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EXECUTION COPY
AMENDMENT, CONSENT AND ACKNOWLEDGMENT
AMENDMENT, CONSENT AND ACKNOWLEDGMENT, dated as of February 24,
1997 (this "Amendment"), to the Amended and Restated Credit Agreement, dated as
of October 30, 1996 (as the same may be further amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"), among PRIMECO
INC., a Texas corporation, the several lenders from time to time parties
thereto (the "Lenders"), THE CHASE MANHATTAN BANK, a New York banking
corporation, as administrative agent for the Lenders (in such capacity, the
"Administrative Agent"), and THE CIT GROUP/BUSINESS CREDIT, INC., a New York
corporation, as collateral agent for the Lenders (the "Collateral Agent").
W I T N E S S E T H:
WHEREAS, the Company, the Lenders, the Administrative Agent and
the Collateral Agent are parties to the Credit Agreement;
WHEREAS, the Company has requested that the Administrative Agent
and the Collateral Agent, with the consent of requisite Lenders, (i) amend
certain provisions of the Credit Agreement and (ii) consent to and acknowledge
the Merger (as defined below).
WHEREAS, the Administrative Agent, with the consent of requisite
Lenders and the Collateral Agent, is agreeable to the requested amendments,
consents and acknowledgements, but only on the terms and subject to the
conditions set forth herein;
NOW THEREFORE, in consideration of the premises herein contained
and for other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto hereby agree as follows:
1. Defined Terms. Unless otherwise defined herein,
capitalized terms used herein which are defined in the Credit Agreement are
used herein as therein defined.
2. Amendments to Subsection 1.1. (a) The following
definitions are hereby added to subsection 1.1 of the Credit Agreement in their
proper alphabetical order:
"'Amendment, Consent and Acknowledgment': the Amendment, Consent
and Acknowledgment, dated as of February 24, 1997, to this
Agreement."
"'Merger': the merger of Primeco Inc. into Prime Service, Inc.,
with the surviving corporation being Prime Service, Inc."
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(b) The following definitions in subsection 1.1 of the Credit
Agreement are hereby amended to read in their respective entireties as follows:
"'Change of Control': shall be considered to have occurred if
any Person (other than INVESTCORP S.A., any of its Affiliates or
Subsidiaries, any Person that is a member of the senior
management of the Company, any entity the majority of the equity
ownership interests of which is owned by such senior management
of the Company or any Person acting in the capacity of an
underwriter), whether singly or in concert with one or more
Persons, shall, directly or indirectly, have acquired, or acquire
the power to vote or direct the voting of, 25% or more, on a
fully diluted basis, of the outstanding common stock of the
Company."
"'Company': prior to the Merger, the Company shall be Primeco
Inc., a Texas corporation, and after the Merger, shall be Prime
Service, Inc., a Delaware corporation."
"'Credit Parties': the collective reference to the Company and
each Subsidiary of the Company from time to time party to a
Guarantee."
