EXHIBIT 99.2
SIXTH AMENDMENT
TO
AMENDED AND RESTATED CREDIT AGREEMENT
THIS SIXTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this
"AMENDMENT") is dated as of October 28, 1999 and entered into by and among
UNIONTOOLS, INC., a Delaware corporation ("BORROWER"), ACORN PRODUCTS, INC., a
Delaware corporation ("HOLDINGS"), X.X. XXXXXXX MANUFACTURING COMPANY, a
Missouri corporation ("X.X. XXXXXXX"), UNIONTOOLS IRRIGATION, INC., a Delaware
corporation formerly known as UnionTools Watering Products, Inc. ("IRRIGATION"
and together with Borrower, Holdings and X.X. Xxxxxxx collectively, the "LOAN
PARTIES"), XXXXXX FINANCIAL, INC., in its individual capacity as a Lender and as
Agent for all Lenders ("AGENT"), and the other Lenders party hereto.
W I T N E S S E T H:
WHEREAS, Borrower, Agent and Lenders have entered into an Amended and
Restated Credit Agreement dated as of May 20, 1997, as amended by that certain
Amendment No. 1 to Credit Agreement dated November 24, 1997, Second Amendment to
Credit Agreement dated as of May 22, 1998, Third Amendment to Amended and
Restated Credit Agreement dated as of October 29, 0000, Xxxxxx Xxxxxxxxx to
Amended and Restated Credit Agreement dated as of February 26, 1999 and Fifth
Amendment to Amended and Restated Credit Agreement dated as of June 10, 1999 (as
the same may be further amended, restated, supplemented or otherwise modified
from time to time, the "LOAN AGREEMENT"), pursuant to which, among other things,
Lenders have agreed, subject to the terms and conditions set forth in the Loan
Agreement, to make loans and financial accommodations to Borrower; and
WHEREAS, the Loan Parties have requested that the Agent and Lenders agree
to modify the Loan Agreement pursuant to the terms and conditions of this
Amendment;
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the Loan Parties, Lenders and Agent
agree as follows:
ARTICLE I. AMENDMENTS TO LOAN AGREEMENT.
This Amendment No. 6 to Loan Agreement shall be deemed to be an amendment
to the Loan Agreement, and shall not be construed in any way as a replacement
therefor. All of the terms and provisions of this Amendment No. 6, including,
without limitation, the representations and warranties set forth herein, are
hereby incorporated by reference into the Loan Agreement as if such terms and
provisions were set forth in full therein. The Loan
Agreement is hereby amended, effective upon the satisfaction of the conditions
precedent set forth in Article III hereof, in the following respects:
1.1 The Index of Defined Terms is amended by inserting the following
term(s) in proper alphabetical order:
Defined Term Defined in Section
------------ ------------------
Lock Box Account Section 1.5(F)
Term Loan Section 1.5(E)
Term Note Section 1.1(D)
Subordinated Participation Agreement Section 6.1(U)
1.2 Section 1.1(A)(1), "REVOLVING LOANS", is amended to replace the
four sentences of such subsection, in their entirety, with the following:
(A) REVOLVING LOANS. (1) Subject to the satisfaction of the
terms and conditions set forth herein and in reliance upon the
representations and warranties set forth herein, each Lender
agrees, severally and not jointly, to lend to Borrower from the
Closing Date to the Expiry Date its Pro Rata Share of the loans
requested by Borrower to be made by Lenders under this subsection
1.1(A), up to an aggregate maximum for all Lenders of (i) during
the period from (x) the Amendment No. 6 Date through and including
December 31, 1999, and (y) November 1 through and including
December 31 of each year after 1999, $35,000,000, (ii) during the
period from January 1 through and including July 30 of each year,
$40,000,000, and (iii) during the period from July 31 through and
including October 31 of each year, $30,000,000 (as the same may be
reduced from time to time hereunder, the "Revolving Loan
Commitment"). Advances or amounts outstanding under the Revolving
Loan Commitment will be called "Revolving Loans". Revolving Loans
may be repaid and reborrowed. The "Maximum Revolving Loan Balance"
will be the lesser of (a) the difference (such difference referred
to herein as the "Borrowing Base") between (x) the borrowing base
(as calculated on Exhibit 4.10(F), the "Borrowing Base
Certificate") minus (y) the Borrowing Base Reserve Amount or (b)
the Revolving Loan Commitment less outstanding Risk Participation
Liability.
1.3 Section 1.1(C), "ACQUISITION LOANS", is amended (a) to replace the
first three sentences of such subsection, in their entirety, with the following:
(C) ACQUISITION LOANS. Subject to the satisfaction of the
terms and conditions set forth herein and in reliance upon the
representations and warranties set forth herein, each Lender
agrees, severally and not jointly, to lend to Borrower from the
Closing Date to the Amendment No. 6 Date its Pro Rata Share of the
loans requested by Borrower (upon not less than thirty (30) days
prior written notice to Agent) to be made by Lenders under this
subsection
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1.1(C) (the "Acquisition Loans"), up to an aggregate maximum
amount for all Lenders of $16,009,287 (the "Acquisition Loan
Commitment"). No new Acquisition Loans shall be permitted after
the Amendment No. 6 Date. Amounts borrowed under this subsection
1.1(C) and repaid may not be reborrowed.
and (b) to restate subsection (10) thereof to read, in its entirety, as follows:
(10) No event shall have occurred and be continuing or would
result from the acquisition of the subject Target or the
Acquisition Loan that would constitute an Event of Default or a
Default.
On the dates indicated below, Borrower shall repay the
Acquisition Loans through periodic installments in the amounts
equal to the applicable percentage of the Acquisition Loans
outstanding as of the Amendment No. 6 Date ("Scheduled Acquisition
Loan Installments").
DATE PAYMENT
---- -------
September 30, 2000 2.083%
December 31, 2000 2.083%
March 31, 2001 2.083%
April 30, 2001 93.751%
On April 30, 2001, the entire remaining principal balance
of the Acquisition Loans, together with all accrued but unpaid
interest thereon, shall be due and payable in full.
1.4 Section 1.1, "LOANS", is amended (a) to restate subsection (D)
thereof to read, in its entirety, as follows:
(D) NOTES. Borrower shall execute and deliver to each
Lender (i) a Note to evidence the Revolving Loans, such Note to be
in the principal amount of such Lender's Pro Rata Share of the
Revolving Loan Commitment, (ii) a Note to evidence the Acquisition
Loans, such Note to be in the principal amount of such Lender's
Pro Rata Share of the Acquisition Loan Commitment, and (iii) a
Note to evidence the Term Loan, such Note to be in the principal
amount of such of the Term Loan and in the form of Exhibit A to
Amendment No. 6 (together with the other Term Notes issued with
respect to interest on the Term Loan, a "Term Note"). In the
event of an assignment under subsection 8.1, Borrower shall, upon
surrender of the assigning Lender's Notes, issue new Notes to
reflect the interests of the assigning Lender and the Person to
which interests are to be assigned.
