FINAL EXECUTION COPY
Exhibit 10.14 AMENDMENT NO. 3 AND WAIVER
AMENDMENT NO. 3 AND WAIVER (this "AMENDMENT"), dated as of September
30, 2001, to that certain Revolving Credit Agreement, dated as of August 20,
1998 (as amended to the date hereof, the "CREDIT AGREEMENT"), among EVENFLO
COMPANY, INC., a Delaware corporation (the "BORROWER"), the Guarantors party
thereto, the Lenders party thereto (the "LENDERS"), XXXXXXX XXXXX & CO., XXXXXXX
LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED, as Lead Arranger and Syndication
Agent, DLJ CAPITAL FUNDING, INC., as Documentation Agent, and BANK OF AMERICA,
NATIONAL ASSOCIATION (successor in interest to BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION), as Administrative Agent (the "ADMINISTRATIVE AGENT").
WITNESSETH:
WHEREAS, pursuant to Section 11.01 of the Credit Agreement, each of
the Obligors and each of the undersigned Lenders hereby agree to amend and waive
and/or otherwise modify certain provisions of the Credit Agreement as set forth
herein (the Credit Agreement, as amended pursuant to the terms of this
Amendment, being referred to as the "AMENDED CREDIT AGREEMENT");
NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
SECTION ONE: Definitions.
(a) CERTAIN DEFINITIONS. The following terms (whether or not
underscored) when used in this Amendment shall have the following meanings (such
meanings to be equally applicable to the singular and plural thereof):
"ADMINISTRATIVE AGENT" has the meaning specified in the PREAMBLE
hereof.
"AMENDED CREDIT AGREEMENT" has the meaning specified in the RECITALS
hereof.
"AMENDMENT" has the meaning specified in the PREAMBLE hereof.
"AMENDMENT EFFECTIVE DATE CERTIFICATE" means the amendment effective
date certificate executed and delivered by the Borrower pursuant to Section 4
hereof, substantially in the form of ANNEX I hereto.
"BORROWER" has the meaning specified in the PREAMBLE hereof.
"CREDIT AGREEMENT" has the meaning specified in the PREAMBLE hereof.
"INTERCREDITOR AGREEMENT" means the Intercreditor Agreement dated as
of September 30, 2001 by and among (a) or for the express intended benefit of,
each of the Existing
Lenders (as defined therein), (b) the Designated Lender (as defined therein) and
(c) Bank of America, N.A., as Administrative Agent on behalf the Existing
Lenders and Designated Lender.
"LENDERS" has the meaning specified in the PREAMBLE hereof.
"THIRD AMENDMENT EFFECTIVE DATE" has the meaning specified in Section
4 hereof.
"WAIVER PERIOD" has the meaning specified in Section 3 hereof.
(b) OTHER DEFINITIONS. Terms for which meanings are provided in the
Amended Credit Agreement are, unless otherwise defined herein or the context
otherwise requires, used in this Amendment with such meanings.
SECTION TWO: AMENDMENTS. Effective on (and subject to the occurrence of)
the Third Amendment Effective Date, certain provisions of the Credit Agreement
are hereby amended in accordance with this Section Two; except expressly as so
amended by this Amendment, the Credit Agreement shall continue in full force and
effect in accordance with its terms.
(a) AMENDMENTS TO DEFINITIONS. Subject to the conditions set forth
in Section Four below, Section 1.01 of the Credit Agreement designated "Certain
Defined Terms" is amended by (i) adding the following sentence at the end of the
definition of "Applicable Margin": "Notwithstanding anything herein, Applicable
Margin means, with respect to Liquidity Facility Loans, as of any date, 2.0% as
to Eurodollar Loans and 1.0% as to Base Rate Loans."; (ii) inserting the words
", a Liquidity Facility Loan" after the words "a Revolving Loan" in the
definition of "Base Rate Loan"; (iii) amending and restating the definition of
"Borrowing" in its entirety as follows: ""Borrowing" means a borrowing hereunder
consisting of (a) Revolving Loans of the same Type made to Borrower on the same
day by the Lenders under Article II or (b) Liquidity Facility Loans of the same
Type made to Borrower on the same day by the Liquidity Facility Lender under
Article II, and, in the case of Eurodollar Rate Loans, having the same Interest
Period"; (iv) inserting the words "or Liquidity Facility Loans" immediately
following the words "Revolving Loans" each time they appear in the definition of
"Conversion/Continuation Date"; (v) inserting the words "or any Liquidity
Facility Loan" after the second parenthesis in clause (a) of the definition of
"Credit Extension", (vi) amending and restating the definition of "Eurodollar
Loan" in its entirety as follows: ""Eurodollar Loan" means a Revolving Loan or a
Liquidity Facility Loan that bears interest based on the Eurodollar Rate"; (vii)
inserting the words "or Liquidity Facility Loan, respectively" immediately
following the words "Revolving Loan" each time they appear in the definition of
"Interest Period", and by replacing the period at the end of clause (iv) thereof
with a comma and adding the following words immediately following such comma
"and no Interest Period for any Liquidity Facility Loan shall extend beyond the
Liquidity Facility Commitment Termination Date."; (viii) amending and restating
the definition of "Obligations" in its entirety as follows: ""Obligations"
means, at any time, all monetary obligations of any type or description owing at
such time by Borrower and any other Obligor to any Lender, including the
Fronting Lender, the Liquidity Facility Lender, any Agent or any Indemnified
Person under this Agreement, any Letter of Credit, any Acceptance, any other
Loan Document or any Swap Contract, whether direct or
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indirect (including those acquired by assignment), absolute or contingent, due
or to become due, now existing or hereafter arising."; (ix) amending and
restating the definition of "Type" in its entirety as follows: ""Type" has the
meaning specified in the definition of "Liquidity Facility Loan" or "Revolving
Loan", as applicable."; and (x) inserting the following definitions in
appropriate alphabetical order:
"ACCOUNTS" means, as to the Borrower or any of its Subsidiaries, all
present and future rights of the Borrower or such Subsidiary to payment for
goods sold or leased or for services rendered, whether or not evidenced by
instruments or chattel paper, and whether or not earned by performance.
