Exhibit 10.5
Participation Agreement
The CIT Group/Business Credit, Inc.
000 Xxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
December 27, 2003
Xx. Xxxxxxx X. Xxxxxx
0000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx 00000
Re: AMENDED AND RESTATED PARTICIPATION AGREEMENT
Dear Xx. Xxxxxx:
The undersigned refers to (a) that certain Credit Agreement, dated as
of July 23, 2001, by and among Xxxxxx Industries, Inc. ("PARENT") and certain of
its subsidiaries, the undersigned lender (the "LENDER"), and the Agent (as
amended through the date hereof, including the Ninth Amendment described below,
the "CREDIT AGREEMENT"), providing for a credit facility consisting of Revolving
Loans, Letters of Credit and Term Loans in the original aggregate principal
amount of up to $110,000,000 (as such terms are defined in the Credit Agreement,
collectively, the "EXISTING CREDIT FACILITIES"); and (b) that certain Ninth
Amendment to Credit Agreement, dated as of the date hereof, among the Borrowers,
Lender and Agent (the "NINTH AMENDMENT") further amending the Credit Agreement
to, among other matters, provide for the creation of New Term Loan B in the
aggregate principal amount of $10,000,000; and (c) that certain Participation
Agreement dated as of October 31, 2003 between, INTER ALIA, you and the
undersigned, in respect of New Term Loan A (referred to therein as the "New Term
Loan") (the "ORIGINAL PARTICIPATION AGREEMENT"). Capitalized terms used but not
defined herein shall have the respective meanings ascribed to such terms in the
Credit Agreement. As used herein, the term "PARTICIPATION OBLIGATIONS" shall
mean the New Term Loans, in an aggregate principal amount of $12,000,000, and
all obligations and liabilities now or hereafter owed by any one or more of the
Borrowers to Lender under or related to the New Term Loans, in each case whether
direct or indirect and whether fixed or contingent, (including, without
limitation, attorneys' fees and legal expenses incurred by Lender in connection
with the New Term Loans), and all charges, commissions, interest, costs,
expenses and attorneys' fees chargeable by Lender to Borrowers in each case
under or related to the New Term Loans; the term "LENDER'S SHARE OF THE
OBLIGATIONS" shall mean, at any time, the entirety of the Obligations then
outstanding (including, without limitation, any Additional Loans (as hereinafter
defined), any Post-Petition Advances (as hereinafter defined), any portion of
the Obligations subject to a Senior Participation and any and all fees and
interest payable pursuant to the terms of the Credit Agreement, including
without limitation those payable after the filing of a bankruptcy case by any of
the Borrowers and irrespective of whether the same are allowed or permitted to
be paid in or during a bankruptcy case of any of the Borrowers), less only the
principal amount of the Participation and accrued and unpaid interest on the
principal amount of the Participation calculated in accordance with and computed
at the rate specified in the Credit Agreement; the term "PARTICIPATION" shall
mean the junior participation interest in the Participation Obligations sold
pursuant to SECTION 1 of this agreement
(this "AMENDED AND RESTATED PARTICIPATION AGREEMENT"); the term "PARTICIPANT"
shall mean Xxxxxxx X. Xxxxxx, an individual, acting in his individual capacity
and not as an officer, director, agent or representative of any of the Borrowers
or any other Person, together with his heirs and his permitted assigns, if any,
as the registered owner of a Certificate of Participation evidencing a junior
participation interest in the Participation Obligations, which aggregate
principal amount shall be equal to the principal amount set forth in such
Certificate of Participation; the term "PARTICIPANT'S ACCOUNT" is defined in
SECTION 3 below; the term "POST-PETITION ADVANCES" is defined in SECTION 10
below; the terms "SENIOR PARTICIPANT" and "SENIOR PARTICIPATIONS" are defined in
SECTION 16 below; and the term "PERMITTED PAYMENTS" shall mean the payment made
by Participant to Lender, on the Participation Closing Date in accordance with
SECTION 1.
This Amended and Restated Participation Agreement will confirm the
arrangement between the Lender and Participant whereby Lender sells to
Participant, without recourse and without representations or warranties of any
kind (except as expressly set forth hereinafter), and Participant purchases from
Lender, a junior participation interest in the Participation Obligations in the
principal amount equal to the principal amount of the New Term Loans, upon and
subject to the terms and conditions set forth in this Amended and Restated
Participation Agreement. Participant shall only have such obligations as are
expressly set forth in this Amended and Restated Participation Agreement or in
the Participation Certificates (hereinafter defined).
1. Participant has (a) executed and delivered to the Collateral Agent,
for the benefit of the Lender, a counterpart of this Amended and Restated
Participation Agreement, dated as of December 27, 2003, (b) paid to the
Collateral Agent, for the benefit of the Lender, in U.S. Dollars by federal
funds bank wire transfer of same day funds, on or about October 31, 2003, an
amount equal to Participant's original junior participation interest in the
Participation Obligations, $2,000,000, in consideration of which the Collateral
Agent, on behalf of the Lender, issued to Participant a Certificate of
Participation in that principal amount in substantially the form of EXHIBIT A to
the Original Participation Agreement (the "FIRST CERTIFICATE OF PARTICIPATION"),
and (c) paid to the Collateral Agent, for the benefit of the Lender, in U.S.
Dollars by federal funds bank wire transfer of same day funds, contemporaneously
with the execution and delivery hereof, an amount equal to Participant's
additional junior participation interest in the Participation Obligations,
$10,000,000, in consideration of which the Collateral Agent, on behalf of the
Lender, is issuing to Participant a Certificate of Participation in that
principal amount in substantially the form of EXHIBIT A hereto (the "SECOND
CERTIFICATE OF PARTICIPATION"). The First Certificate of Participation shall
remain in full force and effect, except that all references therein to the
Participation Agreement shall be deemed references to this Amended and Restated
Participation Agreement.