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and (b) to insert a new subsection (E) thereof to read, in its entirety, as
follows:
(E) TERM LOAN. (i) Subject to the terms and conditions
of this Agreement and in reliance upon the representations and
warranties set forth herein and in the other Loan Documents,
Xxxxxx agrees to lend to Borrower on the Amendment No. 6 Date, a
term loan (the "Term Loan") in the aggregate original principal
amount of $6,000,000 as evidenced by the Term Notes, PROVIDED,
that Xxxxxx shall not be obligated to fund the Term Loan until it
receives payment in full from the participants pursuant to the
terms of the Subordinated Participation Agreement;
(ii) Borrower shall make principal payments in
respect of the Term Loan in the amount of the Scheduled
Installments (or such lesser principal amount as shall then be
outstanding) on the dates and in the amounts set forth below.
"SCHEDULED INSTALLMENT" means, for each date set forth below, the
amount set forth opposite such date.
AMOUNT OF
PRINCIPAL
INSTALLMENT OF
DATE TERM LOAN
---- ---------
Ninety-one days after the date Entire principal
specified in clause (c) of the amount of the
definition of "Expiry Date" Term Loan
(iii) The Term Loan shall be funded in one drawing
on the Amendment No. 6 Date. Amounts of the Term Loan repaid may
not be reborrowed.
(iv) In no event may Borrower repay all or any
portion of the Term Loan by using any of Borrower's or any other
Loan Party's own cash or other assets (except out of proceeds of
equity contributions or Subordinated Indebtedness but only upon
the terms and conditions set forth in SUBSECTION 1.5(A) hereof) or
proceeds of any Loan hereunder; provided that if any or all of the
Obligations shall have been accelerated the provisions of this
sentence shall not apply.
(v) Proceeds of the Term Loan shall be used by
Borrower to bring its accounts payable more current and for other
working capital purposes.
(vi) The Lenders and Agent agree that if the
Acquisition Loans or Revolving Loans are accelerated, the Term Loan
will also be accelerated.
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1.5 Section 1.2(A), "INTEREST", is amended to (a) add a new subclause
(3) to such subsection to read as follows:
(3) If a Term Loan, than at a rate per annum equal to 12%.
and (b) to restate the Pricing Grid appearing therein to read, in its entirety,
as follows:
PRICING TABLE
------------------------------------------------------------
Adjusted Total Indebtedness Base Rate LIBOR Margin
to Operating Cash Margin on and on and after
Flow Ratio after Amendment Amendment
No. 6 Date No. 6 Date
------------------------------------------------------------
Greater than 3.75:1 1.50% 3.50%
------------------------------------------------------------
Equal to or greater than 1.50% 3.50%
3.00:1 but equal to or less
than 3.75:1
------------------------------------------------------------
Less than 3:00:1 1.50% 3.50%
------------------------------------------------------------
1.6 Section 1.2(D), "COMPUTATION OF INTEREST AND RELATED FEES", is
amended to add a new sentence at the conclusion of subsection 1.2(D) to read as
follows:
Notwithstanding anything contained in this Agreement to the
contrary, the Borrower shall not pay interest in cash on the Term
Loan, but rather the Term Loan shall accrue interest at the rate
otherwise applicable to the Term Loan and such interest shall be
payable by the issuance of additional Term Notes. No cash may be
paid with respect to interest on the Term Loans until the date on
which all of the Obligations (including, without limitation, fees,
costs and expenses in respect of the Loans and Risk Participation
Liabilities) in which the "Purchasers" under the Subordinated
Participation Agreement shall not have participated in or
purchased (i.e., excluding principal of and interest on the Term
Loan) shall have been paid indefeasibly (which term "indefeasibly"
shall mean the ninety-first day following the final payment to
Lenders and Agent) in full and the Revolving Loan Commitments
shall have been terminated. Notwithstanding the foregoing, to the
extent of a refinancing in full of all of the Revolving Loans and
Acquisition Loans, the Term Loan may be refinanced or repaid
contemporaneously with such refinancing.
1.7 Section 1.3, is amended to insert a new subsection (D) thereof to
read, in its entirety, as follows:
(D) Upon the repayment of the Revolving Loans and
Acquisition Loans
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in full (including via a refinancing of the facilities provided by
this Agreement) or any extension of this Agreement, Borrower shall
pay Agent, for the benefit of all Lenders (based upon their
respective Pro Rata Shares), a success fee equal to the product of
(i) the sum of (a) the outstanding amount of Acquisition Loans on
the date immediately prior to the date of such repayment or
extension plus (b) the average daily amount of the Revolving Loan
Commitment (whether used or unused) from the Amendment No.6 Date
through the date of such repayment or extension, multiplied by
(ii) the applicable percentage set forth in the grid below
(provided that no such success fee shall be payable to Xxxxxx in
its individual capacity to the extent Xxxxxx is the lead agent
bank on any such refinancing, in which case the success fee
payable by Borrower shall be reduced by the amount which would
otherwise be payable to Xxxxxx in such individual capacity):
IF THE REPAYMENT OCCURS
DURING THE BELOW PERIOD: THE SUCCESS FEE IS:
----------------------- -------------------
On or prior to 4/30/2000 0.5%
After 4/30/2000 but on or prior to 7/31/2000 1.0%
After 7/31/2000 but on or prior to 10/31/2000 1.5%
After 10/31/2000 but on or prior to 1/31/2001 2.0%
After 1/31/2001 3.0%
In the event of an Event of Default under subclauses 6.1(F) and
(G), then notwithstanding anything contained in this Agreement or
the Loan Documents to the contrary, the success fee contemplated
by this subclause 1.3(D) shall rank pari passu with the rights of
the participants to receive payments of the Term Notes pursuant to
the terms of the Subordinated Participation Agreement. The
success fee, when expensed, shall be treated by Borrower as an
interest expense for purposes of calculating EBIDAT.
