Exhibit 10.6
FIRST AMENDMENT TO CREDIT AGREEMENT
U.S. RUBBER RECLAIMING, INC., an Indiana corporation (the "Company") and
BANK ONE, INDIANA, NATIONAL ASSOCIATION (the "Bank"), being parties to a certain
Credit Agreement dated as of December 29, 2000 (the "Agreement"), hereby agrees
to amend the Agreement by this First Amendment to Credit Agreement (this "First
Amendment"), on the terms and subject to the conditions set forth below:
1. Definitions. Terms used in this First Amendment with their initial
letters capitalized and which are not defined herein shall have the meanings
ascribed to them in the Agreement, as amended by this First Amendment. As used
herein, the term "First Amendment Effective Date" shall mean the date on which
all of the following have occurred: (a) the Bank shall have received written
evidence satisfactory to the Bank that all of the Voting Stock of the Company
has been transferred by OCP to Xxxxxx Corporation ("Parent") in exchange for
Series C Preferred Stock of Parent, as contemplated by the Xxxxxx Acquisition
Agreement, with the effect that the Company becomes a wholly-owned subsidiary of
Parent, and that other transactions contemplated by the Xxxxxx Acquisition
Agreement shall have been consummated with the effect that OCP owns not less
than 63% of the Voting Stock of Parent; (b) all of the Conditions precedent set
out in Section 4 of this First Amendment have been satisfied; and (c) the
Company shall have completed the performance of its obligations under Sections
5.01 (n) and (m) of the Agreement
2. Amendments. Effective as of the First Amendment Effective Date, the
Agreement is amended as follows:
(a) The definitions of the terms "Capital Contribution Agreement" and
"Change of Control of Company" in Section 1.02 of the Agreement are amended
and restated to read as follows, and the following new definitions are
added to Section 1.02 in appropriate alphabetical order:
"First Amendment" means the First Amendment to Credit Agreement dated
as of June 20, 2001, between the Company and the Bank.
"Capital Contribution Agreement" means a capital contribution
agreement in form and substance as Exhibit A to the First Amendment,
among OCP, Parent, the Company and the Bank, as the same may be
amended, modified, supplemented and or restated from time to time and
at any time.
"Change of Control of Company" means Parent shall cease to own Voting
Stock of the Company, including securities that are freely and without
material conditions convertible into or exchangeable for Voting Stock
of the Company, in an aggregate amount representing at least 51% of
the total aggregate voting power of all classes of the Voting Stock of
the Company, calculated on a fully diluted basis, including securities
convertible into or exchangeable for Voting Stock of the Company.
"Xxxxxx Acquisition Agreement" means that certain Acquisition
Agreement and Plan of Reorganization dated June ____, 2001, among
Parent, Xxxxxx Industries, Inc., Pyramid Coach, Inc., Champion
Trailer, Inc., United Acquisition, Inc., the Company, OCP, and Xxxxxxx
X. Xxxxxx.
"Parent" means Xxxxxx Corporation, a New York corporation which
proposes to change its name to Obsidian Capital Corporation.
(b) The definition of the term "EBITDA" in Section 1.02 of the Agreement is
amended by substituting the word "Parent" for the word "OCP" in clause (b).
(c) Section 3.01(l) is amended and restated to read as follows:
"(l) Subsidiaries/Parent. The Company has no Subsidiaries. Parent is
the sole shareholder of the Company. OCC is the general partner of
OCP."
(d) Section 5.01(b) of the Agreement is amended and restated in its
entirety to read as follows:
"(b) Reports, Certificates and Other Information. The Company shall
furnish to the Bank the following Financial Statements, certificates
and other information, in form satisfactory to the Bank:
(1) Annual Statements. As soon as available and in any event
within one hundred and twenty (120) days after the close of each
fiscal year of the Company and of OCP, annual audited Financial
Statements for the Company and OCP, audited by the Company's
Auditors, showing the financial condition and results of
operations of the Company and OCP as at the close of such fiscal
year and for such fiscal year, all prepared in accordance with
GAAP, accompanied by an opinion of the Company's Auditors, which
opinion shall be without qualification and shall state that such
audited Financial Statements present fairly the financial
position of the Company or OCP as of the date of such Financial
Statements and the results of its operations and changes in its
financial position for the period covered thereby, and that their
examination in connection with such Financial Statements has been
made in accordance with GAAP.