2. At all times and from time to time until Lender shall have received
payment in full of Lender's Share of the Obligations and all Commitments shall
have been terminated, Lender shall be entitled to receive and apply against the
Obligations (other than the New Term Loans) for Lender's benefit (and the
benefit of the Senior Participants), all in such order, such amounts and such
manner as provided in the Credit Agreement (PROVIDED, HOWEVER, that such
reference does not constitute, and shall not be construed to create, any
obligation to or rights of Participant in respect of such provisions of the
Credit Agreement), all amounts as the same become due in connection with or
arising out of the Existing Credit Facilities, the Loan Documents, the
Collateral and/or the Obligations, whether as principal, interest, fees or
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otherwise, and including, without limiting the generality hereof, proceeds of or
recoveries under insurance policies, amounts payable by third parties as
guarantors or otherwise, amounts payable by reason of total or partial
condemnation or taking by governmental authority, amounts realized as the result
of enforcement of Collateral, amounts received as proceeds of one or more sales,
and income from the operation or sale of Collateral or any part thereof;
PROVIDED HOWEVER that notwithstanding anything contained herein to the contrary,
principal and interest payments on the New Term Loans shall be governed solely
by Section 3 hereof and in no event shall any Permitted Payments be included in,
subject to, or covered by, this paragraph. Participant shall not have any right
to acquire any interest in, and, except for the Passthrough Fees (hereinafter
defined), shall not be entitled to receive, any portion of any fees or
administration or service charges provided for in the Credit Agreement or
payable by any Borrower pursuant to any Loan Document to Lender. Participant
shall not be entitled to receive any payment or distribution of principal on
account of or with respect to all or any part of the Participation unless and
until such time as Lender shall have received payment in full of Lender's Share
of the Obligations and all Commitments shall have been terminated. For purposes
of this Section 2, "Passthrough Fees" shall mean the respective amounts equal to
37 & 1/2% of the following described fees: (a) the Amendment Fee payable under
the Ninth Amendment, and (b) any Early Termination Fee payable by the Borrowers;
PROVIDED, HOWEVER, that Passthrough Fees shall not include any portion of the
amount(s) payable to the Lender in connection with the exercise of Participant's
purchase option set forth in Section 20 hereunder.
3. The New Term Loans shall not permit the Borrowers to make any
payment, prepayment or repayment of the principal thereof, and Lender hereby
agrees not to accept any, or to apply any Collections (as hereinafter defined)
to, payment, prepayment or repayment of principal on the New Term Loans, unless
and until the Lender's Share of the Obligations is paid in full and all
Commitments shall have been terminated. The Collateral Agent, on behalf of the
Lender, will maintain on such Agent's books an account in the name of the
Participant (the "PARTICIPANT'S ACCOUNT") into which (a) all amounts received by
such Agent from or on behalf of the Borrowers in payment of principal
("PARTICIPATION PRINCIPAL") and/or interest accrued on the Participation (the
"PARTICIPATION INTEREST") will be credited and (b) all amounts paid out by such
Agent in cash to the Participant with respect to the Participation Principal or
Participation Interest will be debited. Each Lender hereby agrees that the
Collateral Agent may, and the Collateral Agent will, pay to Participant in cash
as soon as practicable but in any event within two (2)
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Business Days of receipt by such Agent, all Participation Interest and
Participation Principal actually received by such Agent and required to be paid
to Participant in accordance with applicable provisions of the Credit Agreement,
PROVIDED, HOWEVER, that (i) amounts due and payable with respect to Lender's
Share of Obligations which constitute unpaid principal, interest, fees and
expenses shall be paid first to Lender in order of priority, with any remaining
amounts, subject to the limitations set forth in the following sub clause, next
paid to Participant on account of Participation Interest, and (ii) to the extent
Lender's Share of the Obligations have not yet been paid in full, such
Participation Interest shall not be paid in cash to Participant or credited to
the Participant's Account, shall not constitute a payment of interest by the
Borrowers on or with respect to the Participation and shall be retained by
Lender or by the Collateral Agent on behalf of the Lender and applied in
accordance with the provisions of Section 5 if, at the time of such payment or
credit, any Default or Event of Default (other than Existing Defaults during the
term of, and as defined in, the Forbearance Agreement) has occurred and has not
been waived or cured, or would result from such payment or credit. Promptly but
in any event within two (2) Business Days of Participant's request therefor,
Collateral Agent, on behalf of the Lender, will furnish to Participant a
statement of the unpaid principal balance on the New Term Loans and of all
accrued and unpaid interest thereon.
4. Each of the Participation Interest, the Participation Principal and
the interest of the Participant in and to any and all amounts received by Lender
from any source (in each case, other than any Permitted Payments), with respect
to the Obligations (collectively, "COLLECTIONS"), is, in each case, in all
respects junior and subordinate to (i) Lender's Share of the Obligations and
(ii) Lender's rights to receive and retain all Collections for the Lender's
respective account and benefit (and the account and benefit of the Senior
Participants) for application to Lender's Share of the Obligations until Lender
has received payment in full of Lender's Share of the Obligations, including,
without limitation, all principal, and interest, and all fees, costs, expenses
and other items included within Lender's Share of the Obligations and due to
Lender and all Commitments shall have been terminated, and, accordingly, each
Lender, for itself and any Senior Participants, shall first be repaid in full in
respect of all of its portion of Lender's Share of the Obligations and all
Commitments shall have been terminated, prior to any payment or repayment of all
or any part of the Participation; PROVIDED, HOWEVER, Participant shall be
entitled to receive the Participation Principal and Participation Interest in
accordance with Section 3 hereof and PROVIDED FURTHER that, in no event, shall
any Permitted Payment or any amount received by Lender from the Participant
pursuant to this Amended and Restated Participation Agreement be deemed to be a
Collection with respect to the Obligations.
