EIGHTH AMENDMENT TO CREDIT
AND GUARANTY AGREEMENT
THIS EIGHTH AMENDMENT, dated as of November 29, 1999 (this "Amendment"),
to the Existing Credit Agreement referred to below, is among IMO INDUSTRIES
INC., a Delaware corporation (the "Borrower"), COLFAX CORPORATION (formerly
known as II Acquisition Corp.), a Delaware corporation (the "Parent"), and the
Lenders (as defined below) parties hereto.
W I T N E S S E T H:
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WHEREAS, the Borrower, the Parent, certain financial institutions from
time to time parties thereto (collectively, the "Lenders"), The Bank of Nova
Scotia, as the Administrative Agent and the Documentation Agent, and NationsBanc
Capital Markets, Inc., as the Syndication Agent, have entered into the Credit
and Guaranty Agreement, dated as of August 29, 1997 (as amended, supplemented,
amended and restated or otherwise modified prior to the date hereof, the
"Existing Credit Agreement" and, as amended by, and together with, this
Amendment, the "Credit Agreement"); and
WHEREAS, the Borrower and the Parent have requested that the Existing
Credit Agreement be amended in certain respects and that the Lenders waive
certain requirements of, and provide their consent with respect to certain
transactions which would otherwise be prohibited by the provisions of, the
Existing Credit Agreement and the Lenders have agreed to amend the Existing
Credit Agreement and to grant such waivers and consents (subject to the terms
and conditions of this Amendment);
NOW, THEREFORE, in consideration of the premises and the other provisions
herein contained, the parties hereto hereby agree as follows.
PART I
DEFINITIONS
SUBPART I.1. Use of Defined Terms. Unless otherwise defined herein or
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the context otherwise requires, terms used in this Amendment, including its
preamble and recitals, have the meanings set forth in the Existing Credit
Agreement.
PART II
AMENDMENTS, WAIVERS AND CONSENTS
TO THE EXISTING CREDIT AGREEMENT
Effective upon (and subject to) the occurrence of the Eighth Amendment
Effective Date (as defined in Subpart 3.1) or, as applicable, the Sierra
Acquisition Effective Date (as defined in Subpart 3.2), certain terms and
provisions of the Existing Credit Agreement are hereby amended, and the waivers
and consent described below are hereby granted, all in accordance with this
Part. Except as so amended or modified by this Amendment, the Existing Credit
Agreement and the Loan Documents shall continue in full force and effect in
accordance with their terms.
SUBPART II.1. Amendment to Article I. Article I of the Existing
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Credit Agreement is hereby amended in accordance with Subparts 2.1.1 through
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2.1.2.
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SUBPART II.1.1. Section 1.1 of the Existing Credit Agreement is hereby
amended by adding the following new definitions in their appropriate
alphabetical sequence:
"Amendment No. 8" means the Eighth Amendment, dated as of
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November 29, 1999, to this Agreement among the Borrower, the Parent and
the Lenders parties thereto.
"Conduit" means Liberty Street Funding Corp., a Delaware
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corporation.
"Contract" means, with respect to any Receivable, any and all
contracts, instruments, agreements, leases, invoices, notes or other
writings pursuant to which such Receivable arises or that evidence such
Receivable or under which a Receivables Obligor becomes or is obligated to
make payment in respect of such Receivable.
"Eighth Amendment Effective Date" is defined in Subpart 3.1 of
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Amendment No. 8.
"Illinois Fee Property" is defined in Subpart 3.2.3 of Amendment
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No. 8.
"Illinois Lease" is defined in Subpart 3.2.3 of Amendment No. 8.
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"Illinois Leased Property" is defined in Subpart 3.2.3 of
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Amendment No. 8.
"Mortgage Amendment" is defined in Subpart 3.2.3 of Amendment No. 8.
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"Permitted Receivables Transaction" means the transaction effected
pursuant to the Transaction Documents (as such term is defined in the
Receivables Purchase Agreement) providing for the sale or financing of
Receivables and Related Rights by the Borrower and its U.S. Subsidiaries
with no more than customary limited recourse based on the collectability
of the Receivables sold.
"Purchase and Sale Agreement" means the Purchase and Sale Agreement,
dated as of November 29, 1999 among the Borrower and Xxxxxx Pumps, Inc.,
as originators, the Borrower, as servicer, and the Conduit, as purchaser.
"Receivable" means (a) any indebtedness and other obligations owed
to the Borrower or any U.S. Subsidiary by, or any right of the Borrower or
any U.S. Subsidiary to payment from or on behalf of, a Receivables Obligor
whether constituting an account, chattel paper, instrument or general
intangible arising in connection with the sale of goods or the rendering
of services by such Person, and includes the obligation to pay any finance
charges, fees and other charges with respect thereto; provided, that none
of the foregoing shall be deemed to be a "Receivable" hereunder unless and
until the same shall be purchased by Receivables Co. pursuant to the terms
of the Permitted Receivables Transaction and (b) any "Receivable"
purchased from the Borrower or any U.S. Subsidiary (other than Receivables
Co.) by Receivables Co. pursuant to the terms of the Permitted Receivables
Transaction.
