EX-10.2 4 dex102.txt FIRST AMEND. TO INTERCREDITOR AGMT. Exhibit 10.2 FIRST AMENDMENT TO INTERCREDITOR AGREEMENT This First Amendment to Intercreditor Agreement dated as of September 27, 2001 (the Amendment amends the Intercreditor Agreement dated as of May 15, 2001 (the "Intercreditor Agreement") by and among Bank of America, National Association, as Administrative Agent (the "US Agent") under the Amended and Restated Multicurrency Credit Agreement, dated as of May 15, 2001, among APW Ltd. (the "US Borrower"), various financial institutions (the "US Banks"), Bank One, NA as Syndication Agent and the US Agent (as such Multicurrency Credit Agreement may from time to time be amended, modified, restated or refinanced, the "US Credit Agreement"); Bank of America, National Association as Security Trustee (the "US Security Trustee") under the Debenture, dated as of May 15, 2001, the Second Debenture dated as of July 13, 2001, the Standard Securities dated as of July 13, 2001 and the Irish Debenture dated as of August 15, 2001 (collectively, the "US Debenture"), among the companies set forth on the Schedules attached thereto and Bank of America, N.A. as Security Trustee; the US Banks (via the execution and delivery of the Intercreditor Agreement by the Required Banks (as such term is defined in the US Credit Agreement)); Royal Bank of Scotland, PLC, as agent ("UK Agent") for itself and National Westminster Bank, PLC ("National Westminster"); Royal Bank of Scotland, PLC as Security Trustee (the "UK Security Trustee") under the Debenture, dated as of May 15, 2001, the Second Debenture dated as of July 13, 2001, the Standard Securities as of July 13, 2001 and the Irish Debenture dated as of August 15, 2001 ("UK Debenture"), among the companies set forth on the Schedules attached thereto and Royal Bank of Scotland, PLC as Security Trustee; and Royal Bank of Scotland, PLC and National Westminster (collectively, the "UK Banks"). WITNESSETH: WHEREAS, the parties have entered into the Intercreditor Agreement to provide for their respective rights in the Collateral, as defined in the Intercreditor Agreement; and WHEREAS, the parties desire to amend the Intercreditor Agreement in certain respects, as hereinafter set forth, NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged) the parties hereto agree as follows: SECTION 1. DEFINITIONS. 1.1 Definitions. Section 1.1 of the Intercreditor Agreement is hereby ----------- amended by the addition of the following terms in proper alphabetical order: "Denmark Collateral Proceeds" shall mean all proceeds of Non-Shared Collateral located in Denmark and subject to security interests to be created by APW Power Supplies A/S in favor of the UK Security Trustee. "Excluded Bank" shall have the meaning set forth in the Germany Security Agreement. "German Law Security Documents" shall have the meaning set forth in the German Security Agreement. "German Security Agreement" shall mean the Security Agreement to be entered between The Royal Bank of Scotland plc as Security Agent and certain banks. "Germany Collateral Proceeds" shall mean all proceeds of Collateral located in Germany and subject to the German Law Security Documents. 1.2 Principal Payments. Section 2 of the Intercreditor Agreement is hereby ------------------ amended by the addition after the number "5" in the first line following: ", 9". 1.3 Collateral Proceeds. Section 3 of the Credit Agreement is hereby ------------------- amended by the deletion of the words "Section 33" in the third line and the substitution of the words "Sections 9 and 33" therefor. 