-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Siv/aBSE/22kxpfiXaxtoR1jfg4oiBMeRVMXpI5Nq70hTqcT1+FFs2KYMTrQBwlS kraod4+v+CFfBJwzbChUrQ== 0000893220-02-000719.txt : 20020523 0000893220-02-000719.hdr.sgml : 20020523 20020523161300 ACCESSION NUMBER: 0000893220-02-000719 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20020521 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20020523 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SL INDUSTRIES INC CENTRAL INDEX KEY: 0000089270 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC LIGHTING & WIRING EQUIPMENT [3640] IRS NUMBER: 210682685 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-04987 FILM NUMBER: 02661147 BUSINESS ADDRESS: STREET 1: 520 FELLOWSHIP ROAD STREET 2: SUITE A114 CITY: MT LAUREL STATE: NJ ZIP: 08054 BUSINESS PHONE: 8567271500 MAIL ADDRESS: STREET 1: 520 FELLOWSHIP ROAD STREET 2: SUITE A114 CITY: MT LAUREL STATE: NJ ZIP: 08054 FORMER COMPANY: FORMER CONFORMED NAME: GL INDUSTRIES INC DATE OF NAME CHANGE: 19710111 FORMER COMPANY: FORMER CONFORMED NAME: SGL INDUSTRIES INC DATE OF NAME CHANGE: 19841008 FORMER COMPANY: FORMER CONFORMED NAME: GL ELECTRONICS CO INC DATE OF NAME CHANGE: 19670928 8-K 1 w60968e8-k.txt SL INDUSTRIES, INC. FORM 8-K ================================================================================ 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): May 23, 2002 SL INDUSTRIES, INC. (Exact name of issuer as specified in its charter) New Jersey 1-4987 21-0682685 (STATE OR OTHER JURISDICTION OF (COMMISSION (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) FILE NUMBER) IDENTIFICATION NUMBER) 520 Fellowship Road, Suite A114 Mount Laurel, New Jersey 08054 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES AND ZIP CODE) (856) 727-1500 (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE) ITEM 5. OTHER EVENTS. On May 23, 2002, SL Industries, Inc. (the "Company") and its lenders reached an agreement, pursuant to which the lenders granted a waiver of default and amended certain financial covenants of the Company's Revolving Credit Facility, so that the Company is in full compliance with the Revolving Credit Facility after giving effect to the amendment. The agreement provides, among other things, for the Company to pay-down outstanding borrowings by $660,000 to $25,500,000, and for the payment to the lenders of an amendment fee of $130,000 at closing. For additional information, reference is made to the press release attached hereto as Exhibit 99.1 and to the form of Second Amendment attached hereto as Exhibit 99.2. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (c) The following are filed as Exhibits to this Report:
Exhibit Number Description - -------------- ----------- 99.1 Press Release dated May 23, 2002 (transmitted herewith). 99.2 Form of Second Amendment and Waiver to Second Amended and Restated Credit Agreement, dated May 23, 2002, among SL Industries, Inc., SL Delaware, Inc., GE Capital CFE, Inc., as Agent, and certain other parties to the Credit Agreement (transmitted herewith).
SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized. SL INDUSTRIES, INC. Dated: May 23, 2002 By: /s/ David R. Nuzzo ------------------------------------------- David R. Nuzzo Vice President Finance and Administration EXHIBIT INDEX
Exhibit Number Description - -------------- ----------- 99.1 Press Release dated May 23, 2002. 99.2 Form of Second Amendment and Waiver to Second Amended and Restated Credit Agreement, dated May 23, 2002, among SL Industries, Inc., SL Delaware, Inc., GE Capital CFE, Inc., as Agent, and certain other parties to the Credit Agreement.
