSat Business that is not required to prepay the New First Lien Debt for fiscal year 2016 and each year thereafter may be used to fund intercompany advances to pay any liabilities of the Other Business rather than to prepay the New First Lien Debt. All intercompany advances by any of the DirectSat Subsidiaries to

 

4



 

 

 

any Other Entity that are expressly permitted under this paragraph shall be referred to as the “Permitted Post-Effective Date DirectSat Intercompany Advances.”

 

All such prepayments will be applied first to repay outstanding funded amounts under the Tranche A New First Lien Debt, second to repay outstanding funded amount under the Tranche B New First Lien Debt, and any remaining portion of such prepayments shall be applied to cash collateralize outstanding Letters of Credit ratably.

 

 

 

Priority and Liens

 

All obligations and all guarantees in connection with the New First Lien Debt shall at all times be secured by a perfected first priority lien on all tangible and intangible property of the Borrowers and Guarantors, including without limitation, all inventory, accounts receivable, general intangibles, chattel paper, owned real estate, real property leaseholds, fixtures and machinery and equipment, deposit accounts, patents, copyrights, trademarks, tradenames, rights under license agreements and other intellectual property and capital stock of subsidiaries of the Borrowers and Guarantors and other investment property, whether now existing or in the future created, and including all proceeds and products of any of the foregoing.

 

 

 

Separation of Businesses

 

The organizational documents for the Borrowers and the Guarantors shall contain provisions with respect to the corporate governance of the DirectSat Subsidiaries (including UniTek Services Co.), and non-consolidation provisions, as described in the Plan Term Sheet and reasonably satisfactory to Apollo and the Specified Term Lenders, separating the DirectSat Business from the Other Business. As used herein, the following terms shall have the following meanings:

 

DirectSat Business” shall mean the assets, liabilities and contractual rights and obligations relating to the business division of the Borrowers and their subsidiaries which provides fulfillment installation, upgrade and maintenance services for satellite content providers, including but not limited to DIRECTV.

 

DirectSat Subsidiaries” shall mean DirectSat and each other subsidiary (if any) of the Borrowers engaged primarily or exclusively in the DirectSat Business (and for the avoidance of doubt excluding Other Entities and Reorganized Holdco (as defined below)).

 

Other Business” shall mean the assets, liabilities and contractual rights and obligations relating to the business divisions of the Borrowers and their subsidiaries other than the DirectSat Business (and for the avoidance of doubt excluding the DirectSat Subsidiaries and Reorganized Holdco).

 

Other Entities” shall mean Borrowers and their subsidiaries that are engaged primarily or exclusively in the Other Business (and for the avoidance of doubt excluding the DirectSat Subsidiaries, Reorganized Holdco and UniTek Services Co.).

 

On or prior to the Closing Date, up to $13.8 million (consisting of $8.0 million for corporate costs of the Other Business and $5.8 million for insurance costs of the Other Business) (the “Initial Pinnacle Cash”) of cash shall be funded pursuant to the Initial Commitments under Tranche A New

 

5



 

 

 

First Lien Debt, for the benefit of the Other Business, and shall be maintained and held by the DirectSat Subsidiaries and the DirectSat Business in one or more segregated deposit accounts (such segregated deposit accounts and/or other segregated deposit accounts of the Other Subsidiaries are the “Pinnacle Cash Account”), which accounts shall be subject to blocked account agreements reasonably acceptable to Apollo and the Specified Term Lenders and shall be subject to a first priority lien securing the New First Lien Debt. The Borrowers shall from time to time withdraw and apply from the Pinnacle Cash Account any amounts required to make payments of expenditures on behalf of the Other Business or to “true up” amounts paid by the DirectSat Business (including through UnitTek Services Co.) to reflect the proper allocation of cash receipts and expenditures during the period from the Closing Date between the Other Business and the DirectSat Business.

 

From and after the Closing Date, cash on hand of the Other Subsidiaries that is cash generated by operations of the Other Business and is properly allocable to the Other Business (“Other Business Allocated Cash”) shall be deposited into one or more segregated deposit accounts of the Other Subsidiaries (such segregated deposit accounts and/or other segregated deposit accounts of the Other Subsidiaries are the “Other Business Account”), which accounts shall be subject to blocked account agreements reasonably acceptable to Apollo and the Specified Term Lenders and shall be subject to a first priority lien securing the New First Lien Debt. The Other Business Account shall be separate funds from the accounts, cash and other property of the DirectSat Business and UniTek Services Co., no funds other than the Other Business Allocated Cash shall be deposited into such Other Business Account, and such Other Business Account and the funds therein shall be utilized solely by the Other Subsidiaries for working capital and other general corporate purposes in connection with the Other Business. After the Closing Date, the cash expenditures of the Other Business and the cash expenditures allocable to the Other Business shall be funded (without duplication) solely by the Initial Pinnacle Cash, the Other Business Allocated Cash, and the Permitted Post-Effective Date DirectSat Intercompany Advances.

 

 

 

Conditions Precedent to Closing of the New First Lien Debt

 

Customary and appropriate for an exit financing facility of this type and reasonably acceptable to Apollo and the Specified Term Lenders. Without limiting the foregoing, closing conditions for the New First Lien Debt shall include the following:

 

(a) The definitive documentation in respect of the New First Lien Debt shall have been executed and delivered by the parties thereto and shall be consistent with the Plan Term Sheet and this Term Sheet and otherwise reasonably acceptable to Apollo and the Specified Term Lenders (for the avoidance of doubt, and without limiting the other provisions of this Term Sheet, the representations and warranties, affirmative covenants and negative covenants in such definitive documentation shall be customary and appropriate for an exit financing facility of this type and reasonably acceptable to Apollo and the Specified Term Lenders), provided, that:

 

(i) the New First Lien Debt shall contain financial covenants (and a

 

6



 

 

 

capital expenditures covenant) reasonably satisfactory to Apollo and the Specified Term Lenders; provided that such financial covenants shall not apply to any period ending on or prior to the end of the last fiscal quarter of 2015.

 

(ii) UniTek Global Services, Inc., as reorganized (“Reorganized Holdco”) shall be prohibited from engaging in business activities, incurring material liabilities (other than its primary liability for the New Holdco Debt and its guarantor liability for the New First Lien Debt) or owning any material assets other than the equity interests of UniTek Acquisition, Inc. (“UniTek Acquisition”); and UniTek Acquisition shall be prohibited from engaging in business activities, incurring material liabilities or owning any material assets other than the equity interests of the DirectSat Subsidiaries and UniTek Services Co. and the equity interests of the Other Entities.

 

(iii) The Loan Parties shall have identified to Apollo and the Specified Term Lenders prior to the Closing Date all material registered intellectual property primarily used in the Other Business, all material customer contracts of the Other Business and any subsidiaries engaged primarily in the Other Business.

 

(iv) The Loan Parties and the Other Subsidiaries shall agree that (x) neither the Loan Parties nor the DirectSat Subsidiaries nor UniTek Services Co. has any commitment to provide any additional funding to the Other Subsidiaries and the Other Business (other than (i) the funding of the Initial Pinnacle Cash and (ii) any funding pursuant to the agreements under the Shared Services Agreement to pay expenses that are allocable to the Other Business on the terms expressly set forth in the Shared Services Agreement), and (y) neither the Loan Parties nor the Other Subsidiaries shall make representations to their respective creditors that could reasonably be expected to cause their respective creditors to believe that any of the Loan Parties or the DirectSat Subsidiaries or UniTek Services Co. has made any such commitment. As soon as available after the end of each month following the Closing Date, Borrowers shall deliver to the Lenders copies of the relevant monthly bank statements for the Pinnacle Cash Account showing the balance and activity on such account(s). Borrowers or the Other Subsidiaries shall deliver a statement of income of the Other Business for each month as soon as practicable (but in any event within 30 days after the end of such month), accompanied by a certificate stating that such statement fairly presents, in all material respects, the results of operations of the Other Business for the periods specified in accordance with GAAP consistently applied, subject to normal year-end audit adjustments.

 

(v) The Borrowers and Guarantors (A) prior to the Closing Date shall have used (and shall thereafter continue to use) commercially reasonable efforts to transfer all or substantially all of the assets (other than rights under contracts) that are primarily used in the DirectSat Business and liabilities associated with the DirectSat Business, including owned or licensed intellectual property

 

7



 

 

 

primarily used in the DirectSat Business, to the DirectSat Subsidiaries (and shall thereafter use commercially reasonable efforts to maintain all such assets in the DirectSat Subsidiaries), (B) prior to the Closing Date shall have used (and shall thereafter continue to use) commercially reasonable efforts to transfer all or substantially all of the assets (other than rights under contracts) that are held by the DirectSat Subsidiaries that are primarily used in the Other Business, and liabilities associated with the Other Business, to the Other Entities (and shall thereafter use commercially reasonable efforts to maintain all such assets in the Other Subsidiaries), and (C) prior to the Closing Date shall have used (and shall thereafter continue to use) commercially reasonable efforts to cause the employment of all employees of any Loan Parties that are engaged primarily in the DirectSat Business to be transferred to the DirectSat Subsidiaries, and shall have used commercially reasonable efforts to cause the DirectSat Subsidiaries (other than UniTek Services Co.) to employ no employees other than employees engaged primarily in the DirectSat Business and to cause UniTek Services Co. to employ no employees other than employees engaged in providing shared services to both the DirectSat Business and the Other Business (and in each case shall thereafter use commercially reasonable efforts to maintain all such employees as employees of the DirectSat Subsidiaries, UniTek Services Co. or the Other Subsidiaries, as applicable), (D) prior to the Closing Date shall have used (and shall thereafter continue to use) commercially reasonable efforts to assign all material contracts that primarily relate to the Other Business to the Other Subsidiaries, except that contracts that relate both to the Other Business and the DirectSat Business will be retained by the DirectSat Subsidiaries and the DirectSat Business or may be assigned to UniTek Services Co.; provided, that nothing in this clause (D) shall be construed to require the Loan Parties or their Subsidiaries to assign or transfer any contractual obligation entered into with a third party, to any of the Other Subsidiaries, if such third party counterparty has a right to terminate the applicable contract if such assignment or transfer occurs and such counterparty has refused to consent to such assignment or transfer after commercially reasonable efforts to obtain such consent have been made by the Loan Parties. Following the Closing Date, Borrower and Guarantors shall use commercially reasonable efforts to cause (i) all new contractual obligations entered into that primarily generate revenue or assets for (or represent liabilities or expenses allocable to) the DirectSat Business to be entered into by DirectSat Subsidiaries that are Loan Parties, and (ii) all new contractual obligations entered into that primarily generate revenue or assets for (or represent liabilities or expenses allocable to) the Other Business to be entered into by Other Entities that are Loan Parties; provided, however, that contractual obligations that relate both to the Other Business and the DirectSat Business may be entered into by UniTek Services Co. pursuant to the Shared Services Agreement, and contractual obligations with third parties that primarily generate revenue for the Other Business may be entered into by the DirectSat Subsidiaries

 

8



 

 

 

and Unitek Services Co. in the event that the Borrower has determined, in the exercise of its reasonable good faith judgment prior to entering into such contractual obligation, that complying with the foregoing provisions of this sentence would be detrimental in any material respect to the ability to induce the applicable counterparty to enter into such contract or otherwise materially adverse to the business of Reorganized Holdco and its Subsidiaries. The Loan Parties shall not, and shall cause their subsidiaries not to, form any Subsidiary after the Closing Date to engage primarily in the Other Business in each case unless such Subsidiary is formed as a wholly-owned direct subsidiary of existing Other Subsidiaries. Any loans or advances by the Other Entities to the DirectSat Subsidiaries (including UniTek Services Co.) and vice versa, in each case to the extent permitted under the New First Lien Loan Documents, will be evidenced by documentation typical of third party lending arrangements and will bear market rates of interest.  Within 60 days following the Closing Date, the Other Entities engaged in the Other Business shall maintain their material assets in such a manner that is not costly or difficult to segregate, ascertain or otherwise identify its individual material assets from or as against those of Reorganized Holdco and its Subsidiaries (other than the Other Business and such Other Entities).

 

(vi) The definitive credit agreement (the “New First Lien Debt Credit Agreement”) and the other documentation for the New First Lien Debt shall provide that (A) the Borrowers and Guarantors shall operate, as between themselves and with third parties, exercising commercially reasonable efforts to prevent, and shall not take any actions that would reasonably be expected to cause, any of the DirectSat Subsidiaries or UniTek Services Co. or the assets of the DirectSat Business or UniTek Services Co. to be substantively consolidated with the Other Entities or with the assets of the Other Business; (B) the Borrowers and Guarantors shall observe customary corporate formalities as between each other, and each of the Other Subsidiaries will hold itself out as an entity that is separate from the other Loan Parties and their Subsidiaries and promptly correct any known misrepresentation with respect to the foregoing, and vice versa, and any corporate, transition or transaction services provided by the Other Subsidiaries to the other Loan Parties and their Subsidiaries (or vice versa) will be required to be approved by the board of directors (or equivalent governing body) of the DirectSat Subsidiaries and will otherwise be subject to compliance with the terms of the Credit Agreement; (C) the Other Subsidiaries shall not acquire securities of Reorganized Holdco or its DirectSat Subsidiaries or UniTek Services Co. (excluding any notes or other documents evidencing any Permitted Post-Effective Date DirectSat Intercompany Advances); (D) from and after April 1, 2015, the Other Business shall prepare and maintain accurate and complete accounts, books and records recording its assets, liabilities, expenses and income, separate and distinct from the books and records, assets and liabilities, expenses and income of the DirectSat Business

 

9



 

 

 

(provided that the DirectSat Subsidiaries and the Other Subsidiaries may have, as between each other, shared assets, liabilities, contracts, and Shared Services Arrangements as specifically permitted under the covenants regarding separation of the businesses as set forth in this Term Sheet (collectively, the “Separation Covenants”), and provided further, it shall not be a breach of this covenant if such accounts, books and records are not accurate or complete to the extent necessary to prepare separate unaudited balance sheets for the Other Business or the DirectSat Business prior to April 1, 2015); (E) the Loan Parties shall establish and maintain separate management and employees for the DirectSat Business or UniTek Services Co., on the one hand, and the Other Business, on the other hand, in accordance with the terms of their organizational documents as in effect on the Closing Date (after giving effect on such date to amendments thereto that are reasonably satisfactory to Apollo and the Specified Term Lenders); (F) commencing with the first full fiscal quarter after March 31, 2015, the DirectSat Subsidiaries, on the one hand, and the Other Entities, on the other hand, shall deliver separate financial statements with respect to such businesses; (G) from and after July 1, 2015, (1) the DirectSat Subsidiaries and UniTek Services Co., on the one hand, and the Other Entities, on the other hand, shall maintain separate cash management systems reasonably satisfactory to Apollo and the Specified Term Lenders, including the formation of separate lockboxes for collection of receipts such that customers of the Other Business shall be directed to pay any receipts (whether as payment under contracts or on accounts receivable or otherwise) that are attributable to the Other Business to the lockboxes for the Other Business, and customers of the DirectSat Business shall be directed to pay any receipts (whether as payment under contracts or on accounts receivable or otherwise) that are attributable to the DirectSat Business to the lockboxes for the DirectSat Business, and (2) the Other Entities shall, promptly upon receipt by them of any receipts (whether as payment under contracts or on accounts receivable or otherwise) that are attributable to the DirectSat Business, transfer such receipts to the DirectSat Subsidiaries, (3) the DirectSat Subsidiaries shall, promptly upon receipt by them of any receipts (whether as payment under contracts or on accounts receivable or otherwise) that are attributable to the Other Business, transfer such receipts to the Other Subsidiaries and (4) pay their respective operating expenses and liabilities out of the separate funds of the DirectSat Subsidiaries or the Other Entities, as applicable; provided that the restrictions in clause (G)(4) shall not apply to certain shared overhead and administrative expenses that would not be commercially reasonable to pay from such separate funds and which shall be allocated to the DirectSat Subsidiaries and the Other Entities under the Shared Services Agreement on a basis reasonably related to actual use or value of services rendered, and the Loan Parties shall use commercially reasonable efforts to have the direct obligations to pay such shared overhead and administrative expenses, where the Loan Parties reasonably

 

10



 

 

 

determine that allocating the direct obligation to pay such expenses on such basis to the Other Entities and the DirectSat Subsidiaries is not practicable or commercially reasonable, allocated to the DirectSat Subsidiaries and UniTek Services Co.; (H) the DirectSat Business and UniTek Services Co. shall not be permitted to guarantee or otherwise become obligated for the debts of the Other Business (other than with respect to the New First Lien Debt) or hold out its or their credit as being available to satisfy the obligations of the Other Business (other than with respect to the New First Lien Debt), and vice versa; and (I) from and after the date that is 12 months after the Closing Date, no transaction between the DirectSat Business and/or any one or more of the DirectSat Subsidiaries or UniTek Services Co., on the one hand, and the Other Business and/or any one or more of the Other Entities, on the other hand, shall be permitted other than (1) any transactions of immaterial value to be agreed upon in the ordinary course of business on terms and conditions comparable to an arm’s-length transaction, (2) transactions for which the costs thereof and receipts therefrom are allocated among the DirectSat Business and the Other Business pursuant to one or more shared services agreements satisfactory to Apollo and the Specified Term Lenders (collectively, the “Shared Services Agreement”) entered into between the DirectSat Subsidiaries, the Other Subsidiaries and a newly formed corporate entity formed as a sister entity to, and with substantially the same governance structure as, Reorganized DirectSat (such newly formed entity, “UniTek Services Co.”), reflecting arms’ length terms and allocations (including but not limited to allocations of expenses and liabilities) between the Other Business and the DirectSat Business and requiring a cash “true up” by the DirectSat Subsidiaries of any amounts allocated to the DirectSat Business and by the Other Entities of any amounts allocated to the Other Business, and in each case unpaid under the Shared Services Agreement, no less frequently than on a monthly basis, and (3) any payments on account of any contribution or reimbursement claims of any of the Loan Parties against any of the other Loan Parties with respect to any payments made in respect of the New First Lien Debt.

 

(vii) The Shared Services Agreement shall contain arrangements among UniTek Services Co., the DirectSat Business and the Other Business made on an arms’ length basis, containing (A) to the extent UniTek Services Co. provides services or property to the DirectSat Business or the Other Business, or the DirectSat Business provides services or property to the Other Business, or vice versa, allocations between UniTek Services Co., the DirectSat Business and the Other Business to the extent practical on the basis of actual use or value of services rendered or a reasonable approximation thereof, (B) pass-through arrangements on an arms-length basis for the DirectSat Business or the Other Business, as applicable, to pass through costs and benefits of contracts where such business is not released from liability under such contract that primarily relates to the other Business, (C) to the extent that a DirectSat Subsidiary is not released

 

11



 

 

 

from liability under a lease of a facility being used by the Other Business, an agreement pursuant to which arrangements are made on an arms-length basis for the Other Business to indemnify the applicable DirectSat Subsidiary for any liabilities under the lease (including environmental indemnities) and for the DirectSat Subsidiary to pass through costs of the lease on an arm’s length basis, (D) with respect to shared space at any premises where employees work for the Other Business and the DirectSat Business, written arms’ length arrangements for such shared facilities, including arrangements regarding sharing the costs of infrastructure and other related liabilities at such locations, with allocations in those arrangements being made to the extent practical on the basis of actual use or value of services rendered or otherwise on a basis reasonably related to (and a reasonable approximation of) actual use or the value of services rendered, (E) to the extent UniTek Services Co. or the DirectSat Business provides sales, general or administrative, legal or information technology support functions to the DirectSat Business or the Other Business, arms-length agreements to provide such functions to the extent practical on the basis of actual use or value of services rendered or otherwise on a basis reasonably related to (and a reasonable approximation of) actual use or the value of services rendered and (F) a cash “true up” by the Other Subsidiaries of any amounts allocated to the Other Business and by the DirectSat Business of any amounts allocated to the DirectSat Business, and in each case unpaid under the Shared Services Agreement, no less frequently than on a monthly basis.  Any allocations of revenues or costs in the Shared Services Agreement based on historical allocations of use or value between the DirectSat Business and the Other Business shall be required to be adjusted on a periodic basis (and not less frequently than annually) to reflect updated historical information.  The Loan Parties shall not amend, modify or otherwise change (or permit the amendment, modification or other change in any manner of) the Shared Services Agreement and any allocation methodologies thereunder, or make any payment that has the same effect as any such amendment, modification or other change, in each case where such amendment, modification or change is material or would reasonably be expected to be materially adverse to either the DirectSat Business or the Other Business.

 

(viii) Not later than 10 Business Days after the end of each month commencing with the first full month following the Closing Date, Borrower shall deliver to the Administrative Agent for distribution to the Lenders a written report in reasonable detail on the progress of efforts to comply with the Separation Covenants and shall promptly respond to all reasonable requests for information and access from Apollo and the Specified Term Lenders and their respective counsel in respect of such progress.

 

(ix) The negative covenant restricting indebtedness shall prohibit Reorganized Holdco and its subsidiaries from incurring additional funded debt; provided, however, that the Other Entities may incur

 

12



 

 

 

funded debt that is contractually subordinated to the New First Lien Debt on terms reasonably satisfactory to Apollo and the Specified Term Lenders.

 

(x) The subordination agreement with respect to the New Holdco Debt (if any) shall be in form and substance reasonably acceptable to Apollo and the Specified Term Lenders.

 

(b) With respect to the Borrowers’ Case:

 

(i) the Bankruptcy Court shall have entered the order approving the Plan (as defined in the Plan Term Sheet);

 

(ii) the Plan shall have been consummated; and

 

(iii) the Plan shall not have been stayed, revoked, or withdrawn.

 

(c) All accrued interest, fees and expenses under the ABL Credit Agreement, and all accrued expenses incurred by the Specified Term Lenders under the Term Credit Agreement or otherwise in respect of the restructuring contemplated by the Plan Term Sheet and this Term Sheet, and all fees and expenses due and payable on the Closing Date to the lenders and the Administrative Agent under the New First Lien Debt, shall have been paid in full in cash on the Closing Date.

 

 

 

Events of Default

 

Customary and appropriate for an exit financing facility of this type and reasonably acceptable to Apollo and the Specified Term Lenders, including an event of default for any change of control (to be defined in the definitive documentation for the New First Lien Debt).

 

13


EX-99.2 3 a14-22689_1ex99d2.htm EX-99.2

Exhibit 99.2

 

 

UniTek Global Services Reaches Agreement on Comprehensive Debt Restructuring

 

No Impact to Service or Operations; Company Seeks Expedited Exit From Pre-Packaged Chapter 11

 

BLUE BELL, PA — October 21, 2014 — UniTek Global Services, Inc. (“UniTek” or the “Company”) (OTC: UNTK), a premier provider of permanently outsourced infrastructure services to the telecommunications, broadband cable, wireless, transportation, public safety and satellite television industries, announced today that the Company and its Lenders, including affiliates of Littlejohn & Co. and New Mountain Capital (the “Lenders”) have agreed to the terms of a comprehensive debt restructuring (the “Restructuring”).

 

The Restructuring will allow the Company to continue honoring its obligations and responsibilities to its employees, customers, and vendors in the ordinary course of business, while significantly reducing its debt, reorganizing other financial obligations, and creating a strong financial foundation for the Company’s future. To implement the Restructuring, the Company intends to file a voluntary petition for a “Pre-Packaged” Chapter 11 Bankruptcy in the U.S. Bankruptcy Court for the District of Delaware, which will be filed prior to November 11, 2014.  In the filing, the Company plans to request a hearing to approve the Restructuring and to set an expedited schedule for the Company’s emergence from Chapter 11.

 

The terms of the Restructuring provide for a substantial reduction of secured debt through a debt-for-equity “swap” of over 40% as well as a substantial reduction in cash interest rate.  In addition, the Lenders have agreed to advance up to $43 million of new capital to support the Company’s recapitalization. All valid unsecured creditors’ claims on UniTek and its subsidiaries will be assumed in the ordinary course of business and unimpaired.

 

Concurrently, the Lenders, as well as UniTek’s largest customer, DIRECTV, have entered into a Plan Support Agreement in support of the Restructuring. “We are pleased that the Company has taken steps to improve its financial profile. We value our relationship with UniTek and look forward to continuing our partnership,” stated Dave Baker, Senior Vice President of DIRECTV.

 

Upon completion of the Restructuring, UniTek will become a private company entirely owned by its Lenders, the largest of which have leading private equity practices, as well as deep relationships in the specialty contracting and fulfillment services industries.

 

“We are very pleased to have the support of the Lenders in the steps we have taken to improve our balance sheet and, through it, the long-term health of our Company,” said Rocky Romanella, Chief Executive Officer. “As a result of this Restructuring, we will be positioned as a financially sound competitor in the industries UniTek serves. We have taken

 

1



 

steps to diminish the impact of this process on our vendors, customers and employees, and we intend to move forward as expeditiously as possible to complete the Restructuring.”

 

About UniTek Global Services

 

UniTek Global Services is a leading provider of communications infrastructure solutions, leveraging a longstanding reputation for innovation and safety to connect individuals, businesses, government agencies and communities to the digital landscape. Contact us for ways we can help your business grow by visiting the UniTek website: www.unitekglobalservices.com.

 

Contact Info

 

The Piacente Group | Investor Relations

Matthew Abenante

(212) 481-2050

unitek@tpg-ir.com

 

Forward-Looking Statements

 

The statements in this press release that are not historical fact are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts, including but not limited to statements regarding the terms of the Company’s proposed comprehensive debt restructuring and the filing of a voluntary petition for a Chapter 11 Bankruptcy in the U.S. Bankruptcy Court for the District of Delaware, their effect on the Company’s operations and the Company’s relationships with its customers. These statements are subject to uncertainties and risks including, but not limited to, the Company’s ability to address issues arising from previously disclosed accounting-related matters, operating performance, general financial, economic, and political conditions affecting the Company’s business and its target industries, the ability of the Company to perform its obligations under its contracts and agreements with customers, and other risks contained in reports filed by the Company with the Securities and Exchange Commission, included in our Form 10-K for the year ended December 31, 2013. The words “may,” “could,” “should,” “would,” “believe,” “are confident,” “anticipate,” “estimate,” “expect,” “intend,” “plan,” “aspire,” and similar expressions are intended to identify forward-looking statements. All such statements are made in good faith by the Company pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. The Company does not undertake to update any forward looking statement, whether written or oral, which may be made from time to time by or on behalf of the Company, except as may be required by applicable law or regulations.

 

2


EX-99.3 4 a14-22689_1ex99d3.htm EX-99.3

Exhibit 99.3

 

EXECUTION

 

SECOND AMENDMENT TO

REVOLVING CREDIT AND SECURITY AGREEMENT

 

This SECOND AMENDMENT TO REVOLVING CREDIT AND SECURITY AGREEMENT (this “Amendment”) is dated as of August 13, 2014 and entered into by and among UNITEK GLOBAL SERVICES INC., a Delaware corporation (“UniTek Parent”), UNITEK ACQUISITION, INC., a Delaware corporation (“UniTek Acquisition”), PINNACLE WIRELESS USA, INC., a Delaware corporation (“Pinnacle”), UNITEK USA, LLC, a Delaware limited liability company (“UniTek USA”), ADVANCED COMMUNICATIONS USA, INC., a Delaware corporation (“Advanced Communications”), DIRECTSAT USA, LLC, a Delaware limited liability company (“DirectSat”), FTS USA, LLC, a Delaware limited liability company (“FTS”) (UniTek Parent, UniTek Acquisition, Pinnacle, UniTek USA, Advanced Communications, DirectSat, FTS, collectively the “Borrowers”), the financial institutions and other institutional lenders party hereto, and APOLLO INVESTMENT CORPORATION, as agent for the Lenders (“AIC”, and in such capacity, the “Agent”).  Capitalized terms used herein without definition shall have the same meanings herein as set forth in that certain Revolving Credit and Security Agreement, dated as of July 10, 2013 (as amended, supplemented or otherwise modified, the “Revolving Credit Agreement”), by and among the Borrowers, the Agent and the Lenders.

 

RECITALS

 

WHEREAS, the Borrowers, Agent and Lenders have previously entered into the Revolving Credit Agreement.

 

WHEREAS, each Person (other than Borrowers and Agent) who immediately prior to effectiveness of this Amendment did not hold any Revolving Commitment Amount and has executed and delivered to the Agent a counterpart to this Amendment (each, a “Last Out Lender”) has agreed to a commitment (each, a “Last Out Loan Commitment”) in respect of certain loans to be made on a subordinated basis on the terms and subject to the conditions set forth in this Amendment and the Revolving Credit Agreement.

 

WHEREAS, upon the effectiveness of this Amendment, each Last Out Lender severally shall make Last Out Loans to the Borrowers in the amount of its Last Out Loan Commitment.

 

WHEREAS, the Borrowers, the Last Out Lenders and the Lenders have agreed to effectuate the foregoing and to amend certain provisions of the Revolving Credit Agreement and Other Documents.

 

NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, the parties hereto agree as follows:

 



 

Section 1.                                          NEW LAST OUT LOANS

 

Upon the occurrence of the Effective Date, each Last Out Lender severally shall make a Last Out Loan (as defined in Section 2 hereof) to the Borrowers in the aggregate amount of its Last Out Loan Commitment as reflected on Schedule 1 annexed hereto, with the proceeds of such Last Out Loans to be funded directly (notwithstanding Section 2.3 of the Revolving Credit Agreement or any other contrary provision of the Revolving Credit Agreement or the existence of any Default or Event of Default) to the Cash Collateral Account and to be applied thereafter, in accordance with the Revolving Credit Agreement, to purposes permitted under the Revolving Credit Agreement.  The terms applicable to such Last Out Loans shall be set forth in the Revolving Credit Agreement after giving effect to this Amendment (it being understood that the conditions in Section 8.2 of the Revolving Credit Agreement shall not apply to the borrowing of the Last Out Loans).

 

Section 2.                                          AMENDMENTS TO THE REVOLVING CREDIT AGREEMENT

 

A.                                    Amendments to Section 1.2.

 

(i)                                     The following new definitions are inserted into Section 1.2 of the Revolving Credit Agreement in the appropriate alphabetical order:

 

Discharge of ABL Obligations” means the “Discharge of ABL Obligations” as such term is defined in the Subordination Agreement.

 

Exempt Last Out Loan Proceeds” shall mean, at any time of determination, any Last Out Loan Proceeds solely to the extent (a) such Last Out Loan Proceeds are on deposit in the Cash Collateral Account and have not been withdrawn therefrom by the Borrowers pursuant to Section 4.15(h) or otherwise, and (b) not more than four Business Days shall have passed since the funding of the Last Out Loans giving rise to such Last Out Loan Proceeds.  For purposes of determining the foregoing, any withdrawals of amounts from the Cash Collateral Account pursuant to Section 4.15(h) or otherwise on and after the Second Amendment Effective Date shall be deemed first to be Exempt Last Out Loan Proceeds (to the extent of any such Exempt Last Out Loan Proceeds that have not then already been withdrawn) that are so withdrawn and shall reduce, dollar for dollar upon such withdrawal, the amount of Exempt Last Out Loan Proceeds deemed remaining in the Cash Collateral Account.

 

 “Forbearance Agreement” means that certain Forbearance Agreement dated as of August 8, 2014, by and among the Borrowers, the Guarantors, the Agent and the Lenders (as the same may be amended, restated, supplemented, otherwise modified or replaced from time to time).

 

Last Out Incremental Loan” shall have the meaning set forth in Section 2.25(a).

 

Last Out Lender” means each Person that is a Last Out Lender (as defined in the Second Amendment) and shall include each Person that becomes a transferee, successor or assign of any Last Out Lender.

 

2



 

Last Out Loan Commitment” of any Last Out Lender shall mean the Last Out Loan Commitment set forth next to each such Lender’s name on Schedule I to the Second Amendment.

 

Last Out Loan Increase Date” shall have the meaning set forth in Section 2.25(a).

 

Last Out Loan Proceeds” shall mean any and all proceeds of the Last Out Loans funded by the Last Out Lenders to the Borrowers.

 

Last Out Loans” shall mean the loans made by the Last Out Lenders pursuant to the Last Out Loan Commitments and the Last Out Incremental Loans.

 

Last Out Required Lenders” shall mean the Last Out Lenders having more than 50% of the aggregate principal amount (including any capitalized paid in kind interest) of the outstanding Last Out Loans.

 

Second Amendment” shall mean that certain Second Amendment to Revolving Credit and Security Agreement dated as of the Second Amendment Effective Date.

 

Second Amendment Effective Date” shall mean the “Effective Date” as defined in the Second Amendment.

 

Specified Defaults” shall mean the “Specified Defaults” as defined in the Forbearance Agreement.

 

Subordination Agreement” shall mean that certain Subordination Agreement dated as of the Second Amendment Effective Date by and among AIC and the Last Out Lenders.

 

(ii)                                  The definition of “Advances” in Section 1.2 of the Revolving Credit Agreement is amended by adding immediately prior to the “.” at the end thereof the following:

 

“; provided, that Advances shall also mean and include, as the context requires, the Last Out Loans (and for the avoidance of doubt, any reference to Revolving Advances, Swing Loans and/or credit extended pursuant to the Revolving Commitment Amounts of the Revolving Lenders shall not mean or refer to the Last Out Loans)”.

 

(iii)                               The definition of “Lenders” in Section 1.2 of the Revolving Credit Agreement is amended by adding immediately prior to the “.” at the end thereof the following:

 

“; provided, that Lenders shall also mean and include, as the context requires, the Last Out Lenders (and for the avoidance of doubt, any reference to Lenders in the

 

3



 

context of holding Revolving Commitment Amounts or Advances other than Last Out Loans shall not mean or refer to the Last Out Lenders)”.

 

(iv)                              The definition of “Other Documents” in Section 1.2 of the Revolving Credit Agreement is amended by adding immediately after the reference to “the Intercreditor Agreement” the phrase “, the Second Amendment, the Subordination Agreement”:

 

(v)                                 The definition of “Required Lenders” in Section 1.2 of the Revolving Credit Agreement is amended by adding immediately prior to the “.” at the end thereof the following:

 

“; provided, further, that following the Discharge of ABL Obligations, Required Lenders shall mean Lenders holding more than 50% of the principal amount (including any capitalized paid-in-kind interest) of the outstanding Last Out Loans”.

 

(vi)                              The definition of “Revolving Advances” in Section 1.2 of the Revolving Credit Agreement is amended by adding immediately after the reference to “Swing Loans” the phrase “, Last Out Loans”.

 

B.                                    Amendments to Revolving Credit Commitments.  The Revolving Credit Agreement is amended by deleting each reference to “Revolving Credit Commitment” or Revolving Credit Commitments” and substituting therefor “Revolving Commitment Amount” or Revolving Commitment Amounts”, respectively.

 

C.                                    Amendment to Section 2.1.  Section 2.1 of the Revolving Credit Agreement is amended by adding at the end thereof the following new Section 2.1(c):

 

“(c)                            Last Out Loans.  On the Second Amendment Effective Date, each Last Out Lender shall fund, severally and not jointly, a Last Out Loan to Borrowers in the aggregate amount of its Last Out Loan Commitment, with the proceeds of such Last Out Loans funded directly (notwithstanding the existence of any Default or Event of Default or any contrary provision of this Agreement) to the Cash Collateral Account and to be applied thereafter, in accordance with this Agreement (including Sections 4.15(h) and 11.5), to purposes permitted under this Agreement.  Last Out Loans once repaid may not be reborrowed.”

 

D.                                    Amendments to Section 2.2.

 

(i)                                     Section 2.2(a) of the Revolving Credit Agreement is amended by adding immediately prior to the “.” at the end thereof the following:

 

“; provided, however, that this Section 2.2(a) shall not apply to interest, fees, charges, costs or expenses with respect to Last Out Loans”.

 

4



 

(ii)                                  Section 2.2(b) of the Revolving Credit Agreement is amended by adding at the end thereof the following new paragraph:

 

“Notwithstanding the foregoing provisions of this paragraph, the Interest Periods (and the applicable interest rates, including the Default Rate) applicable to Revolving Advances in effect on the Second Amendment Effective Date and thereafter shall apply to the Last Out Loans pro rata (and the corresponding dates for payment of such interest shall be the same) so that, after any funding of the Last Out Loans (including on any Last Out Loan Increase Date), any Interest Period applicable to the principal amount of the Revolving Advances and any outstanding Last Out Loans on such funding date shall apply to a ratable portion of the principal amount of such funded Last Out Loans (and the Interest Periods in respect of such Last Out Loans shall apply pro rata to each Last Out Lender’s Last Out Loans; provided, however, that upon payment in full of all Advances other than the Last Out Loans, the Last Out Loans shall thereafter accrue interest at a rate or rates determined in accordance with the foregoing provisions of Section 2.2(b) and Section 3.1 of this Agreement.”

 

E.                                    Amendments to Section 2.6.

 

(i)                                     Section 2.6(a) of the Revolving Credit Agreement is amended by adding at the end thereof the following new sentence:

 

“The Last Out Loans shall be due and payable in full on the last day of the Term, subject to earlier prepayment and acceleration upon an Event of Default as herein provided; provided that the Borrowers shall not make any payment of such amounts so due and payable until the Discharge of ABL Obligations.”

 

(ii)                                  Section 2.6(c) of the Revolving Credit Agreement is amended by adding immediately after the reference to “Revolving Advances” contained therein the phrase “and for the ratable accounts of the Last Out Lenders with respect to the Last Out Loans”.

 

(iii)                               Section 2.6 of the Revolving Credit Agreement is amended by adding at the end thereof the following new Section 2.6(e):

 

“(e)                            Except where a provision under this Agreement expressly sets forth that such provision shall govern over the Subordination Agreement, in the event of any conflicts between provisions under this Agreement and provisions under the Subordination Agreement, the Subordination Agreement shall govern.”

 

F.                                     Amendments to Section 2.20.

 

(i)                                     Section 2.20(a) of the Revolving Credit Agreement is amended by adding at the end thereof the following new sentence:

 

5



 

“After the Second Amendment Effective Date, any borrowing of additional Last Out Loans shall be in accordance with the express provisions of Section 2.25.”

 

(ii)                                  Section 2.20(b) of the Revolving Credit Agreement is amended by adding immediately prior to the “.” at the end thereof the following:

 

“, except that payments made by the Borrowers with respect to the Last Out Loans (and permitted hereunder) shall be made by Borrowers directly to each of the Last Out Lenders on the due dates therefor (with a notice to the Agent specifying the amount and nature of such payment at least one Business Day prior to such payment).  Each payment (including each prepayment) by any Borrower on account of the principal and interest on the Last Out Loans (if permitted by this Agreement and by the Subordination Agreement), shall be made to the Last Out Loans of the Last Out Lenders ratably.”

 

(iii)                               Section 2.20(d) of the Revolving Credit Agreement is amended by adding at the end thereof the following new sentence:

 

“Notwithstanding anything herein to the contrary, no Last Out Lender shall have any rights under this Section 2.20(d) against any Lender other than another Last Out Lender with respect to payments or benefits received on account of Last Out Loans; provided that if any Lender (other than a Last Out Lender) shall receive, after the Discharge of ABL Obligations, any payment or interest or receive any Collateral, in each case on account of the Last Out Loans (or any other Advance which has been paid in full as a result of the Discharge of ABL Obligations), such Lender shall payover such payment or interest or Collateral to the Last Out Lenders (it being understood that with respect to any such amount or Collateral received that does not consist of cash, securities or instruments, such Lender’s obligations under this sentence shall be limited to using commercially reasonable efforts provide the Last Out Lenders with the benefits thereof), or the proceeds thereof, so they may share the excess payment or benefits of such Collateral or proceeds ratably with each of the other Last Out Lenders.”

 

G.                                   Amendments to Section 2.21.

 

(i)                                     Section 2.21(a) of the Revolving Credit Agreement is amended by adding immediately prior to the “.” at the end of the second sentence thereof the following:

 

“; provided, however, that if such notice is for prepayment of the Last Out Loans (which notice shall only be delivered following the Discharge of ABL Obligations), such notice shall contain a statement indicating such prepayment is to be applied to the Last Out Loans”.

 

(ii)                                  Section 2.21 of the Revolving Credit Agreement is further amended by adding at the end thereof the following new Section 2.21(e):

 

6



 

“(e)                            Any prepayments of the Advances by the Borrowers under this Section 2.21 on any date on which a prepayment is required to be made or elected pursuant to this Section 2.21 shall be applied first to all Advances as if the Last Out Loans were not outstanding, and only after the Discharge of ABL Obligations (and subject to the Subordination Agreement) shall any such payment on the Last Out Loans be due and payable and/or permitted to be made hereunder; provided that, notwithstanding anything in this Section 2.21 to the contrary. no prepayment that is required to be made or elected by any Borrower, or on behalf of any Borrower (including at the direction of the Agent), shall use any of the Last Out Loan Proceeds for such prepayment to the extent expressly prohibited by Section 4.15(h) or 11.5.”

 

H.                                   Amendment to Section 2.22(a).  Section 2.22(a) of the Revolving Credit Agreement is amended by adding at the end thereof the following:

 

“Notwithstanding the foregoing, (x) the Borrowers shall only apply the proceeds of the Last Out Loans to (1) provide ongoing working capital financing for Borrowers and (2) to pay those Obligations expressly described in Section 3.1(ii)(J) or 6.1(c) of the Forbearance Agreement as in effect on the Second Amendment Effective Date (or such corresponding provisions in any other Forbearance Agreement) and Obligations consisting of accrued interest and fees. The Last Out Loan Proceeds shall be funded directly to the Cash Collateral Account to be applied thereafter in accordance with Section 4.15(h) or 11.5.”

 

I.                                        Amendment to Section II.  Section II of the Revolving Credit Agreement is amended by adding at the end thereof the following new Section 2.25:

 

“2.25                  Last Out Incremental Loans

 

(a)                                 After the Second Amendment Effective Date, the Borrowers and any one or more of the Last Out Lenders may, with notice to the Agent, from time to time agree that such Last Out Lender(s) shall each make an additional Last Out Loan (each a “Last Out Incremental Loan”), with the proceeds of such Last Out Loan(s) to be funded directly to the Cash Collateral Account and to be applied thereafter, in accordance with this Agreement, to purposes permitted under this Agreement; provided, however, that (x) no Default or Event of Default (other than the Specified Defaults) shall have occurred and be continuing as of the date of such request or as of the effective date of the making of such additional Last Out Loan(s) (each a “Last Out Loan Increase Date”) or shall occur as a result thereof (unless this condition requiring no such Default or Event of Default is waived by such Last Out Lender(s); it being understood and agreed that none of the Agent nor any other Lender hereunder shall be permitted to prohibit such Last Out Incremental Loan due to the existence of any Default or Event of Default, including any Default or Event of Default arising from an overadvance of the Revolving Advances or Out-of-Formula Loans), (y) the terms applicable to such Last Out Incremental Loan(s) shall be the same as the terms applicable to the Last

 

7



 

Out Loans outstanding as of such Last Out Loan Increase Date and (z) the other conditions set forth in this Section 2.25 are satisfied.  The aggregate principal amount of Last Out Incremental Loans made hereunder shall not exceed (together with the aggregate principal amount of Last Out Loans made on the Second Amendment Effective Date, but excluding interest paid in kind and capitalized on the Last Out Loans) $25,000,000.

 

(b)                                 On a Last Out Loan Increase Date, Agent shall have received on or before such Last Out Loan Increase Date the following, each dated such date: (i) confirmation from each Last Out Lender providing such Last Out Incremental Loan of the amount of Last Out Incremental Loan, in form and substance reasonably satisfactory to the Agent; (ii) a certificate of Borrowing Agent certifying that no Default or Event of Default (other than the Specified Defaults) shall have occurred and be continuing or shall occur as a result of such Last Out Incremental Loan(s) (unless waived by such Last Out Lender(s)); (iii) a certificate of Borrowing Agent certifying that the representations and warranties made by each Borrower herein and in the Other Documents are true and complete in all respects with the same force and effect as if made on and as of such date (or, to the extent any such representation or warranty specifically relates to an earlier date, such representation or warranty is true and complete in all respects as of such earlier date), except with respect to the occurrence of Specified Defaults; and (iv) such other documents, instruments and information as such Last Out Lender(s) or its (their) counsel shall reasonably deem necessary in connection with such Last Out Incremental Loan(s) (provided that in no event shall any such document or instrument purport to adversely affect any rights of the Agent and Lenders under this Agreement or the Other Documents).  On such Last Out Loan Increase Date, upon fulfillment of the conditions set forth in this Section 2.25, Agent shall notify all Last Out Lenders and the Borrowers, on or before 12:00 noon, by telecopier or e-mail, that such Last Out Incremental Loan(s) are to be effected on such Last Out Loan Increase Date.  Upon the making of such Last Out Incremental Loan(s), the Agent shall increase the outstanding Last Out Loans for the account of each Last Out Lender making a Last Out Incremental Loan by the amount of such Last Out Incremental Loan.  No Last Out Lender shall receive any compensation for the commitment to or the funding of Last Out Loans (including Last Out Incremental Loans) other than as expressly provided herein, and all such Last Out Loans shall be funded in cash at 100% of the principal amount thereof.

 

J.                                      Amendment to Section 3.1.  Section 3.1 of the Revolving Credit Agreement is amended by adding at the end thereof the following new paragraph:

 

“Notwithstanding any other provision hereof, (i) so long as any Revolving Advances are outstanding, with respect to any portion of the principal amount of Last Out Loans allocated to a particular Interest Period, interest charges on such portion of outstanding Last Out Loans shall equal the applicable Revolving Interest Rate for such Interest Period, and otherwise shall equal the Revolving Interest Rate then applicable to Domestic Rate Loans, provided that if the Default

 

8



 

Rate is in effect with respect to the other Obligations, the Default Rate shall also be in effect in respect of the Last Out Loans; (ii) even if no Revolving Advances are outstanding, interest charges on the principal amount of outstanding Last Out Loans shall equal (A) if such Last Out Loans are Domestic Rate Loans, an interest rate per annum equal to the sum of the stated Applicable Margin for Revolving Advances that are Domestic Rate Loans plus the Alternate Base Rate and (B) if such Last Out Loans are Eurodollar Rate Loans, an interest rate per annum equal to the sum of the stated Applicable Margin for Revolving Advances that are Eurodollar Rate Loans plus the Eurodollar Rate, provided that if the Default Rate is in effect with respect to any other Obligations, the Default Rate shall also be in effect in respect of the Last Out Loans; and (iii) so long as the Discharge of ABL Obligations has not occurred, all interest on the outstanding Last Out Loans (including any Default Rate interest) shall be capitalized on the due date therefor and interest shall accrue on all amounts so capitalized at the applicable rate(s) set forth in this paragraph, except that if on such due date (x) all principal, premium, interest, fees and other amounts, to the extent then due and payable with respect to the Obligations (other than the Last Out Loans) (provided, that any principal amount due and payable under Section 2.7 because Revolving Advances exceed the sum of (A) the Formula Amount plus (B) the amount of Out-of-Formula Loans permitted under Section 16.2 (an “Overdue Formula Amount”) shall not be considered (solely for purposes of the preceding provisions of this clause (x)) a principal amount due and payable, except that at any time the Target Amount (used hereinafter as defined in the Forbearance Agreement) as of any Saturday following the Second Amendment Effective Date shall exceed the sum of Eligible Receivables plus Eligible Unbilled Receivables (as of the calculation date for any Borrowing Base Certificate delivered to the Agent on such Saturday pursuant to the Forbearance Agreement or otherwise), any Overdue Formula Amount shall thereupon be deemed a principal amount due and payable for all purposes of this clause (x) unless and until, before the close of business on the fourth Business Day following such applicable Saturday, the Borrowers shall have repaid a principal amount of the outstanding Revolving Advances at least equal to such excess or shall have delivered to Agent an updated Borrowing Base Certificate for the Wednesday following such applicable Saturday (pursuant to the Forbearance Agreement or otherwise) demonstrating that the Target Amount no longer exceeds the sum of Eligible Receivables plus Eligible Unbilled Receivables), have been paid in full in cash and (y) no Insolvency Proceeding (as defined in the Subordination Agreement) shall have occurred, Borrowers shall pay a portion of such interest amount in cash on the date such interest is otherwise due and payable equal to the portion of such interest that is attributable to a per annum interest rate of five percent (5.0%) on the Last Out Loans.”

