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): July 26, 2005
BEL
FUSE INC.
(Exact
Name of Registrant as Specified in its Charter)
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New
Jersey
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0-11676
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22-1463699
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(State
or Other
Jurisdiction
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(Commission
File
Number)
|
(IRS
Employer Identification
No.)
|
|
of
Incorporation)
|
||
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206
Van Vorst Street, Jersey City, New
Jersey
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07302
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|
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(Address
of principal executive
offices)
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(Zip
Code)
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Registrant's
telephone number, including area code (201) 432-0463
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 |
communications
pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|
| o |
material
pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
| o |
communications
pursuant to Rule 14d-2(b) under the Exchange Act(17
CFR 240.14d-2(b))
|
| o |
communications
pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
1.01 Entry
into a Material Definitive Agreement.
As
of
July 26, 2005, the Bank of New York, as Lender, the Registrant, as Borrower,
and
the Registrant’s domestic subsidiaries, as Guarantors, entered into Amendment
No. 1 (the “Amendment”) to the Amended and Restated Credit and Guarantee
Agreement dated as of March 21, 2003 (the “Credit Agreement”), by and among
Lender, the Registrant, and the Registrant’s domestic subsidiaries. The
Amendment serves to increase the revolving loan commitment made available to
the
Registrant pursuant to the Credit Agreement from $10,000,000 to $20,000,000
and
provides for an extension of the maturity date of the revolving loan from March
21, 2006 to June 30, 2008. The term loan that was the subject of the Credit
Agreement, having been previously been paid by the Registrant, was deleted
from
the Credit Agreement. In addition, the Amendment operates to modify various
covenants contained in the Credit Agreement. In connection with the execution
and delivery of the Amendment, the Lender’s security interest in assets of the
Registrant and the domestic subsidiaries was terminated other than in the stock
of the domestic subsidiaries owned by the Registrant and in any pledged debt.
There
is
no material relationship between the Registrant and the Lender other than
pursuant to the agreements described above.
Item
9.01. Financial Statements and Exhibits.
(c) Exhibits
Exhibit
10.1- Amendment No. 1 to the Registrant’s Amended and Restated Credit and
Guarantee Agreement dated as of March 21, 2003.
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.
| BEL FUSE INC. | ||
| |
|
|
| By: | /s/ Daniel Bernstein | |
|
Name: Daniel Bernstein |
||
| Title: President and Chief Executive Officer | ||
| Dated: August 1, 2005 | ||
EXHIBIT
INDEX
Exhibit10.1-
Amendment No. 1 to the Registrant’s Amended and Restated Credit and Guarantee
Agreement dated as of March 21, 2003.
Exhibit
10.1
BEL
FUSE INC.
AMENDMENT
NO. 1
AMENDMENT
NO. 1 (this “Amendment”),
dated
as of July 26, 2005, to the Amended and Restated Credit and Guarantee Agreement,
dated as of March 21, 2003, by and among BEL FUSE INC., a New Jersey corporation
(the “Borrower”),
the
Subsidiary Guarantors party thereto and THE BANK OF NEW YORK (the “Lender”)
(the
“Credit
Agreement”).
RECITALS
I. Except
as
otherwise provided herein, capitalized terms used herein which are not defined
herein shall have the meanings set forth in the Credit Agreement.
II. The
Borrower has requested that the Lender amend the Credit Agreement upon the
terms
and conditions contained herein, and the Lender is willing to do
so.
Accordingly,
in consideration of the covenants, conditions and agreements hereinafter
set
forth, and for other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, and pursuant to Section 9.1 of the Credit
Agreement, the parties hereto agree as follows:
1. Section
1.1 of the Credit Agreement is hereby amended by deleting the following
definitions: “Class”, “Commitments”, “Consolidated Total Liabilities”,
“Intellectual Property”, “Liquidity Ratio”, “Term Commitment”, “Term Loan” and
“Term Maturity Date”.