"Receivables Co." means Imo Funding Company, LLC, a special
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purpose, bankruptcy-remote wholly-owned U.S. Subsidiary of the Borrower
organized under the laws of the state of Delaware.
"Receivables Facility Outstandings" means, at any date of
determination, with respect to the Permitted Receivables Transaction, the
aggregate cash proceeds received by the Borrower or any of its
wholly-owned U.S. Subsidiaries from the sale or financing of Receivables
and Related Rights pursuant to the Permitted Receivables Transaction which
Receivables and Related Rights are outstanding on the date of
determination, which amount shall be equal to the amount of Capital (as
defined in the Receivables Purchase Agreement) outstanding on such date of
determination.
"Receivables Obligor" means, with respect to any Receivable, the
Person obligated to make payments pursuant to the Contract relating to
such Receivable.
"Receivables Purchase Agreement" means the Receivables Purchase
Agreement, dated as of November 29, 1999 among Receivables Co., as seller,
the Borrower, as servicer, the Conduit, as issuer, and Scotiabank, as
administrator.
"Related Rights" means,
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(a) all rights to, but not the obligations under, all Related
Security;
(b) all monies due or to become due with respect to any
Receivable and any of the foregoing;
(c) all books and records related to any Receivable and any of
the foregoing; and
(d) all proceeds thereof (as defined in the U.C.C.) received on or
after the date hereof including, without limitation, all funds which
either are received by the Borrower or any U.S. Subsidiary from or on
behalf of the Receivables Obligors in payment of any amounts owed
(including, without limitation, finance charges, interest and all other
charges) in respect of Receivables, or are applied to such amounts owed by
the Receivables Obligors (including, without limitation, insurance
payments, if any, that the Borrower or any U.S. Subsidiary applies in the
ordinary course of its business to amounts owed in respect of any
Receivable).
"Related Security" means, with respect to any Receivable:
(a) all of the Borrower's or any U.S. Subsidiary's interest in any
goods (including returned goods), and documentation of title evidencing
the shipment or storage of any goods (including returned goods), relating
to any sale giving rise to such Receivable,
(b) all instruments and chattel paper that may evidence such
Receivable,
(c) all other security interests or liens and property subject
thereto from time to time purporting to secure payment of such Receivable,
whether pursuant to the Contract related to such Receivable or otherwise,
together with all U.C.C. financing statements or similar filings relating
thereto, and
(d) all of the Borrower's or any U.S. Subsidiary's rights, interests
and claims under the Contracts and all guaranties, indemnities, insurance
and other agreements (including the related Contract) or arrangements of
whatever character from time to time supporting or securing payment of
such Receivable or otherwise relating to such Receivable, whether pursuant
to the Contract related to such Receivable or otherwise.
"Sierra" means Sierra International Inc., an Illinois corporation.
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"Sierra Acquisition Effective Date" is defined in Subpart 3.2 of
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Amendment No. 8.
"Sierra Mortgage" is defined in Subpart 3.2.3 of Amendment No. 8.
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"Sierra Stock Purchase Agreement" means the Stock Purchase
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Agreement, dated as of October 13, 1999, between the Borrower and
Echlin Inc., a Connecticut corporation.
SUBPART II.1.2. Section 1.1 of the Existing Credit Agreement is hereby
further amended as follows:
(a) by amending the definitions of "Applicable Commitment Fee
Margin" and "Applicable Margin", in each case, by replacing the reference
to "clause (c) of Section 7.1.1" each time it appears therein with a
reference to "clause (b) of Section 7.1.1";
(b) by amending the definition of "Indebtedness" by (i) deleting the
word "and" which immediately follows clause (f) thereto, (ii) adding a new
clause (g) thereto which shall read "(g) for purposes of calculating the
Leverage Ratio and Total Debt, all Receivables Facility Outstandings (it
being understood and agreed by the parties that for GAAP and other
purposes, such Receivables Facility Outstandings shall not be deemed to be
"Indebtedness"); and" and (iii) re-lettering the current clause (g)
thereto as clause (h) thereto;
(c) by amending the definition of "Interest Expense" by (i)
replacing the phrase "including, without duplication," appearing therein
with the phrase "including, without duplication, (i)" and (ii) replacing
the "." appearing at the end of such definition with the phrase "and (ii)
interest (or other fees in the nature of interest or discount accrued and
paid or payable in cash for such period) in respect of the Permitted
Receivables Transaction.";
(d) by amending the definition of "Net Debt Proceeds" by replacing
the reference to "clause (m) of Section 7.2.2" appearing therein with a
reference to "clause (n) of Section 7.2.2";
(e) by amending the definition of "Net Income" by adding a proviso
prior to the "." at the end of such definition which shall provide:
"provided, however, that following the Sierra Acquisition Effective Date,
such net income for the first three Fiscal Quarters prior to the Sierra
Acquisition Effective Date will, for all purposes other than the
calculation of Excess Cash Flow, be calculated on a pro forma basis to
give effect to the acquisition of Sierra as if such acquisition had
occurred at the beginning of such period"; and
(f) by amending the definition of "Total Debt" by replacing the
reference to "clause (a), (b) or (c) of the definition of Indebtedness"
appearing therein with a reference to "clauses (a), (b), (c) or (g) of the
definition of Indebtedness".
