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EXHIBIT 10.2
SUPPORT AGREEMENT
THIS SUPPORT AGREEMENT (this "Agreement") is entered into as of June ___,
2000, by and among the financial institutions executing this Agreement (such
financial institutions, and their successors and assigns, are collectively
referred to herein as the "Lenders"), WESTAR CAPITAL II LLC, a Delaware limited
liability company ("Westar LLC"), WESTAR CAPITAL, L.P., a California limited
partnership ("Westar L.P.") (Westar LLC and Westar L.P. being referred to herein
separately as a "Payor" and collectively the "Payors") and XXXXXXXX
MANUFACTURING COMPANY, for the benefit of BANK OF AMERICA, N.A. (formerly known
as NationsBank, N.A., successor by merger to NationsBank of Texas, N.A.), as
Administrative Agent for the Lenders (the "Administrative Agent") to the extent
and in the manner provided for in the Credit Agreement (defined below and herein
so called).
BACKGROUND:
X. Xxxxxxxx Manufacturing Company, a Texas corporation (the "Borrower"), has
entered into a Credit Agreement, dated as of September 19, 1997, as amended by
that certain First Amendment to Credit Agreement, dated as of February 10, 1999,
that certain Second Amendment to Credit Agreement, dated as of May 14, 1999,
that certain Third Amendment to Credit Agreement, dated as of August 12, 1999,
and that certain Fourth Amendment to Credit Agreement, dated as of October 12,
1999, among the Lenders party thereto and the Administrative Agent for the
Lenders (said Credit Agreement, as it may be amended, supplemented or otherwise
modified from time to time, being the "Credit Agreement", and capitalized terms
not defined herein but defined therein being used herein as therein defined);
and
B. The Payors, directly or indirectly, and their affiliates own beneficially and
of record more than 86% of the Voting Stock of the Borrower; and
C. The Borrower has requested that the Administrative Agent and the Lenders make
certain changes to the Credit Agreement pursuant to that certain Fifth Amendment
to Credit Agreement, dated as of the date herewith (the "Fifth Amendment"); and
D. It is a condition precedent to the effectiveness of the Fifth Amendment that
the Payors shall have executed and delivered this Agreement for the benefit of
the Administrative Agent and the Lenders; and
NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent and the Lenders to enter into the Fifth Amendment, each
Payor hereby agrees as follows:
SECTION 1. Payment. Each Payor hereby jointly
and severally agrees to pay to the Borrower, (a) no later than 90 days after the
end of the fiscal year ending June 30, 2000, an amount that would cause EBITDA
to be no less than $22,754,000 for the three consecutive fiscal quarters
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ending June 30, 2000, and (b) no later than (i) 60 days after the end of the
fiscal quarters ending on September 30, 2000, December 31, 2000, and March 31,
2001, and (ii) 90 days after the end of the fiscal quarter ending on June 30,
2001, an amount which if added to the remainder of (A) EBITDA minus (B)
Maintenance Capital Expenditures minus (C) scheduled payments of principal on
indebtedness for borrowed money and Capitalized Leases (excluding any payment
under the Temporary Credit Facility or any prepayments pursuant to Section 2.5
of the Credit Agreement) minus (D) payments of cash interest on Indebtedness
(but not including any amortized closing fees or closing costs), as calculated
for the previous twelve months as of the last day of the fiscal quarter in
question, would make the remainder of such calculation greater than zero (such
amount, in each case, being the "Payment Obligation").
SECTION 2. Payment Absolute. The Payors will pay the Payment Obligation as
provided herein without set-off or counterclaim, and regardless of any
Applicable Law now or hereafter in effect in any jurisdiction affecting any of
such terms or the rights of the Lenders with respect thereto. The liability of
each Payor under this Agreement shall be joint and several, absolute and
unconditional to the extent permitted by Applicable Law irrespective of:
(a) any lack of validity or enforceability of any provision of any Loan
Document or any other agreement or instrument relating to any Loan
Document, or avoidance or subordination of any of the Obligations;
(b) any change in the time, manner or place of payment of, or in any
other term of, or any increase in the amount of, all or any of the
Obligations, or any other amendment or waiver of any term of, or any
consent to departure from any requirement of, the Credit Agreement, the
Notes or any of the other Loan Documents;
(c) any exchange, release or non-perfection of any Lien on any
collateral for, or any release or amendment or waiver of any term of
any other guaranty of, or any consent to departure from any requirement
of any other guaranty of, all or any of the Obligations;
(d) the absence of any attempt to collect any of the Obligations from
the Borrower or from any other Person or any other action to enforce
the same or the election of any remedy by any of the Lenders;
(e) any waiver, consent, extension, forbearance or granting of any
indulgence by any of the Lenders with respect to any provision of any
Loan Document;
(f) the election by any of the Lenders in any proceeding under the
Bankruptcy Code of the application of section 1111(b)(2) of the
Bankruptcy Code;
(g) any borrowing or grant of a security interest by the Borrower, as
debtor-in-possession, under section 364 of the Bankruptcy Code; or
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(h) any other circumstance which might otherwise constitute a legal or
equitable discharge or defense of a borrower or a guarantor other than
payment or performance of the Obligations.
