SIXTH AMENDMENT TO LOAN AGREEMENT
THIS SIXTH AMENDMENT TO LOAN AGREEMENT (this "Amendment"), made and entered
into as of October 12, 1998, but effective upon satisfaction of each of the
conditions precedent specified in Section 3 hereof, by and between FAIRFIELD
MANUFACTURING COMPANY, INC., a Delaware corporation ("Borrower"), and GENERAL
ELECTRIC CAPITAL CORPORATION, a New York corporation ("GE Capital"), as sole
"Lender" under the "Loan Agreement" hereinafter referred to and as agent for
itself and the other "Lenders" who may hereafter become parties to the Loan
Agreement (GE Capital, in such capacity, the "Agent").
RECITALS:
A. Borrower and GE Capital, as a Lender and as Agent, entered into a
certain Loan Agreement, dated as of July 7, 1993, as amended pursuant to a First
Amendment to Loan Agreement, dated as of September 30, 1994, a Second Amendment
to Loan Agreement, dated March 30, 1995, but effective as of December 31, 1994,
a Third Amendment to Loan Agreement, dated as of March 31, 1995, a Fourth
Amendment to Loan Agreement, dated as of December 5, 1996, and a Fifth Amendment
to Loan Agreement, dated as of February 26, 1997 (the "Loan Agreement";
capitalized terms used herein and not defined herein shall have the meanings
ascribed to them in the Loan Agreement) whereby, subject to the terms and
conditions set forth therein, GE Capital, as sole Lender thereunder, made the
Commitment and the Term Loans available to Borrower.
B. Borrower has requested certain amendments to the Loan Agreement,
including, among other things, (a) a reduction in the rate of interest payable
on the Obligations and in the commitment fee payable in regard to the
Commitment, as set forth herein, (b) extensions of the Commitment Termination
Date for the Commitment and of the Maturity Date of the Term Loan to July 1,
2005, (c) an increase in the maximum amount of the Commitment to $30,000,000,
(d) an increase in the amount of the Term Loans to $35,000,000 pursuant to
which Lenders will loan to Borrower the excess of such increased amount of the
Term Loans over the outstanding principal balance of the Term Loans, for use by
Borrower for application in payment of Advances, (e) the modification of the
principal amortization schedule of the Term Loans to provide for a single
principal payment in the amount of the entire outstanding principal balance of
the Term Loans, due and payable on the Maturity Date; and (f) the establishment
by Lenders for Borrower of a non-revolving line of credit in the maximum amount
of Ten Million Dollars ($10,000,000), pursuant to which Borrower may obtain
loans for use by it in repurchasing or redeeming Senior Subordinated Notes.
C. Subject to the terms and conditions set forth herein, including
without limitation, the payment by Borrower to Lenders of the fees specified
herein, Lenders are willing to amend the Loan Agreement as described in the
preceding paragraph B.
D. Borrower and GE Capital, as Agent and sole Lender under the Loan
Agreement, desire to enter into this Amendment in order to amend the Loan
Agreement in the manner described generally in paragraph B of these recitals and
described more particularly herein and to amend the Loan Agreement in certain
other respects as hereinafter set forth.
In consideration of the premises and the mutual covenants and agreements
herein contained, the parties hereto covenant and agree as follows:
1. Amendments to Loan Agreement. Effective upon fulfillment, to the
satisfaction of Lenders, of the conditions precedent set forth in Section 1
hereof, the Loan Agreement shall be deemed to be amended as follows:
(a) Amendments to Section 1.1 of the Loan Agreement.
(i) Section 1.1 of the Loan Agreement shall be deemed to be amended
by deleting the definitions of "Agreement", "Commitment", "Consolidated EBITDA",
"Consolidated Fixed Charges", "Consolidated Net Income", "Consolidated Net
Interest Expense", "Fixed Rate", "Fixed Rate Loan", "Floating Rate Loan", "Loan
Documents" and "Maturity Date" therein in their entireties and substituting in
lieu thereof the following revised definitions of "Agreement", "Commitment",
"Consolidated EBITDA", "Consolidated Fixed Charges", "Consolidated Net Income",
"Consolidated Net Interest Expense", "Fixed Rate", "Fixed Rate Loan", "Floating
Rate Loan", "Loan Documents" and "Maturity Date":
"Agreement" means this Loan Agreement, either as originally executed
or as it may from time to time be supplemented, modified, amended,
renewed, extended or supplanted (including, without limitation, by the
First Amendment, the Second Amendment, the Third Amendment, the Fourth
Amendment, the Fifth Amendment and the Sixth Amendment).
"Commitment" means Twenty Million Dollars ($20,000,000), as such
amount may be increased to Thirty Million Dollars ($30,000,000)
pursuant to the Subsequent Commitment Increases provided for in
Section 2.8, unless and until reduced to zero pursuant to Section
3.2(a).
"Consolidated EBITDA" means, for any period, the sum of
(a) Consolidated Net Income for such period, plus (b) Consolidated Net
Interest Expense (excluding Permitted Preferred Stock Dividends) for
such period, plus (c) all taxes computed on a stand-alone basis for
Borrower and its Subsidiaries accrued for such period on or measured
by income, to the extent treated as expense in the determination of
Consolidated Net Income for such period, plus (d) all depreciation and
amortization of fees or intangibles of any kind for such period, to
the extent treated as expense in the determination of Consolidated Net
Income for such period, plus (e) all non-cash accruals or cash
expenses relating to the Equity Participation Plan and Equity
Incentive Plan, to the extent that such accruals or expenses reduce
net income, in each case, determined on a consolidated basis in
accordance with GAAP.
"Consolidated Fixed Charges" means, for any period, without
duplication, the sum of (a) Consolidated Net Interest Expense for such
period (including, without limitation, under Capital Leases, but
excluding Permitted Preferred Stock Dividends), plus (b) scheduled
amortization during such period of the principal balances of the Debt
Repurchase Loans, plus (c) all payments made by Borrower and its
Subsidiaries pursuant to Operating Leases during such period, plus
(d) all taxes payable by Borrower and its Subsidiaries during such
period, including all amounts paid or payable to Lancer under the Tax
Sharing Agreement during such period (without giving effect to any
corresponding capital contribution or other reduction therein provided
for in Section 7 of the Tax Sharing Agreement), plus (e) all cash
payments made by Borrower to purchase Exchange Preferred Stock during
such period, other than payments made from the proceeds of cash
capital contributions to Borrower not made under or with respect to
the Tax Sharing Agreement, plus (f) all other payments made by
Borrower in cash during such period as permitted under Section 6.3 (to
the extent not added or subtracted in calculating Consolidated Cash
Flow), other than Permitted Preferred Stock Dividends and payments
permitted pursuant to clause (p) of Section 6.3 (inclusive of any made
prior to the Sixth Amendment Date with Lenders' prior written
consent), in each case determined on a consolidated basis in
accordance with GAAP.
