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EXHIBIT 10.17
TBM HOLDINGS, INC.
LONG REACH, INC.
OMNIBUS AMENDMENT
OMNIBUS AMENDMENT dated as of March 15, 2001 among (i) TBM HOLDINGS, INC., a
Florida corporation (the "PARENT"), (ii) LONG REACH, INC. (formerly TBM
Acquisition I, Inc.), a Delaware corporation and wholly-owned subsidiary of the
Parent (the "COMPANY"), and (iii) Xxxxx Associates Incorporated, as agent for
the holders from time to time of the Subordinated Notes referred to herein (the
"SUBORDINATED NOTEHOLDERS").
R E C I T A L S
WHEREAS, the Parent, the Company, the Subordinated Noteholders
and certain other persons are parties to the Amended and Restated Agreement and
Plan of Merger dated as of February 4, 2000 (as amended from time to time,
including pursuant hereto, the "MERGER AGREEMENT"), pursuant to which, among
other things, Long Reach Holdings, Inc., a Delaware corporation (the "SELLER")
was merged with and into the Company on February 23, 2000, with the Company
being the surviving corporation;
WHEREAS, the Company issued Subordinated Notes to the Subordinated
Noteholders pursuant to the Merger Agreement; and
WHEREAS, the Parent desires to issue and sell certain preferred stock
on the terms set forth in the letter agreement dated as of February 26, 2001
(the "PREFERRED STOCK"), and some or all of the Subordinated Noteholders are
willing to purchase, or to cause an affiliate to purchase, up to $1,500,000 of
such Preferred Stock, on condition, among others, that the Parent and the
Company enter into this Omnibus Amendment and deliver the documents contemplated
hereby;
NOW, THEREFORE, in consideration of the premises, each of the Parent
and the Company agrees with the Subordinated Noteholders as follows:
1. DEFINITIONS. (a) Capitalized terms used in this Omnibus Amendment
and not otherwise defined herein shall have the meanings given thereto in the
Note Documents.
(b) The following terms used in this Omnibus Amendment shall have the
meanings indicated:
"GUARANTY" shall mean the Guaranty dated as of February 18, 2000 by the
Parent in favor of Xxxxx Associates Incorporated, as agent for the Subordinated
Noteholders, as the same may be amended from time to time, including pursuant
hereto.
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"NOTE DOCUMENTS" shall mean, collectively, the Merger Agreement, the
Subordinated Notes, the Guaranty and the Security Documents.
"SECURITY DOCUMENTS") shall mean, collectively, (i) the Security
Agreement dated as of April 20, 1999, as amended from time to time (including
pursuant to Amendment No. 1 dated as of February 23, 2000 and pursuant hereto),
by the Company (as successor by merger to the Seller) in favor of Xxxxx
Associates Incorporated, as agent for the Subordinated Noteholders, and (ii) the
Subordinated Deed of Trust, Security Agreement and Assignment of Rents and
Leases dated as of April 20, 1999, as amended from time to time (including
pursuant to the Modification of Deed of Trust dated as of February 23, 2000 and
pursuant hereto), by the Company (as successor by merger to the Seller) in favor
of Xxxxx Associates Incorporated, as agent for the Subordinated Noteholders, in
respect of the Company's property located at 00000 Xxxxxx Xxxxx, Xxxxxxx, Xxxxx
00000.
"SHAREHOLDERS" and "SUBSIDIARIES" shall have the respective meanings
given thereto in the Merger Agreement.
"SUBORDINATED NOTES" shall mean the "Subordinated Notes" referred to
in the Merger Agreement, as amended from time to time, including pursuant
hereto.
2. EFFECTIVE DATE. This Omnibus Amendment shall be effective as of the
date of the issuance and sale of Preferred Stock to any of the
Subordinated Noteholders or any of their affiliates (the "EFFECTIVE DATE").