 

K.                                   Amendment to Section 4.15(h).  Section 4.15(h) of the Revolving Credit Agreement is amended by deleting the first paragraph thereof in its entirety and substituting therefor the following:

 

9



 

“(h)                           Establishment of a Lockbox Account, Dominion Account.  All proceeds of the ABL Priority Collateral shall be deposited by Borrowers into either (i) a lockbox account, dominion account or such other “blocked account” (“Blocked Accounts”) established at a bank or banks (each such bank, a “Blocked Account Bank”) pursuant to an arrangement with such Blocked Account Bank as may be selected by Borrowing Agent and be acceptable to Agent or (ii) depository accounts (“Depository Accounts”) established at a bank or banks for the deposit of such proceeds (each such bank, a “Depository Account Bank”) or (iii) the Cash Collateral Account.  Each applicable Borrower, Agent and each Blocked Account Bank or Depository Account Bank, as applicable, shall enter into a deposit account control agreement in form and substance satisfactory to Agent directing such Blocked Account Bank or Depository Account Bank, as applicable, to transfer at the close of each Business Day such funds so deposited to the Cash Collateral Account.  As between Borrowers on the one hand and Agent on the other (and without derogation of any rights (if any) of any third parties including the Term Debt Creditors as between Borrowers on the one hand and such third parties on the other, or as between Agent and/or Lenders on the one hand and such third parties on the other), Borrowing Agent shall obtain the agreement by such Blocked Account Bank or Depository Account Bank, as applicable, to waive any offset rights against the funds so deposited.  Neither Agent nor any Lender assumes any responsibility for such blocked account arrangement, including any claim of accord and satisfaction or release with respect to deposits accepted by any Blocked Account Bank or Depository Account Bank thereunder.  All funds in the Cash Collateral Account shall be retained in such account until the earliest of (x) the Borrowers request that the account bank release such funds; provided, that, any such release of funds (i) shall not be permitted (and the Borrowers shall not be permitted to request such release) so long as a Default or Event of Default shall have occurred and be continuing and (ii) shall constitute a representation and warranty by each Borrower that as of the date of such release the conditions contained in Section 8.2 have been satisfied (and Borrowing Agent shall provide evidence as to such satisfaction promptly after Agent’s request therefor), (y) the determination by Agent to apply any portion of the proceeds on deposit in such account (other than the Exempt Last Out Loan Proceeds) to the satisfaction of the Obligations (including the cash collateralization of the Letters of Credit) in such order as Agent shall determine in its sole discretion, provided that, in the absence of any Event of Default, Agent shall apply all such funds (other than the Exempt Last Out Loan Proceeds) first to the prepayment of the principal amount of the Revolving Advances and the Swing Loans in accordance with the provisions of Section 2.20(e) and (z) upon the occurrence of any Event of Default under Section 10.7 or 10.8 of this Agreement, all funds on deposit in such account (other than the Exempt Last Out Loan Proceeds) shall, without any notice or action on the part of Agent, be applied to prepay the Obligations. Notwithstanding the preceding sentence, no prepayment of Last Out Loans shall be made with the funds on deposit in such account (other than the Exempt Last Out Loan Proceeds)

 

10



 

until the Discharge of ABL Obligations, and any payment to the Last Out Lenders on account of the Last Out Loans shall be subject to the Subordination Agreement; provided, however, that notwithstanding anything in this Agreement or the Subordination Agreement to the contrary, (A) so long as no Default or Event of Default has occurred (other than the Specified Defaults) and prior to any election by certain Last Out Lenders described in the next sentence, any and all Exempt Last Out Loan Proceeds then on deposit in the Cash Collateral Account shall be distributed to the Borrowers upon the Borrowers’ request at any time and from time to time, and (B) in the event any Exempt Last Out Loan Proceeds remain in the Cash Collateral Account at the time of an election described in this clause (B), upon the occurrence of any subsequent Default or Event of Default (other than any Specified Default), and notwithstanding anything in this Agreement or the Subordination Agreement to the contrary requiring the prior Discharge of the ABL Obligations, upon the election of the Last Out Required Lenders, such Exempt Last Out Loan Proceeds shall be applied by the Agent, if received by the Agent, solely to the repayment of the Last Out Loans and shall not be subject to the Subordination Agreement.  For the avoidance of doubt, (I) Borrowers shall use and apply the Last Out Loan Proceeds (whether Exempt Last Out Loan Proceeds or not) only as set forth in Section 2.22(a) (provided, that notwithstanding anything to the contrary herein, the Agent and the Lenders shall not be responsible or liable with respect to any breach by Borrowers of their agreements in this clause (I) or Section 2.22(a) with respect to use of the Last Out Loan Proceeds), (II) none of the Exempt Last Out Loan Proceeds, so long as they remain Exempt Last Out Loan Proceeds, shall be applied by the Agent to pay, repay or reimburse any of the Obligations except for the Last Out Loans (and accrued and cash pay interest thereon in accordance with the terms of this Agreement), and (III) any Last Out Loan Proceeds that cease for any reason to be Exempt Last Out Loan Proceeds cease to be subject to any restrictions in this Agreement that are applicable to Exempt Last Out Loan Proceeds (including the restriction in clause (II) of this sentence but not the requirement set forth in clause (I) of this sentence).  Nothing contained in the Subordination Agreement shall be deemed to prejudice any of the terms and conditions of the preceding two sentences of this Section 4.15(h).”

 

L.                                    Amendment to Section 11.5.  Section 11.5 of the Revolving Credit Agreement is amended by deleting it in its entirety and substituting therefor the following:

 

“11.5                  Allocation of Payments After Event of Default.(a) Notwithstanding any other provisions of this Agreement to the contrary, after the occurrence and during the continuance of an Event of Default, all amounts collected or received by the Agent on account of the Obligations (including without limitation any amounts outstanding under any of the Other Documents but excluding any Exempt Last Out Loan Proceeds), or in respect of the Collateral (excluding any Exempt Last Out Loan Proceeds) may, at Agent’s discretion, be paid over or delivered as follows:

 

11



 

FIRST, to the payment of all reasonable out-of-pocket costs and expenses (including reasonable attorneys’ fees) of the Agent in connection with enforcing its rights and the rights of the Lenders under this Agreement and the Other Documents and any protective advances made by the Agent with respect to the Collateral under or pursuant to the terms of this Agreement;

 

SECOND, to payment of any fees owed to the Agent;

 

THIRD, to the payment of all reasonable out-of-pocket costs and expenses (including reasonable attorneys’ fees) of each of the Lenders to the extent owing to such Lender pursuant to the terms of this Agreement;

 

FOURTH, to the payment of all of the Obligations consisting of accrued interest on account of the Swing Loans;

 

FIFTH, to the payment of the outstanding principal amount of the Obligations consisting of Swing Loans;

 

SIXTH, to the payment of all of the Obligations consisting of accrued fees and interest with respect to the Advances (other than interest on the Swing Loans) or otherwise provided for in this Agreement or the Other Documents;

 

SEVENTH, to the payment of the outstanding principal amount of the Advances (other than the Swing Loans), including the payment or cash collateralization of any outstanding Letters of Credit in accordance with Section 3.2(b) hereof, and all Hedge Liabilities;

 

EIGHTH, to all other Obligations provided for in this Agreement or the Other Documents or otherwise which shall have become due and payable and not repaid pursuant to clauses “FIRST” through “SEVENTH” above, and

 

NINTH, to the payment of the surplus, if any, to whoever may be lawfully entitled to receive such surplus.

 

In carrying out the foregoing, (i) amounts received shall be applied in the numerical order provided until exhausted prior to application to the next succeeding category; (ii) each of the Lenders shall receive an amount equal to its Ratable Share of amounts available to be applied pursuant to clauses “SIXTH”, “SEVENTH” and “EIGHTH” above; and (iii) to the extent that any amounts available for distribution pursuant to clause “SEVENTH” above are attributable to the issued but undrawn amount of outstanding Letters of Credit, such amounts shall be held by the Agent as cash collateral as provided for in Section 3.2(b) hereof and applied (A) first, to reimburse the Issuer from time to time for any drawings under such Letters of Credit and (B) then, following the expiration of all Letters of Credit, to all other obligations of the types described in clauses “SEVENTH” and “EIGHTH” above in the manner provided in this Section 11.5.

 

Notwithstanding anything to the contrary contained in this Section 11.5(a), prior to the Discharge of ABL Obligations, no payment that would otherwise be made in accordance with clauses “FIRST” through “EIGHTH” above shall be made to the Last Out Lenders on account of such Last Out Loans, except that interest

 

12



 

accrued, due and payable on the Last Out Loans shall be permitted to be paid in accordance with such clauses above to the extent payment of such interest at such time is permitted under Section 3.1; provided however that, subject to Section 11.5(b), nothing contained in this paragraph shall be deemed to prejudice any of the terms and conditions of the Subordination Agreement.

 

(b)                                 Notwithstanding any other provisions of this Agreement to the contrary, after the occurrence and during the continuance of an Event of Default, all Exempt Last Out Loan Proceeds received or collected by the Agent, at the election and at the direction of the Last Out Required Lenders, shall be paid over or delivered as follows, if constituting Exempt Last Out Loan Proceeds at the time of such payment over or delivery:

 

FIRST, to the payment of all accrued interest on account of the Last Out Loans (to the extent accrued and unpaid on the principal amount prepaid in accordance with clause “SECOND” below);

 

SECOND, to the payment of the outstanding principal amount of the Last Out Loans;

 

THIRD, to the payment of all reasonable out-of-pocket costs and expenses (including reasonable attorneys’ fees) of each of the Last Out Lenders to the extent owing to such Last Out Lender pursuant to the terms of this Agreement;

 

FOURTH, to all other Obligations provided for in this Agreement or the Other Documents or otherwise which shall have become due and payable and not repaid pursuant to clauses “FIRST” through “THIRD” above in this Section 11.5(b) in the order set forth in clause (a) of this Section 11.5; and

 

FIFTH, to the payment of the surplus, if any, to whoever may be lawfully entitled to receive such surplus.

 

In carrying out the foregoing, (i) amounts received shall be applied in the numerical order provided until exhausted prior to application to the next succeeding category; (ii) each of the Last Out Lenders shall receive an amount equal to its ratable portion (according to the respective principal amounts of the Last Out Loans held by such Last Out Lenders) of amounts available to be applied pursuant to clauses “FIRST”, “SECOND” and “THIRD” above.

 

For the avoidance of doubt, nothing contained in the Subordination Agreement shall be deemed to prejudice any of the terms and conditions of this Section 11.5(b).”

 

M.                                 Amendments to Section XIV.

 

(i)                                     Section 14.3 of the Revolving Credit Agreement is amended by adding at the end thereof the following new sentence:

 

“Notwithstanding anything to the contrary contained in this Agreement or the Other Documents, each Last Out Lender, hereby agrees that such Last Out

 

13



 

Lender shall have no right whatsoever, to make or bring any claim, in its capacity as Last Out Lender, against the Agent, Issuer, any Revolving Lender or Swing Loan Lender with respect to the duties and obligations of such Persons under this Agreement and the Other Documents, except with respect to a material breach by any such Person of the material duties or material obligations of such Person in respect of the Exempt Last Out Loan Proceeds as expressly set forth under this Agreement and the other Documents.”

 

(ii)                                  Section 14.7 of the Revolving Credit Agreement is amended by deleting it in its entirety and substituting therefor the following:

 

“14.7                  Indemnification.  To the extent Agent is not reimbursed and indemnified by Borrowers (or by the Last Out Lenders, to the extent provided in the next sentence), each Lender (other than a Last Out Lender) will reimburse and indemnify Agent in proportion to its respective portion of the Advances (other than the Last Out Loans) (or, if no Advances are outstanding, according to its Revolving Commitment Percentage), from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted against Agent in performing its duties hereunder, or in any way relating to or arising out of this Agreement or any Other Document; provided that, Lenders shall not be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from Agent’s gross (not mere) negligence or willful misconduct (as determined by a court of competent jurisdiction in a final non-appealable judgment).  To the extent Agent is not reimbursed and indemnified by Borrowers, each Last Out Lender will reimburse and indemnify Agent and each Lender (other than Last Out Lenders) in proportion to its respective portion of the Last Out Loans, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted against Agent in performing its duties hereunder with respect to Last Out Loans, or in any way relating to or arising out of Last Out Loans; provided that, Last Out Lenders shall not be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from Agent’s or such Lender’s (as applicable) gross (not mere) negligence or willful misconduct (as determined by a court of competent jurisdiction in a final non-appealable judgment).  No Last Out Lender shall have any contribution, indemnification or similar rights in respect of or arising out of the indemnification obligations of the Lenders (other than the Last Out Lenders) pursuant to this Section 14.7.”

 

(iii)                               Section XIV of the Revolving Credit Agreement is further amended by adding at the end thereof the following new Section 14.14:

 

14



 

“14.14  Consent to Subordination Agreement.  Each of the Lenders hereby authorizes the Agent to enter into the Subordination Agreement and agrees to be bound by the terms thereof applicable to such Lender (for the avoidance of doubt, each Last Out Lender agrees to be bound by the Subordination Agreement as a Subordinated Creditor (as defined in the Subordination Agreement)).  The Agent shall not agree to amend or waive any of the provisions of the Subordination Agreement without the prior written consent of the Required Lenders.  For the avoidance of doubt, the Agent shall have no authority to amend or waive any of the provisions of the Subordination Agreement on behalf of any Last Out Lender in its capacity as a Subordinated Creditor thereunder.”

 

N.                                    Amendment to Section 16.2(b). Section 16.2(b) of the Revolving Credit Agreement is amended by deleting it in its entirety and substituting therefor the following:

 

“(b)                           The Required Lenders (or Agent with the consent in writing of the Required Lenders) and Borrowers may, subject to the provisions of this Section 16.2(b), from time to time enter into written supplemental agreements to this Agreement or the Other Documents executed by Borrowers, for the purpose of adding or deleting any provisions or otherwise changing, varying or waiving in any manner the rights of Lenders, Agent or Borrowers thereunder or the conditions, provisions or terms thereof or waiving any Event of Default thereunder, but only to the extent specified in such written agreements; provided, however, that no such supplemental agreement shall:

 

(i)                                     increase the Revolving Commitment Percentage or Revolving Commitment Amount of any Lender without the consent of such Lender or, except in connection with any Borrower Revolver Increase, increase the Maximum Revolving Advance Amount without the consent of all Revolving Lenders (other than Defaulting Lenders), or increase the Last Out Term Loans of any Last Out Lender without the consent of such Last Out Lender (provided that only the Last Out Lender providing a Last Out Incremental Loan shall have the right to waive any condition with respect to the making of its own Last Out Incremental Loan), or increase the maximum amount of Last Out Loans permitted under Section 2.25 or change the last sentence of Section 2.25 or the proviso to clause (iv) of Section 2.25(b), without the consent of all Lenders;

 

(ii)                                  extend the Term or the maturity of any Note or any Last Out Loan or the due date for any amount payable hereunder, or decrease the rate of interest or reduce or waive any principal, fee or other amount payable by Borrowers to any Lenders (including the Last Out Lenders) pursuant to this Agreement, in any such case, without the consent of each Lender (including any Last Out Lender) directly affected thereby other than any waiver of the application of the Default Rate hereunder; provided that any waiver of the Default Rate in respect to the Last Out Loans shall require the consent of the Last Out Required Lenders;

 

15



 

(iii)                               alter, amend or modify the definition of the term “Required Lenders”, Section 2.20(a), Section 2.20(b), any provision regarding the pro rata treatment of or sharing of payments by the Lenders, or requiring all Lenders (or all Revolving Lenders) to authorize the taking of any action or this Section 16.2(b), in any such case, without the consent of all Revolving Lenders; provided that, any such alteration, amendment or modification to the definition of the term “Required Lenders”, to the extent it would affect the voting rights of the Last Out Lenders following the Discharge of ABL Obligations, shall require the consent of all Last Out Lenders; provided further, that any such alteration, amendment or modification to the last sentence of Section 2.20(a), the last sentence of Section 2.20(b), any provision regarding the pro rata treatment of or sharing of payments solely by the Last Out Lenders, or requiring all Last Out Lenders to authorize the taking of any action or this Section 16.2(b), shall require the consent of all Last Out Lenders;

 

(iv)                              release any Collateral during any calendar year (other than in accordance with the provisions of this Agreement) having an aggregate value in excess of $1,000,000 without the consent of all of the Lenders (excluding the Last Out Lenders) (except for any release of Liens with respect to Collateral that is part of the Term Debt Priority Collateral if and to the extent required under the Intercreditor Agreement);

 

(v)                                 change the rights and duties of Agent or Issuer without the consent of Agent or each Issuer (as applicable);

 

(vi)                              alter, amend or modify (A) the definition of Exempt Last Out Loan Proceeds, Last Out Required Lenders, Last Out Loan Proceeds or Last Out Loans (and any underlying or component definition thereof to the extent the alteration, amendment or modification of such definition would directly affect the meaning thereof, (B) Section 2.22(a) in respect of permitted uses of the Last Out Loan Proceeds by Borrowers, (C) Section 2.25, or (D) to the extent expressly regarding the allocation of payments to the Last Out Lenders or the treatment of Exempt Last Out Loan Proceeds, Section 4.15(h) or Section 11.5, in any such case, without the consent of all of the Last Out Lenders;

 

(vii)                           either (x) increase the Advance Rates above the Advance Rates in effect on the Closing Date, or (y) make any modification to the definitions of Eligible Receivable, Eligible Unbilled Receivables Sublimit or Eligible Project Receivables, in any such case without the consent of all of the Lenders (other than the Last Out Lenders and Defaulting Lenders); or

 

(viii)                        release any Borrower or Guarantor without the consent of all of the Lenders (excluding the Last Out Lenders).

 

At any time prior to the Discharge of ABL Obligations, except as set forth above in respect of any amendment, modification, waiver, vote, determination

 

16



 

consent or other action expressly requiring the consent of all Last Out Lenders or the consent of any Last Out Lender directly affected thereby or the consent of Required Last Out Lenders, for purposes of any other amendment, modification, waiver, vote, determination, consent or other such action with respect to any of the terms of this Agreement or any Other Document, each of the Last Out Lenders shall be deemed to have voted its interest as a Last Out Lender without discretion in the same proportion as the allocation of voting with respect to such matter by Lenders who are not Last Out Lenders to whom the voting restrictions of this sentence apply.  The Last Out Lenders hereby waive their right to cast any vote or make any determination inconsistent with this paragraph.

 

Any such supplemental agreement shall apply to each Lender and shall be binding upon Borrowers, Lenders and Agent and all future holders of the Obligations.  In the case of any waiver, Borrowers, Agent and Lenders shall be restored to their former positions and rights, and any Event of Default waived shall be deemed to be cured and not continuing, but no waiver of a specific Event of Default shall extend to any subsequent Event of Default (whether or not the subsequent Event of Default is the same as the Event of Default which was waived), or impair any right consequent thereon.

 

Subject to the terms and conditions herein, including the conditions precedent set forth in Section 8.2 hereof, Agent and Lenders shall permit Revolving Advances at any time to exceed the Formula Amount by up to the Additional Borrowing Base Amount (the “Out-of-Formula Loans”).  A request for an Advance of an Out-of-Formula Loan shall be made in accordance with, and subject to the same terms and conditions as, a Revolving Advance, including notice as required by Section 2.2; provided, however, that together with any request for an Out-of-Formula Loan, Borrowing Agent also shall certify that there have been no material changes in the information or the extent or value of the Accounts as specified in the most recently delivered Borrowing Base Certificate; and provided further, that the most recently delivered monthly report as to the aging of account receivables shall evidence Accounts in an amount that exceeds $80,000,000; and provided further, that to the extent that the amount of Accounts is less than $80,000,000, the Additional Borrowing Base Amount then available shall be reduced on a dollar for dollar basis to the extent such amount is less than $80,000,000.  Notwithstanding anything herein to the contrary, Out-of-Formula Loans shall be deemed Revolving Advances, and part of the Obligations, for all purposes.

 

In addition to (and not in substitution of) the Revolving Advances permitted above in this Section 16.2, the Agent is hereby authorized by Borrowers and the Lenders, from time to time in the Agent’s sole discretion, (A) after the occurrence and during the continuation of a Default or an Event of Default, or (B) at any time that any of the other applicable conditions precedent set forth in Section 8.2 hereof have not been satisfied, to make Revolving Advances to Borrowers on behalf of the Lenders which the Agent, in its reasonable business

 

17



 

judgment, deems necessary or desirable (a) to preserve or protect the Collateral, or any portion thereof, (b) to enhance the likelihood of, or maximize the amount of, repayment of the Advances and other Obligations, or (c) to pay any other amount chargeable to Borrowers pursuant to the terms of this Agreement; provided, that at any time after giving effect to any such Revolving Advances the outstanding Revolving Advances do not exceed one hundred and five percent (105%) of the Formula Amount.”

 

O.                                   Amendment to Section 16.3. Section 16.3 of the Revolving Credit Agreement is further amended by adding at the end thereof the following new Section 16.3(h):

 

“(h)                           Notwithstanding anything contained herein to the contrary, no Last Out Lender shall assign, or grant a participation interest in, any Last Out Loans, without the prior written consent of the Agent (until the Discharge of ABL Obligations) and any such assignment or participation without such consent shall be deemed null and void ab initio.  If a transferor Lender transfers any portion of its Last Out Loans to a Purchasing Lender, such assignment shall require as an additional condition to effectiveness that the Purchasing Lender execute a joinder to the Subordination Agreement agreeing to be bound by the terms thereof as a Last Out Lender, and any assignment of Last Out Loans to a Purchasing Lender that has not executed and delivered such joinder to the Agent shall be null and void ab initio.

 

P.                                     Amendment to Section 16.4. Section 16.4 of the Revolving Credit Agreement is amended by deleting the first sentence thereof and substituting therefor the following:

 

“Subject to and in accordance with Section 4.15(h) and Section 11.5, Agent shall have the continuing and exclusive right to apply or reverse and re-apply any payment and any and all proceeds of Collateral to any portion of the Obligations.”

 

Q.                                   Amendment to Section XVI.  Section XVI of the Revolving Credit Agreement is further amended by adding at the end thereof the following new Sections 16.18 and 16.19:

 

“16.18           Agreements by Last Out Lenders.  (a) Each Last Out Lender, solely in its capacity as a Last Out Lender, hereby agrees that such Last Out Lender shall have no right whatsoever, so long as such Person is an Last Out Lender, to take the following actions:

 

(1)                                 to vote with respect to any amendment, modification, waiver, consent or other such action with respect to any of the terms of this Agreement or any Other Document except to the extent expressly permitted pursuant to Section 16.2;

 

(2)                                 to attend (or require the delivery to it of any notice of) any meeting, conference call or correspondence with any Agent or any Lender

 

18



 

at which a representative of the Borrowers is not then present or require the delivery to it of any information from any Agent or any other Lender or prepared by any Agent or any Lender or any communication by or among any Agent and/or one or more Lenders, except that Last Out Lenders shall have the right to require delivery to it of notices of borrowings, prepayments and other administrative notices solely in respect of its Last Out Loans required to be delivered to Last Out Lenders pursuant to this Agreement or any amendment, modification, waiver, consent or other such action requiring the consent or vote of the Last Out Lenders;

 

(3)                                 to make or bring any claim, in its capacity as a Last Out Lender, against the Agent, Issuer, any Revolving Lender or Swing Loan Lender with respect to the duties and obligations of such Persons under this Agreement and the Other Documents, except as expressly set forth in Section 14.3.

 

(b)                                 Each Last Out Lender, solely in its capacity as a Last Out Lender, hereby further agrees that if any Borrower or Guarantor shall be subject to any voluntary or involuntary proceeding commenced under any Bankruptcy Law (as defined in the Subordination Agreement):

 

(1)                                 The provisions set forth in this Section 16.18 constitute (x) a “subordination agreement” as such term is contemplated by, and utilized in, Section 510(a) of the Bankruptcy Code, and, as such, would be enforceable for all purposes in any case where a Borrower or Guarantor has filed for protection under any Bankruptcy Law and (y) an irrevocable voting proxy coupled with a pledge in favor of Agent with respect to voting obligations set forth in this Section 16.18.

 

(2)                                 Each such Last Out Lender, solely in its capacity as a Last Out Lender, shall be deemed to have voted in such proceedings in the same proportion as the allocation of voting with respect to such matter by those Lenders who are not Last Out Lenders.  For the avoidance of doubt, Agent is hereby irrevocably authorized and empowered (in the name of such Last Out Lender) to vote on behalf of such Last Out Lender or consent on behalf of such Last Out Lender in any such proceedings with respect to any and all claims of such Last Out Lender relating to the Obligations.  Each such Last Out Lender agrees and acknowledges that the foregoing constitutes an irrevocable proxy in favor of Agent to vote or consent on behalf of such Last Out Lender, solely in its capacity as a Last Out Lender, in any proceeding in the manner set forth above and that such Last Out Lender shall be irrevocably bound to any such votes made or consents given and further shall not challenge or otherwise object to such votes or consents and such Last Out Lender, solely in its capacity as a Last Out Lender, shall not itself vote or provide consents in the proceeding.

 

19



 

(5)                                 Each such Last Out Lender hereby expressly and irrevocably waives, for the benefit of Agent, Issuer and Lenders any principles or provisions of law (including as set forth in any Bankruptcy Law, statutory or otherwise) which are or might be in conflict with the terms of this Agreement and any legal or equitable discharge of such Last Out Lender’s obligations hereunder.

 

16.19                 Intercreditor Agreement.  Each of the Agent, the Revolving Lenders, the Last Out Lenders and the Borrowers acknowledge and agree that nothing in Section 6.18 or elsewhere in the Second Amendment shall impair or otherwise affect the respective rights and obligations under the Intercreditor Agreement of (a) ABL Agent or any ABL Lenders, in its capacity as the ABL Representative (as defined in the Intercreditor Agreement) or an ABL Secured Party (as defined in the Intercreditor Agreement), (b) any Last Out Lender, in its capacity as the Term Debt Representative (used in this Section as defined in the Intercreditor Agreement) or a Term Debt Secured Party (used in this Section as defined in the Intercreditor Agreement) or in any capacity other than as a Last Out Lender or (c) any Obligor; provided, however, that no Person that is a Last Out Lender, but acting or purporting to act in its capacity as Term Debt Representative or a Term Debt Secured Party, shall take any action or exercise its rights, remedies and powers under the Intercreditor Agreement or otherwise to the extent such action or exercise would advantage or benefit such Person principally in its capacity as a Last Out Lender against the Agent or any Revolving Lender (in their respective capacities as such).

 

Section 3.                                          REPRESENTATIONS AND WARRANTIES

 

In order to induce AIC, in its capacity as the sole Lender and as the Agent, to enter into this Amendment and to amend the Revolving Credit Agreement in the manner provided herein, each Borrower represents and warrants that the following statements are true, correct and complete:

 

A.                                    Corporate Power and Authority.  Such Borrower has all requisite corporate or limited liability company power and authority to enter into this Amendment and to carry out the transactions contemplated by, and perform its obligations under, this Amendment and the Revolving Credit Agreement (as amended by this Amendment, the “Amended Revolving Credit Agreement”), including the borrowing of the Last Out Loans.

 

B.                                    Authorization of Agreements.  The execution and delivery of this Amendment, the performance of this Amendment and the Amended Revolving Credit Agreement and the borrowing of the Last Out Loans have been duly authorized by all necessary corporate or limited liability company action, as applicable, on the part of such Borrower.

 

C.                                    Binding Obligation.  This Amendment has been duly executed and delivered by such Borrower and this Amendment and the Amended Revolving Credit Agreement are the legally valid and binding obligations of such Borrower, enforceable against such Borrower in

 

20



 

accordance with their respective terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally.

 

D.                                    Incorporation of Representations and Warranties from Revolving Credit Agreement.  The representations and warranties contained in Section V of the Revolving Credit Agreement are and will be true, correct and complete in all material respects on and as of the date hereof to the same extent as though made on and as of that date, except to the extent such representations and warranties specifically relate to an earlier date, in which case they were true, correct and complete in all material respects on and as of such earlier date, and except with respect to the occurrence of “Specified Defaults” (used hereinafter as defined in the Forbearance Agreement dated as of August 8. 2014, by and among the Borrowers, Agent and the Lenders).

 

E.                                    Absence of Default.  After giving effect to this Amendment, (i) no event has occurred and is continuing that would constitute a Default or an Event of Default (other than the Specified Defaults), and (ii) after giving effect to this Amendment, no event will result from the consummation of the transactions contemplated by this Amendment that would constitute a Default or an Event of Default.

 

Section 4.                                          CONDITIONS TO EFFECTIVENESS

 

Sections 1 and 2 of this Amendment shall become effective as of the first date (the “Effective Date”) when, and only when all of the following conditions precedent shall have been satisfied:

 

A.                                    Agent shall have received this Amendment and the Subordination Agreement, in each case duly executed and delivered by an authorized officer of each Borrower and each Last Out Lender.

 

B.                                    Agent shall have received a certificate of the Secretary or Assistant Secretary (or other equivalent officer, partner or manager) of each Borrower in form and substance satisfactory to Agent dated as of the Effective Date which shall certify (i) copies of resolutions in form and substance reasonably satisfactory to Agent, of the board of directors (or other equivalent governing body, member or partner) of such Borrower authorizing (x) the execution, delivery and performance of this Amendment and the Subordination Agreement (including authorization of the incurrence of the Last Out Loans), (ii) the incumbency and signature of the officers of such Borrower authorized to execute this Amendment and the Subordination Agreement, (iii) copies of the Organizational Documents of such Borrower as in effect on such date, complete with all amendments thereto, and (iv) the good standing (or equivalent status) of such Borrower in its jurisdiction of organization and each applicable jurisdiction where the conduct of such Borrower’s business activities or the ownership of its properties necessitates qualification, as evidenced by good standing certificate(s) (or the equivalent thereof issued by any applicable jurisdiction) dated not more than thirty (30) days prior to the Closing Date, issued by the Secretary of State or other appropriate official of each such jurisdiction as attached to such certificate.

 

21



 

C.                                    The Borrowers shall have delivered to Agent a certificate as of the Effective Date certifying that the representations and warranties set forth in Section 3 are true and correct.

 

D.                                    Concurrently with the effectiveness of this Amendment, the Last Out Loans shall be funded directly to the Cash Collateral Account.

 

E.                                    Agent shall have received evidence that all reasonable out-of-pocket expenses of the Agent (including the reasonable fees and expenses of counsel for the Agent invoiced to the Borrowers) shall have been paid.

 

F.                                     Agent shall have received a copy of a fully executed amendment to the Term Debt Credit Agreement in form and substance reasonably satisfactory to Agent, which amendment shall be in full force and effect.

 

G.                                   Agent shall have received an executed legal opinion of Morgan, Lewis & Bockius LLP, in form and substance satisfactory to Agent which shall cover such matters incident to the transactions contemplated by this Amendment and the Subordination Agreement as Agent may reasonably require (including but not limited to an opinion as to no conflicts with the Term Debt Documents and the Intercreditor Agreement and an opinion that the execution and delivery of the Amendment and the borrowing of the Last Out Loans will not result in the loss of perfection of any security interest arising under Article 9 of the UCC created and perfected under Article 9 of the UCC immediately prior to such execution and delivery) and each Borrower hereby authorizes and directs such counsel to deliver such opinions to Agent and Lenders.

 

H.                                   Agent shall have received such tax forms and other administrative information from Last Out Lenders as Agent may reasonably request.

 

Section 5.                                          CONFIRMATION OF SECURITY DOCUMENTS AND INTERCREDITOR AGREEMENT

 

Each of the Borrowers hereby confirms and ratifies all of its obligations under the security agreement contained in the Revolving Credit Agreement and under all Other Documents to which it is a party.  By its execution on the respective signature lines provided below, each of the Borrowers hereby confirms and ratifies all of its obligations and the Liens granted by it under such agreements and Other Documents to which it is a party and confirms that all Liens are properly perfected to the extent required under such agreements and Other Documents, and that none of the execution, delivery and performance of this Amendment nor the borrowing of the Last Out Loans shall impair or otherwise adversely affect the validity, perfection or priority of such Liens.

 

Each of the Agent, the Lenders and the Borrowers hereby confirms and ratifies all of its obligations under the Intercreditor Agreement in the capacities in which such Persons are party thereto and confirms that none of the execution, delivery and performance of this Amendment or the Subordination Agreement (as defined in the Revolving Credit Agreement as amended by this Amendment) shall supersede the rights and obligations of such Persons under

 

22



 

the Intercreditor Agreement in the capacities in which such Persons are party thereto or otherwise affect the validity or enforceability of the Intercreditor Agreement.

 

Section 6.                                          RELEASE

 

A.                                    In consideration of the agreements of the Agent and Lenders contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, each of the Borrowers, on behalf of themselves and their successors, assigns, and other legal representatives, hereby absolutely, unconditionally and irrevocably release, remise and forever discharge Agent and Lenders, and their successors and assigns, and their present and former shareholders, affiliates, subsidiaries, divisions, predecessors, directors, officers, attorneys, employees, agents and other representatives (Agent, each Lender and all such other Persons being hereinafter referred to collectively as the “Releasees” and individually as a “Releasee”), of and from all demands, actions, causes of action, suits, covenants, contracts, controversies, agreements, promises, sums of money, accounts, bills, reckonings, damages and any and all other claims, counterclaims, defenses, rights of set-off, demands and liabilities whatsoever (individually, a “Claim” and collectively, “Claims”) of every name and nature, known or unknown, suspected or unsuspected, both at law and in equity, Borrowers or any of their successors, assigns, or other legal representatives may now or hereafter own, hold, have or claim to have against the Releasees or any of them for, upon, or by reason of any circumstance, action, cause or thing whatsoever which, in each case, arises at any time on or prior to the day and date of this Amendment for or on account of, or in relation to, or in any way in connection with any of the Revolving Credit Agreement or any of the other related documents or transactions thereunder or related thereto; provided that nothing herein shall constitute a release of any Releasee of any of its future obligations under the loan documents.

 

B.                                    Each of the Borrowers understands, acknowledges and agrees that the release set forth above may be pleaded as a full and complete defense to the matters covered in the release set forth above and may be used as a basis for an injunction against any action, suit or other proceeding which may be instituted, prosecuted or attempted in breach of the provisions of such release.

 

C.                                    Each of the Borrowers agrees that no fact, event, circumstance, evidence or transaction which could now be asserted or which may hereafter be discovered shall affect in any manner the final, absolute and unconditional nature of the release set forth above.

 

Section 7.                                          MISCELLANEOUS

 

A.                                    Reference to and effect on the Revolving Credit Agreement.

 

(i)                                     On and after the date hereof, each reference in the Revolving Credit Agreement to “this Agreement”, “hereunder”, “hereof”, “herein” or words of like import referring to the Revolving Credit Agreement shall mean and be a reference to the Amended Revolving Credit Agreement.

 

23



 

(ii)                                  Except as specifically amended by this Amendment, the Revolving Credit Agreement shall remain in full force and effect and is hereby ratified and confirmed.

 

(iii)                               The execution, delivery and performance of this Amendment shall not, except as expressly provided herein, constitute a waiver of any provision of, or operate as a waiver of any right, power or remedy of the Agent or any Lender under, the Revolving Credit Agreement.

 

B.                                    Fees and Expenses.  Borrowers acknowledge that all costs, fees and expenses as described in subsection 16.9 of the Revolving Credit Agreement incurred by the Agent and its counsel with respect to this Amendment and the documents and transactions contemplated hereby shall be for the account of Borrowers and may be charged to Borrowers’ Account.

 

C.                                    Headings.  Section and subsection headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose or be given any substantive effect.

 

D.                                    Applicable Law.  THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLIED TO CONTRACTS TO BE PERFORMED WHOLLY WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES. In addition to and without limitation of any of the foregoing, this Amendment shall otherwise be subject to all of the terms and conditions contained in Section 16.1 of the Revolving Credit Agreement, mutatis mutandi.

 

E.                                    Counterparts; Effectiveness.  This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument; signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are physically attached to the same document. Delivery of an executed counterpart of this Amendment by facsimile or electronic mail shall be equally as effective as delivery of an original executed counterpart of this Amendment.  Any party delivering an executed counterpart of this Amendment by facsimile or electronic mail also shall deliver an original executed counterpart of this Amendment but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Amendment.

 

[Remainder of page intentionally left blank.]

 

24



 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first written above.

 

BORROWERS:

 

 

UNITEK GLOBAL SERVICES, INC.

 

UNITEK ACQUISITION, INC.

 

 

 

 

 

 

By:

Andrew J. Herning

 

 

Name:

Andrew J. Herning

 

 

Title:

Chief Financial Officer

 

 

 

 

 

PINNACLE WIRELESS USA, INC.

 

UNITEK USA, LLC

 

ADVANCED COMMUNICATIONS USA, INC.

 

DIRECTSAT USA, LLC

 

FTS USA, LLC

 

 

 

 

 

 

By:

Andrew J. Herning

 

 

Name:

Andrew J. Herning

 

 

Title:

Treasurer

 

[Signature Page to Second Amendment to Revolving Credit and Security Agreement]

 



 

AGENT AND LENDERS:

 

 

APOLLO INVESTMENT CORPORATION, as Revolving Lender, Swing Loan Lender and as Agent

 

 

 

By: Apollo Investment Management, L.P., as Advisor

 

 

 

By: ACC Management, LLC, as its General Partner

 

 

 

 

 

 

 

By:

/s/ Ted Goldthorpe

 

Name:

Ted Goldthorpe

 

Title:

Authorized Signatory

 

[Signature Page to Second Amendment to Revolving Credit and Security Agreement]

 



 

LAST OUT LENDERS:

PENNANTPARK FLOATING RATE CAPITAL LTD., as a Last Out Lender

 

 

 

 

By:

/s/ Aviv Efrat

 

Name:

Aviv Efrat

 

Title:

CFO

 

[Signature Page to Second Amendment to Revolving Credit and Security Agreement]

 



 

LAST OUT LENDERS:

 

 

 

CETUS CAPITAL II, LLC, as a Last Out Lender

 

 

 

 

By:

/s/ Richard Maybaum

 

Name:

Richard Maybaum

 

Title:

Managing Director

 

 

 

 

 

 

 

LITTLEJOHN OPPORTUNITIES MASTER FUND LP, as a Last Out Lender

 

 

 

 

By:

/s/ Richard Maybaum

 

Name:

Richard Maybaum

 

Title:

Managing Director

 

[Signature Page to Second Amendment to Revolving Credit and Security Agreement]

 



 

LAST OUT LENDERS:

 

 

 

NEW MOUNTAIN FINANCE CORPORATION, as a Last Out Lender

 

 

 

 

By:

/s/ John R. Kline

 

Name:

John R. Kline

 

Title:

EVP & COO

 

[Signature Page to Second Amendment to Revolving Credit and Security Agreement]

 



 

LAST OUT LENDERS:

 

 

CERBERUS ASRS HOLDINGS LLC, as a Last Out Lender

 

 

 

 

By:

/s/ Daniel Wolf

 

Name:

Daniel Wolf

 

Title:

Vice President

 

 

 

 

 

 

 

CERBERUS AUS LEVERED HOLDINGS LP, as a Last Out Lender

 

 

 

BY: CAL I GP Holdings LLC

 

Its: General Partner

 

 

 

By:

/s/ Daniel Wolf

 

Name:

Daniel Wolf

 

Title:

Senior Managing Director

 

 

 

 

 

 

 

CERBERUS LEVERED LOAN OPPORTUNITIES FUND II, L.P., as a Last Out Lender

 

 

 

BY: Cerberus Levered Opportunities II GP, LLC

 

Its: General Partner

 

 

 

By:

/s/ Daniel Wolf

 

Name:

Daniel Wolf

 

Title:

Senior Managing Director

 

 

 

 

 

 

 

CERBERUS OFFSHORE LEVERED LOAN OPPORTUNITIES MASTER FUND II, L.P., as a Last Out Lender

 

 

 

BY: Cerberus Levered Opportunities Master Fund II GP, LLC

 

Its: General Partner

 

 

 

By:

/s/ Daniel Wolf

 

Name:

Daniel Wolf

 

Title:

Senior Managing Director

 

[Signature Page to Second Amendment to Revolving Credit and Security Agreement]

 



 

 

MARBLEGATE SPECIAL OPPORTUNITIES MASTER FUND, L.P., as a Last Out Lender

 

 

 

 

By:

/s/ Paul Arrouet

 

Name:

Paul Arrouet

 

Title:

Managing Partner

 

[Signature Page to Second Amendment to Revolving Credit and Security Agreement]

 



 

Exhibit A

 

Subordination Agreement

 

(See attached)

 



 

EXECUTION

 

SUBORDINATION AGREEMENT

 

SUBORDINATION AGREEMENT dated as of August 13, 2014 among UNITEK GLOBAL SERVICES INC., a Delaware corporation (“UniTek Parent”), UNITEK ACQUISITION, INC., a Delaware corporation (“UniTek Acquisition”), PINNACLE WIRELESS USA, INC., a Delaware corporation (“Pinnacle”), UNITEK USA, LLC, a Delaware limited liability company (“UniTek USA”), ADVANCED COMMUNICATIONS USA, INC., a Delaware corporation (“Advanced Communications”), DIRECTSAT USA, LLC, a Delaware limited liability company (“DirectSat”), FTS USA, LLC, a Delaware limited liability company (“FTS”) (UniTek Parent, UniTek Acquisition, Pinnacle, UniTek USA, Advanced Communications, DirectSat, FTS, collectively the “Borrowers”), APOLLO INVESTMENT CORPORATION, as administrative agent under the ABL Credit Agreement (“AIC”, and in such capacity, the “ABL Agent”), and each lender of Last Out Loans party hereto on the date hereof or from time to time party to the ABL Credit Agreement (each a “Subordinated Creditor” or, in its capacity as a party to the ABL Credit Agreement, a “Last Out Lender”and collectively, the “Subordinated Creditors” or, in their capacities as parties to the ABL Credit Agreement, the “Last Out Lenders”).

 

The Borrowers and any “Guarantors” (as defined in the ABL Credit Agreement; collectively, with the Borrowers, the “Obligors”), certain lenders (the “ABL Lenders”) and the ABL Agent are parties to a Revolving Credit and Security Agreement, dated as of July 10, 2013 (as amended by that certain Amendment and Limited Waiver to Revolving Credit and Security Agreement and Fee Letter, dated as of July 25, 2013, and by that certain Second Amendment to Revolving Credit and Security Agreement, dated as of the date hereof (the “Second Amendment”), and as it may be further amended, restated, supplemented or otherwise modified and in effect from time to time, the “ABL Credit Agreement”), providing, subject to the terms and conditions thereof, for extensions of credit (by making loans and issuing letters of credit) by the ABL Lenders to the Borrowers.

 

To induce the ABL Lenders to enter into the Second Amendment and consent to the making of the Last Out Loans referred to therein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each of the Subordinated Creditors has agreed to subordinate the Subordinated Indebtedness (as hereinafter defined) to the ABL Obligations (as hereinafter defined), all in the manner and to the extent hereinafter provided.

 

Accordingly, the parties hereto agree as follows:

 

SECTION 1                               Definitions.

 

(a)                                 Defined Terms.  The following terms shall have the following meanings:

 

ABL Collateral” means all “Collateral” as defined in the ABL Security Documents and any other assets of any other Obligor now or at any time hereafter subject to Liens securing any ABL Obligations and any Subordinated Indebtedness.

 

2



 

ABL Loan Documents” means the ABL Credit Agreement and the “Other Documents”, as defined in the ABL Credit Agreement.

 

ABL Obligations” means all Obligations (including, for the avoidance of doubt, in respect of post-petition interest at the default rate) that are not Subordinated Indebtedness.

 

ABL Required Lenders” means the “Required Lenders”, as defined in the ABL Credit Agreement.

 

ABL Secured Parties” means the ABL Agent and the holders of the Obligations, but shall not include the Subordinated Creditors.

 

ABL Security Documents” means the security agreement contained in the ABL Credit Agreement, any “Guarantor Security Agreement”, any “Pledge Agreement”, as defined in the ABL Credit Agreement, and any other agreement, document or instrument pursuant to which a Lien is granted to secure any ABL Obligations and any Subordinated Indebtedness or under which rights or remedies with respect to any such Lien are governed.

 

Bankruptcy Code” means Title 11 of the United States Code entitled “Bankruptcy,” as now and hereinafter in effect, or any successor statute.

 

Bankruptcy Law” means any bankruptcy, insolvency, reorganization, receivership or other similar law of any jurisdiction, including any law of any jurisdiction permitting a debtor to obtain a stay or a compromise of the claims of its creditors against it.

 

DIP Financing” shall have the meaning assigned to such term in Section 3.01(a).

 

DIP Financing Liens” shall have the meaning assigned to such term in Section 3.01(a).

 

Discharge of ABL Obligations” means, subject to Section 2.08, (a) payment in full in cash of the principal of and interest (including interest accruing during the pendency of any insolvency or liquidation proceeding (including post-petition interest at the default rate)) regardless of whether allowed or allowable in an Insolvency Proceeding and premium, if any, on all indebtedness (other than Subordinated Indebtedness) outstanding under the ABL Loan Documents, (b) payment in full of all other ABL Obligations that are due and payable or otherwise accrued and owing at or prior to the time such principal and interest are paid (including any contingent indemnification obligations to the extent asserted), (c) termination or expiration of all commitments to lend under the ABL Credit Agreement, (d) termination, expiration or cash collateralization (to the reasonable satisfaction of the ABL Agent and the issuer thereof) of all letters of credit issued pursuant to the ABL Credit Agreement and (e) expiration or termination of all Hedge Liabilities (as defined in the ABL Credit Agreement) and Cash Management Obligations (as defined in the ABL Credit Agreement).

 

Exempted Last Out Loan Proceeds” means “Exempted Last Out Loan Proceeds” as defined in the ABL Credit Agreement.

 

3



 

Insolvency Proceeding” means (a) any voluntary or involuntary proceeding under the Bankruptcy Code or any other Bankruptcy Law with respect to any Obligor, (b) any voluntary or involuntary appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for any Obligor or for a substantial part of the property or assets of any Obligor, (c) any voluntary or involuntary winding-up or liquidation of any Obligor, or (d) a general assignment for the benefit of creditors by any Obligor.

 

Intercreditor Agreement” means the “Intercreditor Agreement” as defined in the ABL Credit Agreement.

 

Liens” has the meaning given to such term in the ABL Credit Agreement.

 

Obligations” has the meaning given to such term in the ABL Credit Agreement.

 

Obligors” means the Borrowers, the Guarantors and each other person that shall have created or purported to create any Lien on all or any part of its assets to secure any ABL Obligations or any Subordinated Indebtedness pursuant to the ABL Documents.

 

Overdue Formula Amount” means, at any time of determination, any “Overdue Formula Amount” as defined in Section 3.1 of the ABL Credit Agreement, but only if at such time such Overdue Formula Amount is expressly considered not due and payable for purposes of clause (iii)(x) of the last paragraph of Section 3.1 of the ABL Credit Agreement.

 

Refinance” means, in respect of any indebtedness, to refinance, extend, renew, restructure or replace or to issue other indebtedness in exchange or replacement for, such Indebtedness, in whole or in part.  “Refinanced” and “Refinancing.” shall have correlative meanings.

 

Subordinated Indebtedness” means all Obligations solely with respect to “Last Out Loans” as defined in, and outstanding from time to time under, the ABL Credit Agreement, including but not limited to principal, interest, fees, expenses, and other obligations of the Obligors with respect to such Last Out Loans.

 

Subordination Terms” means the terms set forth in Section 2.

 

(b)                                 Terms Generally.  The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”.  The word “will” shall be construed to have the same meaning and effect as the word “shall”.  Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (c) the words “herein”, “hereof and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Sections and Exhibits shall be

 

4



 

construed to refer to Sections of, and Exhibits to, this Agreement and (e) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

 

SECTION 2                               Subordination Terms.  The Obligors, ABL Agent and Subordinated Creditors hereby agree as follows:

 

(a)                                 Subordination.  Each Obligor, for itself and its successors and assigns, covenants and agrees and each Subordinated Creditor, on its own behalf and on behalf of each subsequent holder of Subordinated Indebtedness, likewise covenants and agrees that, to the extent and in the manner set forth in this Agreement, the Subordinated Indebtedness is subordinated and subject in right of payment to the ABL Obligations, such that (subject to Sections 2.01(a) and 2.01(b), the Discharge of ABL Obligations shall occur before any Subordinated Creditor is entitled to receive any payment (other than of Exempt Last Out Loan Proceeds) on account of the Subordinated Indebtedness and, in that connection, unless and until the Discharge of ABL Obligations occurs:

 

(i)                                     no payment (other than of Exempt Last Out Loan Proceeds) on account of the principal of, or interest on, or any other amount in respect of, this Agreement, the ABL Loan Documents (but only so far as it relates to the Subordinated Indebtedness) or any judgment with respect hereto or thereto (and no payment on account of the purchase or redemption or other acquisition in respect of the Subordinated Indebtedness) shall be made by or on behalf of the Obligors; provided that, (i) interest on the Subordinated Indebtedness may be capitalized as provided for in Section 3.1 of the ABL Credit Agreement and, subject to any terms hereof to the contrary, paid in cash as provided for in Section 3.1 of the ABL Credit Agreement, provided that, without affecting any obligation of the Obligors, no such cash interest shall be paid (x) if at such time any principal, premium, interest, fees and other amounts, to the extent then due and payable with respect to the ABL Obligations, have not been paid in full in cash (other than any Overdue Formula Amount) or (y) in the event of any Insolvency Proceeding (but, for the avoidance of doubt, only until the Discharge of ABL Obligations in such Insolvency Proceeding); and (ii) notwithstanding anything in this Agreement to the contrary, the Subordinated Obligations may be repaid with Exempt Last Out Loan Proceeds as provided in Sections 4.15(h) and 11.5 of the ABL Credit Agreement; and

 

(ii)                                  the Subordinated Creditors shall not (i) ask, demand, sue for, accelerate or take or receive from any Obligor, by set-off or in any other manner, any payment on account of the principal of, or interest on, or any other amount in respect of, this Agreement or the ABL Credit Agreement (but only so far as it relates to the Subordinated Indebtedness), other than of Exempt Last Out Loan Proceeds as provided in Sections 4.15(h) and 11.5 of the ABL Credit Agreement, provided that, interest on the Subordinated Indebtedness may be capitalized as provided for in Section 3.1 of the ABL Credit Agreement and, subject to any terms hereof to the contrary, paid in cash as provided for in Section 3.1 of the ABL Credit Agreement, provided that, without affecting any obligation of the Obligors, no such cash interest shall be paid (x) if at such time any principal, premium, interest, fees and other amounts, to the extent then due and payable with respect to the ABL Obligations, have not been paid in full in cash (other than any Overdue Formula Amount) or (y) in the event of any Insolvency Proceeding (but, for the avoidance of

 

5



 

doubt, only until the Discharge of ABL Obligations in such Insolvency Proceeding), or (ii) seek any other remedy allowed at law or in equity against any Obligor for breach of such Obligor’s obligations hereunder or thereunder (but only so far as it relates to the Subordinated Indebtedness) other than any such remedy in respect of such Obligor’s obligations under Section 4.15(h) of the ABL Credit Agreement.