"Consolidated Net Income" means, for any period, the net income (or
loss) of Borrower and its Subsidiaries for such period, determined on
a consolidated basis in accordance with GAAP (after taxes but before
dividends on the New Preferred Stock and accretions thereon), but
without giving effect to extraordinary losses or gains for such period
or to non-operating or non-cash items of income or expense (or
expenses relating to the LIFO reserve) during such period and
excluding net income (or loss) of any Person other than Borrower and
its Subsidiaries that is included in the determination of such net
income (or loss) except to the extent of dividends or distributions
paid to Borrower or its Subsidiaries.
"Consolidated Net Interest Expense" means, for any period, the gross
interest expense of Borrower and its Subsidiaries for such period,
plus (a) the portion of the up-front costs and expenses for Interest
Rate Contracts (to the extent not included in gross interest expense)
fairly allocated to such Interest Rate Contracts as expenses for such
period, less (b) interest income (to the extent not deducted from
gross interest expense), Interest Rate Contracts payments received and
amortized debt discount and deferred financing fees (to the extent not
deducted from gross interest expense) of Borrower and its Subsidiaries
for such period plus (c) Permitted Preferred Stock Dividends paid in
cash during such period, other than Permitted Preferred Stock
Dividends paid from the proceeds of cash capital contributions to
Borrower not made under or with respect to the Tax Sharing Agreement
less (d) amortization of deferred financing costs included in gross
interest expense, in each case determined on a consolidated basis in
accordance with GAAP.
"Fixed Rate" means, (i) commencing on the Sixth Amendment Date and
continuing until July 1, 1999, the LIBOR Rate plus, as to the
Revolving Credit Loan, one and one-quarter percent (1-1/4%) per annum,
as to the Debt Repurchase Loans, one and three-quarters percent (1-
3/4%) per annum and, as to the Term Loan and all other Obligations
(other than Obligations under the Revolving Credit Loan and the Debt
Repurchase Loans), one and one-half percent (1-1/2%) per annum; and
(ii) commencing on July 1, 1999, the Fixed Rate will mean the LIBOR
Rate plus the Applicable LIBOR Margin as determined in accordance with
the following grid:
If the Ratio of
Consolidated EBITDA
to Consolidated Net
Interest Expense
for the Four The
Consecutive Fiscal Applicable
Quarters ending on LIBOR
the last day of the Margin for
Preceding Fiscal Fixed Rate
Quarter is: Loans will
be:
Revolving Term Loan Debt
Credit Repurchase
Loan Loans
Greater than or 0.75% per 1.00% per 1.25% per
equal to 2.75 annum annum annum
Greater than or 1.00% per 1.25% per 1.50% per
equal to 2.50:1.00 annum annum annum
Less than 2.50:1 1.25%per 1.50% per 1.75% per
annum annum annum
Any change in the Applicable LIBOR Margin by virtue of the
foregoing provision with regard to any Fiscal Quarter shall be made
within five (5) days after delivery by Borrower to Lender of
financial statements for such Fiscal Quarter pursuant to
Section 7.1(b); provided, however, that any such change shall be
deemed to have become effective on that date thirty (30) days after
the end of such Fiscal Quarter.
"Fixed Rate Loan" means a Fixed Rate Advance, a
Fixed Rate Debt Repurchase Loan or a Fixed Rate Term Loan, or two
or more of them, as the context may require.
"Floating Rate Loan" means a Floating Rate
Advance, a Floating Rate Debt Repurchase Loan or a Floating Rate
Term Loan, or two or more of them, as the context may require.
"Loan Documents" means, collectively, this Agreement, the First
Amendment, the Second Amendment, the Third Amendment, the Fourth
Amendment, the Fifth Amendment, the Sixth Amendment, the Notes, the
Blocked Account Agreements, the Subsidiary Guaranty, the Collateral
Documents, the Lancer Pledge Agreement and any other agreements of
any type or nature heretofore or hereafter executed and delivered
by Borrower or any of its Affiliates in favor of the Agent or
Lenders in any way relating to or in furtherance of this Agreement,
in each case either as originally executed or as the same may from
time to time be supplemented, modified, amended, restated, extended
or supplanted.
"Maturity Date" means July 1, 2005.
(ii) Section 1.1 of the Loan Agreement shall be deemed further
amended by adding therein, in appropriate alphabetical order, the following
additional definitions:
"Debt Repurchase Line" shall mean a line of credit in the
maximum principal amount of Ten Million Dollars ($10,000,000)
established by Lenders pursuant to Section 2.3A hereof.
"Debt Repurchase Loans" shall mean loans made by Lenders to
Borrower under the Debt Repurchase Line as provided in Section 2.3A
hereof.
"Equity Incentive Plan" means Borrower's long-term incentive
compensation plan, as such plan may be amended, supplemented or
restated by the Board of Directors of Borrower; provided, however,
that any amendment, supplement or restatement which could
reasonably be expected to have a Material Adverse Effect shall
require the consent of the Majority Lenders.
"Equity Plan Cap" means the sum of $5,000,000 in the aggregate in
each Fiscal Year and $35,000,000 in the aggregate during the term
of this Agreement.
"Fixed Rate Debt Repurchase Loan" shall mean the Debt
Repurchase Loans or portions thereof bearing interest at the Fixed
Rate pursuant to Section 3.5(a).
"Floating Rate Debt Repurchase Loan" shall mean the Debt
Repurchase Loans or portions thereof bearing interest at the
Floating Rate pursuant to Section 3.4.
"Sixth Amendment" means the Sixth Amendment to the Loan Agreement,
dated as of October 12, 1998, among Borrower, the Agent and GE
Capital, as sole Lender.
"Sixth Amendment Date" means October 12, 1998, or such later date
as the Sixth Amendment shall have been executed and delivered by
the parties and all conditions precedent to the effectiveness
thereof set forth in Section 3 thereof shall have been satisfied.
(iii) Section 1.1 of the Loan Agreement shall be deemed further
amended by deleting the definition of "Consolidated Excess Cash Flow" therefrom.