"BORROWING BASE" means, at any date, the amount equal to (a) ninety
percent (90%) of the Net Amount of Accounts at such date plus (b) seventy-five
percent (75%) of the Value of the Inventory at such date.
"BORROWING BASE CERTIFICATE" means a certificate substantially in the
form of Annex II to the Third Amendment, as such form may from time to time be
reasonably modified by the Administrative Agent, which is duly completed and
executed by the chief financial officer or other appropriate financial officer
of the Borrower and delivered to the Administrative Agent.
"DETERMINATION DATE" has the meaning specified in Section 2.01(d).
"INVENTORY" means, as to the Borrower or any of its Subsidiaries, all
of the Borrower's or such Subsidiary's now owned and hereafter existing or
acquired raw materials, work in process, finished goods and all other inventory
of whatsoever kind or nature, wherever located.
"LIQUIDITY FACILITY COMMITMENT" has the meaning specified in Section
2.01(c).
"LIQUIDITY FACILITY COMMITMENT TERMINATION DATE" means the earlier to
occur of:
(a) January 31, 2002; and
(b) the date on which the Liquidity Facility Commitment terminates
in accordance with the provisions of this Agreement.
"LIQUIDITY FACILITY LENDER" means Bank of America, and each permitted
successor or assign thereof.
"LIQUIDITY FACILITY LOAN" and "LIQUIDITY FACILITY LOANS" have the
respective meanings specified in Section 2.01(c), and may be a Base Rate Loan or
a Eurodollar Loan (each a "Type" of Liquidity Facility Loan).
"NET AMOUNT OF ACCOUNTS" shall mean the gross amount of Accounts less
(a) sales, excise or similar taxes (including value added taxes) included in the
amount thereof and (b) returns, discounts, claims, credits and allowances of any
nature at any time issued, owing, granted, outstanding or claimed with respect
thereto.
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"THIRD AMENDMENT" means Amendment No. 3 and Waiver, dated as of
September 30, 2001, to this Agreement.
"THIRD AMENDMENT EFFECTIVE DATE" has the meaning specified in the
Third Amendment.
"VALUE" means the amount, with respect to Inventory, equal to the
lower of (a) cost computed in accordance with GAAP under the methods used by the
Borrower and previously disclosed to the Administrative Agent or (b) market
value (calculated in accordance with GAAP), PROVIDED, THAT, for purposes of the
calculation of the Borrowing Base, the Value of the Inventory shall not include
the portion of the value of Inventory equal to the profit earned by any
Affiliate on the sale thereof to the Borrower.
(b) AMENDMENTS TO SECTION 2.01. Section 2.01 of the Credit
Agreement designated "Amounts and Terms of Commitments" is hereby amended by (i)
inserting the following proviso at the end of the last sentence of clause (a)
thereof: "; provided, however, in the event that the Borrower requests Revolving
Loans such that after giving effect to such Borrowings, the aggregate principal
amount of all outstanding Revolving Loans PLUS all outstanding Swing Line Loans
PLUS all outstanding Special Facility Obligations would exceed $90,000,000, the
Borrower hereby acknowledges and agrees that such excess Borrowings shall
consist of at all times an equal amount of Revolving Loans and Liquidity
Facility Loans to the extent that such additional Liquidity Facility Loans are
available therefor (it being further understood and agreed that the aggregate
amount of such additional Revolving Loans in excess of $90,000,000 shall not in
any event exceed $5,000,000)" and (ii) inserting new clauses (c) and (d) at the
end thereof as follows:
"(c) THE LIQUIDITY FACILITY. The Liquidity Facility Lender
agrees, on the terms and conditions set forth herein, to make loans to
Borrower (each such loan, a "LIQUIDITY FACILITY LOAN"; collectively, the
"LIQUIDITY FACILITY LOANS") from time to time on any Business Day during
the period from the Third Amendment Effective Date to the Liquidity
Facility Commitment Termination Date in an aggregate amount not to exceed
$10,000,000 at any time outstanding (the "LIQUIDITY FACILITY COMMITMENT").
Within the limits of the Liquidity Facility Commitment, and subject to the
other terms and conditions hereof, the Borrower may borrow under this
Section 2.01(c), prepay under Section 2.07 and reborrow from time to time
under this Section 2.01(c) provided, that, notwithstanding any of the
foregoing, after giving effect to any such prepayment(s), the outstanding
principal amount of Revolving Loans and Liquidity Facility Loans shall be
in accordance with the proviso at the end of Section 2.01(a).
Notwithstanding anything to the contrary contained in this Agreement or the
Loan Documents, the Borrower shall not terminate or permanently reduce the
Liquidity Facility Commitment without the consent of the Administrative
Agent and the Required Lenders.
(d) BORROWING BASE. From and after the Third Amendment
Effective Date until the Revolving Commitment Termination Date, the
Borrower shall deliver to the Administrative Agent by the fifteenth day of
each month (such date being referred to herein as the "Determination Date")
commencing on October 15, 2001 a Borrowing Base Certificate which shall set
forth the Borrowing Base determined for the last day of the immediately
preceding month. The Borrowing Base specified in each Borrowing Base
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Certificate shall constitute the applicable Borrowing Base for the
thirty-day period immediately succeeding the applicable Determination Date.
Notwithstanding anything herein or otherwise, the Borrower hereby covenants
and agrees that the aggregate principal amount of all outstanding Revolving
Loans PLUS all outstanding Swing Line Loans PLUS all outstanding Special
Facility Obligations, shall not at any time exceed the Borrowing Base
applicable at such date."
(c) Section 2.03 of the Credit Agreement designated "Procedure for
Borrowing" is hereby amended and restated in its entirety as follows:
"SECTION 2.03. PROCEDURE FOR BORROWING.