3. AMENDMENT OF NOTE DOCUMENTS. (a) Notwithstanding anything
to the contrary contained in any of the Note Documents, all references in the
Subordinated Notes (and in any description of the terms thereof contained in the
Merger Agreement or any other Note Document) to (i) an interest rate of six
percent (6%) per annum are hereby changed to ten percent (10%) per annum, and
(ii) an interest rate per annum equal to the Senior Debt Rate plus two percent
(2%) are hereby changed to the higher of such rate and ten percent (10%) per
annum. Such changes shall be deemed to have been made as of the date of original
issuance of the Subordinated Notes.
(b) In order to evidence the amendment to the Subordinated Notes
effected by paragraph (a) above, concurrently with the execution and delivery
hereof, the Company will execute and deliver to each Subordinated Noteholder an
Amendment to Subordinated Note substantially in the form of EXHIBIT A hereto,
provided that the Subordinated Notes shall be deemed amended hereby regardless
of whether or not such a separate Amendment is executed and delivered.
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4. CONFIRMATION OF GUARANTY. The Parent hereby confirms that the
Guaranty remains in full force and effect, and that the "Obligations" guaranteed
thereby include without limitation the Subordinated Notes as amended hereby.
5. CONFIRMATION OF SECURITY DOCUMENTS. The Company hereby confirms that
each of the Security Documents remains in full force and effect, and that the
obligations secured by each such Security Document (whether referred to therein
as "Obligations", "Indebtedness" or any other term) include without limitation
the Subordinated Notes as amended hereby.
6. CERTAIN CLAIMS UNDER THE MERGER AGREEMENT. (a) Notwithstanding
anything to the contrary contained in the Merger Agreement, from and after the
Effective Date, none of the Subordinated Noteholders or the Shareholders shall
have any liability under Section 9.2(a) or any other provision of the Merger
Agreement, except in respect of:
(i) the inaccuracy in or breach of any of the representations
and warranties of the Seller and/or the Shareholders contained in the
following Sections of the Merger Agreement: (x) Section 3.29
(ENVIRONMENTAL) (as modified by Section 6(b) below), which
representations and warranties shall survive until February 23, 2002,
(y) Sections 3.1 (ORGANIZATION; POWERS; APPROVALS), 3.2 (AUTHORIZATION
OF TRANSACTION; NONCONTRAVENTION), 3.3 (CAPITALIZATION; SHARES), 4.1
(OWNERSHIP OF SHARES) and 4.2 (POWER AND AUTHORITY), which
representations and warranties shall survive for the full period of the
applicable statute of limitations, and (z) Sections 3.6 (TAX RETURNS)
and 3.12 (ERISA), which representations and warranties shall survive
for the full period of the applicable statute of limitation and for a
period of 180 days thereafter;
(ii) claims, if any, which are based upon fraud by the Seller, the
Subsidiaries or the Shareholders, which shall survive for the full period
of the applicable statute of limitations, until finally resolved and
satisfied in full;
(iii) any breach or nonperformance of any of the covenants
made by the Subordinated Noteholders or the Shareholders in the Merger
Agreement to the extent (and only to the extent) that such covenants
provide for continuing performance by them after the Effective Date,
including without limitation Section 6.4 (FURTHER ASSURANCES) of the
Merger Agreement;
(iv) any claim for indemnification otherwise available against the
Subordinated Noteholders or the Shareholders under the provisions of
Sections 9.2(a) and 9.1 of the Merger Agreement (as in effect prior to
the Effective Date) in respect of (x) the Xxxxxx Lime & Cement accidental
death incident from May, 1999 and the IRS audit of the Seller's tax return
for the period ended June 30, 1998 (which matters are referred to in the
second paragraph of Section 9.2(c) of the Merger Agreement), and (y)
Stakeholder 2.2 Claims (as defined in the Merger Agreement); and
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(v) any claim for indemnification otherwise available against the
Subordinated Noteholders or the Shareholders under the provisions of
Sections 9.2(a) and 9.1 of the Merger Agreement (as in effect prior to the
Effective Date) in respect of the specific claims, and in the specific
amounts, listed on SCHEDULE I hereto.