1.8 Section 1.5(A), "VOLUNTARY PREPAYMENT OF TERM LOAN AND ACQUISITION
LOAN", is amended to restate such subsection to read, in its entirety, as
follows:
(A) PREPAYMENTS. Borrower may, at any time upon not less
than five (5) Business Days' prior notice to Agent, prepay the
Acquisition Loan, terminate the Revolving Commitment or prepay the
Term Loan; provided, however, the Revolving Loan Commitment may
not be terminated by Borrower until the Acquisition Loan is paid
in full, and no portion of the Term Loan may be prepaid until the
Acquisition Loan and the Revolving Loans are paid in full and the
Revolving Loan Commitment has been terminated, except that
notwithstanding the foregoing, the Term Loan may be prepaid in
full at any time exclusively and solely out of proceeds of an
equity contribution (any terms of which relating to the redemption
or other repayment of such contribution or any dividend or other
return on such contribution must meet with the approval of the
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Requisite Lenders, which approval shall not be unreasonably
withheld or delayed) or Subordinated Indebtedness, in either case
earmarked for payment of the Term Loan (such earmarking to be upon
terms and conditions acceptable to the Lenders of the Term Loan in
their sole discretion), it being agreed that in no event may
Borrower prepay all or any portion of the Term Loan by using any
of Borrower's or any other Loan Party's own cash or other assets
or proceeds of any Loan hereunder (except for the proceeds of the
above-described equity contribution or Subordinated Indebtedness
subject to the terms of the preceding parenthetical regarding
earmarking). Any such prepayment shall be accompanied by any
applicable LIBOR Breakage Fees, if applicable.
1.9 Section 1.5(C), "PREPAYMENTS FROM ASSET DISPOSITIONS", is amended
to restate such subsection to read, in its entirety, as follows:
PREPAYMENTS FROM ASSET DISPOSITIONS. Borrower shall immediately
use the proceeds from sales of inventory in the ordinary course of
business and any payments received with respect to accounts
receivable to immediately repay Revolving Loans. Immediately upon
receipt of any Net Proceeds, Borrower shall repay the outstanding
principal balance of the Revolving Loans by the amount of any
reduction in the Borrowing Base attributable to the Asset
Disposition giving rise to such Net Proceeds. To the extent not
required to so prepay Revolving Loans as provided above, Borrower
may, upon prior written notice to Agent, reinvest any remaining
Net Proceeds of Asset Dispositions, within ninety (90) days, in
productive replacement assets of a kind then used or usable in the
business of Borrower; provided, that, if Borrower does not intend
to so reinvest any such remaining Net Proceeds, or if the
applicable ninety (90) day period expires without Borrower having
reinvested any such remaining Net Proceeds, Borrower shall prepay
the Loans in the amount thereof, such prepayments to be applied as
provided in subsection 1.5(E); provided, that, notwithstanding the
foregoing or any provision of subsection 1.5(E) to the contrary,
from and after the Amendment No. 6 Date, the first $10,000,000 of
such prepayments shall in any event be applied (1) with respect to
the first $2,000,000 of such prepayments, to prepay the Revolving
Loans or Acquisitions Loans (as determined by the Borrower) and
(2) with respect to the next $8,000,000 in such prepayments, up
to fifty percent (50%) (as determined by the Borrower) to prepay
the Revolving Loans (and, at the option of Borrower, the Revolving
Loan Commitment may be reduced by the amount of any such
prepayment) and the remainder to prepay the Acquisition Loans.
1.10 Section 1.5(E), "APPLICATION OF PROCEEDS", is amended to restate
such subsection to read, in its entirety, as follows:
APPLICATION OF PROCEEDS. With respect to the mandatory
prepayments described in subsections 1.5(B), 1.5(C) and 1.5(D),
such prepayments shall first be
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applied in payment of the Acquisition Loans (i) in the case of
prepayments with respect to the remaining Net Proceeds as
described in subsection 1.5(B), as the Borrower may determine in a
written notice delivered to the Agent prior to such prepayment
against remaining Scheduled Acquisition Loan Installments, and if
the Borrower fails to deliver such a notice such prepayments shall
be applied in the order of maturity of the remaining Scheduled
Acquisition Loan Installments, and (ii) in the case of prepayments
described in subsection 1.5(C) and 1.5(D), pro rata against all
remaining Scheduled Acquisition Loan Installments and, with
respect to prepayments under subsections 1.5(B), 1.5(C) and
1.5(D), at any time after the Acquisition Loans shall have been
prepaid in full, such prepayments shall be applied to reduce the
outstanding principal balance of the Revolving Loans and, subject
to Section 1.5(C), as a permanent reduction of the Revolving Loan
Commitment.
1.11 Section 1.5 is amended to insert a new subsection (F), "LOCK BOX
PROCEEDS", to read, in its entirety, as follows:
LOCK BOX PROCEEDS. At least daily on each Business Day,
commencing as soon as possible but no later than thirty (30) days
from the Amendment No. 6 Date, the Borrower shall cause, and
hereby directs the Lender with whom the Borrower's operating
account(s) (the "Lock Box Account") is located to cause, subject
to the terms of the Lock Box Agreement, all funds in the Lock Box
Account to be transferred to the Agent for immediate payment, such
payments to be applied to reduce the outstanding principal balance
of the Revolving Loans, and if no Revolving Loans are outstanding
after giving effect to all or any portion of such repayment, pro
rata against all remaining Scheduled Acquisition Loan
Installments.
1.12 Section 3.1, "INDEBTEDNESS", is amended to change the period at
the end of subsection (C) to "; and", and to add new a subsection (D) thereto to
read, in its entirety, as follows:
(D) Subordinated Indebtedness.
1.13 Section 3.8, "TRANSACTION WITH AFFILIATES", is amended to add the
following sentence thereto to read, in its entirety, as follows:
Borrower will not, and will not permit any Subsidiary to, make any
payments of expenses or liabilities on behalf of their Affiliates in
excess of $250,000 in the aggregate from and after the Amendment No. 6
Date.
1.14 Section 4.1, "CAPITAL EXPENDITURE LIMITS", is amended to delete
the amount "$4,000,000" appearing in such subclause and replacing it with the
amount "$3,500,000".
1.15 Section 4.2, 4.4, 4.5,and 4.6, are amended in their entirety to
read
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"[Intentionally Omitted]".