(a) Each Borrowing shall be made upon Borrower's irrevocable
written or telephonic notice delivered to the Administrative Agent (and to
the Swing Line Lender if a Swing Line Loan is requested or to the Liquidity
Facility Lender if a Liquidity Facility Loan is requested, as the case may
be) (if in writing) in the form of a Notice of Borrowing (any such notice
to be received by the Administrative Agent (and by the Swing Line Lender if
a Swing Line Loan is requested or by the Liquidity Facility Lender if a
Liquidity Facility Loan is requested, as the case may be) not later than
(i) 11:00 a.m. (New York City time) three Business Days prior to the
requested Borrowing Date (if telephonic, promptly confirmed thereafter in
writing in the form of a Notice of Borrowing), in the case of Eurodollar
Loans and (ii) 11:00 a.m. (New York City time) (or 1:00 p.m. (New York City
time) in the case of Swing Line Loans or Liquidity Facility Loans) on the
requested Borrowing Date (if telephonic, confirmed thereafter in writing in
the form of a Notice of Borrowing), in the case of Base Rate Loans,
specifying:
(A) the amount of the Borrowing, which shall (1) in the case of
Revolving Loans, be in an aggregate minimum of $500,000 for both Eurodollar
Loans and Base Rate Loans or any multiple of $100,000 in excess thereof,
(2) in the case of Swing Line Loans (except for Swing Line Loans made in
accordance with Section 3.04), be in an aggregate minimum amount of
$100,000 of Base Rate Loans or any multiple of $100,000 in excess thereof
and (3) in the case of Liquidity Facility Loans, be in an aggregate minimum
of $500,000 for Eurodollar Loan and $100,000 for Base Rate Loans or any
multiple of $100,000 in excess thereof in the case of either such loans.
(B) the requested Borrowing Date, which shall be a Business Day;
(C) the Type of Revolving Loans and Liquidity Facility Loans
comprising the Borrowing (PROVIDED that all Swing Line Loans shall be Base
Rate Loans); and
(D) the duration of the Interest Period applicable to Eurodollar
Loans included in such notice. If the Notice of Borrowing fails to specify
the duration of the Interest Period for any Borrowing comprised of
Eurodollar Loans, such Interest Period shall be one month.
(b) If Revolving Loans (other than Swing Line Loans and
Liquidity Facility Loans) are requested, the Administrative Agent will
promptly notify each Lender
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of its receipt of any Notice of Borrowing and of the amount of such
Lender's Revolving Loan Percentage of that Borrowing.
(c) (i) In the case of Revolving Loans (other than Swing Line
Loans and Liquidity Facility Loans), each Lender will make the amount of
its Revolving Loan Percentage of each Borrowing available to the
Administrative Agent for the account of Borrower at the Administrative
Agent's Payment Office by 1:00 p.m. (New York City time) on the Borrowing
Date requested by Borrower in funds immediately available to the
Administrative Agent. The proceeds of all such Revolving Loans will then be
made available to Borrower by the Administrative Agent at such office by
crediting the account of Borrower on the books on the Administrative Agent
with the aggregate of the amounts made available to the Administrative
Agent by the Lenders or by wire transfer in accordance with written
instructions provided to the Administrative Agent by Borrower, in each case
in like funds as received by the Administrative Agent.
(ii) In the case of Swing Line Loans and Liquidity Facility
Loans, the Swing Line Lender and the Liquidity Facility Lender, as the case
may be, will make available to Borrower at its account at the Swing Line
Lender or the Liquidity Facility Lender, not later than 2:00 p.m. (New York
City time) on the requested Borrowing Date, in immediately available funds,
the proceeds of the Swing Line Loan or the Liquidity Facility Loan being
made on such date.
(d) Without in any way limiting the obligation of Borrower to
confirm in writing any notice it may give hereunder by telephone, the
Administrative Agent (and the Swing Line Lender and the Liquidity Facility
Lender) may act prior to receipt of written confirmation without liability
upon the basis of such telephonic notice believed by the Administrative
Agent (and the Swing Line Lender and the Liquidity Facility Lender) in good
faith to be from a Responsible Officer of Borrower (or a designee of such
Responsible Officer). In each such case Borrower hereby waives the right to
dispute the Administrative Agent's (and the Swing Line Lender's and the
Liquidity Facility Lender's) record of the terms of any such telephonic
notice.
(d) Section 2.04 designated "Conversion and Continuation Elections"
is hereby amended and restated in its entirety as follows:
"Section 2.04. CONVERSION AND CONTINUATION ELECTIONS.
(a) Borrower may, upon irrevocable telephonic notice to the
Administrative Agent or, in the case of Liquidity Facility Loans, to the
Liquidity Facility Lender (in each case promptly confirmed thereafter in
writing) in accordance with Section 2.04(b):
(i) elect, as of any Business Day, in the case of Base Rate
Loans, or as of the last day of the applicable Interest Period, in the case
of Eurodollar Loans, to convert any such Revolving Loans or Liquidity
Facility Loans (or any part thereof in an amount not less than $500,000 in
the case of conversions of Revolving Loans or Liquidity Facility Loans to
Eurodollar Loans or Base Rate Loans, or in each case that is in an
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integral multiple of $100,000 in excess thereof) into Revolving Loans or
Liquidity Facility Loans of any other Type; or
(ii) elect, as of the last day of the applicable Interest
Period, to continue any Revolving Loans or Liquidity Facility Loans having
Interest Periods expiring on such day (or any part thereof in an amount not
less than $500,000 for Eurodollar Loans or, in each case, any multiple of
$100,000 in excess thereof).
(b) Borrower shall deliver a Notice of Conversion/Continuation to be
received by the Administrative Agent or, in the case of Liquidity Facility
Loans, by the Liquidity Facility Lender not later than 11:00 a.m. (New York City
time) (i) at least three Business Days in advance of the Conversion/Continuation
Date, if the Revolving Loans or the Liquidity Facility Loans are to be converted
into or continued as Eurodollar Loans and (ii) on the Conversion/Continuation
Date, if the Revolving Loans or the Liquidity Facility Loans are to be converted
into Base Rate Loans, specifying:
(A) the proposed Conversion/Continuation Date;
(B) the aggregate amount of Revolving Loans or Liquidity Facility
Loans to be converted or continued;
(C) the Type of Revolving Loans or Liquidity Facility Loans resulting
from the proposed conversion or continuation; and
(D) other than in the case of conversions into Base Rate Loans, the
duration of the requested Interest Period.