5. Other than as required by Section 3 above, all Collections received
by Lender (i) shall be applied to the Obligations in such amounts, manner and/or
order as provided in the Credit Agreement (PROVIDED, HOWEVER, that such
reference does not constitute, and shall not be construed to create, any
obligation to or rights of Participant in respect of such provisions of the
Credit Agreement), and (ii) shall be first retained and applied by Lender until
the payment in full of Lender's Share of the Obligations and all Commitments
shall have been terminated, and only then and thereafter shall the Participant
have any rights to have any surplus remaining remitted to the Participant, and
then only to the extent legally permissible. If Participant obtains any payment
(other than (i) payments of Participation Interest or Participation Principal
received from the Collateral Agent in accordance with the terms of SECTION 3
hereof, (ii) payments in respect of salary, benefits, reimbursement of expenses
or in partial satisfaction of the principal amount of, or any interest on or
fees in respect of, the 150K Debt, which do not, in the aggregate for any month,
exceed the sum of $30,000 or (iii) provided there is then no Default or Event of
Default that has occurred and has not been cured or waived, payments in respect
of the Financing Fee (hereinafter defined) which do not, in the aggregate for
any month, exceed the sum of $18,000) from any Borrower or attributable to any
Collateral prior to payment in full of all Obligations and the termination of
all Commitments with respect thereto, the Participant shall receive and hold
such payment in trust for Lender's benefit and shall promptly pay over such
payment to Lender to be applied in the manner set forth in this SECTION 5.
"FINANCING FEE" shall mean and refer to that certain annual fee in the amount of
$216,000 that Borrowers have agreed to pay to Participant in connection with
Participant's entering into and performing this Participation Agreement.
6. Participant, by execution in confirmation of this letter,
acknowledges and agrees that (a) Participant has received from Borrowers and
reviewed copies of all of the Loan
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Documents and has independently and without reliance on any Agent or Lender made
Participant's own analysis of the Loan Documents, including copies of all legal
opinions delivered to Agent and Lender in connection with the Loan Documents,
(b) Participant has, independently and without reliance on any Agent or Lender,
and based on such documents and information as Participant has deemed
appropriate, made Participant's own credit analysis of the Borrowers and
Participant's own decision to enter into this Amended and Restated Participation
Agreement and to purchase such Participation as herein provided, and (c)
Participant is thoroughly familiar with and has complete and current financial
statements and other relevant information concerning the financial condition and
creditworthiness of each of the Borrowers. Except as otherwise expressly
provided herein, Lender and Agent shall have no duties, responsibilities or
obligations whatsoever to Participant. Agent and Lender make no representation
or warranty, express or implied (whether by executing and delivering this
Amended and Restated Participation Agreement or any Certificate of Participation
or by selling or issuing all or any portion of the Participation, or otherwise),
to Participant, except that (i) Lender owns all rights, titles and interests in
and to Term Loan A and Term Loan B, and such interests have not been encumbered,
participated or assigned by any of such Lender to any Person other than
Participant, (ii) Lender is the sole lender under the Credit Agreement and
Lender has not assigned or granted any participations to any Person other than
Participant in respect of any of its rights or obligations under the Credit
Agreement or in respect of any of the Lender's Share of Obligations, and Agent
and Lender shall have no responsibility, as to the value, validity,
effectiveness, genuineness, regularity, enforceability, collectibility or
sufficiency of the Credit Agreement or any other Loan Document, or as to the
accuracy of any recital, statement, representation or warranty therein or in any
information memorandum pertaining to any Borrower, or in any certificate or
other document referred to or provided for in the Credit Agreement or any other
Loan Document, or as to the title to, validity, priority, value, perfection or
sufficiency of the Collateral or any Lien securing or purporting to secure all
or any part of the Obligations, or any other guarantees or collateral security
of any kind, or as to the financial condition of any of the Borrowers, nor shall
Lender have any responsibility to Participant for any failure by any Borrower to
perform its obligations under the Credit Agreement or any other Loan Document.
Neither Agent nor Lender shall be required to keep Participant informed as to
the performance or observance by any Borrower of the Credit Agreement or any
other Loan Document, or to inspect the properties or books of any Borrower.
Agent and Lender do not assume, neither make nor have made any warranties
(except that the Lender owns all rights, titles and interests in and to the
interests in the Participation Obligations being purchased by Participant
pursuant to this Amended and Restated Participation Agreement and that such
interests have not been encumbered or assigned by Lender to any other Person)
with respect to, and shall have no liability to Participant for the repayment of
all or any part of the Participation or the interest equivalent thereon except,
and only to the extent, expressly set forth in this Amended and Restated
Participation Agreement. Lender, Participant and by their acknowledgements
below, Agent and Borrowers, acknowledge and agree that Section 11.2(e) of the
Credit Agreement contains certain requirements with respect to the sale of a
participation by a Lender. Lender, Agent and Borrowers hereby waive the
requirement of Section 11.2(e) that Participant not be an Affiliate of Parent,
and agree that the proviso following sub clause (e)(iv) thereof, which begins
with the words "except that", shall not be applicable to Participant and in lieu
thereof the Participation shall be governed solely by the terms and conditions
of this Amended and Restated Participation Agreement.