1.16 Section 4.3, "EBIDAT", is amended to restate such subsection to
read, in its entirety, as follows:
Borrower shall not permit EBIDAT for any of the periods set forth below
to be less than the amount set forth for such period:
Period Amount
---------------------------------------
10/1/1999 - 12/31/99 ($1,990,000)
---------------------------------------
11/1/1999 - 1/30/2000 ($1,179,000)
---------------------------------------
12/1/1999 - 2/28/2000 $923,000
---------------------------------------
1/1/2000 - 3/31/2000 $2,610,000
---------------------------------------
1/1/2000 - 4/30/2000 $4,067,000
---------------------------------------
1/1/2000 - 5/31/2000 $5,237,000
---------------------------------------
1/1/2000 - 6/30/2000 $5,034,000
---------------------------------------
1/1/2000 - 7/31/2000 $5,083,000
---------------------------------------
1/1/2000 - 8/31/2000 $5,190,000
---------------------------------------
1/1/2000 - 9/30/2000 $5,512,000
---------------------------------------
1/1/2000 - 10/31/2000 $5,761,000
---------------------------------------
1/1/2000 - 11/30/2000 $5,729,000
---------------------------------------
1/1/2000 - 12/31/2000 $5,753,000
---------------------------------------
2/1/2000 - 1/31/2001 $6,129,000
---------------------------------------
3/1/2000 - 2/28/2001 $6,653,000
---------------------------------------
4/1/2000 - 3/31/2001 $7,062,000
---------------------------------------
5/1/2000 - 4/30/2001 $7,062,000
---------------------------------------
"EBIDAT" will be calculated as illustrated on Exhibit 4.10(C). Notwithstanding
anything else in subclause 6.1 or elsewhere in the Loan Documents to the
contrary, the Borrower shall not be deemed to have breached this covenant, and
no Default or Event of Default with respect to this covenant shall be deemed to
exist, to the extent that: (1) within five (5) Business Days of the delivery of
financial statements demonstrating that the Borrower has not generated
9
sufficient EBIDAT for the applicable period, the Borrower delivers a commitment
from a credit worthy Person acceptable to Requisite Lenders to infuse new equity
or Subordinated Indebtedness, in either case in the form of cash into the
Borrower in an amount at least equal to the difference (the "EBIDAT Shortfall
Amount") between the amount of EBIDAT which the Borrower was required to
generate pursuant to this subsection for the applicable period and the amount of
EBIDAT actually generated by the Borrower in such period and (2) within fifteen
(15) Business Days of its delivery of such commitment the Borrower receives an
equity infusion or the proceeds of Subordinated Indebtedness, in either case in
the form of cash from the issuer of such commitment (or an affiliate of such
issuer) in an amount at least equal to the EBIDAT Shortfall Amount.
Notwithstanding subclause 1.5(E), equity or Subordinated Indebtedness infused
into the Borrower pursuant to this subclause shall be applied as payments of the
Revolving Loans and/or the Acquisition Loans, as the Borrower may determine in a
written notice delivered to Agent prior to such prepayment (and if the Borrower
fails to deliver such a notice such prepayments shall be applied first in the
order of maturity of the remaining Scheduled Acquisition Loan Installments and
next as payment of the Revolving Loans). Any equity or Subordinated
Indebtedness infused into the Borrower pursuant to this subclause shall
thereafter be deemed to be additional EBIDAT of the Borrower generated in the
period covered by the financial stateents referred to above.
1.17 Section 4.10 is amended to change the requirement that the
Borrower deliver the financial statements and schedules set forth therein within
thirty (30) days after the end of each fiscal quarter to a requirement that from
and after the Amendment No. 6 Date the Borrower deliver such financial
statements and schedules on a monthly basis within twenty-eight (28) days after
the end of each calendar month.
1.18 Section 4.10(F) is amended to restate such subsection to read, in
its entirety, as follows:
BORROWING BASE CERTIFICATE; WEEK CASH FLOW FORECAST. As soon as
available and in any event on Tuesday of each week (or if Tuesday
is not a Business Day on the immediately succeeding Business Day),
or more frequently as the Borrower may desire, and from time to
time upon the request of Agent, Borrower will deliver (1) a
Borrowing Base Certificate (in substantially the same form as
Exhibit 4.10(F)) as at the last Business Day of the prior week and
(2) a cash flow forecast in form acceptable to Requisite Lenders
covering the week in which such forecast is delivered and the
immediately following 13 calendar weeks on a week by week basis.
1.19 Section 4.10(H) is amended to restate such subsection to read, in
its entirety, as follows:
COLLATERAL VALUE REPORT. Promptly after the Amendment No. 6 Date,
and thereafter from time to time upon the reasonable request of
Requisite Lenders, Borrower will cooperate with (including
granting of access to its Property) and
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assist Agent in obtaining, at the expense of Borrower, a report of
an independent collateral auditor satisfactory to Requisite
Lenders (which may be, or be affiliated with, a Lender) with
respect to the accounts and inventory components included in the
Borrowing Base, which report shall indicate whether or not the
information set forth in the Borrowing Base Certificate most
recently delivered is accurate and complete in all material
respects based upon a review by such auditors of the accounts
(including verification with respect to the amount, aging,
identity and credit of the respective account debtors and the
billing practices of Borrower) and inventory (including
verification as to the value, location and respective types).
1.20 Section 4.10, is amended to insert a new subsection (P) thereof to
read, in its entirety, as follows:
(P) ASSET DISPOSITION SCHEDULE. Prior to any Asset
Disposition, the Borrower shall deliver a report setting forth the
EBIDAT producing assets subject to such Asset Disposition versus
the non-EBIDAT producing assets.
1.21 Section 6.1, "EVENT OF DEFAULT", is amended to change the period
at the end of subsection (T) to "; or", and to add new subsections (U) and (V)
thereto to read, in their entirety, as follows:
(U) SUBORDINATED PARTICIPATION AGREEMENT: (1) Any Purchaser
(as defined in the Subordinated Participation Agreement referred to
below) shall breach or be in violation of (a) any of its payment
obligations at any time under the Subordinated Participation Agreement
dated on or about the date of Amendment No. 6 by and among Agent, a
certain "Seller" thereunder and the participants named therein (or
certain constituents thereof) (as such Agreement may from time to time be
amended, modified, supplemented or restated from time to time, and herein
referred to as the "SUBORDINATED PARTICIPATION AGREEMENT"), or any
Purchaser (as such terms are defined in the Subordinated Participation
Agreement) shall breach or be in violation of any of its obligations,
liabilities, representations, warranties or covenants under the
Subordinated Participation Agreement (excluding the payment obligations
covered under the preceding subsection (U)(1)) which breach or violation
is not remedied or waived to the reasonable satisfaction of Agent within
three (3) days after receipt by Borrower of notice from Agent of such
breach or violation; or
(V) CERTAIN SECURITY DOCUMENTS: Failure by Borrower or any of
the applicable Loan Parties to have executed and delivered to Agent with
reasonable promptness (but no later than thirty (30) days from the
Amendment No. 6 Date unless an extension to such 30 day period is
consented to in writing by Agent) such agreements, instruments and
documents as the Agent may reasonably require in order to (1) modify any
documents relating to real estate to reflect the terms of Amendment No. 6
and (2) transfer Borrower's accounts to a Lender who has executed the
Lock Box
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Agreement in form and substance satisfactory to Agent.