(b) Certain References to "Term Loans". The terms "Term Loan" or "Term
Loans" when used in the following provisions of the Loan Agreement shall mean
not only the Term Loans but also the Debt Repurchase Loans and such provisions
shall apply to the Debt Repurchase Loans to the same extent as to the Term
Loans: the defined terms "Interest Period", "Loans" and "Request for Fixed Rate
Election" included in Section 1.1 of the Loan Agreement; Section 2.7; Section
3.2(b); Section 3.12; Section 3.13; Section 3.14; Section 3.15; Section 3.17;
Section 3.22; Section 3.23; Section 4.15; Section 4.16; Section 4.20;
introduction to Article 5; introduction to Article 6; Section 6.1(b); Section
6.11; introduction to Article 7; Section 10.7; Section 11.4; Section 11.5;
Section 11.8, Section 11.11(d); Section 11.13 and Section 11.17.
(c) Amendment to Section 2.3 of the Loan Agreement.
Section 2.3 of the Loan Agreement shall be deemed to be
amended by deleting such Section in its entirety and substituting
in lieu thereof the following revised Section 2.3:
2.3 Term Loans.
(a) On the Sixth Amendment Date, the outstanding
principal balance of the term loans previously made by
Lenders to Borrower (individually, the "Term Loan" and,
collectively, the "Term Loans") is $25,000,000. Pursuant to
Borrower's request, Lenders have agreed to increase the
principal amount of the Term Loans to $35,000,000 and to lend
the Borrowers the difference between such increased amount of
the Term Loans and the outstanding principal balance thereof
prior to such increase. Borrower may not reborrow the Term
Loans or any portion thereof once repaid.
(b) Not later than 11:00 a.m., Atlanta time, on the
Sixth Amendment Date, each Lender shall make its portion of
the increased amount of the Term Loan available to the Agent
by wire transfer of immediately available funds to Agent's
Deposit Account. Upon fulfillment of the applicable
conditions set forth in Section 2 of the Sixth Amendment,
such increased amount of the Term Loan shall be made
available to Borrower by the Agent by wire transfer of
immediately available funds as instructed by Borrower, to the
extent actually received from the Lenders. No Lender shall
be responsible for the failure of any other Lender to make
available the portion of such increase to be made by such
other Lender.
(c) Each Lender's Term Loan, as so increased, shall
be evidenced by that Lender's Term Note, subject to the
provisions of Section 2.6.
(d) Addition of New Section 2.3A of the Loan Agreement.
The following Section 2.3A of the Loan Agreements is hereby
added immediately after Section 2.3:
2.3A Debt Repurchase Line.
(a) Subject to the terms and conditions set forth in this
Agreement, Lenders hereby establish the Debt Repurchase Line
pursuant to which, each Lender agrees, severally, and for itself
alone, that during the period commencing on the Sixth Amendment
Date and ending on the second anniversary of the Sixth Amendment
Date, it shall make pro rata, according to that Lender's Pro Rata
Share of the Debt Repurchase Line, Debt Repurchase Loans in such
amounts as Borrower may request in accordance with Section 2.3A(c),
the proceeds of which will be used by Borrower to effect
repurchases or redemptions of Senior Subordinated Notes; provided,
that, each of the following conditions precedent have been
satisfied:
(i) The repurchase or redemption of Senior
Subordinated Notes to be effected with the proceeds of such
Debt Repurchase Loan shall be permitted pursuant to the terms
of the Senior Subordinated Note Indenture, and no default or
event of default shall exist thereunder as a result thereof.
(ii) The representations and warranties contained in
Article 4 shall be true and correct in all material respects
on and as of the date of the Debt Repurchase Loan as though
made on and as of that date (except to the extent that such
representations and warranties relate solely to an earlier
date and except as affected by transaction expressly
contemplated by this Agreement).
(iii) There shall not then be pending or, to the best
knowledge of Borrower, threatened, any litigation,
arbitration, injunction, proceeding, governmental
investigation or inquiry against or affecting Borrower or any
Property of Borrower before any Governmental Agency that
could reasonably be expected to have Material Adverse Effect.
(iv) No Default or Event of Default shall have
occurred and be continuing or will result from the redemption
or repurchase to be effected with such Debt Repurchase Loan.
(v) Since June 30, 1998, there shall not have
occurred: (A) any event or circumstance that could reasonably
be expected to have a Material Adverse Effect, or (B) any
dividends or other distributions made to the stockholders of
Borrower, except as permitted by Section 6.3 of this
Agreement or Section 7(b) of the Lancer Pledge Agreement.
(vi) Lenders shall be satisfied that Borrower's
incurrence of Indebtedness pursuant to the requested Debt
Repurchase Loan is permissible pursuant to Section 1010 of
the Senior Subordinated Note Indenture and that after giving
effect thereto each of the representations and warranties set
forth in Section 4.21 shall continue to be true and correct
in all respects and shall have received such assurances in
regard thereto as Lenders shall request, including, without
limitation, certifications of Senior Officers of Borrower and
an opinion of Borrower's counsel with regard to such matters,
each to be in form and substance satisfactory to Lenders.
(b) The aggregate amount of Debt Repurchase Loans made
hereunder may not exceed the amount of the Debt Repurchase Line. No
Debt Repurchase Loan may be reborrowed once repaid.
(c) Borrower shall request each Debt Repurchase Loan in
writing at least three (3) Business Days prior to the requested
funding date, which request shall specify the date of the requested
Debt Repurchase Loan, the amount thereof and the amount of Senior
Subordinated Notes to be purchased with the proceeds thereof and shall
include a certification that each of the conditions precedent thereto
specified in paragraph (a) above has been satisfied. In the event that
the requested Debt Repurchase Loan is to be a Fixed Rate Loan,
Borrower shall concurrently with such request make a Fixed Rate
Election with respect thereto in accordance with Section 3.5(b).
(d) On the effective date of the Sixth Amendment the sum
of $5,000,000 constituting an Advance previously made to permit a
repurchase of Senior Subordinated Notes shall be converted from an
Advance to a Debt Repurchase Loan.
(e) Promptly following receipt of a request for Debt
Repurchase Loan, the Agent shall notify each Lender by telephone or
telecopier of the date of the Debt Repurchase Loan and such Lender's
Pro Rata Share of the Loan. Not later than 11:00 a.m., Atlanta time,
on the date specified for any Debt Repurchase Loan, each Lender shall
make its Pro Rata Share of the Loan available to the Agent by wire
transfer of immediately available funds to the Agent's Deposit
Account. Upon fulfillment of the applicable conditions set forth in
Section 8.2, each Debt Repurchase Loan shall be made by the Agent by
wire transfer of immediately available funds to Borrower's Deposit
Account, to the extent actually received from Lenders. No Lender
shall be responsible for the failure of any other Lender to make the
Pro Rata Share of any Loan to be made by such other Lender.