(2) Interim Monthly Statements. As soon as available and in any
event within thirty (30) days after the end of each calendar
month ending after the Closing Date, unaudited consolidated
Financial Statements for the Company showing its financial
condition and results of operations as at, and for such calendar
month and year-to-date, all in reasonable detail, and certified
to the Bank by an Authorized Officer. Such Financial Statements
shall be provided with comparable prior year-to-date Financial
Statements as at the end of the same calendar month of the prior
year (beginning in fiscal year 2002).
(3) Annual and Monthly Officer's Certificates. Contemporaneously
with the furnishing of each set of Financial Statements of the
Company provided for in Sections 5.01(b)(1) and (2), above, an
Officer's Certificate.
(4) Orders. Prompt notice of any orders in any material
proceedings to which the Company, OCP, OCC or Parent is a party,
issued by any court or regulatory agency, federal or state, and
if the Bank should so request, a copy of any such order.
(5) Notice of Default or Litigation. Immediately upon learning of
the occurrence of an Event of Default or Unmatured Event of
Default, or the institution of or any adverse determination in
any litigation, arbitration proceeding or governmental proceeding
which is material to the Company, OCP, OCC or Parent or the
occurrence of any event which could have a Materially Adverse
Effect, written notice thereof describing the same and the steps
being taken with respect thereto.
(6) Accounts Receivable Reports. Within thirty (30) days after
the end of each calendar month ending after the Closing Date, a
certified report of the accounts receivable of the Company as of
the end of such month, with agings for the accounts receivable
and with such report otherwise to be in such form and provide
such detail as may be reasonably satisfactory to the Bank.
(7) Monthly Borrowing Base Certificates and Compliance
Certificates. Within thirty (30) days after the last Banking Day
of the last calendar week of each calendar month, and at the time
of each Application for Advance if at such time more than thirty
(30) days ha elapsed since the Company submitted a Borrowing Base
Certificate: (i) a completed Borrowing Base Certificate,
certified to the Bank by an Authorized Officer, setting forth a
computation of the Borrowing Base as of the last day of the
period covered thereby and, if the Bank so requests, specifying
the locations of the all Eligible Inventory listed thereon; and
(ii) a certificate, signed by an Authorized Officer, certifying
compliance by the Company with the financial covenants set forth
in Section 5.01(g) of this Agreement, and providing a detailed
calculation of each of such covenants as of the date of such
certificate.
(8) OCC Tax Returns. Within fifteen (15) days of the filing
thereof, copies of each federal tax return of OCC.
(9) SerVaas Inventory Reports. At the same time such reports are
provided to SerVaas, Inc., copies of all sales reports and
Certificate of Consigned Goods Statuts given to SerVaas, Inc.
pursuant to the SerVaas Inventory Agreement.
(10) Parent Information. Promptly upon the furnishing thereof to
the shareholders of Parent, copies of all financial statements,
reports, and proxy statements so furnished.
(11) SEC Filings. Promptly upon the filing thereof, copies of all
registration statements and annual, quarterly, monthly and any
other reports which Parent or any of its Subsidiaries files with
the Securities and Exchange Commission.
(12) Other Information. From time to time such other information,
data and documents concerning the Company, Parent, OCP or OCC as
the Bank may reasonably request."
(e) Section 7.01 of the Agreement is amended as follows:
(i) Subsections (b), (c), (d), (e), and (j) are amended by replacing
the phrase "the Company, OCP, or OCC" with the phrase "the Company,
Parent, OCP, or OCC" each time it appears therein.
(ii) Subsection (h) is amended by replacing the phrase "the Company or
OCP" with the phrase "the Company, Parent, or OCP".
