CONSENT AND AMENDMENT LETTER
March 27, 1997
Fairfield Manufacturing Company, Inc.
U.S. Xxxxx 00 Xxxxx
Xxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxx Xxxx
Chief Financial Officer
Ladies and Gentlemen:
A. Preamble. We refer to that certain Loan Agreement, dated as of
July 7, 1993 (as amended, the "Loan Agreement"), between you and the
undersigned, General Electric Capital Corporation, as Agent and sole Lender.
Capitalized terms used herein and not defined herein have the meanings assigned
to them in the Loan Agreement.
You have advised us that pursuant to a Merger Agreement ("Merger
Agreement") to be entered into between you and First Colony Farms, Inc., a
Delaware corporation ("First Colony") and a Certificate of Merger ("Certificate
of Merger") to be filed with the Secretary of State of Delaware, you and First
Colony wish to merge with you being the surviving corporation of the Merger (the
"Merger") (the Merger Agreement and the Certificate of Merger collectively, the
"Merger Documents").
B. Consent. Without our prior written consent as sole Lender, the
Merger would be prohibited by Section 6.2 of the Loan Agreement and would result
in Events of Default under Sections 9.1(c) and 9.1(n) thereof. We hereby consent
to the consummation of the Merger and agree that Events of Default shall not be
deemed to exist under Sections 9.1(c) and 9.1(n) of the Loan Agreement solely as
a result of the consummation of the Merger to the satisfaction, on or prior
to April 15, 1997, of the following conditions precedent:
1. You shall have provided to us evidence satisfactory to us showing
that prior to the consummation of the Merger First Colony has no
liabilities or indebtedness and that immediately following
consummation of the Merger you shall not have any liabilities or
indebtedness (including contingent liabilities) in excess of your
present liabilities and indebtedness, and one of your Senior Officers
shall have so certified to us in writing.
2. You shall have provided to us (a) copies of all certificates and
opinions required to be delivered in connection with the Merger
pursuant to the Senior Subordinated Note Indenture and the
Certificate of Designation pertaining to the New Preferred Stock, all
of which shall be in form and substance satisfactory to us; (b) a
certificate of your chief financial officer covering the matters set
forth in the officer's certificate to be delivered to the trustee
under the Senior Subordinated Note Indenture pursuant to Section
801(a) of the Senior Subordinated Note Indenture and (c) an opinion
of your counsel that the Merger does not violate the terms of the
Senior Subordinated Note Indenture or the Certificates of Designation
pertaining to the New Preferred Stock, or a reliance letter as to the
opinions to that effect that your counsel will deliver under the
Senior Subordinated Note Indenture and the Certificate of
Designation, all of which shall be in form and substance satisfactory
to us.
3. You shall have obtained all consents or approvals of any Governmental
Agency, party to any Contractual Obligation with you or other person
required in connection with the consummation of the Merger (other
than our consents and agreements set forth herein), and one of your
Senior Officers shall have so certified to us.
4. After giving effect to the consummation of the Merger and the
consents and agreements set forth herein, no default or event of
default shall exist under any of your Contractual Obligations, and
one of your Senior Officers shall have so certified to us.
5. The Merger Documents shall be in form and substance satisfactory to
us.
6. You shall have delivered to us copies of the resolutions of your and
First Colony's respective boards of directors and shareholders
approving the Merger, certified to be true, correct and complete by
your and First Colony's respective Secretaries or assistant
secretaries.
7. At the time of consummation of the Merger and after giving effect
thereto and to the consents and agreements set forth herein, no
Default or Event of Default shall have occurred and be continuing.
The consent set forth herein shall become void and of no further
force and effect on April 15, 1997 unless on or prior to such date each of the
conditions precedent set forth above has been satisfied and the Merger has been
consummated.
C. Amendment. Effective upon satisfaction of all of the conditions
precedent set forth in Section B above and consummation of the Merger, the Loan
Agreement shall be deemed to be amended in the following manner:
The definition of Consolidated Fixed Charges set forth in Section 1.1
of the Loan Agreement shall be amended by adding at the end of clause
(d) thereof (before the word "plus") a comma followed by the phrase
"whether or not characterized as a dividend under GAAP".
D. Covenants. In order to induce the undersigned to consent to the
Merger, you hereby agree that (a) within fifteen (15) days after the date
hereof, Lancer shall pledge
and deliver to us, pursuant to the Lancer Pledge Agreement all shares of your
common stock issued to it pursuant to Section 1.5(a) of the Merger Agreement,
accompanied by stock powers executed in blank and (b) within ten (10) days after
we so request, you shall execute and deliver to us such amendments to UCC
financing statements previously delivered by you and additional UCC financing
statements as we shall deem necessary or appropriate to evidence the continued
perfection of our liens on the Collateral.
E. Miscellaneous. The consent set forth herein is limited to the
matters expressly set forth herein and shall not be deemed to be a consent to
any other matter prohibited by the Loan Agreement or a waiver of any other
provision of the Loan Agreement. As amended pursuant to Section C hereof, all
provisions of the Loan Agreement shall continue in full force and effect.
Please countersign in the space provided below to acknowledge your
concurrence with the foregoing.
Sincerely yours,
General Electric Capital
Corporation,
as Agent and Lender
By: /s/ XXXXXX X. XXXXX
-----------------------------
Xxxxxx X. Xxxxx
Senior Vice President-
Commercial Finance
Acknowledged and agreed:
Fairfield Manufacturing
Company, Inc.
By: /s/ XXXXXXX X. XXXX
---------------------------
Xxxxxxx X. Xxxx
Vice President-Finance