 

(b)                                 Actions upon Dissolution.  In the event of any Insolvency Proceeding, then upon any payment or distribution of assets of any Obligor of any kind or character, whether in cash, property or securities, to any of its creditors (including without limitation the Subordinated Creditors) the Discharge of ABL Obligations shall occur first before the holders of the Subordinated Indebtedness shall be entitled to retain any assets (other than Exempt Last Out Loan Proceeds) so paid or distributed in respect of the Subordinated Indebtedness (for principal, premium, interest or otherwise) and, to that end, the holders of the ABL Obligations shall be entitled to receive for application in payment thereof any payment or distribution of any kind or character (other than Exempt Last Out Loan Proceeds as provided in Sections 4.15(h) and 11.5 of the ABL Credit Agreement), whether in cash or property or securities that would, but for these Subordination Terms, be paid or delivered to the Subordinated Creditors.  The Subordinated Creditors shall provide to the ABL Agent (on behalf of the ABL Secured Parties) all information and documents necessary to present claims or seek enforcement with respect to the Subordinated Indebtedness and will duly and promptly take such action as the ABL Agent (on behalf of the ABL Secured Parties) may request (i) to collect the Subordinated Indebtedness for the account of the ABL Agent (on behalf of the ABL Secured Parties), other than Exempt Last Out Loan Proceeds, and (ii) to file appropriate claims or proofs of claim with respect thereto.  No Subordinated Creditor, solely in its capacity as a Subordinated Creditor or Last Out Lender under the ABL Credit Agreement, shall take any action in any Insolvency Proceeding in any way so as to contest, and hereby waives any rights it may have to contest (a) the validity or enforceability of any of the ABL Loan Documents, (b) the rights and duties of the ABL Agent and the ABL Secured Parties established in any of the ABL Loan Documents or (c) the validity or enforceability of the subordination provisions set forth in this Agreement.

 

(c)                                  Subrogation.  Following the Discharge of ABL Obligations, the Subordinated Creditors shall be subrogated to the rights of the ABL Agent (on behalf of the ABL Secured Parties) to receive payments and distributions of cash, property and securities applicable to the ABL Obligations until the principal of, and interest on, and all other amounts in respect of, the Subordinated Indebtedness shall be paid in full.  For purposes of such subrogation, no payments or distributions to the ABL Agent or the ABL Secured Parties of any cash, property or securities to which the Subordinated Creditors would be entitled except for these Subordination Terms, and no payments over pursuant to these Subordination Terms to the ABL Agent or the ABL Secured Parties by the Subordinated Creditors, shall be deemed to be a payment or distribution by any Obligor to or on account of the ABL Obligations; it being understood and agreed that the Subordination Terms are solely for the purpose of defining the relative rights of the ABL Agent and the ABL Secured Parties on the one hand, and the Subordinated Creditors on the other hand.

 

(d)                                 Turnover by the Subordinated Creditors.  If any payment or distribution of any character (other than Exempt Last Out Loan Proceeds), whether in cash, securities or other property, in respect of this Agreement (so far as it relates to the ABL Obligations or the

 

6



 

Subordinated Indebtedness) or the ABL Loan Documents shall be received by any Subordinated Creditor in contravention of these Subordination Terms, such payment or distribution shall be held in trust for the benefit of, and shall be paid over or delivered to the ABL Agent (on behalf of the ABL Secured Parties) to the extent necessary to effect the Discharge of ABL Obligations.

 

(e)                                  No Petition.  So long as any ABL Obligation is outstanding, any Subordinated Creditor in its capacity as such and as a Last Out Lender, in each case, shall not commence, or join with any creditor in commencing, any Insolvency Proceeding.

 

(f)                                   No Effect.  Unless the ABL Secured Parties and the Subordinated Creditors so expressly subsequently agree, these Subordination Terms shall not be affected by (i) any amendment or modification of, or addition or supplement to, the ABL Credit Agreement or any other ABL Loan Document, (ii) any exercise or non-exercise of any right, power or remedy under or in respect of the ABL Credit Agreement or any other ABL Loan Document, or (iii) any waiver, consent, release, extension, renewal, modification, delay, or other action, inaction or omission in respect of the ABL Credit Agreement or any other ABL Loan Document.

 

(g)                                  Continuation.  The provisions of these Subordination Terms constitute a continuing agreement and shall (i) remain in full force and effect until the Discharge of ABL Obligations, (ii) be binding upon the Subordinated Creditors, the Obligors and the other parties hereto and their respective successors, transferees and assignees and (iii) inure to the benefit of, and be enforceable by, the ABL Agent (on behalf of the ABL Secured Parties).  These Subordination Terms and this Agreement shall automatically, and without further action, terminate and have no further force or effect as to the Borrowers upon the Discharge of ABL Obligations.

 

(h)                                 No Impairment; Automatic Restoration.  Except to the extent otherwise expressly provided in the ABL Loan Documents, the foregoing provisions are solely for the purpose of defining the relative rights of the holders of the ABL Obligations on the one hand and the Subordinated Creditors on the other hand, and nothing herein shall impair or affect, as between the Obligors and the Subordinated Creditors, the obligations of the Obligors, which are unconditional and absolute, to pay to the Subordinated Creditors the Subordinated Indebtedness in accordance with the terms of the ABL Loan Documents.  These Subordination Terms shall be automatically reinstated if and to the extent that for any reason any payment by or on behalf of any Obligor in respect of the ABL Obligations is rescinded or must be otherwise restored by any holder of any of the ABL Obligations, whether as a result of any proceedings in bankruptcy or reorganization or otherwise.

 

SECTION 3                               Insolvency Proceedings.  Without limiting the provisions of Section 2 hereof, the Obligors hereby agree as follows:

 

(a)                                 Finance and Sale Matters.  i. Until the Discharge of ABL Obligations has occurred (other than a Discharge of ABL Obligations arising from the Refinancing of the ABL Obligations with the proceeds of a DIP Financing (as defined below) or otherwise), each of the Subordinated Creditors agrees that, in the event of any Insolvency Proceeding, such Subordinated Creditor:

 

7



 

(A)                               will not take any step or action (whether directly or indirectly) in such Insolvency Proceeding to oppose, object to, impede, or delay the use of any ABL Collateral constituting cash collateral (including, without limitation, any and all terms of any cash collateral order) under Section 363 of the Bankruptcy Code, or any comparable provision of any other Bankruptcy Law, unless the ABL Secured Parties, or a representative authorized by the requisite ABL Secured Parties, shall oppose or object to such use of cash collateral;

 

(B)                               will not take any step or action (whether directly or indirectly) in such Insolvency Proceeding to oppose, object to, impede, or delay any post-petition equity or debt financing (including, without limitation, any and all terms of any financing agreement, related documents and financing order), whether provided by Secured Parties or any other person, under Section 364 of the Bankruptcy Code, or any comparable provision of any other Bankruptcy Law (a “DIP Financing”), or the Liens securing any DIP Financing (“DIP Financing Liens”), or any grant of adequate protection in connection with any DIP Financing, unless in each case the ABL Secured Parties, or a representative authorized by the requisite ABL Secured Parties, shall then oppose or object to such DIP Financing or such DIP Financing Liens;

 

(C)                               in connection with the use of cash collateral as described in clause (i) above or a DIP Financing, will not request adequate protection (except as otherwise provided under Section 3.04(b) hereof) or any other relief in connection with such use of cash collateral, DIP Financing or DIP Financing Liens; and

 

(D)                               will not take any step or action (whether directly or indirectly) in such Insolvency Proceeding to oppose, object to, impede, or delay any sale or other disposition of any assets (including, without limitation, the terms and conditions of any bidding procedures orders, sale orders and any and all purchase and sale agreements and related documents) free and clear of Liens under the ABL Security Documents or other claims, whether under Section 363 of the Bankruptcy Code (or any comparable provision of any other Bankruptcy Law) or otherwise, if the ABL Secured Parties, or a representative authorized by the requisite ABL Secured Parties, shall consent to such Disposition.

 

(ii)                                  Each of the Subordinated Creditors agrees that it shall not oppose, contest or challenge, or support any other person in opposing, contesting or challenging, (i) any request by the ABL Agent or any other ABL Secured Party for adequate protection in any form or (ii) any objection, based on a claim of a lack of adequate protection, by the ABL Agent or any other ABL Secured Party to any motion, relief, action or proceeding.

 

(iii)                               Each of the Subordinated Creditors hereby expressly and irrevocably waives, for the benefit of ABL Agent and ABL Secured Parties any principles or provisions of law (including as set forth in any Bankruptcy Law, statutory or otherwise) which are or might be in conflict with the terms of this Agreement and any legal or equitable discharge of such Subordinated Creditor’s obligations hereunder.

 

(b)                                 Relief from the Automatic Stay.  Notwithstanding anything to the contrary contained herein, each of the Subordinated Creditors agrees that, so long as the Discharge of

 

8



 

ABL Obligations has not occurred, it shall not, without the prior written consent of the ABL Agent, seek or request relief from or modification of the automatic stay or any other stay in any Insolvency Proceeding in respect of any part of the ABL Collateral or any proceeds thereof.

 

(c)                                  Reorganization Securities.  Without prejudice to Section 2 hereof, if, in any Insolvency Proceeding, debt obligations of the reorganized debtor secured by Liens upon any property of the reorganized debtor are distributed, pursuant to a plan of reorganization or similar dispositive restructuring plan, on account of both the ABL Obligations and the Subordinated Obligations, then, to the extent the debt obligations distributed on account of the ABL Obligations and on account of the Subordinated Obligations are secured by Liens upon the same assets or property, the provisions of this Agreement will survive the distribution of such debt obligations pursuant to such plan and will apply with like effect to the Liens securing such debt obligations.

 

(d)                                 Post-Petition Interest; Adequate Protection.  ii. Each of the Subordinated Creditors agrees that it shall not oppose or seek to challenge any claim by the ABL Agent or any other ABL Secured Party for allowance of ABL Obligations consisting of principal, post-petition interest at the default rate, fees, expenses, or any other ABL Obligations, or payment of such claims, in any Insolvency Proceeding.

 

(i)                                     If any of the Subordinated Creditors obtains any adequate protection payment in respect of the Subordinated Indebtedness in any Insolvency Proceeding, then it agrees to turnover such payment to the ABL Agent (on behalf of the ABL Secured Parties other than the Subordinated Creditors); provided, that if the ABL Secured Parties receive as adequate protection of their interests in the ABL Collateral, (i) a replacement Lien in the ABL Collateral or (ii) superpriority claims, the Subordinated Creditors may, as adequate protection of their interests in the ABL Collateral, receive adequate protection consisting solely of (x) such replacement Lien on the ABL Collateral with respect to the Last Out Loans otherwise subject to the terms of this Agreement, including this Section 3.04(b) with respect to any proceeds of such Lien, and (y) superpriority claims junior in all respects to the superpriority claims granted to the ABL Secured Parties; provided, however, that each Subordinated Creditor shall have irrevocably agreed, pursuant to Section 1129(a)(9) of the Bankruptcy Code, in any stipulation and/or order granting such adequate protection, that such junior superpriority claims may be paid under any plan of reorganization in any combination of cash, debt, equity or other property having a value on the effective date of such plan equal to the allowed amount of such claims;

 

(e)                                  Certain Waivers by the Subordinated Creditors.  Each Subordinated Creditor waives any claim it may hereafter have against any ABL Secured Party arising out of (a) the election by any ABL Secured Party of the application of Section 1111(b)(2) of the Bankruptcy Code, or any comparable provision of any other Bankruptcy Law, or (b) any cash collateral or financing arrangement, or any grant of a security interest in the ABL Collateral, in any Insolvency Proceeding.

 

(f)                                   Filing of Motions.  Until the Discharge of ABL Obligations has occurred, each of the Subordinated Creditors agrees that it shall not, in or in connection with any Insolvency Proceeding, file any pleadings or motions, take any position at any hearing or proceeding of any nature, or otherwise take any action whatsoever, in each case in respect of any

 

9



 

of the ABL Collateral, including without limitation with respect to the determination of any Liens or claims held by the ABL Agent (including the validity and enforceability thereof) or any other ABL Secured Party or the value of any claims of such parties under Section 506(a) of the Bankruptcy Code or otherwise.

 

(g)                                  Separate Grants of Security and Separate Classification.  iii. Each of the Subordinated Creditors and the ABL Agent (on behalf of the ABL Secured Parties) acknowledges and agrees that (to the extent applicable) because of, among other things, their differing rights in the ABL Collateral, the Subordinated Indebtedness is not similarly situated to the ABL Obligations and must be separately classified in any plan of reorganization proposed or adopted in any Insolvency Proceeding.

 

(i)                                     To further effectuate the intent of the parties as provided in paragraph (a), if it is held (i) that the claims of the ABL Secured Parties and the Subordinated Creditors in respect of the ABL Collateral constitute only one secured claim (rather than separate classes of senior and junior secured claims), then each of the Subordinated Creditors and the ABL Agent (on behalf of the ABL Secured Parties) hereby acknowledge and agree that all distributions shall be made as if there were separate classes of senior and junior secured claims against the Obligors in respect of the ABL Collateral (with the effect being that, to the extent that the aggregate value of the ABL Collateral is sufficient (for this purpose ignoring all claims held by the Subordinated Creditors), the ABL Secured Parties shall be entitled to receive, in addition to amounts distributed to them in respect of principal, pre-petition interest and other claims, all amounts owing in respect of post-petition interest at the default rate before any distribution is made in respect of the claims held by the Subordinated Creditors), with each of the Subordinated Creditors hereby acknowledging and agreeing to turn over to the ABL Agent, for distribution to the ABL Secured Parties, amounts otherwise received or receivable by them to the extent necessary to effectuate the intent of this sentence, even if such turnover has the effect of reducing the claim or recovery of the Subordinated Creditors.

 

(h)                                 Plans of Reorganization.  ABL Agent is hereby irrevocably authorized and empowered (in the name of each Subordinated Creditor) to vote on behalf of such Subordinated Creditor or consent or object on behalf of such Subordinated Creditor in any Insolvency Proceeding with respect to any and all claims of such Subordinated Creditors relating to the Subordinated Indebtedness, and each of the Subordinated Creditors hereby appoints the ABL Agent as its agent, and grants to the ABL Agent an irrevocable power of attorney coupled with an interest, and its proxy, for the purpose of exercising any and all rights and taking any and all actions available to such Subordinated Creditor in connection with any case by or against the Obligors in any Insolvency Proceeding, including without limitation, the right to file and/or prosecute any claims, to support or vote in favor of any plan of reorganization, or to make any election under Section 1111(b) of the Bankruptcy Code.  Each of the Subordinated Creditors agrees and that such Subordinated Creditor shall be irrevocably bound to any such votes made or consents given and further shall not challenge or otherwise object to such votes or consents and shall not itself vote or provide consents in the proceeding To the extent that any Subordinated Creditor attempts to vote or votes in favor of any plan or reorganization in a manner inconsistent with this Section 3.08, each of the Subordinated Creditors irrevocably agrees that the ABL Agent may be, and may be deemed, an “authorized agent” of such party under Bankruptcy Rules

 

10



 

3018(c) and 9010, and that the ABL Agent shall be authorized and entitled to submit a superseding ballot on behalf of such Subordinated Creditor that is consistent herewith.

 

(i)                                     Other Matters.  Each of the Subordinated Creditors agrees not to assert any rights under Section 363 or Section 364 of the Bankruptcy Code with respect to any of the ABL Collateral without the prior written consent of the ABL Agent; provided that if requested by the ABL Agent, such Subordinated Creditor shall timely exercise such rights in the manner requested by the ABL Agent, as applicable, including any rights to payments in respect of such rights.

 

(j)                                    Effectiveness in Insolvency Proceedings.  This Agreement, which the parties hereto expressly acknowledge is a “subordination agreement” under section 510(a) of the Bankruptcy Code, shall be effective before and after the commencement of an Insolvency Proceeding.  All references in this Agreement to any Obligor shall include such Obligor as a debtor-in-possession and any receiver or trustee for such Obligor in any Insolvency Proceeding.

 

(k)                                 Intercreditor Agreement.  Each of the Secured Parties and the Obligors acknowledge and agree that nothing in this Section 3 or elsewhere in this Agreement shall impair or otherwise affect the respective rights and obligations under the Intercreditor Agreement of (a) any Secured Party, in its capacity as the ABL Representative (as defined therein) or an ABL Secured Party (as defined therein), (b) any Subordinated Creditor, in its capacity as the Term Debt Representative (used in this Section as defined in the Intercreditor Agreement) or a Term Debt Secured Party (used in this Section as defined in the Intercreditor Agreement) or in any capacity other than as a Subordinated Creditor or (c) any Obligor; provided, however, that no Person that is a Subordinated Creditor, but acting or purporting to act in its capacity as Term Debt Representative or a Term Debt Secured Party, shall take any action or exercise its rights, remedies and powers under the Intercreditor Agreement or otherwise to the extent such action or exercise would advantage or benefit such Person principally in its capacity as a Subordinated Creditor against the ABL Agent or ABL Secured Parties (in their respective capacities as such).

 

SECTION 4                               Representations.  Each of the parties hereto represents and warrants, as to itself, that it has duly authorized, executed and delivered this Agreement and that this Agreement is the legal, valid and binding obligation of such party, enforceable against such party in accordance with its terms, except to the extent that enforceability may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or other similar laws affecting the enforcement of creditor’s rights and subject to general equitable principles.

 

SECTION 5                               Assignment.  This Agreement may not be assigned by any party hereto to any other entity without the prior written consent of the ABL Agent (until the Discharge of ABL Obligations) and any such assignment without such consent shall be deemed null and void.

 

Governing Law; Submission to Jurisdiction; Venue; Waiver of Jury Trial.

 

(i)                                     Governing Law.  This Agreement shall be governed by, and construed in accordance with, the law of the State of New York.

 

11



 

(ii)                                  Submission to Jurisdiction.  Each Obligor and each Subordinated Creditor irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of the Supreme Court of the State of New York sitting in New York County and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement, or for recognition or enforcement of any judgment, and each of the parties hereto irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State court or, to the fullest extent permitted by applicable law, in such Federal court.  Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.  Nothing in this Agreement shall affect any right that the ABL Agent or any ABL Secured Party may otherwise have to bring any action or proceeding relating to this Agreement against any Obligor or Subordinated Creditor or its properties in the courts of any jurisdiction.

 

(iii)                               Waiver of Venue.  Each Obligor and each Subordinated Creditor irrevocably and unconditionally waives, to the fullest extent permitted by applicable law, any objection that it may now or hereafter have to the laying of venue of any action or proceeding arising out of or relating to this Agreement in any court referred to in paragraph (b) of this Section.  Each of the parties hereto irrevocably waives, to the fullest extent permitted by applicable law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

 

(iv)                              Service of Process.  Each party hereto irrevocably consents to service of process in the manner provided for notices in Section 11.  Nothing in this Agreement will affect the right of any party hereto to serve process in any other manner permitted by applicable law.

 

(v)                                 WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER ABL LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE SECOND AMENDMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

SECTION 6                               Amendment.  Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Obligors, the Subordinated Creditors and the ABL Agent; provided that this Agreement may be amended pursuant a joinder in substantially the form of Exhibit A annexed

 

12



 

hereto, executed by such Subordinated Creditor consented to by ABL Agent, to evidence the joinder of any Subordinated Creditor hereto.

 

SECTION 7                               Waiver.  No failure on the part of the ABL Agent to exercise, and no course of dealing with respect to, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise by the ABL Agent of any right, power or remedy hereunder preclude any other or further exercise thereof or the exercise of any other right, power or remedy.  The remedies herein are cumulative and are not exclusive of any remedies provided by law.

 

SECTION 8                               Severability.  Each party hereto expressly agrees that it is not the intention of any party hereto to violate public policy or state or federal statutory or common laws and applicable regulations and that if any sentence, paragraph, clause or combination thereof in this Agreement is in violation of the same or is required to be changed to comply with same, such paragraph, clause or sentence, or combination of the same shall be inoperative and the remainder of this Agreement shall remain binding upon the parties herein.

 

SECTION 9                               Notices.

 

(a)                                 Generally.  Except in the case of notices and other communications expressly permitted to be given by telephone, all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy, as follows:

 

(i)                                     if to the Obligors or the ABL Agent, as provided for in the ABL Credit Agreement; and

 

(ii)                                  if to the Subordinated Creditors, to the notice address provided by each Last Out Lender under the ABL Credit Agreement.

 

(b)                                 Electronic Notification.  Notices and other communications to the ABL Agent, the Obligors or the Subordinated Creditors may be delivered or furnished by electronic communications pursuant to procedures approved by it.  The ABL Agent, the Obligors or the Subordinated Creditors may, in their discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.

 

(c)                                  Modifications to Notice Provisions.  Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other parties hereto.  All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt.

 

(d)                                 Appointment of Process Agent.  Each Subordinated Creditor organized under the laws of a jurisdiction other than the United States or any state thereof shall, promptly upon becoming a party hereto, irrevocably appoint a process agent (a “Process Agent”), reasonably satisfactory to ABL Agent, as its agent to receive on behalf of such Subordinated

 

13



 

Creditor and its property service of copies of the summons and complaint and any other process which may be served in any such action or proceeding.  Such service may be made by mailing or delivering a copy of such process to such Subordinated Creditor in care of the Process Agent at the Process Agent’s address notified to ABL Agent, and such Subordinated Creditor hereby irrevocably authorizes and directs the Process Agent to accept such service on its behalf.  As an alternative method of service, such Subordinated Creditor also irrevocably consents to the service of any and all process in any such action or proceeding by the mailing of copies of such process to such Subordinated Creditor at its address specified in Section 11.01.

 

SECTION 10                        Successors and Assigns.  The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

 

[Remainder of page intentionally left blank]

 

14



 

IN WITNESS WHEREOF, the parties hereto have caused this Subordination Agreement to be signed by their duly authorized officers on the date first set forth above.

 

BORROWERS:

 

 

 

 

UNITEK GLOBAL SERVICES, INC.

 

UNITEK ACQUISITION, INC.

 

 

 

 

 

By:

 

 

Name:

Andrew J. Herning

 

Title:

Chief Financial Officer

 

 

 

 

 

PINNACLE WIRELESS USA, INC.

 

UNITEK USA, LLC

 

ADVANCED COMMUNICATIONS USA, INC.

 

DIRECTSAT USA, LLC

 

FTS USA, LLC

 

 

 

 

 

By:

 

 

Name:

Andrew J. Herning

 

Title:

Treasurer

 

[Signature Page to Subordination Agreement]

 



 

ABL AGENT:

APOLLO INVESTMENT CORPORATION, as Administrative Agent under the ABL Credit Agreement

 

 

 

By: Apollo Investment Management, L.P., as Advisor

 

 

 

By: ACC Management, LLC, as its General Partner

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

[Signature Page to Subordination Agreement]

 



 

SUBORDINATED CREDITORS:

PENNANTPARK FLOATING RATE CAPITAL LTD., as a Subordinated Creditor

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

CETUS CAPITAL II, LLC, as a Subordinated Creditor

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

LITTLEJOHN OPPORTUNITIES MASTER FUND LP, as a Subordinated Creditor

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

NEW MOUNTAIN FINANCE CORPORATION, as a Subordinated Creditor

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

CERBERUS ASRS HOLDINGS LLC, as a Subordinated Creditor

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

CERBERUS AUS LEVERED HOLDINGS LP, as a Subordinated Creditor

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

CERBERUS LEVERED LOAN OPPORTUNITIES FUND II, L.P., as a Subordinated Creditor

 

By:

 

 

Name:

 

 

Title:

 

 

[Signature Page to Subordination Agreement]

 



 

 

CERBERUS OFFSHORE LEVERED LOAN OPPORTUNITIES MASTER FUND II, L.P., as a Subordinated Creditor

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

MAIN STREET CAPITAL CORPORATION, as a Subordinated Creditor

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

MARBLEGATE SPECIAL OPPORTUNITIES MASTER FUND, L.P., as a Subordinated Creditor

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

[Signature Page to Subordination Agreement]

 



 

EXHIBIT A

 

FORM OF NEW SUBORDINATED CREDITOR JOINDER TO SUBORDINATION AGREEMENT

 

This JOINDER AGREEMENT (this “Agreement”) dated as of [      ], 2014 is executed by the undersigned for the benefit of APOLLO INVESTMENT CORPORATION, as administrative agent under the ABL Credit Agreement referenced below (“AIC”, and in such capacity, the “ABL Agent”) and the ABL Secured Parties, in connection with (i) that certain Revolving Credit and Security Agreement, dated as of July 10, 2013  (as from time to time amended, modified, extended, renewed, refinanced, or restated, the “ABL Credit Agreement”), by and among UNITEK GLOBAL SERVICES INC., a Delaware corporation (“UniTek Parent”), UNITEK ACQUISITION, INC., a Delaware corporation (“UniTek Acquisition”), PINNACLE WIRELESS USA, INC., a Delaware corporation (“Pinnacle”), UNITEK USA, LLC, a Delaware limited liability company (“UniTek USA”), ADVANCED COMMUNICATIONS USA, INC., a Delaware corporation (“Advanced Communications”), DIRECTSAT USA, LLC, a Delaware limited liability company (“DirectSat”), FTS USA, LLC, a Delaware limited liability company (“FTS”) (UniTek Parent, UniTek Acquisition, Pinnacle, UniTek USA, Advanced Communications, DirectSat, FTS, collectively the “Borrowers”), ABL Agent, and each lender party thereto, and (ii) that certain Subordination Agreement dated as of August 13, 2014 among the Borrowers under the ABL Credit Agreement, the ABL Agent and the Subordinated Creditors party thereto (as amended, restated, supplemented or modified from time to time, the “Subordination Agreement”).  Capitalized terms not otherwise defined herein are being used herein as defined in the Subordination Agreement.

 

In consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each signatory hereby agrees as follows:

 

1.                                      Each such Person assumes, effective as of the date hereof all the obligations of a Subordinated Creditor under the Subordination Agreement, subject to the terms thereof, and agrees that such Person is a Subordinated Creditor and bound as a Subordinated Creditor under the terms of the Subordination Agreement as if it had been an original signatory to such agreement.

 

2.                                      Each such Person hereby makes (as of the date hereof, except for such representations that per their terms relate to a different date, which are made as of such date) to the ABL Agent the representations and warranties applicable to a Subordinated Creditor set forth in the Subordination Agreement applicable to such Person and confirms that such representations and warranties are true and correct in all material respects.

 

3.                                      Each such Person’s address for notices under the Subordination Agreement shall be the address set forth below:

 

[Insert notice address]

 



 

4.                                      This Agreement shall be deemed to be part of, and a modification to, the Subordination Agreement and shall be governed by all the terms and provisions of the Subordination Agreement, respectively, with respect to the modifications intended to be made to such agreement, which terms are incorporated herein by reference, are ratified and confirmed and shall continue in full force and effect as valid and binding agreements of each such Person enforceable against such Person.  Each such Person hereby waives notice of the ABL Agent’s acceptance of this Agreement.  Each such Person will deliver an executed original of this Agreement to the ABL Agent.

 

[Add signature block for each new Subordinated Creditor]

 



 

Schedule 1

 

Last Out Loan Commitments

 

Last Out Lender

 

Last Out Loan Commitment

 

PENNANTPARK FLOATING RATE CAPITAL LTD.

 

$

74,808.38

 

CETUS CAPITAL II, LLC

 

$

1,523,538.87

 

LITTLEJOHN OPPORTUNITIES MASTER FUND LP

 

$

273,183.40

 

NEW MOUNTAIN FINANCE CORPORATION

 

$

1,478,075.58

 

CERBERUS ASRS HOLDINGS LLC

 

$

271,542.29

 

CERBERUS AUS LEVERED HOLDINGS LP

 

$

96,279.39

 

CERBERUS LEVERED LOAN OPPORTUNITIES FUND II, L.P.

 

$

422,875.46

 

CERBERUS OFFSHORE LEVERED LOAN OPPORTUNITIES MASTER FUND II, L.P.

 

$

233,414.61

 

MAIN STREET CAPITAL CORPORATION

 

$

352,526.93

 

MARBLEGATE SPECIAL OPPORTUNITIES MASTER FUND, L.P.

 

$

273,755.09

 

Total

 

$

5,000,000.00

 

 


EX-99.4 5 a14-22689_1ex99d4.htm EX-99.4

Exhibit 99.4

 

Execution Version

 

FIFTH AMENDMENT TO CREDIT AGREEMENT

 

This FIFTH AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is dated as of August 13, 2014 and entered into by and among UNITEK GLOBAL SERVICES INC., a Delaware corporation (the “Borrower”), the Lenders party hereto, constituting Required Lenders, and CERBERUS BUSINESS FINANCE, LLC, as administrative agent for the Lenders (in such capacity, the “Administrative Agent”, as successor in interest to FBR Capital Markets LT, Inc. (“FBR”)), and the Credit Support Parties (as defined in Section 5 hereof), and is made with reference to that certain Credit Agreement dated as of April 15, 2011, as amended by that First Amendment dated as of September 14, 2012, the Second Amendment and Limited Waiver, dated as of July 25, 2013, the Third Amendment to Credit Agreement dated as of November 5, 2013, the Fourth Amendment to Credit Agreement, dated as of July 28, 2014 and the Forbearance Agreement (the “Forbearance Agreement”), dated as of August 8, 2014 (as so amended and modified and as otherwise amended, supplemented or modified prior to the date hereof the “Credit Agreement”), by and among the Borrower, the several banks and other financial institutions or entities from time to time party thereto (the “Lenders”) and FBR, in its capacities as documentation agent, syndication agent and administrative agent.  Capitalized terms used herein without definition shall have the same meanings herein as set forth in the Credit Agreement.

 

RECITALS

 

WHEREAS, the Administrative Agent, the Lenders, the ABL Agent and the ABL Lenders are involved in ongoing discussions with the Borrower regarding a potential restructuring of its capital structure and debt obligations;

 

WHEREAS, in connection therewith, the ABL Agent and the ABL Lenders have agreed to enter into that certain Second Amendment to Revolving Credit and Security Agreement (the “ABL Second Amendment”), by and among the Loan Parties, the ABL Agent, the ABL Lenders and certain other lenders party thereto, to provide, among other things, additional liquidity to the Borrower and the other Loan Parties on the terms and conditions set forth therein; and

 

WHEREAS, in connection with the ABL Second Amendment, the Loan Parties have requested, and the Lenders party hereto constituting Required Lenders have each agreed, to amend the Credit Agreement to permit these amendments and the incurrence of this additional indebtedness under the ABL Credit Agreement.

 

NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, the parties hereto agree as follows:

 



 

Section 1.                                          AMENDMENTS TO THE CREDIT AGREEMENT

 

1.1                               Amendments to Article 1: Definitions.

 

A.                                    Section 1.1 Defined Terms of the Credit Agreement is hereby amended by adding the following definitions in alphabetical order:

 

“Fifth Amendment” means that certain Fifth Amendment to Credit Agreement dated as of August 13, 2014, by and among the Borrower, the Credit Support Parties as defined therein, the Lenders party thereto and Cerberus Business Finance, LLC, in its capacity as the Administrative Agent (as successor in interest to FBR Capital Markets LT, Inc. in its capacity as the prior administrative agent under this Agreement).

 

“Fifth Amendment Effective Date” has the meaning given to such term in Section 2 of the Fifth Amendment.

 

1.2                               Amendments to Article 6:  Negative Covenants.

 

A.                                    Section 6.2 Indebtedness of the Credit Agreement is hereby amended by amending and restating clause 6.2(f) therein in its entirety as follows:

 

“(f)                             (i) Indebtedness of the Borrower and the Subsidiary Guarantors incurred pursuant to the ABL Credit Agreement in an aggregate principal amount not to exceed $75,000,000, provided that, the Borrower and the Subsidiary Guarantors may incur additional Indebtedness pursuant to the ABL Credit Agreement in excess of such limitation not to exceed an additional aggregate principal amount (excluding any interest that is paid in kind and capitalized thereon) of not more than $25,000,000 pursuant to “Borrower Revolver Increases” and/or the “Last Out Loans” (in each case, as defined and provided for in the ABL Credit Agreement as in effect on the Fifth Amendment Effective Date) and only with respect to any Borrower Revolver Increase (but not in respect of any Last Out Loan) no later than five (5) Business Days (or such shorter period of time as agreed to by the Administrative Agent) prior to the incurrence of any such additional Indebtedness under the ABL Credit Agreement, the Borrower shall have delivered to the Administrative Agent a pro forma balance sheet and pro forma financial statements and a Compliance Certificate demonstrating that the Borrower would be in compliance with the financial covenants set forth in Section 6.1 on a pro forma basis after giving effect to such Indebtedness (assuming the full amount of any such Borrower Revolving Increase was drawn) as if such Indebtedness had been incurred on the first day of the most recent period of four consecutive fiscal quarters in respect of which the financial covenants have been tested in accordance with Section 7.1; and any Permitted Refinancing Indebtedness in respect thereof (including Permitted Refinancing Indebtedness in respect of Borrower Revolving Increases which are permitted by this paragraph (f) as if such Borrower Revolving Increases had been implemented) and (ii) if applicable, Guarantee Obligations of any Subsidiary Guarantor under the ABL Credit Agreement in respect of such Indebtedness;”

 

2



 

B.                                    Section 6.17 Amendments to ABL Documents of the Credit Agreement is hereby amended by amending and restating clause 6.17(ii) therein in its entirety as follows:

 

“(ii) to provide for any incurrence of additional or increased ABL Indebtedness after the Closing Date in an aggregate principal amount exceeding $75,000,000, except for any such incurrence and increase of the ABL Indebtedness pursuant to “Borrower Revolving Increases” and/or the “Last Out Loans” (in each case, as defined and provided for in the ABL Credit Agreement as in effect on the Fifth Amendment Effective Date) permitted under the provisions of Section 6.2(f) hereof and which does not otherwise violate the provisions of this Section 6.17 or the Intercreditor Agreement,”

 

Section 2.                                          CONDITIONS TO EFFECTIVENESS FOR AMENDMENT

 

A.                                    Conditions to Effectiveness.  Section 1 of this Amendment shall become effective only upon the satisfaction of all of the following conditions precedent (the date of satisfaction of such conditions being referred to herein as the “Fifth Amendment Effective Date”):

 

(i)                                     Each Loan Party, the Lenders (constituting Required Lenders) and the Administrative Agent shall have duly executed and delivered this Amendment.

 

(ii)                                  A copy of the duly executed ABL Second Amendment shall have been delivered to the Administrative Agent and the Lenders with the only remaining condition to effectiveness thereunder being the delivery and effectiveness of this Amendment.

 

Section 3.                                          REPRESENTATIONS AND WARRANTIES

 

In order to amend the Credit Agreement in the manner provided herein, each Loan Party represents and warrants to the Lenders that the following statements are true, correct and complete:

 

A.                                    Corporate Power and Authority.  Such Loan Party has all requisite corporate power and authority to enter into this Amendment and to carry out the transactions contemplated by, and perform its obligations under, this Amendment and the Credit Agreement as amended by this Amendment (the “Amended Credit Agreement”).

 

B.                                    Authorization of Agreements.  The execution and delivery of this Amendment and the performance of this Amendment and the Amended Credit Agreement have been duly authorized by all necessary corporate action on the part of such Loan Party.

 

C.                                    No Conflict.  The execution and delivery by such Loan Party of this Amendment and the performance by such Loan Party of this Amendment and of the Amended Credit Agreement do not and will not (i) violate any provision of any law or any governmental rule or regulation applicable to such Loan Party, its organizational documents or any order, judgment or decree of any court or other agency of government binding on such Loan Party, (ii) conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any

 

3



 

ABL Documents or any other material contract of such Loan Party, (iii) result in or require the creation or imposition of any Lien upon any of the properties or assets of such Loan Party (other than Liens created under any of the Loan Documents in favor of Administrative Agent on behalf of Lenders), or (iv) require any approval of stockholders or any approval or consent of any Person under the ABL Documents or any other material contract of such Loan Party, except as have been obtained.

 

D.                                    Governmental Consents.  The execution and delivery by such Loan Party of this Amendment and the performance by such Loan Party of the Amendment and the Amended Credit Agreement do not and will not require any registration with, consent or approval of, or notice to, or other action to, with or by, any federal, state or other governmental authority or regulatory body, except as have been obtained.

 

E.                                    Binding Obligation.  This Amendment has been duly executed and delivered by such Loan Party and this Amendment and the Amended Credit Agreement are the legally valid and binding obligations of such Loan Party, enforceable against such Loan Party in accordance with their respective terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally or by equitable principles relating to enforceability.

 

F.                                     Incorporation of Representations and Warranties from Credit Agreement.  The representations and warranties contained in Section 3 of the Credit Agreement (other than in Section 3.2 thereof) are and will be true, correct and complete in all material respects on and as of the Fifth Amendment Effective Date to the same extent as though made on and as of that date, except with respect to the occurrence of Specified Defaults, and except to the extent such representations and warranties specifically relate to an earlier date, in which case they were true, correct and complete in all material respects on and as of such earlier date.

 

G.                                   Absence of Default.  After giving effect to this Amendment, no event has occurred and is continuing or will result from the consummation of the transactions contemplated by this Amendment that would constitute a Default or an Event of Default (other than the Specified Defaults as defined in the Forbearance Agreement).

 

Section 4.                                          MISCELLANEOUS

 

A.                                    Reference to and Effect on the Credit Agreement and the Other Loan Documents.

 

(i)                                     On and after the Fifth Amendment Effective Date, each reference in the Credit Agreement to “this Agreement,” “hereunder,” “hereof,” “herein” or words of like import referring to the Credit Agreement, and each reference in the other Loan Documents to the “Credit Agreement,” “thereunder,” “thereof” or words of like import referring to the Credit Agreement shall mean and be a reference to the Amended Credit Agreement.

 

4



 

(ii)                                  Except as specifically amended by this Amendment, the Credit Agreement and the other Loan Documents shall remain in full force and effect and are hereby ratified and confirmed.

 

(iii)                               The execution, delivery and performance of this Amendment shall not, except as expressly provided herein, constitute a waiver of any provision of, or operate as a waiver of any right, power or remedy of the Administrative Agent or any Lender under, the Credit Agreement or any of the other Loan Documents.

 

B.                                    Fees and Expenses.  Borrower acknowledges that all costs, fees and expenses as described in subsection 9.5 of the Credit Agreement incurred by the Administrative Agent and its counsel with respect to this Amendment and the documents and transactions contemplated hereby shall be for the account of Borrower.

 

C.                                    Headings.  Section and subsection headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose or be given any substantive effect.

 

D.                                    Applicable Law.  THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.  In addition to and without limitation of any of the foregoing, this Amendment shall be deemed to be a Loan Document and shall otherwise be subject to all of the terms and conditions contained in Section 9.12 of the Credit Agreement, mutatis mutandi.

 

E.                                    Counterparts; Effectiveness.  This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument; signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are physically attached to the same document. Delivery of an executed counterpart of this Amendment by telefacsimile or electronic mail shall be equally as effective as delivery of an original executed counterpart of this Amendment.  Any party delivering an executed counterpart of this Amendment by telefacsimile or electronic mail also shall deliver an original executed counterpart of this Amendment but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Amendment.

 

Section 5.                                          ACKNOWLEDGEMENT AND CONSENT

 

Each Subsidiary Guarantor and each Subsidiary of the Borrower that is a party to a Loan Document and listed on the signatures pages hereof (each, a “Credit Support Party” and collectively, the “Credit Support Parties”) has read this Amendment and consents to the terms hereof and hereby acknowledges and agrees that the Guarantee and Collateral Agreement and

 

5



 

any other Security Document (each, a “Credit Support Document”) to which it is a party or otherwise bound shall continue in full force and effect and that all of its obligations thereunder shall be valid and enforceable, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally and by equitable principles relating to enforceability, and shall not be impaired or limited by the execution or effectiveness of this Amendment.  Each Credit Support Party acknowledges and agrees that (i) notwithstanding the conditions to effectiveness set forth in this Amendment, such Credit Support Party is not required by the terms of the Credit Agreement or any other Loan Document to consent to the waivers and amendments to the Credit Agreement effected pursuant to this Amendment and (ii) nothing in the Credit Agreement, this Amendment or any other Loan Document shall be deemed to require the consent of such Credit Support Party to any future amendments to the Credit Agreement.

 

[Remainder of page intentionally left blank.]

 

6



 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first written above.

 

BORROWER:

 

 

 

 

UNITEK GLOBAL SERVICES, INC.

 

 

 

 

 

By:

/s/

Andrew J. Herning

 

Name:

Andrew J. Herning

 

Title:

Chief Financial Officer

 

[Signature Page to Fifth Amendment to Credit Agreement]

 



 

CREDIT SUPPORT PARTIES:

 

 

UNITEK ACQUISITION, INC.

 

 

 

 

 

By:

/s/

Andrew J. Herning

 

Name:

Andrew J. Herning

 

Title:

Chief Financial Officer

 

 

 

 

 

PINNACLE WIRELESS USA, INC.

 

 

 

 

 

By:

/s/

Andrew J. Herning

 

Name:

Andrew J. Herning

 

Title:

Treasurer

 

 

 

 

 

UNITEK USA, LLC

 

 

 

 

 

By:

/s/

Andrew J. Herning

 

Name:

Andrew J. Herning

 

Title:

Treasurer

 

 

 

 

 

ADVANCED COMMUNICATIONS USA, INC.

 

 

 

 

 

By:

/s/

Andrew J. Herning

 

Name:

Andrew J. Herning

 

Title:

Treasurer

 

 

 

 

 

DIRECTSAT USA, LLC

 

 

 

 

 

By:

/s/

Andrew J. Herning

 

Name:

Andrew J. Herning

 

Title:

Treasurer

 

 

 

 

 

FTS USA, LLC

 

 

 

 

 

By:

/s/

Andrew J. Herning

 

Name:

Andrew J. Herning

 

Title:

Treasurer

 

[Signature Page to Fifth Amendment to Credit Agreement]

 



 

ADMINISTRATIVE AGENT:

CERBERUS BUSINESS FINANCE, LLC

 

 

 

 

 

By:

/s/

Dan Wolf

 

Name:

Dan Wolf

 

Title:

President

 

[Signature Page to Fifth Amendment to Credit Agreement]

 



 

LENDER:

 

 

 

CERBERUS OFFSHORE LEVERED II LP

 

By: COL II GP Inc.

 

Its: General Partner

 

 

 

 

By:

/s/ Dan Wolf

 

Name: Dan Wolf

 

Title: Vice President

 

 

 

CERBERUS ASRS FUNDING LLC

 

 

 

 

By:

/s/ Dan Wolf

 

Name: Dan Wolf

 

Title: Vice President

 

 

 

CERBERUS ONSHORE II CLO LLC

 

 

 

 

By:

/s/ Dan Wolf

 

Name: Dan Wolf

 

Title: Vice President

 

 

 

CERBERUS AUS LEVERED II LP

 

By: CAL II GP LLC

 

Its: General Partner

 

 

 

 

By:

/s/ Dan Wolf

 

Name: Dan Wolf

 

Title: Vice President

 

 

 

CERBERUS ONSHORE LEVERED II LLC

 

 

 

 

By:

/s/ Dan Wolf

 

Name: Dan Wolf

 

Title: Vice President

 

[Signature Page to Fifth Amendment to Credit Agreement]

 



 

LENDERS:

LITTLEJOHN OPPORTUNITIES MASTER FUND LP

 

 

 

 

 

 

By:

/s/ Richard Maybaum

 

Name: Richard Maybaum

 

Title: Managing Director

 

[Signature Page to Fifth Amendment to Credit Agreement]

 



 

LENDERS:

 

CETUS CAPITAL II, LLC

 

 

 

 

By:

/s/ Richard Maybaum

 

Name: Richard Maybaum

 

Title: Managing Director

 

[Signature Page to Fifth Amendment to Credit Agreement]

 



 

LENDERS:

SG DISTRESSED FUND, LP

 

 

 

 

 

 

By:

/s/ Richard Maybaum

 

Name: Richard Maybaum

 

Title: Managing Director

 

[Signature Page to Fifth Amendment to Credit Agreement]

 



 

LENDERS:

MAIN STREET CAPITAL CORPORATION

 

 

 

 

 

 

By:

/s/ Nick Meserve

 

Name: Nick Meserve

 

Title: Managing Director

 

[Signature Page to Fifth Amendment to Credit Agreement]

 



 

LENDERS:

MARBLEGATE SPECIAL OPPORTUNITIES MASTER FUND, L.P.

 

 

 

 

 

 

By:

/s/ Paul Arrouet

 

Name: Paul Arrouet

 

Title: Managing Partner

 

[Signature Page to Fifth Amendment to Credit Agreement]

 



 

LENDERS:

NEW MOUNTAIN FINANCE HOLDINGS, L.L.C.

 

 

 

 

 

 

By:

/s/ Robert Hamwee

 

Name: Robert Hamwee

 

Title: CEO

 

 

 

 

 

NEW MOUNTAIN FINANCE CORPORATION

 

 

 

 

 

 

By:

/s/ Robert Hamwee

 

Name: Robert Hamwee

 

Title: CEO

 

[Signature Page to Fifth Amendment to Credit Agreement]

 



 

LENDERS:

PennantPark Floating Rate Funding I, LLC, as Lender

 

 

 

By: PennantPark Floating Rate Capital Ltd., as Designated Manager

 

 

 

 

 

 

By:

/s/ Arthur Penn

 

Name: Arthur Penn

 

Title: CEO

 

[Signature Page to Fifth Amendment to Credit Agreement]

 


EX-99.5 6 a14-22689_1ex99d5.htm EX-99.5

Exhibit 99.5

 

Execution Version

 

FORBEARANCE AGREEMENT

 

THIS FORBEARANCE AGREEMENT, is entered into as of August 8, 2014 (this “Agreement”), by and among Unitek Global Services, Inc., a Delaware corporation (the “Borrower”), the undersigned Subsidiary Guarantors, the Lenders party hereto constituting Required Lenders (the “Consenting Lenders”), and Cerberus Business Finance, LLC as successor administrative agent for the Lenders (the “Administrative Agent”).

 

W I T N E S S E T H:

 

WHEREAS, the Borrower, FBR Capital Markets LT, Inc., in its capacity as administrative agent (as succeeded by the Administrative Agent) and the Lenders entered into that certain Credit Agreement dated as of April 15, 2011, as amended by that First Amendment, dated as of September 14, 2012; the Second Amendment and Limited Waiver, dated as of July 25, 2013; the Third Amendment to Credit Agreement dated as of November 5, 2013; and the Fourth Amendment to Credit Agreement, dated as of July 28, 2014 (as so amended and as otherwise amended, restated, supplemented or modified from time to time, the “Credit Agreement”; unless otherwise defined herein, capitalized terms are used herein as defined in the Credit Agreement), pursuant to which, among other things, the Lenders have extended credit to the Borrower in the form of Term Loans;

 

WHEREAS, the Borrower and the other Loan Parties have advised the Administrative Agent and the Lenders that certain Known Defaults (as defined herein) have occurred and are continuing and certain Prospective Defaults (as defined herein) are believed to have occurred or are expected to occur and be continuing;

 

WHEREAS, the Administrative Agent and the Lenders have not expressly or impliedly waived any of the Known Defaults or Prospective Defaults (collectively, the “Specified Defaults”), and as a result of the occurrence and continuation of any Specified Default, the Administrative Agent and the Lenders are entitled to exercise at any time all of their rights and remedies to commence enforcement and collection actions under the Credit Agreement, the other Loan Documents and applicable law (such rights, remedies and actions, collectively, “Enforcement Actions”), including without limitation, to declare to be immediately due and payable the Facility, all accrued interest thereon and all fees and other Obligations owing to the Administrative Agent and the Lenders under the Credit Agreement and the other Loan Documents;

 

WHEREAS, in connection with the foregoing, the Borrower and the other Loan Parties have requested that the Administrative Agent and the Lenders agree to implement a forbearance period in respect of the Specified Defaults for a limited period; and

 

WHEREAS, the Administrative Agent and each Consenting Lender are willing to so agree, but only upon the terms and subject to the conditions expressly set forth in this Agreement, and without any advance understanding or agreement by the Consenting Lenders to consent to, or grant a waiver to permit, the implementation of any amendment, restructuring proposal or the consummation of any transaction for which such consent or waiver would be

 

1



 

required under the Credit Agreement or the other Loan Documents (including without limitation, under this Agreement);

 

NOW THEREFORE, in consideration of the premises and for other good and valuable consideration the receipt of which is hereby acknowledged, the parties hereto hereby agree as follows:

 

SECTION 1.                         DEFINITIONS

 

As used in this Agreement, the following terms shall have the following meanings:

 

Additional Funding” shall mean additional Indebtedness for borrowed money incurred by the Borrower and the other Loan Parties under the ABL Credit Agreement, as permitted under the Intercreditor Agreement and the Credit Agreement.

 

Effective Date” shall have the meaning set forth in Section 6 hereof.

 

Forbearance Period” shall mean the period from and including the Effective Date to, but not including, the Forbearance Period Termination Date.

 

Forbearance Period Termination Date” shall have the meaning set forth in Section 3.1 hereof.

 

Known Defaults” means those certain Events of Default that have occurred and are continuing, as expressly described on Schedule I attached hereto.

 

Prospective Defaults” means those certain Event of Default that the Loan Parties have advised will occur and be continuing in the future, as expressly described on Schedule I attached hereto.

 

SECTION 2.                         ACKNOWLEDGMENTS

 

2.1                               Specified DefaultsEach Loan Party hereby acknowledges and agrees that (a) each of the Known Defaults constitutes an Event of Default which has occurred and is continuing and which has not been waived by the Lenders and (b) each of the Prospective Defaults will constitute an Event of Default upon the occurrence and continuation thereof.  The Loan Parties hereby acknowledge and agree that the occurrence of any of the Specified Defaults entitles the Administrative Agent and Lenders to exercise any Enforcement Action.

 

2.2                               Obligations.  Each Loan Party acknowledges and agrees that (a) as of the close of business on July 31, 2014, the Obligations include, without limitation, $145,009,799.57 on account of the outstanding unpaid amount of principal of the Term Loans and $1,368,850.12 on account of the accrued and unpaid interest in respect of the Term Loans (excluding any outstanding fees), (b) the Borrower is truly and justly indebted to the Lenders for the Obligations, without defense, counterclaim or offset of any kind and (c) each Guarantor is liable for all of its obligations and undertakings under its guarantees and other obligations under the

 

2



 

Loan Documents (the “Guaranties”) (subject to the terms of such Guaranties), without defense, counterclaim or offset of any kind.