(iii) Subsection (k) is amended and restated in its entirety to read
as follows:
"(k) Restrictions on Contributions. (i) Parent shall create or
suffer to exist (A) any restriction or limitation (contractual or
otherwise) on the right or ability of Parent to make
contributions, loans, advances, or extensions of credit, or
otherwise to transfer funds to or for the benefit of the Company;
or (B) any Lien on Parent's rights, title, and interest under any
subscription agreement or other agreement between OCP and Parent
whereby OCP subscribes to stock or agrees to make any capital
contribution or loan to Parent or to the Company, including
without limitation, Parent's rights against OCP and OCP's
obligations to Parent in respect of the Legacy Commitments (as
defined in the Xxxxxx Acquisition Agreement); (ii) OCP shall
create or suffer to exist (A) any restriction or limitation
(contractual or otherwise) on the right or ability of OCP to
perform its obligations under the Capital Contribution Agreement;
or (B) any Lien on OCP's rights, title, and interest under any
subscription agreement or other agreement between OCP and any
third party whereby such third party subscribes to purchase
limited partnership interests in or agrees to make capital
contributions to OCP, other than the Provident Pledge Agreement;
or (iii) the total amount of credit and financial accommodations
extended by The Provident Bank to OCP including all commitments
to lend) exceeds at any time the sum of $1,500,000.00."
3. Reaffirmation of Representations and Warranties - No Event of Default.
To induce the Bank to enter into this First Amendment, (i) the Company makes and
reaffirms, as of the date of this First Amendment, each of the representations
and warranties contained in Section 3.01 of the Agreement and in each of the
other Loan Documents to which it is a party, as fully as if such representations
and warranties were stated hereto; and (ii) the Company further represents and
warrants to the Bank that as of the date of this First Amendment, no Event of
Default or Unmatured Event of Default has occurred and is continuing.
4. Conditions Precedent. This First Amendment shall become effective upon
the execution and delivery by the Company and the Bank of this First Amendment
and the Bank's receipt of the following, each duly executed, dated, and in form
and substance satisfactory to the Bank:
(a) The Capital Contribution Agreement in the form of Exhibit A attached
hereto, duly executed by OCP, Parent, and the Company.
(b) certificates of the Secretaries of the Company and Parent and of the
Managing Member of OCC (in its capacity as general partner of OCP), (i)
regarding all action taken by it to authorize the execution, delivery and
performance of this First Amendment and/or the Capital Contribution
Agreement, including without limitation, copies of resolutions adopted by
their respective directors or managers, and if applicable, their
shareholders or members; and (ii) setting out the incumbency and specimen
signatures of each of its officers who are authorized to execute and
deliver this First Amendment and the Capital Contribution Agreement;
(c) a copy of the Articles of Incorporation of Parent, as amended,
certified by the Secretary of State of New York as of a current date, a
copy of the current By-Laws of Parent, certified as true and correct by its
Secretary, and copies of the amendments thereto to be proposed to Parent's
shareholders pursuant to Section 11.1 of the Xxxxxx Acquisition Agreement;
(d) a full and complete copy of the executed Xxxxxx Acquisition Agreement
provided to the Bank, in form and substance acceptable to the Bank;
(e) a copy of the Agreement of Limited Partnership Agreement of OCP and all
amendments thereto, certified as true and correct by the Managing Member of
OCC and in form and substance acceptable to the Bank;
(f) a copy of the Stock Pledge Agreement executed by Parent in favor of
SerVaas, Inc. to secure the SerVaas Note, in form and substance acceptable
to the Bank, and
(h) Such other documents as the Bank may reasonably request.
5. Consent. Effective as of the First Amendment Effective Date, the Bank
consents to the acquisition by Parent of 100% of the capital stock of the
Company in accordance with the terms of the Xxxxxx Acquisition Agreement, and
agree that such acquisition shall not constitute an Event of Default under the
Agreement.
6. Prior Agreements. The Agreement, as amended by this First Amendment,
supersedes all previous agreements and commitments made or issued by the Bank
with respect to the Loans and all other subjects of the Agreement, as amended by
this First Amendment, including, without limitation, any oral or written
proposals or commitments which may have been made or issued by the Bank.
7. Costs, Expenses and Taxes. The Company shall pay or reimburse the Bank
on demand for all reasonable out-of-pocket costs and expenses of the Bank
(including reasonable attorneys' fees and legal expenses) incurred by it in
connection with the preparation, negotiation, and closing of this First
Amendment. All obligations provided for in this Section shall survive
termination of the Agreement.
8. Reaffirmation. Except as expressly amended by or pursuant to this First
Amendment, all of the terms and conditions of the Agreement and each of the
other Loan Documents remain unmodified and in full force and effect.
IN WITNESS WHEREOF, the Company and the Bank have executed this First
Amendment as of the 20th day of June, 2001.
U.S. RUBBER RECLAIMING, INC.
By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Chairman
BANK ONE, INDIANA, NATIONAL ASSOCIATION
By: ________________________________
Xxxxxx X. Xxxxxxx, Vice President
EXHIBIT A
CAPITAL CONTRIBUTION AGREEMENT
This CAPITAL CONTRIBUTION AGREEMENT ("Agreement") is made as of the 20th
day of June, 2001, by OBSIDIAN CAPITAL PARTNERS, L.P., a Delaware limited
partnership ("OCP"), XXXXXX CORPORATION, a New York corporation ("Xxxxxx"), U.S.
RUBBER RECLAIMING, INC., an Indiana corporation formerly known as USRR
Acquisition Corp. ("Borrower"), and BANK ONE, INDIANA, NATIONAL ASSOCIATION (the
"Bank").
Recitals
1. The Bank and Borrower are parties to a Credit Agreement, dated as of
December 29, 2000 (as the same may hereafter be amended and/or restated from
time to time and at any time, the "Credit Agreement"), pursuant to which the
Bank has extended credit to Borrower. Pursuant to the Credit Agreement, OCP
executed and delivered to the Bank a Capital Contribution Agreement, dated as of
December 29, 2000 (the `Original Agreement").
2. Pursuant to the terms of an Acquisition Agreement and Plan of
Reorganization dated June _____, 2001, among Xxxxxx, Xxxxxx Industries, Inc.,
Pyramid Coach, Inc., Champion Trailer, Inc., United Acquisition, Inc., the
Company, OCP, and Xxxxxxx X. Xxxxxx, OCP intends to transfer all of the capital
stock of the Borrower owned by it to Xxxxxx in exchange for shares of the
capital stock of Xxxxxx, as a result of which the Borrower will become a
wholly-owned subsidiary of Xxxxxx.
3. OCP and Xxxxxx each affirm by execution of this Agreement that they
desire that the Bank enter into the First Amendment to Credit Agreement, of even
date, and continue to extend credit to the Borrower under the Revolving Loan,
Term Loan I, Term Loan II and Equipment Loan as provided in the Credit
Agreement. OCP and Xxxxxx further affirm that: (i) they have determined that it
is in the best interests of Borrower and financially beneficial to Borrower for
Borrower to continue to obtain credit from the Bank; (ii) they have received a
copy of the Credit Agreement and the other Loan Documents and are familiar with
the terms of the credit extensions under and pursuant to the Credit Agreement;
and (iii) they hereby request that the Bank consent to the transaction described
in paragraph 2 above and continue to extend the Loans to Borrower and they
acknowledge that their execution and delivery of this Agreement is a condition
precedent to the effectiveness of the First Amendment to Credit Agreement, dated
June ___, 2001, between the Bank and Borrower, (the "First Amendment").
Agreement
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged by each of the parties to this Agreement, it is agreed as follows:
1. Definitions. Terms used in this Agreement which are defined in the
Credit Agreement and which are not otherwise defined in this Agreement shall
have the same meanings in this Agreement as are ascribed to them in the Credit
Agreement. In addition, as used herein the following terms shall have the
following meanings:
(a) "Contribution Event" shall mean a failure of compliance with
Section 5.01(g)(2) of the Credit Agreement.
(b) "Required Cure Amount" shall mean that amount determined by the
Bank to be necessary to cure and remedy any Contribution Event which has
occurred.
(c) "Request" shall have the meaning ascribed to such term in
paragraph 2 of this Agreement.
(d) "Term" shall mean the period beginning with the date of this
Agreement and ending on November 30, 2006.
2. Capital Contribution. Xxxxxx covenants and agrees that, from time to
time upon the occurrence during the Term of this Agreement of any Contribution
Event and the subsequent written request by the Bank to Xxxxxx specifying the
Required Cure Amount for such Contribution Event ("Request"), Xxxxxx will make a
capital contribution in cash to Borrower in such Required Cure Amount. OCP
covenants and agrees that, from time to time, if requested to do so by Xxxxxx or
the Bank, it will make a capital contribution or loan in cash to Xxxxxx in the
Required Cure Amount pursuant to a Request; provided that OCP shall not be
required to make such a capital contribution or loan to the extent that such
capital contribution or loan, when added to all other capital contributions and
loans made by OCP to Xxxxxx pursuant to this Agreement, would exceed
$1,620,000.00. (The foregoing limitation does not in any respect limit the
obligations of Xxxxxx under the first sentence of this paragraph 2.) Xxxxxx and
Borrower hereby authorize and direct OCP, and OCP agrees with Bank, to disburse
the funds representing such capital contribution or loan directly to the Bank on
Danzer's behalf and for the account of Borrower. Xxxxxx agrees that such a
disbursement to the Bank shall constitute a capital contribution or loan to
Xxxxxx by OCP, as fully as if the funds had been disbursed to it directly.
Borrower agrees that such a disbursement shall constitute a capital contribution
by Xxxxxx to Borrower, as fully as if the funds had been disbursed to it
directly.
The foregoing covenants are for the independent benefit of the Bank and shall be
enforceable independently by the Bank without the participation or authorization
of Borrower or Xxxxxx. All capital contributions made by Xxxxxx pursuant to this
Agreement will be made in respect of the capital stock of Borrower owned by
Xxxxxx and, if Borrower declines to do so, without the issuance of any
additional shares of capital stock of Borrower. All capital contributions made
by Xxxxxx pursuant to this Agreement upon the issuance of a Request by the Bank
shall be made within ten (10) days after the date of delivery to Xxxxxx of the
Request for such capital contribution payment, and shall be made by payment
directly to the Bank for the account of Borrower by Xxxxxx. Immediately upon
such capital contribution payment being received it shall be applied by Borrower
to the Obligations in such order as the Bank may determine (or, if there are no
outstanding balances on the Loans, held as cash collateral in an interest
bearing account under the Security Agreement). Xxxxxx or Borrower shall provide
such confirmations as the Bank reasonably may require of each capital
contribution made pursuant to a Request promptly after making each such capital
contribution. In the event for any reason this Agreement is deemed a
subscription by Xxxxxx to make an additional capital contribution to Borrower,
Borrower hereby assigns such subscription to the Bank as security for the
Obligations and agrees that such subscription is a general intangible subject to
the security interests of the Bank granted under the Security Agreement.
3. Enforcement. Each of OCP and Xxxxxx agrees that its strict performance
of this Agreement is necessary, and substantial performance in good faith shall
not be deemed sufficient performance. Each of them agrees that its strict
performance of this Agreement is of the essence of this undertaking and
Agreement and a primary basis upon which the Bank is executing the First
Amendment. Therefore, each of OCP and Xxxxxx hereby waives any and all defenses,
whether legal or equitable, which it might raise against the Bank with respect
to strict enforcement of this Agreement and each of its terms, and agrees to pay
to the Bank all reasonable costs and reasonable attorneys' fees incurred by the
Bank in the enforcement of this Agreement after any default hereunder by it.
4. Notices. Any Request or other notice to be given under this Agreement
shall be in writing and shall be delivered by any method permitted for notices
under the terms of the Credit Agreement and shall be addressed to the addresses
for the Bank and Borrower stated in the Credit Agreement and for OCP and Xxxxxx
to the address noted beneath its signature at the foot of this Agreement.