(b) In order to induce the Subordinated Noteholders' to agree that the
representations and warranties contained in Section 3.29 (ENVIRONMENTAL) of the
Merger Agreement shall survive until February 23, 2002, the Company and the
Parent hereby (i) represent to the Subordinated Noteholders that they are not
aware as of the date hereof of any inaccuracy in or breach of any of the
representations or warranties contained such Section 3.29, or of any condition
or circumstance which could lead to any such inaccuracy or breach, and (ii)
agree that the Subordinated Noteholders shall have no liability under Section
9.2(a) or any other provision of the Merger Agreement in respect of any
inaccuracy in or breach of any of the representations or warranties contained
such Section 3.29 unless either: (x) the cost to the Company of remedying one or
more conditions which are the subject of such inaccuracy or breach exceeds
$500,000 (the "AGGREGATE MINIMUM"), in which event the Subordinated Noteholders
shall be liable for all Losses (as defined in the Merger Agreement) relating to
such condition or conditions, including the Aggregate Minimum, but only to the
extent the Subordinated Noteholders would otherwise be liable for such Losses
under the provisions of Section 9.2 of the Merger Agreement, or (y) the cost to
the Company of remedying any single condition which is the subject of such
inaccuracy or breach exceeds $250,000 (the "INDIVIDUAL MINIMUM"), in which event
the Subordinated Noteholders shall be liable for all Losses relating to such
condition, including the Individual Minimum, but only to the extent the
Subordinated Noteholders would otherwise be liable for such Losses under the
provisions of Section 9.2 of the Merger Agreement.
(c) In furtherance of the agreement of the parties contained
in paragraph (a) above, concurrently with the execution and delivery hereof, the
Parent and the Company agree to execute and deliver a Release substantially in
the form of EXHIBIT B hereto.
7. MISCELLANEOUS.
7.1 RATIFICATION AND CONFIRMATION OF NOTE DOCUMENTS. Except as herein
expressly amended, the Note Documents are each ratified and confirmed in all
respects and shall remain in full force and effect in accordance with their
respective terms.
7.2 REFERENCES. Any reference in the Note Documents or in any other
documents to any document comprising one of the Note Documents shall mean the
Note Documents as amended hereby and as such Note Document may in the future be
amended, restated, supplemented or modified from time to time.
7.3 EXPENSES. The Parent and the Company shall pay, on demand, all
costs and expenses arising from the negotiation and documentation of this
Omnibus Agreement and
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related documents, including the fees and expenses of counsel for the
Subordinated Noteholders and all other out-of-pocket costs and
expenses incurred by the Subordinated Noteholders in connection with the
negotiation and documentation of this Omnibus Amendment and related documents.
7.4 GOVERNING LAW. This Omnibus Amendment shall be construed in
accordance with and governed by the laws of the State of Connecticut.
7.5 COUNTERPARTS; EFFECTIVENESS. This Omnibus Amendment may be signed
in any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
7.6 CAPTIONS. The captions in this Omnibus Amendment are included
for convenience of reference only, do not constitute a part hereof and shall
be disregarded in the interpretation or construction hereof.
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IN WITNESS WHEREOF, the Company and the Subordinated
Noteholders have duly executed this Omnibus Amendment as of the day and year
first above written.
HOLDING: AGENT FOR THE SUBORDINATED NOTEHOLDERS:
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TBM HOLDINGS, INC. XXXXX ASSOCIATES INCORPORATED
By: /s/ Xxxxxxx X. Xxxxxxxx By: /s/ Xxxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxxxxx, President Xxxxxxxx X. Xxxxx, President
COMPANY:
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LONG REACH, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx, Secretary
ATTACHMENTS: Exhibit A - Form of Amendment to Subordinated Note
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Exhibit B - Form of Release
Schedule I - Potential Claims not Released
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