SUBPART II.2. Amendment to Article VI. Article VI of the Existing
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Credit Agreement is hereby amended in accordance with Subpart 2.2.1.
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SUBPART II.2.1. A new Section 6.25 is hereby added to the Existing Credit
Agreement immediately following Section 6.24 which shall provide as follows:
"SECTION 6.25. Year 2000. Each Obligor has reviewed the areas within
its business and operations which could be adversely affected by, and has
developed or is developing a program to address on a timely basis, the
"Year 2000 Problem" (that is, the risk that computer applications used by
such Obligor may be unable to recognize and properly perform
date-sensitive functions involving certain dates prior to, and any date
after, December 31, 1999). Based on such review and program, the Year 2000
Problem could not reasonably be expected to have a material adverse effect
on the financial condition, operations, assets, business, properties,
revenues or prospects of the Borrower and its Subsidiaries taken as a
whole."
SUBPART II.3. Amendments to Article VII. Article VII of the Existing
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Credit Agreement is hereby amended in accordance with Subparts 2.3.1 through
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Subpart 2.3.16.
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SUBPART II.3.1. Section 7.1.8 of the Existing Credit Agreement is hereby
amended by replacing the phrase "upon any Person" appearing therein with the
phrase "upon any Person (other than, at all times prior to the termination of
the Permitted Receivables Transaction, Receivables Co.)".
SUBPART II.3.2. Section 7.1.16 of the Existing Credit Agreement is hereby
amended by replacing the word "Subsidiaries" each time such word appears therein
with the phrase "Subsidiaries (other than, at all times prior to the termination
of the Permitted Receivables Transaction, Receivables Co.)".
SUBPART II.3.3. A new Section 7.1.19 is hereby added to the Existing
Credit Agreement immediately following Section 7.1.18 which shall provide as
follows:
"SECTION 7.1.19. Sierra Real Estate Matters. Each of the Borrower
and the Parent agrees to use its best efforts to obtain a Landlord Waiver
and Consent Agreement, in form and substance reasonably satisfactory to
the Administrative Agent, with respect to any Lease encumbering the
Florida Property under which Sierra, the Borrower or any other Obligor is
lessee."
SUBPART II.3.4. Effective upon the Sierra Acquisition Effective Date,
Section 7.1.19 is hereby amended in its entirety to read as follows:
"SECTION 7.1.19. Sierra Real Estate Matters. The Borrower and the
Parent agree to cause Sierra, no later than ninety (90) days after the
Sierra Acquisition Effective Date, to:
(a) acquire the Illinois Leased Property pursuant to and in
accordance with the terms of the Illinois Lease. Immediately upon
Sierra's acquisition of the Illinois Leased Property, the Borrower
and the Parent agree to so notify the Administrative Agent and, at
the Borrower's sole cost and expense, the Borrower shall, or shall
cause Sierra to, (i) authorize the Administrative Agent to record
the Mortgage Amendment, (ii) take all further actions necessary or
required by the Administrative Agent, in its sole discretion, to
cause said Illinois Leased Property to be subject to the Lien of the
Sierra Mortgage and (iii) deliver to the Administrative Agent an
endorsement to the mortgagee's title insurance policy with respect
to the Illinois Fee Property, which endorsement shall insure that
the Sierra Mortgage, as modified and spread by the Mortgage
Amendment, constitutes a valid first priority Lien on the Illinois
Fee Property and the Illinois Leased Property, free and clear of all
Liens other than those approved by the Administrative Agent. If
Sierra fails to exercise its option to acquire the Illinois Leased
Property within the ninety (90) day period described above, then the
Borrower and the Parent shall cause Sierra to immediately deliver to
the Administrative Agent any instrument or documents required by the
Administrative Agent, in its sole discretion, to create a valid
first priority Lien on Sierra's leasehold interest in the Illinois
Leased Property and any other instruments, agreements, insurance
policies, surveys or other documents required by the Administrative
Agent with respect to the Illinois Leased Property, including,
without limitation, all of the documents described in Subpart 3.2.3
to Amendment No. 8; and
(b) obtain a Landlord Waiver and Consent Agreement, in form
and substance reasonably satisfactory to the Administrative Agent,
with respect to any Lease encumbering the Florida Property under
which Sierra, the Borrower or any other Obligor is lessee."
SUBPART II.3.5. Section 7.2.1 of the Existing Credit Agreement is hereby
amended by replacing the word "Subsidiaries" which appears therein with the
phrase "Subsidiaries (other than, at all times prior to the termination of the
Permitted Receivables Transaction, Receivables Co.)".
SUBPART II.3.6. Section 7.2.2 of the Existing Credit Agreement is hereby
amended by (i) deleting the word "and" which immediately follows clause (l)
thereto, (ii) adding a new clause (m) thereto which shall read "(m) without
duplication, Indebtedness of the Borrower, its U.S. Subsidiaries (other than
Receivables Co.) or Receivables Co., in each case, incurred in connection with
the Permitted Receivables Transaction in an aggregate amount at any time not to
exceed $35,000,000; and", (iii) re-lettering the current clause (m) thereto as
clause (n) thereto and (iv) by deleting the phrase "(l) and (m)" appearing in
the proviso thereto and replacing such phrase with the phrase "(l), (m) and
(n)".