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7. The Obligations, the Collateral, and the Collections shall in each
instance be held by each Lender in such Lender's own name or by Collateral Agent
on behalf of the Lender. It is understood and agreed that the Participant shall
have no right in or interest in any property taken as security for, or any
offset effected with respect to, all or any part of the New Term Loans or any of
the Obligations, or in any property now or hereafter in any Agent's or Lender's
possession or control which may be or become security for all or any part of the
New Term Loans or any of the Obligations by reason of the Credit Agreement or
any other Loan Documents; PROVIDED, HOWEVER that subject to the provisions of
Sections 11 and 12, Lender agrees (and so long as Lender is the sole lender
under the Credit Agreement, Lender in its capacity as Collateral Agent agrees)
not to amend the Credit Agreement or the other Loan Documents in order to cause
the New Term Loans to be unsecured. It is understood and agreed that upon the
payment in full of Lender's Share of the Obligations and the termination of all
Commitments, that Participant shall thereupon have the right to have any surplus
remaining from the Collections or otherwise to be remitted to the Participant
and applied to the Participation and to have transferred and assigned to
Participant any remaining Collateral and Lender's rights under the Loan
Documents in accordance with the provisions of Sections 11and 17 hereof.
8. If at any time after any Lender, either directly or through the
Collateral Agent, has distributed any amount to the Participant on account of
the Participant's interests in the Participation including, without limitation
Participation Interest, any amount paid or owing to any Lender, or to the
Collateral Agent, by any Borrower is subordinated, set aside, avoided, declared
to be fraudulent or preferential, disallowed or recovered from such Lender or
from the Collateral Agent in connection with an insolvency or bankruptcy
proceeding or otherwise, the Participant agrees to refund to each such Lender,
or to Collateral Agent on behalf of any such Lender, without interest, the
amount thereof to the extent of the aggregate amount of any payment or
distribution made by such Lender, or by the Collateral Agent on behalf of such
Lender, to Participant.
9. Participant agrees that, at any time and from time to time prior to Lender's
receipt of the payment in full of Lender's Share of the Obligations and the
termination of all Commitments, whether or not a Default or Event of Default has
occurred and is then continuing, Lender may (a) in Lender's sole and absolute
discretion, continue to extend additional advances, loans, letter of credit
guaranties, and other financial accommodations to any Borrower and increase the
Commitments under the Loan Documents (collectively, the "ADDITIONAL LOANS"), and
the Participation, the Participation Interest and the Participant's interest
therein shall be subject and subordinate to such Additional Loans and in the
security therefor on the same terms and conditions as are set forth herein, and
(b) apply all or any part of any proceeds of Collateral received by Lender,
payments received by Lender from any Borrower, any other proceeds or payments
received by Lender on account of the Obligations from any other source, any
credits for any Borrower's account, and all other Collections to all or any part
of the Obligations and in such order, in such amounts and in such manner as
provided in the Credit Agreement (PROVIDED, HOWEVER, that such reference does
not constitute, and shall not be construed to create, any obligation to or
rights of Participant in respect of such provisions of the Credit Agreement).
10. It is understood and agreed by the Participant that, in Lender's
sole and absolute discretion, subject only to proper court approval, Lender may
continue to extend additional advances, loans, letter of credit guaranties, and
other financial accommodations to any Borrower
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after commencement and during the continuation of any case under the U.S.
Bankruptcy Code (a "BANKRUPTCY CASE") with respect to any Borrower
(collectively, "POST-PETITION ADVANCES"), and the Participation, the
Participation Interest and the Participant's interest therein shall be subject
and subordinate to such Post-Petition Advances and in the security therefor on
the same terms and conditions as are set forth herein. Further, Participant
covenants and agrees, with and for the benefit of the Agent and the Lender, and
as a material part of the consideration to the Agent and the Lender hereunder,
without which covenants and agreements Agent and Lender would not have entered
into this Amended and Restated Participation Agreement, that in connection with
a Bankruptcy Case of any Borrower, Participant shall not, directly or indirectly
(a) challenge the existence, validity or priority of any Lien on any of the
Collateral in favor of any of the Agent or Lender, (b) file, or cause or support
the filing of, any objection to the provision of Post-Petition Advances or other
debtor-in-possession financing to such Borrower by the Lender, (c) propose, vote
for or otherwise support any bankruptcy plan which would have the effect of
compromising, impairing or otherwise modifying the Obligations without the
unanimous written consent of the Lender, or (d) seek to establish, or support in
any manner the establishment of, a credit facility for the benefit of such
Borrower where any of the obligations under such credit facility would have
priority over any of the Obligations or any Post-Petition Advances, whether by
lien, contract, court order or otherwise, except only to the extent that such
credit facility is provided by the Lender.
11. Subject only to the Right of First Refusal hereinafter set forth
(to the extent applicable) Lender may, from time to time, in Lender's discretion
and without notice to the Participant and without necessity of the consent of
Participant, (a) amend, modify, renew and/or extend in whole or in part the
Obligations, the Loan Documents, the Collateral and any guaranties therefor,
including without limitation the sale, in one or more transactions, of all or
any part of the Collateral for an aggregate amount less than the amount
necessary to satisfy in full all of the Obligations, (b) subject to the Right of
First Refusal hereinafter set forth (to the extent applicable), compromise and
settle with, and release, any Borrower, or any other Person obligated on or with
respect to all or any part of the Obligations, and (c) extend the Additional
Loans, the Post-Petition Advances and any other advances, loans and other
financial accommodations to any Borrower in excess of any formulae under the
Loan Documents, all without notice to the Participant and without necessity of
the consent of Participant. The Collateral Agent shall, from time to time, but
not more frequently than once in any calendar quarter, after such Agent's
receipt of Participant's reasonably detailed written request, furnish the
Participant with copies of such other papers and documents relating to the
Participation Obligations, the Obligations and the Collateral and with
statements describing the status of the Participation Obligations, the
Obligations and the Collateral, as the Participant may reasonably request.