SECTION 3. Representations and Warranties of Westar LLC. Westar LLC hereby
represents and warrants to the Administrative Agent and the Lenders as follows:
(a) Westar LLC is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Delaware,
and except where failure to do so could not reasonably be expected to
have a material adverse effect on (i) the business, financial
condition, results of operation or prospects of Westar LLC, (ii) the
validity or enforceability of this Agreement or (iii) the rights or
remedies of the Lenders or the Administrative Agent under this
Agreement (collectively, "Material Adverse Effect"), (v) is duly
qualified as a foreign limited liability company and in good standing
under the laws of each jurisdiction in which such qualification is
required, except where the failure to do so would not have a Material
Adverse Effect, (w) has all requisite legal power and authority and the
legal right to own, pledge, mortgage and operate its properties, to
lease the property it operates under the lease and to conduct its
business as now or currently proposed to be conducted, (x) is in
compliance with its certificate of limited liability company and other
governance documents, (y) is in compliance with all other applicable
requirements of Law, except where the failure to do so would not have a
Material Adverse Effect, and (z) has all necessary licenses, permits,
consents or approvals from or by, has made all necessary filings with,
and has given all necessary notices to, each Tribunal having
jurisdiction, to the extent required for such ownership, operation and
conduct.
(b) The execution, delivery and performance by Westar LLC of this
Agreement:
(i) are within its limited liability company powers;
(i) have been duly authorized by all necessary limited
liability company action, including, without limitation, the
consent of members when required; and
(iii) do not and will not (A) contravene its limited liability
company agreement or other governance documents, (B) violate
any other applicable requirement of Law (including, without
limitation, Regulations T, U and X of the Board of Governors
of the Federal Reserve System), or any order or decree of any
Tribunal or arbitrator except to the extent that any such
violation could not reasonably be expected to have a Material
Adverse Effect, (C) conflict with or result in the breach of,
or constitute a default under, or result in or permit the
termination or acceleration of, any of its agreements, the
result of which could reasonably be expected to have a
Material Adverse Effect, (D) result in the creation or
imposition of any Lien (other than a Permitted Lien) upon any
of its property other than those in favor of the
Administrative Agent on behalf of and for the
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ratable benefit of the Secured Parties, or (E) require the
consent of, authorization by, approval of, notice to, or
filing or registration with, any Tribunal or any other Person,
except to the extent that the failure to obtain such consent
or approval could not reasonably be expected to have a
Material Adverse Effect.
(c) This Agreement has been duly executed and delivered by Westar LLC
and is the legal, valid and binding obligation of Westar LLC
enforceable against it in accordance with its terms, subject to Debtor
Relief Laws (insofar as any such law relates to the bankruptcy,
insolvency or similar event of Westar LLC) and general principles of
equity.
(d) The performance by Westar LLC under this Agreement is not
restrained or enjoined (either temporarily, preliminarily or
permanently) and no material adverse conditions have been imposed by
any Tribunal or arbitrator upon any of the foregoing transactions.
(e) Westar LLC is Solvent.
SECTION 4. Representations and Warranties of Westar L.P. Westar L.P. hereby
represents and warrants to the Administrative Agent and the Lenders as follows:
(a) Westar L.P. is a limited partnership duly organized, validly
existing and in good standing under the laws of the State of
California, and except where failure to do so could not reasonably be
expected to have a material adverse effect on (i) the business,
financial condition, results of operation or prospects of Westar L.P.,
(ii) the validity or enforceability of this Agreement or (iii) the
rights or remedies of the Lenders or the Administrative Agent under
this Agreement (collectively, "Material Adverse Effect"), (v) is duly
qualified as a foreign limited partnership and in good standing under
the laws of each jurisdiction in which such qualification is required,
except where the failure to do so would not have a Material Adverse
Effect, (w) has all requisite legal power and authority and the legal
right to own, pledge, mortgage and operate its properties, to lease the
property it operates under the lease and to conduct its business as now
or currently proposed to be conducted, (x) is in compliance with its
certificate of limited liability company and other governance
documents, (y) is in compliance with all other applicable requirements
of Law, except where the failure to do so would not have a Material
Adverse Effect, and (z) has all necessary licenses, permits, consents
or approvals from or by, has made all necessary filings with, and has
given all necessary notices to, each Tribunal having jurisdiction, to
the extent required for such ownership, operation and conduct.
