Exhibit 10.6
AMENDMENT NO. 3 TO AMENDED AND RESTATED CREDIT AGREEMENT
AND WAIVER AGREEMENT
THIS AMENDMENT NO. 3 TO AMENDED AND RESTATED CREDIT AGREEMENT AND
WAIVER AGREEMENT (this "AGREEMENT") is made and entered into as of January 14,
2004, by and among ▇▇▇▇▇▇ INDUSTRIES, INC., a Tennessee corporation ("▇▇▇▇▇▇"),
and ▇▇▇▇▇▇ INDUSTRIES TOWING EQUIPMENT INC., a Delaware corporation and wholly
owned subsidiary of ▇▇▇▇▇▇ ("▇▇▇▇▇▇ TOWING") (▇▇▇▇▇▇ and ▇▇▇▇▇▇ Towing may be
referred to herein individually as a "BORROWER" and together as the
"BORROWERS"), EACH OF THE GUARANTORS SIGNATORY HERETO (the "GUARANTORS"),
CONTRARIAN FUNDS, LLC ("CONTRARIAN"), as successor Agent to Bank of America,
N.A. (in such capacity, the "AGENT") for the Lenders under the Credit Agreement
(as defined below) and as a Lender, and HARBOURSIDE INVESTMENTS, LLLP
("HARBOURSIDE") as a Lender.
W I T N E S S E T H:
WHEREAS, the Agent, the Lenders and the Borrowers have entered into
that certain Amended and Restated Credit Agreement dated as of July 23, 2001, as
amended by (i) that certain Amendment No. 1 to Amended and Restated Credit
Agreement dated as of April 12, 2002, among Borrowers, certain Subsidiaries of
Borrowers, Bank of America, N.A., Wachovia Bank, N.A., AmSouth Bank and SunTrust
Bank, and (ii) that certain letter agreement dated November 19, 2003, by
Contrarian as sole Lender and Agent (as so amended and as hereby and from time
to time amended, supplemented, modified or replaced, the "CREDIT AGREEMENT"),
pursuant to which $13,849,086.18 in aggregate principal amount of subordinated
term loans remains outstanding as of the date of this Agreement; and
WHEREAS, ▇▇▇▇▇▇ and Contrarian are entering into that certain Exchange
Agreement dated as of the date hereof in the form attached hereto as EXHIBIT A
(the "CONTRARIAN EXCHANGE AGREEMENT"), pursuant to which, subject to certain
terms and conditions, Contrarian has agreed to (a) exchange the Obligations
consisting of principal, interest and fees owing by Borrowers to Contrarian for
common stock of ▇▇▇▇▇▇ and an amended promissory note under the Credit Agreement
to evidence the outstanding principal amount of Term Loans held by Contrarian
after giving effect to the transactions contemplated by the Contrarian Exchange
Agreement, and (b) to cancel and convert all of the outstanding Warrants held by
Contrarian into shares of common stock of ▇▇▇▇▇▇ (such transactions as described
in this Whereas clause are referred to herein as the "CONTRARIAN EXCHANGE
TRANSACTION") ; and
WHEREAS, ▇▇▇▇▇▇ and Harbourside are entering into that certain Exchange
Agreement dated as of the date hereof in the form attached hereto as EXHIBIT B
(the "HARBOURSIDE EXCHANGE AGREEMENT"; together with the Contrarian Exchange
Agreement referred to herein collectively as the "EXCHANGE AGREEMENTS"),
pursuant to which, subject to certain terms and conditions, Harbourside has
agreed to (a) exchange the Obligations consisting of principal, interest and
fees owing by ▇▇▇▇▇▇ to Harbourside for common stock of ▇▇▇▇▇▇ and an amended
promissory note under the Credit Agreement to evidence the outstanding principal
amount of Term Loans held by Harbourside after giving effect to the transactions
contemplated by the Harbourside Exchange
Agreement, and (b) to cancel and convert all of the outstanding Warrants held by
Harbourside into shares of common stock of ▇▇▇▇▇▇ (such transactions as
described in this Whereas clause are referred to herein as the "HARBOURSIDE
EXCHANGE Transaction"); and
WHEREAS, it is a condition precedent to the effectiveness of the
Exchange Agreements that the Borrowers, Agent and Lenders enter into this
Agreement; and
WHEREAS, the Borrowers have requested that the terms of the Credit
Agreement be amended in the manner set forth herein, and that certain Defaults
and/or Events of Default under the Credit Agreement be waived, and the Agent and
the Lenders, subject to the terms and conditions contained herein, have agreed
to such waivers and amendments as set forth below;
WHEREAS, the Borrowers, the Agent, the Lenders and the Guarantors
acknowledge that the terms of this Agreement constitute an amendment and
modification of, and not a novation of, the Credit Agreement and the Notes;
NOW, THEREFORE, in consideration of the mutual covenants and the
fulfillment of the conditions set forth herein, the parties hereby agree as
follows:
1. DEFINITIONS. Unless the context otherwise requires, all capitalized
terms used herein without definition shall have the definitions provided
therefor in the Credit Agreement.
2. AMENDMENTS TO CREDIT AGREEMENT. Subject to the conditions hereof,
the Credit Agreement is hereby amended, effective as of the date hereof, as
follows:
(a) SECTION 1.1 of the Credit Agreement is hereby amended by
amending and restating the following definitions to read in their entirety as
follows:
"Notes" means, collectively, the Existing Notes, Tranche A
Note, the Tranche B Note and any Replacement Note.
"Stated Termination Date" means (a) at all times prior to the
Rescission Date, July 31, 2005, and (b) on and at all time after the
Rescission Date, July 31, 2003.