 

2.3                               Other Lenders.  Each Loan Party acknowledges and agrees that (a) the Administrative Agent is entering into this Agreement at the direction of the Required Lenders and (b) each Consenting Lender is acting solely on its own behalf and not on behalf of any other Lender.  Notwithstanding the foregoing, the Administrative Agent and the Consenting Lenders acknowledge the provisions under Section 8.4 of the Credit Agreement providing that the Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting under the Loan Documents in accordance with a request of the Required Lenders (as provided in any such Loan Document) and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Lenders and all future holders of the Loans.

 

SECTION 3.                         FORBEARANCE; LOANS; NO WAIVER

 

3.1                               Forbearance Period.  Upon the satisfaction of the conditions precedent set forth in Section 6.1 of this Agreement, the Administrative Agent and each Consenting Lender agrees to temporarily forbear (but not waive such Defaults and Events of Default, whether now existing or hereafter arising) from taking any Enforcement Action solely with respect to the Specified Defaults during the period from and including the Effective Date until the earliest to occur of the following (the earliest such date, the “Forbearance Period Termination Date”):

 

(i)                                     on August 27, 2014; provided that, if the Borrower receives at least $3,000,000 in cash proceeds of Additional Funding on or prior to August 27, 2014, such date shall be automatically extended, without any further action by any party hereto, to September 15, 2014; and

 

(ii)                                  immediately on the date on which any of the following shall occur: (A) the occurrence of a Default or an Event of Default (other than a Specified Default) without giving effect to any cure or grace period thereunder, (B) an amendment or any restructuring of any of the Loan Documents, (C) any Loan Party shall take any action to challenge (including without limitation, to assert in writing any challenge to) the validity or enforceability of the Credit Agreement, this Agreement or any provision hereof or any other Loan Document, (D) an amendment or any restructuring of any of the ABL Documents that is not reasonably satisfactory to the Required Lenders, (E) the occurrence of the “Forbearance Period Termination Date” as defined in the ABL Forbearance Agreement (as defined below), or an amendment, supplement, waiver or other modification of the ABL Forbearance Agreement that is not reasonably satisfactory to the Required Lenders, (F) the commencement of any enforcement and collection actions against any Loan Party by the holders of Indebtedness of such Loan Party or (G) the agreement or consent of any Loan Party to either of (D) or (F) above, without the prior written consent of the Required Lenders or, in the case of (F) above, the written consent of the Required Lenders within 2 business days after any such commencement.

 

3.2                               No Waiver; Limitation on Forbearance.  Each Loan Party acknowledges and agrees that, notwithstanding the agreement of the Administrative Agent and the Consenting Lenders to refrain from taking Enforcement Actions during the Forbearance

 

3



 

Period in respect of the Specified Defaults, except as provided in Section 3.3 below, (a) such agreement shall not constitute a waiver of the occurrence or the continuance of any Default or Event of Default, including any Specified Default, and each Specified Default (and any other Default or Event of Default) which occurs or has occurred shall continue to exist unless and until waived by the Required Lenders or the Lenders, as applicable under the Credit Agreement, (b) the Administrative Agent and the Consenting Lenders have not waived, presently do not intend to waive and may never waive the Specified Defaults, and nothing contained in this Agreement or the transactions contemplated hereby shall be deemed to constitute any such waiver, (c) nothing contained in this Agreement shall be construed to limit or affect the right of the Administrative Agent and the Consenting Lenders to bring or maintain during the Forbearance Period any action to enforce or interpret any term or provision of this Agreement, or to file or record instruments of public record (or take other action) to perfect or further protect the liens and security interests granted by the Loan Parties to the Administrative Agent or the Lenders, (d) such agreement shall not constitute a waiver of any other right or remedy of the Administrative Agent or the Consenting Lenders whether under the Loan Documents or applicable law and (e) any requirement to provide any notice, demand or request for performance under the Guaranties shall be tolled during the Forbearance Period.

 

3.3                               Enforcement Actions After Forbearance Period.  Each Loan Party acknowledges and agrees that on the Forbearance Period Termination Date the agreement of the Consenting Lenders and the Administrative Agent to refrain from taking any Enforcement Action in respect of the Specified Defaults shall automatically cease and be of no further force or effect, and the Administrative Agent and the Consenting Lenders shall be entitled to immediately take Enforcement Actions under the Credit Agreement, the other Loan Documents and applicable law, all without further notice or demand, in respect of the Specified Defaults or any other Event of Default then existing.

 

SECTION 4.                         AGREEMENTS

 

4.1                               Agreements by Borrower.  From and after the Effective Date through the Forbearance Period Termination Date, each Loan Party shall comply with its obligations under the Loan Documents (other than in respect of the Specified Defaults).  Without limiting the foregoing, during the Forbearance Period, each Loan Party shall promptly provide such information concerning the Specified Defaults as the Administrative Agent or the Required Lenders may reasonably request from time to time.

 

4.2                               Default Interest.  All interest on the Loans shall accrue at the Default Interest Rate commencing as of August 5, 2014 (it being understood and agreed that any accrued but unpaid default interest that is not paid in cash shall be added to the outstanding principal amount of the Term Loans).

 

4.3                               Lender Call.  Every week during the Forbearance Period, beginning with the week of August 11, 2014, the Borrower shall host a call with the Administrative Agent and the Lenders (which call shall be similar to the weekly call required under Section 4.3 of the ABL Forbearance Agreement) to provide such information as the Administrative Agent and the Lenders may reasonably request, including updates with respect to the Specified Defaults and any material developments since the last update.

 

4



 

4.4                               ABL Forbearance Agreement.  On or prior to the Effective Date, the Borrower shall deliver to the Administrative Agent (for distribution to the Lenders) a copy of an agreement, duly executed and delivered by the Borrower and Persons necessary for the effectiveness thereof pursuant to the terms of the ABL Credit Agreement (the “ABL Required Lenders”), which agreement shall (a) provide for the forbearance by such holders of the exercise of any rights or remedies under the ABL Credit Agreement or the ABL Documents, including without limitation, the acceleration of the ABL Loans, due to any default or event of default arising out of or relating to any of the Specified Defaults for a period of time equal to no less than the Forbearance Period and (b) otherwise be in form and substance reasonably satisfactory to the Consenting Lenders (the “ABL Forbearance Agreement”).

 

4.5                               Failure to Comply.  The Loan Parties acknowledge, confirm and agree that any material misrepresentation by any Loan Party, or any failure of any Loan Party to perform timely or otherwise comply with the covenants, conditions and agreements contained in this Agreement, the Credit Agreement and the other Loan Documents or in any other agreement, document or instrument at any time executed and/or delivered by any Loan Party with, to or in favor of the Administrative Agent or any Lenders shall constitute an immediate Event of Default (without notice or the expiration of any cure or grace period that would otherwise be applicable), which shall automatically terminate the Forbearance Period.

 

4.6                               Other Agreements.  Each Loan Party hereby agrees that during the Forbearance Period (a) no Loan Party shall (i) incur (A) any additional Indebtedness for borrowed money other than (1) capitalized interest on the Term Loans or (2) the Additional Funding or (B) other Indebtedness outside the ordinary course of business, (ii) purchase or acquire obligations or Equity Interests of, or any other interest in, any Person, in reliance on Sections 6.7(l) and 6.7(p) of the Credit Agreement, (iii) declare, pay or make any dividend or distribution or payments in reliance on Section 6.6, other than dividends by any Loan Party (other than Borrower) to any other Loan Party, (iv) sell, lease, transfer or otherwise dispose of any assets outside the ordinary course of business, (v) repay, prepay, redeem or retire any other Indebtedness, (vi) engage in any transactions with any Affiliate (other than the Loan Parties); (b) the Loan Parties shall provide to the Administrative Agent copies of all written notices, reports, term sheets and other materials and information given to any of the ABL Creditors, concurrently with providing such notices, reports, term sheets, materials and information to such ABL Creditors; and (c) the Loan Parties shall negotiate with the Administrative Agent and Lenders in good faith towards a recapitalization of the Loan Parties’ debt obligations, and shall deliver to the Administrative Agent and Lenders (i) as soon as available and not later than 20 days after the Effective Date, a comprehensive term sheet setting forth the material terms of such recapitalization that shall have been mutually agreed by the relevant parties and (ii) as soon as available and not later than August 27, 2014 (provided that, if the date under Section 3.1(i) is automatically extended to September 15, 2014, as provided therein, this date shall also be so extended to September 15, 2014, without any further action by any party hereto) the substantially final forms of the definitive principal agreements and other documentation pursuant to which such recapitalization would be implemented.

 

4.7                               Advisors.  On or prior to August 13, 2014, the Borrower shall have retained a financial advisor on terms acceptable to the Required Lenders to assist the Borrower with its day-to-day business operations, including the operations of the other Loan Parties and

 

5



 

such financial advisor (or any replacement thereof) shall be retained through the implementation of the recapitalization of the Loan Parties’ debt obligations..

 

SECTION 5.                         REPRESENTATIONS AND WARRANTIES

 

To induce the Administrative Agent and the Lenders to enter into this Agreement and refrain from taking Enforcement Actions during the Forbearance Period, each Loan Party hereby (a) represents and warrants to the Administrative Agent and each Lender that (i) such Loan Party has the full right, power and authority to make, deliver and perform this Agreement and such Loan Party has taken all necessary corporate or other action to authorize the execution, delivery and performance of this Agreement,(ii) this Agreement constitutes the legal, valid and binding obligations of such Loan Party, enforceable against such Loan Party in accordance with the terms hereof, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally and general equitable principles (whether considered in a proceeding in equity or at law) and (iii) no Loan Party or Affiliate thereof is obligated to pay any compensation (other than the reimbursement of expenses expressly set forth in the ABL Forbearance Agreement and the ABL Credit Agreement) in connection with, or as a condition to, entering into the ABL Forbearance Agreement, and (b) confirms that each of the representations and warranties made by such Loan Party in the Loan Documents to which such Loan Party is a party is true and correct in all material respects as of the date hereof (except to the extent that the Specified Defaults make any such representation or warranty incorrect or false), except to the extent that any such representation or warranty expressly relates to a specific earlier date, in which case such Loan Party hereby confirms such representation or warranty is true and correct in all material respects as of such earlier date (except to the extent the Specified Defaults make any such representation and warranty incorrect or false).

 

SECTION 6.                         CONDITIONS PRECEDENT

 

6.1                               Effective Date.  This Agreement shall become effective on and as of August 8, 2014 (the “Effective Date”) at 5:01 p.m. New York time, so long as each of the following conditions precedent shall have been satisfied or waived, as determined by the Administrative Agent:

 

(a)                                 Forbearance Agreement.  The Administrative Agent shall have received this Agreement, duly executed and delivered by each Loan Party.

 

(b)                                 ABL Forbearance Agreement.  The Administrative Agent shall have received the ABL Forbearance Agreement, duly executed and delivered by the Borrower, the ABL Required Lenders and the ABL Administrative Agent.

 

(c)                                  Payment of Costs, Expenses and Fees.  The Borrower shall have paid all invoiced out-of-pocket costs and expenses earned, due and payable to advisors to the Administrative Agent, as required by Section 9.5 of the Credit Agreement, and all other fees earned, due and payable in connection with the execution and delivery of this Agreement and in addition to the foregoing shall have paid to such account as the Administrative Agent shall direct $150,000 as a retainer on account of legal fees and expenses that are anticipated to be incurred

 

6



 

by the Administrative Agent’s counsel in connection with its services related to this Agreement, the Credit Agreement and the recapitalization of the Loan Parties’ debt obligations, and to the extent that any amounts owed to Administrative Agent’s counsel under this Agreement or the Credit Agreement are unpaid in whole or in part, such amounts shall be paid out of such retainer.  The Loan Parties agree to replenish the foregoing retainer to its full amount from time to time promptly upon receiving any invoice from the Administrative Agent’s counsel.

 

SECTION 7.                         MISCELLANEOUS

 

7.1                               Amendments and Waivers.  Neither this Agreement, nor any terms hereof, may be amended, waived, supplemented or otherwise modified except in a writing signed by the Loan Parties, the Administrative Agent and the Required Lenders.

 

7.2                               Notices.  All notices, requests and demands to or upon the respective parties hereto shall be given in accordance with the notice provisions set forth in the Loan Documents.

 

7.3                               Costs, Fees and Expenses.  Without limiting the obligations of any Loan Party under the Loan Documents, the Borrower ratifies and reaffirms its reimbursement and indemnification obligations under Section 9.5 of the Credit Agreement, including without limitation, its obligation to pay all out-of-pocket costs and expenses, including without limitation, the fees and disbursements of counsel, incurred by the Administrative Agent and each Lender in connection with the administration and enforcement of this Agreement and the transactions contemplated hereby.  The Borrower further agrees to pay or reimburse each Lender for all its reasonable costs and expenses incurred in connection the Credit Agreement, the other Loan Documents and any such other documents, including the fees and disbursements of counsel (including the allocated fees and expenses of in-house counsel) to each Lender and the fees and expenses of any accountants and financial advisors engaged by any Lender.

 

7.4                               Specific Indemnification.  Without limiting the foregoing Section 7.3, each Loan Party acknowledges and agrees that the Administrative Agent and each Consenting Lender is fully indemnified pursuant to Section 8.7 of the Credit Agreement in respect of the Administrative Agent’s and each Consenting Lender’s negotiation, execution, compliance with and implementation of this Agreement, including as against any claims that any third party (including any Lender not a Consenting Lender) might or could assert in respect of such negotiation, execution, compliance and implementation, and to the extent such Section 8.7 as currently drafted is not entirely clear as to such indemnification, such Section 8.7 shall automatically be deemed to be amended by this Agreement to ensure that such Section 8.7 encompasses the indemnification obligations described in this Section 7.4.

 

7.5                               Loan Documents, Guaranties, Etc. Remain in Effect.

 

(a)                                 Except to the extent expressly set forth in this Agreement, all of the provisions of the Credit Agreement and the other Loan Documents are, and shall continue to be, in full force and effect in accordance with their respective terms, and each Loan Party shall remain obligated to comply with all of such Loan Party’s obligations contained in each Loan Document to which such Loan Party is a party.  Each Loan Party ratifies and reaffirms the

 

7



 

validity, enforceability and binding nature of all such obligations (subject to, and in accordance with, the terms of the Loan Documents applicable to such Loan Party). Without limiting the foregoing, each Loan Party hereby: (i) reaffirms, ratifies, confirms, and acknowledges its obligations under the Loan Documents, and agrees to continue to be bound thereby and perform thereunder; (ii) agrees and acknowledges that the Loan Documents to which it is a party and all of its obligations thereunder are and remain in full force and effect and have not been modified except as set forth herein; (iii) acknowledges that it has reviewed, and hereby consents to, this Agreement, and each Loan Party further acknowledges that its obligations under the Loan Documents to which it is a party are not in any way released, diminished, or impaired by any of the terms or provisions of this Agreement; (iv) acknowledges and agrees that it has no defenses, offsets or counterclaims of any kind or nature whatsoever to its obligations under the Loan Documents and (v) acknowledges and agrees that the Liens granted under the Security Documents in the Collateral are valid, duly perfected Liens, enforceable in accordance with the Security Documents and applicable law.

 

(b)                                 Each Loan Party acknowledges and agrees that, except as expressly provided herein, nothing in this Agreement or in the course of any prior or future discussions or negotiations (whether written or oral) between the Administrative Agent and the Lenders on the one hand and the Loan Parties on the other shall constitute an amendment or waiver of, or a commitment or agreement to effect any amendment or waiver of, any provision of any Loan Document, it being understood by each Loan Party that any such amendment, waiver or commitment (if any) shall be conditioned on and subject to definitive documentation acceptable to the Required Lenders in their sole discretion as evidenced by the execution and delivery of such documentation by Lenders whose consent to such documentation may be required under Section 9.1 of the Credit Agreement.

 

7.6                               Loan Party Release; Covenant Not to Sue.

 

(a)                                 Loan Party Release.  In consideration of the delivery of this Agreement and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, unconditionally, freely and voluntarily, after consultation with counsel and becoming fully and adequately informed as to the relevant facts, circumstances and consequences, each Loan Party, for itself and on behalf its successors and assigns, and its present and former members, affiliates, subsidiaries, divisions, predecessors, directors, officers, attorneys, employees, agents, legal representatives and other representatives, and any Person acting for or on behalf of, or claiming through it (each Loan Party and all such other Persons being hereinafter referred to collectively as the “Releasing Parties” and individually as a “Releasing Party”), hereby waives, releases, remises and forever discharges the Administrative Agent and each Lender, and each of their respective Affiliates, and each of their respective successors in title, past, present and future officers, directors, employees, limited partners, general partners, investors, attorneys, assigns, subsidiaries, shareholders, trustees, agents and other professionals and all other persons and entities to whom the Administrative Agent or any Lender would be liable if such persons or entities were found to be liable to any Loan Party (each a “Releasee” and collectively, the “Releasees”), from any and all past, present and future claims, suits, liens, lawsuits, adverse consequences, amounts paid in settlement, debts, deficiencies, diminution in value, disbursements, demands, obligations, liabilities, causes of action, damages, losses, costs and expenses of any kind or character, whether based in equity, law, contract, tort, implied or express

 

8



 

warranty, strict liability, criminal or civil statute or common law (each a “Claim” and collectively, the “Claims”), whether known or unknown, fixed or contingent, direct, indirect, or derivative, asserted or unasserted, matured or unmatured, foreseen or unforeseen, past or present, liquidated or unliquidated, suspected or unsuspected, which any Releasing Party ever had from the beginning of the world, now has, or might hereafter have against any such Releasee, which Claims relate, directly or indirectly, to any act or omission by any Releasee that occurred on or prior to the date of this Agreement and relate, directly or indirectly, to the Credit Agreement, any other Loan Document, any Loan Party or any acts or omissions of any such Releasee that occurred on or prior to the date of this Agreement with respect to the Credit Agreement or any other Loan Document, any Loan Party or the lender-borrower relationship evidenced by the Loan Documents, except for the duties and obligations set forth in this Agreement and the duties and obligations set forth in the Loan Documents to be performed on or after the date of this Agreement.  As to each and every Claim released hereunder, each Releasing Party waives the benefit of each provision of applicable federal or state law (including without limitation the laws of the state of New York), if any, pertaining to general releases after having been advised by its legal counsel with respect thereto.

 

Each Releasing Party acknowledges that it may hereafter discover facts different from or in addition to those now known or believed to be true with respect to such Claims, and agrees that this instrument shall be and remain effective in all respects notwithstanding any such differences or additional facts.  Each Releasing Party understands, acknowledges and agrees that the release set forth above may be pleaded as a full and complete defense and may be used as a basis for an injunction against any action, suit or other proceeding which may be instituted, prosecuted or attempted in breach of the provisions of such release.

 

(b)                                 Covenant Not to Sue.  Each Releasing Party hereby absolutely, unconditionally and irrevocably, covenants and agrees with and in favor of each Releasee above that it will not sue (at law, in equity, in any regulatory proceeding or otherwise) any Releasee on the basis of any Claim released, remised and discharged by such Releasing Party pursuant to the above release.  Each Releasing Party further agrees that it shall not dispute the validity or enforceability of the Credit Agreement or any of the other Loan Documents or any of its obligations thereunder, or the validity, priority, enforceability or the extent of Collateral Agent’s Lien on any item of Collateral under the Credit Agreement or the other Loan Documents.  If any Releasing Party or any of its respective successors, assigns, or officers, directors, employees, agents or attorneys (solely in their capacities as officers, directors, employees, agents and attorneys), or any Person acting for or on behalf of, or claiming through it violate the foregoing covenant, each Loan Party, for itself and its successors, assigns and legal representatives, agrees to pay, in addition to such other damages as any Releasee may sustain as a result of such violation, all attorneys’ fees and costs incurred by such Releasee as a result of such violation.

 

7.7                               No Waiver; Cumulative Remedies.  No failure to exercise and no delay in exercising, on the part of the Administrative Agent or the Lenders, any right, remedy, power or privilege under this Agreement or any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege under this Agreement or any other Loan Document preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.  The rights, remedies, powers and privileges of the Administrative Agent and the Lenders provided under this Agreement, the

 

9



 

Credit Agreement and the other Loan Documents are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

 

7.8                               Counterparts.  This Agreement may be executed by one or more of the parties hereto on any number of separate counterparts (including by telecopy or electronic transmission), and all of which counterparts taken together shall be deemed to constitute one and the same instrument.

 

7.9                               Further Assurances.  Each Loan Party shall from time to time, upon the reasonable request of the Administrative Agent, promptly and duly execute and deliver such further instruments and documents and take such further actions as the Administrative Agent may reasonably request for the purposes of obtaining or preserving the full benefits of this Agreement and of the rights, remedies, powers and privileges hereunder.

 

7.10                        Severability.  Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

7.11                        Integration; Successors.  This Agreement and the other Loan Documents constitute the entire agreement of the Loan Parties, the Administrative Agent and the Lenders concerning the subject matter hereof and may not be contradicted by evidence of prior, contemporaneous, or subsequent oral agreements.  There are no promises, undertakings, oral agreements, representations or warranties by the Loan Parties, the Administrative Agent or the Lenders relative to the subject matter hereof not expressly set forth herein.  This Agreement shall be deemed to be a Loan Document for all purposes under and in connection with the Credit Agreement and the other Loan Documents and shall be binding upon and inure to the benefit of each of the parties hereto and their respective successors and assigns.  This Agreement is not intended to confer any rights or benefits on any Person other than the parties hereto and their respective successors and assigns.

 

7.12                        Governing Law.  This Agreement and the rights and obligations of the parties hereto under this Agreement shall be governed by, and construed and interpreted in accordance with, the law of the State of New York.

 

7.13                        WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY) AND FOR ANY COUNTERCLAIM THEREIN.  EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE

 

10



 

BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

[Remainder of page intentionally left blank.]

 

11



 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the date first written above.

 

BORROWER:

UNITEK GLOBAL SERVICES, INC.

 

 

 

 

 

 

By:

/s/ Andrew J. Herning

 

Name: Andrew J. Herning

 

Title: CFO

 

 

 

 

SUBSIDIARY GUARANTORS:

UNITEK ACQUISITION, INC.

 

PINNACLE WIRELESS USA, INC.

 

UNITEK USA, LLC

 

ADVANCED COMMUNICATIONS USA, INC.

 

DIRECTSAT USA, LLC

 

FTS USA, LLC

 

 

 

 

 

 

By:

/s/ Andrew J. Herning

 

Name: Andrew J. Herning

 

Title: CFO

 

[Signature Page to UniTek Forbearance Agreement]

 



 

ADMINISTRATIVE AGENT:

CERBERUS BUSINESS FINANCE, LLC, as Administrative Agent

 

 

 

 

 

 

 

By:

/s/ Kevin Genda

 

Name: Kevin Genda

 

Title: Vice Chairman

 

[Signature Page to UniTek Forbearance Agreement]

 



 

LENDER:

 

CERBERUS OFFSHORE LEVERED II LP

 

By: COL II GP Inc.

 

Its: General Partner

 

 

 

 

By:

/s/ Kevin Genda

 

Name: Kevin Genda

 

Title: Vice President

 

 

 

CERBERUS ASRS FUNDING LLC

 

 

 

 

By:

/s/ Kevin Genda

 

Name: Kevin Genda

 

Title: Vice President

 

 

 

CERBERUS ONSHORE II CLO LLC

 

 

 

 

By:

/s/ Kevin Genda

 

Name: Kevin Genda

 

Title: Vice President

 

 

 

CERBERUS AUS LEVERED II LP

 

By: CAL II GP LLC

 

Its: General Partner

 

 

 

 

By:

/s/ Kevin Genda

 

Name: Kevin Genda

 

Title: Vice President

 

 

 

CERBERUS ONSHORE LEVERED II LLC

 

 

 

 

By:

/s/ Kevin Genda

 

Name: Kevin Genda

 

Title: Vice President

 

[Signature Page to UniTek Forbearance Agreement]

 



 

LENDER:

 

CETUS CAPITAL II, LLC

 

 

 

 

 

 

By:

/s/ Richard Maybaum

 

Name: Richard Maybaum

 

Title: Managing Director

 

[Signature Page to UniTek Forbearance Agreement]

 



 

LENDERS:

SG DISTRESSED FUND, LP

 

 

 

 

 

 

By:

/s/ Richard Maybaum

 

Name: Richard Maybaum

 

Title: Managing Director

 

[Signature Page to UniTek Forbearance Agreement]

 



 

LENDERS:

LITTLEJOHN OPPORTUNITIES MASTER FUND LP

 

 

 

 

 

 

By:

/s/ Richard Maybaum

 

Name: Richard Maybaum

 

Title: Managing Director

 

[Signature Page to UniTek Forbearance Agreement]

 



 

LENDERS:

MAIN STREET CAPITAL CORPORATION

 

 

 

 

 

 

By:

/s/ Rodger Stout

 

Name: Rodger Stout

 

Title: Executive Vice President

 

[Signature Page to UniTek Forbearance Agreement]

 



 

LENDERS:

MARBLEGATE SPECIAL OPPORTUNITIES MASTER FUND, L.P.

 

 

 

 

 

 

By:

/s/ Andrew Milgram

 

Name: Andrew Milgram

 

Title: Managing Partner

 

[Signature Page to UniTek Forbearance Agreement]

 



 

LENDERS:

NEW MOUNTAIN FINANCE HOLDINGS, L.L.C.

 

 

 

 

 

 

By:

/s/ John R. Kline

 

Name: John R. Kline

 

Title: EVP & COO

 

 

 

 

 

NEW MOUNTAIN FINANCE CORPORATION

 

 

 

 

 

 

By:

/s/ John R. Kline

 

Name: John R. Kline

 

Title: EVP & COO

 

[Signature Page to UniTek Forbearance Agreement]

 



 

LENDERS:

PennantPark Floating Rate Funding I, LLC, as Lender

 

 

 

By: PennantPark Floating Rate Capital Ltd., as Designated Manager

 

 

 

 

 

 

By:

/s/ Aviv Efrat

 

Name: Aviv Efrat

 

Title: CFO

 

[Signature Page to UniTek Forbearance Agreement]

 



 

SCHEDULE I

 

SPECIFIED DEFAULTS

 

Known Defaults

 

1.                                      An Event of Default under Section 7(a) of the Credit Agreement resulting from the Borrower’s failure to pay on the due date (or within the 5-day cure period thereunder) the monthly interest payment due on July 31, 2014, as required under Section 2.9(d) of the Credit Agreement.

 

2.                                      An Event of Default under Section 7(d) of the Credit Agreement resulting from the Borrower’s failure to hold a monthly update and status call, as required by Section 5.2(k) of the Credit Agreement for the month of July 2014.

 

3.                                      Events of Default under Section 7(e) of the Credit Agreement resulting from “Specified Defaults” (as such term is defined in the ABL Forbearance Agreement).

 

4.                                      Any failure under Section 5.2(h) of the Credit Agreement to deliver notice of one or more Specified Defaults.

 

Prospective Defaults

 

5.                                      An Event of Default under Section 7(c) resulting from the Borrower’s failure to comply with the Consolidated Leverage Ratio covenant for the fiscal quarter ended June 30, 2014, as required under Section 6.1(a) of the Credit Agreement.

 

6.                                      An Event of Default under Section 7(c) due to the Borrower’s failure to comply with the Consolidated Fixed Charge Coverage Ratio covenant for the fiscal quarter ending June 30, 2014, as required under Section 6.1(b) of the Credit Agreement.

 

7.                                      An Event of Default under Section 7(a) of the Credit Agreement resulting from the Borrower’s failure to pay on the due date (or within the 5-day cure period thereunder) the monthly interest payment due on August 31, 2014, as required under Section 2.9(d) of the Credit Agreement.

 

8.                                      An Event of Default under Section 7(d) of the Credit Agreement resulting from the Borrower’s failure to provide the financial reporting required by Section 5.1(a) of the Credit Agreement, if and to the extent the audit provided pursuant to such subsection for the 2013 fiscal year is subsequently qualified.

 


EX-99.6 7 a14-22689_1ex99d6.htm EX-99.6

Exhibit 99.6

 

EXECUTION

 

FORBEARANCE AGREEMENT

 

THIS FORBEARANCE AGREEMENT, is entered into as of August 8, 2014 (this “Agreement”), by and among UNITEK GLOBAL SERVICES INC., a Delaware corporation (“UniTek Parent”), UNITEK ACQUISITION, INC., a Delaware corporation (“UniTek Acquisition”), PINNACLE WIRELESS USA, INC., a Delaware corporation (“Pinnacle”), UNITEK USA, LLC, a Delaware limited liability company (“UniTek USA”), ADVANCED COMMUNICATIONS USA, INC., a Delaware corporation (“Advanced Communications”), DIRECTSAT USA, LLC, a Delaware limited liability company (“DirectSat”), FTS USA, LLC, a Delaware limited liability company (“FTS”) (UniTek Parent, UniTek Acquisition, Pinnacle, UniTek USA, Advanced Communications, DirectSat, FTS, collectively the “Borrowers”),  the Lenders party hereto (the “Consenting Lenders”), and APOLLO INVESTMENT CORPORATION, as administrative agent and collateral agent for the Lenders (“AIC”, and in such capacity, the “Agent”).

 

W I T N E S S E T H:

 

WHEREAS, the Borrowers, Agent and the Lenders entered into that certain Revolving Credit and Security Agreement dated as of July 10, 2013, as amended by that certain Amendment and Limited Waiver to Revolving Credit and Security Agreement and Fee Letter, dated as of July 25, 2013 (as so amended and as otherwise amended, restated, supplemented or modified from time to time, the “Revolving Credit Agreement”; unless otherwise defined herein, capitalized terms are used herein as defined in the Credit Agreement), pursuant to which, among other things, the Lenders have extended credit to the Borrowers;

 

WHEREAS, the Borrowers and the other Loan Parties have advised the Agent and the Lenders that certain Known Defaults (as defined herein) have occurred and are continuing and certain Prospective Defaults (as defined herein) are believed to have occurred or are expected to occur and be continuing;

 

WHEREAS, the Agent and the Lenders have not expressly or impliedly waived any of the Known Defaults or Prospective Defaults (collectively, the “Specified Defaults”), and as a result of the occurrence and continuation of any Specified Default, the Agent and the Lenders are entitled to exercise at any time all of their rights and remedies to commence enforcement and collection actions under the Revolving Credit Agreement, the Other Documents and applicable law (such rights, remedies and actions, collectively, “Enforcement Actions”), including without limitation, to declare to be immediately due and payable the Obligations owing to the Agent and the Lenders under the Revolving Credit Agreement and the Other Documents;

 

WHEREAS, in connection with the foregoing, the Borrowers and the Guarantors have requested that the Agent and the Lenders agree to implement a forbearance period in respect of the Specified Defaults for a limited period; and

 

WHEREAS, the Agent and each Consenting Lender are willing to so agree, but only upon the terms and subject to the conditions expressly set forth in this Agreement, and without any advance understanding or agreement by the Consenting Lenders to consent to, or grant a waiver to permit, the implementation of any amendment, restructuring proposal or the

 

1



 

consummation of any transaction for which such consent or waiver would be required under the Revolving Credit Agreement or the Other Documents (including without limitation, under this Agreement);

 

NOW THEREFORE, in consideration of the premises and for other good and valuable consideration the receipt of which is hereby acknowledged, the parties hereto hereby agree as follows:

 

SECTION 1.                         DEFINITIONS

 

As used in this Agreement, the following terms shall have the following meanings:

 

Effective Date” shall have the meaning set forth in Section 6 hereof.

 

Forbearance Period” shall mean the period from and including the Effective Date to, but not including, the Forbearance Period Termination Date.

 

Forbearance Period Termination Date” shall have the meaning set forth in Section 3.1 hereof.

 

Known Defaults” means those certain Events of Default that have occurred and are continuing, as expressly described on Schedule I attached hereto.

 

Prospective Defaults” means those certain Event of Default that the Borrowers have advised will occur and be continuing in the future, as expressly described on Schedule I attached hereto.

 

SECTION 2.                         ACKNOWLEDGMENTS

 

2.1                               Specified DefaultsEach Borrower and Guarantor hereby acknowledges and agrees that (a) each of the Known Defaults constitutes an Event of Default which has occurred and is continuing and which has not been waived by the Lenders and (b) each of the Prospective Defaults will constitute an Event of Default upon the occurrence and continuation thereof.  The Borrowers and Guarantors hereby acknowledge and agree that the occurrence of any of the Specified Defaults entitles the Agent and Lenders to exercise any Enforcement Action.

 

2.2                               Obligations.  Each Loan Party acknowledges and agrees that (a) as of the close of business on July 31, 2014, the Obligations include, without limitation, $40,402,131.20 on account of the outstanding unpaid amount of principal of the Revolving Advances, accrued and unpaid interest in respect of the Revolving Advances, $21,646,300 on account of the outstanding unpaid face amount Letters of Credit, accrued and unpaid Letter of Credit Fees, and accrued and unpaid Commitment Fee, (b) the Borrowers, jointly and severally, are truly and justly indebted to the Lenders for the Obligations, without defense, counterclaim or offset of any kind and (c) each Guarantor is liable for all of its obligations and undertakings under its Guaranty and other obligations under the Other Documents (the “Guaranty Obligations”)

 

2



 

(subject to the terms of such Guaranty and such Other Documents), without defense, counterclaim or offset of any kind.

 

2.3                               Other Lenders.  Each Borrower and Guarantor acknowledges and agrees that (a) the Agent is entering into this Agreement at the direction of the Required Lenders and (b) each Consenting Lender is acting solely on its own behalf and not on behalf of any other Lender.  Notwithstanding the foregoing, the Agent and the Consenting Lenders acknowledge the provisions under Section 14.4 of the Revolving Credit Agreement providing that the Agent shall in all cases be fully protected in acting, or in refraining from acting under the Other Documents in accordance with a request of the Required Lenders (as provided in any such Other Document) and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Lenders and all future holders of the Loans.

 

SECTION 3.                         FORBEARANCE; LOANS; NO WAIVER

 

3.1                               Forbearance Period.  Upon the satisfaction of the conditions precedent set forth in Section 6.1 of this Agreement, the Agent and each Consenting Lender agrees to temporarily forbear (but not waive such Defaults and Events of Default, whether now existing or hereafter arising) from taking any Enforcement Action solely with respect to the Specified Defaults during the period from and including the Effective Date until the earliest to occur of the following (the earliest such date, the “Forbearance Period Termination Date”):

 

(i)                                     on August 27, 2014; provided that, if the Borrowers receive on or prior to August 27, 2014 at least $3,000,000 in cash proceeds of Additional Funding (as defined below), then such date shall be automatically extended, without any further action by any party hereto, to September 15, 2014; and

 

(ii)                                  immediately on the date on which any of the following shall occur:  (A) the occurrence of a Default or an Event of Default (other than a Specified Default) without giving effect to any cure or grace period thereunder, (B) an amendment or any restructuring of any of the Other Documents, (C) any Borrower or Guarantor shall take any action to challenge (including without limitation, to assert in writing any challenge to) the validity or enforceability of the Revolving Credit Agreement, this Agreement or any provision hereof or any Other Document, (D) an amendment or any restructuring of any of the Term Debt Documents that is not reasonably satisfactory to the Required Lenders, (E) the occurrence of the “Forbearance Period Termination Date” as defined in the Term Debt Forbearance Agreement (as defined below), (F) an amendment, supplement, waiver or other modification of the Term Debt Forbearance Agreement that is not reasonably satisfactory to the Required Lenders, (G) the commencement of any enforcement and collection actions against any Borrower or Guarantor by the holders of Indebtedness of such Borrower or Guarantor, (H) the agreement or consent of any Borrower or Guarantor to either of (D), (F) or (G) above, without the prior written consent of the Required Lenders or, in the case of (G) above, the written consent of the Required Lenders within 2 business days after any such commencement, (I) any payment in cash of interest owed under the Term Debt Credit Agreement; or (J) the Target Amount as of any Saturday shall exceed the sum of Eligible Receivables plus Eligible Unbilled Receivables (as of the calculation date for any Borrowing Base Certificate

 

3



 

delivered to the Agent on such Saturday pursuant to Section 4.7 below); provided, however, that an occurrence of the condition set forth in this clause (J) shall not trigger the Forbearance Period Termination Date if before the close of business on the fourth Business Day following the applicable Saturday, the Borrowers shall have repaid a principal amount of the outstanding Revolving Advances at least equal to such excess or shall have delivered to Agent the updated Borrowing Base Certificate for the Wednesday following such applicable Saturday pursuant to Section 4.7(c) below demonstrating that the Target Amount no longer exceeds the sum of Eligible Receivables plus Eligible Unbilled Receivables.  The “Target Amount” shall mean, at any time, $45,000,000 minus the aggregate principal amount of Revolving Advances prepaid by the Borrowers pursuant to clause (J) of the preceding sentence..

 

3.2                               No Waiver; Limitation on Forbearance.  Each Borrower and Guarantor acknowledges and agrees that, notwithstanding the agreement of the Agent and the Consenting Lenders to refrain from taking Enforcement Actions during the Forbearance Period in respect of the Specified Defaults, except as provided in Section 3.3 below, (a) such agreement shall not constitute a waiver of the occurrence or the continuance of any Default or Event of Default, including any Specified Default, and each Specified Default (and any other Default or Event of Default) which occurs or has occurred shall continue to exist unless and until waived by the Required Lenders or the Lenders, as applicable under the Revolving Credit Agreement, (b) the Agent and the Consenting Lenders have not waived, presently do not intend to waive and may never waive the Specified Defaults, and nothing contained in this Agreement or the transactions contemplated hereby shall be deemed to constitute any such waiver, (c) nothing contained in this Agreement shall be construed to limit or affect the right of the Agent and the Consenting Lenders to bring or maintain during the Forbearance Period any action to enforce or interpret any term or provision of this Agreement, or to file or record instruments of public record (or take other action) to perfect or further protect the liens and security interests granted by the Borrowers or Guarantors to the Agent or the Lenders, (d) such agreement shall not constitute a waiver of any other right or remedy of the Agent or the Consenting Lenders whether under the Other Documents or applicable law and (e) any requirement to provide any notice, demand or request for performance under the Guaranty Obligations shall be tolled during the Forbearance Period.

 

3.3                               Enforcement Actions After Forbearance Period.  Each Borrower and Guarantor acknowledges and agrees that on the Forbearance Period Termination Date the agreement of the Consenting Lenders and the Agent to refrain from taking any Enforcement Action in respect of the Specified Defaults shall automatically cease and be of no further force or effect, and the Agent and the Consenting Lenders shall be entitled to immediately take Enforcement Actions under the Revolving Credit Agreement, the Other Documents and applicable law, all without further notice or demand, in respect of the Specified Defaults or any other Event of Default then existing.

 

SECTION 4.                         AGREEMENTS

 

4.1                               Agreements by Borrower.  From and after the Effective Date through the Forbearance Period Termination Date, each Borrower and Guarantor shall comply with its obligations under the Other Documents (other than in respect of the Specified Defaults).  Without limiting the foregoing, during the Forbearance Period, each Borrower and Guarantor

 

4



 

shall promptly provide such information concerning the Specified Defaults as the Agent or the Required Lenders may reasonably request from time to time.

 

4.2                               Default Interest; Amendment to Applicable Margin.  (a) All interest on the Obligations shall accrue at the Default Rate (and the Letter of Credit Fees shall be increased by an additional 2.0% per annum) commencing as of August 5, 2014 (it being understood and agreed that any accrued but unpaid default interest and additional Letter of Credit Fees shall be paid in arrears in cash on each date on which interest on the Obligations is (or the Letter of Credit Fees, as applicable, are) otherwise payable), without further notice from or action by the Agent or the Required Lenders.

 

For the avoidance of doubt, except as expressly set forth above, the Borrowers hereby confirm that nothing in this Forbearance Agreement limits or otherwise modifies their joint and several obligation to pay cash interest and fees accrued on the Obligations in accordance with the terms of the Revolving Credit Agreement.

 

(b)                                 Notwithstanding anything in Section 4.2(a) above to the contrary, in the event that the Additional Funding is agreed upon by the relevant parties and occurs (it being understood that nothing herein shall be construed as an agreement or consent by Agent or Lenders to permit such Additional Funding), the principal amount of the loans made for such Additional Funding shall accrue interest at a per annum rate not exceeding 12.5% payable in kind, except that a portion thereof not exceeding a per annum rate of 5.0% shall be payable in cash so long as the Lenders are paid current cash interest on the other Obligations, subject to restrictions on payment and other subordination provisions to be agreed upon in connection with such Additional Funding.

 

4.3                               Lender Call.  Every week during the Forbearance Period, beginning with the week of August 11, 2014, the Borrower shall host a call with the Agent and the Lenders (which call shall be similar to the weekly call required under section 4.3 of the Term Debt Forbearance Agreement) to provide such information as the Agent and the Lenders may reasonably request, including updates with respect to the Specified Defaults and any material developments since the last update.

 

4.4                               Term Debt Forbearance Agreement.  On or prior to the Effective Date, the Borrower shall deliver to the Agent (for distribution to the Lenders) a copy of an agreement, duly executed and delivered by the Borrowers and Persons necessary for the effectiveness thereof pursuant to the terms of the Term Debt Credit Agreement (the “Term Debt Required Lenders”), which agreement shall (a) provide for the forbearance by such holders of the exercise of any rights or remedies under the Term Debt Credit Agreement or the Term Debt Documents, including without limitation, the acceleration of the Term Debt Indebtedness, due to any default or event of default arising out of or relating to any of the Specified Defaults for a period of time equal to no less than the Forbearance Period and (b) otherwise be in form and substance reasonably satisfactory to the Consenting Lenders (the “Term Debt Forbearance Agreement”).

 

4.5                               Failure to Comply.  The Borrowers and Guarantors acknowledge, confirm and agree that any material misrepresentation by any Borrower or Guarantor, or any failure of any Borrower or Guarantor to perform timely or otherwise comply with the covenants,

 

5



 

conditions and agreements contained in this Agreement (including but not limited to Section 4 hereof), the Revolving Credit Agreement and the Other Documents or in any other agreement, document or instrument at any time executed and/or delivered by any Borrower or Guarantor with, to or in favor of the Agent or any Lenders shall constitute an immediate Event of Default (without notice or the expiration of any cure or grace period that would otherwise be applicable), which shall automatically terminate the Forbearance Period.

 

4.6                               Repayment of Advances.  The Borrowers hereby agree to prepay $1,000,000 in principal amount of the currently outstanding Revolving Advances (the “Advance Repayment”), no later than August 19, 2014, in immediately available funds (and if the Advance Repayment shall not have been made by 2:00 p.m. New York time by the Borrowers, the parties hereto acknowledge and agree that Agent may elect to apply amounts on deposit in the Cash Collateral Account to make such payment); provided that, if the Borrowers receive on on or prior to 2:00 p.m. New York time on August 19, 2014 at least $3,000,000 in cash proceeds of Additional Funding (as defined below), then the Advance Repayment will be automatically waived, without any further action by the Agent or the Lenders.

 

4.7                               Other Agreements.  The Borrowers and Guarantors hereby agree that during the Forbearance Period (a) no Borrower or Guarantor shall (i) incur any additional Indebtedness for borrowed money (other than (x) capitalized interest on the Term Debt or (y) additional Indebtedness for borrowed money under the Revolving Credit Agreement consented to by the Lenders (such additional Indebtedness being “Additional Funding”) and permitted under the Intercreditor Agreement and the Term Debt Documents) or other Indebtedness outside the ordinary course of business, (ii) purchase or acquire obligations or Equity Interests of, or any other interest in, any Person, in reliance on Section 7.4(b), 7.4(d) or 7.4(e) of the Revolving Credit Agreement, (iii) make any advances, loans or extensions of credit to any Person in reliance on Section 7.5(d) or 7.5(f) of the Revolving Credit Agreement, (iv) declare, pay or make any dividend or distribution or payments in reliance on Section 7.7, other than dividends by any Borrower other than Unitek Parent to any other Borrower, (v) sell, lease, transfer or otherwise dispose of any assets outside the ordinary course of business, (vi) repay, prepay, redeem or retire any other Indebtedness, (vii) engage in any transactions with any Affiliate (other than Borrowers); (b) Borrowers shall provide to the Agent copies of all written notices, reports, term sheets and other materials and information given to any of the Term Debt Creditors, concurrently with providing such notices, reports, term sheets, materials and information to such Term Debt Creditors; (c) Borrowers shall deliver to the Agent an updated Borrowing Base Certificate by Noon New York City time on Saturday (calculated as of such day) of each week and on Wednesday morning (calculated as of the end of the preceding day) of each week; and (d) Borrowers shall negotiate with Agent and Lenders in good faith towards a recapitalization of the Borrowers’ debt obligations, and shall deliver to the Agent and Lenders (i) as soon as available and not later than 20 days after the Effective Date, a comprehensive term sheet setting forth the material terms of such recapitalization that shall have been mutually agreed by the relevant parties and (ii) as soon as available and not later than August 27, 2014 (provided that, if the date under Section 3.1(i) above is automatically extended to September 15, 2014, as provided therein, this date shall also be so extended to September 15, 2014, without any further action by any party hereto), the substantially final forms of the definitive principal agreements and other documentation pursuant to which such recapitalization would be implemented.

 

6



 

4.8                               Advisors.  On or prior to August 13, 2014, the Borrower shall have retained a financial advisor on terms acceptable to the Required Lenders to assist the Borrowers with their day-to-day business operations, and such financial advisor (or any replacement thereof) shall be retained through the implementation of the recapitalization of the Loan Parties’ debt obligations.

 

SECTION 5.                         REPRESENTATIONS AND WARRANTIES

 

To induce the Agent and the Lenders to enter into this Agreement and refrain from taking Enforcement Actions during the Forbearance Period, each Borrower and Guarantor hereby (a) represents and warrants to the Agent and each Lender that (i) such Borrower or Guarantor has the full right, power and authority to make, deliver and perform this Agreement and such Borrower or Guarantor has taken all necessary corporate or other action to authorize the execution, delivery and performance of this Agreement, (ii) this Agreement constitutes the legal, valid and binding obligations of such Borrower or Guarantor, enforceable against such Borrower or Guarantor in accordance with the terms hereof, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally and general equitable principles (whether considered in a proceeding in equity or at law), and (iii) no Borrower or Guarantor or Affiliate thereof is obligated to pay any compensation (other than the reimbursement of expenses expressly set forth in the Term Debt Forbearance Agreement and the Term Debt Credit Agreement) in connection with, or as a condition to, entering into the Term Debt Forbearance Agreement, and (b) confirms that each of the representations and warranties made by such Borrower or Guarantor in the Other Documents to which such Borrower or Guarantor is a party is true and correct in all material respects as of the date hereof (except to the extent that the Specified Defaults make any such representation or warranty incorrect or false), except to the extent that any such representation or warranty expressly relates to a specific earlier date, in which case such Borrower or Guarantor hereby confirms such representation or warranty is true and correct in all material respects as of such earlier date (except to the extent the Specified Defaults make any such representation and warranty incorrect or false).

 

SECTION 6.                         CONDITIONS PRECEDENT

 

6.1                               Effective Date.  This Agreement shall become effective on and as of August 8, 2014 (the “Effective Date”) at 5:01 p.m. New York City time, so long as each of the following conditions precedent shall have been satisfied or waived, as determined by the Agent:

 

(a)                                 Forbearance Agreement.  The Agent shall have received this Agreement, duly executed and delivered by each Borrower and Guarantor.

 

(b)                                 Term Debt Forbearance Agreement.  The Agent shall have received the Term Debt Forbearance Agreement, duly executed and delivered by the Borrower, the Term Debt Required Lenders and the Term Debt Agent.

 

(c)                                  Payment of Costs, Expenses and Fees.  The Borrowers shall have paid all invoiced out-of-pocket costs and expenses earned, due and payable to advisors to the Agent, as required by Section 16.9 of the Revolving Credit Agreement, and all other fees earned, due and

 

7



 

payable in connection with the execution and delivery of this Agreement, and in addition to the foregoing shall have paid to such account as the Agent shall direct $150,000 as a retainer on account of legal fees and expenses that are anticipated to be incurred by Agent’s counsel in connection with its services related to this Agreement, the Revolving Credit Agreement and the recapitalization of the Borrowers’ debt obligations, and to the extent that any amounts owed to Agent’s counsel under this Agreement or the Revolving Credit Agreement are unpaid in whole or in part, such amounts shall be paid out of such retainer.  The Borrowers agree to replenish the foregoing retainer to its full amount from time to time promptly upon receiving any invoice from Agent’s counsel.

 

SECTION 7.                         MISCELLANEOUS

 

7.1                               Amendments and Waivers.  Neither this Agreement, nor any terms hereof, may be amended, waived, supplemented or otherwise modified except in a writing signed by the Borrowers, the Guarantors, the Agent and the Required Lenders.

 

7.2                               Notices.  All notices, requests and demands to or upon the respective parties hereto shall be given in accordance with the notice provisions set forth in the Other Documents.

 

7.3                               Costs, Fees and Expenses.  Without limiting the obligations of any Borrower or Guarantor under the Other Documents, each of the Borrower ratifies and reaffirms its reimbursement and indemnification obligations under Section 16.9 of the Revolving Credit Agreement, including without limitation, its obligation to pay all out-of-pocket costs and expenses, including without limitation, the fees and disbursements of counsel, incurred by the Agent and each Lender in connection with the administration and enforcement of this Agreement and the transactions contemplated hereby, and to the extent such Section 16.9 as currently drafted is not entirely clear as to such obligations, such Section 16.9 shall automatically be deemed to be amended by this Agreement to ensure that such Section 16.9 encompasses the obligations described in this Section 7.3.  The Borrowers, jointly and severally, further agree to pay or reimburse each Lender for all its reasonable costs and expenses incurred in connection the Revolving Credit Agreement, the Other Documents and any such other documents, including the fees and disbursements of counsel (including the allocated fees and expenses of in-house counsel) to each Lender and the fees and expenses of any accountants and financial advisors engaged by any Lender.

 

7.4                               Specific Indemnification.  Without limiting the foregoing Section 7.3, each Borrower and Guarantor acknowledges and agrees that the Agent and each Consenting Lender is fully indemnified pursuant to Section 16.5 of the Revolving Credit Agreement in respect of the Agent’s and each Consenting Lender’s negotiation, execution, compliance with and implementation of this Agreement, including as against any claims that any third party (including any Lender not a Consenting Lender) might or could assert in respect of such negotiation, execution, compliance and implementation, and to the extent such Section 16.5 as currently drafted is not entirely clear as to such indemnification, such Section 16.5 shall automatically be deemed to be amended by this Agreement to ensure that such Section 16.5 encompasses the indemnification obligations described in this Section 7.4.

 

8



 

7.5                               Other Documents, Guaranties, Etc. Remain in Effect.

 

(a)                                 Except to the extent expressly set forth in this Agreement, all of the provisions of the Revolving Credit Agreement and the Other Documents are, and shall continue to be, in full force and effect in accordance with their respective terms, and each Borrower and Guarantor shall remain obligated to comply with all of such Borrower’s or Guarantor’s obligations contained in each Other Document to which such Borrower or Guarantor is a party.  Each Borrower and Guarantor ratifies and reaffirms the validity, enforceability and binding nature of all such obligations (subject to, and in accordance with, the terms of the Other Documents applicable to such Borrower or Guarantor). Without limiting the foregoing, each Borrower and Guarantor hereby: (i) reaffirms, ratifies, confirms, and acknowledges its obligations under the Other Documents, and agrees to continue to be bound thereby and perform thereunder; (ii) agrees and acknowledges that the Other Documents to which it is a party and all of its obligations thereunder are and remain in full force and effect and have not been modified except as set forth herein; (iii) acknowledges that it has reviewed, and hereby consents to, this Agreement, and each Borrower and Guarantor further acknowledges that its obligations under the Other Documents to which it is a party are not in any way released, diminished, or impaired by any of the terms or provisions of this Agreement; (iv) acknowledges and agrees that it has no defenses, offsets or counterclaims of any kind or nature whatsoever to its obligations under the Other Documents and (v) acknowledges and agrees that the Liens granted under the Revolving Credit Agreement and the Other Documents in the Collateral are valid, duly perfected Liens, enforceable in accordance with the Revolving Credit Agreement and the Other Documents and applicable law.

 

(b)                                 Each Borrower and Guarantor acknowledges and agrees that, except as expressly provided herein, nothing in this Agreement or in the course of any prior or future discussions or negotiations (whether written or oral) between the Agent and the Lenders on the one hand and the Borrowers and Guarantors on the other shall constitute an amendment or waiver of, or a commitment or agreement to effect any amendment or waiver of, any provision of any Other Document, it being understood by each Borrower and Guarantor that any such amendment, waiver or commitment (if any) shall be conditioned on and subject to definitive documentation acceptable to the Required Lenders in their sole discretion as evidenced by the execution and delivery of such documentation by Lenders whose consent to such documentation may be required under Section 16.2 of the Revolving Credit Agreement.

 

7.6                               Loan Party Release; Covenant Not to Sue.

 

(a)                                 Loan Party Release.  In consideration of the delivery of this Agreement and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, unconditionally, freely and voluntarily, after consultation with counsel and becoming fully and adequately informed as to the relevant facts, circumstances and consequences, each Borrower and Guarantor, for itself and on behalf its successors and assigns, and its present and former members, affiliates, subsidiaries, divisions, predecessors, directors, officers, attorneys, employees, agents, legal representatives and other representatives, and any Person acting for or on behalf of, or claiming through it (each Borrower and Guarantor and all such other Persons being hereinafter referred to collectively as the “Releasing Parties” and individually as a “Releasing Party”), hereby waives, releases, remises and forever discharges the Agent and each Lender, and each of

 

9



 

their respective Affiliates, and each of their respective successors in title, past, present and future officers, directors, employees, limited partners, general partners, investors, attorneys, assigns, subsidiaries, shareholders, trustees, agents and other professionals and all other persons and entities to whom the Agent or any Lender would be liable if such persons or entities were found to be liable to any Loan Party (each a “Releasee” and collectively, the “Releasees”), from any and all past, present and future claims, suits, liens, lawsuits, adverse consequences, amounts paid in settlement, debts, deficiencies, diminution in value, disbursements, demands, obligations, liabilities, causes of action, damages, losses, costs and expenses of any kind or character, whether based in equity, law, contract, tort, implied or express warranty, strict liability, criminal or civil statute or common law (each a “Claim” and collectively, the “Claims”), whether known or unknown, fixed or contingent, direct, indirect, or derivative, asserted or unasserted, matured or unmatured, foreseen or unforeseen, past or present, liquidated or unliquidated, suspected or unsuspected, which any Releasing Party ever had from the beginning of the world, now has, or might hereafter have against any such Releasee, which Claims relate, directly or indirectly, to any act or omission by any Releasee that occurred on or prior to the date of this Agreement and relate, directly or indirectly, to the Revolving Credit Agreement, any Other Document, any Borrower or Guarantor or any acts or omissions of any such Releasee that occurred on or prior to the date of this Agreement with respect to the Revolving Credit Agreement or any Other Document, any Borrower or Guarantor or the lender-borrower relationship evidenced by the Other Documents, except for the duties and obligations set forth in this Agreement and the duties and obligations set forth in the Other Documents to be performed on or after the date of this Agreement.  As to each and every Claim released hereunder, each Releasing Party waives the benefit of each provision of applicable federal or state law (including without limitation the laws of the state of New York), if any, pertaining to general releases after having been advised by its legal counsel with respect thereto.

 

Each Releasing Party acknowledges that it may hereafter discover facts different from or in addition to those now known or believed to be true with respect to such Claims, and agrees that this instrument shall be and remain effective in all respects notwithstanding any such differences or additional facts.  Each Releasing Party understands, acknowledges and agrees that the release set forth above may be pleaded as a full and complete defense and may be used as a basis for an injunction against any action, suit or other proceeding which may be instituted, prosecuted or attempted in breach of the provisions of such release.

 

(b)                                 Covenant Not to Sue.  Each Releasing Party hereby absolutely, unconditionally and irrevocably, covenants and agrees with and in favor of each Releasee above that it will not sue (at law, in equity, in any regulatory proceeding or otherwise) any Releasee on the basis of any Claim released, remised and discharged by such Releasing Party pursuant to the above release.  Each Releasing Party further agrees that it shall not dispute the validity or enforceability of the Revolving Credit Agreement or any of the Other Documents or any of its obligations thereunder, or the validity, priority, enforceability or the extent of Agent’s Lien on any item of Collateral under the Revolving Credit Agreement or the Other Documents.  If any Releasing Party or any of its respective successors, assigns, or officers, directors, employees, agents or attorneys (solely in their capacities as officers, directors, employees, agents and attorneys), or any Person acting for or on behalf of, or claiming through it violate the foregoing covenant, each Borrower and Guarantor, for itself and its successors, assigns and legal representatives, agrees to pay, in addition to such other damages as any Releasee may sustain as

 

10



 

a result of such violation, all attorneys’ fees and costs incurred by such Releasee as a result of such violation.

 

7.7                               No Waiver; Cumulative Remedies.  No failure to exercise and no delay in exercising, on the part of the Administrative Agent or the Lenders, any right, remedy, power or privilege under this Agreement or any Other Document shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege under this Agreement or any Other Document preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.  The rights, remedies, powers and privileges of the Administrative Agent and the Lenders provided under this Agreement, the Revolving Credit Agreement and the Other Documents are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

 

7.8                               Counterparts.  This Agreement may be executed by one or more of the parties hereto on any number of separate counterparts (including by telecopy or electronic transmission), and all of which counterparts taken together shall be deemed to constitute one and the same instrument.

 

7.9                               Further Assurances.  Each Loan Party shall from time to time, upon the reasonable request of the Agent, promptly and duly execute and deliver such further instruments and documents and take such further actions as the Agent may reasonably request for the purposes of obtaining or preserving the full benefits of this Agreement and of the rights, remedies, powers and privileges hereunder.

 

7.10                        Severability.  Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

7.11                        Integration; Successors.  This Agreement and the Other Documents constitute the entire agreement of the Borrowers, the Guarantors, the Agent and the Lenders concerning the subject matter hereof and may not be contradicted by evidence of prior, contemporaneous, or subsequent oral agreements.  There are no promises, undertakings, oral agreements, representations or warranties by the Borrowers, the Guarantors, the Agent or the Lenders relative to the subject matter hereof not expressly set forth herein.  This Agreement shall be deemed to be an Other Document for all purposes under and in connection with the Revolving Credit Agreement and the  Documents and shall be binding upon and inure to the benefit of each of the parties hereto and their respective successors and assigns.  This Agreement is not intended to confer any rights or benefits on any Person other than the parties hereto and their respective successors and assigns.

 

7.12                        Governing Law.  This Agreement and the rights and obligations of the parties hereto under this Agreement shall be governed by, and construed and interpreted in accordance with, the law of the State of New York.

 

11



 

7.13                        WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY) AND FOR ANY COUNTERCLAIM THEREIN.  EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the date first written above.

 

BORROWERS:

UNITEK GLOBAL SERVICES, INC.

 

UNITEK ACQUISITION, INC.

 

PINNACLE WIRELESS USA, INC.

 

UNITEK USA, LLC

 

ADVANCED COMMUNICATIONS USA, INC.

 

DIRECTSAT USA, LLC

 

FTS USA, LLC

 

 

 

 

 

By:

/s/ Andrew J. Herning

 

Name: Andrew J. Herning

 

Title: CFO

 

12



 

AGENT AND LENDERS:

APOLLO INVESTMENT CORPORATION, as Revolving Lender and Swing Loan Lender and as Administrative Agent and Collateral Agent

 

 

 

By:

Apollo Investment Management, L.P., as Advisor

 

 

 

 

 

By:

ACC Management, LLC, as its General Partner

 

 

 

 

 

 

 

 

By:

/s/ Ted Goldthorpe

 

 

Name: Ted Goldthorpe

 

 

Title: Authorized Signatory

 

[Signature Page to UniTek Forbearance Agreement]

 



 

SCHEDULE I

 

SPECIFIED DEFAULTS

 

Known Defaults

 

1.                                      An Event of Default under Section 10.11 of the Revolving Credit Agreement resulting from Unitek Parent’s failure to pay on the due date (or within the 5-day cure period thereunder) the monthly interest payment due on July 31, 2014, as required under Section 2.9(d) of the Term Debt Credit Agreement.

 

2.                                      An Event of Default under Section 10.11 of the Revolving Credit Agreement resulting from Unitek Parent’s failure to hold a monthly update and status call as required by Section 5.2(k) of the Term Debt Credit Agreement for the month of July 2014.

 

3.                                      Events of Default under Sections 10.2 and 10.5 of the Revolving Credit Agreement resulting from (a) failure of the Borrowers to deliver a Borrowing Base Certificate for the period ended July 26, 2014, (b) failure of the Borrowers any time after July 26, 2014 to prepay the Advances under Section 2.7 of the Revolving Credit Agreement in the amount by which the Advances exceed the sum of (x) the Formula Amount plus (y) the amount of Out-of-Formula Loans permitted under Section 16.2 of the Revolving Credit Agreement, and (c) any inaccurate representation made or deemed made by the Borrowers in connection with the failure to deliver such Borrowing Base Certificate referred to in clause (a) above or in connection with any Advance made prior to the date hereof, or in connection with any requests to release of funds from the Cash Collateral Account solely to the extent such representations made in connection with such requests were inaccurate as a result of Advances outstanding in excess of the sum described in clause (b) above or as a result of the occurrence and continuance of other Specified Defaults.

 

4.                                      Any failure under Section 5.7 of the Revolving Credit Agreement to deliver notice of one or more Specified Defaults.

 

5.                                      Any Event of Default under Section 10.11 of the Revolving Credit Agreement resulting from a default under the Term Debt Credit Agreement arising solely due to the occurrence and continuance of a Specified Default and/or a “Specified Default” (as defined in the Term Debt Forbearance Agreement).

 

Prospective Defaults

 

6.                                      An Event of Default under Section 10.11 of the Revolving Credit Agreement resulting from the Borrower’s failure to comply with the “Consolidated Leverage Ratio” (as defined in the Term Debt Credit Agreement) covenant for the fiscal

 



 

quarter ended June 30, 2014, as required under Section 6.1(a) of the Term Debt Credit Agreement.

 

7.                                      An Event of Default under Section 10.11 of the Revolving Credit Agreement due to the Borrower’s failure to comply with the “Consolidated Fixed Charge Coverage Ratio” (as defined in the Term Debt Credit Agreement) covenant for the fiscal quarter ending June 30, 2014, as required under Section 6.1(b) of the Term Debt Credit Agreement.

 

8.                                      An Event of Default under Section 10.5(i) of the Revolving Credit Agreement due to the Borrower’s failure to comply with the Consolidated Fixed Charge Coverage Ratio covenant for the fiscal quarter ending June 30, 2014, as required under Section 6.5 of the Revolving Credit Agreement.

 

9.                                      An Event of Default under Section 10.11 of the Revolving Credit Agreement resulting from the Borrower’s failure to pay on the due date (or within the 5-day cure period thereunder) the monthly interest payment due on August 31, 2014, as required under Section 2.9(d) of the Term Debt Credit Agreement.

 

10.                               An Event of Default under Section 10.5 of the Revolving Credit Agreement resulting from the Borrower’s failure to provide the financial reporting required by Section 9.7 of the Revolving Credit Agreement, if and solely to the extent the audit provided pursuant to such Section for the 2013 fiscal year is subsequently qualified.

 


EX-99.7 8 a14-22689_1ex99d7.htm EX-99.7

Exhibit 99.7

 

FIRST AMENDMENT TO FORBEARANCE AGREEMENT

 

THIS FIRST AMENDMENT TO FORBEARANCE AGREEMENT (this “Amendment”), is entered into as of September 3, 2014 but is effective as of August 28, 2014,, by and among Unitek Global Services, Inc., a Delaware corporation (the “Borrower”), the undersigned Subsidiary Guarantors, the Lenders party hereto constituting Required Lenders (the “Consenting Lenders”), and Cerberus Business Finance, LLC as successor administrative agent for the Lenders (the “Administrative Agent”).

 

W I T N E S S E T H:

 

WHEREAS, the Borrower, the other Loan Parties, the Administrative Agent and certain lenders constituting Required Lenders entered into that certain Forbearance Agreement, dated as of August 8, 2014 (as amended hereby and as further amended, restated, supplemented or otherwise modified from time to time, the “Forbearance Agreement”);

 

WHEREAS, the Borrower, FBR Capital Markets LT, Inc., in its capacity as administrative agent (as succeeded by the Administrative Agent) and the Lenders entered into that certain Credit Agreement dated as of April 15, 2011, as amended by that First Amendment, dated as of September 14, 2012; the Second Amendment and Limited Waiver, dated as of July 25, 2013; the Third Amendment to Credit Agreement dated as of November 5, 2013; and the Fourth Amendment to Credit Agreement, dated as of July 28, 2014 (as so amended and as further amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), pursuant to which, among other things, the Lenders have extended credit to the Borrower in the form of Term Loans;

 

WHEREAS, each of the Specified Defaults identified in the Forbearance Agreement is continuing;

 

WHEREAS, the Loan Parties have requested that the Administrative Agent and the Lenders amend the Forbearance Agreement on the terms and subject to the conditions set forth in this Amendment; and

 

WHEREAS, the Administrative Agent and the Consenting Lenders are willing to so amend the Forbearance Agreement on the terms and subject to the conditions set forth in this Amendment.

 

NOW THEREFORE, in consideration of the premises and for other good and valuable consideration the receipt of which is hereby acknowledged, the parties hereto hereby agree as follows:

 

SECTION 1.                         DEFINITIONS

 

All capitalized terms used but not defined in this Amendment shall have the meanings given to them in the Forbearance Agreement, or, if not defined therein, in the Credit Agreement.

 



 

SECTION 2.                         ACKNOWLEDGMENTS

 

2.1                               Recitals.  Each party hereto acknowledges and affirms that the recitals set forth above are true and correct.  Such recitals are incorporated herein by reference.

 

2.2                               Acknowledgments Regarding Specified Defaults; Agreement re Section 3.1 of the Forbearance Agreement.  Each Loan Party acknowledges that each of the Specified Defaults is continuing.  The parties hereto agree that the Forbearance Period Termination Date shall not be deemed to have occurred as a result of failure to deliver by August 28, 2014 a comprehensive term sheet setting forth the material terms of a recapitalization of the Loan Parties’ debt obligations, mutually agreed by the relevant parties

 

SECTION 3.                         AMENDMENTS TO FORBEARANCE AGREEMENT

 

3.1                               Forbearance Period.  Section 3.1 of the Forbearance Agreement is hereby amended by amending and restating clause (i) therein in its entirety as follows:

 

“(i) on September 23, 2014; and”

 

3.2                               Forbearance Period Termination Event.  Section 3.1 of the Forbearance Agreement is hereby further amended by amending and restating clause (ii) therein in its entirety as follows:

 

(ii)                                  immediately on the date on which any of the following shall occur: (A) the occurrence of a Default or an Event of Default (other than a Specified Default) without giving effect to any cure or grace period thereunder, (B) an amendment or any restructuring of any of the Loan Documents, (C) any Loan Party shall take any action to challenge (including without limitation, to assert in writing any challenge to) the validity or enforceability of the Credit Agreement, this Amendment or any provision hereof or any other Loan Document, (D) an amendment or any restructuring of any of the ABL Documents that is not reasonably satisfactory to the Required Lenders, (E) the occurrence of the “Forbearance Period Termination Date” as defined in the ABL Forbearance Agreement (as defined below), or an amendment, supplement, waiver or other modification of the ABL Forbearance Agreement that is not reasonably satisfactory to the Required Lenders, (F) the commencement of any enforcement and collection actions against any Loan Party by the holders of Indebtedness of such Loan Party, (G) the breach of, or default under, Section 3.1(ii)(J) of the ABL Forbearance Agreement, without giving effect to any waiver or consent of the ABL Lenders to such breach or default, (H) the repayment or prepayment of any ABL Loan other than a “Last Out Loan” (as defined under the ABL Credit Agreement), (I) the agreement or consent of any Loan Party to any of the actions under clause (D) or (F) above, without the prior written consent of the Required Lenders or, in the case of clause (F) above, the written consent of the Required Lenders within 2 business days after any such commencement.”

 

3.3                               Other Agreements.  Section 4.6 of the Forbearance Agreement is hereby amended by amending and restating clause (c) therein in its entirety as follows:

 

2



 

“(c) the Loan Parties shall negotiate with the Administrative Agent and Lenders in good faith towards a recapitalization of the Loan Parties’ debt obligations.”

 

3.4                               Advisors.  Section 4.7 of the Forbearance Agreement is hereby amended by adding as the last sentence thereof the following:

 

“Each Loan Party shall, and shall cause its respective Subsidiaries to, deliver to the Lenders any report, work product, supporting detail, or other documents produced or furnished by such financial advisor and other professionals engaged by the Loan Parties (other than any such report, work product, supporting detail, or other documents protected by the attorney-client privilege), their respective equityholder and subsidiaries or board of directors or similar governing body of any of the foregoing that is delivered to the ABL Creditors or any other financing source to the Loan Parties and their respective Subsidiaries, in each case in identical form and on the same Business Day so delivered.”

 

SECTION 4.                         CONDITIONS PRECEDENT

 

4.1                               Effective Date.  This Amendment shall become effective with retroactive effect on and as of August 28, 2014 (the “Effective Date”), so long as each of the following conditions precedent shall have been satisfied or waived, as determined by the Administrative Agent, on or prior to September 3, 2014:

 

(a)                                 Forbearance Agreement.  The Administrative Agent shall have received this Amendment, duly executed and delivered by each Loan Party.

 

(b)                                 ABL Forbearance Agreement.  The Administrative Agent shall have received an amendment to the ABL Forbearance Agreement in form and substance reasonably satisfactory to the Administrative Agent and the Consenting Lenders, duly executed and delivered by the Loan Parties, the ABL Required Lenders, and the ABL Agent.

 

(c)                                  Payment of Costs, Expenses and Fees.  The Borrower shall have paid all invoiced costs and expenses of advisors to the Administrative Agent.

 

SECTION 5.                         MISCELLANEOUS

 

5.1                               Costs, Fees and Expenses.  Without limiting the obligations of any Loan Party under the Loan Documents, the Borrower ratifies and reaffirms its reimbursement and indemnification obligations under Section 9.5 of the Credit Agreement, including without limitation, its obligation to pay all out-of-pocket costs and expenses, including without limitation, the fees and disbursements of counsel, incurred by the Administrative Agent and each Lender in connection with this Amendment and the administration and enforcement of the Forbearance Agreement and the transactions contemplated hereby.  The Borrower further agrees to pay or reimburse each Lender for all its reasonable costs and expenses incurred in connection the Forbearance Agreement, the Credit Agreement, the other Loan Documents and any such other documents, including the fees and disbursements of counsel (including the allocated fees and expenses of in-house counsel) to each Lender and the fees and expenses of any accountants and financial advisors engaged by any Lender.

 

3



 

5.2                               Full Force and Effect of Forbearance Agreement and Credit Agreement.  Except as expressly amended by this Amendment, the terms and provisions of the Forbearance Agreement shall remain unmodified, and the terms and provisions of the Forbearance Agreement, as amended hereby, shall remain in full force and effect and are hereby ratified and confirmed.   The execution, delivery and performance of this Amendment shall not, except as expressly provided herein, constitute a waiver of any provision of, or operate as a waiver of any right, power or remedy of the Administrative Agent or any Lender under, the Forbearance Agreement, the Credit Agreement or any of the other Loan Documents. On and after the Effective Date, each reference in or to the “Forbearance Agreement,” “thereunder,” “thereof” or words of like import referring to the Forbearance Agreement shall mean and be a reference to the Forbearance Agreement, as amended by this Amendment.  All representations and warranties of the Loan Parties set forth in the Forbearance Agreement shall be deemed to have been remade on the date hereof, after giving effect to this Amendment.  Each Loan Party reconfirms and ratifies the Credit Agreement, the other Loan Documents and all other documents executed in connection therewith except to the extent the Forbearance Agreement is expressly modified by this Amendment; and each Loan Party confirms that all such documents have remained in full force and effect since the date of their execution.  This Amendment (subject to Section 4 hereof) shall be effective upon execution and delivery by each Loan Party, the Administrative, Agent and the Consenting Lenders

 

5.3                               Reservation of Rights and Remedies.                                  Except as otherwise provided for in the Forberance Agreement, as amended by this Amendment, the Administrative Agent on behalf of the Lenders expressly reserves any and all rights and remedies available under the Forbearance Agreement, as amended hereby, the Credit Agreement and the other Loan Documents, and any other agreement or at law or in equity or otherwise.

 

5.4                               Loan Party Release; Covenant Not to Sue.

 

(a)                                 Loan Party Release.  In consideration of the delivery of this Amendment and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, unconditionally, freely and voluntarily, after consultation with counsel and becoming fully and adequately informed as to the relevant facts, circumstances and consequences, each Loan Party, for itself and on behalf its successors and assigns, and its present and former members, affiliates, subsidiaries, divisions, predecessors, directors, officers, attorneys, employees, agents, legal representatives and other representatives, and any Person acting for or on behalf of, or claiming through it (each Loan Party and all such other Persons being hereinafter referred to collectively as the “Releasing Parties” and individually as a “Releasing Party”), hereby waives, releases, remises and forever discharges the Administrative Agent and each Lender, and each of their respective Affiliates, and each of their respective successors in title, past, present and future officers, directors, employees, limited partners, general partners, investors, attorneys, assigns, subsidiaries, shareholders, trustees, agents and other professionals and all other persons and entities to whom the Administrative Agent or any Lender would be liable if such persons or entities were found to be liable to any Loan Party (each a “Releasee” and collectively, the “Releasees”), from any and all past, present and future claims, suits, liens, lawsuits, adverse consequences, amounts paid in settlement, debts, deficiencies, diminution in value, disbursements, demands, obligations, liabilities, causes of action, damages, losses, costs and expenses of any kind or character, whether based in equity, law, contract, tort, implied or express

 

4



 

warranty, strict liability, criminal or civil statute or common law (each a “Claim” and collectively, the “Claims”), whether known or unknown, fixed or contingent, direct, indirect, or derivative, asserted or unasserted, matured or unmatured, foreseen or unforeseen, past or present, liquidated or unliquidated, suspected or unsuspected, which any Releasing Party ever had from the beginning of the world, now has, or might hereafter have against any such Releasee, which Claims relate, directly or indirectly, to any act or omission by any Releasee that occurred on or prior to the date of this Amendment and relate, directly or indirectly, to the Forbearance Agreement, the Credit Agreement, any other Loan Document, any Loan Party or any acts or omissions of any such Releasee that occurred on or prior to the date of this Amendment with respect to the Forbearance Agreement, the Credit Agreement or any other Loan Document, any Loan Party or the lender-borrower relationship evidenced by the Loan Documents, except for the duties and obligations set forth in this Amendment and the duties and obligations set forth in the Loan Documents to be performed on or after the date of this Amendment.  As to each and every Claim released hereunder, each Releasing Party waives the benefit of each provision of applicable federal or state law (including without limitation the laws of the state of New York), if any, pertaining to general releases after having been advised by its legal counsel with respect thereto.

 

Each Releasing Party acknowledges that it may hereafter discover facts different from or in addition to those now known or believed to be true with respect to such Claims, and agrees that this instrument shall be and remain effective in all respects notwithstanding any such differences or additional facts.  Each Releasing Party understands, acknowledges and agrees that the release set forth above may be pleaded as a full and complete defense and may be used as a basis for an injunction against any action, suit or other proceeding which may be instituted, prosecuted or attempted in breach of the provisions of such release.

 

(b)                                 Covenant Not to Sue.  Each Releasing Party hereby absolutely, unconditionally and irrevocably, covenants and agrees with and in favor of each Releasee above that it will not sue (at law, in equity, in any regulatory proceeding or otherwise) any Releasee on the basis of any Claim released, remised and discharged by such Releasing Party pursuant to the above release.  Each Releasing Party further agrees that it shall not dispute the validity or enforceability of the Forbearance Agreement, the Credit Agreement or any of the other Loan Documents or any of its obligations thereunder, or the validity, priority, enforceability or the extent of Collateral Agent’s Lien on any item of Collateral under the Credit Agreement or the other Loan Documents.  If any Releasing Party or any of its respective successors, assigns, or officers, directors, employees, agents or attorneys (solely in their capacities as officers, directors, employees, agents and attorneys), or any Person acting for or on behalf of, or claiming through it violate the foregoing covenant, each Loan Party, for itself and its successors, assigns and legal representatives, agrees to pay, in addition to such other damages as any Releasee may sustain as a result of such violation, all attorneys’ fees and costs incurred by such Releasee as a result of such violation.

 

5.5                               No Waiver; Cumulative Remedies.  No failure to exercise and no delay in exercising, on the part of the Administrative Agent or the Lenders, any right, remedy, power or privilege under the Forbearance Agreement, the Credit Agreement or any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege under this Amendment or any other Loan Document preclude any

 

5



 

other or further exercise thereof or the exercise of any other right, remedy, power or privilege.  The rights, remedies, powers and privileges of the Administrative Agent and the Lenders provided under this Amendment, the Credit Agreement and the other Loan Documents are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

 

5.6                               Execution in Counterparts.  This Amendment may be executed by one or more of the parties hereto on any number of separate counterparts (including by telecopy or electronic transmission), and all of which counterparts taken together shall be deemed to constitute one and the same instrument.  Each party hereto executing this Amendment represents that such party has the full authority and legal power to do so.

 

5.7                               Severability.  Any provision of this Amendment which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

5.8                               Indemnity, Governing Law; Jury Trial Waiver.  The provisions of Sections 7.4, 7.12 and 7.13 of the Forbearance Agreement are hereby incorporated by reference, mutatis mutandis, and shall be deemed to be a part hereof as if restated herein in their entirety.

 

[Remainder of page intentionally left blank.]

 

6



 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered as of the date first written above.

 

BORROWER:

UNITEK GLOBAL SERVICES, INC.

 

 

 

 

 

By:

/s/ Andrew J. Herning

 

Name: Andrew J. Herning

 

Title: CFO

 

 

 

 

SUBSIDIARY GUARANTORS:

UNITEK ACQUISITION, INC.

 

PINNACLE WIRELESS USA, INC.

 

UNITEK USA, LLC

 

ADVANCED COMMUNICATIONS USA, INC.

 

DIRECTSAT USA, LLC

 

FTS USA, LLC

 

 

 

 

 

By:

/s/ Andrew J. Herning

 

Name: Andrew J. Herning

 

Title: CFO

 

[Signature Page to UniTek Forbearance First Amendment]

 



 

ADMINISTRATIVE AGENT:

CERBERUS BUSINESS FINANCE, LLC, as Administrative Agent

 

 

 

 

 

By:

/s/ Kevin P. Genda

 

Name: Kevin P. Genda

 

Title: Vice Chairman

 

[Signature Page to UniTek Forbearance Agreement]

 



 

CONSENTING LENDERS:

 

 

CETUS CAPITAL II, LLC

 

 

 

 

 

By:

/s/ Richard Maybaum

 

Name: Richard Maybaum

 

Title:  Managing Director

 

 

 

 

 

LITTLEJOHN OPPORTUNITIES MASTER FUND LP

 

 

 

 

 

By:

/s/ Richard Maybaum

 

Name: Richard Maybaum

 

Title:  Managing Director

 

[Signature Page to UniTek Forbearance First Amendment]

 



 

CONSENTING LENDERS:

 

 

 

 

SG Distressed Fund, LP

 

 

 

 

 

By:

/s/ Richard Maybaum

 

Name: Richard Maybaum

 

Title:  Managing Director

 

[Signature Page to UniTek Forbearance First Amendment]

 



 

CONSENTING LENDERS:

 

 

NEW MOUNTAIN FINANCE CORPORATION

 

 

 

 

 

By:

/s/ John R. Kline

 

Name: John R. Kline

 

Title:  EVP-COO

 

 

 

 

 

NEW MOUNTAIN FINANCE HOLDINGS, L.L.C.

 

 

 

 

 

By:

/s/ John R. Kline

 

Name: John R. Kline

 

Title:  EVP-COO

 

[Signature Page to UniTek Forbearance First Amendment]

 



 

CONSENTING LENDERS:

 

 

CERBERUS OFFSHORE LEVERED II LP

 

 

 

By: COL II GP Inc.

 

Its: General Partner

 

 

 

By:

/s/ Daniel Wolf

 

Name: Daniel Wolf

 

Title:  Vice President

 

 

 

CERBERUS ASRS FUNDING LLC

 

 

 

 

 

By:

/s/ Daniel Wolf

 

Name: Daniel Wolf

 

Title:  Vice President

 

 

 

 

 

CERBERUS ONSHORE II CLO LLC

 

 

 

 

 

By:

/s/ Daniel Wolf

 

Name: Daniel Wolf

 

Title:  Vice President

 

 

 

 

 

CERBERUS AUS LEVERED II LP

 

 

 

 

 

By: CAL II GP LLC

 

Its: General Partner

 

 

 

 

 

By:

/s/ Daniel Wolf

 

Name: Daniel Wolf

 

Title:  Vice President

 

[Signature Page to UniTek Forbearance First Amendment]

 



 

CONSENTING LENDERS:

 

 

CERBERUS ONSHORE LEVERED II LLC

 

 

 

 

 

By:

/s/ Daniel Wolf

 

Name: Daniel Wolf

 

Title:  Vice President

 

 

 

CERBERUS OFFSHORE LEVERED II LP

 

 

 

 

 

By: COL II GP Inc.

 

Its: General Partner

 

 

 

 

 

By:

/s/ Daniel Wolf

 

Name: Daniel Wolf

 

Title:  Vice President

 

[Signature Page to UniTek Forbearance First Amendment]

 



 

CONSENTING LENDERS:

 

 

MAIN STREET CAPITAL CORPORATION

 

 

 

 

 

By:

/s/ Nick Meserve

 

Name: Nick Meserve

 

Title:  Managing Director

 

[Signature Page to UniTek Forbearance First Amendment]

 



 

CONSENTING LENDERS:

 

 

MARBLEGATE SPECIAL OPPORTUNITIES MASTER FUND, L.P.

 

 

 

 

 

By:

/s/ Andrew S. Milgram

 

Name: Andrew S. Milgram

 

Title: Managing Partner

 

[Signature Page to UniTek Forbearance First Amendment]

 



 

CONSENTING LENDERS:

 

 

 

 

PENNANTPARK FLOATING RATE CAPITAL LTD.

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

[Signature Page to UniTek Forbearance First Amendment]

 


EX-99.8 9 a14-22689_1ex99d8.htm EX-99.8

Exhibit 99.8

 

EXECUTION

 

FIRST AMENDMENT TO FORBEARANCE AGREEMENT

 

THIS FIRST AMENDMENT TO FORBEARANCE AGREEMENT (this “Amendment”) is entered into as of September 3, 2014 but is effective as of August 28, 2014, by and among UNITEK GLOBAL SERVICES INC., a Delaware corporation (“UniTek Parent”), UNITEK ACQUISITION, INC., a Delaware corporation (“UniTek Acquisition”), PINNACLE WIRELESS USA, INC., a Delaware corporation (“Pinnacle”), UNITEK USA, LLC, a Delaware limited liability company (“UniTek USA”), ADVANCED COMMUNICATIONS USA, INC., a Delaware corporation (“Advanced Communications”), DIRECTSAT USA, LLC, a Delaware limited liability company (“DirectSat”), FTS USA, LLC, a Delaware limited liability company (“FTS”) (UniTek Parent, UniTek Acquisition, Pinnacle, UniTek USA, Advanced Communications, DirectSat, FTS, collectively the “Borrowers”),  the Lenders party hereto (the “Consenting Lenders”), and APOLLO INVESTMENT CORPORATION, as administrative agent and collateral agent for the Lenders (“AIC”, and in such capacity, the “Agent”).

 

R E C I T A L S:

 

A.                                    Reference is made to that certain Forbearance Agreement dated as of August 8, 2014, by and among the parties hereto (the forbearance agreement, as heretofore and hereafter amended, modified or supplemented from time to time, the “Forbearance Agreement”).  Reference is also made to that certain Revolving Credit and Security Agreement dated as of July 10, 2013, as amended by that certain Amendment and Limited Waiver to Revolving Credit and Security Agreement and Fee Letter, dated as of July 25, 2013 and by that certain Second Amendment to Revolving Credit and Security Agreement, dated as of August 13, 2014 (as so amended and as otherwise amended, restated, supplemented or modified from time to time, the “Revolving Credit Agreement”), pursuant to which, among other things, the Lenders have extended credit to the Borrowers.

 

B.                                    Each of the Specified Defaults identified in the Forbearance Agreement is continuing.

 

C.                                    The Borrowers have requested that Agent and Lenders amend the Forbearance Agreement on the terms and subject to the conditions set forth in this Amendment.

 

D.                                    Agent and Required Lenders are willing to so amend the Forbearance Agreement on the terms and subject to the conditions set forth in this Amendment.

 

NOW THEREFORE, in consideration of the above recitals and for other good and valuable consideration, the receipt and adequacy of which are hereby mutually acknowledged, and intending to be legally bound hereby, the parties hereto agree as follows:

 



 

1)             Definitions.  All capitalized terms used but not defined in this Amendment shall have the meanings given to them in the Forbearance Agreement, or, if not defined therein, in the Revolving Credit Agreement.

 

2)             Affirmation of Recitals.  Each party hereto acknowledges and affirms that the recitals set forth above are true and correct.  Such recitals are incorporated herein by reference.

 

3)             Acknowledgments Regarding Specified Defaults; Agreement re Section 3.1 of the Forbearance Agreement.  The Borrowers and Guarantors acknowledge that each of the Specified Defaults is continuing.  The parties hereto agree that the Forbearance Period Termination Date shall not be deemed to have occurred as a result of failure to deliver by August 28, 2014 a comprehensive term sheet setting forth the material terms of a recapitalization of the Borrowers’ debt obligations, mutually agreed by the relevant parties.

 

4)             Amendments to Forbearance Agreement.

 

(a)         Section 3.1 of the Forbearance Agreement is hereby amended by amending and restating clause (i) of such Section in its entirety as follows:

 

“(i) on September 23, 2014; and”.

 

(b)         Section 3.1 of the Forbearance Agreement is hereby further amended by deleting subclause (J) of clause (ii) of such Section, the proviso following such subclause and the last sentence of clause (ii) in their entirety, and substituting therefor the following:

 

“(J) the Target Amount as of any Saturday on or after August 30, 2014 shall exceed the sum of Eligible Receivables plus Eligible Unbilled Receivables (as of the calculation date for any Borrowing Base Certificate delivered to the Agent on such Saturday pursuant to Section 4.7 below); provided, however, that an occurrence of the condition set forth in this clause (J) shall not trigger the Forbearance Period Termination Date if before the close of business on the fourth Business Day following the applicable Saturday, the Borrowers shall have repaid a principal amount of the outstanding Revolving Advances at least equal to such excess (or the Agent and Required Lenders shall have waived such repayment in writing) or shall have delivered to Agent an updated Borrowing Base Certificate for the Wednesday following such applicable Saturday pursuant to Section 4.7(c) below demonstrating that the Target Amount no longer exceeds the sum of Eligible Receivables plus Eligible Unbilled Receivables; or (K) the repayment or prepayment of any Last Out Loan, other than payments made with Exempt Last Out Loan Proceeds (solely to the extent such Exempt Last Out Loan Proceeds arise from Last Out Loans funded after September 3, 2014) as permitted under the Revolving Credit Agreement.  The “Target Amount” shall mean, at any time, $45,000,000 minus the sum of (I) the principal amount of Revolving Advances prepaid by the Borrowers on August 28, 2014 and (II) the aggregate principal

 



 

amount of Revolving Advances prepaid by the Borrowers pursuant to clause (J) of the preceding sentence.”

 

(c)          Section 4.7 of the Forbearance Agreement is hereby amended by amending and restating clause (d) thereof in its entirety as follows:

 

“(d) Borrowers shall negotiate with the Agent and Lenders in good faith towards a recapitalization of the Borrowers’ debt obligations.”

 

(d)                                 Section 4.8 of the Forbearance Agreement is hereby amended by adding the following as the last sentence thereof:

 

“The Borrowers shall, and shall cause their respective Subsidiaries to, deliver to the Lenders any report, work product, supporting detail, or other documents produced or furnished by such financial advisor and other professionals engaged by the Borrowers, their respective equityholder and subsidiaries or board of directors or similar governing body of any of the foregoing that it delivered to the Term Creditors or any other financing source to the Borrowers and their respective Subsidiaries, in each case in identical form and on the same Business Day so delivered.”

 

5)             Effectiveness.  This Amendment shall become effective with retroactive effect on and as of August 28, 2014 (the “Effective Date”), so long as each of the following conditions precedent shall have been satisfied or waived, as determined by the Agent, on or prior to September 3, 2014:  (a) the Agent shall have received this Amendment, duly executed and delivered by each Borrower and Guarantor; (b) the Agent shall have received an amendment to the existing forbearance agreement with respect to the Term Debt in form and substance reasonably satisfactory to Agent, duly executed and delivered by the Borrower, the Term Debt Required Lenders and the Term Debt Agent; and (c) the Borrowers shall have paid all invoiced costs and expenses of advisors to the Agent.

 

6)             Costs, Fees and Expenses.  Without limiting the obligations of the Borrowers or any Guarantor under the Revolving Credit Agreement or the Other Documents, the Borrowers ratify and reaffirm their reimbursement and indemnification obligations under Sections 16.5 and 16.9 of the Revolving Credit Agreement, including without limitation, their obligation to pay all out-of-pocket costs and expenses, including without limitation, the fees and disbursements of counsel and the fees and expenses of any accountants and financial advisors engaged by Agent or Required Lenders, incurred by the Agent in connection with this Amendment and the administration and enforcement of the Forbearance Agreement and the transactions contemplated hereby.

 

7)             Full Force and Effect of Forbearance Agreement and Revolving Credit Agreement.  Except as expressly amended by this Amendment, the terms and provisions of the Forbearance Agreement shall remain unmodified, and the terms and provisions of the Forbearance Agreement, as amended hereby, shall remain in full force and effect and are hereby ratified and confirmed.   The execution, delivery and performance of this Amendment shall not,

 



 

except as expressly provided herein, constitute a waiver of any provision of, or operate as a waiver of any right, power or remedy of the Agent or any Lender under, the Forbearance Agreement, the Revolving Credit Agreement or any of the Other Documents. On and after the Effective Date, each reference in or to the “Forbearance Agreement,” “thereunder,” “thereof” or words of like import referring to the Forbearance Agreement shall mean and be a reference to the Forbearance Agreement, as amended by this Amendment.  All representations and warranties of the Borrowers and any Guarantors set forth in the Forbearance Agreement shall be deemed to have been remade on the date hereof, after giving effect to this Amendment.  Each Borrower and Guarantor reconfirms and ratifies the Revolving Credit Agreement, the Other Documents and all other documents executed in connection therewith except to the extent the Forbearance Agreement is expressly modified by this Amendment; and each Borrower and Guarantor confirms that all such documents have remained in full force and effect since the date of their execution. This Amendment (subject to Section 5 hereof) shall be effective upon execution and delivery by Borrowers, the Agent and the Consenting Lenders.

 

8)             Reservation of Rights and Remedies.  Except as otherwise expressly provided for in the Forbearance Agreement as amended by this Amendment, the Agent on behalf of the Lenders expressly reserves any and all rights and remedies available under the Forbearance Agreement, as amended hereby, the Revolving Credit Agreement and the Other Documents, and any other agreement or at law or in equity or otherwise.

 

9)             Loan Party Release; Covenant Not to Sue.

 

(a)         Release.  In consideration of the delivery of this Amendment and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, unconditionally, freely and voluntarily, after consultation with counsel and becoming fully and adequately informed as to the relevant facts, circumstances and consequences, each Borrower and Guarantor, for itself and on behalf its successors and assigns, and its present and former members, affiliates, subsidiaries, divisions, predecessors, directors, officers, attorneys, employees, agents, legal representatives and other representatives, and any Person acting for or on behalf of, or claiming through it (each Borrower and Guarantor and all such other Persons being hereinafter referred to collectively as the “Releasing Parties” and individually as a “Releasing Party”), hereby waives, releases, remises and forever discharges the Agent and each Lender, and each of their respective Affiliates, and each of their respective successors in title, past, present and future officers, directors, employees, limited partners, general partners, investors, attorneys, assigns, subsidiaries, shareholders, trustees, agents and other professionals and all other persons and entities to whom the Agent or any Lender would be liable if such persons or entities were found to be liable to any Borrower or Guarantor (each a “Releasee” and collectively, the “Releasees”), from any and all past, present and future claims, suits, liens, lawsuits, adverse consequences, amounts paid in settlement, debts, deficiencies, diminution in value, disbursements, demands, obligations, liabilities, causes of action, damages, losses, costs and expenses of any kind or character, whether based in equity, law, contract, tort, implied or express warranty, strict liability, criminal or civil statute or common law (each a “Claim” and collectively, the “Claims”), whether known or unknown, fixed or contingent, direct, indirect, or derivative, asserted or unasserted, matured or unmatured, foreseen or unforeseen, past or present, liquidated or unliquidated, suspected or unsuspected, which any Releasing Party ever had from the beginning

 



 

of the world, now has, or might hereafter have against any such Releasee, which Claims relate, directly or indirectly, to any act or omission by any Releasee that occurred on or prior to the date of this Agreement and relate, directly or indirectly, to the Revolving Credit Agreement, any Other Document, any Borrower or Guarantor or any acts or omissions of any such Releasee that occurred on or prior to the date of this Agreement with respect to the Revolving Credit Agreement or any Other Document, any Borrower or Guarantor or the lender-borrower relationship evidenced by the Other Documents, except for the duties and obligations set forth in this Agreement and the duties and obligations set forth in the Other Documents to be performed on or after the date of this Amendment.  As to each and every Claim released hereunder, each Releasing Party waives the benefit of each provision of applicable federal or state law (including without limitation the laws of the state of New York), if any, pertaining to general releases after having been advised by its legal counsel with respect thereto.

 

Each Releasing Party acknowledges that it may hereafter discover facts different from or in addition to those now known or believed to be true with respect to such Claims, and agrees that this instrument shall be and remain effective in all respects notwithstanding any such differences or additional facts.  Each Releasing Party understands, acknowledges and agrees that the release set forth above may be pleaded as a full and complete defense and may be used as a basis for an injunction against any action, suit or other proceeding which may be instituted, prosecuted or attempted in breach of the provisions of such release.

 

(b)         Covenant Not to Sue.  Each Releasing Party hereby absolutely, unconditionally and irrevocably, covenants and agrees with and in favor of each Releasee above that it will not sue (at law, in equity, in any regulatory proceeding or otherwise) any Releasee on the basis of any Claim released, remised and discharged by such Releasing Party pursuant to the above release.  Each Releasing Party further agrees that it shall not dispute the validity or enforceability of the Revolving Credit Agreement or any of the Other Documents or any of its obligations thereunder, or the validity, priority, enforceability or the extent of Agent’s Lien on any item of Collateral under the Revolving Credit Agreement or the Other Documents.  If any Releasing Party or any of its respective successors, assigns, or officers, directors, employees, agents or attorneys (solely in their capacities as officers, directors, employees, agents and attorneys), or any Person acting for or on behalf of, or claiming through it violate the foregoing covenant, each Borrower and Guarantor, for itself and its successors, assigns and legal representatives, agrees to pay, in addition to such other damages as any Releasee may sustain as a result of such violation, all attorneys’ fees and costs incurred by such Releasee as a result of such violation.

 

10)      No Waiver; Cumulative Remedies.  No failure to exercise and no delay in exercising, on the part of the Agent or the Lenders, any right, remedy, power or privilege under the Forbearance Agreement, the Revolving Credit Agreement or any Other Document shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege under this Amendment, the Revolving Credit Agreement or any Other Document preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.  The rights, remedies, powers and privileges of the Agent and the Lenders provided under this Amendment, the Revolving Credit Agreement and the Other Documents are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

 



 

11)      Execution in Counterparts.  This Amendment may be executed by one or more of the parties hereto on any number of separate counterparts (including by telecopy or electronic transmission), and all of which counterparts taken together shall be deemed to constitute one and the same instrument.  Each party executing this Amendment represents that such party has the full authority and legal power to do so.

 

12)      Severability.  Any provision of this Amendment which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

13)      Indemnity; Governing Law; Jury Trial Waiver.  The provisions of Sections 7.4, 7.12 and 7.13 of the Forbearance Agreement are hereby incorporated by reference, mutatis mutandis, and shall be deemed to be a part hereof as if restated herein in their entirety.

 

[SIGNATURE PAGES FOLLOW]

 



 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered as of the date first written above.

 

BORROWERS:

 

UNITEK GLOBAL SERVICES, INC.

 

 

UNITEK ACQUISITION, INC.

 

 

PINNACLE WIRELESS USA, INC.

 

 

UNITEK USA, LLC

 

 

ADVANCED COMMUNICATIONS USA, INC.

 

 

DIRECTSAT USA, LLC

 

 

FTS USA, LLC

 

 

 

 

 

 

 

 

By:

/s/ Andrew J. Herning

 

 

Name: Andrew J. Herning

 

 

Title: CFO

 

[Signature Page to First Amendment to Forbearance Agreement]

 



 

AGENT AND LENDERS:

 

APOLLO INVESTMENT CORPORATION, as Revolving Lender and Swing Loan Lender and as Administrative Agent  and Collateral Agent

 

 

 

 

 

By:

Apollo Investment Management, L.P., as Advisor

 

 

 

 

 

 

 

By:

ACC Management, LLC, as its General Partner

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ Ted Goldthorpe

 

 

 

Name: Ted Goldthorpe

 

 

 

Title: Authorized Signatory

 

[Signature Page to First Amendment to Forbearance Agreement]

 


EX-99.9 10 a14-22689_1ex99d9.htm EX-99.9

Exhibit 99.9

 

Execution Version

 

SECOND AMENDMENT TO FORBEARANCE AGREEMENT

 

THIS SECOND AMENDMENT TO FORBEARANCE AGREEMENT (this “Amendment”) is dated as of September 23, 2014 by and among Unitek Global Services, Inc., a Delaware corporation (the “Borrower”), the undersigned Subsidiary Guarantors, the Lenders party hereto constituting Required Lenders (the “Consenting Lenders”), and Cerberus Business Finance, LLC as successor administrative agent for the Lenders (the “Administrative Agent”).

 

W I T N E S S E T H:

 

WHEREAS, the Borrower, the other Loan Parties, the Administrative Agent and certain lenders constituting Required Lenders entered into that certain Forbearance Agreement, dated as of August 8, 2014, as amended by that certain First Amendment to Forbearance Agreement entered into on September 3, 2014, and effective as of August 28, 2014 (as further amended hereby and as further amended, restated, supplemented or otherwise modified from time to time, the “Forbearance Agreement”);

 

WHEREAS, the Borrower, FBR Capital Markets LT, Inc., in its capacity as administrative agent (as succeeded by the Administrative Agent) and the Lenders entered into that certain Credit Agreement dated as of April 15, 2011, as amended by that First Amendment, dated as of September 14, 2012; the Second Amendment and Limited Waiver, dated as of July 25, 2013; the Third Amendment to Credit Agreement dated as of November 5, 2013; and the Fourth Amendment to Credit Agreement, dated as of July 28, 2014 (as so amended and as further amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), pursuant to which, among other things, the Lenders have extended credit to the Borrower in the form of Term Loans;

 

WHEREAS, each of the Specified Defaults identified in the Forbearance Agreement is continuing;

 

WHEREAS, the Loan Parties have requested that the Administrative Agent and the Lenders amend the Forbearance Agreement on the terms and subject to the conditions set forth in this Amendment; and

 

WHEREAS, the Administrative Agent and the Consenting Lenders are willing to so amend the Forbearance Agreement on the terms and subject to the conditions set forth in this Amendment.

 

NOW THEREFORE, in consideration of the premises and for other good and valuable consideration the receipt of which is hereby acknowledged, the parties hereto hereby agree as follows:

 

SECTION 1.                         DEFINITIONS

 

All capitalized terms used but not defined in this Amendment shall have the meanings given to them in the Forbearance Agreement, or, if not defined therein, in the Credit Agreement.

 



 

SECTION 2.                         ACKNOWLEDGMENTS

 

2.1                               Recitals.  Each party hereto acknowledges and affirms that the recitals set forth above are true and correct.  Such recitals are incorporated herein by reference.

 

2.2                               Acknowledgments Regarding Specified Defaults.  Each Loan Party acknowledges that each of the Specified Defaults is continuing.

 

SECTION 3.                         AMENDMENTS TO FORBEARANCE AGREEMENT

 

3.1                               Forbearance Period.  Section 3.1 of the Forbearance Agreement is hereby amended by amending and restating clause (i) therein in its entirety as follows:

 

“(i) on October 2, 2014; and”

 

SECTION 4.                         CONDITIONS PRECEDENT

 

4.1                               Effective Date.  This Amendment shall become effective on and as of September 23, 2014 (the “Effective Date”), so long as each of the following conditions precedent shall have been satisfied or waived, as determined by the Administrative Agent, on or prior to such date:

 

(a)                                 Forbearance Agreement.  The Administrative Agent shall have received this Amendment, duly executed and delivered by each Loan Party.

 

(b)                                 ABL Forbearance Agreement.  The Administrative Agent shall have received an amendment to the ABL Forbearance Agreement in form and substance reasonably satisfactory to the Administrative Agent and the Consenting Lenders, duly executed and delivered by the Loan Parties, the ABL Required Lenders, and the ABL Agent.

 

(c)                                  Payment of Costs, Expenses and Fees.  The Borrower shall have paid all invoiced costs and expenses of Klee, Tuchin, Bogdanoff & Stern LLP, counsel to the Administrative Agent.

 

SECTION 5.                         MISCELLANEOUS

 

5.1                               Costs, Fees and Expenses.  Without limiting the obligations of any Loan Party under the Loan Documents, the Borrower ratifies and reaffirms its reimbursement and indemnification obligations under Section 9.5 of the Credit Agreement, including without limitation, its obligation to pay all out-of-pocket costs and expenses, including without limitation, the fees and disbursements of counsel, incurred by the Administrative Agent and each Lender in connection with this Amendment and the administration and enforcement of the Forbearance Agreement and the transactions contemplated hereby.  The Borrower further agrees to pay or reimburse each Lender for all its reasonable costs and expenses incurred in connection the Forbearance Agreement, the Credit Agreement, the other Loan Documents and any such other documents, including the fees and disbursements of counsel (including the allocated fees and expenses of in-house counsel) to each Lender and the fees and expenses of any accountants and financial advisors engaged by any Lender.

 

2



 

5.2                               Full Force and Effect of Forbearance Agreement and Credit Agreement.  Except as expressly amended by this Amendment, the terms and provisions of the Forbearance Agreement shall remain unmodified, and the terms and provisions of the Forbearance Agreement, as amended hereby, shall remain in full force and effect and are hereby ratified and confirmed.   The execution, delivery and performance of this Amendment shall not, except as expressly provided herein, constitute a waiver of any provision of, or operate as a waiver of any right, power or remedy of the Administrative Agent or any Lender under, the Forbearance Agreement, the Credit Agreement or any of the other Loan Documents. On and after the Effective Date, each reference in or to the “Forbearance Agreement,” “thereunder,” “thereof” or words of like import referring to the Forbearance Agreement shall mean and be a reference to the Forbearance Agreement, as amended by this Amendment.  All representations and warranties of the Loan Parties set forth in the Forbearance Agreement shall be deemed to have been remade on the date hereof, after giving effect to this Amendment.  Each Loan Party reconfirms and ratifies the Credit Agreement, the other Loan Documents and all other documents executed in connection therewith except to the extent the Forbearance Agreement is expressly modified by this Amendment; and each Loan Party confirms that all such documents have remained in full force and effect since the date of their execution.  This Amendment (subject to Section 4 hereof) shall be effective upon execution and delivery by each Loan Party, the Administrative, Agent and the Consenting Lenders.

 

5.3                               Reservation of Rights and RemediesExcept as otherwise provided for in the Forbearance Agreement, as amended by this Amendment, the Administrative Agent on behalf of the Lenders expressly reserves any and all rights and remedies available under the Forbearance Agreement, as amended hereby, the Credit Agreement and the other Loan Documents, and any other agreement or at law or in equity or otherwise.

 

5.4                               Loan Party Release; Covenant Not to Sue.

 

(a)                                 Loan Party Release.  In consideration of the delivery of this Amendment and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, unconditionally, freely and voluntarily, after consultation with counsel and becoming fully and adequately informed as to the relevant facts, circumstances and consequences, each Loan Party, for itself and on behalf its successors and assigns, and its present and former members, affiliates, subsidiaries, divisions, predecessors, directors, officers, attorneys, employees, agents, legal representatives and other representatives, and any Person acting for or on behalf of, or claiming through it (each Loan Party and all such other Persons being hereinafter referred to collectively as the “Releasing Parties” and individually as a “Releasing Party”), hereby waives, releases, remises and forever discharges the Administrative Agent and each Lender, and each of their respective Affiliates, and each of their respective successors in title, past, present and future officers, directors, employees, limited partners, general partners, investors, attorneys, assigns, subsidiaries, shareholders, trustees, agents and other professionals and all other persons and entities to whom the Administrative Agent or any Lender would be liable if such persons or entities were found to be liable to any Loan Party (each a “Releasee” and collectively, the “Releasees”), from any and all past, present and future claims, suits, liens, lawsuits, adverse consequences, amounts paid in settlement, debts, deficiencies, diminution in value, disbursements, demands, obligations, liabilities, causes of action, damages, losses, costs and expenses of any kind or character, whether based in equity, law, contract, tort, implied or express

 

3



 

warranty, strict liability, criminal or civil statute or common law (each a “Claim” and collectively, the “Claims”), whether known or unknown, fixed or contingent, direct, indirect, or derivative, asserted or unasserted, matured or unmatured, foreseen or unforeseen, past or present, liquidated or unliquidated, suspected or unsuspected, which any Releasing Party ever had from the beginning of the world, now has, or might hereafter have against any such Releasee, which Claims relate, directly or indirectly, to any act or omission by any Releasee that occurred on or prior to the date of this Amendment and relate, directly or indirectly, to the Forbearance Agreement, the Credit Agreement, any other Loan Document, any Loan Party or any acts or omissions of any such Releasee that occurred on or prior to the date of this Amendment with respect to the Forbearance Agreement, the Credit Agreement or any other Loan Document, any Loan Party or the lender-borrower relationship evidenced by the Loan Documents, except for the duties and obligations set forth in this Amendment and the duties and obligations set forth in the Loan Documents to be performed on or after the date of this Amendment.  As to each and every Claim released hereunder, each Releasing Party waives the benefit of each provision of applicable federal or state law (including without limitation the laws of the state of New York), if any, pertaining to general releases after having been advised by its legal counsel with respect thereto.

 

Each Releasing Party acknowledges that it may hereafter discover facts different from or in addition to those now known or believed to be true with respect to such Claims, and agrees that this instrument shall be and remain effective in all respects notwithstanding any such differences or additional facts.  Each Releasing Party understands, acknowledges and agrees that the release set forth above may be pleaded as a full and complete defense and may be used as a basis for an injunction against any action, suit or other proceeding which may be instituted, prosecuted or attempted in breach of the provisions of such release.

 

(b)                                 Covenant Not to Sue.  Each Releasing Party hereby absolutely, unconditionally and irrevocably, covenants and agrees with and in favor of each Releasee above that it will not sue (at law, in equity, in any regulatory proceeding or otherwise) any Releasee on the basis of any Claim released, remised and discharged by such Releasing Party pursuant to the above release.  Each Releasing Party further agrees that it shall not dispute the validity or enforceability of the Forbearance Agreement, the Credit Agreement or any of the other Loan Documents or any of its obligations thereunder, or the validity, priority, enforceability or the extent of Collateral Agent’s Lien on any item of Collateral under the Credit Agreement or the other Loan Documents.  If any Releasing Party or any of its respective successors, assigns, or officers, directors, employees, agents or attorneys (solely in their capacities as officers, directors, employees, agents and attorneys), or any Person acting for or on behalf of, or claiming through it violate the foregoing covenant, each Loan Party, for itself and its successors, assigns and legal representatives, agrees to pay, in addition to such other damages as any Releasee may sustain as a result of such violation, all attorneys’ fees and costs incurred by such Releasee as a result of such violation.

 

5.5                               No Waiver; Cumulative Remedies.  No failure to exercise and no delay in exercising, on the part of the Administrative Agent or the Lenders, any right, remedy, power or privilege under the Forbearance Agreement, the Credit Agreement or any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege under this Amendment or any other Loan Document preclude any

 

4



 

other or further exercise thereof or the exercise of any other right, remedy, power or privilege.  The rights, remedies, powers and privileges of the Administrative Agent and the Lenders provided under this Amendment, the Credit Agreement and the other Loan Documents are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

 

5.6                               Execution in Counterparts.  This Amendment may be executed by one or more of the parties hereto on any number of separate counterparts (including by telecopy or electronic transmission), and all of which counterparts taken together shall be deemed to constitute one and the same instrument.  Each party hereto executing this Amendment represents that such party has the full authority and legal power to do so.

 

5.7                               Severability.  Any provision of this Amendment which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

5.8                               Indemnity, Governing Law; Jury Trial Waiver.  The provisions of Sections 7.4, 7.12 and 7.13 of the Forbearance Agreement are hereby incorporated by reference, mutatis mutandis, and shall be deemed to be a part hereof as if restated herein in their entirety.

 

[Remainder of page intentionally left blank.]

 

5



 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered as of the date first written above.

 

BORROWER:

UNITEK GLOBAL SERVICES, INC.

 

 

 

 

 

By:

/s/ Andrew J. Herning

 

Name:  Andrew J. Herning

 

Title: CFO

 

 

 

 

SUBSIDIARY GUARANTORS:

UNITEK ACQUISITION, INC.

 

PINNACLE WIRELESS USA, INC.

 

UNITEK USA, LLC

 

ADVANCED COMMUNICATIONS USA, INC.

 

DIRECTSAT USA, LLC

 

FTS USA, LLC

 

 

 

 

 

By:

/s/ Andrew J. Herning

 

Name:  Andrew J. Herning

 

Title: CFO and Treasurer

 

[Signature Page to UniTek Forbearance Second Amendment]

 



 

ADMINISTRATIVE AGENT:

CERBERUS BUSINESS FINANCE, LLC, as Administrative Agent

 

 

 

 

 

By:

/s/ Kevin Genda

 

Name:  Kevin Genda

 

Title: Vice Chairman

 

[Signature Page to UniTek Forbearance Agreement]

 



 

CONSENTING LENDERS:

 

 

CETUS CAPITAL II, LLC

 

 

 

 

 

By:

/s/ Robert E. Davis

 

 

Name: Robert E. Davis

 

 

Title: Managing Director

 

 

 

 

 

LITTLEJOHN OPPORTUNITIES MASTER FUND LP

 

 

 

 

 

By:

/s/ Robert E. Davis

 

 

Name: Robert E. Davis

 

 

Title: Managing Director

 

 

 

 

 

SG DISTRESSED FUND, LP

 

 

 

 

 

By:

/s/ Robert E. Davis

 

 

Name: Robert E. Davis

 

 

Title: Managing Director

 

[Signature Page to UniTek Forbearance Second Amendment]

 



 

CONSENTING LENDERS:

 

 

NEW MOUNTAIN FINANCE CORPORATION

 

 

 

 

 

By:

/s/ John R. Kline

 

 

Name: John R. Kline

 

 

Title: EVP & COO

 

 

 

 

 

NEW MOUNTAIN FINANCE HOLDINGS, L.L.C.

 

 

 

 

 

By:

/s/ John R. Kline

 

 

Name: John R. Kline

 

 

Title: EVP & COO

 

[Signature Page to UniTek Forbearance Second Amendment]

 



 

CONSENTING LENDERS:

 

 

CERBERUS OFFSHORE LEVERED II LP

 

 

 

By: COL II GP Inc.

 

Its: General Partner

 

 

 

 

 

By:

/s/ Kevin Genda

 

Name: Kevin Genda

 

Title: Vice Chairman

 

 

 

 

 

CERBERUS ASRS FUNDING LLC

 

 

 

 

 

By:

/s/ Kevin Genda

 

 

Name: Kevin Genda

 

 

Title: Vice Chairman

 

 

 

 

 

CERBERUS ONSHORE II CLO LLC

 

 

 

 

 

By:

/s/ Kevin Genda

 

 

Name: Kevin Genda

 

 

Title: Vice Chairman

 

 

 

 

 

CERBERUS AUS LEVERED II LP

 

 

 

By: CAL II GP LLC

 

Its: General Partner

 

 

 

 

 

By:

/s/ Kevin Genda

 

 

Name: Kevin Genda

 

 

Title: Vice Chairman

 

[Signature Page to UniTek Forbearance Second Amendment]

 



 

CONSENTING LENDERS:

 

 

CERBERUS ONSHORE LEVERED II LLC

 

 

 

 

 

By:

/s/ Kevin Genda

 

 

Name: Kevin Genda

 

 

Title: Vice Chairman

 

[Signature Page to UniTek Forbearance Second Amendment]

 



 

CONSENTING LENDERS:

 

 

MAIN STREET CAPITAL CORPORATION

 

 

 

 

 

By:

/s/ Rodger Stout

 

 

Name: Rodger Stout

 

 

Title: Executive Vice President

 

[Signature Page to UniTek Forbearance Second Amendment]

 



 

CONSENTING LENDERS:

 

 

MARBLEGATE SPECIAL OPPORTUNITIES MASTER FUND, L.P.

 

 

 

 

 

By:

/s/ Andrew S. Milgram

 

 

Name: Andrew S. Milgram

 

 

Title: Managing Partner

 

[Signature Page to UniTek Forbearance Second Amendment]

 



 

CONSENTING LENDERS:

 

 

 

 

PENNANTPARK FLOATING RATE CAPITAL LTD.

 

 

 

 

 

By:

/s/ Aviv Efrat

 

Name: Aviv Efrat

 

Title: CFO

 

[Signature Page to UniTek Forbearance Second Amendment]

 


EX-99.10 11 a14-22689_1ex99d10.htm EX-99.10

Exhibit 99.10

 

EXECUTION

 

SECOND AMENDMENT TO FORBEARANCE AGREEMENT

 

THIS SECOND AMENDMENT TO FORBEARANCE AGREEMENT (this “Amendment”) is dated as of September 23, 2014, by and among UNITEK GLOBAL SERVICES INC., a Delaware corporation (“UniTek Parent”), UNITEK ACQUISITION, INC., a Delaware corporation (“UniTek Acquisition”), PINNACLE WIRELESS USA, INC., a Delaware corporation (“Pinnacle”), UNITEK USA, LLC, a Delaware limited liability company (“UniTek USA”), ADVANCED COMMUNICATIONS USA, INC., a Delaware corporation (“Advanced Communications”), DIRECTSAT USA, LLC, a Delaware limited liability company (“DirectSat”), FTS USA, LLC, a Delaware limited liability company (“FTS”) (UniTek Parent, UniTek Acquisition, Pinnacle, UniTek USA, Advanced Communications, DirectSat, FTS, collectively the “Borrowers”),  the Lenders party hereto (the “Consenting Lenders”), and APOLLO INVESTMENT CORPORATION, as administrative agent and collateral agent for the Lenders (“AIC”, and in such capacity, the “Agent”).

 

R E C I T A L S:

 

A.                                    Reference is made to that certain Forbearance Agreement dated as of August 8, 2014, by and among the parties hereto (the forbearance agreement, as amended by that certain First Amendment to Forbearance Agreement entered into as of September 3, 2104 and as hereafter amended, modified or supplemented from time to time, the “Forbearance Agreement”).  Reference is also made to that certain Revolving Credit and Security Agreement dated as of July 10, 2013, as amended by that certain Amendment and Limited Waiver to Revolving Credit and Security Agreement and Fee Letter, dated as of July 25, 2013 and by that certain Second Amendment to Revolving Credit and Security Agreement, dated as of August 13, 2014 (as so amended and as otherwise amended, restated, supplemented or modified from time to time, the “Revolving Credit Agreement”), pursuant to which, among other things, the Lenders have extended credit to the Borrowers.

 

B.                                    Each of the Specified Defaults identified in the Forbearance Agreement is continuing.

 

C.                                    The Borrowers have requested that Agent and Lenders amend the Forbearance Agreement on the terms and subject to the conditions set forth in this Amendment.

 

D.                                    Agent and Required Lenders are willing to so amend the Forbearance Agreement on the terms and subject to the conditions set forth in this Amendment.

 

NOW THEREFORE, in consideration of the above recitals and for other good and valuable consideration, the receipt and adequacy of which are hereby mutually acknowledged, and intending to be legally bound hereby, the parties hereto agree as follows:

 



 

1)             Definitions.  All capitalized terms used but not defined in this Amendment shall have the meanings given to them in the Forbearance Agreement, or, if not defined therein, in the Revolving Credit Agreement.

 

2)             Affirmation of Recitals.  Each party hereto acknowledges and affirms that the recitals set forth above are true and correct.  Such recitals are incorporated herein by reference.

 

3)             Acknowledgments Regarding Specified Defaults.  The Borrowers and Guarantors acknowledge that each of the Specified Defaults is continuing.

 

4)             Amendments to Forbearance Agreement.

 

(a)         Section 3.1 of the Forbearance Agreement is hereby amended by amending and restating clause (i) of such Section in its entirety as follows:

 

“(i) on October 2, 2014; and”.

 

(b)         Section 3.1 of the Forbearance Agreement is hereby further amended by restating the last sentence of clause (ii) thereof and adding immediately thereafter a new sentence, so that such two sentences read in their entirety as follows:

 

“The “Target Amount” shall mean, at any time, $45,000,000 minus the sum of (I) the principal amount of Revolving Advances prepaid by the Borrowers on August 28, 2014 and (II) the aggregate principal amount of Revolving Advances prepaid by the Borrowers pursuant to clause (J) of the preceding sentence (to the extent not already included in clause (I) of this sentence).  Notwithstanding anything to the contrary in subclause (J) of clause (ii) of this Section 3.1, the Agent and Required Lenders agree that the sum of Eligible Receivables plus Eligible Unbilled Receivables, as reflected in the Borrowing Base Certificate delivered to the Agent on September 20, 2014, being less than the Target Amount shall not trigger the Forbearance Period Termination Date (it being understood and agreed by the parties hereto that the foregoing provisions of this sentence do not constitute (x) a waiver of subclause (J) of clause (ii) of this Section as to any other Borrowing Base Certificate or in any other instance, or (y) a waiver of the occurrence of any other Forbearance Period Termination Date or of the Borrowers’ compliance with any other provision of this Agreement).”

 

5)             Effectiveness.  This Amendment shall become effective on and as of September 23, 2014 (the “Effective Date”), so long as each of the following conditions precedent shall have been satisfied or waived, as determined by the Agent, on or prior to such date:  (a) the Agent shall have received this Amendment, duly executed and delivered by each Borrower and Guarantor; (b) the Agent shall have received an amendment to the existing forbearance agreement with respect to the Term Debt in form and substance reasonably satisfactory to Agent, duly executed and delivered by the Borrower, the Term Debt Required

 



 

Lenders and the Term Debt Agent; and (c) the Borrowers shall have paid all invoiced costs and expenses of advisors to the Agent.

 

6)             Costs, Fees and Expenses.  Without limiting the obligations of the Borrowers or any Guarantor under the Revolving Credit Agreement or the Other Documents, the Borrowers ratify and reaffirm their reimbursement and indemnification obligations under Sections 16.5 and 16.9 of the Revolving Credit Agreement, including without limitation, their obligation to pay all out-of-pocket costs and expenses, including without limitation, the fees and disbursements of counsel and the fees and expenses of any accountants and financial advisors engaged by Agent or Required Lenders, incurred by the Agent in connection with this Amendment and the administration and enforcement of the Forbearance Agreement and the transactions contemplated hereby.

 

7)             Full Force and Effect of Forbearance Agreement and Revolving Credit Agreement.  Except as expressly amended by this Amendment, the terms and provisions of the Forbearance Agreement shall remain unmodified, and the terms and provisions of the Forbearance Agreement, as amended hereby, shall remain in full force and effect and are hereby ratified and confirmed.   The execution, delivery and performance of this Amendment shall not, except as expressly provided herein, constitute a waiver of any provision of, or operate as a waiver of any right, power or remedy of the Agent or any Lender under, the Forbearance Agreement, the Revolving Credit Agreement or any of the Other Documents. On and after the Effective Date, each reference in or to the “Forbearance Agreement,” “thereunder,” “thereof” or words of like import referring to the Forbearance Agreement shall mean and be a reference to the Forbearance Agreement, as amended by this Amendment.  All representations and warranties of the Borrowers and any Guarantors set forth in the Forbearance Agreement shall be deemed to have been remade on the date hereof, after giving effect to this Amendment.  Each Borrower and Guarantor reconfirms and ratifies the Revolving Credit Agreement, the Other Documents and all other documents executed in connection therewith except to the extent the Forbearance Agreement is expressly modified by this Amendment; and each Borrower and Guarantor confirms that all such documents have remained in full force and effect since the date of their execution. This Amendment (subject to Section 5 hereof) shall be effective upon execution and delivery by Borrowers, the Agent and the Consenting Lenders.

 

8)             Reservation of Rights and Remedies.  Except as otherwise expressly provided for in the Forbearance Agreement as amended by this Amendment, the Agent on behalf of the Lenders expressly reserves any and all rights and remedies available under the Forbearance Agreement, as amended hereby, the Revolving Credit Agreement and the Other Documents, and any other agreement or at law or in equity or otherwise.

 

9)             Loan Party Release; Covenant Not to Sue.

 

(a)         Release.  In consideration of the delivery of this Amendment and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, unconditionally, freely and voluntarily, after consultation with counsel and becoming fully and adequately informed as to the relevant facts, circumstances and consequences, each Borrower and Guarantor, for itself and on behalf its successors and assigns, and its present and former

 



 

members, affiliates, subsidiaries, divisions, predecessors, directors, officers, attorneys, employees, agents, legal representatives and other representatives, and any Person acting for or on behalf of, or claiming through it (each Borrower and Guarantor and all such other Persons being hereinafter referred to collectively as the “Releasing Parties” and individually as a “Releasing Party”), hereby waives, releases, remises and forever discharges the Agent and each Lender, and each of their respective Affiliates, and each of their respective successors in title, past, present and future officers, directors, employees, limited partners, general partners, investors, attorneys, assigns, subsidiaries, shareholders, trustees, agents and other professionals and all other persons and entities to whom the Agent or any Lender would be liable if such persons or entities were found to be liable to any Borrower or Guarantor (each a “Releasee” and collectively, the “Releasees”), from any and all past, present and future claims, suits, liens, lawsuits, adverse consequences, amounts paid in settlement, debts, deficiencies, diminution in value, disbursements, demands, obligations, liabilities, causes of action, damages, losses, costs and expenses of any kind or character, whether based in equity, law, contract, tort, implied or express warranty, strict liability, criminal or civil statute or common law (each a “Claim” and collectively, the “Claims”), whether known or unknown, fixed or contingent, direct, indirect, or derivative, asserted or unasserted, matured or unmatured, foreseen or unforeseen, past or present, liquidated or unliquidated, suspected or unsuspected, which any Releasing Party ever had from the beginning of the world, now has, or might hereafter have against any such Releasee, which Claims relate, directly or indirectly, to any act or omission by any Releasee that occurred on or prior to the date of this Agreement and relate, directly or indirectly, to the Revolving Credit Agreement, any Other Document, any Borrower or Guarantor or any acts or omissions of any such Releasee that occurred on or prior to the date of this Agreement with respect to the Revolving Credit Agreement or any Other Document, any Borrower or Guarantor or the lender-borrower relationship evidenced by the Other Documents, except for the duties and obligations set forth in this Agreement and the duties and obligations set forth in the Other Documents to be performed on or after the date of this Amendment.  As to each and every Claim released hereunder, each Releasing Party waives the benefit of each provision of applicable federal or state law (including without limitation the laws of the state of New York), if any, pertaining to general releases after having been advised by its legal counsel with respect thereto.

 

Each Releasing Party acknowledges that it may hereafter discover facts different from or in addition to those now known or believed to be true with respect to such Claims, and agrees that this instrument shall be and remain effective in all respects notwithstanding any such differences or additional facts.  Each Releasing Party understands, acknowledges and agrees that the release set forth above may be pleaded as a full and complete defense and may be used as a basis for an injunction against any action, suit or other proceeding which may be instituted, prosecuted or attempted in breach of the provisions of such release.

 

(b)         Covenant Not to Sue.  Each Releasing Party hereby absolutely, unconditionally and irrevocably, covenants and agrees with and in favor of each Releasee above that it will not sue (at law, in equity, in any regulatory proceeding or otherwise) any Releasee on the basis of any Claim released, remised and discharged by such Releasing Party pursuant to the above release.  Each Releasing Party further agrees that it shall not dispute the validity or enforceability of the Revolving Credit Agreement or any of the Other Documents or any of its obligations thereunder, or the validity, priority, enforceability or the extent of Agent’s Lien on

 



 

any item of Collateral under the Revolving Credit Agreement or the Other Documents.  If any Releasing Party or any of its respective successors, assigns, or officers, directors, employees, agents or attorneys (solely in their capacities as officers, directors, employees, agents and attorneys), or any Person acting for or on behalf of, or claiming through it violate the foregoing covenant, each Borrower and Guarantor, for itself and its successors, assigns and legal representatives, agrees to pay, in addition to such other damages as any Releasee may sustain as a result of such violation, all attorneys’ fees and costs incurred by such Releasee as a result of such violation.

 

10)      No Waiver; Cumulative Remedies.  No failure to exercise and no delay in exercising, on the part of the Agent or the Lenders, any right, remedy, power or privilege under the Forbearance Agreement, the Revolving Credit Agreement or any Other Document shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege under this Amendment, the Revolving Credit Agreement or any Other Document preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.  The rights, remedies, powers and privileges of the Agent and the Lenders provided under this Amendment, the Revolving Credit Agreement and the Other Documents are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

 

11)      Execution in Counterparts.  This Amendment may be executed by one or more of the parties hereto on any number of separate counterparts (including by telecopy or electronic transmission), and all of which counterparts taken together shall be deemed to constitute one and the same instrument.  Each party executing this Amendment represents that such party has the full authority and legal power to do so.

 

12)      Severability.  Any provision of this Amendment which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

13)      Indemnity; Governing Law; Jury Trial Waiver.  The provisions of Sections 7.4, 7.12 and 7.13 of the Forbearance Agreement are hereby incorporated by reference, mutatis mutandis, and shall be deemed to be a part hereof as if restated herein in their entirety.

 

[SIGNATURE PAGES FOLLOW]

 



 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered as of the date first written above.

 

BORROWERS:

UNITEK GLOBAL SERVICES, INC.

 

UNITEK ACQUISITION, INC.

 

PINNACLE WIRELESS USA, INC.

 

UNITEK USA, LLC

 

ADVANCED COMMUNICATIONS USA, INC.

 

DIRECTSAT USA, LLC

 

FTS USA, LLC

 

 

 

 

 

By:

/s/ Andrew J. Herning

 

Name: Andrew J. Herning

 

Title: CFO and Treasurer

 

[Signature Page to Second Amendment to Forbearance Agreement]

 



 

AGENT AND LENDERS:

APOLLO INVESTMENT CORPORATION, as Revolving Lender and Swing Loan Lender and as Administrative Agent and Collateral Agent

 

 

 

By:

Apollo Investment Management, L.P., as Advisor

 

 

 

 

 

By:

ACC Management, LLC, as its General Partner

 

 

 

 

 

 

 

 

 

 

By:

/s/ Ted Goldthorpe

 

 

Name: Ted Goldthorpe

 

 

Title: Authorized Signatory

 

[Signature Page to Second Amendment to Forbearance Agreement]

 


EX-99.11 12 a14-22689_1ex99d11.htm EX-99.11

Exhibit 99.11

 

Execution Version

 

THIRD AMENDMENT TO FORBEARANCE AGREEMENT

 

THIS THIRD AMENDMENT TO FORBEARANCE AGREEMENT (this “Amendment”) is dated as of October 2, 2014 by and among Unitek Global Services, Inc., a Delaware corporation (the “Borrower”), the undersigned Subsidiary Guarantors, the Lenders party hereto constituting Required Lenders (the “Consenting Lenders”), and Cerberus Business Finance, LLC as successor administrative agent for the Lenders (the “Administrative Agent”).

 

W I T N E S S E T H:

 

WHEREAS, the Borrower, the other Loan Parties, the Administrative Agent and certain lenders constituting Required Lenders entered into that certain Forbearance Agreement, dated as of August 8, 2014, as amended by that certain First Amendment to Forbearance Agreement entered into on September 3, 2014, and effective as of August 28, 2014, as amended by that certain Second Amendment to Forbearance Agreement dated as of September 23, 2014 (as further amended hereby and as further amended, restated, supplemented or otherwise modified from time to time, the “Forbearance Agreement”);

 

WHEREAS, the Borrower, FBR Capital Markets LT, Inc., in its capacity as administrative agent (as succeeded by the Administrative Agent) and the Lenders entered into that certain Credit Agreement dated as of April 15, 2011, as amended by that First Amendment, dated as of September 14, 2012; the Second Amendment and Limited Waiver, dated as of July 25, 2013; the Third Amendment to Credit Agreement dated as of November 5, 2013; and the Fourth Amendment to Credit Agreement, dated as of July 28, 2014 (as so amended and as further amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), pursuant to which, among other things, the Lenders have extended credit to the Borrower in the form of Term Loans;

 

WHEREAS, each of the Specified Defaults identified in the Forbearance Agreement is continuing;

 

WHEREAS, the Loan Parties have requested that the Administrative Agent and the Lenders amend the Forbearance Agreement on the terms and subject to the conditions set forth in this Amendment; and

 

WHEREAS, the Administrative Agent and the Consenting Lenders are willing to so amend the Forbearance Agreement on the terms and subject to the conditions set forth in this Amendment.

 

NOW THEREFORE, in consideration of the premises and for other good and valuable consideration the receipt of which is hereby acknowledged, the parties hereto hereby agree as follows:

 



 

SECTION 1.                         DEFINITIONS

 

All capitalized terms used but not defined in this Amendment shall have the meanings given to them in the Forbearance Agreement, or, if not defined therein, in the Credit Agreement.

 

SECTION 2.                         ACKNOWLEDGMENTS

 

2.1                               Recitals.  Each party hereto acknowledges and affirms that the recitals set forth above are true and correct.  Such recitals are incorporated herein by reference.

 

2.2                               Acknowledgments Regarding Specified Defaults.  Each Loan Party acknowledges that each of the Specified Defaults (giving effect to this Amendment) is continuing.

 

SECTION 3.                         AMENDMENTS TO FORBEARANCE AGREEMENT

 

3.1                               Forbearance Period.

 

(a)                                 Section 3.1 of the Forbearance Agreement is hereby amended by amending and restating clause (i) therein in its entirety as follows:

 

“(i) on October 9, 2014; and”

 

(b)                                 Schedule I to the Forbearance Agreement is hereby amended by deleting each reference to “the fiscal quarter ended June 30, 2014” in items 5 and 6 of such Schedule and substituting therefor the phrase “the fiscal quarters ending June 28, 2014 and September 27, 2014”.

 

(c)                                  Schedule I to the Forbearance Agreement is hereby further amended by amending and restating item 7 of such Schedule as follows:

 

“An Event of Default under Section 7(a) of the Credit Agreement resulting from the Borrower’s failure to pay on the due date (or within the 5-day cure period thereunder) the monthly interest payment due on August 31, 2014 and September 30, 2014, as required under Section 2.9(d) of the Credit Agreement.”

 

SECTION 4.                         CONDITIONS PRECEDENT

 

4.1                               Effective Date.  This Amendment shall become effective on and as of October 2, 2014 (the “Effective Date”), so long as each of the following conditions precedent shall have been satisfied or waived, as determined by the Administrative Agent, on or prior to such date:

 

(a)                                 Forbearance Agreement.  The Administrative Agent shall have received this Amendment, duly executed and delivered by each Loan Party.

 

2



 

(b)                                 ABL Forbearance Agreement.  The Administrative Agent shall have received an amendment to the ABL Forbearance Agreement in form and substance reasonably satisfactory to the Administrative Agent and the Consenting Lenders, duly executed and delivered by the Loan Parties, the ABL Required Lenders, and the ABL Agent.

 

(c)                                  Payment of Costs, Expenses and Fees.  The Borrower shall have paid all invoiced costs and expenses of Klee, Tuchin, Bogdanoff & Stern LLP, counsel to the Administrative Agent.

 

SECTION 5.                         MISCELLANEOUS

 

5.1                               Costs, Fees and Expenses.  Without limiting the obligations of any Loan Party under the Loan Documents, the Borrower ratifies and reaffirms its reimbursement and indemnification obligations under Section 9.5 of the Credit Agreement, including without limitation, its obligation to pay all out-of-pocket costs and expenses, including without limitation, the fees and disbursements of counsel, incurred by the Administrative Agent and each Lender in connection with this Amendment and the administration and enforcement of the Forbearance Agreement and the transactions contemplated hereby.  The Borrower further agrees to pay or reimburse each Lender for all its reasonable costs and expenses incurred in connection the Forbearance Agreement, the Credit Agreement, the other Loan Documents and any such other documents, including the fees and disbursements of counsel (including the allocated fees and expenses of in-house counsel) to each Lender and the fees and expenses of any accountants and financial advisors engaged by any Lender.

 

5.2                               Full Force and Effect of Forbearance Agreement and Credit Agreement.  Except as expressly amended by this Amendment, the terms and provisions of the Forbearance Agreement shall remain unmodified, and the terms and provisions of the Forbearance Agreement, as amended hereby, shall remain in full force and effect and are hereby ratified and confirmed.   The execution, delivery and performance of this Amendment shall not, except as expressly provided herein, constitute a waiver of any provision of, or operate as a waiver of any right, power or remedy of the Administrative Agent or any Lender under, the Forbearance Agreement, the Credit Agreement or any of the other Loan Documents. On and after the Effective Date, each reference in or to the “Forbearance Agreement,” “thereunder,” “thereof” or words of like import referring to the Forbearance Agreement shall mean and be a reference to the Forbearance Agreement, as amended by this Amendment.  All representations and warranties of the Loan Parties set forth in the Forbearance Agreement shall be deemed to have been remade on the date hereof, after giving effect to this Amendment.  Each Loan Party reconfirms and ratifies the Credit Agreement, the other Loan Documents and all other documents executed in connection therewith except to the extent the Forbearance Agreement is expressly modified by this Amendment; and each Loan Party confirms that all such documents have remained in full force and effect since the date of their execution.  This Amendment (subject to Section 4 hereof) shall be effective upon execution and delivery by each Loan Party, the Administrative, Agent and the Consenting Lenders.

 

5.3                               Reservation of Rights and RemediesExcept as otherwise provided for in the Forbearance Agreement, as amended by this Amendment, the Administrative Agent on behalf of the Lenders expressly reserves any and all rights and remedies available under the

 

3



 

Forbearance Agreement, as amended hereby, the Credit Agreement and the other Loan Documents, and any other agreement or at law or in equity or otherwise.

 

5.4                               Loan Party Release; Covenant Not to Sue.

 

(a)                                 Loan Party Release.  In consideration of the delivery of this Amendment and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, unconditionally, freely and voluntarily, after consultation with counsel and becoming fully and adequately informed as to the relevant facts, circumstances and consequences, each Loan Party, for itself and on behalf its successors and assigns, and its present and former members, affiliates, subsidiaries, divisions, predecessors, directors, officers, attorneys, employees, agents, legal representatives and other representatives, and any Person acting for or on behalf of, or claiming through it (each Loan Party and all such other Persons being hereinafter referred to collectively as the “Releasing Parties” and individually as a “Releasing Party”), hereby waives, releases, remises and forever discharges the Administrative Agent and each Lender, and each of their respective Affiliates, and each of their respective successors in title, past, present and future officers, directors, employees, limited partners, general partners, investors, attorneys, assigns, subsidiaries, shareholders, trustees, agents and other professionals and all other persons and entities to whom the Administrative Agent or any Lender would be liable if such persons or entities were found to be liable to any Loan Party (each a “Releasee” and collectively, the “Releasees”), from any and all past, present and future claims, suits, liens, lawsuits, adverse consequences, amounts paid in settlement, debts, deficiencies, diminution in value, disbursements, demands, obligations, liabilities, causes of action, damages, losses, costs and expenses of any kind or character, whether based in equity, law, contract, tort, implied or express warranty, strict liability, criminal or civil statute or common law (each a “Claim” and collectively, the “Claims”), whether known or unknown, fixed or contingent, direct, indirect, or derivative, asserted or unasserted, matured or unmatured, foreseen or unforeseen, past or present, liquidated or unliquidated, suspected or unsuspected, which any Releasing Party ever had from the beginning of the world, now has, or might hereafter have against any such Releasee, which Claims relate, directly or indirectly, to any act or omission by any Releasee that occurred on or prior to the date of this Amendment and relate, directly or indirectly, to the Forbearance Agreement, the Credit Agreement, any other Loan Document, any Loan Party or any acts or omissions of any such Releasee that occurred on or prior to the date of this Amendment with respect to the Forbearance Agreement, the Credit Agreement or any other Loan Document, any Loan Party or the lender-borrower relationship evidenced by the Loan Documents, except for the duties and obligations set forth in this Amendment and the duties and obligations set forth in the Loan Documents to be performed on or after the date of this Amendment.  As to each and every Claim released hereunder, each Releasing Party waives the benefit of each provision of applicable federal or state law (including without limitation the laws of the state of New York), if any, pertaining to general releases after having been advised by its legal counsel with respect thereto.

 

Each Releasing Party acknowledges that it may hereafter discover facts different from or in addition to those now known or believed to be true with respect to such Claims, and agrees that this instrument shall be and remain effective in all respects notwithstanding any such differences or additional facts.  Each Releasing Party understands, acknowledges and agrees that the release set forth above may be pleaded as a full and complete defense and may be used as a

 

4



 

basis for an injunction against any action, suit or other proceeding which may be instituted, prosecuted or attempted in breach of the provisions of such release.

 

(b)                                 Covenant Not to Sue.  Each Releasing Party hereby absolutely, unconditionally and irrevocably, covenants and agrees with and in favor of each Releasee above that it will not sue (at law, in equity, in any regulatory proceeding or otherwise) any Releasee on the basis of any Claim released, remised and discharged by such Releasing Party pursuant to the above release.  Each Releasing Party further agrees that it shall not dispute the validity or enforceability of the Forbearance Agreement, the Credit Agreement or any of the other Loan Documents or any of its obligations thereunder, or the validity, priority, enforceability or the extent of Collateral Agent’s Lien on any item of Collateral under the Credit Agreement or the other Loan Documents.  If any Releasing Party or any of its respective successors, assigns, or officers, directors, employees, agents or attorneys (solely in their capacities as officers, directors, employees, agents and attorneys), or any Person acting for or on behalf of, or claiming through it violate the foregoing covenant, each Loan Party, for itself and its successors, assigns and legal representatives, agrees to pay, in addition to such other damages as any Releasee may sustain as a result of such violation, all attorneys’ fees and costs incurred by such Releasee as a result of such violation.

 

5.5                               No Waiver; Cumulative Remedies.  No failure to exercise and no delay in exercising, on the part of the Administrative Agent or the Lenders, any right, remedy, power or privilege under the Forbearance Agreement, the Credit Agreement or any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege under this Amendment or any other Loan Document preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.  The rights, remedies, powers and privileges of the Administrative Agent and the Lenders provided under this Amendment, the Credit Agreement and the other Loan Documents are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

 

5.6                               Execution in Counterparts.  This Amendment may be executed by one or more of the parties hereto on any number of separate counterparts (including by telecopy or electronic transmission), and all of which counterparts taken together shall be deemed to constitute one and the same instrument.  Each party hereto executing this Amendment represents that such party has the full authority and legal power to do so.

 

5.7                               Severability.  Any provision of this Amendment which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

5.8                               Indemnity, Governing Law; Jury Trial Waiver.  The provisions of Sections 7.4, 7.12 and 7.13 of the Forbearance Agreement are hereby incorporated by reference, mutatis mutandis, and shall be deemed to be a part hereof as if restated herein in their entirety.

 

5



 

[Remainder of page intentionally left blank.]

 

6



 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered as of the date first written above.

 

BORROWER:

UNITEK GLOBAL SERVICES, INC.

 

 

 

 

 

By:

/s/ Andrew J. Herning

 

Name:  Andrew J. Herning

 

Title: CFO

 

 

 

 

SUBSIDIARY GUARANTORS:

UNITEK ACQUISITION, INC.

 

PINNACLE WIRELESS USA, INC.

 

UNITEK USA, LLC

 

ADVANCED COMMUNICATIONS USA, INC.

 

DIRECTSAT USA, LLC

 

FTS USA, LLC

 

 

 

 

 

By:

/s/ Andrew J. Herning

 

Name:  Andrew J. Herning

 

Title: Treasurer

 

[Signature Page to UniTek Forbearance Third Amendment]

 



 

ADMINISTRATIVE AGENT:

CERBERUS BUSINESS FINANCE, LLC, as Administrative Agent

 

 

 

 

 

By:

/s/ Daniel E. Wolf

 

Name:  Daniel E. Wolf

 

Title: President

 

[Signature Page to UniTek Forbearance Third Amendment]

 



 

CONSENTING LENDERS:

 

 

CETUS CAPITAL II, LLC

 

 

 

 

 

By:

/s/ Robert E. Davis

 

Name:  Robert E. Davis

 

Title: Managing Director

 

 

 

 

 

LITTLEJOHN OPPORTUNITIES MASTER FUND LP

 

 

 

 

 

By:

/s/ Robert E. Davis

 

Name:  Robert E. Davis

 

Title: Managing Director

 

 

 

 

 

SG DISTRESSED FUND, LP

 

 

 

 

 

By:

/s/ Robert E. Davis

 

Name:  Robert E. Davis

 

Title: Managing Director

 

[Signature Page to UniTek Forbearance Third Amendment]

 



 

CONSENTING LENDERS:

 

 

NEW MOUNTAIN FINANCE CORPORATION

 

 

 

 

 

By:

/s/ John Kline

 

Name:  John Kline

 

Title: EVP - COO

 

 

 

NEW MOUNTAIN FINANCE HOLDINGS, L.L.C.

 

 

 

 

 

By:

/s/ John Kline

 

Name:  John Kline

 

Title: EVP - COO

 

[Signature Page to UniTek Forbearance Third Amendment]

 



 

CONSENTING LENDERS:

 

 

CERBERUS OFFSHORE LEVERED II LP

 

 

 

By: COL II GP Inc.

 

Its: General Partner

 

 

 

 

 

By:

/s/ Daniel E. Wolf

 

Name:  Daniel E. Wolf

 

Title: Vice President

 

 

 

 

 

CERBERUS ASRS FUNDING LLC

 

 

 

 

 

By:

/s/ Daniel E. Wolf

 

Name:  Daniel E. Wolf

 

Title: Vice President

 

 

 

CERBERUS ONSHORE II CLO LLC

 

 

 

 

 

By:

/s/ Daniel E. Wolf

 

Name:  Daniel E. Wolf

 

Title: Vice President

 

 

 

CERBERUS AUS LEVERED II LP

 

 

 

By: CAL II GP LLC

 

Its: General Partner

 

 

 

 

 

By:

/s/ Daniel E. Wolf

 

Name:  Daniel E. Wolf

 

Title: Vice President

 

[Signature Page to UniTek Forbearance Third Amendment]

 



 

CONSENTING LENDERS:

 

 

CERBERUS ONSHORE LEVERED II LLC

 

 

 

 

 

By:

/s/ Daniel E. Wolf

 

Name:  Daniel E. Wolf

 

Title: Vice President

 

[Signature Page to UniTek Forbearance Third Amendment]

 



 

CONSENTING LENDERS:

 

 

MAIN STREET CAPITAL CORPORATION

 

 

 

 

 

By:

/s/ Rodger Stout

 

Name:  Rodger Stout

 

Title: Executive Vice President

 

[Signature Page to UniTek Forbearance Third Amendment]

 



 

CONSENTING LENDERS:

 

 

MARBLEGATE SPECIAL OPPORTUNITIES MASTER FUND, L.P.

 

 

 

 

 

By:

/s/ Andrew S. Milgram

 

Name:  Andrew S. Milgram

 

Title: Managing Partner

 

[Signature Page to UniTek Forbearance Third Amendment]

 



 

CONSENTING LENDERS:

 

 

 

 

PENNANTPARK FLOATING RATE FUNDING I, LLC, as lender

 

 

 

By: PENNANTPARK FLOATING RATE CAPITAL LTD., as designated manager

 

 

 

 

 

By:

/s/ Arthur H. Penn

 

Name:  Arthur H. Penn

 

Title: CEO

 

[Signature Page to UniTek Forbearance Third Amendment]

 


EX-99.12 13 a14-22689_1ex99d12.htm EX-99.12

Exhibit 99.12

 

EXECUTION

 

THIRD AMENDMENT TO FORBEARANCE AGREEMENT

 

THIS THIRD AMENDMENT TO FORBEARANCE AGREEMENT (this “Amendment”) is dated as of October 2, 2014, by and among UNITEK GLOBAL SERVICES INC., a Delaware corporation (“UniTek Parent”), UNITEK ACQUISITION, INC., a Delaware corporation (“UniTek Acquisition”), PINNACLE WIRELESS USA, INC., a Delaware corporation (“Pinnacle”), UNITEK USA, LLC, a Delaware limited liability company (“UniTek USA”), ADVANCED COMMUNICATIONS USA, INC., a Delaware corporation (“Advanced Communications”), DIRECTSAT USA, LLC, a Delaware limited liability company (“DirectSat”), FTS USA, LLC, a Delaware limited liability company (“FTS”) (UniTek Parent, UniTek Acquisition, Pinnacle, UniTek USA, Advanced Communications, DirectSat, FTS, collectively the “Borrowers”),  the Lenders party hereto (the “Consenting Lenders”), and APOLLO INVESTMENT CORPORATION, as administrative agent and collateral agent for the Lenders (“AIC”, and in such capacity, the “Agent”).

 

R E C I T A L S:

 

A.                                    Reference is made to that certain Forbearance Agreement dated as of August 8, 2014, by and among the parties hereto (the forbearance agreement, as amended by that certain First Amendment to Forbearance Agreement entered into as of September 3, 2104 and that certain Second Amendment to Forbearance Agreement dated as of September 23, 2104 and as hereafter amended, modified or supplemented from time to time, the “Forbearance Agreement”).  Reference is also made to that certain Revolving Credit and Security Agreement dated as of July 10, 2013, as amended by that certain Amendment and Limited Waiver to Revolving Credit and Security Agreement and Fee Letter, dated as of July 25, 2013 and by that certain Second Amendment to Revolving Credit and Security Agreement, dated as of August 13, 2014 (as so amended and as otherwise amended, restated, supplemented or modified from time to time, the “Revolving Credit Agreement”), pursuant to which, among other things, the Lenders have extended credit to the Borrowers.

 

B.                                    Each of the Specified Defaults identified in the Forbearance Agreement is continuing.

 

C.                                    The Borrowers have requested that Agent and Lenders amend the Forbearance Agreement on the terms and subject to the conditions set forth in this Amendment.

 

D.                                    Agent and Required Lenders are willing to so amend the Forbearance Agreement on the terms and subject to the conditions set forth in this Amendment.

 

NOW THEREFORE, in consideration of the above recitals and for other good and valuable consideration, the receipt and adequacy of which are hereby mutually acknowledged, and intending to be legally bound hereby, the parties hereto agree as follows:

 



 

1)             Definitions.  All capitalized terms used but not defined in this Amendment shall have the meanings given to them in the Forbearance Agreement, or, if not defined therein, in the Revolving Credit Agreement.

 

2)             Affirmation of Recitals.  Each party hereto acknowledges and affirms that the recitals set forth above are true and correct.  Such recitals are incorporated herein by reference.

 

3)             Acknowledgments Regarding Specified Defaults.  The Borrowers and Guarantors acknowledge that each of the Specified Defaults (giving effect to this Amendment) is continuing.

 

4)             Amendments to Forbearance Agreement.

 

(a)         Section 3.1 of the Forbearance Agreement is hereby amended by amending and restating clause (i) of such Section in its entirety as follows:

 

“(i) on October 9, 2014; and”.

 

(b)         Section 3.1 of the Forbearance Agreement is hereby further amended by restating the last sentence of clause (ii) thereof as follows:

 

“Notwithstanding anything to the contrary in subclause (J) of clause (ii) of this Section 3.1, the Agent and Required Lenders agree that the sum of Eligible Receivables plus Eligible Unbilled Receivables, as reflected in the Borrowing Base Certificates delivered to the Agent on September 20, 2014 and September 27, 2014, being less than the Target Amount shall not trigger the Forbearance Period Termination Date (it being understood and agreed by the parties hereto that the foregoing provisions of this sentence do not constitute (x) a waiver of subclause (J) of clause (ii) of this Section as to any other Borrowing Base Certificate or in any other instance, or (y) a waiver of the occurrence of any other Forbearance Period Termination Date or of the Borrowers’ compliance with any other provision of this Agreement).”

 

(c)          Schedule I to the Forbearance Agreement is hereby amended by deleting each reference to “the fiscal quarter ended June 30, 2014” in item 6 of such Schedule and substituting therefor the phrase “the fiscal quarters ending June 28, 2014 and September 27, 2014”.

 

(d)         Schedule I to the Forbearance Agreement is hereby further amended by deleting each reference to “the fiscal quarter ending June 30, 2014” in items 7 and 8 of such Schedule and substituting therefor the phrase “the fiscal quarters ending June 28, 2014 and September 27, 2014”.

 

(e)          Schedule I to the Forbearance Agreement is hereby further amended by restating item 9 of such Schedule as follows:

 



 

“9.                                An Event of Default under Section 10.11 of the Revolving Credit Agreement resulting from the Borrower’s failure to pay on the due date (or within the 5-day cure period thereunder) the monthly interest payments due on August 31, 2014 and September 30, 2014, as required under Section 2.9(d) of the Term Debt Credit Agreement.”

 

5)             Effectiveness.  This Amendment shall become effective on and as of October 2, 2014 (the “Effective Date”), so long as each of the following conditions precedent shall have been satisfied or waived, as determined by the Agent, on or prior to such date:  (a) the Agent shall have received this Amendment, duly executed and delivered by each Borrower and Guarantor; and (b) the Agent shall have received an amendment to the existing forbearance agreement with respect to the Term Debt in form and substance reasonably satisfactory to Agent, duly executed and delivered by the Borrower, the Term Debt Required Lenders and the Term Debt Agent; provided, however, that this Amendment shall immediately cease to be effective as of 5:00 p.m. New York time on October 3, 2014 (and the Forbearance Period Termination Date shall thereupon be deemed to have occurred) if the Borrowers shall have failed by such time to pay all costs and expenses of outside legal counsel to the Agent invoiced to the Borrowers on or prior to October 3, 2014.

 

6)             Costs, Fees and Expenses.  Without limiting the obligations of the Borrowers or any Guarantor under the Revolving Credit Agreement or the Other Documents, the Borrowers ratify and reaffirm their reimbursement and indemnification obligations under Sections 16.5 and 16.9 of the Revolving Credit Agreement, including without limitation, their obligation to pay all out-of-pocket costs and expenses, including without limitation, the fees and disbursements of counsel and the fees and expenses of any accountants and financial advisors engaged by Agent or Required Lenders, incurred by the Agent in connection with this Amendment and the administration and enforcement of the Forbearance Agreement and the transactions contemplated hereby.

 

7)             Full Force and Effect of Forbearance Agreement and Revolving Credit Agreement.  Except as expressly amended by this Amendment, the terms and provisions of the Forbearance Agreement shall remain unmodified, and the terms and provisions of the Forbearance Agreement, as amended hereby, shall remain in full force and effect and are hereby ratified and confirmed.   The execution, delivery and performance of this Amendment shall not, except as expressly provided herein, constitute a waiver of any provision of, or operate as a waiver of any right, power or remedy of the Agent or any Lender under, the Forbearance Agreement, the Revolving Credit Agreement or any of the Other Documents. On and after the Effective Date, each reference in or to the “Forbearance Agreement,” “thereunder,” “thereof” or words of like import referring to the Forbearance Agreement shall mean and be a reference to the Forbearance Agreement, as amended by this Amendment.  All representations and warranties of the Borrowers and any Guarantors set forth in the Forbearance Agreement shall be deemed to have been remade on the date hereof, after giving effect to this Amendment.  Each Borrower and Guarantor reconfirms and ratifies the Revolving Credit Agreement, the Other Documents and all other documents executed in connection therewith except to the extent the Forbearance Agreement is expressly modified by this Amendment; and each Borrower and Guarantor

 



 

confirms that all such documents have remained in full force and effect since the date of their execution. This Amendment (subject to Section 5 hereof) shall be effective upon execution and delivery by Borrowers, the Agent and the Consenting Lenders.

 

8)             Reservation of Rights and Remedies.  Except as otherwise expressly provided for in the Forbearance Agreement as amended by this Amendment, the Agent on behalf of the Lenders expressly reserves any and all rights and remedies available under the Forbearance Agreement, as amended hereby, the Revolving Credit Agreement and the Other Documents, and any other agreement or at law or in equity or otherwise.

 

9)             Loan Party Release; Covenant Not to Sue.

 

(a)         Release.  In consideration of the delivery of this Amendment and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, unconditionally, freely and voluntarily, after consultation with counsel and becoming fully and adequately informed as to the relevant facts, circumstances and consequences, each Borrower and Guarantor, for itself and on behalf its successors and assigns, and its present and former members, affiliates, subsidiaries, divisions, predecessors, directors, officers, attorneys, employees, agents, legal representatives and other representatives, and any Person acting for or on behalf of, or claiming through it (each Borrower and Guarantor and all such other Persons being hereinafter referred to collectively as the “Releasing Parties” and individually as a “Releasing Party”), hereby waives, releases, remises and forever discharges the Agent and each Lender, and each of their respective Affiliates, and each of their respective successors in title, past, present and future officers, directors, employees, limited partners, general partners, investors, attorneys, assigns, subsidiaries, shareholders, trustees, agents and other professionals and all other persons and entities to whom the Agent or any Lender would be liable if such persons or entities were found to be liable to any Borrower or Guarantor (each a “Releasee” and collectively, the “Releasees”), from any and all past, present and future claims, suits, liens, lawsuits, adverse consequences, amounts paid in settlement, debts, deficiencies, diminution in value, disbursements, demands, obligations, liabilities, causes of action, damages, losses, costs and expenses of any kind or character, whether based in equity, law, contract, tort, implied or express warranty, strict liability, criminal or civil statute or common law (each a “Claim” and collectively, the “Claims”), whether known or unknown, fixed or contingent, direct, indirect, or derivative, asserted or unasserted, matured or unmatured, foreseen or unforeseen, past or present, liquidated or unliquidated, suspected or unsuspected, which any Releasing Party ever had from the beginning of the world, now has, or might hereafter have against any such Releasee, which Claims relate, directly or indirectly, to any act or omission by any Releasee that occurred on or prior to the date of this Agreement and relate, directly or indirectly, to the Revolving Credit Agreement, any Other Document, any Borrower or Guarantor or any acts or omissions of any such Releasee that occurred on or prior to the date of this Agreement with respect to the Revolving Credit Agreement or any Other Document, any Borrower or Guarantor or the lender-borrower relationship evidenced by the Other Documents, except for the duties and obligations set forth in this Agreement and the duties and obligations set forth in the Other Documents to be performed on or after the date of this Amendment.  As to each and every Claim released hereunder, each Releasing Party waives the benefit of each provision of applicable federal or state law (including

 



 

without limitation the laws of the state of New York), if any, pertaining to general releases after having been advised by its legal counsel with respect thereto.

 

Each Releasing Party acknowledges that it may hereafter discover facts different from or in addition to those now known or believed to be true with respect to such Claims, and agrees that this instrument shall be and remain effective in all respects notwithstanding any such differences or additional facts.  Each Releasing Party understands, acknowledges and agrees that the release set forth above may be pleaded as a full and complete defense and may be used as a basis for an injunction against any action, suit or other proceeding which may be instituted, prosecuted or attempted in breach of the provisions of such release.

 

(b)         Covenant Not to Sue.  Each Releasing Party hereby absolutely, unconditionally and irrevocably, covenants and agrees with and in favor of each Releasee above that it will not sue (at law, in equity, in any regulatory proceeding or otherwise) any Releasee on the basis of any Claim released, remised and discharged by such Releasing Party pursuant to the above release.  Each Releasing Party further agrees that it shall not dispute the validity or enforceability of the Revolving Credit Agreement or any of the Other Documents or any of its obligations thereunder, or the validity, priority, enforceability or the extent of Agent’s Lien on any item of Collateral under the Revolving Credit Agreement or the Other Documents.  If any Releasing Party or any of its respective successors, assigns, or officers, directors, employees, agents or attorneys (solely in their capacities as officers, directors, employees, agents and attorneys), or any Person acting for or on behalf of, or claiming through it violate the foregoing covenant, each Borrower and Guarantor, for itself and its successors, assigns and legal representatives, agrees to pay, in addition to such other damages as any Releasee may sustain as a result of such violation, all attorneys’ fees and costs incurred by such Releasee as a result of such violation.

 

10)      No Waiver; Cumulative Remedies.  No failure to exercise and no delay in exercising, on the part of the Agent or the Lenders, any right, remedy, power or privilege under the Forbearance Agreement, the Revolving Credit Agreement or any Other Document shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege under this Amendment, the Revolving Credit Agreement or any Other Document preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.  The rights, remedies, powers and privileges of the Agent and the Lenders provided under this Amendment, the Revolving Credit Agreement and the Other Documents are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

 

11)      Execution in Counterparts.  This Amendment may be executed by one or more of the parties hereto on any number of separate counterparts (including by telecopy or electronic transmission), and all of which counterparts taken together shall be deemed to constitute one and the same instrument.  Each party executing this Amendment represents that such party has the full authority and legal power to do so.

 

12)      Severability.  Any provision of this Amendment which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any

 



 

such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

13)      Indemnity; Governing Law; Jury Trial Waiver.  The provisions of Sections 7.4, 7.12 and 7.13 of the Forbearance Agreement are hereby incorporated by reference, mutatis mutandis, and shall be deemed to be a part hereof as if restated herein in their entirety.

 

[SIGNATURE PAGES FOLLOW]

 



 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered as of the date first written above.

 

BORROWERS:

 

UNITEK GLOBAL SERVICES, INC.

 

 

UNITEK ACQUISITION, INC.

 

 

PINNACLE WIRELESS USA, INC.

 

 

UNITEK USA, LLC

 

 

ADVANCED COMMUNICATIONS USA, INC.

 

 

DIRECTSAT USA, LLC

 

 

FTS USA, LLC

 

 

 

 

 

 

 

 

By:

/s/ Andrew J. Herning

 

 

Name:

Andrew J. Herning

 

 

Title:

CFO and Treasurer

 

[Signature Page to Third Amendment to Forbearance Agreement]

 



 

AGENT AND LENDERS:

 

APOLLO INVESTMENT CORPORATION, as Revolving Lender and Swing Loan Lender and as Administrative Agent and Collateral Agent

 

 

 

 

 

By:

Apollo Investment Management, L.P., as Advisor

 

 

 

 

 

 

 

By:

ACC Management, LLC, as its General Partner

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ Ted Goldthorpe

 

 

 

Name:

Ted Goldthorpe

 

 

 

Title:

Authorized Signatory

 

[Signature Page to Third Amendment to Forbearance Agreement]

 


EX-99.13 14 a14-22689_1ex99d13.htm EX-99.13

Exhibit 99.13

 

Execution Version

 

FOURTH AMENDMENT TO FORBEARANCE AGREEMENT

 

THIS FOURTH AMENDMENT TO FORBEARANCE AGREEMENT (this “Amendment”) is dated as of October 9, 2014 by and among Unitek Global Services, Inc., a Delaware corporation (the “Borrower”), the undersigned Subsidiary Guarantors, the Lenders party hereto constituting Required Lenders (the “Consenting Lenders”), and Cerberus Business Finance, LLC as successor administrative agent for the Lenders (the “Administrative Agent”).

 

W I T N E S S E T H:

 

WHEREAS, the Borrower, the other Loan Parties, the Administrative Agent and certain lenders constituting Required Lenders entered into that certain Forbearance Agreement, dated as of August 8, 2014, as amended by that certain First Amendment to Forbearance Agreement entered into on September 3, 2014, and effective as of August 28, 2014, as amended by that certain Second Amendment to Forbearance Agreement dated as of September 23, 2014, as amended by that certain Third Amendment to Forbearance Agreement dated as of October 3, 2014 (as further amended hereby and as further amended, restated, supplemented or otherwise modified from time to time, the “Forbearance Agreement”);

 

WHEREAS, the Borrower, FBR Capital Markets LT, Inc., in its capacity as administrative agent (as succeeded by the Administrative Agent) and the Lenders entered into that certain Credit Agreement dated as of April 15, 2011, as amended by that First Amendment, dated as of September 14, 2012; the Second Amendment and Limited Waiver, dated as of July 25, 2013; the Third Amendment to Credit Agreement dated as of November 5, 2013; and the Fourth Amendment to Credit Agreement, dated as of July 28, 2014 (as so amended and as further amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), pursuant to which, among other things, the Lenders have extended credit to the Borrower in the form of Term Loans;

 

WHEREAS, each of the Specified Defaults identified in the Forbearance Agreement is continuing;

 

WHEREAS, the Loan Parties have requested that the Administrative Agent and the Lenders amend the Forbearance Agreement on the terms and subject to the conditions set forth in this Amendment; and

 

WHEREAS, the Administrative Agent and the Consenting Lenders are willing to so amend the Forbearance Agreement on the terms and subject to the conditions set forth in this Amendment.

 

NOW THEREFORE, in consideration of the premises and for other good and valuable consideration the receipt of which is hereby acknowledged, the parties hereto hereby agree as follows:

 



 

SECTION 1.                         DEFINITIONS

 

All capitalized terms used but not defined in this Amendment shall have the meanings given to them in the Forbearance Agreement, or, if not defined therein, in the Credit Agreement.

 

SECTION 2.                         ACKNOWLEDGMENTS

 

2.1                               Recitals.  Each party hereto acknowledges and affirms that the recitals set forth above are true and correct.  Such recitals are incorporated herein by reference.

 

2.2                               Acknowledgments Regarding Specified Defaults.  Each Loan Party acknowledges that each of the Specified Defaults is continuing.

 

SECTION 3.                         AMENDMENTS TO FORBEARANCE AGREEMENT

 

3.1                               Forbearance Period.  Section 3.1 of the Forbearance Agreement is hereby amended by amending and restating clause (i) therein in its entirety as follows:

 

“(i) on October 23, 2014; and”

 

SECTION 4.                         CONDITIONS PRECEDENT

 

4.1                               Effective Date.  This Amendment shall become effective on and as of October 9, 2014 (the “Effective Date”), so long as each of the following conditions precedent shall have been satisfied or waived, as determined by the Administrative Agent, on or prior to such date:

 

(a)                                 Forbearance Agreement.  The Administrative Agent shall have received this Amendment, duly executed and delivered by each Loan Party.

 

(b)                                 ABL Forbearance Agreement.  The Administrative Agent shall have received an amendment to the ABL Forbearance Agreement in form and substance reasonably satisfactory to the Administrative Agent and the Consenting Lenders, duly executed and delivered by the Loan Parties, the ABL Required Lenders, and the ABL Agent.

 

(c)                                  Payment of Costs, Expenses and Fees.  The Borrower shall have paid all invoiced costs and expenses of Klee, Tuchin, Bogdanoff & Stern LLP, counsel to the Administrative Agent.

 

SECTION 5.                         MISCELLANEOUS

 

5.1                               Costs, Fees and Expenses.  Without limiting the obligations of any Loan Party under the Loan Documents, the Borrower ratifies and reaffirms its reimbursement and indemnification obligations under Section 9.5 of the Credit Agreement, including without limitation, its obligation to pay all out-of-pocket costs and expenses, including without limitation, the fees and disbursements of counsel, incurred by the Administrative Agent and each Lender in connection with this Amendment and the administration and enforcement of the

 

2



 

Forbearance Agreement and the transactions contemplated hereby.  The Borrower further agrees to pay or reimburse each Lender for all its reasonable costs and expenses incurred in connection the Forbearance Agreement, the Credit Agreement, the other Loan Documents and any such other documents, including the fees and disbursements of counsel (including the allocated fees and expenses of in-house counsel) to each Lender and the fees and expenses of any accountants and financial advisors engaged by any Lender.

 

5.2                               Full Force and Effect of Forbearance Agreement and Credit Agreement.  Except as expressly amended by this Amendment, the terms and provisions of the Forbearance Agreement shall remain unmodified, and the terms and provisions of the Forbearance Agreement, as amended hereby, shall remain in full force and effect and are hereby ratified and confirmed.   The execution, delivery and performance of this Amendment shall not, except as expressly provided herein, constitute a waiver of any provision of, or operate as a waiver of any right, power or remedy of the Administrative Agent or any Lender under, the Forbearance Agreement, the Credit Agreement or any of the other Loan Documents. On and after the Effective Date, each reference in or to the “Forbearance Agreement,” “thereunder,” “thereof” or words of like import referring to the Forbearance Agreement shall mean and be a reference to the Forbearance Agreement, as amended by this Amendment.  All representations and warranties of the Loan Parties set forth in the Forbearance Agreement shall be deemed to have been remade on the date hereof, after giving effect to this Amendment.  Each Loan Party reconfirms and ratifies the Credit Agreement, the other Loan Documents and all other documents executed in connection therewith except to the extent the Forbearance Agreement is expressly modified by this Amendment; and each Loan Party confirms that all such documents have remained in full force and effect since the date of their execution.  This Amendment (subject to Section 4 hereof) shall be effective upon execution and delivery by each Loan Party, the Administrative, Agent and the Consenting Lenders.

 

5.3                               Reservation of Rights and RemediesExcept as otherwise provided for in the Forbearance Agreement, as amended by this Amendment, the Administrative Agent on behalf of the Lenders expressly reserves any and all rights and remedies available under the Forbearance Agreement, as amended hereby, the Credit Agreement and the other Loan Documents, and any other agreement or at law or in equity or otherwise.

 

5.4                               Loan Party Release; Covenant Not to Sue.

 

(a)                                 Loan Party Release.  In consideration of the delivery of this Amendment and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, unconditionally, freely and voluntarily, after consultation with counsel and becoming fully and adequately informed as to the relevant facts, circumstances and consequences, each Loan Party, for itself and on behalf its successors and assigns, and its present and former members, affiliates, subsidiaries, divisions, predecessors, directors, officers, attorneys, employees, agents, legal representatives and other representatives, and any Person acting for or on behalf of, or claiming through it (each Loan Party and all such other Persons being hereinafter referred to collectively as the “Releasing Parties” and individually as a “Releasing Party”), hereby waives, releases, remises and forever discharges the Administrative Agent and each Lender, and each of their respective Affiliates, and each of their respective successors in title, past, present and future officers, directors, employees, limited partners, general partners, investors, attorneys, assigns,

 

3



 

subsidiaries, shareholders, trustees, agents and other professionals and all other persons and entities to whom the Administrative Agent or any Lender would be liable if such persons or entities were found to be liable to any Loan Party (each a “Releasee” and collectively, the “Releasees”), from any and all past, present and future claims, suits, liens, lawsuits, adverse consequences, amounts paid in settlement, debts, deficiencies, diminution in value, disbursements, demands, obligations, liabilities, causes of action, damages, losses, costs and expenses of any kind or character, whether based in equity, law, contract, tort, implied or express warranty, strict liability, criminal or civil statute or common law (each a “Claim” and collectively, the “Claims”), whether known or unknown, fixed or contingent, direct, indirect, or derivative, asserted or unasserted, matured or unmatured, foreseen or unforeseen, past or present, liquidated or unliquidated, suspected or unsuspected, which any Releasing Party ever had from the beginning of the world, now has, or might hereafter have against any such Releasee, which Claims relate, directly or indirectly, to any act or omission by any Releasee that occurred on or prior to the date of this Amendment and relate, directly or indirectly, to the Forbearance Agreement, the Credit Agreement, any other Loan Document, any Loan Party or any acts or omissions of any such Releasee that occurred on or prior to the date of this Amendment with respect to the Forbearance Agreement, the Credit Agreement or any other Loan Document, any Loan Party or the lender-borrower relationship evidenced by the Loan Documents, except for the duties and obligations set forth in this Amendment and the duties and obligations set forth in the Loan Documents to be performed on or after the date of this Amendment.  As to each and every Claim released hereunder, each Releasing Party waives the benefit of each provision of applicable federal or state law (including without limitation the laws of the state of New York), if any, pertaining to general releases after having been advised by its legal counsel with respect thereto.

 

Each Releasing Party acknowledges that it may hereafter discover facts different from or in addition to those now known or believed to be true with respect to such Claims, and agrees that this instrument shall be and remain effective in all respects notwithstanding any such differences or additional facts.  Each Releasing Party understands, acknowledges and agrees that the release set forth above may be pleaded as a full and complete defense and may be used as a basis for an injunction against any action, suit or other proceeding which may be instituted, prosecuted or attempted in breach of the provisions of such release.

 

(b)                                 Covenant Not to Sue.  Each Releasing Party hereby absolutely, unconditionally and irrevocably, covenants and agrees with and in favor of each Releasee above that it will not sue (at law, in equity, in any regulatory proceeding or otherwise) any Releasee on the basis of any Claim released, remised and discharged by such Releasing Party pursuant to the above release.  Each Releasing Party further agrees that it shall not dispute the validity or enforceability of the Forbearance Agreement, the Credit Agreement or any of the other Loan Documents or any of its obligations thereunder, or the validity, priority, enforceability or the extent of Collateral Agent’s Lien on any item of Collateral under the Credit Agreement or the other Loan Documents.  If any Releasing Party or any of its respective successors, assigns, or officers, directors, employees, agents or attorneys (solely in their capacities as officers, directors, employees, agents and attorneys), or any Person acting for or on behalf of, or claiming through it violate the foregoing covenant, each Loan Party, for itself and its successors, assigns and legal representatives, agrees to pay, in addition to such other damages as any Releasee may sustain as

 

4



 

a result of such violation, all attorneys’ fees and costs incurred by such Releasee as a result of such violation.

 

5.5                               No Waiver; Cumulative Remedies.  No failure to exercise and no delay in exercising, on the part of the Administrative Agent or the Lenders, any right, remedy, power or privilege under the Forbearance Agreement, the Credit Agreement or any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege under this Amendment or any other Loan Document preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.  The rights, remedies, powers and privileges of the Administrative Agent and the Lenders provided under this Amendment, the Credit Agreement and the other Loan Documents are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

 

5.6                               Execution in Counterparts.  This Amendment may be executed by one or more of the parties hereto on any number of separate counterparts (including by telecopy or electronic transmission), and all of which counterparts taken together shall be deemed to constitute one and the same instrument.  Each party hereto executing this Amendment represents that such party has the full authority and legal power to do so.

 

5.7                               Severability.  Any provision of this Amendment which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

5.8                               Indemnity, Governing Law; Jury Trial Waiver.  The provisions of Sections 7.4, 7.12 and 7.13 of the Forbearance Agreement are hereby incorporated by reference, mutatis mutandis, and shall be deemed to be a part hereof as if restated herein in their entirety.

 

[Remainder of page intentionally left blank.]

 

5



 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered as of the date first written above.

 

BORROWER:

 

UNITEK GLOBAL SERVICES, INC.

 

 

 

 

 

 

 

 

By:

/s/ Andrew J. Herning

 

 

Name:

Andrew J. Herning

 

 

Title:

CFO and Treasurer

 

 

 

 

 

 

SUBSIDIARY GUARANTORS:

 

UNITEK ACQUISITION, INC.

 

 

PINNACLE WIRELESS USA, INC.

 

 

UNITEK USA, LLC

 

 

ADVANCED COMMUNICATIONS USA, INC.

 

 

DIRECTSAT USA, LLC

 

 

FTS USA, LLC

 

 

 

 

 

 

 

 

By:

/s/ Andrew J. Herning

 

 

Name:

Andrew J. Herning

 

 

Title:

CFO and Treasurer

 

[Signature Page to UniTek Forbearance Fourth Agreement]

 



 

ADMINISTRATIVE AGENT:

 

CERBERUS BUSINESS FINANCE, LLC, as
Administrative Agent

 

 

 

 

 

 

 

 

By:

/s/ Daniel E. Wolf

 

 

Name:

Daniel E. Wolf

 

 

Title:

President

 

[Signature Page to UniTek Forbearance Fourth Agreement]

 



 

CONSENTING LENDERS:

 

CETUS CAPITAL II, LLC

 

 

 

 

 

 

 

By:

/s/ Robert E. Davis

 

Name:

Robert E. Davis

 

Title:

Managing Director

 

 

 

 

LITTLEJOHN OPPORTUNITIES MASTER FUND LP

 

 

 

 

By:

/s/ Robert E. Davis

 

Name:

Robert E. Davis

 

Title:

Managing Director

 

 

 

 

 

 

 

SG DISTRESSED FUND, LP

 

 

 

 

 

By:

/s/ Robert E. Davis

 

Name:

Robert E. Davis

 

Title:

Managing Director

 

[Signature Page to UniTek Forbearance Fourth Amendment]

 



 

CONSENTING LENDERS:

 

NEW MOUNTAIN FINANCE CORPORATION

 

 

 

 

 

By:

/s/ John R. Kline

 

Name:

John R. Kline

 

Title:

EVP & COO

 

 

 

 

 

 

NEW MOUNTAIN FINANCE HOLDINGS, L.L.C.

 

 

 

 

 

By:

/s/ John R. Kline

 

Name:

John R. Kline

 

Title:

EVP & COO

 

[Signature Page to UniTek Forbearance Fourth Amendment]

 



 

CONSENTING LENDERS:

 

 

CERBERUS OFFSHORE LEVERED II LP

 

 

 

By: COL II GP Inc.

 

Its: General Partner

 

 

 

 

 

 

 

By:

Daniel E. Wolf

 

Name:

Daniel E. Wolf

 

Title:

Vice President

 

 

 

 

 

 

 

CERBERUS ASRS FUNDING LLC

 

 

 

 

 

By:

Daniel E. Wolf

 

Name:

Daniel E. Wolf

 

Title:

Vice President

 

 

 

 

 

 

 

CERBERUS ONSHORE II CLO LLC

 

 

 

 

 

By:

Daniel E. Wolf

 

Name:

Daniel E. Wolf

 

Title:

Vice President

 

 

 

 

 

 

 

CERBERUS AUS LEVERED II LP

 

 

 

By: CAL II GP LLC

 

Its: General Partner

 

 

 

 

 

 

By:

Daniel E. Wolf

 

Name:

Daniel E. Wolf

 

Title:

Vice President

 

[Signature Page to UniTek Forbearance Fourth Amendment]

 



 

CONSENTING LENDERS:

 

 

CERBERUS ONSHORE LEVERED II LLC

 

 

 

 

 

By:

Daniel E. Wolf

 

Name:

Daniel E. Wolf

 

Title:

Vice President

 

[Signature Page to UniTek Forbearance Fourth Amendment]

 



 

CONSENTING LENDERS:

 

 

MAIN STREET CAPITAL CORPORATION

 

 

 

 

 

By:

Nick Meserve

 

Name:

Nick Meserve

 

Title:

Managing Director

 

[Signature Page to UniTek Forbearance Fourth Amendment]

 



 

CONSENTING LENDERS:

 

 

MARBLEGATE SPECIAL OPPORTUNITIES MASTER FUND, L.P.

 

 

 

 

 

By:

/s/ Andrew S. Milgram

 

Name:

Andrew S. Milgram

 

Title:

Managing Partner

 

[Signature Page to UniTek Forbearance Fourth Amendment]

 



 

CONSENTING LENDERS:

 

 

PENNANTPARK FLOATING RATE FUNDING I, LLC

 

 

 

By: PENNANTPARK FLOATING RATE CAPITAL LTD., as Designated Manager

 

 

 

 

 

By:

/s/ Arthur H. Penn

 

Name:

Arthur H. Penn

 

Title:

CEO

 

[Signature Page to UniTek Forbearance Fourth Amendment]

 


EX-99.14 15 a14-22689_1ex99d14.htm EX-99.14

Exhibit 99.14

 

EXECUTION

 

FOURTH AMENDMENT TO FORBEARANCE AGREEMENT

 

THIS FOURTH AMENDMENT TO FORBEARANCE AGREEMENT (this “Amendment”) is dated as of October 9, 2014, by and among UNITEK GLOBAL SERVICES INC., a Delaware corporation (“UniTek Parent”), UNITEK ACQUISITION, INC., a Delaware corporation (“UniTek Acquisition”), PINNACLE WIRELESS USA, INC., a Delaware corporation (“Pinnacle”), UNITEK USA, LLC, a Delaware limited liability company (“UniTek USA”), ADVANCED COMMUNICATIONS USA, INC., a Delaware corporation (“Advanced Communications”), DIRECTSAT USA, LLC, a Delaware limited liability company (“DirectSat”), FTS USA, LLC, a Delaware limited liability company (“FTS”) (UniTek Parent, UniTek Acquisition, Pinnacle, UniTek USA, Advanced Communications, DirectSat, FTS, collectively the “Borrowers”),  the Lenders party hereto (the “Consenting Lenders”), and APOLLO INVESTMENT CORPORATION, as administrative agent and collateral agent for the Lenders (“AIC”, and in such capacity, the “Agent”).

 

R E C I T A L S:

 

A.                                    Reference is made to that certain Forbearance Agreement dated as of August 8, 2014, by and among the parties hereto (the forbearance agreement, as amended by that certain First Amendment to Forbearance Agreement entered into as of September 3, 2014, that certain Second Amendment to Forbearance Agreement dated as of September 23, 2014 and that certain Third Amendment to Forbearance Agreement dated as of October 2, 2014, and as hereafter amended, modified or supplemented from time to time, the “Forbearance Agreement”).  Reference is also made to that certain Revolving Credit and Security Agreement dated as of July 10, 2013, as amended by that certain Amendment and Limited Waiver to Revolving Credit and Security Agreement and Fee Letter, dated as of July 25, 2013 and by that certain Second Amendment to Revolving Credit and Security Agreement, dated as of August 13, 2014 (as so amended and as otherwise amended, restated, supplemented or modified from time to time, the “Revolving Credit Agreement”), pursuant to which, among other things, the Lenders have extended credit to the Borrowers.

 

B.                                    Each of the Specified Defaults identified in the Forbearance Agreement is continuing.

 

C.                                    The Borrowers have requested that Agent and Lenders amend the Forbearance Agreement on the terms and subject to the conditions set forth in this Amendment.

 

D.                                    Agent and Required Lenders are willing to so amend the Forbearance Agreement on the terms and subject to the conditions set forth in this Amendment.

 



 

NOW THEREFORE, in consideration of the above recitals and for other good and valuable consideration, the receipt and adequacy of which are hereby mutually acknowledged, and intending to be legally bound hereby, the parties hereto agree as follows:

 

1)             Definitions.  All capitalized terms used but not defined in this Amendment shall have the meanings given to them in the Forbearance Agreement, or, if not defined therein, in the Revolving Credit Agreement.

 

2)             Affirmation of Recitals.  Each party hereto acknowledges and affirms that the recitals set forth above are true and correct.  Such recitals are incorporated herein by reference.

 

3)             Acknowledgments Regarding Specified Defaults.  The Borrowers and Guarantors acknowledge that each of the Specified Defaults is continuing.

 

4)             Amendments to Forbearance Agreement.

 

(a)         Section 3.1 of the Forbearance Agreement is hereby amended by amending and restating clause (i) of such Section in its entirety as follows:

 

“(i) on October 23, 2014; and”.

 

(b)         Section 3.1 of the Forbearance Agreement is hereby further amended by restating the last sentence of clause (ii) thereof as follows:

 

“Notwithstanding anything to the contrary in subclause (J) of clause (ii) of this Section 3.1, the Agent and Required Lenders agree that the sum of Eligible Receivables plus Eligible Unbilled Receivables, as reflected in the Borrowing Base Certificates delivered to the Agent on September 20, 2014, September 27, 2014 and October 4, 2014, being less than the Target Amount shall not trigger the Forbearance Period Termination Date (it being understood and agreed by the parties hereto that the foregoing provisions of this sentence do not constitute (x) a waiver of subclause (J) of clause (ii) of this Section as to the Borrowing Base Certificate to be delivered on October 11, 2014 or any other Borrowing Base Certificate or in any other instance, or (y) a waiver of the occurrence of any other Forbearance Period Termination Date or of the Borrowers’ compliance with any other provision of this Agreement).”

 

5)             Effectiveness.  This Amendment shall become effective on and as of October 9, 2014 (the “Effective Date”), so long as each of the following conditions precedent shall have been satisfied or waived, as determined by the Agent, on or prior to such date:  (a) the Agent shall have received this Amendment, duly executed and delivered by each Borrower and Guarantor; and (b) the Agent shall have received an amendment to the existing forbearance agreement with respect to the Term Debt in form and substance reasonably satisfactory to Agent, duly executed and delivered by the Borrower, the Term Debt Required Lenders and the Term Debt Agent; provided, however, that this Amendment shall immediately cease to be effective as of 5:00 p.m. New York time on October 10, 2014 (and the Forbearance Period Termination Date

 



 

shall thereupon be deemed to have occurred) if the Borrowers shall have failed by such time to pay all costs and expenses of outside legal counsel to the Agent invoiced to the Borrowers on or prior to October 10, 2014.

 

6)             Costs, Fees and Expenses.  Without limiting the obligations of the Borrowers or any Guarantor under the Revolving Credit Agreement or the Other Documents, the Borrowers ratify and reaffirm their reimbursement and indemnification obligations under Sections 16.5 and 16.9 of the Revolving Credit Agreement, including without limitation, their obligation to pay all out-of-pocket costs and expenses, including without limitation, the fees and disbursements of counsel and the fees and expenses of any accountants and financial advisors engaged by Agent or Required Lenders, incurred by the Agent in connection with this Amendment and the administration and enforcement of the Forbearance Agreement and the transactions contemplated hereby.

 

7)             Full Force and Effect of Forbearance Agreement and Revolving Credit Agreement.  Except as expressly amended by this Amendment, the terms and provisions of the Forbearance Agreement shall remain unmodified, and the terms and provisions of the Forbearance Agreement, as amended hereby, shall remain in full force and effect and are hereby ratified and confirmed.   The execution, delivery and performance of this Amendment shall not, except as expressly provided herein, constitute a waiver of any provision of, or operate as a waiver of any right, power or remedy of the Agent or any Lender under, the Forbearance Agreement, the Revolving Credit Agreement or any of the Other Documents. On and after the Effective Date, each reference in or to the “Forbearance Agreement,” “thereunder,” “thereof” or words of like import referring to the Forbearance Agreement shall mean and be a reference to the Forbearance Agreement, as amended by this Amendment.  All representations and warranties of the Borrowers and any Guarantors set forth in the Forbearance Agreement shall be deemed to have been remade on the date hereof, after giving effect to this Amendment.  Each Borrower and Guarantor reconfirms and ratifies the Revolving Credit Agreement, the Other Documents and all other documents executed in connection therewith except to the extent the Forbearance Agreement is expressly modified by this Amendment; and each Borrower and Guarantor confirms that all such documents have remained in full force and effect since the date of their execution. This Amendment (subject to Section 5 hereof) shall be effective upon execution and delivery by Borrowers, the Agent and the Consenting Lenders.

 

8)             Reservation of Rights and Remedies.  Except as otherwise expressly provided for in the Forbearance Agreement as amended by this Amendment, the Agent on behalf of the Lenders expressly reserves any and all rights and remedies available under the Forbearance Agreement, as amended hereby, the Revolving Credit Agreement and the Other Documents, and any other agreement or at law or in equity or otherwise.

 

9)             Loan Party Release; Covenant Not to Sue.

 

(a)         Release.  In consideration of the delivery of this Amendment and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, unconditionally, freely and voluntarily, after consultation with counsel and becoming fully and adequately informed as to the relevant facts, circumstances and consequences, each Borrower

 



 

and Guarantor, for itself and on behalf its successors and assigns, and its present and former members, affiliates, subsidiaries, divisions, predecessors, directors, officers, attorneys, employees, agents, legal representatives and other representatives, and any Person acting for or on behalf of, or claiming through it (each Borrower and Guarantor and all such other Persons being hereinafter referred to collectively as the “Releasing Parties” and individually as a “Releasing Party”), hereby waives, releases, remises and forever discharges the Agent and each Lender, and each of their respective Affiliates, and each of their respective successors in title, past, present and future officers, directors, employees, limited partners, general partners, investors, attorneys, assigns, subsidiaries, shareholders, trustees, agents and other professionals and all other persons and entities to whom the Agent or any Lender would be liable if such persons or entities were found to be liable to any Borrower or Guarantor (each a “Releasee” and collectively, the “Releasees”), from any and all past, present and future claims, suits, liens, lawsuits, adverse consequences, amounts paid in settlement, debts, deficiencies, diminution in value, disbursements, demands, obligations, liabilities, causes of action, damages, losses, costs and expenses of any kind or character, whether based in equity, law, contract, tort, implied or express warranty, strict liability, criminal or civil statute or common law (each a “Claim” and collectively, the “Claims”), whether known or unknown, fixed or contingent, direct, indirect, or derivative, asserted or unasserted, matured or unmatured, foreseen or unforeseen, past or present, liquidated or unliquidated, suspected or unsuspected, which any Releasing Party ever had from the beginning of the world, now has, or might hereafter have against any such Releasee, which Claims relate, directly or indirectly, to any act or omission by any Releasee that occurred on or prior to the date of this Agreement and relate, directly or indirectly, to the Revolving Credit Agreement, any Other Document, any Borrower or Guarantor or any acts or omissions of any such Releasee that occurred on or prior to the date of this Agreement with respect to the Revolving Credit Agreement or any Other Document, any Borrower or Guarantor or the lender-borrower relationship evidenced by the Other Documents, except for the duties and obligations set forth in this Agreement and the duties and obligations set forth in the Other Documents to be performed on or after the date of this Amendment.  As to each and every Claim released hereunder, each Releasing Party waives the benefit of each provision of applicable federal or state law (including without limitation the laws of the state of New York), if any, pertaining to general releases after having been advised by its legal counsel with respect thereto.

 

Each Releasing Party acknowledges that it may hereafter discover facts different from or in addition to those now known or believed to be true with respect to such Claims, and agrees that this instrument shall be and remain effective in all respects notwithstanding any such differences or additional facts.  Each Releasing Party understands, acknowledges and agrees that the release set forth above may be pleaded as a full and complete defense and may be used as a basis for an injunction against any action, suit or other proceeding which may be instituted, prosecuted or attempted in breach of the provisions of such release.

 

(b)         Covenant Not to Sue.  Each Releasing Party hereby absolutely, unconditionally and irrevocably, covenants and agrees with and in favor of each Releasee above that it will not sue (at law, in equity, in any regulatory proceeding or otherwise) any Releasee on the basis of any Claim released, remised and discharged by such Releasing Party pursuant to the above release.  Each Releasing Party further agrees that it shall not dispute the validity or enforceability of the Revolving Credit Agreement or any of the Other Documents or any of its

 



 

obligations thereunder, or the validity, priority, enforceability or the extent of Agent’s Lien on any item of Collateral under the Revolving Credit Agreement or the Other Documents.  If any Releasing Party or any of its respective successors, assigns, or officers, directors, employees, agents or attorneys (solely in their capacities as officers, directors, employees, agents and attorneys), or any Person acting for or on behalf of, or claiming through it violate the foregoing covenant, each Borrower and Guarantor, for itself and its successors, assigns and legal representatives, agrees to pay, in addition to such other damages as any Releasee may sustain as a result of such violation, all attorneys’ fees and costs incurred by such Releasee as a result of such violation.

 

10)      No Waiver; Cumulative Remedies.  No failure to exercise and no delay in exercising, on the part of the Agent or the Lenders, any right, remedy, power or privilege under the Forbearance Agreement, the Revolving Credit Agreement or any Other Document shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege under this Amendment, the Revolving Credit Agreement or any Other Document preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.  The rights, remedies, powers and privileges of the Agent and the Lenders provided under this Amendment, the Revolving Credit Agreement and the Other Documents are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

 

11)      Execution in Counterparts.  This Amendment may be executed by one or more of the parties hereto on any number of separate counterparts (including by telecopy or electronic transmission), and all of which counterparts taken together shall be deemed to constitute one and the same instrument.  Each party executing this Amendment represents that such party has the full authority and legal power to do so.

 

12)      Severability.  Any provision of this Amendment which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

13)      Indemnity; Governing Law; Jury Trial Waiver.  The provisions of Sections 7.4, 7.12 and 7.13 of the Forbearance Agreement are hereby incorporated by reference, mutatis mutandis, and shall be deemed to be a part hereof as if restated herein in their entirety.

 

[SIGNATURE PAGES FOLLOW]

 



 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered as of the date first written above.

 

BORROWERS:

UNITEK GLOBAL SERVICES, INC.

 

UNITEK ACQUISITION, INC.

 

PINNACLE WIRELESS USA, INC.

 

UNITEK USA, LLC

 

ADVANCED COMMUNICATIONS USA, INC.

 

DIRECTSAT USA, LLC

 

FTS USA, LLC

 

 

 

 

 

By:

/s/ Andrew J. Herning

 

Name: Andrew J. Herning

 

Title: CFO

 

[Signature Page to Fourth Amendment to Forbearance Agreement]

 



 

AGENT AND LENDERS:

APOLLO INVESTMENT CORPORATION, as Revolving Lender and Swing Loan Lender and as Administrative Agent and Collateral Agent

 

 

 

By:

Apollo Investment Management, L.P., as Advisor

 

 

 

 

By:

ACC Management, LLC, as its General Partner

 

 

 

 

 

 

By:

/s/ Ted Goldthorpe

 

 

Name: Ted Goldthorpe

 

 

Title: Authorized Signatory

 

[Signature Page to Fourth Amendment to Forbearance Agreement]

 


EX-99.15 16 a14-22689_1ex99d15.htm EX-99.15

Exhibit 99.15

 

EXECUTION

 

SUBORDINATION AGREEMENT

 

SUBORDINATION AGREEMENT dated as of August 13, 2014 among UNITEK GLOBAL SERVICES INC., a Delaware corporation (“UniTek Parent”), UNITEK ACQUISITION, INC., a Delaware corporation (“UniTek Acquisition”), PINNACLE WIRELESS USA, INC., a Delaware corporation (“Pinnacle”), UNITEK USA, LLC, a Delaware limited liability company (“UniTek USA”), ADVANCED COMMUNICATIONS USA, INC., a Delaware corporation (“Advanced Communications”), DIRECTSAT USA, LLC, a Delaware limited liability company (“DirectSat”), FTS USA, LLC, a Delaware limited liability company (“FTS”) (UniTek Parent, UniTek Acquisition, Pinnacle, UniTek USA, Advanced Communications, DirectSat, FTS, collectively the “Borrowers”), APOLLO INVESTMENT CORPORATION, as administrative agent under the ABL Credit Agreement (“AIC”, and in such capacity, the “ABL Agent”), and each lender of Last Out Loans party hereto on the date hereof or from time to time party to the ABL Credit Agreement (each a “Subordinated Creditor” or, in its capacity as a party to the ABL Credit Agreement, a “Last Out Lender”and collectively, the “Subordinated Creditors” or, in their capacities as parties to the ABL Credit Agreement, the “Last Out Lenders”).

 

The Borrowers and any “Guarantors” (as defined in the ABL Credit Agreement; collectively, with the Borrowers, the “Obligors”), certain lenders (the “ABL Lenders”) and the ABL Agent are parties to a Revolving Credit and Security Agreement, dated as of July 10, 2013 (as amended by that certain Amendment and Limited Waiver to Revolving Credit and Security Agreement and Fee Letter, dated as of July 25, 2013, and by that certain Second Amendment to Revolving Credit and Security Agreement, dated as of the date hereof (the “Second Amendment”), and as it may be further amended, restated, supplemented or otherwise modified and in effect from time to time, the “ABL Credit Agreement”), providing, subject to the terms and conditions thereof, for extensions of credit (by making loans and issuing letters of credit) by the ABL Lenders to the Borrowers.

 

To induce the ABL Lenders to enter into the Second Amendment and consent to the making of the Last Out Loans referred to therein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each of the Subordinated Creditors has agreed to subordinate the Subordinated Indebtedness (as hereinafter defined) to the ABL Obligations (as hereinafter defined), all in the manner and to the extent hereinafter provided.

 

Accordingly, the parties hereto agree as follows:

 

Section 1.                                           Definitions.

 

1.01                        Defined Terms.  The following terms shall have the following meanings:

 

ABL Collateral” means all “Collateral” as defined in the ABL Security Documents and any other assets of any other Obligor now or at any time hereafter subject to Liens securing any ABL Obligations and any Subordinated Indebtedness.

 



 

ABL Loan Documents” means the ABL Credit Agreement and the “Other Documents”, as defined in the ABL Credit Agreement.

 

ABL Obligations” means all Obligations (including, for the avoidance of doubt, in respect of post-petition interest at the default rate) that are not Subordinated Indebtedness.

 

ABL Required Lenders” means the “Required Lenders”, as defined in the ABL Credit Agreement.

 

ABL Secured Parties” means the ABL Agent and the holders of the Obligations, but shall not include the Subordinated Creditors.

 

ABL Security Documents” means the security agreement contained in the ABL Credit Agreement, any “Guarantor Security Agreement”, any “Pledge Agreement”, as defined in the ABL Credit Agreement, and any other agreement, document or instrument pursuant to which a Lien is granted to secure any ABL Obligations and any Subordinated Indebtedness or under which rights or remedies with respect to any such Lien are governed.

 

Bankruptcy Code” means Title 11 of the United States Code entitled “Bankruptcy,” as now and hereinafter in effect, or any successor statute.

 

Bankruptcy Law” means any bankruptcy, insolvency, reorganization, receivership or other similar law of any jurisdiction, including any law of any jurisdiction permitting a debtor to obtain a stay or a compromise of the claims of its creditors against it.

 

DIP Financing” shall have the meaning assigned to such term in Section 3.01(a).

 

DIP Financing Liens” shall have the meaning assigned to such term in Section 3.01(a).

 

Discharge of ABL Obligations” means, subject to Section 2.08, (a) payment in full in cash of the principal of and interest (including interest accruing during the pendency of any insolvency or liquidation proceeding (including post-petition interest at the default rate)) regardless of whether allowed or allowable in an Insolvency Proceeding and premium, if any, on all indebtedness (other than Subordinated Indebtedness) outstanding under the ABL Loan Documents, (b) payment in full of all other ABL Obligations that are due and payable or otherwise accrued and owing at or prior to the time such principal and interest are paid (including any contingent indemnification obligations to the extent asserted), (c) termination or expiration of all commitments to lend under the ABL Credit Agreement, (d) termination, expiration or cash collateralization (to the reasonable satisfaction of the ABL Agent and the issuer thereof) of all letters of credit issued pursuant to the ABL Credit Agreement and (e) expiration or termination of all Hedge Liabilities (as defined in the ABL Credit Agreement) and Cash Management Obligations (as defined in the ABL Credit Agreement).

 

Exempted Last Out Loan Proceeds” means “Exempted Last Out Loan Proceeds” as defined in the ABL Credit Agreement.

 

2



 

Insolvency Proceeding” means (a) any voluntary or involuntary proceeding under the Bankruptcy Code or any other Bankruptcy Law with respect to any Obligor, (b) any voluntary or involuntary appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for any Obligor or for a substantial part of the property or assets of any Obligor, (c) any voluntary or involuntary winding-up or liquidation of any Obligor, or (d) a general assignment for the benefit of creditors by any Obligor.

 

Intercreditor Agreement” means the “Intercreditor Agreement” as defined in the ABL Credit Agreement.

 

Liens” has the meaning given to such term in the ABL Credit Agreement.

 

Obligations” has the meaning given to such term in the ABL Credit Agreement.

 

Obligors” means the Borrowers, the Guarantors and each other person that shall have created or purported to create any Lien on all or any part of its assets to secure any ABL Obligations or any Subordinated Indebtedness pursuant to the ABL Documents.

 

Overdue Formula Amount” means, at any time of determination, any “Overdue Formula Amount” as defined in Section 3.1 of the ABL Credit Agreement, but only if at such time such Overdue Formula Amount is expressly considered not due and payable for purposes of clause (iii)(x) of the last paragraph of Section 3.1 of the ABL Credit Agreement.

 

Refinance” means, in respect of any indebtedness, to refinance, extend, renew, restructure or replace or to issue other indebtedness in exchange or replacement for, such Indebtedness, in whole or in part.  “Refinanced” and “Refinancing.” shall have correlative meanings.

 

Subordinated Indebtedness” means all Obligations solely with respect to “Last Out Loans” as defined in, and outstanding from time to time under, the ABL Credit Agreement, including but not limited to principal, interest, fees, expenses, and other obligations of the Obligors with respect to such Last Out Loans.

 

Subordination Terms” means the terms set forth in Section 2.

 

1.02                        Terms Generally.  The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”.  The word “will” shall be construed to have the same meaning and effect as the word “shall”.  Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (c) the words “herein”, “hereof and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Sections and Exhibits shall be

 

3



 

construed to refer to Sections of, and Exhibits to, this Agreement and (e) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

 

Section 2.                                           Subordination Terms.  The Obligors, ABL Agent and Subordinated Creditors hereby agree as follows:

 

2.01                        Subordination.  Each Obligor, for itself and its successors and assigns, covenants and agrees and each Subordinated Creditor, on its own behalf and on behalf of each subsequent holder of Subordinated Indebtedness, likewise covenants and agrees that, to the extent and in the manner set forth in this Agreement, the Subordinated Indebtedness is subordinated and subject in right of payment to the ABL Obligations, such that (subject to Sections 2.01(a) and 2.01(b), the Discharge of ABL Obligations shall occur before any Subordinated Creditor is entitled to receive any payment (other than of Exempt Last Out Loan Proceeds) on account of the Subordinated Indebtedness and, in that connection, unless and until the Discharge of ABL Obligations occurs:

 

(a)                                 no payment (other than of Exempt Last Out Loan Proceeds) on account of the principal of, or interest on, or any other amount in respect of, this Agreement, the ABL Loan Documents (but only so far as it relates to the Subordinated Indebtedness) or any judgment with respect hereto or thereto (and no payment on account of the purchase or redemption or other acquisition in respect of the Subordinated Indebtedness) shall be made by or on behalf of the Obligors; provided that, (i) interest on the Subordinated Indebtedness may be capitalized as provided for in Section 3.1 of the ABL Credit Agreement and, subject to any terms hereof to the contrary, paid in cash as provided for in Section 3.1 of the ABL Credit Agreement, provided that, without affecting any obligation of the Obligors, no such cash interest shall be paid (x) if at such time any principal, premium, interest, fees and other amounts, to the extent then due and payable with respect to the ABL Obligations, have not been paid in full in cash (other than any Overdue Formula Amount) or (y) in the event of any Insolvency Proceeding (but, for the avoidance of doubt, only until the Discharge of ABL Obligations in such Insolvency Proceeding); and (ii) notwithstanding anything in this Agreement to the contrary, the Subordinated Obligations may be repaid with Exempt Last Out Loan Proceeds as provided in Sections 4.15(h) and 11.5 of the ABL Credit Agreement; and

 

(b)                                 the Subordinated Creditors shall not (i) ask, demand, sue for, accelerate or take or receive from any Obligor, by set-off or in any other manner, any payment on account of the principal of, or interest on, or any other amount in respect of, this Agreement or the ABL Credit Agreement (but only so far as it relates to the Subordinated Indebtedness), other than of Exempt Last Out Loan Proceeds as provided in Sections 4.15(h) and 11.5 of the ABL Credit Agreement, provided that, interest on the Subordinated Indebtedness may be capitalized as provided for in Section 3.1 of the ABL Credit Agreement and, subject to any terms hereof to the contrary, paid in cash as provided for in Section 3.1 of the ABL Credit Agreement, provided that, without affecting any obligation of the Obligors, no such cash interest shall be paid (x) if at such time any principal, premium, interest, fees and other amounts, to the extent then due and payable with respect to the ABL Obligations, have not been paid in full in cash (other than any Overdue Formula Amount) or (y) in the event of any Insolvency Proceeding (but, for the avoidance of

 

4



 

doubt, only until the Discharge of ABL Obligations in such Insolvency Proceeding), or (ii) seek any other remedy allowed at law or in equity against any Obligor for breach of such Obligor’s obligations hereunder or thereunder (but only so far as it relates to the Subordinated Indebtedness) other than any such remedy in respect of such Obligor’s obligations under Section 4.15(h) of the ABL Credit Agreement.

 

2.02                        Actions upon Dissolution.  In the event of any Insolvency Proceeding, then upon any payment or distribution of assets of any Obligor of any kind or character, whether in cash, property or securities, to any of its creditors (including without limitation the Subordinated Creditors) the Discharge of ABL Obligations shall occur first before the holders of the Subordinated Indebtedness shall be entitled to retain any assets (other than Exempt Last Out Loan Proceeds) so paid or distributed in respect of the Subordinated Indebtedness (for principal, premium, interest or otherwise) and, to that end, the holders of the ABL Obligations shall be entitled to receive for application in payment thereof any payment or distribution of any kind or character (other than Exempt Last Out Loan Proceeds as provided in Sections 4.15(h) and 11.5 of the ABL Credit Agreement), whether in cash or property or securities that would, but for these Subordination Terms, be paid or delivered to the Subordinated Creditors.  The Subordinated Creditors shall provide to the ABL Agent (on behalf of the ABL Secured Parties) all information and documents necessary to present claims or seek enforcement with respect to the Subordinated Indebtedness and will duly and promptly take such action as the ABL Agent (on behalf of the ABL Secured Parties) may request (i) to collect the Subordinated Indebtedness for the account of the ABL Agent (on behalf of the ABL Secured Parties), other than Exempt Last Out Loan Proceeds, and (ii) to file appropriate claims or proofs of claim with respect thereto.  No Subordinated Creditor, solely in its capacity as a Subordinated Creditor or Last Out Lender under the ABL Credit Agreement, shall take any action in any Insolvency Proceeding in any way so as to contest, and hereby waives any rights it may have to contest (a) the validity or enforceability of any of the ABL Loan Documents, (b) the rights and duties of the ABL Agent and the ABL Secured Parties established in any of the ABL Loan Documents or (c) the validity or enforceability of the subordination provisions set forth in this Agreement.

 

2.03                        Subrogation.  Following the Discharge of ABL Obligations, the Subordinated Creditors shall be subrogated to the rights of the ABL Agent (on behalf of the ABL Secured Parties) to receive payments and distributions of cash, property and securities applicable to the ABL Obligations until the principal of, and interest on, and all other amounts in respect of, the Subordinated Indebtedness shall be paid in full.  For purposes of such subrogation, no payments or distributions to the ABL Agent or the ABL Secured Parties of any cash, property or securities to which the Subordinated Creditors would be entitled except for these Subordination Terms, and no payments over pursuant to these Subordination Terms to the ABL Agent or the ABL Secured Parties by the Subordinated Creditors, shall be deemed to be a payment or distribution by any Obligor to or on account of the ABL Obligations; it being understood and agreed that the Subordination Terms are solely for the purpose of defining the relative rights of the ABL Agent and the ABL Secured Parties on the one hand, and the Subordinated Creditors on the other hand.

 

2.04                        Turnover by the Subordinated Creditors.  If any payment or distribution of any character (other than Exempt Last Out Loan Proceeds), whether in cash, securities or other property, in respect of this Agreement (so far as it relates to the ABL Obligations or the

 

5



 

Subordinated Indebtedness) or the ABL Loan Documents shall be received by any Subordinated Creditor in contravention of these Subordination Terms, such payment or distribution shall be held in trust for the benefit of, and shall be paid over or delivered to the ABL Agent (on behalf of the ABL Secured Parties) to the extent necessary to effect the Discharge of ABL Obligations.

 

2.05                        No Petition.  So long as any ABL Obligation is outstanding, any Subordinated Creditor in its capacity as such and as a Last Out Lender, in each case, shall not commence, or join with any creditor in commencing,  any Insolvency Proceeding.

 

2.06                        No Effect.  Unless the ABL Secured Parties and the Subordinated Creditors so expressly subsequently agree, these Subordination Terms shall not be affected by (i) any amendment or modification of, or addition or supplement to, the ABL Credit Agreement or any other ABL Loan Document, (ii) any exercise or non-exercise of any right, power or remedy under or in respect of the ABL Credit Agreement or any other ABL Loan Document, or (iii) any waiver, consent, release, extension, renewal, modification, delay, or other action, inaction or omission in respect of the ABL Credit Agreement or any other ABL Loan Document.

 

2.07                        Continuation.  The provisions of these Subordination Terms constitute a continuing agreement and shall (i) remain in full force and effect until the Discharge of ABL Obligations, (ii) be binding upon the Subordinated Creditors, the Obligors and the other parties hereto and their respective successors, transferees and assignees and (iii) inure to the benefit of, and be enforceable by, the ABL Agent (on behalf of the ABL Secured Parties).  These Subordination Terms and this Agreement shall automatically, and without further action, terminate and have no further force or effect as to the Borrowers upon the Discharge of ABL Obligations.

 

2.08                        No Impairment; Automatic Restoration.  Except to the extent otherwise expressly provided in the ABL Loan Documents, the foregoing provisions are solely for the purpose of defining the relative rights of the holders of the ABL Obligations on the one hand and the Subordinated Creditors on the other hand, and nothing herein shall impair or affect, as between the Obligors and the Subordinated Creditors, the obligations of the Obligors, which are unconditional and absolute, to pay to the Subordinated Creditors the Subordinated Indebtedness in accordance with the terms of the ABL Loan Documents.  These Subordination Terms shall be automatically reinstated if and to the extent that for any reason any payment by or on behalf of any Obligor in respect of the ABL Obligations is rescinded or must be otherwise restored by any holder of any of the ABL Obligations, whether as a result of any proceedings in bankruptcy or reorganization or otherwise.

 

Section 3.                                           Insolvency Proceedings.  Without limiting the provisions of Section 2 hereof, the Obligors hereby agree as follows:

 

3.01                        Finance and Sale Matters.  (a) Until the Discharge of ABL Obligations has occurred (other than a Discharge of ABL Obligations arising from the Refinancing of the ABL Obligations with the proceeds of a DIP Financing (as defined below) or otherwise), each of the Subordinated Creditors agrees that, in the event of any Insolvency Proceeding, such Subordinated Creditor:

 

6



 

(i)                                     will not take any step or action (whether directly or indirectly) in such Insolvency Proceeding to oppose, object to, impede, or delay the use of any ABL Collateral constituting cash collateral (including, without limitation, any and all terms of any cash collateral order) under Section 363 of the Bankruptcy Code, or any comparable provision of any other Bankruptcy Law, unless the ABL Secured Parties, or a representative authorized by the requisite ABL Secured Parties, shall oppose or object to such use of cash collateral;

 

(ii)                                  will not take any step or action (whether directly or indirectly) in such Insolvency Proceeding to oppose, object to, impede, or delay any post-petition equity or debt financing (including, without limitation, any and all terms of any financing agreement, related documents and financing order), whether provided by Secured Parties or any other person, under Section 364 of the Bankruptcy Code, or any comparable provision of any other Bankruptcy Law (a “DIP Financing”), or the Liens securing any DIP Financing (“DIP Financing Liens”), or any grant of adequate protection in connection with any DIP Financing, unless in each case the ABL Secured Parties, or a representative authorized by the requisite ABL Secured Parties, shall then oppose or object to such DIP Financing or such DIP Financing Liens;

 

(iii)                               in connection with the use of cash collateral as described in clause (i) above or a DIP Financing, will not request adequate protection (except as otherwise provided under Section 3.04(b) hereof) or any other relief in connection with such use of cash collateral, DIP Financing or DIP Financing Liens; and

 

(iv)                              will not take any step or action (whether directly or indirectly) in such Insolvency Proceeding to oppose, object to, impede, or delay any sale or other disposition of any assets (including, without limitation, the terms and conditions of any bidding procedures orders, sale orders and any and all purchase and sale agreements and related documents) free and clear of Liens under the ABL Security Documents or other claims, whether under Section 363 of the Bankruptcy Code (or any comparable provision of any other Bankruptcy Law) or otherwise, if the ABL Secured Parties, or a representative authorized by the requisite ABL Secured Parties, shall consent to such Disposition.

 

(b)                                 Each of the Subordinated Creditors agrees that it shall not oppose, contest or challenge, or support any other person in opposing, contesting or challenging, (i) any request by the ABL Agent or any other ABL Secured Party for adequate protection in any form or (ii) any objection, based on a claim of a lack of adequate protection, by the ABL Agent or any other ABL Secured Party to any motion, relief, action or proceeding.

 

(c)                                  Each of the Subordinated Creditors hereby expressly and irrevocably waives, for the benefit of ABL Agent and ABL Secured Parties any principles or provisions of law (including as set forth in any Bankruptcy Law, statutory or otherwise) which are or might be in conflict with the terms of this Agreement and any legal or equitable discharge of such Subordinated Creditor’s obligations hereunder.

 

3.02                        Relief from the Automatic Stay.  Notwithstanding anything to the contrary contained herein, each of the Subordinated Creditors agrees that, so long as the Discharge of

 

7



 

ABL Obligations has not occurred, it shall not, without the prior written consent of the ABL Agent, seek or request relief from or modification of the automatic stay or any other stay in any Insolvency Proceeding in respect of any part of the ABL Collateral or any proceeds thereof.

 

3.03                        Reorganization Securities.  Without prejudice to Section 2 hereof, if, in any Insolvency Proceeding, debt obligations of the reorganized debtor secured by Liens upon any property of the reorganized debtor are distributed, pursuant to a plan of reorganization or similar dispositive restructuring plan, on account of both the ABL Obligations and the Subordinated Obligations, then, to the extent the debt obligations distributed on account of the ABL Obligations and on account of the Subordinated Obligations are secured by Liens upon the same assets or property, the provisions of this Agreement will survive the distribution of such debt obligations pursuant to such plan and will apply with like effect to the Liens securing such debt obligations.

 

3.04                        Post-Petition Interest; Adequate Protection.  (a) Each of the Subordinated Creditors agrees that it shall not oppose or seek to challenge any claim by the ABL Agent or any other ABL Secured Party for allowance of ABL Obligations consisting of principal, post-petition interest at the default rate, fees, expenses, or any other ABL Obligations, or payment of such claims, in any Insolvency Proceeding.

 

(b)                                 If any of the Subordinated Creditors obtains any adequate protection payment in respect of the Subordinated Indebtedness in any Insolvency Proceeding, then it agrees to turnover such payment to the ABL Agent (on behalf of the ABL Secured Parties other than the Subordinated Creditors); provided, that if the ABL Secured Parties receive as adequate protection of their interests in the ABL Collateral, (i) a replacement Lien in the ABL Collateral or (ii) superpriority claims, the Subordinated Creditors may, as adequate protection of their interests in the ABL Collateral, receive adequate protection consisting solely of (x) such replacement Lien on the ABL Collateral with respect to the Last Out Loans otherwise subject to the terms of this Agreement, including this Section 3.04(b) with respect to any proceeds of such Lien, and (y) superpriority claims junior in all respects to the superpriority claims granted to the ABL Secured Parties; provided, however, that each Subordinated Creditor shall have irrevocably agreed, pursuant to Section 1129(a)(9) of the Bankruptcy Code, in any stipulation and/or order granting such adequate protection, that such junior superpriority claims may be paid under any plan of reorganization in any combination of cash, debt, equity or other property having a value on the effective date of such plan equal to the allowed amount of such claims;

 

3.05                        Certain Waivers by the Subordinated Creditors.  Each Subordinated Creditor waives any claim it may hereafter have against any ABL Secured Party arising out of (a) the election by any ABL Secured Party of the application of Section 1111(b)(2) of the Bankruptcy Code, or any comparable provision of any other Bankruptcy Law, or (b) any cash collateral or financing arrangement, or any grant of a security interest in the ABL Collateral, in any Insolvency Proceeding.

 

3.06                        Filing of Motions.  Until the Discharge of ABL Obligations has occurred, each of the Subordinated Creditors agrees that it shall not, in or in connection with any Insolvency Proceeding, file any pleadings or motions, take any position at any hearing or proceeding of any nature, or otherwise take any action whatsoever, in each case in respect of any

 

8



 

of the ABL Collateral, including without limitation with respect to the determination of any Liens or claims held by the ABL Agent (including the validity and enforceability thereof) or any other ABL Secured Party or the value of any claims of such parties under Section 506(a) of the Bankruptcy Code or otherwise.

 

3.07                        Separate Grants of Security and Separate Classification.  (a) Each of the Subordinated Creditors and the ABL Agent (on behalf of the ABL Secured Parties) acknowledges and agrees that (to the extent applicable) because of, among other things, their differing rights in the ABL Collateral, the Subordinated Indebtedness is not similarly situated to the ABL Obligations and must be separately classified in any plan of reorganization proposed or adopted in any Insolvency Proceeding.

 

(b)                                 To further effectuate the intent of the parties as provided in paragraph (a), if it is held (i) that the claims of the ABL Secured Parties and the Subordinated Creditors in respect of the ABL Collateral constitute only one secured claim (rather than separate classes of senior and junior secured claims), then each of the Subordinated Creditors and the ABL Agent (on behalf of the ABL Secured Parties) hereby acknowledge and agree that all distributions shall be made as if there were separate classes of senior and junior secured claims against the Obligors in respect of the ABL Collateral (with the effect being that, to the extent that the aggregate value of the ABL Collateral is sufficient (for this purpose ignoring all claims held by the Subordinated Creditors), the ABL Secured Parties shall be entitled to receive, in addition to amounts distributed to them in respect of principal, pre-petition interest and other claims, all amounts owing in respect of post-petition interest at the default rate before any distribution is made in respect of the claims held by the Subordinated Creditors), with each of the Subordinated Creditors hereby acknowledging and agreeing to turn over to the ABL Agent, for distribution to the ABL Secured Parties, amounts otherwise received or receivable by them to the extent necessary to effectuate the intent of this sentence, even if such turnover has the effect of reducing the claim or recovery of the Subordinated Creditors.

 

3.08                        Plans of Reorganization.  ABL Agent is hereby irrevocably authorized and empowered (in the name of each Subordinated Creditor) to vote on behalf of such Subordinated Creditor or consent or object on behalf of such Subordinated Creditor in any Insolvency Proceeding with respect to any and all claims of such Subordinated Creditors relating to the Subordinated Indebtedness, and each of the Subordinated Creditors hereby appoints the ABL Agent as its agent, and grants to the ABL Agent an irrevocable power of attorney coupled with an interest, and its proxy, for the purpose of exercising any and all rights and taking any and all actions available to such Subordinated Creditor in connection with any case by or against the Obligors in any Insolvency Proceeding, including without limitation, the right to file and/or prosecute any claims, to support or vote in favor of any plan of reorganization, or to make any election under Section 1111(b) of the Bankruptcy Code.  Each of the Subordinated Creditors agrees and that such Subordinated Creditor shall be irrevocably bound to any such votes made or consents given and further shall not challenge or otherwise object to such votes or consents and shall not itself vote or provide consents in the proceeding  To the extent that any Subordinated Creditor attempts to vote or votes in favor of any plan or reorganization in a manner inconsistent with this Section 3.08, each of the Subordinated Creditors irrevocably agrees that the ABL Agent may be, and may be deemed, an “authorized agent” of such party under Bankruptcy Rules

 

9



 

3018(c) and 9010, and that the ABL Agent shall be authorized and entitled to submit a superseding ballot on behalf of such Subordinated Creditor that is consistent herewith.

 

3.09                        Other Matters.  Each of the Subordinated Creditors agrees not to assert any rights under Section 363 or Section 364 of the Bankruptcy Code with respect to any of the ABL Collateral without the prior written consent of the ABL Agent; provided that if requested by the ABL Agent, such Subordinated Creditor shall timely exercise such rights in the manner requested by the ABL Agent, as applicable, including any rights to payments in respect of such rights.

 

3.10                        Effectiveness in Insolvency Proceedings.  This Agreement, which the parties hereto expressly acknowledge is a “subordination agreement” under section 510(a) of the Bankruptcy Code, shall be effective before and after the commencement of an Insolvency Proceeding.  All references in this Agreement to any Obligor shall include such Obligor as a debtor-in-possession and any receiver or trustee for such Obligor in any Insolvency Proceeding.

 

3.11                        Intercreditor Agreement.  Each of the Secured Parties and the Obligors acknowledge and agree that nothing in this Section 3 or elsewhere in this Agreement shall impair or otherwise affect the respective rights and obligations under the Intercreditor Agreement of (a) any Secured Party, in its capacity as the ABL Representative (as defined therein) or an ABL Secured Party (as defined therein), (b) any Subordinated Creditor, in its capacity as the Term Debt Representative (used in this Section as defined in the Intercreditor Agreement) or a Term Debt Secured Party (used in this Section as defined in the Intercreditor Agreement) or in any capacity other than as a Subordinated Creditor or (c) any Obligor; provided, however, that no Person that is a Subordinated Creditor, but acting or purporting to act in its capacity as Term Debt Representative or a Term Debt Secured Party, shall take any action or exercise its rights, remedies and powers under the Intercreditor Agreement or otherwise to the extent such action or exercise would advantage or benefit such Person principally in its capacity as a Subordinated Creditor against the ABL Agent or ABL Secured Parties (in their respective capacities as such).

 

Section 4.                                           Representations.  Each of the parties hereto represents and warrants, as to itself, that it has duly authorized, executed and delivered this Agreement and that this Agreement is the legal, valid and binding obligation of such party, enforceable against such party in accordance with its terms, except to the extent that enforceability may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or other similar laws affecting the enforcement of creditor’s rights and subject to general equitable principles.

 

Section 5.                                           Assignment.  This Agreement may not be assigned by any party hereto to any other entity without the prior written consent of the ABL Agent (until the Discharge of ABL Obligations) and any such assignment without such consent shall be deemed null and void.

 

Governing Law; Submission to Jurisdiction; Venue; Waiver of Jury Trial.

 

(a)                                 Governing Law.  This Agreement shall be governed by, and construed in accordance with, the law of the State of New York.

 

10



 

(b)                                 Submission to Jurisdiction.  Each Obligor and each Subordinated Creditor irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of the Supreme Court of the State of New York sitting in New York County and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement, or for recognition or enforcement of any judgment, and each of the parties hereto irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State court or, to the fullest extent permitted by applicable law, in such Federal court.  Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.  Nothing in this Agreement shall affect any right that the ABL Agent or any ABL Secured Party may otherwise have to bring any action or proceeding relating to this Agreement against any Obligor or Subordinated Creditor or its properties in the courts of any jurisdiction.

 

(c)                                  Waiver of Venue.  Each Obligor and each Subordinated Creditor irrevocably and unconditionally waives, to the fullest extent permitted by applicable law, any objection that it may now or hereafter have to the laying of venue of any action or proceeding arising out of or relating to this Agreement in any court referred to in paragraph (b) of this Section.  Each of the parties hereto irrevocably waives, to the fullest extent permitted by applicable law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

 

(d)                                 Service of Process.  Each party hereto irrevocably consents to service of process in the manner provided for notices in Section 11.  Nothing in this Agreement will affect the right of any party hereto to serve process in any other manner permitted by applicable law.

 

(e)                                  WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER ABL LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE SECOND AMENDMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

Section 6.                                           Amendment.  Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Obligors, the Subordinated Creditors and the ABL Agent; provided that this Agreement may be amended pursuant a joinder in substantially the form of Exhibit A annexed

 

11



 

hereto, executed by such Subordinated Creditor consented to by ABL Agent, to evidence the joinder of any Subordinated Creditor hereto.

 

Section 7.                                           Waiver.  No failure on the part of the ABL Agent to exercise, and no course of dealing with respect to, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise by the ABL Agent of any right, power or remedy hereunder preclude any other or further exercise thereof or the exercise of any other right, power or remedy.  The remedies herein are cumulative and are not exclusive of any remedies provided by law.

 

Section 8.                                           Severability.  Each party hereto expressly agrees that it is not the intention of any party hereto to violate public policy or state or federal statutory or common laws and applicable regulations and that if any sentence, paragraph, clause or combination thereof in this Agreement is in violation of the same or is required to be changed to comply with same, such paragraph, clause or sentence, or combination of the same shall be inoperative and the remainder of this Agreement shall remain binding upon the parties herein.

 

Section 9.                                           Notices.

 

9.01                        Generally.  Except in the case of notices and other communications expressly permitted to be given by telephone, all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy, as follows:

 

(a)                                 if to the Obligors or the ABL Agent, as provided for in the ABL Credit Agreement; and

 

(b)                                 if to the Subordinated Creditors, to the notice address provided by each Last Out Lender under the ABL Credit Agreement.

 

9.02                        Electronic Notification.  Notices and other communications to the ABL Agent, the Obligors or the Subordinated Creditors may be delivered or furnished by electronic communications pursuant to procedures approved by it.  The ABL Agent, the Obligors or the Subordinated Creditors may, in their discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.

 

9.03                        Modifications to Notice Provisions.  Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other parties hereto.  All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt.

 

9.04                        Appointment of Process Agent.  Each Subordinated Creditor organized under the laws of a jurisdiction other than the United States or any state thereof shall, promptly upon becoming a party hereto, irrevocably appoint a process agent (a “Process Agent”), reasonably satisfactory to ABL Agent, as its agent to receive on behalf of such Subordinated

 

12



 

Creditor and its property service of copies of the summons and complaint and any other process which may be served in any such action or proceeding.  Such service may be made by mailing or delivering a copy of such process to such Subordinated Creditor in care of the Process Agent at the Process Agent’s address notified to ABL Agent, and such Subordinated Creditor hereby irrevocably authorizes and directs the Process Agent to accept such service on its behalf.  As an alternative method of service, such Subordinated Creditor also irrevocably consents to the service of any and all process in any such action or proceeding by the mailing of copies of such process to such Subordinated Creditor at its address specified in Section 11.01.

 

Section 10.                                    Successors and Assigns.  The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

 

[Remainder of page intentionally left blank]

 

13



 

IN WITNESS WHEREOF, the parties hereto have caused this Subordination Agreement to be signed by their duly authorized officers on the date first set forth above.

 

BORROWERS:

 

 

 

 

UNITEK GLOBAL SERVICES, INC.

 

UNITEK ACQUISITION, INC.

 

 

 

 

 

By:

Andrew J. Herning

 

Name:

Andrew J. Herning

 

Title:

Chief Financial Officer

 

 

 

 

 

PINNACLE WIRELESS USA, INC.

 

UNITEK USA, LLC

 

ADVANCED COMMUNICATIONS USA, INC.

 

DIRECTSAT USA, LLC

 

FTS USA, LLC

 

 

 

 

 

By:

Andrew J. Herning

 

Name:

Andrew J. Herning

 

Title:

Treasurer

 

[Signature Page to Subordination Agreement]

 



 

ABL AGENT:

APOLLO INVESTMENT CORPORATION, as Administrative Agent under the ABL Credit Agreement

 

 

 

By:

Apollo Investment Management, L.P., as Advisor

 

 

 

 

By:

ACC Management, LLC, as its General Partner

 

 

 

 

 

 

 

By:

/s/ Ted Goldthorpe

 

Name: Ted Goldthorpe

 

Title: Authorized Signatory

 

[Signature Page to Subordination Agreement]

 



 

SUBORDINATED CREDITORS:

PENNANTPARK FLOATING RATE CAPITAL LTD., as a Subordinated Creditor

 

 

 

By:

/s/ Aviv Efrat

 

Name:

Aviv Efrat

 

Title:

CFO

 

[Signature Page to Subordination Agreement]

 



 

SUBORDINATED CREDITORS:

 

 

CETUS CAPITAL II, LLC, as a Subordinated Creditor

 

 

 

By:

/s/ Richard Maybaum

 

Name:

Richard Maybaum

 

Title:

Managing Director

 

 

 

 

 

LITTLEJOHN OPPORTUNITIES MASTER FUND LP, as a Subordinated Creditor

 

 

 

By:

/s/ Richard Maybaum

 

Name:

Richard Maybaum

 

Title:

Managing Director

 

[Signature Page to Subordination Agreement]

 



 

SUBORDINATED CREDITORS:

 

 

 

 

NEW MOUNTAIN FINANCE CORPORATION, as a Subordinated Creditor

 

 

 

By:

/s/ John R. Kline

 

Name:

John R. Kline

 

Title:

EVP & COO

 

[Signature Page to Subordination Agreement]

 



 

SUBORDINATED CREDITORS:

 

 

 

 

CERBERUS ASRS HOLDINGS LLC, as a Subordinated Creditor

 

 

 

By:

/s/ Daniel Wolf

 

Name: Daniel Wolf

 

Title:   Vice President

 

 

 

 

 

CERBERUS AUS LEVERED HOLDINGS LP, as a Subordinated Creditor

 

 

 

BY: CAL I GP Holdings LLC

 

Its: General Partner

 

 

 

By:

/s/ Daniel Wolf

 

Name: Daniel Wolf

 

Title:   Senior Managing Director

 

 

 

 

 

CERBERUS LEVERED LOAN OPPORTUNITIES FUND II, L.P., as a Subordinated Creditor

 

 

 

BY: Cerberus Levered Opportunities II GP, LLC

 

Its: General Partner

 

 

 

By:

/s/ Daniel Wolf

 

Name: Daniel Wolf

 

Title:   Senior Managing Director

 

 

 

 

 

CERBERUS OFFSHORE LEVERED LOAN OPPORTUNITIES MASTER FUND II, L.P., as a Subordinated Creditor

 

 

 

BY: Cerberus Levered Opportunities Master Fund II GP, LLC

 

Its: General Partner

 

 

 

By:

/s/ Daniel Wolf

 

Name: Daniel Wolf

 

Title:   Senior Managing Director

 

[Signature Page to Subordination Agreement]

 



 

SUBORDINATED CREDITORS:

 

 

 

 

MAIN STREET CAPITAL CORPORATION, as a Subordinated Creditor

 

 

 

By:

/s/ Nick Meserve

 

Name:

Nick Meserve

 

Title:

Managing Director

 

[Signature Page to Subordination Agreement]

 



 

SUBORDINATED CREDITORS:

 

 

 

 

MARBLEGATE SPECIAL OPPORTUNITIES MASTER FUND, L.P., as a Subordinated Creditor

 

 

 

By:

/s/ Paul Arrouet

 

Name:

Paul Arrouet

 

Title:

Managing Partner

 

[Signature Page to Subordination Agreement]

 



 

EXHIBIT A

 

FORM OF NEW SUBORDINATED CREDITOR JOINDER
TO SUBORDINATION AGREEMENT

 

This JOINDER AGREEMENT (this “Agreement”) dated as of [      ], 2014 is executed by the undersigned for the benefit of APOLLO INVESTMENT CORPORATION, as administrative agent under the ABL Credit Agreement referenced below (“AIC”, and in such capacity, the “ABL Agent”) and the ABL Secured Parties, in connection with (i) that certain Revolving Credit and Security Agreement, dated as of July 10, 2013 (as from time to time amended, modified, extended, renewed, refinanced, or restated, the “ABL Credit Agreement”), by and among UNITEK GLOBAL SERVICES INC., a Delaware corporation (“UniTek Parent”), UNITEK ACQUISITION, INC., a Delaware corporation (“UniTek Acquisition”), PINNACLE WIRELESS USA, INC., a Delaware corporation (“Pinnacle”), UNITEK USA, LLC, a Delaware limited liability company (“UniTek USA”), ADVANCED COMMUNICATIONS USA, INC., a Delaware corporation (“Advanced Communications”), DIRECTSAT USA, LLC, a Delaware limited liability company (“DirectSat”), FTS USA, LLC, a Delaware limited liability company (“FTS”) (UniTek Parent, UniTek Acquisition, Pinnacle, UniTek USA, Advanced Communications, DirectSat, FTS, collectively the “Borrowers”), ABL Agent, and each lender party thereto, and (ii) that certain Subordination Agreement dated as of August 13, 2014 among the Borrowers under the ABL Credit Agreement, the ABL Agent and the Subordinated Creditors party thereto (as amended, restated, supplemented or modified from time to time, the “Subordination Agreement”).  Capitalized terms not otherwise defined herein are being used herein as defined in the Subordination Agreement.

 

In consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each signatory hereby agrees as follows:

 

1.             Each such Person assumes, effective as of the date hereof all the obligations of a Subordinated Creditor under the Subordination Agreement, subject to the terms thereof, and agrees that such Person is a Subordinated Creditor and bound as a Subordinated Creditor under the terms of the Subordination Agreement as if it had been an original signatory to such agreement.

 

2.             Each such Person hereby makes (as of the date hereof, except for such representations that per their terms relate to a different date, which are made as of such date) to the ABL Agent the representations and warranties applicable to a Subordinated Creditor set forth in the Subordination Agreement applicable to such Person and confirms that such representations and warranties are true and correct in all material respects.

 

3.             Each such Person’s address for notices under the Subordination Agreement shall be the address set forth below:

 

[Insert notice address]

 



 

4.             This Agreement shall be deemed to be part of, and a modification to, the Subordination Agreement and shall be governed by all the terms and provisions of the Subordination Agreement, respectively, with respect to the modifications intended to be made to such agreement, which terms are incorporated herein by reference, are ratified and confirmed and shall continue in full force and effect as valid and binding agreements of each such Person enforceable against such Person.  Each such Person hereby waives notice of the ABL Agent’s acceptance of this Agreement.  Each such Person will deliver an executed original of this Agreement to the ABL Agent.

 

[Add signature block for each new Subordinated Creditor]

 


GRAPHIC 17 g226891moi001.jpg GRAPHIC begin 644 g226891moi001.jpg M_]C_X``02D9)1@`!`0$`8`!@``#_VP!#``H'!P@'!@H("`@+"@H+#A@0#@T- M#AT5%A$8(Q\E)"(?(B$F*S7J#A(6&AXB)BI*3E)66EYB9FJ*CI*6FIZBIJK*SM+6VM[BYNL+#Q,7& MQ\C)RM+3U-76U]C9VN'BX^3EYN?HZ>KQ\O/T]?;W^/GZ_\0`'P$``P$!`0$! M`0$!`0````````$"`P0%!@<("0H+_\0`M1$``@$"!`0#!`<%!`0``0)W``$" M`Q$$!2$Q!A)!40=A<1,B,H$(%$*1H;'!"2,S4O`58G+1"A8D-.$E\1<8&1HF M)R@I*C4V-S@Y.D-$149'2$E*4U155E=865IC9&5F9VAI:G-T=79W>'EZ@H.$ MA8:'B(F*DI.4E9:7F)F:HJ.DI::GJ*FJLK.TM;:WN+FZPL/$Q<;'R,G*TM/4 MU=;7V-G:XN/DY>;GZ.GJ\O/T]?;W^/GZ_]H`#`,!``(1`Q$`/P#V:BBB@`HH MHH`****`"BBB@`HHJ*XN8+2%I[B9(8D&6>1@H'XF@"6DKB=5^*>CVC-%IL4N MI2CO&-L?_?1Z_@*Y2Z^(GBS4W*VD<-@AZ;(MQ_-O\*+`>PT%@.I%>%32^);] M=]QJ]Y-DXP)RHS^&*IG2YB^+JYN%=N[2$_UJN5BN?0(8'H117@+^'[Z-/-MK MJ4XYRLA%,M]4\16!S;:Q>(!V,Q(_6A1;V"Y]`T5XYIWQ&\3VN!,T%\@ZB6/: MW_?2_P"%=1IWQ3TNY*QZA!+I\I[M\\?_`'T.GY5-AG=T5CIK5O/$LL,Z2QL, MAD;(-)_:Z?WJ`-FEK&&K(?XQ^=31ZDC?Q"@#2I:K1W:/WJ=6#=*`'4444`%% M%%`!1110`4444`%%%%`!1110`4E-DD2&-I)'5$0%F9C@`>IKR;Q7X^N?$$LN MG:%(\.G+E9;I>&G]0OHOOWH`Z+Q9\3+'1&>STM!J%Z/E.#^ZB/N>Y]A7F&HZ MAK/B6X\_5KR289RL0^6-/HO2HH;9,YVX`Z#TJZNU!VKKIT;ZLQE,CMK%8L$< M$5NZ3I4U^S;9C'&GWF)R?PK(-P%%:>E:1KNI.'TZTG"_\]3\B_F:UE",40I- MLZ"'1+*T99-[DIS\Q&/KBL-]2M#=.9K:.2$L<%1AL>N:[;3?!VH-:;=5U+]X M?^>`R0/3)_PK6T_P=H6G8:.Q25Q_'-\Y_6N932O?4UY6]CCK!EU)-EA;32A1 MC_5G^=/?X?7]Z_F+Y=IGJ'.?T%>D*BHH5%"J.@`QBHY+F"$XEGC0^C.!67,T M]"[=SD+3X&HVW26DDY/7S)21^0K:DUS2XCA[ M^'\&S_*H&\4:.O\`R]AOHC?X4M6,DL/#NCZ6"MCIT$`;J%7K5X6\(Z0QCZ** MRO\`A+-'[W+#_MF:>GBG1'./[0B7_?RO\Z0&D;:!NL$9_P"`BH)-+LY/^6(4 M^JG%2V][:W8S;7,4P_V'!_E4]`&3)I,L/S6TQ8?W'_QIMO>NDGE2J4<=0:V* MJ7UFMU%D8$J\HW]*`)XI`Z@YJ2LK3IR?E;@C@CTK4!R,T`+1110`4444`%%% M%`!1110`4A('6D+`#K7G?Q3\8MIMDNAZ?+MO+Q2/=O\*WCRQ?O&;NUH<#;K-=3""UA M>:5NB1J2:Z_2/AMJ][MDU&5;&(\[?O2'\.@KOXXO#_A.RX^RZ?$!RS$!F_'J M:Y?5OBSIUN3'I5K)>/T\Q_D3_$UK[6I/2"(Y(QUD=!I/@G0](VNEH)YA_P`M M9_G/X#H*T;_6M*TF/-[?06X'\+,,_D.:\;U3Q[XAU7*O>FVB/_+.W&S]>IKG MVD+N7=B['JS')JHX6"!0D2JBCIM&* MEKL49RD(DOB*>Z+WFM3-$#]Q3@,/H.E3&T1F#N-S#HS>Q1U/`IDDT]J^RYADA;T=2*D6Z#"GRIA M>)(V*LI^HK4\)_$S4-/OH[#7YCGUYO\(O$,]]97.C71+O9 M@/&Y[H>,'Z&O1ZYVK:&ICC]WJLZCINSCZBM=/N"L:W/GW\TPZ%^/ITK97A12 M`=1110`4444`%%%(2`*`#-1R3*@ZU#<7:QCK6C_#?4_$&IRZWXHE:V-R^_[,A_>8[`G^$8XQUKL] M7U_0?"$0:^N-URPRL2C=*_T'85Y]KGQ)UC5RT5C_`,2ZV/&$.9&'NW;\*N$6 M]B9-+<]$-YX;\(6OV2`10$=881ND8^_?\ZXKQ-\2-6=7BTJ-;.,$`R,-TF". MW85RNDOFX<2,69_FW$Y)/UJ_=V:72;KR.6-2V>GW5^6$"`A>K,<`56=2DC(W520:ZOPY;7-_9Q6]A;O M-)D[P@X!]SVKOJ25.-T<\4Y/4S(?#L^X_:)T08XVF6W@ZVL8/M?B#4(XD')17VK^+'K^%66\6:!H\7DZ/9^<0.#&NU3]6/ M)KC^M3;]W4V]DEN96F>#=6GA0-''80X'RO\`>_(5T%MX(TRV4/>3R7!'7:4'!5W/\JR]E5EN5SP6 MQZ8MSX9TGY4DL8B/[N&;_&FOXTT*/@73/_NQDUYT+=1V_2G>2OM1]7[A[4]! M7QQH3'!N)%]S$U:-EKFEZ@VVUOHI&_N[L'\C7EIB%02Q`?,.#ZC@TG0[#54] MBN;6"\B,-Q$DJ$O7-^LVG7DAED@ M4/'(>I7I@_2JGQ%N$^T6%L""ZAG/L#@"LH)J?*7*SC39W?P2?Z5Z-J=UY%OL0_O9/E7V]36-I%M9>!O!R?;9500J9+A_[\AZ@>I["N M;\%^+9O%?B+48[P!&&);6/\`N1C@K[GH?QKSY^\W);'5'16.XTZW"1CZ5HTR M)-B@5)6904444`%%%%`#68*,FJ%U=A`<&G74^T8'>JHVP-YDH\R;JL?9?%X_GFH46J-D6ES,YR\A+$^I)S5 M[<%'-=U&)S5&3QN8G5U."IR*UH[@S[1$I9GX"J,DGTQ65I]M/J=TMO:JK,>2 MS'"H.Y8]A730:SIOA=#%HJ+?7Y&)+^1?D3VC7^M;3OLEJ9Q\R[!X'L(XUU+Q M/<"RC/(@5L22?7_ZW-/O_&LNGVC6/A/2X;.W0<2NN6;W"^OUS7-7-_/?3&YN M[AYY&ZLY_P`XHAG1N!BE&E*6L]1NHE\)D7&J76HWZW.K7,]T5;)#MG'T'05O M6%W!>JQB#`IU#"J5_IJW0,L("S=^P:DTJYM;.V,4L@BEW$N'XKJY(N.ACS.Y MLK#$K.P09?[WO21V=K'(9$@C#DYW8K-U#6$M[8/;NKLYP#U`]:R1KMVJG]_E MB0)9!N,J*Y)XP<`"M*'5H+B(.C#W! M/(I.FQ\QI;JAFD^6JK7Z?WA^=6=-LSJDQ+RK!:1?-/.Y^5!_4GL*RFN57947 M=G4^`XDL;74-X')_7`KF-5U636=6FOY.`YPB_W5'05-XB\1)> M01:=IR+88C0]9#_>:JU_X>UG2]-_M&\MECM?E^<2@GGIP*YH4]>:74WE+ M2RZ%:>X$<98G@"ND\*:/::);MXO\1.(`%_T6-^H![X[L>PK#L5L=-":EK*^= M(/FMM/!Y<]GD_NK[=ZS->UB_\177GWTN0O\`JHEX2,>@']:'%R?*MA)I*X_Q M;XNN_%5Z"P,-E$?W,&?_`!YO4_RJCX3U(Z-XSTV\W;8VE$4G^Z_!_F*SAD$@ MBH+O8GWEY'U%:U:*C"R"$VWJ?4-+5+1[L7^CV5X#GSX$?\2HJ[7E'6%%% M%`!1110!G21MORO7L?2B&T^;)ZU?V+Z4H4#H*`&)&JCI6%X\F-MX&UB13@_9 MF4?CQ_6NAKEOB5G_`(0#5&5Z:9-;29I>&T63Q1IL M;J&1IU!4C(-=/\2;>WL]2TY;>".$-$Y(C4+GD>EH$#`\'MWYKN_P#A//`7_0/'_@$*XSQ7X#U'PQ$+LS+= MV9.TS*N"A_VA_6CPAX&F\66UU<+>K;1P-L7*;BS8S^`J:BHU(^TT@^1 M(]*\/ZKX4\3331:=IT):!0S^9:*O!JMJWB?P=H.IRZ?=V"+/&`6\NT!'(R.: MP/A);O:ZYK-M+C?"JHV#QD,0:YWXD_\`(]7W^['_`.@BN:-"+KNG=VL;.HU3 M4NIVZ^/?`SL%%D03ZV8KA9;IIW9`VV`2,R1C@#)ZX]:7PMX%U/Q*!+:"?J#Q6O[BC)QYM3-^TFKV.&N6`6 MO4?&[M'\/U=<;@(<$CITKR[4K:XT^[ELKR(Q3Q'#*?Y_2O4/''_)/1](?Z4J MZ7-3MW"D_=D>4?,[%W8LST0) MO,3@EP3T7ZGTK27+')&;)%5;Q!Y1P*M@DCI5:Z_U1K*JW8TI[GN? MP\G-QX"TASU$&W\B1_2NEKE/AC_R3[2O]Q__`$-JZNO+>YV(****0PHHHH`* M***`"N?\=P&Y\#ZO$HR?LS,/PY_I7056O[87FGW-JW2:)H_S&*`/FVR;,2GU M%;GAO_D:=+_Z^D_G6!9JT+/`XP\3%&'N#BM[PX0/%&ED]/M2?SKT:3]UG)-: MH]!^+/\`R"M/_P"O@_\`H->;H>!7I'Q:_P"03IY_Z>#_`.@UYM'T%:8;^$B* MWQFKX9_Y&W2_^OA:Z_XA_P#(U^'O]_\`]G6N0\+\^+-+_P"OA:Z[XA_\C9X> M_P!__P!G6G/^/'T?ZA'^&_4ZSQ'?V&D6BZI>QB1[8G[.O( M-3=YQJ,UL<[DC@;8J^WO^-=E\5!_Q+=/_P"NY_\`0:\]/$=&#IQY.9J["O-\ MUD>GV%T_B7X9R2WV'EEM)%E..K+D9^O&:X;X;:5J^I6]^VF:X^FA2J2*L8?? MD'GGH1ZUVWA8?\6V?_KC/_[-6%\%_P#CSU7_`*Z1_P`C62?)3JV[_J:6YI0O MV&_"RV:S\3:];/(96APAD/5R&/-9/BO2SK?Q8;302!.T09)\2==E\/:59:)I M+FU\Y#EHS@I&O``],UY[H/B74=$U>"[CO)C'O`EC>0LKJ3R"#7K7BO4?!UKJ M,4?B*WBEN?*S&9("^$SV/UK$_MGX7_\`/E:_^`C?X4J$TJ5G!N_6P5(WG?FL M1?%[3(WL;'6HAB17\EV'=2,KGZ$?K6SXX/\`Q;H'_9@_I6#X[\8:#KWA@Z=I MMR9)O-1E4QLH`!YY-=;K\6G2^%+2/59&2S+0"0@=N.OH/6L_>C&GS+9O]"M& MY6[')?#[PLD@'B#5%"V\66MUDZ''\9]AVK&\:>*6\2:EY1G/W5R(, M8%5+PXA)]JMM5"^#2*(DR6@Z:/>OA]`;;P)I$9&"8-WYDG^M=' M532K06.E6EH!CR(43'T`%6Z\UG8%%%%`!1110`4444`%%%%`'SYXUTW^QO'6 MH0!=L<[_`&B/TP_)_7-5+.Y-G?6UV.L$JR?DG-K_A`3V2^:\16YC"]67'./P->/I* M,8]/TKKO"/Q`?0K5=.U&-Y[1/]5(GWXQZ8/45T,VM_#[4I/M-S':F1N6+P%6 M/UP.:UIN=%.+C=>1E/EGK>S.8^'NG2ZCXIAN%0F"SS([XX!Q@#ZYK2\M`[X^7;'Y<:GU/R-K,>I7 M4C2R?:%FE;NW.36L%*C_%3_`)!FG_\`7P?_`$&O.F/[ MNNF\9^+K#Q):6T-G',C0REV\Q0!C&*Y M"_%^G^%(KN.^CG=KAE9?*4'``[\UA*G-PJ*V[-5./-'79&S\.O\`D=/$W_70 M_P#H9K(\0:JNB?&#[>YQ%&T:R'_99`#_`#JMX5\8Z?HGB#5]0N(YVCOGS&(U M!(^8GGGWK$\6ZM;Z_P"([G4;976*4*`)!@\#%;1I-UFY+1JWY$RJ+D5GK<]! M^*>@RZKIMMK%DAF:U!$@09)C/.X>N/ZUY(&![BNX\)?$:XT.V33]2B:ZM$XC M=3\\8].>HKHIM<^'=VYNI["$RGD@VI!)]\<4JP^.QGX=`?[,/]*Y;Q5XKT?4]$_LG2-/:!/,5]^Q4'';`J;Q'X MVTW5_"PTF"*X6;$8RZ@+\N,]_:IJ<]24)9SY$ M!(_A!^8_B?Y5A7D;4D>G4M%%<1T!1110`4444`%%%%`!1110!5U*PM]4TZXL M+I-T-Q&8W'L:^=;S3+K0M:N-(N0?-@DVJ3T<'[K#ZBOI.N!^)OA.35K)=7T^ M/.H6(R5`YEC')'U'4?C6E.5F1-71RVJSVWA>Y32;+3[2>>*)3F:34X[;Q=*FL:;J-G%/-$JW5M M6\UE;6][;PF>":WC\ ML,%^\C`<'BDMX;9=$G\/W6J6(DEE%S;3QR[HPXX*,?XP<'\3Q^%:1N;1_$TMY<:_ M9-I,L2I);&;?O^4#&WH.>X(/KFLX\ MS7*BG9.[*-K:1?\`"):G/-`/M,%U%&&(^9>N16-IT-E<^)+2'47V6;2JLIS@ M8^O85VE^=,O]/U1+/4K*(ZA-!I]P:XNYT@)JT5H^IV!$^3YR2[ MHT]F..*Z:4^:Z;M_PQG*+C:QO7RW4?B"UTK4M!T^WMY+M!#)%!@-'N[,/O`C MK5F^M[F'Q`UF_A:SATXW@A6X^R$?(6P/FSWJ319?[(T\V>LZK9W4?VB)K2*. M82^20P)?/\*XIL]L9/$[Z@?$-D]H;SS@C7A.%W9^[TK+FL[=O4O6VGZ$US8V M4USKL-WH=I:6MBKFWNHXBA#`_*,YPV?2L?Q!81/=I4S7 M-F,Y$C%2-H]?FP:$Y1U_K^KB:4M#4;P[IFH6Z:=!;QQM;7J6TUP@^=@L9:0Y M]SFN:G\1PQ7$D5GHVFBS1B$CE@W,RCN6SG)K2T#Q%!I>C+<7$RO.=3\R6+/S MM&RD,0/QK.NO#4,EQ)-9ZUIK6+,6622?:RJ>Q7KD5,=&U/8F:/I]UIDT(,TS0[R)3]X,";I4N- MXF7'*^7W/:L[I*_^9HDW(XZUT^XUO5K?2[-DF"-AS#"3D#ZD8KOJY:DN9G3 M35D+11169H%%%%`!1110`4444`%%%%`!367=]:=10!X[\1_`LFFSR:_I,.ZU M<[KJ!1_JCW<#^[Z^E<3;W"R*,$5]+,BLI5@"",$$9!%>2>./AE-9R2ZOX;B+ MPG+362]5]2GJ/;\JVIU6M#*5-,XT$4X8[5GP78;Y6X8<$'J#5Q7!KMA53.:5 M.Q,"*=FH@:<#6RD9\I)FJ$S9E;Z]ZMAN*BDA$C;@=I[\5K"23U)<1]LJB+*H M5SUSWJ;BHU+!0&(..]+NJ7+4?*AV12$TW--+5#D/E%)IIP.<4UGQ56>[5!@< MD]`.]92J)&D:=R2>=8UR379_#OP+)J\\>NZM"5LT.ZVA" M/AI-J$D>K>(XC';<-%9MPTGH7]![5Z\B*BA5`55&``,`"N*=5LZ8TTAJ1[:D MI*6L#4****`"BBB@`HHHH`****`"BBB@`HHHH`*2EHH`XSQ;\-M+\2,]W;$6 M&HG_`);1K\LA_P!M>_UZUY)K?AW7?"TVW4[-O)SA;F/YHV_'M^-?1M-DC26- MHY$5T8896&01]*I2:$TF?-$5XCCJ*G64'O7KFM_"GPYJS-+;1OIL[?QVQPI/ MNAX_+%<7J'P?\0VI)T^^M;U.RL3$WZ\?K71&L9.F*K1VF MLR$)'I%\Q/0"W?\`PK0MO"7BZ^($.@W2`]Y1Y8_6E*L"IE9I0.]5Y;Q$'WA^ M==?I_P`(?$5X0=1O;6Q3NJDR-^G'ZUV>B_"?PYI;++=))J4Z\[KD_+G_`'1Q M^>:PE6-%3/*=%T#7/%$WEZ79NT6<-<2?+&OX]_PKUGPE\--,\.LEY=D:AJ`Y M\UU^2,_["_U/-=E%#'#&L44:QQJ,*B``#Z"G5A*39HHI!2T45)04444`%%%% M`!1110`4444`%%%%`!1110`4444`%%%%`!1110`4444`%%%%`!1110`4444` ;%%%%`!1110`4444`%%%%`!1110`4444`?__9 ` end