Exhibit 10.35
CONSENT AND AMENDMENT PERTAINING TO
SUBORDINATED NOTE PURCHASE AGREEMENT
This CONSENT AND AMENDMENT PERTAINING TO SUBORDINATED NOTE PURCHASE
AGREEMENT ("CONSENT") is dated as of November 2, 2005, and is entered into by
and among XXXXXXX SERVICES, INC., a Delaware corporation formerly known as
Xxxxxxx GRP, Inc. ("BORROWER"), and TA Subordinated Debt Fund, L.P., a Delaware
limited partnership ("TA DEBT FUND").
W I T N E S S E T H:
WHEREAS, Borrower and TA Debt Fund are parties to that certain
Subordinated Note Purchase Agreement, dated as of August 2, 2004, by and among
Borrower and the Noteholders and Guarantors named therein (as the same may be
from time to time amended, supplemented or otherwise modified, the "AGREEMENT";
capitalized terms not otherwise defined herein have the definitions provided
therefor in the Agreement);
WHEREAS, Borrower is in breach of Section 7.14.6 of the Agreement as
Borrower has made Capital Expenditures in excess of $5,000,000 during Fiscal
Year 2005, and such breach constitutes an Event of Default under Section 8.1.4
of the Agreement (the "CAPITAL EXPENDITURE EVENT OF DEFAULT");
WHEREAS, Borrower, Agent, and Senior Lenders are parties to the Senior
Credit Agreement;
WHEREAS, Borrower is in breach of Section 7.14.4 of the Senior Credit
Agreement as Borrower has made Capital Expenditures in excess of $3,900,000
during Fiscal Year 2005, and such breach constitutes an Event of Default under
Section 8.1.1 of the Senior Credit Agreement (the "SENIOR CAPITAL EXPENDITURE
EVENT OF DEFAULT");
WHEREAS, Borrower is in breach of Section 2.10.2(a)(iii) of the Senior
Credit Agreement as the Borrower has failed to make its scheduled mandatory
prepayment with respect to Excess Cash Flow for the Fiscal Year ending December
31, 2004, and such breach constitutes an Event of Default under Section 8.1.1 of
the Senior Credit Agreement (the "SENIOR PREPAYMENT EVENT OF DEFAULT");
WHEREAS, the occurrence of the Senior Capital Expenditure Event of
Default and the Senior Prepayment Event of Default each constitute an Event of
Default under Section 8.1.2 of the Agreement (collectively, the "EXISTING SENIOR
EVENTS OF DEFAULT");
WHEREAS, Borrower has requested that Agent and Senior Lenders waive
the Existing Senior Events of Default;
WHEREAS, Borrower has requested that TA Debt Fund waive the Capital
Expenditure Event of Default and the Existing Senior Events of Default
(collectively, the "EXISTING EVENTS OF DEFAULT");
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WHEREAS, Borrower has requested that Agent and Senior Lenders amend
and restate Section 7.14.4 of the Senior Credit Agreement to increase the
Capital Expenditures limitation for each Fiscal Year through December 31, 2009;
WHEREAS, Borrower has requested that TA Debt Fund amend and restate
Section 7.14.6 of the Agreement to provide a corresponding increase in the
Capital Expenditures limitation for each Fiscal Year through December 31, 2009
so as to preserve any "cushion" between the covenant levels contained in the
Senior Credit Agreement and the Agreement;
WHEREAS, TA Debt Fund holds greater than fifty percent (50%) in
principal amount of all Notes currently outstanding, thereby allowing TA Debt
Fund to consent to a waiver of an Event of Default pursuant to Section 8.2 of
the Agreement and an amendment of the Agreement pursuant to Section 9.2 thereof;
NOW THEREFORE, in consideration of the mutual conditions and
agreements set forth in the Agreement and this Consent, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. WAIVER. Subject to the satisfaction of the conditions set forth in
Section 3 below, and in reliance on the representations set forth in Section 4
below, the Existing Events of Default are hereby waived. This is a limited
waiver and shall not be deemed to constitute a waiver of any Event of Default
(other than the Existing Events of Default) or any future breach of the
Agreement or any of the other Subordinated Notes Documents or any other
requirement of any provision of the Agreement or any other Subordinated Notes
Documents.