"'Excess Cash Flow': for any fiscal year of the Company,
commencing with the fiscal year ending on December 31, 1996, the
excess of (a) the sum, without duplication, of (i) Consolidated
EBITDA for such fiscal year plus (ii) the book value of all
property sold (other than pursuant to eminent domain or
condemnation proceedings) by the Company and its Subsidiaries
during such fiscal year over (b) the sum, without duplication, of
(i) the aggregate amount actually paid by the Company and its
Subsidiaries in cash during such fiscal year on account of
capital expenditures (other than capital expenditures made with
the proceeds of eminent domain or condemnation proceedings to the
extent such proceeds are not included in the determination of
EBITDA for such fiscal year), (ii) the aggregate amount of
payments of principal in respect of any Indebtedness during such
fiscal year (other than any such payments of principal (x) from
the Net Proceeds of the IPO, (y) pursuant to subsection
4.4(b)(iii) or (z) in respect of any revolving credit facility to
the extent that there is not an equivalent reduction in such
facility), (iii) increases in working capital (calculated as
Consolidated Current Assets at the end of such fiscal year minus
Consolidated Current Liabilities as at the end of such fiscal
year) of the Company and its Subsidiaries for such fiscal year
(excluding any increase in cash or Cash Equivalents above an
increase deemed in good faith by the Company to be necessary or
desirable for the operation of the business of the Company and
its Subsidiaries), (iv) cash interest expense (including fees
paid in connection with Letters of Credit and surety bonds) of
the Company, (v) the amount of dividends actually paid in cash by
the Company during such fiscal year as permitted by subsection
8.11(c)(ii), (vi) the amount of taxes actually paid in cash by
the Company and its Subsidiaries for such fiscal year either
during such fiscal year or within a normal payment period
thereof, (vii) the
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amount of cash actually paid to repurchase Capital Stock of the
Company pursuant to subsection 8.11(c)(i), and (viii) to the
extent added to consolidated net income of the Company and its
Subsidiaries in calculating Consolidated EBITDA for such fiscal
year, the net cost of Interest Rate Agreements, franchise taxes
and management fees."
"'Guarantees': any guarantee which may from time to time be
executed and delivered by a Subsidiary of the Company pursuant to
subsection 8.6(b)."
"'Holdings': Prime Service, Inc., a Delaware corporation, as it
existed prior to the Merger."
"'Holdings Guarantee': the Holdings Guarantee, substantially in
the form of Exhibit F, to be made by Holdings in favor of the
Collateral Agent for the ratable benefit of the Lenders, as the
same may be amended, modified or supplemented from time to time.
As provided for in the Amendment, Consent and Acknowledgment, in
connection with, and effective upon, the Merger, the Holdings
Guarantee has been terminated."
"'Holdings Pledge Agreement': the Pledge Agreement,
substantially in the form of Exhibit G, to be made by Holdings in
favor of the Collateral Agent for the ratable benefit of the
Lenders, as the same may be amended, modified or supplemented
from time to time. As provided for in the Amendment, Consent and
Acknowledgment, in connection with, and effective upon, the
Merger, the Holdings Pledge Agreement has been terminated."
"'Pledge Agreements': any pledge agreement from time to time
executed and delivered by the Company providing for the pledge of
the Capital Stock of any Subsidiary pursuant to subsection
8.6(b)."
3. Amendment to Subsection 5.2. Subsection 5.2 of the Credit
Agreement is hereby amended by deleting the existing subsection 5.2 in its
entirety and inserting in lieu thereof the following new subsection 5.2:
No Change. Since June 30, 1996 (before and after giving
effect to the transactions described in subsection 5.1(c)) (a)
there has been no change and, (as of the Effective Date only) no
development or event involving a prospective change, which has
had or could reasonably be expected to have a material adverse
effect on the business, assets, condition (financial or
otherwise) or results of operations of the Company and its
Subsidiaries taken as a whole and (b) no dividends or other
distributions have been declared, paid or made upon the Capital
Stock of Primeco Inc. (prior to the Merger) or Prime Service,
Inc. (after the Merger) nor has any such Capital Stock been
redeemed, retired, repurchased or otherwise acquired for value by
Primeco Inc. (prior to the Merger) or Prime Service, Inc. (after
the Merger) or any of their Subsidiaries, except as permitted by
subsection 8.11.