(f) On the second anniversary of the Sixth Amendment Date,
Borrower's ability to obtain Debt Repurchase Loans shall terminate.
(g) Interest shall be payable on each Debt Repurchase Loan
on the dates provided in Section 3.17 (as amended pursuant to Section
1(b) above), commencing on the first such date occurring after the
disbursement thereof. With respect to the Advance converted to a Debt
Repurchase Loan as provided in clause (d) above, such commencement
date shall be November 15, 1998. The outstanding principal balances
of the Debt Repurchase Loans shall be payable in twenty equal
quarterly installments (based on a five-year amortization) commencing
on August 15, 2000 and continuing on each Quarterly Payment Date
thereafter provided, however, that on the twentieth Quarterly Payment
Date, the outstanding principal balance of the Debt Repurchase Loans,
together with all accrued and unpaid interest thereon, shall be due
and payable in full.
(h) The Debt Repurchase Loans shall be evidenced by
promissory notes in form and substance satisfactory to Lenders which
shall be "Notes" for all purposes of this Agreement.
(e) Amendment to Section 2.8 to the Loan Agreement. The Loan Agreement
shall be deemed further amended by deleting Section 2.8 thereof in its entirety
and substituting in lieu thereof the following revised Section 2.8:
2.8 Subsequent Commitment Increases.
(a) Subsequent Commitment Increases. Subject to the satisfaction of
each of the conditions set forth in Section 2.8(b), at Borrower's written
request, delivered by Borrower to the Agent at least fifteen (15) days
prior to the requested increase date and specifying the requested increase
date (each individually a "Subsequent Commitment Increase Date" and
collectively the "Subsequent Commitment Increase Dates"), the Commitment
shall be increased (each individually a "Subsequent Commitment Increase"
and collectively the "Subsequent Commitment Increases") on no more than two
Subsequent Commitment Increase Dates by an amount not in excess of Ten
Million Dollars ($10,000,000) in the aggregate as to both Subsequent
Commitment Increases.
(b) Conditions Precedent to Subsequent Commitment Increases. The
obligations of the Lenders to make the Subsequent Commitment Increases
available to Borrower are subject to the following conditions precedent
each of which shall be satisfied prior to or on the applicable Subsequent
Commitment Increase Date:
(i) There shall be no more than two Subsequent Commitment
Increases.
(ii) Each Subsequent Commitment Increase shall be in a
minimum amount of Five Million Dollars ($5,000,000).
(iii) The Agent shall have received all of the
following, each dated as of the applicable Subsequent Commitment
Increase Date and all in form and substance satisfactory to the Agent
and legal counsel for the Agent:
(1) amendments to the then existing Revolving Credit Note
executed by Borrower in favor of each Lender pursuant to which the
principal amount of the Revolving Credit Note held by each Lender
shall be increased by an amount equal to such Lender's Pro Rata Share
of the Subsequent Commitment Increase;
(2) an Officer's Certificate affirming that the conditions
set forth in clauses (v), (vi), (vii) and (viii) below have been
satisfied;
(3) to the extent deemed necessary by the Agent, an
amendment to the Mortgage giving effect to the Subsequent Commitment
Increase, executed by Borrower, and in form acceptable for recordation
with the appropriate Governmental Agency;
(4) to the extent deemed necessary by the Agent, assurance
from the Title Company that it is committed to cause such amendment to
the Mortgage to be recorded, and, upon recordation of such amendment
to issue an endorsement to the title insurance policy issued by the
Title Company with regard to the Mortgage, in a form acceptable to the
Agent, insuring the continued validity and priority of the Mortgage as
a lien upon the Owned Real Property, subject to only those title
exceptions which are set forth in such title insurance policy and such
other title exceptions as may be approved by the Agent in its sole
discretion; and
(5) such other assurances, certificates, documents,
consents or opinions (in addition to those described hereinbelow) as
the Agent may reasonably require.
(iv) The representations and warranties contained in Article 4
shall be true and correct in all material respects on and as of the
Subsequent Commitment Increase Date as though made on and as of that
date (except to the extent that such representations and warranties
relate solely to an earlier date and except as affected by
transactions expressly contemplated by this Agreement).
(v) There shall not then be pending or, to the best knowledge of
Borrower, threatened, any litigation, arbitration, injunction,
proceeding, governmental investigation or inquiry against or affecting
Borrower or any Property of Borrower before any Governmental Agency
that could reasonably be expected to have a Material Adverse Effect.
(vi) Each of Lancer, Borrower and each of Borrower's Subsidiaries
shall be in compliance with all the terms and provisions of the Loan
Documents to which it is party, and no Default or Event of Default
shall have occurred and be continuing.
(vii) Since June 30, 1998, there shall not have occurred:
(A) any event or circumstance that could reasonably be expected to
have a Material Adverse Effect, or (B) any dividends or other
distributions made to the stockholders of Borrower, except as
permitted by Section 6.3 of this Agreement or Section 7(b) of the
Lancer Pledge Agreement.
(viii) Lenders shall be satisfied that Borrower and its
Subsidiaries are in compliance with all applicable Laws, including,
without limitation, all Environmental Laws and all Laws pertaining to
labor, occupational safety and health and ERISA matters except to the
extent that noncompliance could not reasonably be expected to have a
Material Adverse Effect. Lenders shall be satisfied that the
consummation of the Subsequent Commitment Increase will not cause
Borrower or any Subsidiary to violate any Contractual Obligation to
which it is party or by which it is bound or any Laws applicable to
it.
(ix) Lenders shall be satisfied that Borrower's incurrence of
Indebtedness pursuant to the Subsequent Commitment Increase is
permissible pursuant to Section 1010 of the Senior Subordinated Note
Indenture and that after giving effect thereto each of the
representations and warranties set forth in Section 4.21 shall
continue to be true and correct in all respects and shall have
received such assurances in regard thereto as Lenders shall request,
including, without limitation, certifications of Senior Officers of
Borrower and an opinion of Borrower's counsel with regard to such
matters, each to be in form and substance satisfactory to Lenders.
(x) Borrower shall pay to Lenders a fee for each Subsequent
Commitment Increase in an amount of one-fourth percent (.25%) of the
amount of such increase which fee shall be fully-earned and non-
refundable on the date of such increase.