(b) The execution, delivery and performance by Westar L.P. of this
Agreement:
(i) are within its partnership powers;
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(ii) have been duly authorized by all necessary partnership
action, including, without limitation, the consent of partners
when required; and
(iii) do not and will not (A) contravene its limited
partnership agreement or other governance documents, (B)
violate any other applicable requirement of Law (including,
without limitation, Regulations T, U and X of the Board of
Governors of the Federal Reserve System), or any order or
decree of any Tribunal or arbitrator except to the extent that
any such violation could not reasonably be expected to have a
Material Adverse Effect, (C) conflict with or result in the
breach of, or constitute a default under, or result in or
permit the termination or acceleration of, any of its
agreements, the result of which could reasonably be expected
to have a Material Adverse Effect, (D) result in the creation
or imposition of any Lien (other than a Permitted Lien) upon
any of its property other than those in favor of the
Administrative Agent on behalf of and for the ratable benefit
of the Secured Parties, or (E) require the consent of,
authorization by, approval of, notice to, or filing or
registration with, any Tribunal or any other Person, except to
the extent that the failure to obtain such consent or approval
could not reasonably be expected to have a Material Adverse
Effect.
(c) This Agreement has been duly executed and delivered by Westar L.P.
and is the legal, valid and binding obligation of Westar L.P.
enforceable against it in accordance with its terms, subject to Debtor
Relief Laws (insofar as any such law relates to the bankruptcy,
insolvency or similar event of Westar L.P.) and general principles of
equity.
(d) The performance by Westar L.P. under this Agreement is not
restrained or enjoined (either temporarily, preliminarily or
permanently) and no material adverse conditions have been imposed by
any Tribunal or arbitrator upon any of the foregoing transactions.
(e) Westar L.P. is Solvent.
SECTION 5. Amendments, Etc. No amendment or waiver of any provision of this
Agreement nor consent to any departure by each Payor herefrom shall in any event
be effective unless the same shall be in writing, approved by the Determining
Lenders and signed by the Administrative Agent, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given.
SECTION 6. Addresses for Notices. All notices and other communications provided
for hereunder shall be effectuated in the manner provided for in Section 11.1 of
the Credit Agreement, provided that if a notice or communication hereunder is
sent to either Payor, said notice shall be addressed to such Payor, in care of
the Borrower.
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SECTION 7. No Waiver; Remedies.
(a) No failure on the part of the Administrative Agent or any Lender to
exercise, and no delay in exercising, any right hereunder shall operate
as a waiver thereof; nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by Applicable
Law.
(b) Any determination by a court of competent jurisdiction of the
amount of any principal and/or interest or other amount constituting
any of the Payment Obligation shall be conclusive and binding on the
Payors irrespective of whether either Payor was a party to the suit or
action in which such determination was made.
SECTION 8. Successors and Assigns. This Agreement shall (a) be binding upon each
Payor, their successors and assigns, and (b) inure to the benefit of and be
enforceable by the Administrative Agent and the Lenders and their respective
successors, transferees, and permitted assigns. Neither Payor may assign any of
its obligations under this Agreement without first obtaining the written consent
of the Lenders and Administrative Agent.
SECTION 9. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND BE CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF TEXAS (WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAWS) AND THE APPLICABLE FEDERAL LAWS OF
THE UNITED STATES OF AMERICA.
SECTION 10. Submission to Jurisdiction; Jury Trial.
(a) Any legal action or proceeding with respect to this Agreement or
any document related thereto may be brought in the United States
Federal or State Courts sitting in Dallas, Texas, and, each of the
Payors, the Administrative Agent and the Lenders hereby accepts for
itself and in respect of its property, generally and unconditionally,
the jurisdiction of the aforesaid courts. Each Payor, the
Administrative Agent and the Lenders hereby irrevocably waives any
objection, including, without limitation, any objection to the laying
of venue or based on the grounds of forum non conveniens, which it may
now or hereafter have to the bringing of any such action or proceeding
in such respective jurisdictions.
(b) Nothing contained in this Section 10 shall affect the right of
either Payor or the Administrative Agent or any Lender to serve process
in any other manner permitted by law or commence legal proceedings or
otherwise proceed against any other party or its property in any other
jurisdiction.
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(c) THE ADMINISTRATIVE AGENT, EACH PAYOR AND THE LENDERS EACH, TO THE
MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, WAIVES ANY RIGHT IT MAY
HAVE TO TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON OR ARISING
OUT OF THIS GUARANTY OR ANY OTHER LOAN DOCUMENT.