SUBPART II.3.7. Section 7.2.3 of the Existing Credit Agreement is hereby
amended by (i) deleting the word "and" which immediately follows clause (h)
thereto, (ii) adding a new clause (i) thereto which shall read "(i) Liens on
Receivables and Related Rights of the Borrower or any U.S. Subsidiary; provided,
that such Liens shall only be permitted to the extent that they solely cover
Excluded Property (as such term is defined in the Security Agreements) and are
created in connection with the Permitted Receivables Transaction; and", and
(iii) re-lettering the current clause (i) thereto as clause (j) thereto.
SUBPART II.3.8. Effective upon the Sierra Acquisition Effective Date,
Section 7.2.3 of the Existing Credit Agreement is hereby further amended by (i)
deleting the word "and" which immediately follows clause (i) thereto, (ii)
adding a new clause (j) thereto which shall read "(j) those certain Liens on
assets of Sierra set forth on Schedule 4.8(a) of the Sierra Stock Purchase
Agreement to the extent that such Liens extend solely to equipment leased by
Sierra; and", and (iii) re-lettering the current clause (j) thereto as clause
(k) thereto.
SUBPART II.3.9. Section 7.2.5 of the Existing Credit Agreement is hereby
amended by (i) replacing the phrase "the Borrower's Investment existing on the
Effective Date in its Subsidiaries" appearing in clause (a) thereof with the
phrase "the Borrower's Investment (i) existing on the Effective Date in its
Subsidiaries and (ii) in Receivables Co., by way of contributions to capital
from time to time; provided, that such Investments in Receivables Co. shall (x)
only be made in connection with, and subject to the terms of, the Permitted
Receivables Transaction and (y) not in the aggregate exceed $3,000,000.00 (not
more than $1,000,000.00 of which shall have been made in cash)", (ii) deleting
clause (c) thereof in its entirety and replacing such clause with the following
"without duplication, Investments (i) permitted as Indebtedness pursuant to
clauses (d), (f), (h) and (k) of Section 7.2.2 and (ii) to the extent that
Receivables Co. is not a Subsidiary of the Borrower, Investments in Receivables
Co. in connection with the Permitted Receivables Transaction made by the
Borrower and/or its Subsidiaries (x) on terms satisfactory to the Administrative
Agent and (y) not in the aggregate to exceed $3,000,000.00 (not more than
$1,000,000.00 of which shall have been made in cash)" and (iii) replacing the
phrase "other Investments" appearing in clause (g) thereof with the phrase
"other Investments (other than by Receivables Co.)".
SUBPART II.3.10. Section 7.2.7 of the Existing Credit Agreement is hereby
amended by replacing the phrase "other Subsidiaries of the Parent" appearing
therein with the phrase "other Subsidiaries of the Parent (other than
Receivables Co.)".
SUBPART II.3.11. Section 7.2.10 of the Existing Credit Agreement is hereby
amended by replacing the word "Subsidiary" appearing therein with the phrase
"Subsidiary (other than Receivables Co.)".
SUBPART II.3.12. Section 7.2.11 of the Existing Credit Agreement is hereby
amended by replacing the phrase "or (iv) any assets of a Subsidiary of the
Borrower to the Borrower" set forth in clause (c) thereof with the phrase "(iv)
any assets of a Subsidiary of the Borrower to the Borrower, or (v) Receivables
and Related Rights pursuant to the Permitted Receivables Transaction; provided,
however, that notwithstanding the foregoing, the aggregate fair market value
outstanding at any one time of Receivables and Related Rights which may be
Disposed of pursuant to this clause (c)(v) shall not exceed $45,000,000.00".
SUBPART II.3.13. Section 7.2.12 of the Existing Credit Agreement is hereby
amended by deleting such section in its entirety and replacing such section with
the following:
"SECTION 7.2.12. Modification of Certain Agreements. Neither the
Borrower nor the Parent will, nor will they permit any of their respective
Subsidiaries to, (a) consent to any amendment, supplement or other
modification of any of the terms or provisions contained in, or applicable
to, any Organic Document, the Borrower Preferred Stock, the Parent
Subscription Agreement, the Borrower Subscription Agreement, the
Subordinated Notes, other than any such amendment, supplement or other
modification which is immaterial and which could not adversely affect the
Administrative Agent or any Lender (it being understood and agreed that,
in any event, any modification to the subordination provisions of, and any
of the defined terms therein, including, but not limited to, the
definition of "Specified Senior Indebtedness" of the Subordinated Notes
shall be deemed to be material); or
(b) without the prior written consent of the Required Lenders,
consent to any material amendment, supplement, or other modification to
any of the terms of the documents, instruments and agreements delivered in
connection with the Permitted Receivables Transaction, other than any such
amendment, modification or change which (x) would extend the maturity
thereof or (y) does not in any way adversely affect the interests of the
Managing Agents, the Lenders or the Issuer hereunder or under the Loan
Documents (including, without limitation, amendments, modifications or
changes of a technical or clarifying nature)."