"Base Rate" means (a) with respect to the principal portion of
the Term Loans evidenced by any Tranche A Note, 18% per annum, (b) with
respect to the principal portion of the Term Loans evidenced by any
Tranche B Notes, 9% per annum, (c) with respect to the principal
portion of the Term Loans evidenced by the Existing Harbourside Note,
the sum of (i) for any day, the rate per annum equal to the higher of
(A) the Federal Funds Rate for such day plus one-half of one percent
(0.5%) or (B) the Prime Rate for such day PLUS (ii) 10%, and (d) with
respect to the principal portion of the Term Loans evidenced by any
Replacement Note, 18% per annum. Any change in the Base Rate due to a
change in the Prime Rate or the Federal Funds Rate shall be effective
on the effective date of such change in the Prime Rate or Federal Funds
Rate. The increase in the interest rate effected by Amendment No. 3 to
the Credit Agreement shall accrue from, and be effective as of, the
date of this Agreement.
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(b) SECTION 1.1 of the Credit Agreement is hereby further amended by
adding the following new definitions in alphabetical order to read in their
entirety as follows:
"Contrarian Exchange Agreement" means that certain
Exchange Agreement dated as of the Third Amendment Effective
Date between Contrarian and ▇▇▇▇▇▇, as amended, restated,
modified, or supplemented from time to time.
"Contrarian Exchange Transaction" has the meaning
assigned to such term in the second recital paragraph to the
Third Amendment.
"Exchange Agreements" means, collectively, the
Harbourside Exchange Agreement and the Contrarian Exchange
Agreement.
"Existing Contrarian Note" means that certain
Promissory Note dated October 28, 2003 issued by Borrowers to
Contrarian in the aggregate principal amount of $7,715,919.45.
"Existing Harbourside Note" means that certain
Promissory Note dated November 24, 2003 issued by ▇▇▇▇▇▇ to
Harbourside in the aggregate principal amount of
$6,133,166.73.
"Existing Notes" means, collectively, the Existing
Contrarian Note and the Existing Harbourside Note.
"Harbourside Exchange Transaction" has the meaning
assigned to such term in the third recital paragraph to the
Third Amendment.
"▇▇▇▇▇▇ Shareholder Approval" has the meaning
assigned to such term in the Harbourside Exchange Agreement.
"Rescission Date" means the effective date of any
exercise by Contrarian of its right of rescission pursuant to
and in accordance with Section 10 of the Contrarian Exchange
Agreement.
"Replacement Note" means any promissory note issued
by the Borrowers to Contrarian on or after the Rescission Date
pursuant to the provisions of SECTIONS 2.4(C), substantially
in the form of EXHIBIT D-3 to the Third Amendment, as amended,
restated, modified, or supplemented from time to time, which
note shall constitute an amendment and restatement of the
Tranche A Note.
"Third Amendment" means that certain Amendment No. 3
to Amended and Restated Credit Agreement and Waiver Agreement
dated as of the Third Amendment Effective Date, among
Borrowers, Agent, Guarantors and Lenders.
"Third Amendment Effective Date" means January 14,
2004.
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"Tranche A Note" means, collectively, the Tranche A
Promissory Note of the Borrowers, substantially in the form of
EXHIBIT D-1 to the Third Amendment, as amended, restated,
modified, or supplemented from time to time, which note shall
constitute an amendment and restatement of the Existing
Contrarian Note.
"Tranche B Note" means, collectively, the Tranche B
Promissory Note of the Borrowers, substantially in the form of
EXHIBIT D-2 to the Third Amendment, as amended, restated,
modified, or supplemented from time to time.
(c) SECTION 1.1 of the Credit Agreement is hereby further amended by
deleting the definition of "Applicable Margin".
(d) SECTION 2.1 of the Credit Agreement is hereby amended and restated
in its entirety as follows:
2.1. TERM LOAN; PAYMENT OF PRINCIPAL.
(a) Subject to the terms and conditions of this
Agreement, the remaining outstanding balance of the Existing
Facility that is not repaid from the proceeds of the initial
funding of the Senior Facility shall be deemed to be Term
Loans made by the Lenders hereunder in accordance with their
respective Applicable Commitment Percentages; provided that
the aggregate amount of the Term Loans shall not exceed the
amount of the Term Loan Facility. Borrowers shall cause the
proceeds of the initial extensions of credit under the Senior
Facility to be used on the closing date thereof to reduce the
Existing Facility.
(b) As of the Third Amendment Effective Date and
after giving effect to the Contrarian Exchange Transaction to
be consummated on the Third Amendment Effective Date: (i) the
aggregate outstanding principal amount of all Term Loans is
$11,534,311.35, together with accrued but unpaid interest
thereon in the aggregate amount equal to $450,325.67, (ii) the
aggregate outstanding principal amount of Term Loans held by
Contrarian is $5,401,143.62, as evidenced by the Tranche A
Note to be issued to Contrarian on the Third Amendment
Effective Date, and the aggregate amount of accrued but unpaid
interest thereon owing to Contrarian is $0, and (iii) the
aggregate outstanding principal amount of Term Loans held by
Harbourside, as evidenced by the Existing Harbourside Note is
$6,133,166.73, and the aggregate amount of accrued but unpaid
interest thereon owing to Harbourside is $450,325.67. On the
Rescission Date, the aggregate outstanding principal amount of
Term Loans held by Contrarian shall be $7,715,919.45, less the
amount of any repayment of the principal amount of Term Loans
held by Contrarian after the Third Amendment Effective Date
and prior to the Rescission Date (other than as contemplated
by the Contrarian Exchange Agreement), as evidenced by the
Replacement Note to be issued to Contrarian on the Rescission
Date.