1.4 Non-Shared Collateral, Section 9 of the Intercreditor Agreement is --------------------- hereby amended to state in its entirety as follows: "9. Non-Shared Collateral. --------------------- (a) Notwithstanding any provisions of Sections 2 or 3 to the contrary but subject to clauses (b) and (c) of this Section, any proceeds of Non-Shared Collateral shall be applied to the payment of the US Obligations or the UK Obligations, whichever are secured by the such collateral. (b) If Denmark Collateral Proceeds are applied to the UK Obligations (and not, based on Pro Rata Shares, to the US Obligations), all payments thereafter under Section 2 of principal (including, without limitation, Letter of Credit Usage as defined in the US Credit Agreement) and applications of Collateral proceeds thereafter under Section 3 shall be applied to the US Obligations until the outstanding US Obligations and the outstanding UK Obligations shall be in the same proportion as prior to the application of such Denmark Collateral Proceeds. (c) If Germany Collateral Proceeds are applied to the UK Obligations and the US Obligations, but not US Obligations held by Excluded Banks, all payments thereafter under Section 2 of principal (including, without limitation, Letter of Credit Usage as defined in the US Credit Agreement) and applications of Collateral proceeds thereafter under Section 3 shall be applied to the US Obligations held by the Excluded Banks until the outstanding US Obligations held by Excluded Banks, the other US Obligations and the UK Obligations shall be in the same proportion as prior to the application of such Germany Collateral Proceeds." 1.5 Insolvency Proceedings. Section 15(a) and (b) of the Intercreditor ---------------------- Agreement are hereby amended to state in their entirety as follows: (a) Until the US Obligations and the UK Obligations shall have been paid in full, any distribution of any kind made in any Insolvency Proceeding of a Loan Party on account of the Shared Collateral shall be allocated and distributed in accordance with the provisions of Section 3 hereof (or Section 33 hereof, if that latter provision instead should be applicable) but subject to Section 9 and in the event, for whatever reason, such a distribution does not occur, the party receiving any portion of a distribution made in violation of Section 3 hereof (or Section 33 hereof, if that latter provision instead should be applicable) but subject to Section 9 shall hold 2 such position in trust consistent with the provisions of Section 13 hereof and shall promptly deliver such portion to the party that should have instead received it pursuant to Section 3 hereof (or Section 33 hereof, if that latter provision instead should be applicable) but subject to Section 9 to then be further distributed by such party as provided in Section 3 hereof (or Section 33 hereof, if that latter provision should be applicable) but subject to Section 9. Without limiting the generality of Section 3 hereof (or Section 33 hereof, if that latter provision instead should be applicable) but subject to Section 9 or of any other provision of this Intercreditor Agreement, if, in any Insolvency Proceeding of any Loan Party, a party hereto obtains a cash or other payment in connection with any asserted or determined impairment to its interest in any of the Shared Collateral or otherwise as a form of "adequate protection" of its interest in any of the Shared Collateral, such payment shall be deemed, for purposes of this Intercreditor Agreement, to be Net Proceeds of Shared Collateral and such party shall thereupon redistribute such payment in accordance with the priority of payment set forth in Section 3 hereof (or Section 33 hereof, if that latter provision instead should be applicable) but subject to Section 9. (b) Each party may file in any Insolvency Proceeding of any Loan Party proofs of claim and other motions and pleadings with respect to its claims and liens and security interests, if and only if consistent with the terms hereof and the limitations of such party imposed hereby. Consistent with, but not in limitation of, the foregoing, each party expressly reserves: (i) its right to vote in any Insolvency Proceeding of any Loan Party; (ii) any and all of its claims or defenses in favor of or in opposition to any plan of reorganization proposed for any Loan Party in an Insolvency Proceeding; and (iii) any and all of its claims, rights, powers and/or remedies under any law governing the Loan Party that any other creditor with security interests and liens in the assets of the Loan Party would have; provided, however, each party expressly agrees that -------- ------- it shall exercise all of such claims, rights, powers, and or remedies in a manner that is consistent with the provisions of this Intercreditor Agreement and that it shall not exercise (and it shall be expressly prohibited from exercising) any such claims, rights (including, without limitation, any right to vote its claim to accept or reject any plan of reorganization for any Loan Party), powers, and/or remedies in a manner that is intended to deprive or that has the likely effect of depriving other parties of the benefits of this Intercreditor Agreement (and any such exercise shall be deemed to be null and void). Each party shall have the right to enforce the provisions of this Intercreditor Agreement (including the provisions of this Section 15(b)) in an Insolvency Proceeding of any Loan Party. Without limiting the generality of the foregoing, no party shall have the right to waive or fail to assert its claims or to support a plan of reorganization that provides for a priority of distribution that is inconsistent with the provisions of Section 3 hereof (or Section 33 hereof, if that latter provision instead should be applicable) but subject to Section 9 in an Insolvency Proceeding of any Loan Party and in the event that US Agent reasonably determines that any member of the UK Lender Group, or that the UK Agent reasonably determines that any member of the US Lender Group, may be on the verge of doing so in any Insolvency Proceeding of any Loan Party, the US Agent or the UK Agent (as the case may be) shall be deemed to be the assignee (and thus the holder) of such claim and shall have the right to assert and vote (including pursuant to a deemed power of attorney) such claim in the Insolvency Proceeding of any Loan Party, including through the filing of a proof of claim therein and/or casting ballots in connection with any proposed plan of reorganization for any Loan Party." SECTION 2. APPOINTMENT OF SECURITY TRUSTEE. 3 2.1 Germany. The US Banks, the US Agent, the UK Banks and the UK Agent ------- hereby appoint Royal Bank of Scotland, PLC as security trustee under Collateral Documents related to assets in Germany. 2.2 Brazil. The US Banks, the US Agent, the UK Banks and the UK Agent ------ hereby appoint Bank of America, N.A. as security trustee under Collateral Documents related to assets in Brazil. SECTION 3. EFFECTIVENESS. This Amendment shall be effective when executed and delivered by the US Agent, the US Security Trustee, the Required Banks, the UK Agent, the UK Banks, and the UK Security Trustee and when the attached Loan Party Acknowledgement shall be executed and delivered by each Loan Party. SECTION 4. MISCELLANEOUS. 4.1 Continuing Effectiveness, etc. This amendment shall be deemed to be an ----------------------------- amendment to the Intercreditor Agreement, and the Intercreditor Agreement, as amended hereby, shall remain in full force and effect and is hereby ratified, approved and confirmed in each and every respect. After the effectiveness of this Amendment in accordance with its terms, all references to the Intercreditor Agreement in the Loan Documents or in any other document, instrument, agreement or writing shall be deemed to refer to the Intercreditor Agreement as amended hereby. 4.2 Severability. Any provision of this Amendment which is prohibited or ------------ unenforceable in any jurisdiction shall, as to such provision and such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Amendment or affecting the validity or enforceability of such provision in any other jurisdiction. 4.3 Headings. The various headings of this Amendment are inserted for -------- convenience only and shall not affect the meaning or interpretation of this Amendment or any provisions hereof. 