12. Subject only to the Right of First Refusal hereinafter set forth
(to the extent applicable) Lender reserves and shall have the sole right, in
Lender's sole and absolute discretion, to manage, perform, modify, supplement
and enforce the Loan Documents, the Obligations and the Collateral, and to
waive, exercise and enforce all privileges, rights and remedies exercisable or
enforceable by Lender thereunder, in accordance with Lender's sole discretion
and the exercise of Lender's business judgment. Without limiting the foregoing,
but subject to the Right of First Refusal hereinafter set forth (to the extent
applicable), Lender may, without notice or responsibility to, or necessity of
consent from, the Participant, (a) exercise or
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refrain from exercising any and all of Lender's rights under or in connection
with any of the Loan Documents, (b) give or withhold consents and approvals or
take or omit to take any action pursuant to any Loan Document and (c)
compromise, settle, adjust and in general deal in any manner with the
Obligations and the Collateral as Lender may deem appropriate, upon such terms
and conditions as Lender may deem appropriate. Agent and Lender shall not be
liable to the Participant for any action taken or omitted. The Participant
expressly releases each Agent and Lender from any and all liability and
responsibility (express or implied), for any loss, depreciation of or delay in
collecting or failing to realize on any Collateral, the Obligations or any
guaranties therefor and for any mistake, omission or error in judgment in
passing upon or accepting any Collateral or in making examinations or audits or
for granting indulgences or extensions to any Borrower, any account debtor or
any guarantor.
13. Subject to the Right of First Refusal hereinafter set forth (if
applicable), Lender shall have the right to sell, encumber, convey, transfer,
and/or assign (collectively, a "TRANSFER") any of Lender's rights and
obligations under the Credit Agreement or under this Amended and Restated
Participation Agreement, PROVIDED that in connection with any such Transfer of
Lender's interests under this Amended and Restated Participation Agreement, the
purchaser, assignee or other transferee agrees in writing to be bound by the
terms of this Amended and Restated Participation Agreement. Neither the
Participation, nor any Certificate of Participation, nor Participant's interest
in the Participation nor any of the individual rights or obligations of
Participant hereunder may be subdivided, assigned, pledged, encumbered or
otherwise transferred by the Participant without Lender's prior written consent.
Subject to the foregoing, all of the terms, covenants and conditions of this
Amended and Restated Participation Agreement shall be binding upon, and inure to
the benefit of, each Lender's and the Participant's respective successors and
assigns, but nothing contained in this Amended and Restated Participation
Agreement is intended, or shall be construed, to confer upon or to give any
Borrower or any other Person, other than the parties hereto and their respective
successors and permitted assigns, any rights or remedies under or by reason of
this Amended and Restated Participation Agreement.
14. Lender shall, prior to (x) offering to sell to any other Person (i)
all of the Obligations, (ii) any part of the Obligations (a "NEW SYNDICATION
INTEREST") or (iii) a participation interest in all of any part of the
Obligations ("NEW PARTICIPATION INTEREST"), or (y) offering to accept payment
from any of the Borrowers of an amount that is less than the then full,
outstanding amount of the Obligations in satisfaction of the Obligations (a
"DISCOUNTED SATISFACTION AMOUNT"), offer to sell the same to Participant upon
the following terms and conditions (collectively the "RIGHT OF FIRST REFUSAL"):
(a) Lender shall provide to Participant written notice, sent to Participant's
address set forth above, of the Right of First Refusal (the "OFFER"), offering
to sell all of the Obligations, the New Syndication Interest or the New
Participation Interest, as applicable, to Participant, and specifying either (i)
the price at which Lender intends to sell the same or (ii) the Discounted
Satisfaction Amount, as applicable (the "SALE PRICE"); (b) Such offer shall
remain outstanding and subject to acceptance by Participant for a period of five
(5) business days after the Date of Deemed Receipt thereof by Participant (the
Date of Deemed Receipt of such Offer shall be, as applicable, (i) the date of
delivery if hand-delivered, (ii) the date specified for delivery if sent by an
overnight courier service or (iii) the date on which such Offer is sent by
facsimile transmission to the facsimile number set forth under Participant's
signature hereunder, so long as a copy thereof is also delivered, on the same
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date, to an overnight courier service for delivery on the available delivery
date); (c) such Offer shall expire unless (i) accepted in writing by
Participant, without any additional terms or conditions and (ii) such written
acceptance is actually delivered to Lender not later than 5:00 p.m. (Atlanta
time) on the fifth (5th) business day after the Date of Deemed Receipt; and (d)
an Offer accepted in accordance with the foregoing terms, and any contract
formed thereby, shall be deemed terminated without any action or notice by or
to, nor payment or penalty due from or to, either Lender or Participant unless,
not later than 5:00 p.m. (Atlanta time) on the tenth (10th) business day after
the Date of Deemed Receipt, Participant shall tender to the Lender good funds in
the amount of the Right of First Refusal Purchase Price (hereinafter defined)
and, if any Letter of Credit is then outstanding under the Credit Agreement, a
Supporting Letter of Credit in the amount and otherwise on the terms set forth
in Section 1.4(g) of the Credit Agreement, conditioned only upon receipt of an
executed Assumption and Assignment Agreement, generally in the form attached as
EXHIBIT E to the Credit Agreement or, if done in connection with a New
Participation Interest, an executed Participation Agreement in the form hereof.
For purposes hereof, the term "Right of First Refusal Purchase Price" shall mean
the lesser of (i) the Sale Price or (ii) the then full outstanding amount of the
Lender's Share of the Obligations. At any time within sixty (60) days after
either (i) the expiration of an Offer without acceptance, or (ii) the
termination of a contract formed by an Offer accepted in accordance with the
foregoing terms and conditions, pursuant to subsection (d), above, Lender may,
without any notice to Participant, either (m) sell all of the Obligations, the
New Syndicated Interest or the New Participation Interest, as applicable, for
any amount equal to or greater than the Sale Price (subject only to the
requirement that any such transferee agree to be bound by the terms of this
Amended and Restated Participation Agreement) or (n) accept payment from any
Borrower in an amount equal to or greater than the Discounted Satisfaction
Amount in full satisfaction of all of the Obligations.