(c) If upon the expiration of any Interest Period applicable to
Eurodollar Loans, Borrower has failed to select timely a new Interest Period to
be applicable to such Eurodollar Loans, Borrower shall be deemed to have elected
to convert such Eurodollar Loans into Eurodollar Loans having an Interest Period
of one month effective as of the expiration date of such Interest Period.
(d) The Administrative Agent will promptly notify each Lender of its
receipt of a Notice of Conversion/Continuation, or, if no timely notice is
provided by Borrower, the Administrative Agent will promptly notify each Lender
of the details of any automatic conversion. All conversions and continuations
shall be made ratably according to the respective outstanding principal amounts
of the Revolving Loans with respect to which the notice was given held by each
Lender.
(e) If any Event of Default or payment Default is in existence at the
time of any proposed continuation of, or conversion into, any Eurodollar Loans
and the Administrative Agent or the Liquidity Facility Lender, as the case may
be, has, or the Required Lenders have, determined in its or their sole
discretion not to permit such continuation or conversion and have notified
Borrower telephonically or in writing thereof, Borrower may not elect to have a
Revolving Loan or Liquidity Facility Loan, as applicable, converted into or
continued as a Eurodollar Loan and any outstanding Eurodollar Loans shall be
automatically converted on the last day of the current Interest Period
applicable thereto into Base Rate Loans.
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(f) Without in any way limiting the obligation of Borrower to confirm
in writing any notice it may give hereunder by telephone, the Administrative
Agent may act prior to receipt of written confirmation without liability upon
the basis of such telephonic notice believed by the Administrative Agent in good
faith to be from a Responsible Officer of Borrower (or a designee of such
Responsible Officer). In each such case Borrower hereby waives the right to
dispute the Administrative Agent's record of the terms of any such telephonic
notice.
(g) No Swing Line Loans may be converted to Eurodollar Loans."
(e) Section 2.06 designated "Voluntary Termination or Reduction of
Revolving, Swing Line and/or Special Facility Commitments" is hereby amended and
restated in its entirety as follows:
"Section 2.06. VOLUNTARY TERMINATION OR REDUCTION OF REVOLVING,
SWING LINE, SPECIAL FACILITY COMMITMENTS, AND/OR LIQUIDITY FACILITY
COMMITMENTS. Borrower may, upon not less than three Business Days' prior
written notice to the Administrative Agent or, in the case of the Liquidity
Facility Commitment, the Liquidity Facility Lenders, terminate the
Revolving Commitments and/or the Swing Line Commitment and/or the Special
Facility Commitment and/or the Liquidity Facility Commitment, or
permanently reduce the Revolving Commitments and/or the Swing Line
Commitment and/or the Special Facility Commitment and/or the Liquidity
Facility Commitment by an aggregate minimum amount of $1,000,000 or any
multiple of $100,000 in excess thereof; unless, after giving effect thereto
and to any prepayments of Revolving Loans made on the effective date
thereof, the then-outstanding principal amount of the Revolving Loans,
Swing Line Loans, Special Facility Obligations and Liquidity Facility Loans
would exceed, respectively, the amount of the Revolving Commitments, the
Swing Line Commitment, the Special Facility Commitment and the Liquidity
Facility Commitment then in effect. Once reduced in accordance with this
Section, the Revolving Commitments and/or the Swing Line Commitment and/or
the Special Facility Commitment and/or the Liquidity Facility Commitment
may not be increased. Any reduction of the Revolving Commitments and/or the
Fronting Lender's Special Facility Commitment shall be applied to each
Lender according to its Revolving Loan Percentage. All accrued commitment
fees to but not including the effective date of any termination in full of
all Revolving Commitments and/or the Swing Line Commitment and/or the
Liquidity Facility Commitment shall be paid on the effective date of such
termination."
(f) Section 2.07 of the Credit Agreement designated "Optional
Prepayments" is hereby amended by inserting the words "or Liquidity Facility
Loans" immediately following the words "Special Facility Obligations" each time
such words appear therein.
(g) Section 2.08 of the Credit Agreement designated "Mandatory
Prepayments of Revolving Loans and Reductions of Commitments" is hereby amended
by deleting the heading thereof and clauses (a), (b) and (c) thereof and
inserting in replacement thereof the following:
"Section 2.08. MANDATORY PREPAYMENT OF REVOLVING LOANS, LIQUIDITY
FACILITY LOANS AND REDUCTIONS OF COMMITMENTS.
