EXHIBIT 2
SECOND AMENDMENT
TO SENIOR SUBORDINATED LOAN DOCUMENTS
This SECOND AMENDMENT TO SENIOR SUBORDINATED LOAN DOCUMENTS ("Second
Amendment") is made and entered into as of December 6, 2001 between CLARION
TECHNOLOGIES, INC., a Delaware corporation (the "Company"), and its subsidiaries
party hereto (the Company and its subsidiaries are referred to individually as a
"Loan Party" and collectively as the "Loan Parties"), jointly and severally, as
borrowers; and XXXXXXX XXXXX MEZZANINE CAPITAL FUND III, L.P., a Delaware
limited partnership ("WBMCF"), Xxxxxx X. Xxxxxx Living Trust dated 0/0/00,
Xxxxxxx Xxxxxxx, Xxxxxx Xxxxxxx, the Xxxxx Xxxxxx Grantor Retained Annuity
Trust, dated January 31, 1994, and the Xxxxxx Xxxxxx Grantor Retained Annuity
Trust, dated January 31, 1994, as the lenders.
RECITALS
A. Pursuant to that certain Senior Subordinated Loan Agreement dated as of
July 21, 2000 (the "Original Loan Agreement") between the Loan Parties and
WBMCF, WBMCF purchased a promissory note of the Loan Parties having a principal
amount of $30,000,000, and the Company issued to WBMCF a warrant to purchase
2,847,797 shares of the Company's Common Stock, and provided certain
registration rights with respect to such stock pursuant to the Registration
Rights Agreement.
B. On April 17, 2001, pursuant to the First Amendment (together with the
Original Loan Agreement, the "Loan Agreement"), the parties thereto agreed to
amend selected provisions of the Original Loan Agreement and Registration Rights
Agreement and to make provision for the purchase of the First Amendment Senior
Subordinated Notes of the Loan Parties by certain Lenders, having an aggregate
principal amount of $3,000,000.
C. On July 31, 2001, with the consent of WBMCF and Senior Lenders, the
Xxxxxx Xxxxxx Grantor Retained Annuity Trust, dated January 31, 1994, advanced
the principal amount of $1,300,000 to the Company, the terms of the such loan to
be documented pursuant to that certain Second Amendment Senior Subordinated
Secured Note dated as of July 31, 2001 (the "Advance Xxxxxx Note").
D. The aggregate amount of principal and accrued interest outstanding owed
by the Loan Parties to Lenders pursuant to the Senior Subordinated Loan
Documents as of the close of business on the date hereof is set forth on
Schedule 1 attached hereto.
E. Prior to the date hereof, the Loan Parties defaulted on certain
obligations to the Agent and Senior Lenders under a Credit Agreement by and
among Agent, Co-Agent and the other Senior Lenders dated February 29, 2000, as
amended by that certain First Amendment to Credit Agreement dated June 30, 2000,
that certain Second Amendment to Credit Agreement dated July 21, 2000, and that
certain Third Amendment to Credit Agreement dated April 17, 2001.
F. In connection with such defaults, the Loan Parties and the Senior
Lenders are entering into a Consent and Fourth Amendment to Credit Agreement of
even date herewith (the "Fourth Amendment to Senior Loan Agreement"), pursuant
to which Senior Lenders, among other things, are agreeing, subject to the terms
thereof, to forego from charging the default
interest rate, to defer principal payments until maturity of the loans, to amend
certain financial covenants contained therein, and to waive existing defaults
specifically enumerated therein.
G. On the date hereof, the Loan Parties are in default under the Loan
Agreement and have requested, and Lenders have agreed to waive such existing
defaults.
H. The Loan Parties have further requested, and Lenders have agreed, to
amend selected provisions of the Loan Agreement and Registration Rights
Agreement and to make provision for the purchase of the Second Amendment Senior
Subordinated Secured Notes (including the Advance Xxxxxx Note) of the Loan
Parties by certain Lenders, having an aggregate principal amount of $3,400,000.
I. In connection with the Second Amendment Senior Subordinated Secured
Notes, the Company has agreed to issue warrants to purchase shares of the
Company's Common Stock certain Lenders upon the terms and conditions as
hereinafter set forth.
J. In order to induce Lenders to waive the existing defaults and to
purchase the Second Amendment Senior Subordinated Secured Notes, the Loan
Parties have further agreed to secure payment of (1) the indebtedness evidenced
by the Second Amendment Senior Subordinated Secured Notes, and (2) the
Obligations evidenced by the Original Senior Subordinated Notes and the First
Amendment Senior Subordinated Notes (as defined in the Loan Agreement) by a
Security Agreement of even date herewith and by certain Mortgage Agreements of
even date herewith in favor of WBMCF on behalf of itself and as agent for the
other Lenders, subject to the terms and conditions of the Subordination
Agreement among Lenders and Agent.
K. Based upon the foregoing recitals, and without waiving any rights or
remedies other than those expressly waived herein, each Lender is willing to
amend the terms of the Senior Subordinated Loan Documents under the terms and
conditions expressly set forth herein.
AGREEMENTS
NOW, THEREFORE, in consideration of the agreements set forth herein, and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
1. Incorporation of Recitals. The foregoing recitals are incorporated
herein by reference and made a part of this Second Amendment.
2. Definitions. All capitalized terms used herein without definition shall
have the meanings given to them in the Loan Agreement.
3. Defaults. The Loan Parties hereby acknowledge, confirm and agree that
certain events have occurred and continue to occur as set forth on Schedule 2
hereto (collectively, the "Existing Defaults"), each of which presently
constitutes an Event of Default or Potential Event of Default and, subject to
the terms of the Intercreditor Agreement, entitles, or would entitle, Lender to
exercise certain rights and remedies under the Loan Agreement.