15. This Amended and Restated Participation Agreement and each
Certificate of Participation shall be governed by and construed in accordance
with the laws and decisions of the State of Georgia.
16. The Participant represents and warrants to Agent and Lender that
(a) Participant does not consider the acquisition of its junior participation
interest hereunder to constitute the "purchase" or "sale" of a "security" within
the meaning of the Securities Act of 1933, the Securities Exchange Act of 1934
or Rule 10b-5 promulgated thereunder, any other applicable securities statute or
law, or any rule or regulation under any of the foregoing (collectively, as
amended, the "Acts"); (b) Participant has no expectation that Participant will
derive profits from the efforts of any Agent or Lender or any third party in
respect of the acquisition of Participant's junior participation interest
hereunder excepting interest related to the Participation; (c) acquisition of
such junior participation interest merely constitutes a commercial transaction
by Participant with Lender regarding Participant's acquisition of a junior
participation interest in the Participation Obligations and does not represent
an "investment" (as that term is commonly understood) in any Agent, any Lender
or any Borrower; (d) Participant is purchasing such Participant's junior
participation interest in the Participation Obligations hereunder for
Participant's own account and risk, and not with a view or in connection with
any subdivision, resale, or distribution thereof, (e) Participant engages in
commercial transactions (including transactions of the nature contemplated
herein and in the Credit Agreement), can bear the economic risk related to the
purchase of the junior participation interest hereunder, and has had
9
access to all information deemed necessary by Participant in making
Participant's decision whether or not to purchase the same, and (f) Participant
will hold the junior participation interest in the Participation Obligations
hereunder solely in the name of, and for the sole benefit of, Participant, and
not jointly or severally with, or on behalf of, any other Person. Further, no
amount paid by Participant to purchase Participant's junior participation
interest in the Participation Obligations shall be considered a loan by
Participant to any Lender, nor an investment of any nature or kind.
17. Subject only to the Right of First Refusal set forth in Section 14
hereof, at any time and from time to time, Lender may sell additional
participations in Obligations other than the Participation Obligations (all of
which shall be deemed included within Lender's Share of the Obligations and
shall be deemed to be Senior Participations for all purposes hereof), upon such
terms and conditions as may be determined by Lender in Lender's sole and
absolute discretion, and nothing herein shall in any way be construed to limit,
restrict or prohibit Lender's right to do so. Participant's junior participation
interest in the Participation Obligations (and in the Collateral and the
Collections) is and shall remain in all respects junior and subordinate to
Lender's Share of the Obligations, and to the receipt by Lender of the payment
in full of Lender's Share of the Obligations and the termination of all
Commitments, which Participant acknowledges and agrees includes and will include
Lender's interests in the Obligations, and each other participation interest in
the Obligations, other than the junior participation interests included within
the Participation, now or hereafter granted and sold by Lender (all such
participation interests, other than the Participation and the junior
participation interests therein held by the Participant, being herein called the
"SENIOR PARTICIPATIONS" and each owner of a Senior Participation being herein
called a "SENIOR PARTICIPANT"), and, accordingly, Lender, for itself and the
benefit of all the Senior Participants, shall first be repaid in full the full
amount of Lender's Share of the Obligations prior to any payment, repayment or
distribution on account of or with respect to the Participation other than
interest payments on the Participation payable to Participant in accordance with
SECTION 3 hereof.
18. Upon payment in full in immediately available funds of all
principal, interest and charges with respect to Lender's Share of the
Obligations, the satisfactory cash collateralization of all outstanding
Obligations in respect of Letters of Credit and the termination of all
Commitments, but subject to assumption by the Participant of all of Lender's
rights, duties and obligations with respect to all of the Loan Documents
(pursuant to a form of assignment and assumption agreement reasonably acceptable
to, and executed and delivered by, Participant and Lender (the "ASSUMPTION
AGREEMENT")), and the receipt of a full, complete and unconditional release from
all Borrowers on terms acceptable to Agent and Lender in their respective sole
and absolute discretion, Lender will effect settlement thereof and will,
promptly after receipt of written request from the Participant, assign to the
Participant, pursuant to the Assumption Agreement and for consideration of $0,
all of the Lender's rights in the Obligations and the Collateral, if any, for
the Obligations and Lender's rights with respect thereto without
representations, warranties or recourse of any kind or nature whatsoever except
to the extent, if any, expressly set forth in the Assumption Agreement, but
nothing in this Section 18 shall diminish the rights and privileges of Lender
described in Section 11 or Section 12 of this Amended and Restated Participation
Agreement.
10
19. THE PARTIES HERETO HEREBY WAIVE TRIAL BY JURY IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR IN THE CONNECTION WITH THIS AMENDED AND RESTATED
PARTICIPATION AGREEMENT AND FURTHER HEREBY WAIVE ANY RIGHT OF OFFSET OR RIGHT TO
INTERPOSE ANY COUNTERCLAIM (OTHER THAN A COMPULSORY COUNTERCLAIM) IN ANY SUCH
ACTION. THE PARTIES HERETO EXPRESSLY SUBMIT IN ADVANCE TO THE NONEXCLUSIVE
JURISDICTION OF THE XXXX COUNTY SUPERIOR COURT, IN THE STATE OF GEORGIA, OR TO
THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA IN ANY
ACTION OR PROCEEDING RELATING TO ANY CLAIM, DISPUTE OR OTHER MATTER PERTAINING
DIRECTLY OR INDIRECTLY TO THIS AMENDED AND RESTATED PARTICIPATION AGREEMENT.