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(a) ASSET DISPOSITIONS. Prior to the Second Amendment Effective Date,
if Borrower or any Restricted Subsidiary shall at any time make a
Disposition (other than a Disposition permitted pursuant to clause (a), (b)
or (c) of Section 8.02), then (i) Borrower or such Restricted Subsidiary
may, within 360 days after the receipt by Borrower or such Restricted
Subsidiary of the Net Disposition Proceeds of such Disposition, (A)
reinvest (subject to Section 8.03) up to 100% of such Net Disposition
Proceeds in the businesses described in Section 7.13 (including, subject to
the provisions of clause (h) of Section 8.03, making an Acquisition in such
businesses), unless at the time of such reinvestment an Event of Default or
payment Default has occurred and is then continuing (except in the case
where Borrower or such Restricted Subsidiary is subject to a definitive
agreement that has been duly and fully executed at a time when no Event of
Default or payment Default existed and pursuant to which it is obligated to
use such Net Disposition Proceeds for a purpose permitted by this Section
2.08(a)) or (B) retain the amount of such Net Disposition Proceeds not so
applied pending such application, and (ii) to the extent such Net
Disposition Proceeds are not so applied during such 360-day period, the
Revolving Commitments shall be immediately reduced in accordance with
Section 2.08(c) in an aggregate amount equal to the portion of such Net
Disposition Proceeds not so applied. From and after the Second Amendment
Effective Date, (i) if Borrower or any Restricted Subsidiary shall at any
time make a Disposition of a Non-Fixed Asset (other than (I) a Disposition
permitted pursuant to clause (a), (b) or (c) of Section 8.02 or (II)
Dispositions generating Net Proceeds of less than $50,000 in the aggregate
for all such Dispositions for any Fiscal Year less the amount of
Disposition Proceeds generated by Dispositions of Fixed Assets referred to
in subclause (II) in the parenthetical contained in Section 2.08(a)(iii)
hereof for such Fiscal Year), then Borrower or such Restricted Subsidiary
shall, concurrently with the receipt of the Net Disposition Proceeds of
such Non-Fixed Asset, apply 100% of the Net Disposition Proceeds of such
Non-Fixed Asset, FIRST to immediately reduce the outstanding Revolving
Loans and permanently reduce the Revolving Commitments in accordance with
Section 2.08(c) in an aggregate amount equal to such Net Disposition
Proceeds, and SECOND, in the event that there are no outstanding Revolving
Loans, Swing Line Loans and/or Special Facility Obligations and the
Commitments of the Lenders in respect of Revolving Loans, Swing Line Loans
and/or Special Facility Obligations have all been terminated, to
immediately reduce the outstanding Liquidity Facility Loans and permanently
reduce the Liquidity Facility Commitment in accordance with Section 2.08(c)
in an aggregate amount equal to such Net Disposition Proceeds; (ii) if the
Borrower or any Restricted Subsidiary shall at any time make a Disposition
of a Fixed Asset (other than a Disposition permitted pursuant to clause
(a), (b) or (c) of Section 8.02) and (A) the Designated Performance Trigger
Event has occurred for the most recently completed Test Period, (B) no
Event of Default or payment Default has occurred and is then continuing and
(C) a Designated Performance Trigger Event Certificate duly executed by a
Responsible Officer has been furnished to the Administrative Agent, then
(x) Borrower or such Restricted Subsidiary may, within 360 days after the
receipt by Borrower or such Restricted Subsidiary of the Net Disposition
Proceeds of such Disposition of Fixed Assets, (A) reinvest (subject to
Section 8.03) up to 100% of such Net Disposition Proceeds in the businesses
described in Section 7.13 (including, subject to the provisions of clause
(h) of Section 8.03, making an Acquisition in such businesses) or (B)
retain the amount of such Net Disposition Proceeds not so applied
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pending such application, and (y) to the extent such Net Disposition
Proceeds are not so applied during such 360-day period, such Net
Disposition Proceeds shall immediately reduce, FIRST, the outstanding
Revolving Loans and permanently reduce the Revolving Commitments in
accordance with Section 2.08(c) in an aggregate amount equal to the portion
of such Net Disposition Proceeds not so applied; and SECOND in the event
that there are no outstanding Revolving Loans, Swing Line Loans and/or
Special Facility Obligations and the Commitments of the Lenders in respect
of Revolving Loans, Swing Line Loans and/or Special Facility Obligations
have all been terminated, the Liquidity Facility Commitment shall be
immediately reduced in accordance with Section 2.08(c) ) in an aggregate
amount equal to the portion of such Net Disposition Proceeds not so
applied, and (iii) if the Borrower or any Restricted Subsidiary shall at
any time make a Disposition of a Fixed Asset (other than (I) a Disposition
permitted pursuant to clause (a), (b) or (c) of Section 8.02 or (II)
Dispositions generating Net Proceeds of less than $50,000 in the aggregate
for all such Dispositions for any Fiscal Year less the amount of
Disposition Proceeds generated by Dispositions of Non-Fixed Assets referred
to in subclause (II) in the parenthetical contained in Section 2.08(a)(i)
hereof for such Fiscal Year) and the Designated Performance Trigger Event
has not occurred, then (x) Borrower or such Restricted Subsidiary shall,
concurrently with the receipt of the Net Disposition Proceeds of such Fixed
Asset, apply the first $5,000,000 and 50% of the balance of the Net
Disposition Proceeds of such Fixed Asset to prepay, FIRST, the outstanding
Revolving Loans in accordance with Section 2.08(d) without permanently
reducing the Revolving Commitments, and SECOND, in the event that there are
no outstanding Revolving Loans, Swing Line Loans and/or Special Facility
Obligations and the Commitments of the Lenders in respect of Revolving
Loans, Swing Line Loans and/or Special Facility Obligations have all been
terminated, the outstanding Liquidity Facility Loans in accordance with
Section 2.08(d) without permanently reducing the Liquidity Facility
Commitment, and (y) (A) reinvest (subject to Section 8.03) up to 50% of the
balance of such Net Disposition Proceeds (after applying the first
$5,000,000 and 50% of the balance of such Net Disposition Proceeds in
accordance with the immediately preceding clause (x)) in the businesses
described in Section 7.13 (including, subject to the provisions of clause
(h) of Section 8.03, making an Acquisition in such businesses), unless at
the time of such reinvestment an Event of Default or payment Default has
occurred and is then continuing (except in the case where Borrower or such
Restricted Subsidiary is subject to a definitive agreement that has been
duly and fully executed at a time when no Event of Default or payment
Default existed and pursuant to which it is obligated to use such Net
Disposition Proceeds for a purpose permitted by this Section 2.08(a)) or
(B) retain the amount of such Net Disposition Proceeds not so applied
pending such application, and (z) to the extent such Net Disposition
Proceeds are not so applied during such 360-day period, such Net
Disposition Proceeds shall, FIRST, immediately reduce the outstanding
Revolving Loans and permanently reduce the Revolving Commitments in
accordance with Section 2.08(c) in an aggregate amount equal to the portion
of such Net Disposition Proceeds not so applied, and SECOND, in the event
that there are no outstanding Revolving Loans, Swing Line Loans and/or
Special Facility Obligations and the Commitments of the Lenders in respect
of Revolving Loans, Swing Line Loans and/or Special Facility Obligations
have all been terminated, immediately reduce the outstanding Li-
-10-
quidity Facility Loans and permanently reduce the Liquidity Facility
Commitment in accordance with Section 2.08(c) ) in an aggregate amount
equal to the portion of such Net Disposition Proceeds not so applied."