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(c) Immediately following the ▇▇▇▇▇▇ Shareholder
Approval and after giving effect to the Harbourside Exchange
Transaction to be consummated on or about such date, the
aggregate outstanding principal amount of Term Loans held by
Harbourside will be $4,293,216.17 less the amount of any
repayment of the principal amount of Term Loans held by
Harbourside after the Third Amendment Effective Date and prior
to the ▇▇▇▇▇▇ Shareholder Approval, as evidenced by the
Tranche B Note to be issued to Harbourside on the date of
▇▇▇▇▇▇ Shareholder Approval.
(d) The entire principal amount of the Term Loans
shall be due and payable on the Stated Termination Date.
(e) SECTION 2.4 of the Credit Agreement is hereby amended and
restated in its entirety as follows:
2.4. NOTES.
(a) On the Third Amendment Effective Date, upon
surrender of the Existing Contrarian Note by Contrarian to
Borrowers, Borrowers will issue to Contrarian a new note in
the form of Tranche A Note in the aggregate principal amount
of $5,401,143.62, which promissory note by its terms shall
amend and restate in its entirety the Existing Contrarian
Note.
(b) On the ▇▇▇▇▇▇ Shareholder Approval in connection
with the consummation of the Harbourside Exchange Transactions
to occur on or about such date, upon surrender of the Existing
Harbourside Note by Harbourside to Borrowers, Borrowers will
issue to Harbourside a Tranche B Note in the aggregate
principal amount of $4,293,216.71 less the amount of any
repayment of the principal amount of Term Loans held by
Harbourside after the Third Amendment Effective Date and prior
to the ▇▇▇▇▇▇ Shareholder Approval, which promissory note
shall amend and in restate in its entirety the Existing
Harbourside Note.
(c) On the Rescission Date, Contrarian shall
surrender to ▇▇▇▇▇▇ the Tranche A Note issued to it pursuant
to SECTION 2.4(A), and Borrowers shall issue and deliver to
Contrarian a new Replacement Note in the aggregate principal
amount of $7,715,919.45 less the amount of any repayment of
the principal amount of Term Loans held by Contrarian after
the Third Amendment Effective Date and prior to the Rescission
Date (other than as contemplated by the Contrarian Exchange
Agreement), which replacement note shall amend and restate in
its entirety such Tranche A Note issued to Contrarian on the
Third Amendment Effective Date.
(f) SECTION 7.1 of the Credit Agreement is hereby amended by adding a
new clause (i) immediately after existing clause (h) to read in its entirety as
follows:
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(i) at the times and in the manner required for
delivery as provided in the Senior Credit Agreement, deliver to Agent
and Lenders a copy of all of the reports, information, documents and
notices required to be delivered to the Senior Agents and Senior
Lenders pursuant to Article 5 of the Senior Credit Agreement.
(g) Clauses (b) and (c) of SECTION 8.1 of the Credit Agreement is
hereby amended and restated in their entirety to read as follows:
(b) CONSOLIDATED FIXED CHARGE COVERAGE RATIO. Permit
the Consolidated Fixed Charge Coverage Ratio to be less than
1.1 to 1.0 for each Four-Quarter Period beginning with the
Four-Quarter Period ending March 30, 2003.
(c) CONSOLIDATED EBITDA. Permit Consolidated EBITDA
for each trailing three month period ended as of the last day
of each fiscal month, commencing on March 31, 2004, to be less
than $2,500,000.
(h) EXHIBIT D to the Credit Agreement is hereby deleted and the
following new ▇▇▇▇▇▇▇▇ ▇-▇, ▇-▇ and D-3 are hereby substituted in lieu thereof
in the form attached to this Agreement as ▇▇▇▇▇▇▇▇ ▇-▇, ▇-▇ and D-3.
3. WAIVER; ACKNOWLEDGEMENT AND AGREEMENT OF AGENT AND LENDERS. Subject
to the satisfaction of the conditions precedent in Section 7 hereof:
(a) Agent and Lenders hereby waive all of the existing
Defaults and Events of Default under the Credit Agreement and Loan Documents
that have occurred and are continuing as of the date of this Agreement,
including, without limitation, (i) any Event of Default as a result of the
failure by Borrowers to repay the Term Loans and other Obligations on July 23,
2003, the original Stated Termination Date (as defined in the Credit Agreement
prior to giving effect to this Agreement), (ii) failure to timely deliver annual
financial statements for fiscal year 2002 and unqualified audit report, (iii)
the Event of Default under SECTION 9.1(G) (due to delivery of blockage and
standstill notices by Senior Lenders to the Lenders and the Agent) and other
defaults which were outlined in prior standstill/default notices given to Senior
Lenders and/or ▇▇▇▇▇▇, (iv) any Event of Default the Event of Default resulting
from Borrowers' breach of Section 8.4 of the Credit Agreement by the incurrence
of debt to ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ in the amount of $150,000 in connection with
the payment of a certain expense deposit to General Electric Capital Corporation
(the "AFFILIATE LOAN") (the foregoing Defaults and Events of Default are
referred to herein collectively as the "EXISTING DEFAULTS"); and
(b) Agent and Lenders hereby acknowledge and agree that the
Term Loan Termination Date has not occurred as a result of the occurrence of any
of the Existing Defaults.