2. The
definition of “Acquisition Consideration” contained in Section 1.1 of the Credit
Agreement is hereby amended and restated in its entirety to read as
follows:
“Acquisition
Consideration”
means,
with respect to any Acquisition, the sum of (i) the cash consideration paid
or
agreed to be paid in connection therewith, plus
(ii) the
fair market value of all noncash consideration paid or agreed to be paid
in
connection therewith, plus
(iii) an
amount equal to the principal or stated amount of all liabilities assumed
or
incurred in connection therewith.
3. The
definition of “Applicable Margin” contained in Section 1.1 of the Credit
Agreement is hereby amended and restated in its entirety to read as
follows:
“Applicable
Margin”
means,
at all times during the applicable periods set forth below: (i)
with
respect to ABR Advances, the percentage set forth below under the heading
“ABR
Margin”, (ii)
with
respect to Eurodollar Advances, the percentage set forth below under the
heading
“Eurodollar Margin”, and (iii)
with
respect to the Commitment Fee, the percentage set forth below under the heading
“Commitment Fee”.
|
When
the Leverage Ratio is:
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||||
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greater
than or equal to
|
and
less than
|
ABR
Margin
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Eurodollar
Margin
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Commitment
Fee
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2.00:1.00
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0.00%
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1.25%
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0.25%
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1.00:1.00
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2.00:1.00
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0.00%
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1.00%
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0.20%
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1.00:1.00
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0.15%
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0.75%
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0.15%
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Changes
in the Applicable Margin resulting from a change in the Leverage Ratio shall
be
based upon the Compliance Certificate most recently delivered pursuant to
Section 6.1(c) and shall become effective on the date such Compliance
Certificate is delivered to the Lender. Notwithstanding anything to the contrary
contained in this definition, if the Borrower shall fail to deliver to the
Lender a Compliance Certificate on or prior to any date required hereby,
the
Leverage Ratio shall be deemed to be greater than 2.00:1.00 from and including
such date to the date of delivery to the Lender of such Compliance
Certificate.
4. The
definition of “Borrower Obligations” contained in Section 1.1 of the Credit
Agreement is hereby amended by adding the following immediately after the
word
“Lender” in the third line thereof:
,
including all reimbursement obligations of the Borrower in respect of any
letters of credit issued by the Lender for the account of the Borrower or
any
Subsidiary,
5. The
definition of “Consolidated Fixed Charges” contained in Section 1.1 of the
Credit Agreement is hereby amended by deleting the phrase “(including scheduled
principal payments in respect of the Term Loan)” appearing after the word
“Subsidiaries” in clause (iii) thereof.
6. The
definition of “Consolidated Tangible Net Worth” contained in Section 1.1 of the
Credit Agreement is hereby amended and restated in its entirety to read as
follows:
“Consolidated
Net Worth”
means,
at any date of determination, the sum of all amounts which would be included
under “stockholders’
equity”or
any
analogous entry on a consolidated balance sheet of the Borrower and the
Subsidiaries determined in accordance with GAAP as of such date.
7. The
definition of “Eurodollar Rate” contained in Section 1.1 of the Credit Agreement
is hereby amended and restated in its entirety to read as follows:
“Eurodollar
Rate”
means,
(b) a
number
equal to 1.00 minus
the
aggregate of the then stated maximum rates during such Interest Period of
all
reserve requirements (including marginal, emergency, supplemental and special
reserves), expressed as a decimal, established by the Board of Governors
and any
other banking authority to which BNY and other major money center banks
chartered under the laws of the United States or any State thereof are subject,
in respect of eurocurrency funding (currently referred to as “eurocurrency
liabilities”in
Regulation D) without benefit of credit for proration, exceptions or offsets
which may be available from time to time to BNY.
8. The
definition of “Fixed Charge Ratio” contained in Section 1.1 of the Credit
Agreement is hereby amended and restated in its entirety to read as
follows:
“Fixed
Charge Ratio”
means,
as of the last day each fiscal quarter, the ratio of Consolidated EBITDA
to
Consolidated Fixed Charges, in each case for the Four Quarter Trailing
Period.
9. The
definition of “Leverage Ratio” contained in Section 1.1 of the Credit Agreement
is hereby amended and restated in its entirety to read as follows:
“Leverage
Ratio”
means,
as of the last day of each fiscal quarter, the ratio of the aggregate
Indebtedness on such date of the Borrower and the Subsidiaries, determined
on a
consolidated basis in accordance with GAAP to Consolidated EBITDA for the
Four
Quarter Trailing Period.