SECTION 11. Section Titles. The Section titles contained in this Agreement are
and shall be without substantive meaning or content of any kind whatsoever and
are not a part of this Agreement.
SECTION 12. Execution in Counterparts. This 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 taken together shall constitute one and the same Agreement.
SECTION 13. No Recourse. Notwithstanding anything herein to the contrary, the
obligations of the Payors shall be without recourse to any of its members,
partners or other holders of equity in the Payors and shall be limited to the
assets of Payors.
SECTION 14. Miscellaneous. All references herein to the Borrower or to either
Payor shall include their respective successors and assigns, including, without
limitation, a receiver, trustee or debtor-in-possession of or for the Borrower
or such Payor. All references to the singular shall be deemed to include the
plural where the context so requires.
SECTION 15. Subrogation. Notwithstanding any reference to subrogation contained
herein to the contrary, until the Release Date, each Payor hereby irrevocably
waives any claim or other rights which it may have or hereafter acquire against
the Borrower that arise from the existence, payment, performance or enforcement
of such Payor's obligations under this Agreement, including, without limitation,
any right of subrogation, reimbursement, exoneration, contribution,
indemnification, any right to participate in any claim or remedy of any Lender
against the Borrower or any collateral which any Lender now has or hereafter
acquires, whether or not such claim, remedy or right arises in equity, or under
contract, statutes or common law, including without limitation, the right to
take or receive from the Borrower, directly or indirectly, in cash or other
property or by set-off or in any other manner, payment or security on account of
such claim or other rights. If any amount shall be paid to either Payor in
violation of the preceding sentence and the Payment Obligation shall not have
been paid in full, such amount shall be deemed to have been paid to such Payor
for the benefit of, and held in trust for the benefit of, the Lenders, and shall
forthwith be paid to the Borrower to be credited and applied upon the Payment
Obligation, whether matured or unmatured. Each Payor acknowledges that it will
receive direct and indirect benefits from the financing arrangements
contemplated by the Credit Agreement and that the waiver set forth in this
Section 15 is knowingly made in contemplation of such benefits.
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SECTION 16. Payor Insolvency. Should either Payor voluntarily seek, consent to,
or acquiesce in the benefits of any Debtor Relief Law or become a party to or be
made the subject of any proceeding provided for by any Debtor Relief Law (other
than as a creditor or claimant) , then any Payment Obligation that has accrued
shall be a fully-matured, due, and payable obligation of such Payor, payable in
full by such Payor without demand, the amount of which shall be such Payment
Obligation as calculated in the first sentence of Section 1 hereof.
SECTION 17. Rate Provision. It is not the intention of any Lender to make an
agreement violative of the laws of any applicable jurisdiction relating to
usury. Regardless of any provision in this Agreement, no Lender shall ever be
entitled to contract, charge, receive, collect or apply, as interest on the
Payment Obligation, any amount in excess of the Highest Lawful Rate.
SECTION 18. Severability. Any provision of this Agreement which is for any
reason prohibited or found or held invalid or unenforceable by any court or
governmental agency shall be ineffective to the extent of such prohibition or
invalidity or unenforceability, without invalidating the remaining provisions
hereof in such jurisdiction or affecting the validity or enforceability of such
provision in any other jurisdiction.
SECTION 19. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which shall
together constitute one and the same agreement.
SECTION 20. ENTIRE AGREEMENT. THIS AGREEMENT REPRESENTS THE FINAL AGREEMENT
BETWEEN THE PARTIES REGARDING THE SUBJECT MATTER HEREIN AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
BETWEEN THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
SECTION 21. TIME OF ESSENCE. Time is important to all parties hereto in the
performance of this Agreement and they have agreed that strict compliance is
required as to any date set forth herein.
SECTION 22. SPECIFIC PERFORMANCE. The parties hereto agree that damages to the
Administrative Agent and the Lenders caused by non-payment of the Payment
Obligations cannot be measured monetarily. In the event that the Payors shall
default in their responsibilities to make the Payment Obligations, the
Administrative Agent shall have the right to demand specific performance of the
Payment Obligation, and the Payors agree to fulfill such responsibility
immediately upon such demand.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
the date first above written.
WESTAR CAPITAL II LLC
By: Westar Capital Associates II, LLC,
its manager and member
By: Xxxx X. Xxxxx, its managing member
WESTAR CAPITAL L.P.
By: Westar Capital Associates, its
general partner
By: Xxxx X. Xxxxx, its general partner
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XXXXXXXX MANUFACTURING COMPANY
By:
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Name:
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Title:
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ACKNOWLEDGED AND AGREED:
BANK OF AMERICA, N.A., as Administrative Agent, and as a Lender
By:
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Name:
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Title:
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