SUBPART II.3.14. Section 7.2.14 of the Existing Credit Agreement is hereby
amended by (i) replacing the phrase "excluding this Agreement" appearing therein
with the phrase "excluding (i) this Agreement", (ii) replacing the phrase
"guaranteed by the Borrower" appearing therein with the phrase "guaranteed by
the Borrower, (ii) in the case of clause (a)(i), restrictions contained in
documents or agreements delivered in connection with the Permitted Receivables
Transaction, provided that such restrictions are only effective against the
Receivables and Related Rights financed or acquired thereby and (iii) in the
case of clause (b), restrictions on Receivables Co. contained in documentation
delivered for the Permitted Receivables Transaction (including, without
limitation, the operating agreement and other Organic Documents of Receivables
Co.)", (iii) replacing the phrase "the creation" appearing in clause (a) thereof
with the phrase "the (i) creation" and (iv) replacing the phrase "or the
ability" appearing in clause (a) thereof with the phrase "or (ii) ability".
SUBPART II.3.15. Section 7.2.15 of the Existing Credit Agreement is hereby
amended by replacing the phrase "payable to independent directors, or (v)"
appearing therein with the phrase "payable to independent directors, (v)
reasonable fees payable in connection with the Permitted Receivables
Transaction, or (vi)".
SUBPART II.3.16. Section 7.2.20 of the Existing Credit Agreement is
hereby amended by replacing the phrase "any U.S. Subsidiaries" appearing
therein with the phrase "any U.S. Subsidiaries (other than Receivables Co.)".
SUBPART II.4. Amendment to Article VIII. Article VIII of the Existing
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Credit Agreement is hereby amended by inserting a new Section 8.1.11 therein
which provides as follows:
"SECTION 8.1.11. Termination of Permitted Receivables Transaction.
Any event or circumstance shall occur which permits or requires the
Persons purchasing, or financing the purchase of, eligible Receivables and
Related Rights under the Permitted Receivables Transaction to stop so
purchasing or financing such Receivables and Related Rights, other than by
reason of the occurrence of the stated expiry date of the Permitted
Receivables Transaction; provided, that any notices or cure periods that
are conditions to the rights of such Persons to stop purchasing, or
financing the purchase of, such Receivables and Related Rights have been
given or have expired, as the case may be."
SUBPART II.5. Amendment to Article XI. Article XI of the Existing
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Credit Agreement
is hereby amended in accordance with Subpart 2.5.1.
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SUBPART II.5.1. Section 11.1 of the Existing Credit Agreement is hereby
amended by replacing the phrase "except as otherwise specifically provided in
any Loan Document" appearing in clause (b) thereof with the phrase "except as
otherwise specifically provided in any Loan Document (including the sale or
transfer of Receivables and Related Rights in accordance with the Permitted
Receivables Transaction)".
SUBPART II.6. Additional Conforming Amendments to Exhibits to Credit
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Agreement.
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SUBPART II.6.1. Exhibit F (Form of Compliance Certificate) to the Credit
Agreement is hereby amended by replacing Attachments 1 and 3 thereto with
Attachments 1 and 3 attached hereto as Annex 1.
SUBPART II.7. Waiver Regarding Section 3.1.2 of the Existing Credit
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Agreement ("Mandatory Repayments and Prepayments"). Notwithstanding anything
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to the contrary contained in the Existing Credit Agreement (including the
definition of the term "Net Disposition Proceeds" or Section 3.1.2 thereto), the
Lenders hereby waive any mandatory prepayment event which would otherwise arise
in connection with the sale or transfer of Receivables and Related Rights to
Receivables Co. or by Receivables Co. to the Conduit.
SUBPART II.8. Waiver Regarding Section 7.1.8 of the Existing Credit
Agreement ("Future Subsidiaries"). Effective upon the Sierra Acquisition
Effective Date, notwithstanding anything to the contrary contained in the
Existing Credit Agreement (including Section 7.1.8 thereto), the Lenders hereby
waive any requirement that, in connection with the acquisition by the Borrower
of Sierra pursuant to the terms and conditions contained in the Sierra Stock
Purchase Agreement, the Liens set forth on Schedule 4.8(a) of such agreement be
released to the extent that such Liens extend solely to equipment leased by
Sierra.
SUBPART II.9. Consent Regarding Partial Release of Liens. Each of the
Lenders hereby authorizes and directs the Administrative Agent to release and
terminate, at the Borrower's expense and without representation or warranty of
any kind by any Lender or any Managing Agent, all Liens and security interests
in and to all Receivables and Related Rights previously granted by the Obligors
under any Security Agreement in favor of the Administrative Agent and the
Lenders to the extent (and only to the extent) such Receivables and Related
Rights are sold, or purported to be sold, pursuant to the Permitted Receivables
Transaction. The Administrative Agent will, at the Borrower's expense and
without representation or warranty (and the Lenders hereby authorize and direct
the Administrative Agent to) deliver to the Borrower executed copies of Uniform
Commercial Code (Form U.C.C.-3) amendment statements or similar instruments with
respect to each of the filings previously made pursuant to a Security Agreement
(as such term is defined in the Credit Agreement) necessary to give effect to
the release of the Liens set forth in this Subpart.