(f) Amendment to Section 3.1 of the Loan Agreement. The Loan Agreement
shall be deemed to be further amended by deleting in its entirety clause (b)
only of Section 3.1 thereof and substituting in lieu thereof the following
revised clause (b):
(b) The aggregate principal amount of the Term Loans shall, if not
sooner paid, be payable in full on the Maturity Date. The aggregate
principal amount of the Debt Repurchase Loans shall be paid as provided in
Section 2.3A.
(g) Amendments to Section 3.3 of the Loan Agreement. (i) Section 3.3 of
the Loan Agreement is hereby amended by deleting clauses (b) and (d) thereof in
their entireties.
(ii) Section 3.3 of the Loan Agreement is hereby further amended by
changing the references to "Term Loan" and "Term Loans" in clauses (c), (e) and
(f) thereof to references to "Debt Repurchase Loan" and "Debt Repurchase Loans".
(iii) Section 3.3 of the Loan Agreement is hereby further amended by
inserting the phrase "and the Debt Repurchase Line" immediately after the word
"Commitment" in clause (g) thereof and by inserting the words "and the Debt
Repurchase Loans" immediately after the words "Term Loans" in such clause (g).
(iv) Section 3.3 of the Loan Agreement is hereby further amended by adding
the following new clause (h) at the end thereof:
(h) To the extent that Borrower prepays the Debt Repurchase Loans in
full prior to the payment in full of the Term Loans, Borrower shall be
required to make the prepayments specified in clauses (c) and (e)
above with regard to the Term Loans.
(h) Amendments to Section 3.4 of the Loan Agreement.
(i) Section 3.4 of the Loan Agreement is hereby amended by deleting the
first sentence thereof in its entirety and substituting in lieu thereof the
following sentence:
Interest shall be payable on (i) the outstanding daily
unpaid principal amount of each Advance from the date hereof
until payment in full of such Advance, (ii) each Term Loan
from the Closing Date until payment in full of the Term Loan
and (iii) each Debt Repurchase Loan from the date thereof
until payment in full thereof, and, in each case shall
accrue and be payable at the applicable rates set forth
herein with respect to Advances, the Term Loans and the Debt
Repurchase Loans, before and after default, before and after
maturity before and after judgment, and before and after the
commencement of any proceeding under any Debtor Relief Law,
with interest on overdue interest to bear interest at the
Default Rate to the extent permitted by applicable laws.
(ii) Section 3.4 of the Loan Agreement is hereby further amended by
inserting in paragraph (b) thereof immediately after the words "Term
Loans" the phrase "and the Debt Repurchase Loans".
(i) Fixed Rate. Borrower shall have the same right to elect
that the Debt Repurchase Loans bear interest at the Fixed Rate as it
does with respect to the Term Loans, in accordance with the provisions
of Section 3.5 of the Loan Agreement; provided, that, Borrower may not
have more than two (2) Interest Periods in effect at any time with
respect to the Debt Repurchase Loans.
(j) Amendment to Section 3.7 of the Loan Agreement. The Loan
Agreement shall be deemed to be further amended by deleting Section
3.7 thereof in its entirety and substituting in lieu thereof the
following revised Section 3.7:
3.7 Commitment Fees. (1)Borrower shall pay to the Agent, for the
account of each Lender, a commitment fee with respect to the Commitment in
an amount equal to the quotient of (a) an amount equal to (i) the average
daily amount by which the Commitment exceeds the Facility Usage during the
preceding month multiplied by (ii) one-quarter of one percent (1/4 of 1%)
divided by (b) 360. The commitment fee payable hereunder shall accrue
daily commencing on the Sixth Amendment Date and be payable monthly in
arrears on each Monthly Payment Date and on the Commitment Termination
Date.
(2) Borrower shall pay to the Agent, for the account of each Lender, a
commitment fee with respect to the Debt Repurchase Line, in an amount equal
to the quotient of (a) an amount equal to (i) the average daily amount by
which the Debt Repurchase Line exceeds the outstanding Debt Repurchase
Loans during the preceding month multiplied by (ii) one quarter of one
percent (1/4 of 1%) divided by (b) 360. The commitment fee payable
hereunder shall accrue daily commencing on the Sixth Amendment Date and be
payable monthly in arrears on each Monthly Payment Date and on the
Commitment Termination Date.
(k) Amendment to Section 4.21 of the Loan Agreement. Section 4.21 of the
Loan Agreement is hereby amended by deleting such Section in its entirety and
substituting in lieu thereof the following revised Section 4.21:
4.21 Subordination of Subordinated Indebtedness. This Agreement,
as amended by the First Amendment, the Second Amendment, the Third
Amendment, the Fourth Amendment, the Fifth Amendment and the Sixth
Amendment, and the other Loan Documents to which Borrower or any
Subsidiary is party, and, to the extent permissible under Section 1010
of the Senior Subordinated Note Indenture, all further amendments,
amendments and restatements, renewals, extensions, restructurings,
supplements, modifications, refinancings, refundings, or replacements
hereof and thereof constitute the "Credit Agreement" within the
meaning of the Senior Subordinated Note Indenture, and the Term Loans,
the Revolving Credit Loan, the Letter of Credit Obligations, the Debt
Repurchase Loans and all other Obligations of Borrower to the Agent
and the Lenders under this Agreement, the Notes and any of the other
Loan Documents, and, to the extent permissible pursuant to Section
1010 of the Senior Subordinated Note Indenture, all further
amendments, amendments and restatements, renewals, extensions,
restructurings, supplements, modifications, refinancings, refundings
and replacements of any of the foregoing, constitute "Senior
Indebtedness" of Borrower within the meaning of the Senior
Subordinated Note Indenture, and the holders thereof from time to time
shall be entitled to all of the rights of a holder of "Senior
Indebtedness" pursuant to Article 13 of the Senior Subordinated Note
Indenture.