10. The
definition of “Material Liabilities” contained in Section 1.1 of the Credit
Agreement is hereby amended by substituting “$1,000,000” for “$100,000” at the
end thereof.
11. The
definition of “Revolving Commitment” contained in Section 1.1 of the Credit
Agreement is hereby amended by substituting “$20,000,000” for “$10,000,000” at
the end thereof.
12. The
definition of “Revolving Maturity Date” contained in Section 1.1 of the Credit
Agreement is hereby amended by substituting “June 30, 2008” for “March 21, 2006”
at the end thereof.
13. The
definition of “Security Agreement” contained in Section 1.1 of the Credit
Agreement is hereby amended and restated in its entirety to read as
follows:
“Security
Agreement”
means
the Second Amended and Restated Security Agreement, dated as of July 26,
2005,
among the Borrower, the Subsidiary Guarantors and the Lender.
14. Section
1.4 of the Credit Agreement is hereby amended and restated in its entirety
to
read “Intentionally
Omitted”.
15. Section
2.1(b) of the Credit Agreement is hereby amended and restated in its entirety
to
read “Intentionally
Omitted”.
16. Clause
(C) of the first sentence of Section 2.2(a) of the Credit Agreement is hereby
deleted and the following clauses are relettered accordingly.
17. The
first
sentence of Section 2.4(a) of the Credit Agreement is hereby amended by deleting
the phrase “of Revolving Loans or all of portion of the Term Loan or” after the
phrase “specifying whether the Loans to be prepaid consist of ”.
18. Section
2.4(c) of the Credit Agreement is hereby amended and restated in its entirety
to
read “Intentionally
Omitted”.
19. Section
2.4(d) of the Credit Agreement is hereby amended by deleting the last sentence
thereof.
20. Section
2.5(a) of the Credit Agreement is hereby amended by deleting the words “or the
Term Maturity Date, as applicable” after “Revolving Maturity Date” in the last
sentence thereof.
21. Section
3.1(c)(iii) of the Credit Agreement is hereby amended and restated in its
entirety to read as follows:
(iii) in
the
case of all Advances, the Revolving Maturity Date.
22. Clause
(i) of Section 3.3(a) of the Credit Agreement is hereby amended to read “(i)
convert ABR Advances to Eurodollar Advances”.
23. Section
3.4(a) of the Credit Agreement is hereby amended and restated in its entirety
to
read as follows:
(a) No
Interest Period in respect of a Eurodollar Advance shall end after the Revolving
Maturity Date.
24. Section
4.18(a) of the Credit Agreement is hereby amended by deleting the phrase
“(other
than the Intellectual Property (as defined in the Security Agreement))” after
the phrase “Collateral” in the third to last line thereof.
25. Section
5.5(a) of the Credit Agreement is hereby amended and restated in its entirety
to
read as follows:
(a)The
representations and warranties of each Loan Party set forth in each Loan
Document shall be true and correct on and as of the date of such Borrowing
(except for representations and warranties expressly made as of a specified
earlier date, which shall be true as of such date).
26. The
first
paragraph of each of Article 6 and Article 7 of the Credit Agreement is hereby
amended by adding the word “Revolving” before the word “Commitments” in the
second line thereof.
27. Section
7.1(c)(ii) and 7.1(d) of the Credit Agreement are each hereby amended by
substituting “1,000,000” for $250,000.”
28. Section
7.1(e) of the Credit Agreement is hereby amended and restated in its entirety
to
read as follows:
(e) Other
unsecured Indebtedness of the Borrower and its Subsidiaries in an aggregate
amount not in excess of $10,000,000 at any one time outstanding.
29. Section
7.3(b) of the Credit Agreement is hereby amended by substituting “$1,000,000”
for $250,000” in the fifth line thereof.
30. Section
7.4(c) of the Credit Agreement is hereby amended by substituting “$1,000,000”
for “$250,000” at the end thereof.