EX-99.1 3 w60968ex99-1.txt PRESS RELEASE EXHIBIT 99.1 SL INDUSTRIES, INC. ANNOUNCES FINANCIAL RESULTS FOR ITS FIRST QUARTER ENDED MARCH 31, 2002 MT. LAUREL, NEW JERSEY, MAY 23, 2002 . . . SL INDUSTRIES, INC. (NYSE & PHLX:SL) announced today that revenue for the first quarter ended March 31, 2002 was $32,947,000, compared to $37,582,000 for the first quarter last year. Net loss from continuing operations was $689,000, or $0.12 per diluted share, compared to net income of $511,000, or $0.09 per diluted share, for the same period in 2001. Discontinued operations added $0.05 per diluted share to income in the current quarter and had a $0.01 per share negative impact in the first quarter of 2001. The loss for the period ended March 31, 2002 included $1,825,000 for special charges ($1,631,000 of change-in-control payments and $194,000 of proxy costs), $225,000 for restructuring charges and an increase to the Company's environmental reserve of $500,000 ($1,514,000 net of taxes). These charges had a $0.26 negative effect on net income for the period. The Company had net income from continuing operations of $825,000, or $0.14 per diluted share, excluding the above charges for the current quarter. The Company reported net new orders of $33,310,000 in the first quarter of 2002, compared to net new orders of $39,614,000 in the first quarter of 2001. Backlog at March 31, 2002 was $55.9 million, as compared to $61 million a year earlier. Commenting on the results, Warren Lichtenstein, Chairman and Chief Executive Officer of SL Industries, said, "The operating results demonstrate that the Company has turned the corner in its restructuring plan. Without including the special charges, earnings from continuing operations before interest, taxes, depreciation and amortization ("EBITDA") for the quarter ended March 31, 2002 was $1,887,000, an increase of $1,957,000 from the fourth quarter of 2001. EBITDA was $3,136,000 for the first quarter of 2001. "Unfortunately, as previously forecasted, the special charges incurred as a result of the contested election of directors in January caused the Company to miss the net income financial covenant under its Revolving Credit Facility for the first quarter of 2002. The Company and its lenders have reached an agreement to waive current events of default and to otherwise amend the Revolving Credit Facility so that the Company will be in full compliance with all covenants and conditions." (more) SL INDUSTRIES, INC. FIRST QUARTER 2002 FINANCIAL RESULTS May 23, 2002 Page 2 Lichtenstein further stated, "There have been other encouraging developments as well. On April 16, the New York Stock Exchange agreed to continue listing SL Industries in connection with its acceptance of the Company's business plan and the Company's meeting the stated objectives under the business plan over the next 18 months. Additionally, the Company has accepted an offer to sell its unoccupied industrial facility in Auburn, New York for $250,000 in cash. This sale will provide cash benefits to the Company in the form of the purchase price and tax deductions." Lichtenstein concluded, "While we are never satisfied to report a loss to our shareholders, the Board of Directors is encouraged by the performance of the Company and is excited about its prospects. SL Industries is in its best financial condition of the past two years. Over the past 12 months it has reduced its indebtedness by approximately $15 million, and expected cash flows this year should further reduce the Company's debt and other liabilities. More importantly, managers and employees throughout the organization are moving forward on corporate and divisional initiatives designed to further increase shareholder value. I note that each non-employee member of the Board of Directors has elected to receive his director's fee in stock options instead of cash. This action will save the Company some cash payments, but it is particularly significant as a real vote of confidence by the Board members in the Company's personnel and future results. "We are making progress on a number of corporate strategies. The Company's investment bankers, Credit Suisse First Boston, should start distributing confidential offering memoranda to prospective purchasers. I look forward to reporting to the shareholders on the progress of the sales process and the execution of the Company's strategy in the months ahead." ABOUT SL INDUSTRIES SL Industries, Inc. designs, manufactures