(l) New Text at End of Article 4 of the Loan Agreement. Article 4 of the
Loan Agreement is hereby further amended by adding the following paragraph at
the end thereof:
In connection with its execution and delivery of the Sixth Amendment,
Borrower hereby affirms that each of the representations and warranties of
Borrower contained in this Agreement or in any of the other Loan Documents
is correct in all material respects as of the Sixth Amendment Date and
after giving effect to the Sixth Amendment (except to the extent that such
representations and warranties relate solely to an earlier date and except
as affected by transactions expressly contemplated by this Agreement). In
addition to induce GE Capital to enter into the Sixth Amendment, Borrower
represents and warrants to the Agent and Lenders as follows:
(a) Financial Statements. Borrower has furnished to the Lenders (i)
Borrower's audited consolidated balance sheets for its Fiscal Year ending
December 31, 1997 and Borrower's related audited consolidated statements of
operations, stockholders' equity and cash flows for its Fiscal Year ending
December 31, 1997, (ii) Borrower's unaudited consolidated balance sheet for
its Fiscal Quarter ending June 30, 1998 and Borrower's related consolidated
statements of operations, stockholders' equity and cash flows for such
Fiscal Quarter, and (iii) Borrower's operating and financial plan for the
five Fiscal Years ending after the date hereof, including projected balance
sheets, statements of operations, and statements of cash flow. The
financial statements described in clauses (i) and (ii) above fairly present
the financial position and results of operations of Borrower, on a
consolidated basis, as at the dates and for the periods indicated in
accordance with GAAP consistently applied. The projections referred to in
clause (iii) above were prepared on the basis of the estimates and
assumptions stated therein and represented, at the date thereof, Borrower's
good faith projections of its future financial performance prepared after
reasonable investigations. As of the Sixth Amendment Date, no material
developments have occurred since the date of such projections which would
lead Borrower to believe that such projections, taken as a whole, are not
reasonably attainable, subject to the uncertainties and approximations
inherent in any projection.
(b) No Other Liabilities; No Material Adverse Effect. Neither
Borrower nor any Subsidiary has any liability or contingent liability that
is material to Borrower or such Subsidiary that is not reflected in,
reserved for or against or otherwise disclosed in the financial statements
described in clause (a) above, and, since June 30, 1998, no event or
circumstance has occurred that could reasonably be expected to have a
Material Adverse Effect.
(m) Amendments to Section 6.3 of the Loan Agreement. (i) Section 6.3 of
the Loan Agreement shall be amended by deleting clauses (c), (d) and (h) thereof
in their entireties and substituting in lieu thereof the following revised
clauses (c), (d) and (h):
(c) payments to Lancer or any Affiliate of Lancer of Borrower's
allocated portion of the Lancer consolidated group's corporate expenses
(including expenses for fees actually paid or payable at market rates to
attorneys, accountants, consultants and other professionals) actually
incurred in connection with Lancer's or any Affiliates of Lancer's
performance of management, consulting, monitoring and financial advisory
services with respect to Borrower or any Subsidiary; provided, however,
that such payments (excluding reimbursement of the expenses referred to in
the preceding parenthetical) shall be in an amount not in excess of
$1,600,000 in the aggregate in any Fiscal Year (inclusive of an amount not
in excess of $100,000 in any Fiscal Year permitted to be retained and paid
by T-H Licensing as provided in clause (A)(2) of the second paragraph of
Section 6.9(c) hereof);
(d) payments in respect of the Equity Participation Plan and the
Equity Incentive Plan to the extent permitted under Section 6.9;
(h) reasonable directors' fees to directors of Borrower who are not
employees of Borrower in an aggregate amount not to exceed $200,000 in any
Fiscal Year;
(ii) Section 6.3 of the Loan Agreement shall be further amended by adding
the following new clauses (m), (n), (o) and (p) at the end of such section:
(m) payments to Lancer or any Affiliate of Lancer for consulting,
investment banking, advisory or other services performed by Lancer or any
Affiliates of Lancer in connection with material and extraordinary
transactions, including material acquisitions and dispositions, of Borrower
or any of its Subsidiaries (including reimbursement of expenses of Lancer
or Affiliates of Lancer for fees actually paid or payable at market rates
to attorneys, accountants, consultants and other professionals in
connection with such services); provided, however, that (i) such payments
(excluding reimbursement of the expenses referred to in the preceding
parenthetical) do not exceed in any Fiscal Year the greater of (x)
$1,500,000 or (y) fifty percent (50%) of Borrowers' Consolidated Net Income
before payment of Permitted Preferred Stock Dividends for the preceding
Fiscal Year, but not to exceed $5,000,000, (ii) no Default or Event of
Default has occurred and is continuing or will result from the payment of
any such amount and (iii) this provision shall not be deemed to be a
consent by Lenders to the consummation of any transaction prohibited by the
Loan Agreement;
(n) payments to Lancer or the Lancer Employee Stock Ownership Plan,
the proceeds of which are used to redeem shares of common stock of Lancer
held by participants in the Lancer Employee Stock Ownership Plan so long as
(i) such payments do not exceed $500,000 in the aggregate in any Fiscal
Year or $2,000,000 in the aggregate in the Fiscal Year (if any) in which
Borrower's employees' participation in the Lancer Employee Stock Ownership
Plan is terminated; (ii) such payments do not exceed $5,500,000 in the
aggregate during the term of this Agreement and (iii) at the time of the
making of any such payment no Default or Event of Default shall have
occurred and be continuing or will result from the making of such payment;
(o) purchases by Borrower or any Subsidiary of Borrower of the
Exchange Preferred Stock so long as (i) the face amount of such purchases
does not exceed $15,000,000 in the aggregate in any Fiscal Year and (ii) at
the time of the making of any such purchase, no Default or Event of Default
shall have occurred and be continuing or will result from the making of
such purchase; and
(p) repurchases or redemptions of Senior Subordinated Notes with the
proceeds of Debt Repurchase Loans so long as all conditions precedent to
the making of each Debt Repurchase Loan set forth in Section 2.3A have
been satisfied.
(n) Amendments to Section 6.9 of the Loan Agreement. (i) Section 6.9
of the Loan Agreement shall be deemed to be amended by deleting subclause
(i) of clause (a) thereof and substituting in lieu thereof the following
revised subclause (i):
(i) to the Persons provided under the Equity Incentive Plan or the
Equity Participation Plan in amounts not in excess of the Equity Plan Cap;
(ii) Section 6.9 of the Loan Agreement shall be further amended by deleting
the figure "$850,000" in clause (A)(2) of the second paragraph of clause (c)
thereof and replacing it with the figure "$1,600,000".
(o) Amendments to Section 6.17 of the Loan Agreement. Section 6.17 of the
Loan Agreement shall be amended by deleting clause (b) thereof and substituting
the following in lieu thereof the following revised clause (b):
(b) amend, supplement, waive or otherwise relinquish any material
right under, or otherwise modify any provision of, any Related Agreement
which could reasonably be expected to have a Material Adverse Effect.
The remainder of Section 6.17, including, without limitation, the last sentence
thereof, shall remain as written.