(b) INDEBTEDNESS ISSUANCE. If Borrower shall issue Indebtedness under
clause (h) of Section 8.04 or, subject to the written consent of the
Required Lenders, if Borrower or any Restricted Subsidiary shall issue or
incur indebtedness for borrowed money or incur Capitalized Lease
Liabilities not otherwise permitted to be issued or incurred pursuant to
Section 8.04, (i) the Revolving Commitments shall be immediately reduced in
accordance with Section 2.08(c) by an amount equal to the Net Issuance
Proceeds of such issuance or incurrence, or (ii) in the event that there
are no outstanding Revolving Loans, Swing Line Loans and/or Special
Facility Obligations and the Commitments of the Lenders in respect of
Revolving Loans, Swing Line Loans and/or Special Facility Obligations have
all been terminated, the Liquidity Facility Commitment shall be immediately
reduced in accordance with Section 2.08(c) by an amount equal to the Net
Issuance Proceeds of such issuance or incurrence not utilized to reduce the
Revolving Commitments.
(c) MANDATORY REDUCTION OF COMMITMENT AND PREPAYMENTS OF REVOLVING
LOANS AND LIQUIDITY FACILITY LOANS. Any reductions in Revolving Commitments
made pursuant to clauses (a) and (b) of this Section 2.08 shall be made in
the amounts so required in each case as and when applicable so that at all
times the Revolving Commitments are not reduced below the amount of Special
Facility Obligations then outstanding. All such reductions shall be applied
to the Lenders' Revolving Commitments pro rata. The Revolving Commitments
shall be automatically and permanently terminated in their entirety on the
Revolving Commitment Termination Date. Borrower shall immediately prepay
the outstanding Revolving Loans to the extent that the amount thereof plus
the Special Facility Obligations then outstanding then exceeds the
Revolving Commitments then in effect. Any reductions in the Liquidity
Facility Commitment made pursuant to clauses (a) and (b) of this Section
2.08 shall be made in the amounts so required in each case as and when
applicable. The Liquidity Facility Commitment shall be automatically and
permanently terminated in its entirety on the Liquidity Facility Commitment
Termination Date. Borrower shall immediately prepay the outstanding
Liquidity Facility Loans to the extent that the amount thereof then
outstanding exceeds the Liquidity Facility Commitments then in effect."
(h) Section 2.09 of the Credit Agreement designated "Repayment" is
hereby amended by adding a new clause (c) at the end thereof as follows:
"(c) THE LIQUIDITY FACILITY CREDIT. Borrower shall repay to the
Liquidity Facility Lender on the Liquidity Facility Commitment Termination
Date the aggregate principal amount of Liquidity Facility Loans outstanding
on such date, provided, that, such payment is expressly conditioned upon,
and subject to, the aggregate outstanding principal amount of all
outstanding Revolving Loans PLUS all outstanding Swing Line Loans PLUS all
outstanding Special Facility Obligations being less than or equal to
$90,000,000 after giving effect to such repayment."
(i) Section 2.10 of the Credit Agreement designated "Interest" is
hereby amended as follows:
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(i) Clause (a) thereof designated "Rate" is hereby amended by
inserting the words "and Liquidity Facility Loan" immediately after the
words "Revolving Loan" in the first line thereof and inserting the words
"and Liquidity Facility Loans" immediately following the words "Revolving
Loans" in the fourth line thereof.
(ii) Clause (b) thereof designated "Payment Dates" is hereby
amended by (x) inserting the words "and Liquidity Facility Loan"
immediately following the words "of Acceptances") on the third line
thereof, (y) inserting the words "and Liquidity Facility Loans" immediately
following the words "the Revolving Loans" in the second sentence thereof,
and (z) inserting the words "or a Liquidity Facility Loan" immediately
following the words "a Revolving Loan" in the second sentence thereof.
(iii) Clause (c) thereof is amended by inserting the words "or
any Liquidity Facility Loan" immediately following the words "any Revolving
Loan" in the second line thereof.
(j) Section 2.11 designated "Fees" is hereby amended by inserting a
new clause (c) at the end thereof as follows:
"(c) LIQUIDITY FACILITY COMMITMENT FEES. Borrower shall pay to
the Liquidity Facility Lender a commitment fee on the daily unused portion of
the Liquidity Facility Commitment, computed and payable on a quarterly basis in
arrears on the last Business Day of each calendar quarter based upon the daily
utilization for the quarter, at a rate PER ANNUM equal to 0.500%. Such
commitment fee shall accrue from the Third Amendment Effective Date to the
Liquidity Facility Commitment Termination Date, with the final payment to be
made in any event on the Liquidity Facility Commitment Termination Date. The
commitment fees provided in this clause shall accrue at all times after the
above-mentioned commencement date, including at any time during which one or
more conditions in Article V are not met."
(k) Section 5.02 of the Credit Agreement designated "Conditions to
All Credit Extensions" is hereby amended by (i) inserting the words "and the
obligation of the Liquidity Facility Lender to make any Liquidity Facility
Loan," immediately following the words "to make any Swing Line Loan, in the
third line thereof; and (ii) inserting the words "or, in the case of any
Liquidity Facility Loan, the Liquidity Facility Lender shall have received a
Notice of Borrower" at the end thereof.
(l) Section 9.01 of the Credit Agreement designated "Event of
Default" is hereby amended by (i) inserting the words "or Liquidity Facility
Loan" immediately following the words "Revolving Loan" in clause (a) thereof,
and (ii) inserting the words "Section 2.01(d) or" immediately following the
words "contained in any of" in clause (c) thereof.
(m) Section 9.02 of the Credit Agreement designated "Remedies" is
hereby amended by (i) inserting the words ", any obligation of the Liquidity
Facility Lender to make Liquidity Facility Loans" immediately following the
words "Swing Line Loans" in clause (a) thereof; (ii) inserting the words "and
Liquidity Facility Loans" immediately following the words "Revolving Loans" in
subclause (ii) of clause (b) thereof; (iii) inserting the words "and any
obligation of the Liquidity Facility Lender to make Liquidity Facility Loans"
immediately following
-12-
the words "or create Acceptances" in clause (c) thereof; and (iv) inserting the
words "and Liquidity Facility Loans" immediately following the words
"outstanding Revolving Loans" in clause (c) thereof.