and markets Power and Data Quality (PDQ) equipment and systems for industrial, medical, aerospace and consumer applications. For more information about SL Industries, Inc. and its products, please visit the Company's web site at www.slpdq.com. (more) SL INDUSTRIES, INC. FIRST QUARTER 2002 FINANCIAL RESULTS May 23, 2002 Page 3 FORWARD-LOOKING STATEMENTS This press release contains statements that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations, estimates and projections about the Company's business based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors, including those described above and the following: the effectiveness of the cost reduction initiatives undertaken by the Company, changes in demand for the Company's products, product mix, the timing of customer orders and deliveries, the impact of competitive products and pricing, constraints on supplies of critical components, excess or shortage of production capacity, difficulties encountered in the integration of acquired businesses and other risks discussed from time to time in the Company's Securities and Exchange Commission filings and reports. In addition, such statements could be affected by general industry and market conditions and growth rates, and general domestic and international economic conditions. Such forward-looking statements speak only as of the date on which they are made, and the Company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release. (table attached) SL INDUSTRIES, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands)
Three-Months Ended March 31, 2002 2001 -------- -------- (Unaudited) Net sales ..................................................... $ 32,947 $ 37,582 -------- -------- Cost and expenses: Cost of products sold ....................................... 21,333 25,288 Engineering and product development ......................... 2,216 2,328 Selling, general and administrative ......................... 7,286 6,830 Depreciation and amortization ............................... 874 1,146 Special charges ............................................. 1,825 -- Restructuring costs ......................................... 225 -- -------- -------- Total cost and expenses ....................................... 33,759 35,592 -------- -------- Operating income (loss) from continuing operations ............ (812) 1,990 Other income (expense): Interest income ............................................. 78 72 Interest expense ............................................ (554) (703) -------- -------- Income (loss) from continuing operations before income taxes .. (1,288) 1,359 Income tax provision (benefit) ................................ (599) 848 -------- -------- Income (loss) from continuing operations ...................... (689) 511 Income (loss) from discontinued operations (net of tax) ....... 313 (32) -------- -------- Net income (loss) ............................................. $ (376) $ 479 ======== ======== Basic net income (loss) per common share Income (loss) from continuing operations .................. (0.12) 0.09 Income (loss) from discontinued operations (net of tax) ... 0.05 (0.01) -------- -------- Net income (loss) ......................................... $ (0.07) $ 0.08 ======== ======== Diluted net income (loss) per common share Income (loss) from continuing operations .................. (0.12) 0.09 Income (loss) from discontinued operations (net of tax) ... 0.05 (0.01) -------- -------- Net income (loss) ......................................... $ (0.07) $ 0.08 ======== ======== Shares used in computing basic net income (loss) per common share ............................................ 5,783 5,675 Shares used in computing diluted net income (loss) per common share ............................................ 5,783 5,818
SL INDUSTRIES, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE OPERATIONS (In thousands)
Three-Months Ended March 31, 2002 2001 ----- ----- (Unaudited) Net income (loss) ........................................ $(376) $ 479 Other comprehensive income (loss): Currency translation adjustment, net of related taxes .. 13 (69) ----- ----- Comprehensive income (loss) .............................. $(363) $ 410 ===== =====
SL INDUSTRIES, INC. SUMMARY CONSOLIDATED BALANCE SHEETS (In thousands)