PART III
CONDITIONS TO EFFECTIVENESS
SUBPART III.1. This Amendment shall become effective on the date (the
"Eighth Amendment Effective Date") when all of the following conditions have
been satisfied to the satisfaction of the Administrative Agent.
SUBPART III.1.1. Execution of Counterparts. The Administrative Agent
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shall have received copies of this Amendment, duly executed and delivered by the
Borrower, the Parent and the Lenders.
SUBPART III.1.2. Resolutions, etc. The Administrative Agent shall have
received from the Borrower and each other Obligor a certificate, dated the
Eighth Amendment Effective Date, of its Secretary or Assistant Secretary as to
resolutions of its Board of Directors then in full force and effect authorizing
the execution, delivery and performance of this Amendment and each other Loan
Document to be executed by such Obligor.
SUBPART III.1.3. Affirmation and Consent. The Administrative Agent
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shall have received an affirmation and consent in form and substance
satisfactory to it, duly executed and delivered by each Subsidiary Guarantor.
SUBPART III.1.4. Pro Forma Compliance Certificate. The Administrative
Agent shall have received, with counterparts for each Lender, a Compliance
Certificate (which Compliance Certificate shall be prepared by using Attachments
1 and 3 attached hereto as Annex 1) giving pro forma effect to the initial
funding of the Permitted Receivables Transaction, dated the Eighth Amendment
Effective Date, duly executed (and with all schedules thereto duly completed)
and delivered by the chief executive, financial or accounting Authorized Officer
of the Borrower, and such Compliance Certificate shall be satisfactory in form
and substance to the Administrative Agent.
SUBPART III.1.5. Documents Relating to Permitted Receivables Transaction.
The Administrative Agent shall have received (with copies for each of the
Lenders) true and correct executed copies, certified by the Borrower, of the
Receivables Purchase Agreement and the Purchase and Sale Agreement relating to
the transactions contemplated under the Permitted Receivables Transaction (and
all schedules, exhibits and attachments to either agreement), all of the
foregoing (including as to the expiration date, term, conditions and structure
(including the legal and organizational structure of Receivables Co. and the
restrictions imposed on its activities) of the Permitted Receivables
Transaction) in form and substance reasonably satisfactory to the Administrative
Agent and each of the Lenders.
SUBPART III.1.6. Opinions of Counsel. The Administrative Agent shall
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have received such opinions, each dated the Eighth Amendment Effective Date, in
form and substance and from counsel satisfactory to, and as may be required by,
the Administrative Agent and each of the Lenders.
SUBPART III.1.7. Reliance Letters. The Administrative Agent shall have
received reliance letters, dated the Eighth Amendment Effective Date and
addressed to the Administrative Agent and each of the Lenders in respect of each
of the legal opinions delivered in connection with the transactions contemplated
under the Permitted Receivables Transaction.
SUBPART III.1.8. Satisfactory Legal Form. All documents executed or
submitted pursuant hereto shall be satisfactory in form and substance to the
Administrative Agent and its counsel. The Administrative Agent and its counsel
shall have received all information and such counterpart originals or such
certified or other copies of such materials, as the Administrative Agent or its
counsel may reasonably request, and all legal matters incident to the
transactions contemplated by this Amendment shall be satisfactory to the
Administrative Agent and its counsel.
SUBPART III.2. The amendments, waivers and other modifications contained
herein relating to Sierra shall become effective on the date (the "Sierra
Acquisition Effective Date") when all of the following conditions have been
satisfied to the satisfaction of the Administrative Agent (which date shall be
no later than the date of the closing of the Sierra Stock Purchase Agreement).
SUBPART III.2.1. Resolutions, etc. The Administrative Agent shall have
received (i) a copy of a good standing certificate, dated a date reasonably
close to the Sierra Acquisition Effective Date, for Sierra and (ii) from Sierra
a certificate, dated a date reasonably close to the Sierra Acquisition Effective
Date, of its Secretary or Assistant Secretary as to:
(a) resolutions of its Board of Directors then in full force and
effect authorizing the execution, delivery and performance of each Loan
Document to be executed by Sierra;
(b) each Organic Document of Sierra; and
(c) the incumbency and signatures of the officers of Sierra
authorized to act with respect to each Loan Document as is to be
executed by it,
upon which certificate each Lender may conclusively rely until it shall have
received a further certificate of the Secretary or Assistant Secretary of Sierra
canceling or amending such prior certificate.
SUBPART III.2.2. Security Documents Relating to Sierra Acquisition, etc.
The Administrative Agent shall have received fully executed copies of each of
the following documents: (a) a Supplement to the Borrower Pledge Agreement,
pursuant to which the Borrower shall pledge to the Administrative Agent for the
benefit of the Lender Parties, inter alia, the capital stock of Sierra, (b) a
Supplement to the Subsidiary Guaranty, pursuant to which Sierra shall become
party to the Subsidiary Guaranty, and (c) a Supplement to the Subsidiary
Security Agreement, pursuant to which Sierra shall become party to the
Subsidiary Security Agreement, and, as applicable, appropriate trademark,
copyright and patent security supplements executed by Sierra (in each case,
together with all schedules and annexes referenced therein) and (d) U.C.C.-1
Financing Statements naming Sierra as the debtor and the Administrative Agent as
the secured party, suitable for filing under the U.C.C. of all jurisdictions as
may be necessary or, in the reasonable opinion of the Administrative Agent,
desirable to perfect the first priority security interest of the Administrative
Agent. The Administrative Agent shall have also received certified copies of
Uniform Commercial Code Requests for Information or Copies (Form U.C.C.-11),
certified by the Borrower, dated a date reasonably near (but prior to) the
Sierra Acquisition Effective Date of Sierra, listing all effective financing
statements, tax liens and judgment liens which name Sierra as the debtor.