20. At Lender's option and in Lender's sole and absolute discretion,
Lender may at any time repurchase the Participation from the Participant by
paying to Participant the outstanding amount of Participant's share of the
Participation, together with Participant's share of the interest attributable to
Participant's share of the Participation to the date of such repurchase. This
Amended and Restated Participation Agreement shall thereupon terminate;
PROVIDED, HOWEVER, that the termination shall not affect the respective rights,
duties or obligations of any party incurred prior to the effective date of such
termination. Notwithstanding the foregoing or any other provision of this
Amended and Restated Participation Agreement, in no event shall any Lender have
any obligation to repurchase the Participation or any part thereof or any
interest therein, whether upon or by reason of the occurrence, existence or
absence of any Default or Event of Default, or otherwise for any other reason or
in any other circumstance. For so long as Lender is the sole Lender under the
Credit Agreement, at Participant's option and in Participant's sole and absolute
discretion, Participant may, upon at least thirty (30) but not more than
forty-five (45) days prior written notice in the form of a binding offer,
purchase from Lender all (but not less than all) of Lender's Share of the
Obligations for a purchase price, payable by wire transfer of cash to an account
designated by Lender, equal to the sum of (i) the entire outstanding amount of
the Lender's Share of the Obligations as of the date on which the purchase price
is tendered by Participant PLUS (ii) an amount equal to Sixty-two & 1/2% of the
Early Termination Fee that would have been payable by Borrowers if Borrowers had
terminated the Credit Agreement as of the date of such purchase.
21. Neither the execution of this Amended and Restated Participation
Agreement, nor the purchase or other acquisition by Participant of an undivided
interest in the Participation, nor any of the transactions contemplated hereby,
is intended to be, nor shall it be construed to be, the formation of a
partnership or joint venture between Participant and any Agent or Lender.
22. This Amended and Restated Participation Agreement and the
Certificates of Participation (a) may not be amended, modified or terminated
(orally or by any course of dealing or otherwise), except by an agreement in
writing signed by Participant and Lender and acknowledged by Agent, (b) shall
remain in full force and effect until all Obligations (including any
Post-Petition Advances) are paid in full and the Credit Agreement is terminated,
unless, prior thereto, Lender, in its discretion, determines to repurchase the
Participation pursuant to the provisions of SECTION 20 hereof, (c) shall be
governed by and construed in accordance with the laws of the State of Georgia
and (d) supercedes any prior negotiations or discussions or communications
between or among Agent, Lender and the Participant, and constitutes the entire
11
agreement between Lender, on the one hand, and Participant, on the other, with
respect to the Obligations, the Participation, the Participation Obligations,
the Collateral, and the Loan Documents. This Amended and Restated Participation
Agreement amends and restates that certain Participation Agreement between
Collateral Agent and Participant dated as of October 31, 2003.
23. This Amended and Restated Participation Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which counterparts taken together shall constitute but
one and the same instrument. Facsimile signatures shall be effective as
originals.
24. Except for the specific notice provisions set forth as part of the
Right of First Refusal hereinabove, all notices and confirmations hereunder by
Collateral Agent or any Lender to the Participant shall be deemed given if
addressed to the applicable address for the Participant set forth below, and
sent by registered or certified mail, return receipt requested, or sent by
facsimile, and all notices and requests hereunder by the Participant to Lender
shall be deemed given if addressed to Lender in care of the Collateral Agent at
such Agent's address set forth above and directed to the attention of Mr. Xxx
Xxxxxx and sent by certified or registered mail, return receipt requested, or
sent by facsimile.
[Remainder of Page Intentionally Left Blank]
12
If the foregoing correctly sets forth the arrangement between Lender
and Participant, please indicate Participant's confirmation thereof and
Participant's acceptance of the terms of this Amended and Restated Participation
Agreement by signing and returning to Lender, in care of the Collateral Agent,
the enclosed copy hereof, whereupon this Amended and Restated Participation
Agreement shall become effective and be binding as between Lender and
Participant, and (without prejudice to SECTION 13 above) the respective
successors and assigns of Lender and the respective permitted assigns of
Participant.
Very truly yours,
THE CIT GROUP/BUSINESS CREDIT, INC.,
as Lender
By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
Address: 000 Xxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
ACKNOWLEDGED AND AGREED TO:
"PARENT"
XXXXXX INDUSTRIES, INC.
By: /s/ J. Xxxxxxx Xxxx
------------------------------
J. Xxxxxxx Xxxx
Chief Financial Officer
"SUBSIDIARY XXXXXX BORROWERS"
APACO, INC.
B&B ASSOCIATED INDUSTRIES, INC.
CHEVRON, INC.
CENTURY HOLDINGS, INC.
CHAMPION CARRIER CORPORATION
COMPETITION WHEELIFT, INC.
GOLDEN WEST TOWING EQUIPMENT INC.
KING AUTOMOTIVE & INDUSTRIAL
EQUIPMENT, INC.
[CONTINUED ON NEXT PAGE]
00
XXX XXXXXXX WRECKER & EQUIPMENT
SALES, INC. OF COLORADO
XXXXXX FINANCIAL SERVICES GROUP,
INC.
XXXXXX/GREENEVILLE, INC.
XXXXXX INDUSTRIES DISTRIBUTING, INC.
XXXXXX INDUSTRIES INTERNATIONAL,
INC.
XXXXXX INDUSTRIES TOWING
EQUIPMENT INC.
PURPOSE, INC.
SONOMA CIRCUITS, INC.
SOUTHERN WRECKER CENTER, INC.
SOUTHERN WRECKER SALES, INC.