March 31, December 31, 2002 2001 --------- ------------ (Unaudited) Cash and cash equivalents ........................... $ 5,518 $ 6,577 Accounts receivable ................................. 23,870 36,041 Inventories ......................................... 20,211 20,497 Other current assets ................................ 6,752 7,115 -------- -------- Total current assets ......................... 56,351 70,230 Property, plant and equipment, net .................. 18,350 18,829 Intangible assets, net .............................. 14,699 14,799 Other assets ........................................ 3,478 3,900 -------- -------- Total assets ................................ $ 92,878 $107,758 ======== ======== Current liabilities ................................. $ 25,375 $ 30,925 Long-term debt due within one year .................. 26,303 35,829 Other liabilities ................................... 7,626 7,800 Shareholders' equity ................................ 33,574 33,204 -------- -------- Total liabilities and shareholders' equity .. $ 92,878 $107,758 ======== ========
EX-99.2 4 w60968ex99-2.txt AMENDMENT AND WAIVER TO RESTATED CREDIT AGREEMENT EXHIBIT 99.2 SECOND AMENDMENT AND WAIVER TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT THIS SECOND AMENDMENT AND WAIVER TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this "Amendment"), dated as of May 23, 2002, is made by and among SL Industries, Inc. and SL Delaware, Inc. (together, the "Borrower"); GE Capital CFE, Inc., both individually "GECC" and as Agent for the Banks (this and all other capitalized terms not defined herein shall have the meanings set forth in the Credit Agreement described below); and the Banks party to the Credit Agreement described below. Background The Borrower, the Agent and the Banks are parties to that certain Second Amended and Restated Credit Agreement dated as of December 13, 2001, as amended by that certain Omnibus Amendment Agreement dated as of February 26, 2002 (as so amended, the "Credit Agreement"). The aggregate principal amount of the Loans (as defined in the Credit Agreement) outstanding as of the date hereof is $26,160,171.24, and such amount is due and payable to the Banks in accordance with the terms of the Credit Agreement without defense, counterclaim or offset by the Borrower. The Borrower has requested that the Agent and the Banks amend the Credit Agreement to make certain adjustments to the scheduled reductions and repayments of the Commitment (as defined therein) and waive certain events of default. The Agent and the Banks are willing to provide for the amendment and waiver requested by the Borrower on the terms and conditions set forth below. Among other things, this Amendment modifies the mandatory Commitment reduction schedule and increases the amount of net losses of the Borrower permitted in certain fiscal quarters. NOW, THEREFORE, in consideration of the premises and of the mutual covenants herein contained and intending to be legally bound hereby, the parties hereto hereby agree as follows: 1. AMENDMENTS. The Credit Agreement is amended as follows: (a) DEFERRAL OF REDUCTION. The reduction of the Commitment scheduled on March 1, 2002, pursuant to Subsection 2.12(c) of the Credit Agreement, is deferred until the effective date of this Amendment. On the effective date of this Amendment, the aggregate amount of the Commitment shall be reduced to $25,500,000 and the Borrower shall repay the Loans such that the aggregate amount of the outstanding Loans and any outstanding letters of credit referred to in Section 2.01 of the Credit Agreement shall not exceed $25,500,000. (b) SCHEDULE 2.12. Schedule 2.12 (Commitment Reduction Amounts) to the Credit Agreement is amended and restated in its entirety to read as follows: "Period Amount of Commitment ------- -------------------- Second Amendment Effective Date $25,500,000 through 12/30/02 12/31/02 $0 The foregoing schedule is subject to further reduction pursuant to the mandatory commitment reduction provisions of the Credit Agreement." (c) SECTION 1.01. Section 1.01 (Certain Definitions) of the Credit Agreement is amended as follows: (i) The following new definitions are added in their correct alphabetical locations: "Second Amendment" shall mean the Second Amendment and Waiver to Second Amended and Restated Credit Agreement, dated as of May 23, 2002, by and among the Borrower, the Agent and the Banks. "Second Amendment Effective Date" shall mean the effective date of the Second Amendment. (ii) The defined term "Designated Subsidiary Equity" is amended by replacing "65%" with "100%". (d) SUBSECTION 2.01(c). Subsection 2.01(c) (Coordination with Letters of Credit) of the Credit Agreement is amended by deleting the word "trade" in clause (iii) thereof. (e) SUBSECTION 2.04(c). Subsection 2.04(c) (Amendment Fee) of the Credit Agreement is amended by adding the following new sentence at the end thereof: "In addition, an amendment fee of $130,000 shall be payable by the Borrower on the closing date of the Second Amendment and earned by the Banks as follows: $32,560 by GE Capital CFE, Inc., $48,720 by Fleet and $48,720 by PNC." (f) SECTION 2.12. Section 2.12 (Reduction of Commitment and Prepayment) of the Credit Agreement is amended by: (i) deleting paragraph (iv) of Subsection 2.12(a) (Foreign Tax Refund) and replacing it with "Intentionally Omitted"; and (ii) adding the following new paragraph (d) at the end thereof: -2- "(d) If at any time the aggregate amount of the outstanding Loans (including Loans advanced pursuant to Section 2.01(e)) and any outstanding letters of credit referred to in Section 2.01 (Loans) exceeds the amount of the Commitment, the Borrower shall immediately, and without the necessity of demand, repay the Loans in such amount as may be necessary to eliminate such excess." (g) SECTION 5.01. Section 5.01 (Reporting Requirements) of the Credit Agreement is amended by: (i) amending and restating paragraph (c) in its entirety to read as follows: "(c) MONTHLY REPORTS. As soon as practicable, and in any event within 30 days after the close of each month of each fiscal year of the Borrower, the Borrower shall furnish to the Banks: (i) an unaudited consolidated statement of income for the Borrower and its Subsidiaries for such month prepared by the Borrower, in reasonable detail; (ii) an unaudited consolidated balance sheet of the Borrower and its Subsidiaries as of the close of such month prepared by the Borrower, in reasonable detail; (iii) a summary of the aging of the accounts receivable of the Borrower and its Subsidiaries for such month; (iv) a chart showing the number of days outstanding for the accounts payable of the Borrower and its Subsidiaries for such month; and (v) a report or letter as to progress of any assets sales and/or refinancing options. (ii) replacing the existing paragraph (g) (which currently reads "Intentionally Omitted") with the following paragraph (g): "(g) By June 30, 2002, the Borrower shall deliver to the Banks: (i) a current valuation analysis prepared by the Borrower; (ii) an outline and explanation of the strategic plan for the sale of the Borrower and its Subsidiaries approved by the board of directors of the Borrower, prepared by Credit Suisse First Boston ("CSFB"); and (iii) the sale book relating to the sale of the Borrower and its Subsidiaries, prepared by CSFB." (h) SUBSECTION 6.01(a). Subsection 6.01(a) (Net Income Test) of the Credit Agreement is amended as follows: (i) For the quarter ending December 31, 2001, by replacing "Net Loss not exceeding $800,000" with "Net Loss not exceeding $1,310,000"; and (ii) For the quarter ending March 31, 2002, by replacing "Net Loss not exceeding $175,000" with "Net Loss not exceeding $400,000". 2. CONDITIONS PRECEDENT. The amendments to the Credit Agreement set forth in Section 1 above and the waivers set forth in Section 4 below shall become effective as of the date hereof, upon the satisfaction of the following conditions precedent: (a) the delivery of a mortgage, duly executed and in form for recording, in favor of the Banks on the Boonton, NJ property owned by RFL Electronics, Inc. (the "Boonton Property"); -3- (b) the execution and delivery by each of the pledgors under the Pledge Agreement dated as of January 11, 2002 of an Amended and Restated Pledge Agreement providing for the pledge of 100% of the equity of each of Cedar Corporation, Condor Holdings, Inc. and SL Delaware, Inc., together with such certificates, assignment powers and other documentation as shall be desirable to perfect such pledge; (c) the execution and delivery by the Borrower, SL Delaware, Inc. and SL Delaware Holdings, Inc. (the "Pledgors") of a control agreement among the Agent, the Pledgors and Mellon Bank, N.A. ("Mellon"), in form and substance reasonably satisfactory to the Agent, with respect to all deposit accounts other than the imprest balance account referred to below; (d) the execution and delivery by the Borrower of an Imprest Balance Account Agreement Letter between the Borrower and