SUBPART III.2.3. Real Estate Documents Relating to Sierra Acquisition,
etc. The Administrative Agent shall have received fully executed copies of each
of the following documents, each in form and substance reasonably satisfactory
to the Administrative Agent, or shall have received evidence, satisfactory to
the Administrative Agent, of the Borrower's or any other Obligor's compliance
with each of the following conditions:
(a) a real estate mortgage (the "Sierra Mortgage"), substantially in
the form of Exhibit J to the Existing Credit Agreement, encumbering all of
Sierra's right, title and interest in and to that certain real property
owned by Sierra and located in Litchfield, Illinois (the "Illinois Fee
Property"; the Illinois Fee Property, the Illinois Leased Property (as
defined below) and the property leased by Sierra located in Clearwater,
Florida are sometimes hereinafter referred to as the "Real Property"),
together with (i) evidence of the completion of all recordings and filings
of the Sierra Mortgage (and related U.C.C. financing statements and
fixture filings) as may be necessary or, in the opinion of the
Administrative Agent, desirable to effectively create a valid first
priority mortgage Lien against the Illinois Fee Property and (ii) such
other approvals, opinions or documents in connection therewith as the
Administrative Agent may reasonably request;
(b) a First Amendment to the Sierra Mortgage (the "Mortgage
Amendment"), which Mortgage Amendment shall, upon its recordation, spread
the Lien of the Sierra Mortgage to encumber that certain parcel of land
and the improvements located thereon situated in Litchfield, Illinois (the
"Illinois Leased Property"), which Illinois Leased Property is presently
owned by The City of Litchfield Illinois and leased to Sierra pursuant to
that certain Lease Agreement, dated as of December 1, 1976 (the "Illinois
Lease") and forms a part of and is contiguous to the manufacturing and
warehouse facilities located on the Illinois Fee Property.
(c) a mortgagees' title insurance policy satisfactory to the
Administrative Agent and from an independent title insurer satisfactory to
the Administrative Agent (the "Title Insurer"), with respect to the
Illinois Fee Property, insuring that title to such Illinois Fee Property
is marketable and that the interests created by the Sierra Mortgage
constitute valid first priority Lien thereon free and clear of all defects
and encumbrances, and such other matters reasonably approved by the
Administrative Agent, and such policies shall also include a revolving
credit endorsement, comprehensive endorsement, variable rate endorsement,
zoning endorsements (with parking), access and utilities endorsements, a
mechanic's lien endorsement and such other endorsements as the
Administrative Agent shall reasonably request;
(d) an "as built" survey for each parcel of the Illinois Fee
Property and the Illinois Leased Property, certified to and satisfactory
to the Administrative Agent and the Title Insurer by a surveyor reasonably
satisfactory to the Administrative Agent and registered in the state of
Illinois, which survey shall (i) be of recent date, in the reasonable
judgment of the Administrative Agent, (ii) contain the minimum detail for
land surveys as most recently adopted by ALTA/ACSM, (iii) comply with the
Administrative Agent's survey requirements, (iv) show a "metes and bounds"
and/or "block and lot" legal description and (v) contain the
Administrative Agent's standard form certification to the Administrative
Agent and the Title Insurer;
(e) Phase One Environmental Site Assessments (the scope and
performance of which meets or exceeds the then most current ASTM Standard
Practice for Environmental Site Assessments: Phase One Environmental Site
Assessment Process, E 1527) of each parcel of Real Property and such other
reports and other information, in form, scope and substance satisfactory
to the Administrative Agent regarding environmental matters relating to
Sierra and each parcel of Real Property, which environmental site
assessments shall (by their terms or pursuant to a separate agreement)
expressly permit the Administrative Agent and the Lenders to rely thereon;
(f) copies of any lease or other rental or occupancy agreements (the
"Leases"), certified to the Administrative Agent, with respect to any Real
Property or any portion thereof under which Sierra, the Borrower or any
other Obligor is either the lessee or the lessor;
(g) Subordination, Non-Disturbance and Attornment Agreements, in
form and substance reasonably satisfactory to the Administrative Agent,
with respect to any Lease encumbering a parcel of Real Property under
which Sierra, the Borrower or any other Obligor is the lessor;
(h) Landlord Waiver and Consent Agreements, in form and substance
reasonably satisfactory to the Administrative Agent, with respect to any
Lease encumbering the Illinois Fee Property under which Sierra, the
Borrower or any other Obligor is the lessee;
(i) an opinion of counsel to the Borrower in the state of Illinois
as to the enforceability of the Sierra Mortgage and each other Loan
Document which creates or perfects a security interest and such other
matters as the Administrative Agent may require; and
(j) evidence of payment in full by the Borrower of all premiums,
title examination, survey, departmental violations, judgment and U.C.C.
search charges, mortgage recording taxes and fees, and other taxes,
charges and fees payable in connection with the issuance of any title
insurance policy, the recording of any Sierra Mortgage or the delivery of
any survey or environmental report required under this Subpart 3.1.5.