2. AMENDMENT. Subject to the satisfaction of the conditions set forth
in Section 3 below, and in reliance on the representations set forth in Section
4 below, Section 7.14.6 is hereby amended and restated in its entirety, as
follows:
"7.14.6 CAPITAL EXPENDITURES.
Not permit the aggregate amount of all Capital Expenditures made by
Borrower and the Subsidiaries in any Fiscal Year to exceed the applicable amount
set forth below for such Fiscal Year:
Capital
Fiscal Year Ending Expenditures
------------------ ------------
12/31/05 15,675,629
12/31/06 17,875,000
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12/31/07 20,454,545
12/30/08 23,020,833
12/30/09 24,181,818
If Borrower does not utilize the entire amount of Capital Expenditures permitted
in any Fiscal Year, so long as no Default or Event of Default exists or would be
caused thereby, Borrower may carry forward to the immediately succeeding Fiscal
Year only, 50% of such unutilized amount (with Capital Expenditures made by
Borrower in such succeeding Fiscal Year applied last to such unutilized
amount)."
3. CONDITIONS TO EFFECTIVENESS. The effectiveness of this Consent is
subject to satisfaction of the following conditions precedent (unless
specifically waived in writing by TA Debt Fund):
(a) TA Debt Fund shall have received a copy of this Consent executed
by Borrower, together with a fully executed copy of the Consent and
Reaffirmation attached hereto as EXHIBIT A;
(b) TA Debt Fund shall have received a fully executed copy of the
Waiver and Amendment No. 1 to Senior Credit Agreement attached hereto as
EXHIBIT B;
(c) All proceedings taken in connection with the transactions
contemplated by this Consent and all documents, instruments and other legal
matters incident thereto shall be satisfactory to TA Debt Fund and its legal
counsel; and
(d) No Default or Event of Default shall have occurred and be
continuing.
4. REPRESENTATIONS AND WARRANTIES. To induce TA Debt Fund to enter
into this Consent, Borrower represents and warrants to TA Debt Fund that:
(a) the execution, delivery and performance of this Consent has been
duly authorized by all requisite corporate action on the part of Borrower and
that this Consent has been duly executed and delivered by Borrower;
(b) this Consent constitutes the legal, valid and binding obligation
of Borrower and is enforceable against Borrower in accordance with its terms;
(c) the execution and delivery by Borrower of this Consent does not
require the consent or approval of any Person, except such consents and
approvals as have been obtained;
(d) the representations and warranties of Borrower and each other Loan
Party set forth in the Agreement and the other Subordinated Notes Documents are
true and correct in all material respects with the same effect as if made on the
date hereof (except to the extent such representations and warranties are stated
to relate to a specific earlier date, in
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which case such representations and warranties are true and correct in all
material respects as of such earlier date); and
(e) no Default or Event of Default has occurred and is continuing.
5. SEVERABILITY. Any provision of this Consent held by a court of
competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Consent and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.
6. REFERENCES. Any reference to the Agreement contained in any
document, instrument or agreement executed in connection with the Agreement
shall be deemed to be a reference to the Agreement as modified by this Consent.
7. COUNTERPARTS. This Consent may be executed in one or more
counterparts, each of which shall constitute an original, but all of which taken
together shall be one and the same instrument.
8. RATIFICATION. The terms and provisions set forth in this Consent
shall modify and supersede all inconsistent terms and provisions of the
Agreement and shall not be deemed to be a consent to the modification or waiver
of any other term or condition of the Agreement. Except as expressly modified
and superseded by this Consent, the terms and provisions of the Agreement and
each of the other Subordinated Notes Documents are ratified and confirmed and
shall continue in full force and effect.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this Consent to be
duly executed under seal and delivered by their respective duly authorized
officers on the date first written above.
XXXXXXX SERVICES, INC.,
formerly known as Xxxxxxx GRP, Inc.
By: /s/ Xxxxxxxx X. Xxxxxx
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Title: Chief Financial Officer
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TA SUBORDINATED DEBT FUND, L.P.
By: TA Associates SDF LLC, its General Partner
By: TA Associates, Inc., its Manager
By: /s/ Xxxxx Xxxxxx
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Name: Xxxxx Xxxxxx
Its: Managing Director
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