31. Section
7.4(e) of the Credit Agreement is hereby amended and restated in its entirety
to
read as follows:
(e) (i)
the
5% Investment made by the Borrower in the equity securities of Artesyn
Technologies Inc. after the Restatement Date and (ii) other Investments in
marketable securities (other than Cash Equivalents) in an amount not in excess
of 10% of Consolidated Net Worth, provided,
however,
that
after giving effect to any Investment described in this clause (ii), Margin
Stock shall constitute less than 25% of the consolidated assets (as determined
by any reasonable method) of the Borrower and the Subsidiaries;
32. Section
7.5(b) of the Credit Agreement is hereby amended by substituting “$1,000,000”
for $250,000” at the end thereof.
33. Section
7.5(c) of the Credit Agreement is hereby amended and restated in its entirety
to
read as follows:
(c) other
Acquisitions, provided that:
(i) immediately
before or after giving effect to each such Acquisition, no Default shall
or
would exist, and immediately after giving effect thereto, all of the
representations and warranties contained in the Loan Documents shall be true
and
correct with the same effect as though then made,
(ii) the
Person or business acquired is engaged in the Line of Business,
(iii) the
Borrower or Subsidiary Guarantor making the Acquisition shall have complied
with
the provisions of Sections 6.9 and 6.10,
(iv) the
Borrower shall have delivered to the Lender (1) notice thereof not less than
ten
days prior to the consummation of such Acquisition, and (2) a certificate
of a
Financial Officer thereof, in all respects reasonably satisfactory to the
Lender
and dated the date of such consummation, certifying that no Default has occurred
and is continuing, and
(v) in
connection with each Acquisition, the Acquisition Consideration of which
exceeds
$10,000,000, the Borrower shall have delivered to the Lender (1) reasonably
detailed calculations demonstrating compliance with Section 7.14 on a pro-forma
basis (after giving effect to such Acquisition and based on the most recent
financial statements delivered pursuant to Section 6.1), (2) historical
financial statements for the period of two years preceding such acquisition
of
the Person or business being acquired in such Acquisition, which financial
statements shall be audited, if available, or if audited financial statements
are not available, shall be unaudited and prepared by the management of such
Person or the Person owning such business and (3) such other information,
documents and other items as the Lender shall have reasonably
requested.
34. Section
7.5(d) of the Credit Agreement is hereby amended and restated in its entirety
to
read “Intentionally
Omitted”.
35. Section
7.7 of the Credit Agreement is hereby amended by (i)
deleting
the word “and” at the end of subsection (a), (ii)
by
substituting “; and” for the period at the end of subsection (b) and
(iii)
by
adding a new subsection (c) to read as follows:
(c) cash
dividends on its common stock, provided
that
immediately before and after giving effect thereto, no Default shall or would
exist.
36. Sections
7.6 and 7.7(a) of the Credit Agreement are each hereby amended by substituting
“$1,000,000” for $250,000” at the end thereof.
37. Section
7.12 of the Credit Agreement is hereby amended by (i)
adding
the word “and” after clause (ii) thereof and (ii)
deleting
clause (iii) thereof.
38. Section
7.14(a) of the Credit Agreement is hereby amended and restated in its entirety
to read “Intentionally
Omitted”.
39. Section
7.14(b) of the Credit Agreement is hereby amended and restated in its entirety
to read as follows:
(b) Minimum
Consolidated Net Worth. The
Borrower shall not permit Consolidated Net Worth to be less than, as of the
last
day of any fiscal quarter, an amount equal to $170,000,000 plus
the sum
for each fiscal year (beginning with the fiscal year ending December 31,
2004),
of 50% of the net income, if positive, of the Borrower and its Subsidiaries
on a
consolidated basis for each such fiscal year plus
an
amount equal to 75% of the net proceeds of any issuance of equity by the
Borrower.
40. Section
7.14(d) of the Credit Agreement is hereby amended and restated in its entirety
to read as follows:
(d) Leverage
Ratio.
The
Borrower shall maintain at all times a Leverage Ratio of less than or equal
to
3.00:1.00.
41. Section
8.1(j) of the Credit Agreement is hereby amended by substituting “$1,000,000”
for “$100,000” in the second line thereof.