Mellon, with respect to an imprest balance account to be maintained with Mellon, and the payment by the Borrower of $5,000 to Mellon to be deposited in such imprest balance account; (e) the delivery by the Borrower of updated financial projections for fiscal year 2002, an operating plan and a budget by division to the Banks and to Penn-Hudson Financial Group, Inc. ("Penn-Hudson"); (f) the delivery by the Borrower of (i) unaudited consolidated statement of income for the Borrower and its Subsidiaries for the month ended March 31, 2002 prepared by the Borrower, in reasonable detail; (ii) an unaudited consolidated balance sheet of the Borrower and its Subsidiaries as of the close of such month prepared by the Borrower, in reasonable detail; (iii) a summary of the aging of the accounts receivable of the Borrower and its Subsidiaries for such month; (iv) a chart showing the number of days outstanding for the accounts payable of the Borrower and its Subsidiaries for such month; and (v) a report or letter as to progress of any assets sales and/or refinancing options; (g) the execution and delivery of this Amendment by each of the Banks, the Agent and the Borrower; (h) the execution and delivery of the Consent and Acknowledgment attached to this Amendment by each of the Guarantors; (i) the payment of the amendment fee referred to in Section 1(e) above by the Borrower; and (j) the payment by the Borrower of the Agent's costs and fees then due and payable, including the fees and expenses of its counsel, Drinker Biddle & Reath LLP. 3. CONDITIONS SUBSEQUENT. Within the time period specified below for each item, the Borrower shall satisfy each of the following conditions subsequent. The failure to satisfy any such condition within the time period specified shall be an Event of Default under the Credit Agreement. -4- (a) If requested by the Agent, the Borrower shall deliver to the Agent title insurance for the Boonton Property, as soon as practicable after such request; (b) as soon as practicable after the delivery of the financial information described in Section 2(e) above, but in any event no later than three (3) weeks after the delivery of such information, the Borrower shall cause Penn-Hudson to meet with the Banks and discuss the same with the Banks. In connection therewith, the Borrower shall provide such information to Penn-Hudson as Penn-Hudson reasonably deems appropriate and authorize Penn-Hudson to candidly and fully discuss the same with the Banks; (c) within ten (10) days after the date of this Amendment, the Borrower shall deliver a legal opinion addressed to the Agent and each Bank, in form and substance reasonably satisfactory to the Agent; and (d) within thirty (30) days after the date of this Amendment or as soon as practicable thereafter, the Borrower shall deliver to the Agent a completed collateral perfection questionnaire which is complete and correct in all material respects. 4. WAIVERS. As of the effective date of the amendments set forth in Section 1 above, the Banks hereby waive any Event of Default under the Credit Agreement as of April 30, 2002, which would not have occurred had this Amendment been in place as of such date and further waive the imposition of the default rate of interest under Section 2.05(c) of the Credit Agreement which would have arisen out of such Event of Default through the date hereof. In addition, the Banks hereby waive the Event of Default arising out of the Borrower's failure to deliver the December 2001, January 2002 and February 2002 monthly financial statements when due under Section 5.01(c) of the Credit Agreement and further waive the imposition of the default rate of interest under Section 2.05(c) of the Credit Agreement which would have arisen out of such Event of Default through the date of this Amendment. These waivers are limited to their terms and do not imply a waiver of any other Potential Defaults or Events of Default which may have occurred or which may hereafter occur or any willingness to waive any similar or other defaults in the future (including, without limitation, any default with respect to the delivery of the financial statements as set forth in Section 2(f) above). 