(p) Amendments to Section 6.18 and Sections 6.20 through 6.22 of the Loan
Agreement. The Loan Agreement shall be deemed to be further amended by deleting
Section 6.18 and Sections 6.20 through 6.22 thereof in their entireties and
substituting in lieu thereof the following revised Section 6.18 and
Sections 6.20 through 6.22:
6.18 Capital Expenditures. Borrower shall not, and shall not permit
any Subsidiary to, make or commit to make Capital Expenditures in any
Fiscal Year which exceed in the aggregate for Borrower and its Subsidiaries
the sum of $15,000,000; provided that, in the event that, for any Fiscal
Year, the maximum aggregate amount set forth above exceeds the amount of
Capital Expenditures actually made in such Fiscal Year, the unused portion
of such permitted amount for such Fiscal Year may be carried forward and
used solely in the next succeeding Fiscal Year for Capital Expenditures,
but only after the entire amount actually scheduled for use in such
succeeding Fiscal Year shall have been used.
6.20 Current Ratio. Borrower will not permit (as of the end of any
Fiscal Quarter) the ratio of Consolidated Current Assets to Consolidated
Current Liabilities to be less than 1.25:1.00.
6.21 Consolidated Fixed Charge Coverage Ratio. Borrower will not
permit the ratio of (a) Consolidated Cash Flow for any Fiscal Quarter to
(b) Consolidated Fixed Charges for such Fiscal Quarter to be less than the
ratio set forth below next to the Fiscal Year in which such Fiscal Quarter
occurs:
FISCAL YEAR ENDING RATIO
December 31, 1998 .90:1.00
December 31, 1999 .90:1.00
December 31, 2000 1.00:1.00
and each Fiscal Year thereafter
For purposes of this Section 6.21, Consolidated Cash Flow and
Consolidated Fixed Charges shall be calculated based upon the period of four
Fiscal Quarters ending on the date of calculation.
6.22 Interest Coverage Ratio. Borrower shall not permit the ratio of
(a) Consolidated EBITDA for any Fiscal Quarter to (b) Consolidated Net
Interest Expense for such Fiscal Quarter to be less than the ratio set
forth below next to the applicable Fiscal Quarter set forth below:
FISCAL QUARTER RATIO
All Fiscal Quarters through 1.50:1.00
the Fiscal Quarter ending
December 31, 2001
Fiscal Quarters Ending
March 31, 2002 and June 30, 2002 1.60:1.00
All Fiscal Quarters thereafter 1.75:1.00
For purposes of this Section 6.22, Consolidated EBITDA and
Consolidated Net Interest Expense shall be calculated based upon the period
of four Fiscal Quarters ending on the date of calculation.
Section 6.19 of the Loan Agreement shall remain as set forth in the Third
Amendment to Loan Agreement, dated as of March 31, 1995.
(q) Amendment to Section 9.2 of the Loan Agreement. Section 9.2 of the
Loan Agreement is hereby amended by inserting in clause (a)(i) thereof
immediately after the words "Letter of Credit Obligations" the phrase "and the
Debt Repurchase Line and Lenders' Obligations to make Debt Repurchase Loans
thereunder".
(r)Amendment to Exhibit P to the Loan Agreement. Exhibit P to the Loan
Agreement shall be deemed to be amended by deleting such Exhibit in its entirety
and substituting in lieu thereof the revised Exhibit P attached to this
Amendment.
2. Conditions Precedent. This Amendment shall not become effective
unless and until each of the following conditions precedent shall have been
fulfilled, to Lenders' and its counsel's satisfaction:
(a) Documents. The Agent shall have received all of the following,
all in form and substance satisfactory to the Agent and legal counsel
for the Agent:
(i) a Term Note executed by Borrower in favor of each Lender in
the amount of such Lender's Pro Rata Share of the Term Loans, which Term
Notes shall be issued in consolidation, extension and renewal of the Term
Notes dated December 5, 1996 issued by Borrower to Lenders;
(ii) an amendment to the Mortgage giving effect to the amendments
effected hereby, executed by Borrower, and in form acceptable for
recordation with the appropriate Governmental Agency;
(iii) assurance from the Title Company that it is committed
to cause such amendment to the Mortgage to be recorded, and, upon
recordation of such amendment to issue an endorsement to the title
insurance policy issued by the Title Company with regard to the Mortgage,
in a form acceptable to the Agent, insuring the continued validity and
priority of the Mortgage as a lien upon the Owned Real Property, subject to
only those title exceptions which are set forth in such title insurance
policy and such other title exceptions as may be approved by the Agent in
its sole discretion;
(iv) a reaffirmation of the Subsidiary Guaranty and Subsidiary
Security Agreement signed by T-H Licensing and a reaffirmation of the
Lancer Pledge Agreement signed by Lancer;
(v) an Officer's Certificate affirming that the conditions set
forth in clauses (b), (c), (d) and (e) below have been satisfied;
(vi) such documentation as the Agent may reasonably require to
confirm the good standing of Borrower in the state of its incorporation,
the qualification of Borrower to engage in business in each jurisdiction in
which it is engaged in business or required to be so qualified, its
authority to execute, deliver and perform this Amendment and any other Loan
Documents to be executed and delivered in connection herewith to which it
is party, certificates of good standing and of qualification to engage in
business, certificates of corporate resolutions, incumbency certificates,
certificates of Responsible Officials and the like;
(vii) the legal opinion of Debevoise & Xxxxxxxx, special
counsel to Borrower, substantially in the form of Exhibit 1 to this
Amendment, together with copies of all factual certificates and legal
opinions upon which such counsel has relied;
(viii) Lenders shall be satisfied that Borrower's incurrence
of Indebtedness pursuant to the increase in the Term Loans contemplated
hereby and the initial Debt Repurchase Loan is permissible pursuant to
Section 1010 of the Senior Subordinated Note Indenture and that after
giving effect thereto each of the representations and warranties set forth
in Section 4.21 shall continue to be true and correct in all respects and
shall have received such assurances in regard thereto as Lenders shall
request, including, without limitation, certifications of Senior Officers
of Borrower with regard to such matters, each to be in form and substance
satisfactory to Lenders.
(ix) such other assurances, certificates, documents, consents or
opinions (in addition to those described hereinbelow) as the Agent may
reasonably require.
(b) Representations and Warranties. The representations and warranties
contained in Article 4 of the Loan Agreement (as amended hereby) shall be
true and correct in all material respects on and as of the effective date
hereof as though made on and as of that date (except to the extent that
such representations and warranties relate solely to an earlier date and
except as affected by transactions expressly contemplated by the Loan
Agreement). In addition, Borrower represents and warrants that a Change of
Control of Lancer did not result from the $30,000,000 capital contribution
made by CIBC Wood Gundy Ventures, Inc. to Lancer.