4. Waiver. In reliance upon the representations, warranties and covenants
of the Loan Parties contained in this Agreement and subject to the terms and
conditions of this Agreement and any documents or instruments executed in
connection herewith, Lender hereby agrees to waive any and all Existing Defaults
through the Deferred Interest Period. The Loan
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Parties understand and agree that the waiver contained in this Section 4 relates
only to the Existing Defaults, which occurred prior to and are existing and/or
continuing as of, the date of this Second Amendment, and that said waiver shall
not be construed as Lender's waiver of, or agreement to waive, any other Events
of Default or Potential Events of Default arising hereafter under the Loan
Agreement or any other Senior Subordinated Loan Document. Except as limited
and/or modified by this Second Amendment and by the documents executed and
delivered in connection herewith, the Loan Documents shall be deemed to be in
full force and effect during the period of the Agreement, and all provisions of
the Loan Agreement relating to the rights and remedies of Lender shall continue
to be in effect until such time as all Obligations have been paid in full.
5. Amendment of the Loan Agreement. Subject to the Loan Parties'
performance of their obligations to Lender hereunder on the date hereof, the
parties hereto agree to amend the terms of the Loan Agreement as follows:
(a) The following definitions shall be added to Section 1.1 of the
Loan Agreement in the proper alphabetical order:
"'Mortgage Agreements' shall mean those certain Mortgage
Agreements dated as of December 6, 2001 between WBMCF, on behalf of
itself and as agent for the other Lenders, and Clarion-Drake
Acquisition, Inc., Clarion Plastics Technologies Inc., and Clarion
Real Estate, LLC respectively, as the same may be amended,
supplemented, restated or otherwise modified from time to time."
"'Second Amendment' shall mean that certain Second Amendment to
Senior Subordinated Loan Documents dated as of December 6, 2001
between the Loan Parties, as borrowers, and WBMCF, the Xxxxx Xxxxxx
Grantor Retained Annuity Trust, dated January 31, 1994, the Xxxxxx
Xxxxxx Grantor Retained Annuity Trust, dated January 31, 1994, and
Xxxxxxx Xxxxxxx as lenders, as the same may be amended, supplemented,
restated or otherwise modified from time to time."
"'Second Amendment Closing Date' shall be deemed to mean the date
of the Second Amendment if and when the conditions for effectiveness
of the Second Amendment are satisfied as provided therein."
"'Second Amendment Loans' shall have the meaning set forth in
Section 2.1 hereof."
"'Second Amendment Senior Subordinated Secured Notes' shall have
the meaning set forth in Section 2.1 hereof."
"'Second Amendment Warrants' shall mean the warrants issued by
the Company to WBMCF, the Xxxxx Xxxxxx Grantor Retained Annuity Trust
dated January 31, 1994, the Xxxxxx Xxxxxx Grantor Retained Annuity
Trust dated January 31, 1994, and Xxxxxxx Xxxxxxx in form and
substance substantially identical to Exhibit D-3 attached hereto."
"'Security Agreement' shall mean that certain Security Agreement
dated as of December 6, 2001 between the Loan Parties and WBMCF on
behalf of
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itself and as agent on behalf of the other Lenders, as the same may be
amended, supplemented, restated or otherwise modified from time to
time."
(b) The following definitions in Section 1.1 of the Loan Agreement
shall be deleted in their entirety and replaced with the following:
"'Lender' shall mean (1) with respect to the Original Loan, WBMCF
and its Affiliates, participants, transferees, successors and assigns,
(2) with respect to the First Amendment Loans, WBMCF, Xxxxxx X. Xxxxxx
Living Trust dated 3/1/94, Xxxxxxx Xxxxxxx and Xxxxxx Xxxxxxx and
their Affiliates, participants, transferees, successors and assigns,
and (3) with respect to the Second Amendment Loans, WBMCF, the Xxxxx
Xxxxxx Grantor Retained Annuity Trust, dated January 31, 1994, the
Xxxxxx Xxxxxx Grantor Retained Annuity Trust, dated January 31, 1994,
and Xxxxxxx Xxxxxxx and their Affiliates, participants, transferees,
successors and assigns."
"'Loan' shall have the meaning set forth in Section 2.1(d)
hereof."
"'Principal' shall mean the unpaid principal amount of the Loan
including, without limitation, the principal amount of the Original
Loan (including, without limitation, the Deferred Interest Portion),
the principal amount of the First Amendment Loans (including, without
limitation, the amounts added to the principal thereof pursuant to
Section 2.3(b)(ii) hereof), and the principal amount of the Second
Amendment Loans (including, without limitation, the amounts added to
the principal thereof pursuant to Section 2.3(b)(iii) hereof)."
"'Senior Subordinated Loan Documents' shall mean this Agreement,
the Senior Subordinated Note, the Intercreditor Agreement, the
Warrant, the Registration Rights Agreement, the Junior Subordination
Agreements, the Security Agreement, the Mortgage Agreements, and any
and all other documents, agreements, certificates and instruments
executed or delivered in connection herewith or therewith (including,
without limitation, those referred to in Article 3 hereof), as any or
all of the foregoing may be supplemented, amended or modified from
time to time."
"'Subordinated Indebtedness' shall mean (i) the Loan (including,
without limitation, the Original Loan, the First Amendment Loan and
the Second Amendment Loans), (ii) each of the Drake Notes, and (iii)
any other unsecured Indebtedness of the Loan Parties which has
subordination terms, covenants, pricing and other terms which have
been approved in writing by Senior Lenders and Lender."
(c) Section 2.1 of the Loan Agreement shall be deleted in its entirety
and replaced with the following:
"2.1 Purchase and Sale of the Original Senior Subordinated Note,
the First Amendment Senior Subordinated Notes, and the Second
Amendment Senior Subordinated Secured Notes.
(a) Subject to the terms hereof, on July 21, 2000, Lender shall
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purchase from the Loan Parties for a purchase price of Thirty
Million Dollars ($30,000,000) less the total amount allocated to
the Original Warrant consistent with the terms thereof, and the
Loan Parties shall issue and sell to Lender, a senior
subordinated note (the "Original Senior Subordinated Note")
evidencing a term loan in the principal amount of Thirty Million
Dollars ($30,000,000) (the "Original Loan"). The Original Senior
Subordinated Note shall be dated July 21, 2000, subject to the
terms and conditions of this Agreement and in the form attached
hereto as Exhibit C-1. The aggregate principal amount of the
Original Senior Subordinated Note outstanding on the First
Amendment Closing Date is Thirty Million Dollars ($30,000,000).
(b) Subject to the terms hereof, on the First Amendment Closing
Date, each Lender shall purchase from the Loan Parties, and the
Loan Parties shall issue and sell to each Lender, a senior
subordinated note (each, a "First Amendment Senior Subordinated
Note" and, collectively, the "First Amendment Senior Subordinated
Notes") evidencing a term loan (each, a "First Amendment Loan"
and, collectively, the "First Amendment Loans") in the amount set
forth opposite such Lender's name on Schedule 2.1(b) attached
hereto for the purchase price equal to such amount set forth
opposite such Lender's name on Schedule 2.1(b) attached hereto,
less the total amount allocated to such Lender's First Amendment
Warrant consistent with the terms thereof. The First Amendment
Senior Subordinated Notes shall be dated as of April 20, 2001,
subject to the terms and conditions of this Agreement and in the
form attached hereto as Exhibit C-2.
(c) Subject to the terms hereof, on the Second Amendment Closing
Date, each Lender shall purchase from the Loan Parties, and the
Loan Parties shall issue and sell to each Lender, a senior
subordinated secured note (each, a "Second Amendment Senior
Subordinated Secured Note" and, collectively, the "Second
Amendment Senior Subordinated Secured Notes" evidencing a term
loan (each, a "Second Amendment Loan" and, collectively, the
"Second Amendment Loans") in the amount set forth opposite such
Lender's name on Schedule 2.1(c) attached hereto for the purchase
price equal to such amount set forth opposite such Lender's name
on Schedule 2.1(c) attached hereto, less the total amount
allocated to such Lender's Second Amendment Warrant consistent
with the terms thereof. The Second Amendment Senior Subordinated
Secured Notes shall each be dated as of December 6, 2001 (except
for the Advance Xxxxxx Note which shall be dated as of July 31,
2001), subject to the terms and conditions of this Agreement and
in the form attached hereto as Exhibit C-3.
(d) The Original Senior Subordinated Note, the First Amendment
Senior Subordinated Notes, and the Second Amendment Senior
Subordinated Secured Notes are collectively referred to herein as
the "Senior Subordinated Note" and the Original Loan, the First
Amendment Loans, and the Second Amendment Loans are collectively
referred to as the "Loan".
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(d) Sections 2.3 of the Loan Agreement shall be deleted in its
entirety and replaced with the following:
"(a) Interest.
(i) Until the Deferred Interest Portion of the Original
Loan is paid in full, the Principal of the Original Loan
shall bear interest from January 1, 2001 until paid,
computed on the basis of a 360-day year for the actual
number of days elapsed, at a fixed annual rate of (1) 12.00%
for the period commencing January 1, 2001 through March 31,
2001, and (2) 15.00% until the Deferred Interest Portion of
the Original Loan is paid in full. After the Deferred
Interest Portion of the Original Loan is paid in full, so
long as no Event of Default has occurred and is continuing,
the Principal of the Original Loan shall bear interest until
paid, computed on the basis of a 360-day year for the actual
number of days elapsed, at a fixed annual rate of 12.00%.
(ii) So long as no Event of Default has occurred and is
continuing, interest shall accrue from April 17, 2001 on the
Principal of the First Amendment Loans from time to time
outstanding until paid, computed on the basis of a 360-day
year for the actual number of days elapsed, initially at a
fixed annual rate of 12.00%."
(iii) So long as no Event of Default has occurred and
is continuing, interest shall accrue from the date hereof on
the Principal of the Second Amendment Loans from time to
time outstanding until paid, computed on the basis of a
360-day year for the actual number of days elapsed,
initially at a fixed annual rate of 12.00%."
"(b) Interest Payment or Accrual.
(i) During the Deferred Interest Period, accrued and
unpaid interest on the Principal of the Original Loan shall
be added to the aggregate principal amount of the Original
Loan as of the close of business on each Quarterly Payment
Date (the "Deferred Interest Portion") commencing with the
Quarterly Payment Date on March 31, 2001. At the expiration
of the Deferred Interest Period, the entire Deferred
Interest Portion shall be payable upon demand. Thereafter,
accrued interest shall be due and payable quarterly in
arrears on each Quarterly Payment Date. In addition, all
accrued and unpaid interest shall be paid upon the payment
in full of the Principal of the Original Loan and, if
payment in full is not made when due, thereafter on demand.
For illustration purposes only, an interest calculation
reflecting the application of this Section 2.3(b)(i) to the
Original Loan is set forth on Schedule 2.3(b)(i) attached
hereto.
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(ii) During the Deferred Interest Period, accrued
interest on the Principal of the First Amendment Loans shall
be added to the Principal of the First Amendment Loans as of
the close of business on the Quarterly Payment Date.