42. Section
10.05 of the Credit Agreement is hereby amended by adding a new subsection
(d)
at the end thereof to read as follows:
(d) The
Lender hereby notifies the Borrower that pursuant to the requirements of
the USA
Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001))
(the “Patriot
Act”),
it is
required to obtain, verify and record information that identifies each Loan
Party, which information includes the name and address of each Loan Party
and
other information that will allow the Lender to identify each Loan Party
in
accordance with the Patriot Act. The Borrower agrees to furnish and cause
each
of its Subsidiaries to promptly furnish to the Lender such information with
documentation required by bank regulatory authorities under applicable “know
your customer” and Anti-Money Laundering rules and regulations (including,
without limitation, the Patriot Act), as from time to time may be reasonably
requested by the Lender.
43. Schedule
4.6
to the
Credit Agreement is hereby amended and restated by Schedule
4.6
in the
form annexed hereto.
44. Paragraphs
1 through 43 of this Amendment shall not become effective until such time
as the
following conditions are satisfied:
(a) the
Lender (or its counsel) shall have received counterparts of this Amendment
duly
executed by the Borrower, the Subsidiary Guarantors and the Lender;
(b) the
Lender (or its counsel) shall have received counterparts of an amendment
and
restatement of the Security Agreement, in form and substance satisfactory
to the
Lender (the “Second
Amended and Restated Security Agreement”),
duly
executed by the Borrower, the Subsidiary Guarantors (including Bel Power
(as
defined below)) and the Lender;
(c) the
Lender (or its counsel) shall have received an executed counterpart of a
Guarantee Supplement, duly executed by Bel Power Inc., a Massachusetts
corporation and a Wholly-Owned Subsidiary of the Borrower (“Bel
Power”);
(d) the
Lender (or its counsel) shall have received a certificate, dated the effective
date of this Amendment, in form and substance satisfactory to the Lender,
of the
Secretary, Assistant Secretary or other analogous counterpart of each Loan
Party
(other than Bel Power) (i)
attaching a true and complete copy of the resolutions of its Managing Person
and
of all other documents evidencing all necessary corporate, partnership or
other
action (in form and substance satisfactory to the Lender) taken to authorize
this Amendment, the Guarantee Supplement and the Second Amended and Restated
Security Agreement (collectively, the “Amendment
Documents”)
to
which it is a party and the transactions contemplated thereby, (ii)
either
certifying that there have been no changes to its Organizational Documents
since
the Restatement Date, or, if so, attaching a true and complete copy of any
amendments thereto, and (iii)
setting
forth the incumbency of its officer or officers (or other analogous counterpart)
who may sign the Amendment Documents, including therein a signature specimen
of
such officer or officers (or other analogous counterpart).
(e) the
Lender (or its counsel) shall have received a certificate, dated the effective
date of this Amendment, in form and substance satisfactory to the Lender,
of the
Secretary, Assistant Secretary or other analogous counterpart of Bel Power
(i)
attaching a true and complete copy of the resolutions of its Managing Person
and
of all other documents evidencing all necessary corporate, partnership or
other
action (in form and substance satisfactory to the Lender) taken to authorize
the
Amendment Documents and the Loan Documents to which it is a party, as amended
thereby and the transactions contemplated thereby, (ii)
attaching a true and complete copy of its Organizational Documents, (iii)
setting
forth the incumbency of its officer or officers (or other analogous counterpart)
who may sign the Amendment Documents, including therein a signature specimen
of
such officer or officers (or other analogous counterpart) and (iv)
attaching a certificate of good standing of the Secretary of State of the
jurisdiction of its formation and of each other jurisdiction in which it
is
qualified to do business.
(f) the
Lender (or its counsel) shall have received an opinion of Lowenstein, Sandler
PC, special counsel to the Loan Parties, addressed to the Lender, dated the
effective date of this Amendment, in form and substance satisfactory to the
Lender;
(g) the
Lender shall have received payment in full of the outstanding principal balance
of the Term Loan together with accrued and unpaid interest thereon and, to
the
extent applicable, break funding payments pursuant to Section 3.5 of the
Credit
Agreement;
(h) the
Lender shall have received an amendment fee in the sum of $40,000;
and
(i) all
other
fees and expenses of the Lender, including, without limitation, the fees
and
expenses of Bryan Cave LLP, counsel to the Lender, shall, have been paid
to the
extent invoiced.