5. RELEASE. As a material inducement to the Agent and the Banks to enter into this Amendment, the Borrower (a) does hereby remise, release, acquit, satisfy and forever discharge the Agent and the Banks and all of their past, present and future officers, directors, employees, agents, attorneys, representatives, participants, heirs, successors and assigns, from any and all manner of debts, accountings, bonds, warranties, representations, covenants, promises, contracts, controversies, agreements, liabilities, obligations, expenses, damages, judgments, executions, actions, claims, demands and causes of action of any nature whatsoever, whether at law or in equity, which the Borrower has by reason of any matter, cause or thing, from the beginning of the world to and including the date of this Amendment with respect to any matters, transactions, occurrences, agreements, actions, or events arising out of, in connection with or relating to the Credit Agreement, any Guaranty or any Security Document; and (b) does hereby covenant and agree never to institute or cause to be instituted or continue prosecution of any suit or other form of action or proceeding of any kind or nature whatsoever against the Agent and the Banks, or any of their past, present or future officers, directors, employees, agents, attorneys, representatives, -5- participants, heirs, successors or assigns, by reason of or in connection with any of the foregoing matters, claims or causes of action. The Borrower expressly acknowledges and agrees that the releases contained in this Amendment shall not be construed as an admission of wrongdoing, liability or culpability on the part of the Agent or any of the Banks or the existence of any claims of the Borrower against the Agent or any of the Banks. 6. REPRESENTATIONS. The Borrower represents and warrants to the Banks and the Agent that each of the representations in the Credit Agreement is true and correct in all material respects after giving effect to this Amendment and that no Event of Default or, to the Borrower's knowledge, Potential Default exists after giving effect to this Amendment. 7. MISCELLANEOUS. (a) RATIFICATION. Except as herein provided, the Credit Agreement shall remain unchanged and in full force and effect and is hereby ratified and confirmed. (b) REFERENCES. From and after the date that this Amendment becomes effective, any reference in the Credit Agreement or any other related documents to the Credit Agreement shall be and mean a reference to such agreement as amended hereby and as the same may be further amended, modified or supplemented from time to time. (c) COUNTERPARTS; COPIES OF SIGNATURES. This Amendment may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which, when so executed, shall be deemed an original, but all such counterparts shall constitute one and the same instrument. A photocopy or facsimile copy of a signature shall be the functional equivalent of a manually executed counterpart for all purposes. (d) GOVERNING LAW. This Amendment shall be governed by, and construed in accordance with, the law of the Commonwealth of Pennsylvania without regard to its conflict of laws principles. [Signature page follows] -6- IN WITNESS WHEREOF, the undersigned have caused this Amendment to be duly executed by their respective duly authorized officers as of the date first above written. BORROWER: SL INDUSTRIES, INC. By: /s/ David R. Nuzzo ------------------------------- Name: David R. Nuzzo Title: Vice President SL DELAWARE, INC. By: /s/ David R. Nuzzo ------------------------------- Name: David R. Nuzzo Title: Vice President BANKS: GE CAPITAL CFE, INC., as a Bank and as Agent By: ------------------------------- Name: Title: FLEET NATIONAL BANK By: ------------------------------- Name: Stephen T. Hill Title: Vice President PNC BANK, NATIONAL ASSOCIATION By: ------------------------------- Name: Michael A. Valerio, Jr. Title: Vice President CONSENT AND ACKNOWLEDGEMENT Reference is made to that certain Second Amended and Restated Credit Agreement dated as of December 13, 2001, as amended by that certain Omnibus Amendment Agreement dated as of February 26, 2002, among SL Industries, Inc. and SL Delaware, Inc. (together, the "Borrower"); GE Capital CFE, Inc. ("GECC"), Fleet National Bank, and PNC Bank, National Association; and GECC, as Agent (as so amended and as further amended pursuant to the foregoing Second Amendment and Waiver to Second Amended and Restated Credit Agreement (the "Amendment") and as the same may be further amended, restated, modified and/or supplemented from time to time, the "Credit Agreement"). Terms not otherwise defined herein are used herein as defined in the Credit Agreement. Each Guarantor confirms