(c) Absence of Litigation. There shall not be pending or, to the best
knowledge of Borrower, threatened, any litigation, arbitration, injunction,
proceeding, governmental investigation or inquiry against or affecting
Borrower or any Property of Borrower before any Governmental Agency that
could reasonably be expected to have a Material Adverse Effect.
(d) No Default. After giving effect to this Amendment, Lancer, Borrower
and T-H Licensing shall be in compliance with all the terms and provisions
of the Loan Documents to which they are party, and no Default or Event of
Default shall have occurred and be continuing.
(e) No Material Adverse Effect. Since June 30, 1998, there shall not have
occurred: (1) any event or circumstance that could reasonably be expected
to have a Material Adverse Effect, or (2) any dividends or other
distributions made to the stockholders of Borrower, except as permitted by
Section 6.3 of the Loan Agreement and Section 7(b) of the Lancer Pledge
Agreement.
(f) Compliance with Laws. Lenders shall be satisfied that Borrower and
its Subsidiaries are in compliance with all applicable Laws, including,
without limitation, all Environmental Laws and all Laws pertaining to
labor, occupational safety and health and ERISA matters except to the
extent that noncompliance could not reasonably be expected to have a
Material Adverse Effect. Lenders shall be satisfied that the execution and
delivery of this Amendment and the consummation of the transactions
contemplated hereby will not cause Borrower or any Subsidiary to violate
any Contractual Obligation to which it is party or by which it is bound or
any Laws applicable to it.
(g) Fees. The Agent shall have received, for the account of Lenders, a
closing fee in the amount of $125,000 which shall be fully-earned and non-
refundable on the date hereof and in addition to and not in lieu of all
other fees, interest and reimbursement for expenses provided herein and in
the Loan Agreement. Lenders acknowledge that Borrower has advised Lenders
that Borrower may prepay or repay some or all of the Senior Subordinated
Notes (the "Refinancing") using proceeds from the issuance of new senior
subordinated notes or other sources. Such Refinancings will require
Lenders' consent pursuant to the terms of the Loan Agreement. Without
limitation of Lenders' discretion to consent or not to consent to each such
Refinancing, Lenders agree that they will not charge any additional fee in
connection with such consent so long as (i) at the times when such consent
is requested and such Refinancing occurs, no Default or Event of Default
has occurred and is continuing, (ii) Borrower does not request that Lenders
grant concurrent consents, waivers, or amendments as to any other matters
except, with respect to the issuance of new senior subordinated notes, any
necessary consents, waivers or amendments incidental to such Refinancing,
(iii) Borrower does not request that Lenders make any financing available
in regard thereto except pursuant to the Debt Repurchase Line, and (iv)
such consent requests and Refinancings occur on or prior to September 15,
1999.
3. Other Agreements
(a) Except as set forth expressly herein and above, all terms of the
Loan Agreement and the other Loan Documents shall be and remain in full
force and effect and shall constitute the legal, valid, binding and
enforceable obligations of Borrower to the Agent and Lenders. In
furtherance of the foregoing, Borrower acknowledges that from and after the
date hereof, it shall continue to be bound by all provisions of the Loan
Agreement as amended hereby. To the extent any terms and conditions in any
of the other Loan Documents shall contradict or be in conflict with any
terms or conditions of the Loan Agreement, after giving effect to this
Amendment, such terms and conditions are hereby deemed modified and amended
accordingly to reflect the terms and conditions of the Loan Agreement as
modified and amended hereby.
(b) Borrower agrees to pay on demand the reasonable fees and out-of-
pocket expenses of counsel to GE Capital incurred in connection with the
preparation, execution, delivery and enforcement of this Amendment, the
closing hereof, and any other transactions contemplated hereby.
(c) To induce the Agent and Lenders to enter into this Amendment,
Borrower hereby acknowledges and agrees that, as of the date hereof, there
exists no right of offset, defense or counterclaim in favor of Borrower as
against the Agent or Lenders with respect to the Obligations.
(d) This Amendment shall be governed by, and construed in accordance
with the laws of the State of New York applicable to contracts made and
performed in such State and all applicable laws of the United States of
America.
(e) This Amendment may be executed in two or more counterparts, all
of which shall constitute one and the same agreement.
4. Refinancings. Borrower agrees that Agent and Lender shall have the
right of first refusal to serve as agent and to participate as a lender,
respectively, in any debt refinancing of the Obligations under the Loan
Agreement consummated at any time prior to September 15, 2000, on substantially
the same terms and conditions as offered by any other prospective agent and
lender; provided, however, that (i) such right of first refusal shall not be
applicable to any proposed refinancing of the Obligations (or portion thereof)
using the proceeds of Subordinated Indebtedness which is junior in rank to the
Obligations and (ii) in the event that any other Indebtedness of Borrower is
refinanced contemporaneously with, or as part of, any refinancing of the
Obligations, such right of first refusal shall only apply to the refinancing of
the Obligations and not such other Indebtedness.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
FAIRFIELD MANUFACTURING
COMPANY, INC.
By:___________________________
Xxxxxxx X. Xxxx
Vice President-Finance
GENERAL ELECTRIC CAPITAL
CORPORATION, as Agent
By:___________________________
Xxxxxx X. Xxxxx
Senior Vice President,
as duly authorized
GENERAL ELECTRIC CAPITAL
CORPORATION, as Lender
By:__________________________
Xxxxxx X. Xxxxx
Senior Vice President,
as duly authorized
ACKNOWLEDGMENT OF GUARANTOR
The undersigned, T-H Licensing, Inc., hereby (a) acknowledges its receipt
of a copy of and consents to the within and foregoing Amendment, (b) agrees to
be bound by the provisions thereof and (c) acknowledges and agrees that the
Subsidiary Guaranty, the Subsidiary Security Agreement and all other Loan
Documents to which the undersigned is a party shall continue in full force and
effect from and after the execution and delivery of the within and foregoing
Amendment without diminution or impairment.
IN WITNESS WHEREOF, the undersigned has set its hand as of the 12th day of
October, 1998.
T-H LICENSING, INC.
By:___________________________
Name:
Title:
ACKNOWLEDGMENT OF LANCER
The undersigned, Lancer Industries Inc., hereby (a) acknowledges its
receipt of a copy of and consents to the within and foregoing amendment, (b)
agrees to be bound by the provisions thereof and (c) acknowledges and agrees
that the Lancer Pledge Agreement shall continue in full force and effect from
and after the execution and delivery of the within and foregoing Amendment
without diminution or impairment.
IN WITNESS WHEREOF, the undersigned has set its hand as of the 12th day of
October, 1998.
LANCER INDUSTRIES INC.
By:____________________
Name:
Title:
