EXHIBIT 10(n)
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.
R E C I T A L S
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 D 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.
A G R E E M E N T S
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 1 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.
-2-
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 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.”
|
-3-
| |
“‘Security
Agreement’ shall mean that certain Security Agreement dated as of
December 6, 2001 between the Loan Parties and WBMCF on behalf of 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:
|
-4-
| |
"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 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.
|
-5-
| |
(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”.
|
| |
(d)
Sections 2.3 of the Loan Agreement shall be deleted in its entirety and replaced with the following:
|
| |
(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.
|
-6-
| |
(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%.
|
-7-
| |
(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 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:
|
| |
(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:
|
-8-
| |
“(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 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
|
-9-
| |
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 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(b)(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 4.10 (Subsidiaries) shall be deleted in its entirety and a new Schedule 4.10 attached hereto
shall be substituted therefor.
|
| |
(n)
Schedule 4.12 (Absence of Undisclosed Liabilities) shall be added to the Loan Agreement.
|
| |
(o)
Schedule 4.15 (Contracts) shall be added to the Loan Agreement.
|
| |
(p)
Schedule 4.16 (Absence of Changes) shall be deleted in its entirety and a
new Schedule 4.16 attached hereto shall be substituted therefor.
|
| |
(q)
Schedule 4.21 (Affiliate Transactions) shall be deleted in its entirety
and a new Schedule 4.21 attached hereto shall be substituted therefor.
|
| |
(r)
Schedule 6.1 (Certain Indebtedness) shall be deleted in its entirety and
a new Schedule 6.1 attached hereto shall be substituted therefor.
|
| |
(s)
Schedule 6.2 (Liens) shall be deleted in its entirety and a new Schedule 6.2 attached hereto shall be
substituted therefor.
|
| |
(t)
Schedule 6.3 (Contingent Liabilities) shall be added to the Loan Agreement.
|
-10-
| |
(u)
Schedule 6.7 (Contemplated Investments) shall be deleted in its entirety
and a new Schedule 6.7 attached hereto shall be substituted therefor.
|
| |
(v)
Schedule 6.10 (Transactions with Affiliates) shall be deleted in its
entirety and a new Schedule 6.10 attached hereto shall be substituted
therefor.
|
| |
(w)
Schedule 7.1 (Certain Executive Officers) shall be deleted in its
entirety and a new Schedule 7.1 attached hereto shall be substituted
therefor.
|
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.”
|
-11-
| |
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 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;
|
-12-
| |
(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;
|
| |
(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.
-13-
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.
|
| |
(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), revised Schedule 4.10 (Subsidiaries), added Schedule
4.12 (Absence of Undisclosed Liabilities), added Schedule 4.15
(Contracts), revised Schedule 4.16 (Absence of Changes) 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.
|
-14-
| |
(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 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.
|
-15-
| |
(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.
|
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.
|
-16-
| |
(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]
-17-
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:
Title: Managing Director
|
-18-
COUNTERPART
SIGNATURE PAGE
SECOND
AMENDMENT TO SENIOR SUBORDINATED LOAN DOCUMENTS
| |
Xxxxxx X. Xxxxxx Living Trust dated 3/1/94
By: /s/ Xxxxx Xxxxxx
Name:
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 |
-19-
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, LLC.
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 |
-20-
| |
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 |
-21-