(n) Section 11.01 of the Credit Agreement designated "Amendments and
Waivers" is hereby amended by (i) inserting a new clause (c) immediately
following clause (b) thereof to read as follows: "(c) no amendment, waiver or
consent shall, unless in writing and signed by the Liquidity Facility Lender (in
addition to the Lenders required under this Section to sign such amendment,
waiver or consent), adversely affect the rights or duties of the Liquidity
Facility Lender under this Agreement or any other Loan Document." and (ii)
relettering clauses (c) and (d) thereof as clauses "(d)" and "(e)",
respectively.
(o) Section 11.04 of the Credit Agreement designated "Costs and
Expenses" is hereby amended by (i) inserting the words ", the Liquidity Facility
Lender" immediately following the words "Swing Line Lender" in clause (a)
thereof; and (ii) inserting the words "or the Liquidity Facility Loans"
immediately following the words "Revolving Loans" each time such words appear in
clause (b) thereof.
SECTION Three: WAIVER. The Administrative Agent and the Required Lenders
hereby waive compliance by the Borrower with the financial covenants contained
in Sections 8.06(a) and (b) of the Credit Agreement from the date hereof to and
including January 31, 2002 (the "Waiver Period"). To the extent that any Default
or Event of Default would have arisen and would be continuing under the Section
of the Credit Agreement referred to above during the Waiver Period in the
absence of this Amendment, such Default or Event of Default will automatically
be reinstated as of January 31, 2002 unless otherwise agreed to in writing by
the Required Lenders.
SECTION Four: (a) AMENDMENT EFFECTIVE DATE. This Amendment, and the
waivers, amendments and modifications contained herein, shall be and become
effective as of the date hereof (the "THIRD AMENDMENT EFFECTIVE DATE") when each
of the conditions set forth in this Section 4 shall have been fulfilled to the
satisfaction of the Administrative Agent.
(b) EXECUTION OF COUNTERPARTS. The Administrative Agent shall have
received counterparts of this Amendment, duly executed and delivered on behalf
of the Borrower and each of the Required Lenders.
(c) RESOLUTIONS; INCUMBENCY. The Administrative Agent shall have
received (i) copies of the resolutions of the board of directors of the Borrower
authorizing the execution, delivery and performance of this Amendment, each
other Loan Document to be delivered by the Borrower in connection herewith and
the transactions contemplated hereby and thereby, certified as of the Third
Amendment Effective Date by the Secretary or an Assistant Secretary of the
Borrower, together with a certificate of the Secretary or Assistant Secretary of
the Borrower dated the Third Amendment Effective Date, certifying the names and
true signatures of the officers of the Borrower authorized to execute, deliver
and perform, as applicable, this Amendment, and such other Loan Documents to be
delivered by it in connection herewith; and (ii) copies of the resolutions of
the board of directors of each Subsidiary authorizing the delivery, execution
and performance by such Subsidiary of the Loan Documents to be delivered by it
in connection
-13-
herewith, certified as of the Third Amendment Effective Date by the Secretary or
an Assistant Secretary of such Subsidiary, together with a certificate of the
Secretary or an Assistant Secretary of such Subsidiary dated the Third Amendment
Effective Date, certifying the names and true signatures of the officers of such
Subsidiary authorized to execute, deliver and perform the Loan Documents.
(d) ORGANIZATION DOCUMENTS. The Administrative Agent shall have
received the articles or certificate of incorporation and the bylaws of each of
Obligors for which such documents have not previously been delivered and
certified, in each case, as in effect on the Third Amendment Effective Date,
certified by the Secretary or Assistant Secretary of such Person as of the Third
Amendment Effective Date, together with a certification that any documents that
were previously delivered are in full force and effect and have not, since the
date of such delivery, been amended.
(e) APPROVALS. All necessary material governmental, shareholders' and
third-party approvals in connection with the execution, delivery and performance
of this Amendment and the other Loan Documents delivered in connection herewith.
(f) OTHER LOAN DOCUMENTS. The Administrative Agent shall have
received an affirmation and consent by each of the Guarantors.
(g) AMENDMENT EFFECTIVE DATE CERTIFICATE. The Administrative Agent
shall have received, with counterparts for each Agent, the Amendment Effective
Date Certificate, dated the Third Amendment Effective Date and duly executed and
delivered by a Responsible Officer of the Borrower, in which certificate the
Borrower shall agree and acknowledge that the statements made therein shall be
deemed to be true and correct (in all material respects) representations and
warranties of the Borrower made as of such date, and, at the time each such
certificate is delivered, such statements shall in fact be true and correct.
(h) LEGAL OPINIONS. The Administrative Agent shall have received a
favorable legal opinion of (i) Simpson, Thacher & Xxxxxxxx, special counsel to
the Obligors and (ii) the General Counsel to the Borrower, in each case,
addressed to the Administrative Agent and the Lenders and dated the Third
Amendment Effective Date, substantially in the forms of ANNEX A-1 and ANNEX A-2,
respectively.
(i) AMENDMENT FEE. The Administrative Agent shall have received, for
the benefit of each Lender actually approving this Third Amendment by duly
executing the signature pages hereto on or prior to October 11, 2001 by 5:00
p.m., Eastern Standard Time, an amendment fee equal to .15% of such Lender's
outstanding Revolving Commitment (whether used or unused on such date).
(j) ARRANGEMENT FEE. The Administrative Agent shall have received the
Arrangement Fee required to be paid to it in accordance with the Side Letter,
dated as of September 30, 2001, on or prior to the Third Amendment Effective
Date.
(k) FEES AND EXPENSES. The Administrative Agent shall have received
all expenses due and payable pursuant to Section 7 hereof (to the extent then
invoiced) and pursuant to the Credit Agreement (including all previously
invoiced fees and expenses).