1.22 Section 9.1, "ASSIGNMENTS AND PARTICIPATIONS IN LOANS", is amended
to add a new paragraph at the end of such subsection to read, in its entirety,
as follows:
Notwithstanding any other provision set forth in this Agreement,
Xxxxxx may at its election on or about the Amendment No. 6 Date,
enter into a participation agreement with the participants party
to the Subordinated Participation Agreement (or any one or more of
the constituents thereof) or any other affiliate thereof, which
agreement shall provide for the purchase by the purchasers
thereunder of a 100% interest in the Term Loan, provided that
without the consent of all Lenders Xxxxxx shall not amend (i) the
terms of Section 2.1 of the Subordinated Participation Agreement,
or (ii) other terms of subordination under the Subordinated
Participation Agreement in such a manner as to allow the
Purchasers to receive payment earlier than is set forth in the
Subordinated Participation Agreement as in effect on the date of
execution and delivery of Amendment No. 6.
1.23 The section of Exhibit 4.10(C), "COMPLIANCE CERTIFICATE"
pertaining to "Covenant 4.3 EBIDAT", is amended by (a) deleting the fourth item
under the heading "Plus" in its entirety, and inserting a new fourth item as
follows:
Losses (or less gains) from Asset Dispositions (including sales of
non-strategic assets) or other non-cash items included in the
determination of net income (excluding sales, expenses or losses
related to current assets) and the sale of obsolete inventory
and (b) adding at the end of the first paragraph of the definition of EBIDAT
immediately following the words ""or consolidated with the Borrower" the
following language:
and (c) an aggregate amount of expenses not to exceed Three
Million Three Hundred Sixty-Two Thousand Dollars ($3,362,000)
incurred, or to be incurred, by the Borrower during the period
commencing August 1, 1999 and ending November 30, 1999, as
reflected in the financial statement forecasts provided by the
Borrower to the Lenders on October 15, 1999, which expenses
pertain to (i) the consolidation of the operations of the Columbus
manufacturing facility into the Frankfort, New York manufacturing
facility, (ii) management restructuring costs (including severance
payments and recruiting/relocation expenses) and (iii) expenses
associated with Amendment No. 6
1.24 Section 10, "DEFINITIONS", is amended to add the following new
definitions in appropriate alphabetical order, each to read, in its respective
entirety, as follows:
12
"AMENDMENT NO. 6" means Sixth Amendment to Amended and Restated
Credit Agreement dated as of October 28, 1999, by and among
Borrower, Lenders signatory thereto and Agent.
"AMENDMENT NO. 6 DATE" means the date on which Amendment No. 6
shall have become effective as provided therein.
"BORROWING BASE RESERVE AMOUNT" means $500,000 or such lesser
amount as Agent, acting at the direction of Lenders having greater
than fifty-percent (50%) or more of the sum of the Revolving Loan
Commitment and the Acquisition Loan Commitment, may specify in
writing to the Borrower.
"SUBORDINATED INDEBTEDNESS" means unsecured Indebtedness fully
subordinated to the Obligations on terms, and pursuant to
documentation, which meets with the approval of Agent and the
Requisite Lenders (including, if required by Agent and the
Requisite Lenders, a requirement that interest on any such
Subordinated Indebtedness be paid only through the issuance of PIK
notes), which approval will not be unreasonably withheld or
delayed.
1.25 The following definitions are hereby amended and restated in their
respective entirety as follows:
"EXPIRY DATE" means the earlier of (a) the suspension (subject to
reinstatement) of the Lenders' obligations to make Revolving Loans
and Acquisition Loans pursuant to subsection 6.2, (b) the
acceleration of the Obligations pursuant to subsection 6.3 or (c)
April 30, 2001.
"LOAN" or "LOANS" means an advance or advances under the Revolving
Loan Commitment or the Acquisition Loans or the Term Loans.
"LOCK BOX AGREEMENT" means that certain Lock Box Agreement entered
into among the Borrower, the Agent and a Lender subsequent to the
Amendment No. 6 Date relating to the Lock Box Account.
"NOTE" or "NOTES" means one or more of the notes of Borrower
substantially in the form of Exhibit 10.1(A), one or more of the
Term Notes, or any combination thereof.
"SECURITY DOCUMENTS" means all instruments, documents and
agreements executed by or on behalf of any Loan Party to guaranty
or provide collateral security with respect to the Obligations
including, without limitation, any security agreement, lock box
agreement or pledge agreement, any guaranty of the Obligations,
any mortgage, any subordination and intercreditor agreements,
13
and all instruments, documents and agreements executed pursuant to
the terms of the foregoing.
ARTICLE II. REPRESENTATION AND WARRANTIES.
Borrower represents and warrants as follows:
2.1 Borrower and each Loan Party is duly organized and validly
existing under the laws of its jurisdiction of organization and has the power to
own its assets and to transact the business in which it is presently engaged and
in which it proposes to be engaged.
2.2 Borrower and each Loan Party is in good standing in its state or
jurisdiction of incorporation and in each state or jurisdiction in which it is
qualified to do business. There are no jurisdictions in which the character of
the properties owned by Borrower or any other Loan Party or in which the
transaction of the business of Borrower or any other Loan Party as now conducted
requires or will require Borrower or any other Loan Party to qualify to do
business, except jurisdictions in which the failure to so qualify would not have
a material adverse effect on the Collateral in the Borrowing Base or on the
business, operations, financial condition, or properties of Borrower or any
other Loan Party.
2.3 Borrower and each Loan Party has the power to execute and deliver
this Amendment No. 6 and to perform the Loan Agreement, as amended hereby, and
to make and deliver the Term Notes and to perform its obligations under the Term
Notes and the Loan Agreement as amended hereby, and Borrower and each Loan Party
has taken all necessary action, corporate or otherwise, to authorize the
execution and delivery of this Amendment No. 6, the making and delivery of the
Term Notes, and the performance of the Loan Agreement, as amended hereby. No
consent or approval of any Person (including, without limitation, any
stockholder of Borrower or any other Loan Party), no consent or approval of any
landlord or mortgagee, no waiver of any Lien or right of distraint or other
similar right and no consent, license, approval, authorization or declaration of
any governmental authority, bureau or agency, is or will be required in
connection with the execution or delivery by Borrower or any other Loan Party of
this Amendment No. 6 or the making and delivery of the Term Notes or the
performance by Borrower, or the validity, enforcement or priority, of the Loan
Agreement as amended hereby and the Term Notes.