Thereafter, accrued interest shall be due and payable in
arrears on each Quarterly Payment Date. The Principal amount
of the First Amendment Loans, including all amounts added
thereto pursuant to this Section 2.3(b)(ii), shall be
payable in accordance with Section 2.2 hereof. In addition,
all accrued and unpaid interest shall be paid upon the
payment in full of the Principal of the First Amendment Loan
and, if payment in full is not made when due, thereafter on
demand. For illustration purposes only, an interest
calculation reflecting the application of this Section
2.3(b)(ii) to the First Amendment Loans is set forth on
Schedule 2.3(b)(ii) attached hereto.
(iii) During the Deferred Interest Period, accrued
interest on the Principal of the Second Amendment Loans
shall be added to the Principal of the Second Amendment
Loans as of the close of business on the Quarterly Payment
Date. Thereafter, accrued interest shall be due and payable
in arrears on each Quarterly Payment Date. The Principal
amount of the Second Amendment Loans, including all amounts
added thereto pursuant to this Section 2.3(b)(iii), shall be
payable on June 30, 2004. In addition, all accrued and
unpaid interest shall be paid upon the payment in full of
the Principal of the Second Amendment Loan and, if payment
in full is not made when due, thereafter on demand. For
illustration purposes only, an interest calculation
reflecting the application of this Section 2.3(b)(iii) to
the Second Amendment Loans is set forth on Schedule
2.3(b)(iii) attached hereto.
"(c) Default Interest Rate.
(i) After the occurrence and during the continuance of
any Event of Default occurring after the date that the
Deferred Interest Portion is paid in full, all Obligations
with respect to the Original Loan shall bear interest from
the date of the occurrence of such Event of Default, payable
on demand, at a fixed annual rate of 15.00%.
(ii) After the occurrence and during the continuance of
any Event of Default, all Obligations with respect to the
First Amendment Loans shall bear interest from the date of
the occurrence of such Event of Default, payable on demand,
at a fixed annual rate of 15.00%.
(iii) After the occurrence and during the continuance
of any Event of Default, all Obligations with respect to the
Second Amendment Loans shall bear interest from the date of
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the occurrence of such Event of Default, payable on demand,
at a fixed annual rate of 15.00%.
(e) Section 5.13 of the Loan Agreement shall be deleted in its
entirety and replaced with the following:
"5.13 Use of Proceeds.
(a) The Loan Parties shall use the proceeds of the Original
Loan solely to (i) repay in full any and all amounts due
from the Loan Parties to Senior Lenders on the date hereof
under Term Note B (as defined in the Senior Loan Agreement
(as in effect on July 21, 2000)), (ii) reduce to zero
dollars any and all amounts due from the Loan Parties to
Senior Lenders on the date hereof under the Revolving Notes
(as defined in the Senior Loan Agreement (as in effect on
July 21, 2000)) (iii) to prepay up to Three Million Dollars
($3,000,000) of the Drake Note in the original principal
amount of Five Million Dollars ($5,000,000), (iv) to pay the
cash portion of the purchase price for the Small Parts
Acquisition, and (v) to pay the fees and expenses arising in
connection with the Senior Subordinated Loan Transactions or
the Senior Subordinated Loan Documents (it being understood
that, any and all proceeds hereunder in excess of the
amounts referred to in clauses (i) - (v) of this Section
5.13 shall be kept on hand for general working capital
purposes and other purposes permitted by the terms hereof).
(b) The Loan Parties shall use the proceeds of the First
Amendment Loans solely to reduce any amounts due from the
Loan Parties to Senior Lenders on the First Amendment
Closing Date under the Revolving Notes (as defined in the
Senior Loan Agreement (as in effect on the First Amendment
Closing Date))."
(c) The Loan Parties shall use the proceeds of the Second
Amendment Loans solely to reduce any amounts due from the
Loan Parties to Senior Lenders on the Second Amendment
Closing Date under the Revolving Notes (as defined in the
Senior Loan Agreement (as in effect on the Second Amendment
Closing Date)).
(f) Section 7.1(d) and 7.1(f) shall be deleted in their entirety
and replaced with the following:
"(d) any representation or warranty made in this Agreement,
the Security Agreement, or the Mortgage Agreements (as the same
shall be modified from time to time (including, without
limitation, the First Amendment and the Second Amendment)) by the
Loan Parties, or in any certificate or financial statement
furnished by the Loan Parties pursuant to the provisions thereof,
shall prove to have been false or misleading in any material
respect as of the time made or furnished;"
"(f) the Loan Parties shall default in the performance of or
compliance with any other covenant, condition or provision of (1)
the First
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Amendment and the Second Amendment or (2) this Agreement or any
other Senior Subordinated Loan Document to which it is a party
(and not constituting an Event of Default under the First
Amendment and the Second Amendment or any of the other
subsections of this Section 7.1) and such default shall not be
remedied for a period of fifteen (15) days after notice thereof;"
(g) Section 8.5 of the Loan Agreement shall be deleted in its
entirety and replaced with the following:
"8.5 Reimbursement of Expenses; Taxes. The Loan Parties
agree upon demand to pay or reimburse each Lender whose Principal
outstanding under the Senior Subordinated Notes is equal to or
exceeds Five Million Dollars ($5,000,000) for all of their
reasonable out-of-pocket expenses, including, without limitation,
all travel expenses and all reasonable legal, consulting,
accounting and independent analyst, audit, and appraisal fees and
expenses, from time to time (a) arising in connection with the
preparation of the Senior Subordinated Loan Documents or the
Senior Subordinated Loan Transactions; (b) relating to any
amendments, waivers or consents pursuant to the provisions hereof
or thereof; (c) incurred by Lender or its designees in the
performance of their duties as directors of the Loan Parties, if
applicable, and (d) arising in connection with the enforcement of
the Senior Subordinated Loan Documents, collection of the
Obligations or actions for declaratory relief in any way related
thereto or the protection or preservation of any rights of Lender
hereunder. The Loan Parties also agree to pay and save Lender
harmless from all liability for any stamp or other similar
documentary or recording taxes which may be payable in connection
with this Agreement and the other Senior Subordinated Loan
Documents or the performance of any transactions contemplated
hereby or thereby."