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SECTION FIVE: REPRESENTATIONS AND WARRANTIES; COVENANTS. In order to
induce the Lenders and the Agents to enter into this Amendment, each Obligor
represents and warrants to each of the Lenders and the Agents that, after giving
effect to this Amendment, (a) no Default or Event of Default has occurred and is
continuing; and (b) all of the representations and warranties in the Credit
Agreement are true and complete in all material respects on and as of the date
hereof as if made on the date hereof (or, if any such representation or warranty
is expressly stated to have been made as of a specific date, as of such specific
date).
SECTION SIX: REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND THE
NOTES. On and after the Effective Date, each reference in the Credit Agreement
to "this Agreement", "hereunder", "hereof" or words of like import referring to
the Credit Agreement, and each reference in the Notes and each of 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
Credit Agreement, as amended by this Amendment. The Credit Agreement, the Notes
and each of the other Loan Documents, as specifically amended by this Amendment,
are and shall continue to be in full force and effect and are hereby in all
respects ratified and confirmed. The execution, delivery and effectiveness of
this Amendment shall not, except as expressly provided herein, operate as a
waiver of any right, power or remedy of any Lender or any Agent under any of the
Loan Documents, nor constitute a waiver of any provision of any of the Loan
Documents. This Amendment is a Loan Document executed pursuant to the Credit
Agreement and shall be construed, administered and applied in accordance with
all of the terms and provisions of the Credit Agreement (and, following the date
hereof, the Amended Credit Agreement). Any breach of any representation or
warranty or covenant or agreement contained in this Amendment shall be deemed to
be an Event of Default for all purposes of the Credit Agreement and the other
Loan Documents. Each Guarantor ratifies and confirms its Guarantee as in full
force and effect after giving effect to the amendments herein set forth and to
any prior amendment or waiver to the Credit Agreement.
SECTION SEVEN: COSTS, EXPENSES AND TAXES. Borrower agrees to pay all
reasonable costs and expenses of the Agents in connection with the preparation,
execution and delivery of this Amendment and the other instruments and documents
to be delivered hereunder, if any (including, without limitation, the reasonable
fees and expenses of Wachtell, Lipton, Xxxxx & Xxxx) in accordance with the
terms of Section 11.04 of the Credit Agreement. In addition, Borrower shall pay
or reimburse any and all stamp and other taxes payable or determined to be
payable in connection with the execution and delivery of this Amendment and the
other instruments and documents to be delivered hereunder, if any, and agrees to
save each Agent and each Lender harmless from and against any and all
liabilities with respect to or resulting from any delay in paying or omission to
pay such taxes.
SECTION EIGHT: FURTHER ASSURANCES. The Borrower hereby agrees that it
will take any action that from time to time may be reasonably necessary to
effectuate the agreements contemplated herein.
SECTION NINE: AUTHORITY TO EXECUTE INTERCREDITOR AGREEMENT. The
Required Lenders hereby authorize the Administrative Agent to execute, for the
benefit of the Lenders, the Intercreditor Agreement, dated as of date hereof.
The Intercreditor Agreement, and compliance by any party thereto of its
obligations thereunder, may at any time and from time to time be
-15-
amended, supplemented, modified or waived, in accordance with the terms and
provisions of the Intercreditor Agreement, only by an instrument or instruments
in writing signed by each of the parties thereto; PROVIDED, HOWEVER, that the
Required Lenders shall have consented to and approved such amendment,
supplement, modification or waiver.
SECTION TEN: 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 thereof.
SECTION ELEVEN: EXECUTION IN COUNTERPARTS. This Amendment may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute but one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Amendment by telecopier shall be effective as delivery of a manually executed
counterpart of this Amendment.
SECTION TWELVE: SUCCESSORS AND ASSIGNS. This Amendment shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
SECTION THIRTEEN: NO THIRD PARTIES BENEFITED. This Amendment is made
and entered into for the sole protection and legal benefit of the Borrower, the
Lenders, each Agent and the Agent-Related Persons, and their permitted
successors and assigns, and no other Person shall be a direct or indirect legal
beneficiary of, or have any direct or indirect cause of action or claim in
connection with, this Amendment or any of the other Loan Documents.
SECTION FOURTEEN: GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT
GIVING EFFECT TO ANY PROVISIONS THEREOF RELATING TO CONFLICTS OF LAW).
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
BORROWER:
EVENFLO COMPANY, INC.
By:
-----------------------------------
Name:
Title:
GUARANTORS:
LISCO FURNITURE, INC.
By:
-----------------------------------
Name:
Title:
LISCO FEEDING, INC.
By:
-----------------------------------
Name:
Title:
AGENT:
BANK OF AMERICA, NATIONAL
ASSOCIATION (successor in interest to
BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION),
as Administrative Agent
By:
-----------------------------------
Name:
Title:
S-1
LENDERS:
BANK OF AMERICA, NATIONAL
ASSOCIATION (successor in interest to
BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION),
as Fronting Lender and as a Lender
By:
-----------------------------------
Name:
Title:
S-2
BANK OF AMERICA, NATIONAL
ASSOCIATION (successor in interest to
BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION),
as Liquidity Facility Lender
By:
-----------------------------------
Name:
Title:
X-0
XXXXX XXXXXXXXX BANK, as a Lender
By:
-----------------------------------
Name:
Title:
S-4
XXX CAPITAL FUNDING, L.P., as a Lender
By Highland Capital Management, L.P.
as Collateral Manager
By:
-----------------------------------
Name:
Title:
S-5
XXXXXXX XXXXX CAPITAL CORPORATION,
as a Lender
By:
-----------------------------------
Name:
Title:
S-6
TRANSAMERICA BUSINESS CREDIT CORPORATION,
as a Lender
By:
-----------------------------------
Name:
Title:
X-0
XXXX XX XXXX XXXXXX, as a Lender
By:
------------------------------------
Name:
Title:
S-8
XXXXXX XXXXXXX SENIOR FUNDING, INC.,
as a Lender
By:
-----------------------------------
Name:
Title:
S-9
SOVEREIGN BANK, as a Lender
By:
-----------------------------------
Name:
Title:
S-10
PAMCO CAYMAN LTD., as a Lender
By Highland Capital Management, L.P.
as Collateral Manager
By:
-----------------------------------
Name:
Title:
S-11