2.4 The execution and delivery by Borrower and each other Loan Party
of this Amendment No. 6 and the making and delivery of the Term Notes and
performance by it hereunder and under the Term Notes, does not and will not
violate any provision of law (including, without limitation, the Xxxxxxxx Act,
Sections 13 and 14 of the Securities and Exchange Act of 1934, and the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, and Regulations U and X of
the Board of Governors of the Federal Reserve System and the rules and
regulations promulgated thereunder) and does not and will not conflict with or
result in a breach of any order, writ, injunction, ordinance, resolution,
decree, or other similar document or instrument of any court or governmental
authority, bureau or agency, domestic or foreign,
14
or any certificate of incorporation or by-laws or comparable document of
Borrower or any other Loan Party or create (with or without the giving of notice
or lapse of time, or both) a default under or breach of any agreement,
instrument, documents, bond, note or indenture to which Borrower or any other
Loan Party is a party, or by which it is bound or any of its properties or
assets is affected, or result in the imposition of any Lien of any nature
whatsoever upon any of the properties or assets owned by or used in connection
with the business of Borrower or any other Loan Party, except for the Liens
created and granted pursuant to the Security Documents or otherwise permitted
under the Loan Agreement.
2.5 This Amendment No. 6, the Term Notes, and the Loan Agreement as
amended hereby have been duly executed and delivered by Borrower and each other
Loan Party and each constitutes the valid and legally binding obligation of
Borrower and each other Loan Party, enforceable in accordance with its terms,
except that the remedy of specific performance and other equitable remedies are
subject to judicial discretion and except as such enforcement may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, or. other similar
laws, now or hereafter in effect, relating to or affecting the enforcement of
creditors' rights generally.
2.6 The Liens granted pursuant to the Security Documents secure,
without limitation, the obligations under the Loan Agreement as amended by this
Amendment No. 6, including, without limitation, the Term Loan(s) and Note(s),
whether or not so stated in the Security Documents. The term "OBLIGATIONS" as
used in the Security Documents (or any other term used therein to refer to the
Indebtedness, liabilities and obligations of Borrower to Lenders) include,
without limitation, Indebtedness, liabilities and obligations to Lenders and
Agent under the Loan Agreement as amended by this Amendment No. 6 and to Xxxxxx
under the Term Note(s) made and delivered in connection with this Amendment No.
6. Each of the matters set forth in Article IV hereof is true and correct.
2.7 The letter executed by Borrower prior to the date hereof relating
to payment to Agent of an agency fee in connection with the Loan Agreement
remains in full force and effect in accordance with its terms and shall not be
impaired in any way as a result of execution and delivery of this Amendment No.
6.
ARTICLE III. CONDITIONS PRECEDENT.
The effectiveness of this Amendment No. 6 shall be subject to the
fulfillment by Borrower, in a manner satisfactory to Agent and Lenders, of all
of the conditions precedent set forth in this Article III, and the date on which
all such conditions shall have been fulfilled to the satisfaction of Agent and
Lenders, and this Amendment No. 6 shall have become effective, shall be herein
called the "AMENDMENT NO. 6 DATE":
3.1 Borrower shall have:
(a) executed and delivered to Agent this Amendment No. 6 and
Lenders and
15
the other Loan Parties shall have executed and delivered this Amendment No. 6;
(b) executed and delivered to Xxxxxx the Term Note;
(c) delivered to Agent a certificate confirming that its
charter and by-laws remain in full force and effect without change since the
Closing Date, each certified as being true and complete as of the Amendment No.
6 Date;
(d) paid all fees and expenses of counsel to Agent incurred in
connection herewith; and
(e) otherwise complied in all respects with the terms hereof
and of any other agreement, document, instrument or other writing to be
delivered by Borrower in connection herewith.
3.2 Agent shall have received the following, each in form and
substance satisfactory to Agent:
(a) copies of the resolutions adopted by Borrower's and each
other Loan Parties' respective Board of Directors, certified as of the Amendment
No. 6 Date by an authorized officer thereof, authorizing the execution, delivery
and performance by Borrower and the other Loan Parties of this Amendment No. 6
and the Term Notes;
(b) a certificate of an authorized officer of Borrower,
certifying as of the Amendment No. 6 Date the names and true signatures of the
officer authorized to sign this Amendment No. 6 and the Term Notes, together
with evidence of the incumbency of such authorized officer; and
(c) favorable written opinions of Xxxxxx, Xxxx & Xxxxxxxx, LLP
and in house counsel to the participants part to the Subordinated Participation
Agreement, as to such matters relating to the transactions contemplated by this
Amendment No. 6 as Lenders may reasonably request.
3.3 Xxxxxx shall have received a fully executed copy of a
participation agreement entered into by and among Xxxxxx and OCM Principal
Opportunities Fund, L.P. and TCW Special Credits, as general partner and/or
investment manager of the funds and accounts set forth on Schedule I thereto,
which agreement shall be in form and substance satisfactory to Xxxxxx and
Requisite Lenders (the "SUBORDINATED PARTICIPATION AGREEMENT"), together with
such other instruments and documents relating' thereto as Xxxxxx may require.
3.4 Borrower and the other Loan Parties shall have executed and
delivered to Agent all agreements, instruments and documents required by Agent
in order to confirm the existing and continuing liens in favor of Agent under
the Security Documents.
3.5 The representations and warranties contained herein and each other
agreement,
16
instrument, certificate or other writing delivered to Agent or any Lender
pursuant hereto or to the Loan Agreement shall be correct on and as of the
date hereof after giving effect to this Amendment No. 6 as though made on and
as of such date except to the extent modified hereby and (b) no Default or
Event of Default shall have occurred and be continuing on the Amendment No. 6
Date or would result from the taking effect of this Amendment No. 6; and the
Agent shall have received a Compliance Certificate dated the Amendment No. 6
Date certifying that the conditions set forth in this Article III shall have
been satisfied.
3.6 All legal matters incident to this Amendment No. 6 and the Loan
Agreement shall be reasonably satisfactory to Agent and counsel to Agent.
ARTICLE IV. ACKNOWLEDGMENTS AND CONFIRMATIONS.
4.1 Borrower acknowledges and confirms to Lenders and Agent that (a)
the liens and security interests granted pursuant to the Loan Agreement and
pursuant to the Security Documents executed by Borrower pursuant to the Loan
Agreement secure, without limitation, the Obligations of Borrower to Lenders and
Agent under the Loan Agreement, as amended hereby, and under the Revolving
Notes, the Acquisition Loan Notes and the Term Note(s), whether or not so stated
in such Security Documents, and (b) the term "OBLIGATIONS" as used in such
Security Documents (or any other term used therein to describe or refer to the
indebtedness, liabilities and obligations of Borrower to Lenders and Agent)
includes, without limitation, the indebtedness, liabilities and obligations of
Borrower under the Term Notes.