By: /s/ J. Xxxxxxx Xxxx
------------------------------------------------
J. Xxxxxxx Xxxx
Vice President and Attorney-in-Fact of each
entity listed above
"SUBSIDIARY ROADONE BORROWERS"
AETEX, INC., F/K/A A-EXCELLENCE TOWING CO.
ALL AMERICAN TOWING SERVICES, INC.
B-G TOWING, INC.
BEAR TRANSPORTATION, INC.
BTRCX, INC. F/K/A BERT'S TOWING RECOVERY
CORPORATION
BBSX, INC. F/K/A XXX XXXXX SERVICES, INC.
BASIEX, INC. F/K/A BOB'S AUTO SERVICE, INC.
BTRX, INC.
BVSWS, INC. F/K/A XXX XXXXXXX AND SONS
WRECKER SERVICE, INC.
CAL WEST TOWING, INC.
CBTX,INC., F/K/ACEDAR BLUFF 24 HOUR
TOWING, INC.
CCASX, INC.
CEX, INC., F/K/A CHAD'S INC.
CVDC, F/K/A CLEVELAND VEHICLE DETENTION
CENTER, INC.
X.X. XXXXXXXX, INC.
DVREX, INC.
DOLLAR ENTERPRISES, INC.
DSX, INC., F/K/A XXXXXX'X SERVICES, INC.
[CONTINUED ON NEXT PAGE]
14
GMAR, INC., F/K/A GOOD MECHANIC AUTO CO.
OF RICHFIELD, INC.
GREAT AMERICA TOWING, INC.
GREG'S TOWING, INC.
HTX, INC.
LTSX, INC., F/K/A LAZER TOW SERVICES, INC.
LASX, INC.
LWKR, INC.
MAEJO, INC.
MEL'S ACQUISITION CORP.
MGEX, INC.
MSTEX, INC.
MTSX INC.
XXXXXX'X TOWING, INC.
X.X.X., INC.
PEX, INC., F/K/A/ PIPES ENTERPRISES, INC.
RMA ACQUISITION CORP.
RRIC ACQUISITION CORP.
RSX, INC., F/K/A RECOVERY SERVICES,
ROAD ONE, INC.
ROADONE EMPLOYEE SERVICES, INC.
ROAD ONE INSURANCE SERVICES, INC.
ROAD ONE SERVICE, INC.
ROAD ONE SPECIALIZED TRANSPORTATION,
INC.
ROADONE TRANSPORTATION AND LOGISTICS,
INC.
R.M.W.S., INC.
SWSX, INC. (F/K/A SUBURBAN WRECKER
SERVICE, INC.)
TEXAS TOWING CORPORATION
TPCTH, INC.
TREASURE COAST TOWING, INC.
TREASURE COAST TOWING OF XXXXXX
COUNTY, INC.
TSSC, INC., F/K/A TRUCK SALES & SALVAGE
CO., INC.
TWSX, INC.
WSX, INC., F/K/A WES'S SERVICE INCORPORATED
WTX, INC. (F/K/A XXXXXX TOWING, INC.)
WTC, INC.
WTEX, INC.
[CONTINUED ON NEXT PAGE]
15
ZTRX, INC., F/K/A XXXXXX TOWING &
RECOVERY, INC.
By: /s/ J. Xxxxxxx Xxxx
--------------------------------------------
J. Xxxxxxx Xxxx
Vice President and Attorney-in-Fact of each
entity listed above
ACKNOWLEDGED AND AGREED TO
SOLELY FOR PURPOSES OF SECTION 6
HEREOF AND THOSE OTHER PROVISIONS
HEREOF WHICH EXPRESSLY REFERENCE
AGENT
"COLLATERAL AGENT"
THE CIT GROUP/BUSINESS CREDIT, INC., as
the Collateral Agent
By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
16
The undersigned party confirms that the foregoing correctly sets forth
the arrangement between such undersigned party (acting as an individual and not
as an officer, director, agent or representative of any of the Borrowers or any
other Person) and Lender with respect to the Participation and the interest of
such undersigned party therein, and such undersigned party hereby accepts and
agrees to the terms of this Amended and Restated Participation Agreement.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------------
Xxxxxxx X. Xxxxxx, as Participant
Address: 0000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx 00000
Telephone:
Facsimile:
EXHIBIT A
December ___, 2003
----
CERTIFICATE OF PARTICIPATION
FOR VALUE RECEIVED, Lender has on the date of this certificate sold to XXXXXXX
X. XXXXXX (the "PARTICIPANT"), whose address is 0000 Xxxxxxxxxx Xxxx,
Xxxxxxxxxx, Xxxxxxx 00000, without recourse on or warranty, express or implied
by Lender (except that the Lender owns all rights, titles and interests in and
to the interests in the Participation Obligations purchased by Participant
pursuant to the Amended and Restated Participation Agreement and that such
interests have not been encumbered or assigned by Lender to any other Person), a
junior participation (the "PARTICIPATION") of Ten Million Dollars ($10,000,000)
in the principal amount of the "Participation Obligations," as defined and
described in the Amended and Restated Participation Agreement dated as of the
date hereof between Lender and the Participant (the "AMENDED AND RESTATED
PARTICIPATION AGREEMENT," with capitalized terms used herein and not otherwise
defined having the respective meanings ascribed to such terms in the Amended and
Restated Participation Agreement), relating, in part, to the Credit Agreement
among Lender and Borrowers.
This Certification of Participation is issued by the Lender pursuant to
SECTION 1 of, and the junior participation interest evidenced hereby is in all
respects subject to the terms and conditions of, the Amended and Restated
Participation Agreement, to which reference is hereby made for all purposes.
This Certificate of Participation evidences an undivided interest in the
Participation.
THE CIT GROUP/BUSINESS CREDIT, INC., as
Lender
By:_________________________________
Name: ______________________________
Title: _____________________________