45. Upon
the
effectiveness of this Amendment, the Lender agrees that its security interest
in
the Collateral as defined in the Security Agreement as in effect prior to
the
effectiveness of the Second Amended and Restated Security Agreement (other
than
the Collateral as defined in the Second Amended and Restated Security Agreement)
is released and, in connection therewith the Lender agrees, at the Borrower’s
expense, to file such UCC-3 amendments as may be necessary (in form and
substance reasonably satisfactory to the Lender) to evidence such
release.
46. In
all
other respects the Credit Agreement and other Loan Documents shall remain
in
full force and effect.
47. In
order
to induce the Lender to execute and deliver this Amendment, the Borrower
and the
Subsidiary Guarantors each (a) certifies that, immediately after giving effect
to the Amendment Documents, all representations and warranties contained
in the
Loan Documents to which it is a party shall be true and correct in all respects
with the same effect as though such representations and warranties had been
made
on the date hereof, except as the context otherwise requires or as otherwise
permitted by the Loan Documents or this Amendment, (b) certifies that,
immediately after giving effect to the Amendment Documents, no Default or
Event
of Default shall exist under the Loan Documents, as amended, and (c) agrees
to
pay all of the reasonable fees and disbursements of counsel to the Lender
incurred in connection with the preparation, negotiation and closing of the
Amendment Documents.
48. Each
of
the Borrower and the Subsidiary Guarantors (a) reaffirms and admits the
validity, enforceability and continuing effect of all Loan Documents to which
it
is a party, and its obligations thereunder, and (b) agrees and admits that
as of
the date hereof it has no valid defenses to or offsets against any of its
obligations to any Credit Party under any Loan Document to which it is a
party.
49. This
Amendment may be executed in any number of separate counterparts and all
of said
counterparts taken together shall be deemed to constitute one and the same
document. It shall not be necessary in making proof of this Amendment to
produce
or account for more than one counterpart signed by the party to be
charged.
50. This
Amendment shall be governed by, and construed and interpreted in accordance
with, the laws of the State of New York.
[Balance
of this Page is Intentionally Blank]
BEL
FUSE
INC.
AMENDMENT
NO. 1 TO
AMENDED
AND RESTATED CREDIT AGREEMENT
| BEL FUSE INC | ||
| By:__________________________ | ||
| Name: Colin Dunn | ||
| Title: Vice President | ||
| BEL VENTURES INC. | ||
| BEL POWER PRODUCTS INC. | ||
| BEL TRANSFORMER INC. | ||
| BEL CONNECTOR INC. | ||
| BEL POWER INC. | ||
| AS TO EACH OF THE FOREGOING: | ||
| By: | ||
| Name: Colin Dunn | ||
| Title: Vice President |
BEL
FUSE
INC.
AMENDMENT
NO. 1 TO
AMENDED
AND RESTATED CREDIT AGREEMENT
| THE BANK OF NEW YORK | ||
| By:________________________ | ||
| Name: Thomas Sweeney | ||
| Title: Vice President |
SCHEDULE
4.6
Legal
Proceedings
The
Borrower is a defendant in a lawsuit, captioned Murata Manufacturing Company,
Ltd. v. Bel Fuse Inc. et al and brought in Illinois Federal District Court.
Plaintiff claims that its patent covers all of the Borrower’s modular jack
products. That party had previously advised the Borrower that it was willing
to
grant a non-exclusive license to the Company under the patent for a 3% royalty
on all future gross sales of ICM products; payments of a lump sum of 3% of
past
sales including sales of applicable Insilco products; an annual minimum royalty
of $500,000; payment of all attorney fees; and marking of all licensed ICM's
with the third party's patent number.
The
Borrower cannot predict the outcome of this matter but believes that the
ultimate resolution of these matters will not have a material impact on the
Company's consolidated financial condition or results of operations.