(h) A new Section 8.19 shall be added to the Loan Agreement:
"8.19 Senior Subordinated Notes; Agency. Each Senior
Subordinated Note shall be pari passu with each other Senior
Subordinated Note. The net proceeds received by any Lender of any
Senior Subordinated Note shall be allocated among, and paid to,
each such Lender prorata in accordance with such Lender's share
of the total Obligations owed to all such Lenders at the time of
each such receipt. Each such Lender shall be responsible for, and
promptly pay, its prorata share of all unreimbursed fees and
costs hereafter incurred in attempting to enforce the common
provisions of any Senior Subordinated Note and the provisions of
the Loan Agreement and the other Senior Subordinated Loan
Documents. WBMCF shall act on behalf of itself and as agent for
the other Lenders with respect to the Security Agreement and the
Mortgage Agreements. None of WBMCF nor any of its partners or
their respective directors, officers, employees or agents shall
be liable for any action taken or omitted to be taken by any of
them under, or in connection with, WBMCF's agency, except to the
extent of such released party's gross negligence or willful
misconduct. The other Lenders shall indemnify WBMCF and its
partners and their respective directors, officers, employees and
agents, prorata, from and against any and all liabilities, costs
and expenses (including reasonable attorneys' fees) that an
indemnified
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party incurs under, or in connection with, WBMCF's agency, except
to the extent of such indemnified party's gross negligence or
willful misconduct."
(i) Schedule 2.1 (Allocation of First Amendment Senior
Subordinated Notes) attached hereto shall be deleted in its entirety
and a new Schedule 2.1(b) (Allocations of First Amendment Senior
Subordinated Notes) and Schedule 2.1(c) (Allocations of Second
Amendment Senior Subordinated Secured Notes) attached hereto shall be
substituted therefor.
(j) Schedule 2.3(e)(iii) (Deferred Interest Calculation for
Second Amendment Loans) attached hereto shall be added to the Loan
Agreement.
(k) Schedule 2.5 (Payments) shall be deleted in its entirety and
a new Schedule 2.5 attached hereto shall be substituted therefor.
(l) Schedule 4.3 (Capitalization) shall be deleted in its
entirety and a new Schedule 4.3 attached hereto shall be substituted
therefor.
(m) Schedule 4.6 (Solvency) shall be added to the Loan Agreement.
(n) Schedule 4.10 (Subsidiaries) shall be deleted in its entirety
and a new Schedule 4.10 attached hereto shall be substituted therefor.
(o) Schedule 4.12 (Absence of Undisclosed Liabilities) shall be
added to the Loan Agreement.
(p) Schedule 4.14 (Tax Matters) shall be added to the Loan
Agreement.
(q) Schedule 4.15 (Contracts) shall be added to the Loan
Agreement.
(r) Schedule 4.16 (Absence of Changes) shall be deleted in its
entirety and a new Schedule 4.16 attached hereto shall be substituted
therefor.
(s) Schedule 4.21 (Affiliate Transactions) shall be deleted in
its entirety and a new Schedule 4.21 attached hereto shall be
substituted therefor.
(t) Schedule 6.1 (Certain Indebtedness) shall be deleted in its
entirety and a new Schedule 6.1 attached hereto shall be substituted
therefor.
(u) Schedule 6.3 (Contingent Liabilities) shall be added to the
Loan Agreement.
(v) Schedule 6.7 (Contemplated Investments) shall be deleted in
its entirety and a new Schedule 6.7 attached hereto shall be
substituted therefor.
(w) Schedule 6.10 (Transactions with Affiliates) shall be deleted
in its entirety and a new Schedule 6.10 attached hereto shall be
substituted therefor.
(x) Schedule 7.1 (Certain Executive Officers) shall be deleted in
its entirety and a new Schedule 7.1 attached hereto shall be
substituted therefor.
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6. Amendment of the Registration Rights Agreement. Subject to the Loan
Parties' performance of their obligations to Lender hereunder on the date
hereof, the parties hereto agree to amend the terms of the Registration Rights
Agreement as follows:
(a) The Recitals to the Registration Rights Agreement shall be deleted
in their entirety and replaced with the following recitals:
"A. On July 21, 2000, the Company entered into this Agreement
pursuant to that certain Senior Subordinated Loan Agreement dated as
of July 21, 2000 among the Company, its subsidiaries made a party
thereto and WBMCF (the "Original Loan Agreement). In connection with
the Original Loan Agreement, the Company agreed, upon the terms and
subject to the conditions contained therein, to issue and sell to
WBMCF a warrant (the "Original Warrant") entitling the holder thereof
to purchase the number of shares (the "Original Warrant Shares") of
common stock, $0.001 par value, of the Company (the "Common Stock"),
as set forth therein. To induce WBMCF to execute and deliver the
Original Loan Agreement, the Company agreed to provide certain
registration rights under the Securities Act of 1933, as amended, and
the rules and regulations thereunder, or any similar successor statute
(collectively, the "Securities Act"), and applicable state securities
laws.
B. In connection with the waiver of certain defaults under the
Original Loan Agreement and the Senior Loan Agreement (as defined in
the Original Loan Agreement), the Loan Parties requested, and WBMCF
agreed, to amend the Original Loan Agreement (the "First Amendment
Loan Agreement") and, made provision for the purchase of additional
senior subordinated notes of the Loan Parties by WBMCF and the
additional lenders set forth in Schedule 2.1(b) of the Loan Agreement,
(as hereinafter defined) (the "First Amendment Lenders"), having an
aggregate principal amount of $3,000,000 (the "First Amendment Senior
Subordinated Notes").