SUBPART III.2.4. Opinions of Counsel. The Administrative Agent shall
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have received such opinions, each dated the Sierra Acquisition Effective Date,
in form and substance and from counsel satisfactory to, and as may be required
by, the Administrative Agent and each of the Lenders.
SUBPART III.2.5. Satisfactory Legal Form. All documents executed or
submitted pursuant hereto shall be satisfactory in form and substance to the
Administrative Agent and its counsel. The Administrative Agent and its counsel
shall have received all information and such counterpart originals or such
certified or other copies of such materials, as the Administrative Agent or its
counsel may reasonably request, and all legal matters incident to the
transactions contemplated by this Amendment shall be satisfactory to the
Administrative Agent and its counsel.
PART IV
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders and the Issuers to enter into this
Amendment, the Borrower and the Parent represent and warrant to the
Administrative Agent, each Issuer and each Lender as set forth in this Part.
SUBPART IV.1. Compliance with Warranties. After giving effect to the terms
of this Amendment, (a) the representations and warranties set forth herein, in
Article VI of the Credit Agreement and in each other Loan Document are true and
correct in all material respects with the same effect as if made on and as of
the date hereof (unless stated to relate solely to an earlier date, in which
case they were true and correct as of such earlier date) and (b) the Borrower
shall be in full compliance with Article 4 of the Subordinated Note Indenture.
SUBPART IV.2. Due Authorization, Non-Contravention, etc. The execution,
delivery and performance by the Borrower and the Parent of this Amendment and
other documents delivered pursuant hereto are within the Borrower's and the
Parent's corporate powers, have been duly authorized by all necessary corporate
action, and do not (i) contravene either the Borrower's or the Parent's Organic
Documents, (ii) contravene or result in a default under any contractual
restriction, law or governmental regulation or court decree or order binding on
or affecting either the Borrower or the Parent, or (iii) result in, or require
the creation or imposition of, any Lien (except as contemplated in or created by
the Loan Documents).
SUBPART IV.3. Validity, etc. This Amendment has been duly executed and
delivered by the Borrower and the Parent and constitutes the legal, valid and
binding obligation of the Borrower and the Parent enforceable in accordance with
its terms, subject as to enforcement to bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally and to
general principles of equity, regardless of whether enforcement is sought in a
proceeding at law or in equity.
SUBPART IV.4. Compliance With Existing Credit Agreement. As of the
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Eighth Amendment Effective Date, both before and after giving effect to the
terms of this Amendment, no Default has occurred and is continuing.
PART V
MISCELLANEOUS PROVISIONS
SUBPART V.1. Ratification of and Limited Amendment to the Credit
Agreement. The Existing Credit Agreement, as amended hereby, is hereby ratified,
approved and confirmed in each and every respect by the parties hereto. Except
as specifically amended or modified herein, the Existing Credit Agreement and
the other Loan Documents shall continue in full force and effect in accordance
with the provisions thereof and except as expressly set forth herein the
provisions hereof shall not operate as a waiver or amendment of any right, power
or privilege of the Administrative Agent and the Lenders nor shall the entering
into of this Amendment preclude the Lenders from refusing to enter into any
further or future amendments.
SECTION V.2. Consent and Acknowledgment of Guarantors, etc. By its
signature below, the Parent, in its capacity as a guarantor and as grantor of
collateral security under certain Loan Documents, hereby acknowledges, consents
and agrees to this Amendment and hereby ratifies and confirms its obligations
under its guaranty and each Loan Document executed and delivered by it in all
respects.
SUBPART V.3. Credit Agreement, References, etc. All references to the
Credit Agreement in any other document, instrument, agreement or writing shall
hereafter be deemed to refer to the Existing Credit Agreement as amended hereby.
As used in the Credit Agreement, the terms "Agreement", "herein", "hereinafter",
"hereunder", "hereto" and words of similar import shall mean, from and after the
date hereof, the Existing Credit Agreement as amended by this Amendment.
SUBPART V.4. Expenses. The Borrower agrees to pay all out-of-pocket
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expenses incurred by the Administrative Agent (including fees and expenses of
counsel to the Administrative Agent) in connection with the preparation,
negotiation, execution and delivery of this Amendment.
SUBPART V.5. Headings; Counterparts. The various headings of this
Amendment are inserted for convenience only and shall not affect the meaning or
interpretation of this Amendment or any provisions hereof. This Amendment may be
signed in any number of separate counterparts, each of which shall be an
original, and all of which taken together shall constitute one instrument.
SUBPART V.6. Governing Law; Entire Agreement. THIS AMENDMENT SHALL BE
DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK. This Amendment constitutes the entire understanding among the parties
hereto with respect to the subject matter hereof and supersedes any prior
agreements, written or oral, with respect thereto.
SUBPART V.7. Loan Document Pursuant to Credit Agreement. This
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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.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