4.2 Holdings hereby acknowledges and confirms to Lenders and Agent
that: (a) its Guaranty executed in favor of Agent, guarantying, without
limitation, the full payment and performance of all of the Obligations of
Borrower under the Loan Agreement, as amended hereby and under the Notes,
including, without limitation, the Term Notes, (b) the term "OBLIGATIONS" as
used in its guaranty (or any other term used therein to describe or refer to the
indebtedness, liabilities and obligations of Borrower to the Lenders or Agent)
includes, without limitation, all of the Obligations of Borrower to Lenders or
Agent under the Loan Agreement, as amended hereby and under the Notes,
including, without limitation, the Term Notes, (c) the liens and security
interests granted pursuant to the Security Documents executed by it pursuant to
the Loan Agreement or other Loan Documents secure, without limitation, the
obligations of Holdings to the Lenders and Agent under its Guaranty, as
confirmed hereby and the obligations of Borrower to Lenders and Agent under the
Loan Agreement, as amended hereby, and the Notes, including without limitation,
the Term Notes, whether or not so stated in such security documents, and (d) the
term "OBLIGATIONS" as used in each security document (or any other term used
therein to describe or refer to the indebtedness, liabilities and obligations of
Borrower or the Holdings(s) to Lenders and Agent includes, without limitation,
the obligations of Holdings to Lenders and Agent under its Guaranty, as
confirmed hereby and the indebtedness, liabilities and obligations of Borrower
under the Notes, including, without limitation, the Term Notes and under the
Loan Agreement, as amended hereby.
4.3 Each of the Loan Parties hereby ratifies and affirms the validity
and
17
enforceability of all of the Agreements to which the it is a party (all of which
shall remain in full force and effect except to the extent they are inconsistent
with this letter agreement), hereby waives any defenses to the enforcement of
the Loan Documents and hereby releases the Agent and the Lenders and all of the
Agent and the Lenders' predecessors, successors, assigns, officers, directors,
attorneys, agents and employees from liability for any and all claims or causes
of action of any nature whatsoever, in law or in equity, arising out of
agreement or imposed by law or otherwise, from the beginning of time to the date
on which this letter agreement is signed, whether or not known now, anticipated
or unanticipated, suspected or claimed, fixed or contingent, and whether or not
yet accrued and whether damage has yet resulted from such or not, including but
not limited to any claims based on or arising out of or relating in any manner
to (a) the administration of the Loan Documents or the Obligations prior to the
date hereof, (b) the negotiation and execution of the Loan Documents or this
Amendment, or (c) any other matter pertaining to the Loan Documents or the
Obligations. In entering into this letter agreement, neither the Agent nor any
Lender admits of any such liability of any sort to any Loan Party. Each of the
Loan Parties further agrees that the provisions of this Amendment represent a
fair and reasonable approach to the Loan Party's current financial and business
circumstances.
ARTICLE V. MISCELLANEOUS.
5.1 The Loan Agreement and the other Loan Documents to which Borrower
is a party delivered in connection herewith or with the Loan Agreement are, and
shall continue to be, in full force and effect, and are hereby ratified and
confirmed in all respects, except that on and after the Amendment No. 6 Date (a)
all references in the Loan Agreement to "this Agreement", "hereto", "hereof",
"hereunder" or words of like import referring to the Loan Agreement shall mean
the Loan Agreement as amended hereby, (b) all references in the Loan Agreement,
the Security Documents or any other agreement, instrument or document executed
and delivered in connection therewith to (i) the "Loan Agreement", "thereto",
"thereof", "thereunder" or words of like import referring to the Loan Agreement
shall mean the Loan Agreement as amended hereby, and (ii) the "Notes" shall be
deemed to include the Term Notes, and (iii) the "Loans" (or any other term or
terms used in any of such documents to describe or refer to Loans made by
Lenders to the Borrower under the Loan Agreement) shall be deemed to refer to
Loans made by Lenders to the Borrower pursuant to the Loan Agreement as amended
hereby.
5.2 The Loan Agreement, the Security Documents and all agreements,
instruments and documents executed and delivered in connection with any of the
foregoing shall each be deemed amended hereby to the extent necessary, if any,
to give effect to the provisions of this Amendment No. 6. Except as so amended
hereby, the Loan Agreement and the other Loan Documents shall remain in full
force and effect in accordance with their respective terms. The execution and
delivery of this Amendment No. 6 by Borrower, Lenders and Agent shall not waive
or be deemed to waive any default which has occurred or which may be occurring
in respect of the Loan Agreement. All of the terms and provisions of this
Amendment No. 6 are hereby incorporated by reference into the Loan Agreement as
if such terms and provisions
18
were set forth in full therein.
5.3 This Amendment No. 6 may be executed in counterparts by the
parties hereto, and each such counterpart shall be considered an original, and
all such counterparts shall constitute one and the same instrument. Facsimile
copies of any signature will be treated as original signatures.
5.4 THIS AMENDMENT NO. 6 SHALL BE CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF ILLINOIS (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAWS), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL
BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
19
IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment
No. 6 to the Loan Agreement to be duly executed as of the date first above
written.
UNIONTOOLS, INC.
By: /s/ Xxxx Xxxxx
--------------------------
Title: Vice President, Chief Financial Officer
-------------------------------------------
ACORN PRODUCTS, INC.
By: /s/ Xxxx Xxxxx
--------------------------
Title: Vice President, Chief Financial Officer
-------------------------------------------
X.X. XXXXXXX MANUFACTURING COMPANY
By: /s/ Xxxx Xxxxx
--------------------------
Title: Vice President, Chief Financial Officer
-------------------------------------------
UNIONTOOLS IRRIGATION, INC.
By: /s/ Xxxx Xxxxx
--------------------------
Title: Vice President, Chief Financial Officer
-------------------------------------------
XXXXXX FINANCIAL, INC., as Agent and a Lender
By: /s/ Xxxxxxx Xxxxxxxx
--------------------------
Title: Assistant Vice President
--------------------------
FLEET BUSINESS CREDIT CORP., formerly known as
Sanwa Business Credit Corporation
By: /s/ Xxxxxxx X. Xxx Xxxxxxxxxx
--------------------------
Title: Senior Vice President
-----------------------
FLEET CAPITAL CORPORATION
By: /s/ Xxxxxxx X. Xxx Xxxxxxxxxx
--------------------------
Title: Senior Vice President
-----------------------
PNC BANK, NATIONAL ASSOCIATION
By: /s/ Xxxxxxx Xxxxx
--------------------------
Title: Vice President
-----------------------
20
BANKBOSTON, N.A., formerly known as The
First National Bank Of Boston
By: Xxxxxx Xxxxx
--------------------------
Title: Managing Director
----------------------
FIRSTAR BANK, N.A.