C. Concurrent with the First Amendment Loan Agreement, the
Company agreed to issue and sell to First Amendment Lenders warrants
(the "First Amendment Warrants" entitling the holders thereof to
purchase the number of shares (the "First Amendment Warrant Shares" of
Common Stock as set forth therein. In addition, to induce First
Amendment Lenders to execute and deliver the First Amendment Loan
Agreement, the Company agreed to amend the Registration Rights
Agreement to extend certain registration rights under the Securities
Act and applicable state securities laws to the First Amendment
Warrant Shares, all upon the terms and conditions set forth herein."
D. The Loan Parties have further requested, and Lender has
further agreed, to amend the Original Loan Agreement and the First
Amendment Loan Agreement (the "Second Amendment Loan Agreement" and,
together with the Original Loan Agreement and the First Amendment Loan
Agreement, as the same may be amended, supplemented, restated or
otherwise modified from time to time in compliance with the terms
thereof, the "Loan Agreement") and to make provision for the purchase
of additional senior subordinated notes of the Loan Parties by WBMCF
and the additional lenders as set forth in Schedule 2.1(c) of the Loan
Agreement (the "Second Amendment Lenders"), having an
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aggregate principal amount of $3,400,000 (the "Second Amendment Senior
Subordinated Secured Notes").
E. Concurrent with the Second Amendment Loan Agreement, the
Company has agreed to issue and sell to Second Amendment Lenders
warrants (the "Second Amendment Warrants" and, together with the
Original Warrant and the First Amendment Warrants, the "Warrant")
entitling the holders thereof to purchase the number of shares (the
"Second Amendment Warrant Shares" and, together with the Original
Warrant Shares and the First Amendment Warrant Shares, the "Warrant
Shares"), of Common Stock as set forth therein. In addition, to induce
Second Amendment Lenders to execute and deliver the Second Amendment
Loan Agreement, the Company has agreed to amend the Registration
Rights Agreement to extend certain registration rights under the
Securities Act and applicable state securities laws to the Second
Amendment Warrant Shares, all upon the terms and conditions set forth
herein."
(b) The definitions of "Holder" and "Registrable Securities" in
Section 1.1 of the Registration Rights Agreement shall be deleted in their
entirety and replaced with the following:
"(b) The term "Holder" means WBMCF, Xxxxxx X. Xxxxxx Living Trust
dated 0/0/00, Xxxxxxx Xxxxxxx, Xxxxxx Xxxxxxx, the Xxxxx Xxxxxx
Grantor Retained Annuity Trust, dated January 31, 1994, and the Xxxxxx
Xxxxxx Grantor Retained Annuity Trust, dated January 31, 1994 and any
transferees or assignees who agree to become bound by the provisions
of this Agreement in accordance with Article IX hereof."
"(c) The term "Registrable Securities" means the Warrant Shares
issued or issuable with respect to the Warrant (without regard to any
limitations on conversion or exercise of any Warrant) and any shares
of capital stock or other securities issued or issuable, from time to
time (with any adjustments), on or in exchange for or otherwise with
respect to the Common Stock or any other Registrable Securities."
7. Second Amendment Conditions. The Second Amendment and the obligations of
Lender contemplated hereby shall be governed by and subject to the following
terms and conditions:
(a) receipt of this Second Amendment to Senior Subordinated Loan
Documents, duly executed by the Loan Parties;
(b) receipt of the applicable Second Amendment Senior Subordinated
Secured Notes and the Second Amendment Warrants, in each case duly executed
by the Loan Parties;
(c) receipt of the Security Agreement and the Mortgage Agreements duly
executed by the Loan Parties;
(d) receipt of the amendment to Intercreditor Agreement, duly executed
by Senior Lenders;
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(e) receipt of the written opinion of Varnum, Riddering, Xxxxxxx &
Xxxxxxx LLP, counsel to the Loan Parties, dated as of the date hereof, in
form and substance satisfactory to Lender;
(f) receipt of certified copies of all documents evidencing corporate
action taken by each Loan Party with respect to the consummation of the
transactions contemplated by this Second Amendment, including but not
limited to, resolutions of the Board of Directors of each Loan Party
authorizing the execution, delivery and performance by such Loan Party of
this Second Amendment, the Second Amendment Senior Subordinated Secured
Notes, and the Second Amendment Warrants;
(g) receipt of a certificate of each Loan Party, signed by its chief
executive officer or president, to the effect that: (i) all of the
representations and warranties of such party contained in this Second
Amendment are true and correct as of the date hereof; (ii) such party has
complied with and performed all of the terms, covenants and agreements
contained in the Senior Subordinated Loan Documents which are to be
complied with or performed by such party on or before the date hereof;
(iii) no Event of Default or Potential Event of Default has occurred and is
continuing; and (iv) no changes to the certificate of incorporation or
certification of designation or By-Laws (or equivalent corporate governance
documents) of any Loan Party have been made since April 21, 2001, except
for the certificate of designations of the Company dated July 3, 2001;
(h) receipt of the Fourth Amendment to Senior Loan Agreement and any
and all other documents, agreements, certificates and instruments executed
or delivered in connection therewith, certified by the Loan Parties'
secretary to be true and correct and in full force and effect
(collectively, together with the Fourth Amendment to Senior Loan Agreement,
the "Amended Senior Loan Documents") each in form and substance
satisfactory to Lender in their sole discretion;
(i) receipt of the execution and delivery or obtainment of such other
instruments, documents, agreements, certificates, instruments, consents,
waivers, opinions and information as Lender may reasonably request;
(j) payment of all legal fees and expenses of counsel to WBMCF related
to the process of amending the Original Loan Agreement (including all such
fees and expenses relating to the First Amendment and this Second
Amendment).