(c) Agent and the Lenders hereby acknowledge and agree that
the Existing Notes and any promissory notes issued pursuant to this Agreement,
are and will be subject to that certain Amended and Restated Intercreditor and
Subordination Agreement, dated as of April 12,
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2002, by and between The CIT Group/Business Credit, Inc. and Agent, as amended
from time to time.
4. CONSENT. Agent and Lenders hereby consent to (i) the repayment by
Borrowers of the Affiliate Loan on or after the Third Amendment Effective Date,
(ii) the consummation of the transactions contemplated by the Exchange
Agreements.
5. CONTINUING EFFECT OF LOAN DOCUMENTS.
(a) Each Guarantor hereby (i) consents and agrees to the
amendments to the Credit Agreement set forth herein and (ii) confirms its joint
and several guarantee of payment of all the Guarantors' Obligations pursuant to
the Guaranty.
(b) Each of the Borrowers and Guarantors hereby acknowledge
and agree that each of the Security Instruments (i) remains in full force and
effect and is hereby reaffirmed, (ii) continues to secure all of the Obligations
of the Borrowers and the Guarantors' Obligations pursuant to the Guaranty, as
applicable, and (iii) notwithstanding anything to the contrary in any Security
Instrument, shall remain in effect until the Facility Termination Date.
6. REPRESENTATIONS AND WARRANTIES. Each of the Borrowers hereby
certifies that after giving effect to this Agreement:
(a) The Borrowers and each Subsidiary have the power and
authority to execute and perform this Amendment Agreement and have taken all
action required for the lawful execution, delivery and performance thereof;
(b) No event has occurred and no condition exists which has
not been waived which, upon the consummation of the transaction contemplated
hereby, will constitute a Default or an Event of Default on the part of the
Borrowers under the Credit Agreement or any other Loan Document either
immediately or with the lapse of time or the giving of notice, or both; and
(c) ▇▇▇▇▇▇ has the power and authority to execute and perform
the Exchange Agreements and has taken all action required for the lawful
execution, delivery and performance thereof, and each of the Exchange Agreements
has been duly executed and delivered by ▇▇▇▇▇▇ and fully executed copies of the
Exchange Agreements have been delivered to the Agent.
7. CONDITIONS TO EFFECTIVENESS. This Amendment shall not be effective
until the each of the following conditions shall have been satisfied:
(a) this Agreement duly executed by the Borrowers, the
Guarantors, the Agent and the Lenders and Agent shall have received a
counterpart thereof from each party thereto;
(b) Agent shall have received copies of the fully executed
Exchange Agreements; and
(c) Borrowers and Agent shall have received (i) consent from
Senior Lender to this Amendment to extent required pursuant to the Intercreditor
Agreement and (ii) consent
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from the Senior Lenders to the transactions contemplated by the Harbourside
Exchange Transaction.
Upon the satisfaction of the conditions set forth in this SECTION 7,
the Amendment Agreement shall be effective as of the date hereof, PROVIDED, THAT
in the event that (i) the shareholders of ▇▇▇▇▇▇ fail to approve the Exchange
(as defined in the Harbourside Exchange Agreement), or (ii) the Rescission Date
has occurred, the provisions of SECTION 3 shall be void ab initio and of no
force and effect. In such case, the Existing Defaults shall be deemed not to
have been waived and shall continue to exist and the Term Loan Termination Date
shall be deemed to have occurred as of such Rescission Date.
8. ENTIRE AGREEMENT. This Agreement sets forth the entire understanding
and agreement of the parties hereto in relation to the subject matter hereof and
supersedes any prior negotiations and agreements among the parties relative to
such subject matter. No promise, condition, representation or warranty, express
or implied, not herein set forth shall bind any party hereto, and not one of
them has relied on any such promise, condition, representation or warranty. Each
of the parties hereto acknowledges that, except as otherwise expressly stated
herein, no representations, warranties or commitments, express or implied, have
been made by any party to the other. None of the terms or conditions of this
Agreement may be changed, modified, waived or canceled orally or otherwise,
except as provided in the Credit Agreement.
9. FULL FORCE AND EFFECT OF AGREEMENT. Except as hereby specifically
amended, modified or supplemented, the Credit Agreement and all of the other
Loan Documents are hereby confirmed and ratified in all respects and shall
remain in full force and effect according to their respective terms.
10. COUNTERPARTS. This Amendment Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument. Delivery of an executed
signature page hereof by facsimile transmission shall be effective as delivery
of a manually executed counterpart hereof.
11. GOVERNING LAW. This Agreement shall in all respects be governed by,
and construed in accordance with, the laws of the State of Georgia.
12. ENFORCEABILITY. Should any one or more of the provisions of this
Amendment Agreement be determined to be illegal or unenforceable as to one or
more of the parties hereto, all other provisions nevertheless shall remain
effective and binding on the parties hereto.
13. NO NOVATION. This Agreement is given as an amendment and
modification of, and not as a payment of, the Obligations of the Borrower under
the Credit Agreement and is not intended to constitute a novation of the Credit
Agreement. All of the indebtedness, liabilities and obligations owing by the
Borrowers under the Credit Agreement and the Guarantor's obligations under the
Guaranties, as applicable, shall continue to be secured by the "Collateral" as
defined in the Credit Agreement and the Borrowers and the Guarantors acknowledge
and agree that the "Collateral" as defined in the Credit Agreement shall
continue to constitute "Collateral"
8
hereunder and remains subject to a security interest in favor of the Agent for
the benefit of itself and the Lenders and to secure such Obligations and
Guarantors' Obligations.
14. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of each of the Borrowers, the Lenders and the Agent and
their respective successors, assigns and legal representatives; PROVIDED,
however, that the Borrowers, without the prior consent of the Agent, may not
assign any rights, powers, duties or obligations hereunder.
[REMAINDER OF PAGE INTENTIONALLY BLANK; NEXT PAGE IS SIGNATURE PAGE]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 3
to Amended and Restated Credit Agreement and Waiver Agreement to be duly
executed by their duly authorized officers, all as of the day and year first
above written.
BORROWERS:
▇▇▇▇▇▇ INDUSTRIES, INC.
By: /s/ A. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ III
Name: A. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ III
Title: Chairman, Special
Committee of the Board of
Directors
▇▇▇▇▇▇ INDUSTRIES TOWING EQUIPMENT
INC.
By: /s/ A. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ III
Name: A. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ III
Title: Chairman, Special
Committee of the Board of
Directors
10
GUARANTORS:
APACO, INC.
B&B ASSOCIATED INDUSTRIES, INC.
CHEVRON, INC.
CENTURY HOLDINGS, INC.
CHAMPION CARRIER CORPORATION
COMPETITION WHEELIFT, INC.
GOLDEN WEST TOWING EQUIPMENT INC.
KING AUTOMOTIVE & INDUSTRIAL
EQUIPMENT, INC.
MID AMERICA WRECKER & EQUIPMENT
SALES, INC. OF COLORADO
▇▇▇▇▇▇ FINANCIAL SERVICES GROUP,
INC.
▇▇▇▇▇▇/GREENEVILLE, INC.
▇▇▇▇▇▇ INDUSTRIES DISTRIBUTING, INC.
▇▇▇▇▇▇ INDUSTRIES INTERNATIONAL,
INC.
▇▇▇▇▇▇ INDUSTRIES TOWING
EQUIPMENT INC.
PURPOSE, INC.
SONOMA CIRCUITS, INC.
SOUTHERN WRECKER CENTER, INC.
SOUTHERN WRECKER SALES, INC.
AETEX, INC., F/K/A A-EXCELLENCE
TOWING CO.
ALL AMERICAN TOWING SERVICES,
INC.
B-G TOWING, INC.
BEAR TRANSPORTATION, INC.
BTRCX, INC. F/K/A BERT'S TOWING
RECOVERY CORPORATION
BBSX, INC. F/K/A ▇▇▇ ▇▇▇▇▇ SERVICES,
INC.
BASIEX, INC. F/K/A BOB'S AUTO
SERVICE,INC.
BTRX, INC.
BVSWS, INC. F/K/A ▇▇▇ ▇▇▇▇▇▇▇ AND
SONS WRECKER SERVICE, INC.
CAL WEST TOWING, INC.
CBTX, INC., F/K/A CEDAR BLUFF 24
HOUR TOWING, INC.
CCASX, INC.
CEX, INC., F/K/A CHAD'S INC.
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CVDC, F/K/A CLEVELAND VEHICLE
DETENTION CENTER, INC.
▇.▇. ▇▇▇▇▇▇▇▇, INC.
DVREX, INC.
DOLLAR ENTERPRISES, INC.
DSX, INC., F/K/A ▇▇▇▇▇▇'▇ SERVICES,
INC.
GMAR, INC., F/K/A GOOD MECHANIC AUTO
CO. OF RICHFIELD, INC.
GREAT AMERICA TOWING, INC.
GREG'S TOWING, INC.
HTX, INC.
LTSX, INC., F/K/A LAZER TOW
SERVICES, INC. LASX, INC.
LWKR, INC. MAEJO, INC.
MEL'S ACQUISITION CORP.
MGEX, INC. MSTEX, INC. MTSX
INC. ▇▇▇▇▇▇'▇ TOWING, INC.
▇.▇.▇., INC.
PEX, INC., F/K/A/ PIPES ENTERPRISES,
INC.
RMA ACQUISITION CORP.
RRIC ACQUISITION CORP.
RSX, INC., F/K/A RECOVERY SERVICES,
INC.
ROAD ONE, INC.
ROADONE EMPLOYEE SERVICES, INC.
ROAD ONE INSURANCE SERVICES, INC.
ROAD ONE SERVICE, INC.
ROAD ONE SPECIALIZED
TRANSPORTATION, INC.
ROADONE TRANSPORTATION AND
LOGISTICS, INC.
R.M.W.S., INC.
SWSX, INC. (F/K/A SUBURBAN WRECKER
SERVICE, INC.)
TEXAS TOWING CORPORATION
TPCTH, INC.
TREASURE COAST TOWING, INC.
TREASURE COAST TOWING OF ▇▇▇▇▇▇
COUNTY, INC.
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TSSC, INC., F/K/A TRUCK SALES
& SALVAGE CO., INC.
TWSX, INC.
WSX, INC., F/K/A WES'S SERVICE
INCORPORATED
WTX, INC. (F/K/A ▇▇▇▇▇▇ TOWING,
INC.)
WTC, INC.
WTEX, INC.
ZTRX, INC., F/K/A ▇▇▇▇▇▇ TOWING &
RECOVERY, INC.