By: /s/ Xxxxxxx Xxxxxx
--------------------------
Title: Assistant Vice President
----------------------------
21
EXHIBIT A TO AMENDMENT
NO. 6
TERM LOAN NOTE
$6,000,000 Chicago, Illinois
October 28, 1999
FOR VALUE RECEIVED, UNIONTOOLS, Inc., a Delaware corporation (the
"BORROWER"), promises to pay to the order of XXXXXX FINANCIAL, INC., a Delaware
corporation ("XXXXXX"), the principal sum of Six Million Dollars ($6,000,000;
the "PRINCIPAL AMOUNT") and to pay interest on the outstanding principal amount
of this Term Loan Note (this "NOTE"), in accordance with Section 2 hereof. This
Note is the Term Loan Note defined in, and is delivered in connection with the
execution and delivery of, that certain Sixth Amendment (the "AMENDMENT";
capitalized terms used and not defined herein shall have the meanings ascribed
thereto in the Amendment) to the Amended and Restated Credit Agreement dated as
of May 20, 1997 (as amended, the "CREDIT AGREEMENT") by and among the Borrower,
Xxxxxx and each of the Lenders under the Credit Agreement.
1. MATURITY. If the Note has not previously been exchanged for
common stock of Acorn Holdings, Inc., a Delaware corporation ("ACORN"), in
accordance with Section 5 hereof, the Borrower shall repay the unpaid Principal
Amount outstanding hereunder on the later of (i) August 1, 2001 and (ii) the
date which is ninety-one (91) days after the Expiry Date, as defined in the
Credit Agreement (such date, the "MATURITY DATE").
2. INTEREST. The Borrower further agrees to pay interest
("INTEREST") on the unpaid Principal Amount hereunder until such amount shall be
paid in full at the rate of twelve percent (12%) per annum (the "INTEREST
RATE"). Interest shall be payable quarterly in arrears on each February 1, May
1, August 1 and November 1 (each such date, an "INTEREST PAYMENT DATE"), and on
the Maturity Date. Interest shall be paid by the Borrower by issuing to Xxxxxx,
on each Interest Payment Date, a term loan note evidencing principal
indebtedness in an amount equal to the Interest owing on such date, on terms and
conditions commensurate with those set forth in this Note. If any payment of
Interest hereunder becomes due and payable on a day other than a Business Day,
such Interest Payment Date shall be extended to the next succeeding Business Day
and Interest thereon shall be payable at the Interest Rate during such
extension.
3. PREPAYMENT. The unpaid Principal Amount, all accrued Interest and
any and all other sums payable to Xxxxxx hereunder may be prepaid by the
Borrower in full or in part at any time prior to the Maturity Date without
prepayment penalty, upon five (5) days prior written notice to Xxxxxx in
accordance with the terms of Section 1.5(a) of the Credit Agreement. All
prepayments shall be applied in accordance with the terms of the Credit
Agreement.
22
4. DEFAULT / ACCELERATION. Upon the occurrence of an Event of
Default, Xxxxxx shall have the right to declare the unpaid Principal Amount and
all accrued Interest immediately due and payable.
5. EXCHANGE. Xxxxxx shall have the right, at any time during which
any unpaid Principal Amount remains outstanding hereunder, upon two (2) days
prior notice to the Borrower, to exchange the Note for a number of shares of
common stock of Acorn (the "SHARES") to be issued to Xxxxxx, or, at the election
of Xxxxxx, directly to the Persons named in the Exchange Direction (as defined
in the Subordinated Participation Agreement dated as of the date hereof by and
between Xxxxxx and the participants named therein) equal to (i) the sum of the
unpaid Principal Amount hereunder plus accrued and unpaid Interest through the
date of exchange, divided by (ii) Three Dollars and Fifty Cents ($3.50). No
fractional shares shall be issued thereupon and the recipient(s) of the Shares
shall receive a cash payment equal to the value of any fractional shares that
would be called for by the foregoing formula. The aforementioned formula will
be adjusted in the event of a stock split, stock dividend or similar event by
Acorn so that the exchange rights set forth herein are, after the occurrence of
such event, as possible to such rights prior to such event. As a condition to
the issuance of the Shares, the recipient(s) thereof, shall, at the time of
exchange, make such representations and warranties to Acorn and the Borrower as
they shall reasonably require so as to permit the issuance of the Shares without
registration thereof under the Securities Act of 1933, as amended, including,
without limitation, acknowledgement that the Shares will not be registered under
the Securities Act of 1933, as amended, will not be freely tradable on the
public markets, will be subject to certain restrictions imposed by that Act and
will have a legend on the certificates for such Shares so indicating. The
Borrower covenants to Xxxxxx to have available for exchange the number of Shares
necessary to satisfy its obligations hereunder. Upon exchange of the Note for
the Shares pursuant to this Section 5, the rights and obligations of the
Borrower and Xxxxxx hereunder shall be fully and forever satisfied.
6. SECURED OBLIGATIONS; PRIORITY. The obligations of the Borrower
under this Note are secured by the Collateral in accordance with the terms of
the Amendment. The Borrower covenants to Xxxxxx that its obligations under this
Note will, at all times, rank senior to all of the Borrower's obligations for
indebtedness for borrowed money (other than pursuant to the Credit Agreement and
any refinancings thereof, as to which its obligations hereunder will rank
junior), and will rank pari passu with all trade indebtedness of the Borrower.
7. MISCELLANEOUS.
(a) The Borrower hereby waives presentment, demand, protest,
notice of diligence and all other notices of any kind.
(b) This Note shall be governed by and construed in accordance
with the laws of the State of Illinois applicable to contracts wholly made and
performed in the State of Illinois.
(c) All amounts owing to Xxxxxx hereunder shall be paid to
Xxxxxx in accordance with the terms of the Credit Agreement.
23
(d) Xxxxxx shall have the right to assign its benefits
hereunder, or to grant participations therein, at its discretion, upon written
notice to the Borrower.
[remainder of page intentionally left blank]
IN WITNESS WHEREOF, The Borrower has executed this Term Loan Note as of the
day and date first above written.
UNIONTOOLS, INC.
By: /s/ Xxxx Xxxxx
-------------------------------------
Name: Xxxx Xxxxx
Title: Vice President, Chief
Financial Officer
24