The Company shall provide the documents specified in (a) - (i) in a form
reasonably acceptable to Lender.
8. Representations and Warranties of the Loan Parties. As a further
inducement for WBMCF to consent to the transactions contemplated by this
Agreement, the Loan Parties hereby represent and warrant to Lender that:
(a) The Loan Parties have the requisite power and authority to
execute, deliver and carry out this Agreement and the transactions
contemplated hereby.
(b) The execution and delivery of this Agreement, the Fourth Amendment
to Senior Loan Agreement and the consummation by the Loan Parties of the
transactions contemplated hereby or thereby has been duly authorized by all
necessary action and other consents, approvals and the like required on the
part of the Loan Parties.
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(c) Neither the execution and delivery by the Loan Parties of this
Second Amendment or the Amended Senior Loan Documents nor the consummation
of the transactions contemplated hereby or thereby, nor compliance by the
Loan Parties with the terms, conditions and provisions hereof or thereof,
shall:
(i) conflict with or result in a breach of the terms, conditions
or provisions of;
(ii) constitute a default under;
(iii) result in the creation of any lien, security interest,
charge or encumbrance upon its capital stock or assets pursuant to
(except those arising pursuant to the Security Agreement or the
Mortgage Agreements);
(iv) give any third party the right to accelerate any obligation
under;
(v) result in a violation of; or
(vi) require any authorization, consent, approval, exemption or
other action by or notice to any court or administrative or
governmental body pursuant to;
the certificate or articles of incorporation or by-laws of the Loan Parties
or any law, statute, rule or regulation to which the Loan Parties are
subject, or any agreement, instrument, order, judgment or decree to which
the Loan Parties are subject.
(d) This Second Amendment and the Amended Senior Loan Documents have
been duly and validly executed and delivered by the Loan Parties and
constitute legal, valid and binding obligations, and all such obligations
of the Loan Parties are enforceable in accordance with their respective
terms.
(e) Except for the Existing Defaults, no event has occurred and is
continuing and no condition exists which would constitute an Event of
Default or Potential Event of Default.
(f) Except for: (i) the representation and warranty set forth in the
first sentence of Section 4.4 of the Loan Agreement; (ii) the
representations and warranties with respect to the matters disclosed on
revised Schedule 4.3 (Capitalization), added Schedule 4.6 (Solvency),
revised Schedule 4.10 (Subsidiaries), added Schedule 4.12 (Absence of
Undisclosed Liabilities), added Schedule 4.14 (Tax Matters), added Schedule
4.15 (Contracts), revised Schedule 4.16 (Absence of Charges) and revised
Schedule 4.21 (Affiliate Transactions), attached to this Second Amendment;
all representations and warranties of the Loan Parties in the Loan
Agreement remain true and correct as of the date hereof as though
originally made on and as of the date hereof and will be true and correct
after giving effect to the amendments set forth in Section 5 hereof.
(g) Each Loan Party represents that: (a) it has no intention to file
or acquiesce in the filing of any bankruptcy or insolvency proceeding
hereafter, absent Lender's approval of such proceeding; and (b) the period
commencing on the Second Amendment Closing Date and ending on the Senior
Termination Date is sufficient for
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such Loan Party to accomplish the commitments it has undertaken in this
Second Amendment.
(h) The Company represents and warrants that it is currently eligible
to register the resale of the Warrant Shares and all Registrable Securities
by Holder on a Registration Statement on Form S-3 under the Securities Act
for the account of Holder (and not for or on behalf of the Company).
9. Release and Indemnity.
(a) Each Loan Party does hereby release and forever discharge Lender
and each Affiliate thereof and each of their respective employees,
officers, directors, partners, trustees, agents, attorneys, successors,
assigns or other representatives from any and all claims, demands, damages,
actions, cross-actions, causes of action, costs and expenses (including
legal expenses), of any kind or nature whatsoever, whether based on law or
equity, which any of said parties has held, whether known or unknown, for
or because of any matter or thing done, omitted or suffered to be done on
or before the actual date upon which this Second Amendment is signed by any
of such parties (i) arising directly or indirectly out of this Second
Amendment, or any other documents, instruments or any other transactions
relating thereto and/or (ii) relating directly or indirectly to all
transactions by and between each Loan Party and WMBCF or any of its
respective directors, partners, officers, agents, employees, attorneys or
other representatives.
(b) Each Loan Party shall and hereby does indemnify each Lender and
each Affiliate thereof and their respective directors, partners, officers,
employees and agents from, and hold each of them harmless against, any and
all losses, liabilities, claims or damages (including reasonable legal fees
and expenses) to which any of them may become subject, insofar as such
losses, liabilities, claims or damages arise out of or result from any
actual or proposed use by any Loan Party of the proceeds of any extension
of credit under this Second Amendment or any investigation, litigation or
other proceeding (including any threatened investigation or proceeding)
relating to the foregoing or any of the other Senior Subordinated Loan
Documents, and the Loan Parties shall reimburse each Lender and each
Affiliate thereof and their respective directors, partners, officers,
employees and agents, upon demand for any expenses (including legal fees)
reasonably incurred in connection with any such investigation or
proceeding; but excluding any such losses, liabilities, claims, damages or
expenses incurred by reason of the gross negligence, bad faith or willful
misconduct of the Person to be indemnified or in connection with disputes
exclusively between Lenders.
(c) Without limiting any provision of this Second Amendment, it is the
express intention of the parties hereto that each Person to be indemnified
hereunder or thereunder shall be indemnified and held harmless against any
and all losses, liabilities, claims or damages: (i) arising out of or
resulting from the sole ordinary or contributory negligence of such Person
or (ii) imposed upon said party under any theory of strict liability.