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4. Amendment to Subsection 8.11. Subsection 8.11(c) of the
Credit Agreement is hereby amended by deleting the existing subsection 8.11(c)
in its entirety and inserting in lieu thereof the following new subsection
8.11(c):
"(c) the Company may pay dividends or make other distributions:
(i) to repurchase Capital Stock of the Company owned by
former employees of the Company or its Subsidiaries or their
assigns, estates and heirs, provided that, the aggregate amount
paid pursuant to this clause (i) (including any amount paid by
Holdings prior to the Merger but since the Effective Date) shall
not, in the aggregate, exceed the sum of $4,000,000 plus any
amounts received by the Company (including any amount received by
Holdings prior to the Merger but since the Effective Date) as a
result of resales of such repurchased shares of Capital Stock;
and
(ii) so long as, after giving effect thereto, no Default
or Event of Default has occurred and is continuing, the Company
may pay cash dividends, provided that, after giving effect to
such cash dividends, the aggregate amount of payments by the
Company of cash dividends pursuant to this clause (ii) in respect
of its common stock made on and after the Effective Date shall
not exceed 25% of consolidated net income of the Company for the
period commencing with the fiscal quarter commencing immediately
prior to the Effective Date through the fiscal quarter ending
immediately prior to the date of proposed payment of such
dividend, but in no event more than $3,000,000 in any fiscal year
pursuant to this clause (ii)."
5. Amendments to Section 9. (a) Section 9(c) of the Credit
Agreement is hereby amended by deleting the existing Section 9(c) in its
entirety and inserting in lieu thereof the following new Section 9(c):
"(c) The Company shall default in the observance or
performance of any agreement contained in subsection 7.7(a), 7.9
or Section 8 of this Agreement or the Company shall default in
the observance or performance of any agreement contained in
subsections 3(a), (h) through (k) and (o) of the Company Security
Agreement or, with respect to any Subsidiary which becomes a
Credit Party after the Closing Date, the Company or such
Subsidiary shall default in the observance or performance of the
corresponding provisions of the pledge agreement, guarantee and
security agreement to which it is a party; or"
(b) Section 9(f) is hereby amended by deleting the existing
Section 9(f) in its entirety and inserting in lieu thereof the following new
Section 9(f):
"(f) (i) The Company or any of its Subsidiaries shall
commence any case, proceeding or other action (A) under any
existing or future law of any jurisdiction, domestic or foreign,
relating to bankruptcy, insolvency,
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reorganization or relief of debtors, seeking to have an order for
relief entered with respect to it, or seeking to adjudicate it as
bankrupt or insolvent, or seeking reorganization, arrangement,
adjustment, winding-up, liquidation, dissolution, composition or
other relief with respect to it or its debts or (B) seeking
appointment of a receiver, trustee, custodian or other similar
official for it or for all or any substantial part of its assets,
or the Company or any of its Subsidiaries shall make a general
assignment for the benefit of its creditors; or (ii) there shall
be commenced against the Company or any of its Subsidiaries any
case, proceeding or other action of a nature referred to in
clause (i) above which (A) results in the entry of an order for
relief or any such adjudication or appointment or (B) remains
undismissed, undischarged or unbonded for a period of 60 days; or
(iii) there shall be commenced against the Company or any of its
Subsidiaries any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or
similar process against all or any substantial part of its assets
which results in the entry of an order for any such relief which
shall not have been vacated, discharged, or stayed or bonded
pending appeal within 60 days from the entry thereof; or (iv) the
Company or any of its Subsidiaries shall take any action in
furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii),
or (iii) above; or (v) the Company or any of its Subsidiaries
shall generally not, or shall be unable to, or shall admit in
writing its inability to, pay its debts as they become due; or"
6. Amendment to Subsection 11.2. Subsection 11.2 is hereby
amended as follows:
The Company: Prime Service, Inc.
00000 Xxxx Xxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Chief Financial Officer
General Counsel
Telecopy: (000) 000-0000
With a copy to: Xxxxxx, Xxxx & Xxxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxx, Esq.
Telecopy: (000) 000-0000
7. Amendment to Subsection 11.6. Subsection 11.6(b) is
hereby amended by deleting the existing subsection 11.6(b) in its entirety and
inserting in lieu thereof the following new subsection 11.6(b):
"(b) Any Lender may, in the ordinary course of its
commercial banking or lending business and in accordance with
applicable law, at any time sell to one or more banks or other
entities ("Participants") participating interests
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in any Loan owing to such Lender, any participating interest in
the Letters of Credit of such Lender, any Note held by such
Lender, any Commitment of such Lender or any other interest of
such Lender hereunder. In the event of any such sale by a Lender
of participating interests to a Participant, such Lender's
obligations under this Agreement to the other parties to this
Agreement shall remain unchanged, such Lender shall remain solely
responsible for the performance thereof, such Lender shall remain
the holder of any such Note for all purposes under this Agreement
and the Company, the Administrative Agent and the Collateral
Agent shall continue to deal solely and directly with such Lender
in connection with such Lender's rights and obligations under
this Agreement. The Company agrees that if amounts outstanding
under this Agreement and the Notes are due and unpaid, or shall
have been declared or shall have become due and payable upon the
occurrence of an Event of Default, each Participant shall be
deemed to have the right of setoff in respect of its
participating interest in amounts owing under this Agreement and
any Note to the same extent as if the amount of its participating
interest were owing directly to it as a Lender under this
Agreement or any Note; provided, that such right of setoff shall
be subject to the obligation of such Participant to share with
the Lenders, and the Lenders agree to share with such
Participant, as provided in subsection 11.7. The Company also
agrees that each Participant shall be entitled to the benefits of
subsections 3.10, 4.11 and 4.12 with respect to its participation
in the Letters of Credit and in the Commitments and the Loans
outstanding from time to time as if it were a Lender; provided,
that no Participant shall be entitled to receive any greater
amount pursuant to any such subsection than the transferor Lender
would have been entitled to receive in respect of the amount of
the participation transferred by such transferor Lender to such
Participant had no such transfer occurred. Each Lender agrees
that the participation agreement pursuant to which any
Participant acquires its participating interest (or any other
document) may afford voting rights to such Participant, or any
right to instruct such Lender with respect to voting hereunder,
only with respect to matters requiring the consent of either all
of the Lenders hereunder or all of the Lenders holding the
relevant Term Loans or Revolving Credit Commitments subject to
such participation."
8. Consent to and Acknowledgment of the Merger. (a) The
Administrative Agent, the Collateral Agent and the Lenders parties hereto
hereby consent (i) to the Merger and (ii) to any amendment, modification or
supplement to the indenture for the Subordinated Debt to permit the Merger, to
provide for an assumption of the Subordinated Debt by Prime Service, Inc. and
to effect modifications incidental thereto.
(b) Prime Service, Inc. hereby assumes, and agrees to duly
perform, all of the obligations, covenants, duties and agreements of the
Company under the Credit Agreement and the other Credit Documents to which the
Company is a party, effective upon the Merger. Each of the parties hereto
acknowledges and agrees (i) that Prime Service, Inc. shall be and is the
Company for all purposes of the Credit Documents, effective upon the Merger,
(ii) that in
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connection with, and effective upon, the Merger, Prime Service, Inc. shall be
released from its obligations, covenants, duties and agreements under the
Holdings Guarantee and Holdings Pledge Agreement and the Holdings Guarantee and
Holdings Pledge Agreement shall be terminated and (iii) that, as a result of
the Merger, the capital stock of the "Company" shall not be subject to a lien
under the Pledge Agreements. The Company and Holdings hereby agree that they
will take such actions as may be reasonably requested by the Administrative
Agent with respect to the Collateral in connection with the Merger, including
the preparation, execution, delivery and filing or recording of appropriate UCC
financing statements or amendments thereto and mortgage instruments and the
obtaining of appropriate title policy endorsements.
9. Effectiveness. The amendments, consents and
acknowledgments provided for in this Amendment shall become effective as of the
date of the Merger, provided that, the Administrative Agent shall have received
counterparts hereof duly executed by the Company, Administrative Agent,
Collateral Agent and requisite Lenders. The Administrative Agent shall be
furnished with a copy of the certificate of merger.
10. Representations and Warranties. The Company hereby
represents and warrants that the representations and warranties contained in
the Credit Agreement (except those which expressly speak as of a certain date)
will be, after giving effect to this Amendment, true and correct in all
material respects, as if made on and as of the date hereof.
11. Continuing Effect of Credit Agreement. This Amendment
shall not be construed as a waiver or consent to any further or future action
on the part of the Company that would require a waiver or consent of the
Administrative Agent and/or the Lenders. Except as amended hereby, the
provisions of the Credit Agreement are and shall remain in full force and
effect.
12. Counterparts. This Amendment may be executed in
counterparts and all of the said counterparts taken together shall be deemed to
constitute one and the same instrument.
13. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
14. Expenses. The Company agrees to pay or reimburse the
Administrative Agent for all of its out-of-pocket costs and expenses incurred
in connection with the preparation, negotiation and execution of this
Amendment, including, without limitation, the fees and disbursements of counsel
to the Administrative Agent.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be executed and delivered by their duly authorized officers as of the date
first written above.
PRIMECO INC.
By: /s/ XXXXXX X. XXXXXXX
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Title: President
PRIME SERVICE, INC.
By: /s/ XXXXXX X. XXXXXXX
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Title: President
THE CHASE MANHATTAN BANK, as
Administrative Agent and a Lender
By: /s/ XXXXXXX X. XXXXXXXX
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Title: Managing Director
THE CIT GROUP/BUSINESS CREDIT, INC.,
as Collateral Agent and a Lender
By: /s/ XXXXXX X. XXXXXX
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Title: Vice President
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BANK OF TOKYO MITSUBISHI TRUST
COMPANY
By: /s/ XXXX X. XXXXXXX
------------------------------
Title: Vice President
BANKERS TRUST COMPANY
By: /s/ XXXX X. XXXXXXXX
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Title: Vice President
CAPTIVA FINANCE LTD.
By: /s/
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Title: Director
CERES FINANCE LTD.
By: /s/
------------------------------
Title: Director
CRESCENT/MACH I PARTNERS, L.P.
By: TCW ASSET MANAGEMENT COMPANY
Its Investment Manager
By: /s/
------------------------------
Title: Vice President
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THE FIRST NATIONAL BANK OF BOSTON
By: /s/
------------------------------
Title: Vice President
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA
By: /s/
------------------------------
Title: Vice President/Director
By:
------------------------------
Title:
FLEET BANK, N.A.
By: /s/
------------------------------
Title: Assistant Vice President
XXXXXX FINANCIAL, INC.
By: /s/ Xxxx Xxxxxxx
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Title: Assistant Vice President
THE LONG-TERM CREDIT BANK OF JAPAN,
LIMITED, NEW YORK BRANCH
By: /s/
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Title: Deputy General Manager
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XXXXXXX XXXXX PRIME RATE PORTFOLIO
BY: XXXXXXX XXXXX ASSET
MANAGEMENT, L.P., as
Investment Advisor
By: /s/ XXXXX XXXXXXXX
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Title: Authorized Signatory
XXXXXXX XXXXX SENIOR FLOATING RATE
FUND, INC.
By: /s/ XXXXX XXXXXXXX
------------------------------
Title: Authorized Signatory
PARIBAS CAPITAL FUNDING LLC
By:
------------------------------
Title:
RESTRUCTURED OBLIGATIONS BACKED BY
SENIOR ASSETS B.V.
By: Chancellor LGT Senior Secured
Management, Inc. as
Portfolio Advisor
By: /s/ XXXXXXXX X. XXXXXXX
------------------------------
Title: Assistant Vice President
By:
------------------------------
Title:
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THE SUMITOMO BANK, LIMITED
By: /s/ XXXX X. X'XXXXX
----------------------------------
Title: Vice President and Manager
By: /s/
----------------------------------
Title: Vice President
XXX XXXXXX AMERICAN CAPITAL PRIME
RATE INCOME TRUST
By: /s/ XXXXXXX X. XXXXXXX
----------------------------------
Title: Senior Vice President
and Director