the following for the benefit of the Banks and the Agent that: (a) it is a Subsidiary of the Borrower and has signed the Guaranty; (b) the Guaranty is in full force and effect; (c) the principal of and interest on the Loans and all other amounts owed from time to time to the Agent and the Banks under the Credit Agreement, as amended by the Amendment, are among the Guaranteed Obligations (as defined in the Guaranty) entitled to the benefits of the guarantees set forth in the Guaranty; and (d) without limiting the generality of the foregoing, (i) it is jointly and severally unconditionally guarantying and acting as surety for, and shall continue to jointly and severally unconditionally guarantee and act as surety for, the Guaranteed Obligations and (ii) the Agent's and the Banks' agreement to enter into the Amendment is based, in part, upon its guarantying and acting as surety for the repayment of the Guaranteed Obligations. As a material inducement to the Agent and the Banks to enter into the Amendment, each Guarantor (a) does hereby remise, release, acquit, satisfy and forever discharge the Agent and the Banks and all of their past, present and future officers, directors, employees, agents, attorneys, representatives, participants, heirs, successors and assigns, from any and all manner of debts, accountings, bonds, warranties, representations, covenants, promises, contracts, controversies, agreements, liabilities, obligations, expenses, damages, judgments, executions, actions, claims, demands and causes of action of any nature whatsoever, whether at law or in equity, which such Guarantor has by reason of any matter, cause or thing, from the beginning of the world to and including the date of the Amendment with respect to any matters, transactions, occurrences, agreements, actions, or events arising out of, in connection with or relating to the Credit Agreement, any Guaranty or any Security Document; and (b) does hereby covenant and agree never to institute or cause to be instituted or continue prosecution of any suit or other form of action or proceeding of any kind or nature whatsoever against the Agent and the Banks, or any of their past, present or future officers, directors, employees, agents, attorneys, representatives, participants, heirs, successors or assigns, by reason of or in connection with any of the foregoing matters, claims or causes of action. Each Guarantor expressly acknowledges and agrees that these releases shall not be construed as an admission of wrongdoing, liability or culpability on the part of the Agent or any of the Banks or the existence of any claims of such Guarantor against the Agent or any of the Banks. SL DELAWARE HOLDINGS, INC. By: /s/ David R. Nuzzo ----------------------------- Name: David R. Nuzzo Title: Secretary SL DELAWARE, INC. By: /s/ David R. Nuzzo ----------------------------- Name: David R. Nuzzo Title: Vice President CEDAR CORPORATION By: /s/ David R. Nuzzo ----------------------------- Name: David R. Nuzzo Title: Secretary CONDOR D.C. POWER SUPPLIES, INC. By: /s/ David R. Nuzzo ----------------------------- Name: David R. Nuzzo Title: Secretary CONDOR HOLDINGS, INC. By: /s/ David R. Nuzzo ----------------------------- Name: David R. Nuzzo Title: President SL AUBURN, INC. By: /s/ David R. Nuzzo ----------------------------- Name: David R. Nuzzo Title: Secretary SL MONTEVIDEO TECHNOLOGY, INC. By: /s/ David R. Nuzzo ----------------------------- Name: David R. Nuzzo Title: Secretary RFL ELECTRONICS, INC. By: /s/ David R. Nuzzo ----------------------------- Name: David R. Nuzzo Title: Secretary SL SURFACE TECHNOLOGIES, INC. By: /s/ David R. Nuzzo ----------------------------- Name: David R. Nuzzo Title: Secretary SLW HOLDINGS, INC. By: /s/ David R. Nuzzo ----------------------------- Name: David R. Nuzzo Title: Secretary TEAL ELECTRONICS CORPORATION By: /s/ David R. Nuzzo ------------------------------ Name: David R. Nuzzo Title: Secretary WABER POWER LTD. By: /s/ David R. Nuzzo ----------------------------- Name: David R. Nuzzo Title: Secretary CEDRO DE MEXICO S.A. DE C.V. By: /s/ David R. Nuzzo ----------------------------- Name: David R. Nuzzo Title: Secretary CONDOR POWER SUPPLIES DE MEXICO S.A. DE C.V. By: /s/ David R. Nuzzo ----------------------------- Name: David R. Nuzzo Title: Secretary INDUSTRIAS SL S.A. DE C.V. By: /s/ David R. Nuzzo ----------------------------- Name: David R. Nuzzo Title: Secretary -----END PRIVACY-ENHANCED MESSAGE-----