Without prejudice to the survival of any other obligations of the Loan
Parties hereunder and under the other Senior Subordinated Loan Documents,
the obligations of the Loan Parties under this Section 10 shall survive the
termination of the Senior Subordinated Loan Documents and the payment of
the Obligations.
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10. Miscellaneous.
(a) Further Assurances. The Loan Parties shall, from time to time at
the request of Lender, do all further acts and things as may in the opinion
of Lender be necessary or advisable to effectuate the transaction and other
matters contemplated hereby, including, without limitation, the
modification of or amendment to any other agreements, certificates or
instruments to which the Loan Parties are a party.
(b) Notices. All notices and other communications given to or made
upon any party hereto in connection with this Agreement shall be in
accordance with Section 8.6 of the Loan Agreement.
(c) Joint and Several Liability. Except as specifically set forth
herein, the liability of each Loan Party under this Second Amendment and
the other agreements in general shall be joint and several, and each
reference herein to the Loan Parties shall be deemed to refer to each such
Loan Party. In furtherance and not in limitation of Lender's rights and
remedies hereunder or at law, Lender may proceed under this Agreement and
the other agreements against any one or more of the Loan Parties in their
absolute and sole discretion for any of the obligations of the Loan Parties
or any other liability or obligation of the Loan Parties arising hereunder.
(d) Survival. All representations, warranties, covenants,
indemnifications, consents and agreements of the Loan Parties contained
herein or made in writing in connection herewith shall survive the
execution and delivery of this Second Amendment, the making of the term
loans hereunder and the issuance of the Second Amendment Senior
Subordinated Secured Notes and, except as set forth otherwise herein, shall
remain in effect through the date that all amounts due hereunder are paid
to Lender.
(e) Entire Agreement. This Second Amendment and the instruments to be
delivered by the parties pursuant to the provisions hereof constitute the
entire agreement between the parties hereto with respect to the subject
matter hereof. The provisions of this Second Amendment may be modified,
amended or waived, but only by a written instrument signed by the Loan
Parties and Persons with at least fifty percent (50%) interest in and
rights under the Senior Subordinated Note at the time such modifications,
amendments or waivers are taken.
(f) Counterparts. This Second Amendment may be executed in any number
of counterparts and by any party hereto on separate counterparts, each of
which, when so executed and delivered, shall be an original, but all such
counterparts shall together constitute one and the same instrument.
(g) Captions. Section captions used in this Second Amendment are for
convenience only, and shall not affect the construction of this Second
Amendment.
(h) No Further Amendments. Except as specifically amended hereby, the
terms and provisions of the Loan Agreement shall remain in full force and
effect.
[Remainder of this page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to
Senior Subordinated Loan Documents to be executed and delivered by their duly
authorized officers as of the day and year first above written.
XXXXXXX XXXXX MEZZANINE CAPITAL FUND III, L.P.
By: Xxxxxxx Xxxxx Mezzanine Capital Partners III,
L.L.C., its general partner
By: /s/ Xxxxxxxx X. Xxxxx
------------------------------------------
Name: Xxxxxxxx X Xxxxx
----------------------------------------
Title: Managing Director
---------------------------------------
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COUNTERPART SIGNATURE PAGE
SECOND AMENDMENT TO SENIOR SUBORDINATED LOAN DOCUMENTS
Xxxxxx X. Xxxxxx Living Trust dated 3/1/94
By: /s/ Xxxx Xxxx
---------------------------------------------
Name: Xxxx Xxxx
-------------------------------------------
Title: Trustee
-------------------------------------------
/s/ Xxxxxxx Xxxxxxx
-------------------------------------------------
Xxxxxxx Xxxxxxx
/s/ Xxxxxx Xxxxxxx
-------------------------------------------------
Xxxxxx Xxxxxxx
Xxxxx Xxxxxx Grantor Retained Annuity Trust,
dated January 31, 1994
By: /s/ Xxxx Xxxx
---------------------------------------------
Xxxx Xxxx, Trustee
Xxxxxx Xxxxxx Grantor Retained Annuity Trust,
dated January 31, 1994
By: /s/ Xxxx Xxxx
---------------------------------------------
Xxxx Xxxx, Trustee
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COUNTERPART SIGNATURE PAGE
SECOND AMENDMENT TO SENIOR SUBORDINATED LOAN DOCUMENTS
CLARION TECHNOLOGIES, INC.
By: /s/ Xxxxxxx Xxxxxxx
---------------------------------------------
Xxxxxxx Xxxxxxx, President
CLARION PLASTICS TECHNOLOGIES, INC.
By: /s/ Xxxxxxx Xxxxxxx
---------------------------------------------
Xxxxxxx Xxxxxxx, President
CLARION REAL ESTATE, L.L.C.
By: /s/ Xxxxxxx Xxxxxxx
---------------------------------------------
Xxxxxxx Xxxxxxx, President
DOUBLE "J" MOLDING, INC
By: /s/ Xxxxxxx Xxxxxxx
---------------------------------------------
Xxxxxxx Xxxxxxx, President
CLARION-DRAKE ACQUISITION, INC.
By: /s/ Xxxxxxx Xxxxxxx
---------------------------------------------
Xxxxxxx Xxxxxxx, President
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MITO PLASTICS, INC.
By: /s/ Xxxxxxx Xxxxxxx
---------------------------------------------
Xxxxxxx Xxxxxxx, President
WAMAR PRODUCTS, INC.
By: /s/ Xxxxxxx Xxxxxxx
---------------------------------------------
Xxxxxxx Xxxxxxx, President
WAMAR TOOL & MACHINE CO.
By: /s/ Xxxxxxx Xxxxxxx
---------------------------------------------
Xxxxxxx Xxxxxxx, President
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