4.4 Execution in Counterparts. This Amendment may be executed by the ------------------------- parties hereto in several counterparts, each of which shall be deemed to be an original and all of which shall constitute together but one and the same agreement. 4.5 Governing Law. THIS AMENDMENT SHALL BE DEEMED TO BE A CONTRACT MADE ------------- UNDER AN GOVERNED BY THE INTERNAL LAWS OF THE STATE OF ILLINOIS. 4.6 Successors and Assigns. This Amendment shall be binding upon and shall ---------------------- inure to the benefit of the parties hereto and their respective successors and assigns. 4 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above. BANK OF AMERICA, NATIONAL ASSOCIATION, as US Agent, US Security Trustee and a US Bank By: /s/ M. Duncan McDuffie -------------------------------------- Name: M. Duncan McDuffie Title: Managing Director ROYAL BANK OF SCOTLAND, PLC, as UK Agent, as UK Security Trustee, as a UK Bank and as a US Bank By: /s/ T.J. SMITH ----------------------------------- Name: T.J. SMITH Title: SENIOR MANAGER SLS BANK ONE, NA, as a US Bank By: /s/ Thomas T. Bower ----------------------------------- Name: THOMAS T. BOWER Title: Senior Vice President THE CHASE MANHATTAN BANK, as a US Bank By: /s/ Michael Lancia ----------------------------------- Name: Michael Lancia Title: Vice President FIRST UNION NATIONAL BANK, as a US Bank By: /s/ Joel Thomas ------------------------------------ Name: Joel Thomas Title: Vice President WILLIAM E. SIMON & SONS SPECIAL SITUATIONS PARTNERS II, L.P., as a US Bank By: /s/ DALE LESHAW ------------------------------------ Name: DALE LESHAW Title: PRINCIPAL LASALLE BANK NATIONAL ASSOCIATION, as a US Bank By: /s/ Margaret P. Heger ----------------------------------- Name: Title: First Vice President THE BANK OF TOKYO-MITSUISHI, LTD., CHICAGO BRANCH, as a US Bank By: /s/ SHINICHIRO MUNECHIKA ----------------------------------- Name: SHINICHIRO MUNECHIKA Title: DEPUTY GENERAL MANAGER CREDIT LYONNAIS CHICAGO BRANCH, as a US Bank By: /s/ Mary Ann Klemm ----------------------------------- Name: MARY ANN KLEMM Title: VICE PRESIDENT U.S. BANK NATIONAL ASSOCIATION, as a US Bank By: ----------------------------------- Name: Title: FIRSTAR BANK, N.A., as a US Bank By: ----------------------------------- Name: Title: Its Attorney-In-Fact THE FUJI BANK, LIMITED By: /s/ Peter L. Chinnici ----------------------------------- Name: Peter L. Chinnici Title: Senior Vice President & Group Head FLEET NATIONAL BANK, as a US Bank By: /s/ Margot Doering ----------------------------------- Name: Margot Doering Title: Vice President THE DAI-ICHI KANGYO BANK, LTD., as a US Bank By: /s/ Nobuyasu Fukatsu ----------------------------------- Name: Nobuyasu Fukatsu Title: General Manager M&I MARSHALL & ILSLEY BANK, as a US Bank By: /s/ Michael Vellon ----------------------------------- Name: Michael Vellon Title: Vice President By: /s/ Mark R. Hogan ----------------------------------- Name: Mark R. Hogan Title: Senior Vice President BNP PARIBAS, as a US Bank By: /s/ Duane P. Helkowski ----------------------------------- Name: Duane P. Helkowski Title: Director By: /s/ Shayne P. March ----------------------------------- Name: Shayne P. March Title: Vice President SOCIETE GENERALE, as a US Bank By: ---------------------------- Name: Title: WACHOVIA BANK, N.A., as a US Bank By: /s/ Edward H. Hutchison ----------------------------------- Name: Edward H. Hutchison Title: Senior Vice President/Group Executive SUMITOMO MITSUI BANKING CORPORATION, as a US Bank By: /s/ Peter R.C. Knight ----------------------------------- Name: Peter R.C. Knight Title: Senior Vice President THE MITSUBISHI TRUST & BANKING CORPORATION, as a US Bank By: ---------------------------- Name: Title: NATIONAL WESTMINSTER BANK, PLC, as a UK Bank By: /s/ Geoff Cruickshank ----------------------------------- Name: Geoff Cruickshank Title: Head of Corporate Restructuring Unit, Specialized Lending Services GOLDMAN SACHS CREDIT PARTNERS L.P., as a US Bank By: /s/ Mark Denatale ----------------------------------- Name: MARK DENATALE Title: AUTHORIZED SIGNATORY LOAN PARTY ACKNOWLEDGMENT ------------------------- Each of the undersigned Loan Parties hereby acknowledges receipt of a copy of the foregoing First Amendment to Intercreditor Agreement, waives notice of acceptance thereof by the parties to such amendment, and agrees to be bound by the terms and provisions of the Intercreditor Agreement, as so amended, to make no payments or distributions contrary to the terms and provisions, and to do every other act and thing necessary or appropriate to carry out such terms and provisions. Dated as of September 27, 2001 APW LTD. By: /s/ Richard D. Carroll ---------------------------- Name: Richard D. Carroll Title: Vice President and Chief Financial Officer APW NORTH AMERICA INC. By: /s/ James Maxwell ---------------------------- Name: James Maxwell Title: Treasurer APW ENCLOSURE SYSTEMS, INC. APW ENCLOSURE SYSTEMS HOLDING, INC. APW WRIGHT LINE LLC APW-ERIE, INC. ASPEN MOTION TECHNOLOGIES INC. CAMBRIDGE AEROFLO, INC. EDER INDUSTRIES INC. ELECTRONIC SOLUTIONS INNOVATIVE METAL FABRICATION, INC. MCLEN WEST INC. MCLEAN MIDWEST CORPORATION METAL ARTS MANUFACTURING, INC. PRECISION FABRICATION TECHNOLOGIES INC. VERO ELECTRONICS, INC. ZERO-EAST DIVISION, ZERO CORPORATION By: /s/ James Maxwell --------------------------------- Name: JAMES MAXWELL Title: TREASURER, ASSISTANT TREASURER, or CFO, as applicable APW ENCLOSURES SYSTEMS, LP by APW ENCLOSURE SYSTEMS HOLDING, INC., its General Partner By: /s/ James Maxwell --------------------------------- Name: James Maxwell Title: Treasurer APPLIED POWER LTD. APW ELECTRONICS INVESTMENTS OVERSEAS LTD. APW ELECTRONICS LTD. APW ENCLOSURE SYSTEMS HOLDINGS LTD. APW ENCLOSURE SYSTEMS (UK) LTD. By: /s/ Samantha Louise Kirby -------------------------------------- Name: Samantha Louise Kirby Title: Company Secretary APW ENCLOSURES (DUBLIN) LIMITED By: /s/ Richard D. Carroll ------------------------------- Name: Richard D. Carroll Title: Vice President APW GALWAY LIMITED By: /s/ Samantha Louise Kirby ------------------------------- Name: Samantha Louise Kirby Title: Director HOERMANN SECURITY SYSTEMS LTD. By: /s/ Richard D. Carroll ------------------------------ Name: Richard D. Carroll Title: Vice President APW POWER SUPPLIES LTD. By: /s/ Richard D. Carroll ------------------------------------- Name: Richard D. Carroll Title: Vice President APW NEW FOREST LIMITED By: /s/ Samantha Louise Kirby ------------------------------- Name: Smantha Louise Kirby Title: Company Secretary TOWERFLAME LIMITED By: /s/ Richard D. Carroll ------------------------------- Name: Richard D. Carroll Title: Vice President APW ELECTRONICS GROUP PLC By: /s/ Samantha Louise Kirby ------------------------------------- Name: Samantha Louise Kirby Title: Company Secretary APW ENCLOSURE PRODUCTS AND SYSTEMS LIMITED By: /s/ Samantha Louise Kirby -------------------------------- Name: Samantha Louise Kirby Title: Company Secretary APW ENCLOSURE SYSTEMS PLC By: /s/ Samantha Louise Kirby ------------------------------ Name: Samantha Louise Kirby Title: Company Secretary AIR CARGO EQUIPMENT (UK) LIMITED By: /s/ Richard D. Carroll ------------------------------------- Name: Richard D. Carroll Title: Vice President APW Enclosures Limited By: /s/ Richard D. Carroll ------------------------------------- Name: Richard D. Carroll Title: Vice President HOERMANN ELECTRONICS LIMITED By: /s/ Richard D. Carroll ------------------------------------- Name: Richard D. Carroll Title: Vice President WRIGHT LINE EUROPE B.V. By: /s/ Richard D. Carroll ------------------------------------- Name: Richard D. Carroll Title: Vice President APW NETHERLANDS B.V. By: /s/ Samantha Louise Kirby ------------------------------------- Name: Samantha Louise Kirby Title: Director APW HOLDING B.V. By: /s/ Richard D. Carroll ---------------------------------- Name: Richard D. Carroll Title: Vice President APW PRODUCTS AND SYSTEMS B.V. By: /s/ Samantha Louise Kirby ------------------------------------- Name: Samantha Louise Kirby Title: Director CIPRESMAD HUNGARY GROUP FINANCING LLC By: /s/ [illegible in Original] ------------------------------------- Name: Title: APW ELECTRONICS GMBH By: /s/ Richard D. Carroll ------------------------------------- Name: Richard D. Carroll Title: Vice President CIPRESMAD-CONSULTORES E SERVICOS, LTD. By: /s/ [illegible in original] ------------------------------------- Name: Title: Schedule 7.6(a)(i) ------------------
--------------------------------------------------------------------------------------------------------------- EBITDARR: Q102 Q202 Q302 Q402 ---- ---- ---- ---- --------------------------------------------------------------------------------------------------------------- EBITDA (per Income Statement) 32,721 14,697 29,581 36,756 - Adjusted for "Other Expenses" - 45 44 44 EBITDA (adjusted for "Other Expenses") 32,721 14,652 29,537 36,712 - Less Gain on Asset Sale (24,000) - - - EBITDA, less Gain on Asset Sale 8,721 14,652 29,537 36,712 + GAAP Restructuring Expense 8,925 2,503 - - + Non-GAAP Restructuring Expense 2,802 3,437 2 - ================================================================= EBITDARR, less Gain on Asset Sale 20,448 20,592 29,539 36,712 1Q Rolling 2Q Rolling 3Q Rolling 4Q Rolling ---------- ---------- ---------- ---------- Rolling EBITDARR 20,448 41,040 70,579 107,290 Total not Less Than 13,948 31,040 60,579 97,290
Schedule 7.6(a)(ii) -------------------
-------------------------------------------------------------------------------------------------------------- Non - GAAP Restructuring expenses: Q1 02E Q2 02E Q3 02E Q4 02E ------ ------ ------ ------ -------------------------------------------------------------------------------------------------------------- Non - GAAP Restructuring 2,802 3,437 2 0 Write-off of Assets 2,173 1,780 1,430 0 Total Non - GAAP Restructuring 4,975 5,217 1,432 0 Non - GAAP Restructuring (cumulative) 4,975 10,192 11,624 11,624 Non - GAAP Restructuring Covenant -not to exceed 7,500 11,000 12,500 12,500
Schedule 7.6(a)(iii) --------------------
------------------------------------------------------------------------------------------------------------------- GAAP Restructuring expenses: Q1 02E Q2 02E Q3 02E Q4 02E ------ ------ ------ ------ ------------------------------------------------------------------------------------------------------------------- GAAP Restructuring 8,925 2,503 0 0 GAAP Restructuring (cumulative) 8,925 11,428 11,428 11,428 GAAP Restructuring Covenant -not to exceed 12,500 12,500 12,500 12,500
Schedule 7.6(a)(iv) -------------------
--------------------------------------------------------------------------------------------------------------- Free Cash Flow: Q1 02E Q2 02E Q3 02E Q4 02E ------ ------ ------ ------ --------------------------------------------------------------------------------------------------------------- Cash Flow (608) (9,677) (5,289) 13,448 Cash Flow (Cumulative) (608) (10,285) (15,574) (2,126) Cumulative Cash Flow Covenant Minimum (7,108) (18,785) (25,574) (12,126)
Schedule 7.6(b) ---------------
---------------------------------------------------------------------------------------------------------------- Rolling 3-month Revenue Test Q4 01E Q1 02E Q2 02E Q3 02E Q4 02E ------ ------ ------ ------ ------ ---------------------------------------------------------------------------------------------------------------- Revenue Projections 290,200 285,000 280,000 310,000 335,000 Month 1 30% 87,060 85,500 84,000 93,000 100,500 Month 2 60% 174,120 171,000 168,000 186,000 201,000 Month 3 90% 261,180 256,500 252,000 279,000 301,500 Monthly Sales Covenant 256,500 252,000 279,000 301,500 (3 month rolling) September 2001 259,620 October 2001 258,060 November 2001 256,500 December 2001 255,000 January 2002 253,500 February 2002 252,000 March 2002 261,000 April 2002 270,000 May 2002 279,000 June 2002 286,500 July 2002 294,000 August 2002 301,500