By: /s/ A. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ III
Name: A. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ III
Title: Chairman, Special
Committee of the Board of
Directors
13
AGENT AND LENDERS:
CONTRARIAN FUNDS, LLC, as Agent
and Lender
By Contrarian Capital Management, LLC,
as Manager
By:/s/ ▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇ ▇. ▇▇▇▇▇
Title: Managing Member
HARBOURSIDE INVESTMENTS, LLLP, as Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: General Partner
14
EXHIBIT A
Form of Contrarian Exchange Agreement
15
EXHIBIT B
Form of Harbourside Exchange Agreement
16
EXHIBIT D-1
Form of Tranche A Promissory Note
Tranche A Promissory Note
(Term Loan)
$__________________________ Atlanta, Georgia
[January ___, 2004]
THIS NOTE AND THE INDEBTEDNESS EVIDENCED
HEREBY HAVE BEEN SUBORDINATED TO CERTAIN
OBLIGATIONS OF THE MAKER PURSUANT TO AN
INTERCREDITOR AND SUBORDINATION AGREEMENT
BETWEEN CONTRARIAN FUNDS, LLC, AS JUNIOR
AGENT, AND THE CIT GROUP/BUSINESS CREDIT,
INC., AS SENIOR AGENT, AS AMENDED FROM
TIME TO TIME.
FOR VALUE RECEIVED, ▇▇▇▇▇▇ INDUSTRIES, INC., a Tennessee corporation
having its principal place of business located in Ooltewah, Tennessee ("▇▇▇▇▇▇")
and ▇▇▇▇▇▇ INDUSTRIES TOWING EQUIPMENT INC., a Delaware corporation having its
principal place of business located in Ooltewah, Tennessee ("▇▇▇▇▇▇ Towing")
(▇▇▇▇▇▇ and ▇▇▇▇▇▇ Towing each are referred to as a "Borrower" and collectively,
the "Borrowers"), hereby promise to pay to the order of
________________________________ (the "Lender"), in its individual capacity, at
the office of CONTRARIAN FUNDS, LLC, as agent for the Lenders (the "Agent"),
located at c/o Contrarian Capital Management, LLC, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (or at such other place or places as the Agent
may designate in writing) at the times set forth in the Amended and Restated
Credit Agreement dated as of July 23, 2001 among the Borrowers, the financial
institutions party thereto (collectively, the "Lenders") and the Agent (as
amended, supplemented or restated and in effect from time to time, the
"Agreement"; all capitalized terms not otherwise defined herein shall have the
respective meanings set forth in the Agreement), in lawful money of the United
States of America in immediately available funds, the principal amount of
____________________________ DOLLARS ($___________) on the Term Loan Termination
Date or such earlier date as may be required pursuant to the terms of the
Agreement, and to pay accrued but unpaid interest on the unpaid principal amount
hereof, in like money, at said office, on the dates and at the rates provided in
ARTICLE II of the Agreement. All or any portion of the principal amount of the
Term Loan may be prepaid or required to be prepaid as provided in the Agreement.
Each Borrower shall be jointly and severally liable as a primary
obligor.
If payment of all sums due hereunder is accelerated under the terms of
the Agreement or under the terms of the other Loan Documents executed in
connection with the Agreement, the then remaining principal amount hereof and
accrued but unpaid interest thereon evidenced by
17
this Note shall become immediately due and payable, without presentation,
demand, protest or notice of any kind, all of which are hereby waived by the
Borrower.
In the event this Note is not paid when due at any stated or
accelerated maturity, the Borrower agrees to pay, in addition to the principal
and interest due hereunder, all costs of collection, including reasonable
attorneys' fees, and interest thereon at the rates set forth above.
Interest hereunder shall be computed as provided in the Agreement.
This Note is the Tranche A Notes referred to in the Agreement
evidencing the Term Loan and is issued pursuant to and entitled to the benefits
and security of the Agreement to which reference is hereby made for a more
complete statement of the terms and conditions upon which the Term Loan
evidenced hereby was made and is to be repaid. The obligations evidenced hereby
are secured by the Security Instruments. This Note is subject to certain
restrictions on transfer or assignment as provided in the Agreement.
This Note constitutes an amendment and restatement of that certain
Promissory Note dated November ___, 2003 issued by Borrowers to Contrarian in
the aggregate principal amount of $7,715,919.45 (the "Prior Note") and this Note
is given as a substitution of, and not as a payment of, the Prior Note. The
indebtedness evidenced by this Note constitutes a continuation and modification
of a portion of that indebtedness outstanding under the Credit Agreement and
evidenced by the Prior Note. All of the indebtedness, liabilities and
obligations owing by the Borrower under the Prior Note shall continue and be
evidenced in part by this Note delivered in partial substitution for, and not
payment or novation of, the Prior Note.
This Note shall be governed by and construed in accordance with the
laws of the State of Georgia.
All Persons bound on this obligation, whether primarily or secondarily
liable as principals, sureties, guarantors, endorsers or otherwise, hereby waive
to the full extent permitted by law all defenses based on suretyship or
impairment of collateral and the benefits of all provisions of law for stay or
delay of execution or sale of property or other satisfaction of judgment against
any of them on account of liability hereon until judgment be obtained and
execution issued against any other of them and returned unsatisfied or until it
can be shown that the maker or any other party hereto had no property available
for the satisfaction of the debt evidenced by this instrument, or until any
other proceedings can be had against any of them, also their right, if any, to
require the holder hereof to hold as security for this Note any collateral
deposited by any of said Persons as security. Protest, notice of protest, notice
of dishonor, diligence or any other formality are hereby waived by all parties
bound hereon.
[REMAINDER OF PAGE INTENTIONALLY BLANK; NEXT PAGE IS SIGNATURE PAGE]
18
IN WITNESS WHEREOF, each of the Borrowers has caused this Tranche A
Promissory Note to be made, executed and delivered by its duly authorized
representative as of the date and year first above written, all pursuant to
authority duly granted.
▇▇▇▇▇▇ INDUSTRIES, INC.
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
▇▇▇▇▇▇ INDUSTRIES TOWING EQUIPMENT INC.
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
19
EXHIBIT D-2
Form of Tranche B Promissory Note
Tranche B Promissory Note
(Term Loan)
$__________________________ Atlanta, Georgia
[_________ ____, 2004]
THIS NOTE AND THE INDEBTEDNESS EVIDENCED
HEREBY HAVE BEEN SUBORDINATED TO CERTAIN
OBLIGATIONS OF THE MAKER PURSUANT TO AN
INTERCREDITOR AND SUBORDINATION AGREEMENT
BETWEEN CONTRARIAN FUNDS, LLC, AS JUNIOR
AGENT, AND THE CIT GROUP/BUSINESS CREDIT,
INC., AS SENIOR AGENT, AS AMENDED FROM
TIME TO TIME.
FOR VALUE RECEIVED, ▇▇▇▇▇▇ INDUSTRIES, INC., a Tennessee corporation
having its principal place of business located in Ooltewah, Tennessee ("▇▇▇▇▇▇")
and ▇▇▇▇▇▇ INDUSTRIES TOWING EQUIPMENT INC., a Delaware corporation having its
principal place of business located in Ooltewah, Tennessee ("▇▇▇▇▇▇ Towing")
(▇▇▇▇▇▇ and ▇▇▇▇▇▇ Towing each are referred to as a "Borrower" and collectively,
the "Borrowers"), hereby promise to pay to the order of
________________________________ (the "Lender"), in its individual capacity, at
the office of CONTRARIAN FUNDS, LLC, as agent for the Lenders (the "Agent"),
located at c/o Contrarian Capital Management, LLC, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (or at such other place or places as the Agent
may designate in writing) at the times set forth in the Amended and Restated
Credit Agreement dated as of July 23, 2001 among the Borrowers, the financial
institutions party thereto (collectively, the "Lenders") and the Agent (as
amended, supplemented or restated and in effect from time to time, the
"Agreement"; all capitalized terms not otherwise defined herein shall have the
respective meanings set forth in the Agreement), in lawful money of the United
States of America in immediately available funds, the principal amount of
____________________________ DOLLARS ($___________) on the Term Loan Termination
Date or such earlier date as may be required pursuant to the terms of the
Agreement, and to pay accrued but unpaid interest on the unpaid principal amount
hereof, in like money, at said office, on the dates and at the rates provided in
ARTICLE II of the Agreement. All or any portion of the principal amount of the
Term Loan may be prepaid or required to be prepaid as provided in the Agreement.
Each Borrower shall be jointly and severally liable as a primary
obligor.
If payment of all sums due hereunder is accelerated under the terms of
the Agreement or under the terms of the other Loan Documents executed in
connection with the Agreement, the then remaining principal amount hereof and
accrued but unpaid interest thereon evidenced by
20
this Note shall become immediately due and payable, without presentation,
demand, protest or notice of any kind, all of which are hereby waived by the
Borrower.
In the event this Note is not paid when due at any stated or
accelerated maturity, the Borrower agrees to pay, in addition to the principal
and interest due hereunder, all costs of collection, including reasonable
attorneys' fees, and interest thereon at the rates set forth above.
Interest hereunder shall be computed as provided in the Agreement.
This Note is the Tranche B Notes referred to in the Agreement
evidencing the Term Loan and is issued pursuant to and entitled to the benefits
and security of the Agreement to which reference is hereby made for a more
complete statement of the terms and conditions upon which the Term Loan
evidenced hereby was made and is to be repaid. The obligations evidenced hereby
are secured by the Security Instruments. This Note is subject to certain
restrictions on transfer or assignment as provided in the Agreement.
This Note constitutes an amendment and restatement of that certain
Promissory Note dated November ___, 2003 issued by Borrowers to Harbourside in
the aggregate principal amount of $6,133,166.73 (the "Prior Note") and this Note
is given as a substitution of, and not as a payment of, the Prior Note. The
indebtedness evidenced by this Note constitutes a continuation and modification
of a portion of that indebtedness outstanding under the Credit Agreement and
evidenced by the Prior Note. All of the indebtedness, liabilities and
obligations owing by the Borrower under the Prior Note shall continue and be
evidenced in part by this Note delivered in partial substitution for, and not
payment or novation of, the Prior Note.
This Note shall be governed by and construed in accordance with the
laws of the State of Georgia.
All Persons bound on this obligation, whether primarily or secondarily
liable as principals, sureties, guarantors, endorsers or otherwise, hereby waive
to the full extent permitted by law all defenses based on suretyship or
impairment of collateral and the benefits of all provisions of law for stay or
delay of execution or sale of property or other satisfaction of judgment against
any of them on account of liability hereon until judgment be obtained and
execution issued against any other of them and returned unsatisfied or until it
can be shown that the maker or any other party hereto had no property available
for the satisfaction of the debt evidenced by this instrument, or until any
other proceedings can be had against any of them, also their right, if any, to
require the holder hereof to hold as security for this Note any collateral
deposited by any of said Persons as security. Protest, notice of protest, notice
of dishonor, diligence or any other formality are hereby waived by all parties
bound hereon.
[REMAINDER OF PAGE INTENTIONALLY BLANK; NEXT PAGE IS SIGNATURE PAGE]
21
IN WITNESS WHEREOF, each of the Borrowers has caused this Tranche B
Promissory Note to be made, executed and delivered by its duly authorized
representative as of the date and year first above written, all pursuant to
authority duly granted.
▇▇▇▇▇▇ INDUSTRIES, INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
▇▇▇▇▇▇ INDUSTRIES TOWING EQUIPMENT INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
22
EXHIBIT D-3
Form of Replacement Promissory Note
Replacement Promissory Note
(Term Loan)
$__________________________ Atlanta, Georgia
[_________ ____, 2004]
THIS NOTE AND THE INDEBTEDNESS EVIDENCED
HEREBY HAVE BEEN SUBORDINATED TO CERTAIN
OBLIGATIONS OF THE MAKER PURSUANT TO AN
INTERCREDITOR AND SUBORDINATION AGREEMENT
BETWEEN CONTRARIAN FUNDS, LLC, AS JUNIOR
AGENT, AND THE CIT GROUP/BUSINESS CREDIT,
INC., AS SENIOR AGENT, AS AMENDED FROM
TIME TO TIME.
FOR VALUE RECEIVED, ▇▇▇▇▇▇ INDUSTRIES, INC., a Tennessee corporation
having its principal place of business located in Ooltewah, Tennessee ("▇▇▇▇▇▇")
and ▇▇▇▇▇▇ INDUSTRIES TOWING EQUIPMENT INC., a Delaware corporation having its
principal place of business located in Ooltewah, Tennessee ("▇▇▇▇▇▇ Towing")
(▇▇▇▇▇▇ and ▇▇▇▇▇▇ Towing each are referred to as a "Borrower" and collectively,
the "Borrowers"), hereby promise to pay to the order of
________________________________ (the "Lender"), in its individual capacity, at
the office of CONTRARIAN FUNDS, LLC, as agent for the Lenders (the "Agent"),
located at c/o Contrarian Capital Management, LLC, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (or at such other place or places as the Agent
may designate in writing) at the times set forth in the Amended and Restated
Credit Agreement dated as of July 23, 2001 among the Borrowers, the financial
institutions party thereto (collectively, the "Lenders") and the Agent (as
amended, supplemented or restated and in effect from time to time, the
"Agreement"; all capitalized terms not otherwise defined herein shall have the
respective meanings set forth in the Agreement), in lawful money of the United
States of America in immediately available funds, the principal amount of
____________________________ DOLLARS ($___________) on the Term Loan Termination
Date or such earlier date as may be required pursuant to the terms of the
Agreement, and to pay accrued but unpaid interest on the unpaid principal amount
hereof, in like money, at said office, on the dates and at the rates provided in
ARTICLE II of the Agreement. All or any portion of the principal amount of the
Term Loan may be prepaid or required to be prepaid as provided in the Agreement.
Each Borrower shall be jointly and severally liable as a primary
obligor.
If payment of all sums due hereunder is accelerated under the terms of
the Agreement or under the terms of the other Loan Documents executed in
connection with the Agreement, the then remaining principal amount hereof and
accrued but unpaid interest thereon evidenced by
23
this Note shall become immediately due and payable, without presentation,
demand, protest or notice of any kind, all of which are hereby waived by the
Borrower.
In the event this Note is not paid when due at any stated or
accelerated maturity, the Borrower agrees to pay, in addition to the principal
and interest due hereunder, all costs of collection, including reasonable
attorneys' fees, and interest thereon at the rates set forth above.
Interest hereunder shall be computed as provided in the Agreement.
This Note is the Replacement Notes referred to in the Agreement
evidencing the Term Loan and is issued pursuant to and entitled to the benefits
and security of the Agreement to which reference is hereby made for a more
complete statement of the terms and conditions upon which the Term Loan
evidenced hereby was made and is to be repaid. The obligations evidenced hereby
are secured by the Security Instruments. This Note is subject to certain
restrictions on transfer or assignment as provided in the Agreement.
This Note constitutes an amendment and restatement of that certain
Tranche A Promissory Note dated January ___, 2004 issued by Borrowers to
Contrarian in the aggregate principal amount of $___________ (the "Prior Note")
and this Note is given as a substitution of, and not as a payment of, the Prior
Note. The indebtedness evidenced by this Note constitutes a continuation and
modification of a portion of that indebtedness outstanding under the Credit
Agreement and evidenced by the Prior Note. All of the indebtedness, liabilities
and obligations owing by the Borrower under the Prior Note shall continue and be
evidenced in part by this Note delivered in partial substitution for, and not
payment or novation of, the Prior Note.
This Note shall be governed by and construed in accordance with the
laws of the State of Georgia.
All Persons bound on this obligation, whether primarily or secondarily
liable as principals, sureties, guarantors, endorsers or otherwise, hereby waive
to the full extent permitted by law all defenses based on suretyship or
impairment of collateral and the benefits of all provisions of law for stay or
delay of execution or sale of property or other satisfaction of judgment against
any of them on account of liability hereon until judgment be obtained and
execution issued against any other of them and returned unsatisfied or until it
can be shown that the maker or any other party hereto had no property available
for the satisfaction of the debt evidenced by this instrument, or until any
other proceedings can be had against any of them, also their right, if any, to
require the holder hereof to hold as security for this Note any collateral
deposited by any of said Persons as security. Protest, notice of protest, notice
of dishonor, diligence or any other formality are hereby waived by all parties
bound hereon.
[REMAINDER OF PAGE INTENTIONALLY BLANK; NEXT PAGE IS SIGNATURE PAGE]
24
IN WITNESS WHEREOF, each of the Borrowers has caused this Replacement
Promissory Note to be made, executed and delivered by its duly authorized
representative as of the date and year first above written, all pursuant to
authority duly granted.
▇▇▇▇▇▇ INDUSTRIES, INC.
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
▇▇▇▇▇▇ INDUSTRIES TOWING EQUIPMENT INC.
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
25