5. Terms.
(a) The obligations of OCP and Xxxxxx under this Agreement are
absolute, continuing and unconditional and shall not be released, abated,
reduced, terminated, discharged, waived or otherwise affected by any
agreement or action of Borrower or any other shareholder of Borrower or by
any additional capital contribution made to Borrower by OCP or Xxxxxx or
any other Person other than those capital contributions which are made
pursuant to a Request. Notwithstanding anything in this Agreement or any of
the other Loan Documents to the contrary, the Bank shall not be obligated
to elect any other remedy before making a Request and it shall not be
obligated to make a Request before pursuing any other right or remedy under
any of the Loan Documents on or after the occurrence of any Contribution
Event. The Bank shall have the right, power and authority at all times to
exercise all of its rights and remedies at law or equity and under the Loan
Documents without first exercising any of its rights or remedies under this
Agreement. This Agreement shall remain in full force and effect until
expiration of the Term.
(b) The Bank may from time to time and without notice to or consent
from OCP or Xxxxxx, and without affecting in any way the obligations of OCP
or Xxxxxx under this Agreement: (i) obtain a security interest or Lien in
any property of Borrower or any other Person to secure all or any of the
Obligations; (ii) obtain the primary or secondary liability of any Person
in addition to Borrower with respect to all or any of the Obligations;
(iii) release or compromise the liability of any Person primarily or
secondarily liable with respect to all or any of the Obligations; (iv)
release in whole or in part any security interest or Lien that the Bank now
or hereafter may have to secure all or any of the Obligations; (v) increase
or decrease the maximum amount of the Obligations which may be incurred
under the Credit Agreement from time to time and at any time; (vi) amend or
restate at any time and from time to time the Credit Agreement or any of
the other Loan Documents; or (vii) waive Events of Default under the Credit
Agreement or any of the other Loan Documents from time to time and at any
time.
6. Modification. No modification, amendment, or alleged waiver of this
Agreement or any provision hereof will be binding upon the party sought to be
bound unless in writing and signed by such party or a duly authorized officer or
agent thereof
7. Waiver/Forbearance. Notwithstanding any contrary provision in this
Agreement, in the event the Bank makes a Request for a capital contribution
under this Agreement and such capital contribution is timely made, then such
capital contribution for all purposes under the Credit Agreement and the other
Loan Documents shall be deemed to have been made on the date(s) of the
occurrence of the Contribution Event or Contribution Events which are the basis
for the Request. If a Request is made with respect to a Contribution Event which
may be remedied by the capital contribution identified in the Request, and no
other Event of Default has occurred and is continuing, the Bank shall forbear in
the exercise of its right to accelerate the maturity of the Obligations for the
ten (10) day period during which Xxxxxx is to make the capital contribution
which is the subject of the Request, thereby giving Xxxxxx and OCP the
opportunity to remedy the Event of Default or Unmatured Event of Default which
is the Contribution Event during such ten (10) day period. Such forbearance by
the Bank shall not impair, diminish or otherwise affect any right or remedy of
the Bank, including the Bank's right to refuse to make Advances while any Event
of Default is continuing, and shall not constitute or give rise to a defense by
Borrower to any of the Obligations.
8. Governing Law. This Agreement and the performance by the parties under
this Agreement shall be construed in accordance with and governed by the laws of
the State of Indiana.
9. Replacement Agreement. This Agreement replaces in full the Original
Agreement, and the Original Agreement shall be of no further force and effect,
and shall no longer be binding on the parties thereto as of the date this
Agreement has been executed and delivered by all the parties hereto.
IN WITNESS WHEREOF, this Agreement has been executed as of the _____ day of
June, 2001.
BANK ONE, INDIANA, NATIONAL ASSOCIATION
By: ______________________________________
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
OBSIDIAN CAPITAL PARTNERS, L.P.,
By: Obsidian Capital Company, LLC,
its general partner
By: _______________________________
Name:______________________________
Title:_____________________________
Address for notices to OCP:
Suite 3680 Bank One Tower
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
XXXXXX CORPORATION
By: _______________________________
Name: _____________________________
Title: ____________________________
Address for notices to Xxxxxx:
-----------------------------------
U.S. RUBBER RECLAIMING, INC.
By: _______________________________
Name: _____________________________
Title: ____________________________
