OMNIBUS AMENDMENT AGREEMENT, LIMITED CONSENT AND WAIVER
Exhibit 10.12
OMNIBUS AMENDMENT AGREEMENT, LIMITED CONSENT AND WAIVER
THIS OMNIBUS AMENDMENT AGREEMENT, LIMITED CONSENT AND WAIVER (this “Amendment”) is
made and entered into as of August 13, 2010, by and between ▇▇▇▇▇▇▇ INTERNATIONAL, INC., a Nevada
corporation (“▇▇▇▇▇▇▇”), HB SERVICE, LLC, a Delaware limited liability company (“HB
Service”), ▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION (as successor by merger to Wachovia Bank,
National Association) (the “Bank”) and the other Persons party hereto.
BACKGROUND STATEMENT
▇. ▇▇▇▇▇▇▇ and the Bank are parties to a Credit Agreement, dated as of November 14,
2005, as amended by that certain First Amendment to Credit Agreement dated as of April
26, 2006, by that certain Second Amendment and Waiver to Credit Agreement dated as of
September 8, 2006, by that certain Third Amendment and Waiver to Credit Agreement dated as of March
21, 2008, by that certain Fourth Amendment and Waiver to Credit Agreement dated as of June 25,
2008, by that certain Fifth Amendment and Waiver to Credit Agreement dated as of June 30, 2009 and
by that certain Sixth Amendment to Credit Agreement, dated as of November 18, 2009 (the
“▇▇▇▇▇▇▇ Credit Agreement”), pursuant to which the Bank has made available to ▇▇▇▇▇▇▇ a
revolving credit facility in the aggregate principal amount of $10,000,000. As of the date hereof,
the current outstanding principal amount of the loans outstanding under the ▇▇▇▇▇▇▇ Credit
Agreement is $10,000,000. The obligations of ▇▇▇▇▇▇▇ under the ▇▇▇▇▇▇▇ Credit Agreement have been
guaranteed by (i) the Subsidiary Guarantors (as defined in the ▇▇▇▇▇▇▇ Credit Agreement) pursuant
to the Guaranty (as defined in the ▇▇▇▇▇▇▇ Credit Agreement), (ii) HB Service and its subsidiaries
pursuant to the HB Service Guaranty (as defined in the ▇▇▇▇▇▇▇ Credit Agreement) and (iii) H. ▇▇▇▇▇
▇▇▇▇▇▇▇▇ (“▇▇▇▇▇▇▇▇”) pursuant to the guaranty agreement made by ▇▇▇▇▇▇▇▇ in favor of the
Bank, dated as of June 25, 2008 (as amended from time to time, the “▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Guaranty”), subject to the terms and conditions therein. The obligations of ▇▇▇▇▇▇▇ under the
▇▇▇▇▇▇▇ Credit Agreement have been secured by a lien on the assets of ▇▇▇▇▇▇▇ and the Subsidiary
Guarantors and HB Service and it subsidiaries pursuant to the terms of the Security Agreement and
the HB Service Security Agreement (each as defined in the ▇▇▇▇▇▇▇ Credit Agreement), respectively.
B. HB Service and the Bank are parties to a Credit Agreement, dated as of June 25, 2008, as
amended by that certain First Amendment and Waiver to Credit Agreement dated as of June 30, 2009
and that certain Second Amendment to Credit Agreement dated as of November 18, 2009 (the “HB
Service Credit Agreement”), pursuant to which the Bank has made available to HB Service a
revolving credit facility in the aggregate principal amount of $15,000,000. As of the date hereof,
the current outstanding principal amount of the loans outstanding under the HB Service Credit
Agreement is $15,000,000. The obligations of HB Service under the HB Service Credit Agreement have
been guaranteed by ▇▇▇▇▇▇▇▇ pursuant to the guaranty agreement made by ▇▇▇▇▇▇▇▇ in favor of the
Bank, dated as of June 25, 2008 (as amended from time to time, the “▇▇▇▇▇▇▇▇ ▇▇ Service
Guaranty”).
C. HB Service and ▇▇▇▇▇▇▇ have notified the Bank that they desire to effectuate a transaction,
pursuant to which, effective as of July 13, 2010, ▇▇▇▇▇▇▇ will acquire all of the
outstanding equity of HB Service and HB Service will become a wholly owned subsidiary of ▇▇▇▇▇▇▇
(such transaction, the “Proposed Transaction”).
D. The consummation of the Proposed Transaction would violate the terms of the HB Service
Credit Agreement and the ▇▇▇▇▇▇▇ Credit Agreement, and therefore HB Service and ▇▇▇▇▇▇▇ have
requested that the Bank give its consent to the Proposed Transaction prior to the consummation
thereof and to make certain amendments to the HB Service Credit Agreement and the ▇▇▇▇▇▇▇ Credit
Agreement in connection therewith.
E. The Proposed Transaction is being consummated, and ▇▇▇▇▇▇▇ and HB Service are requesting
that the Bank enter into in this Amendment, in connection with the planned merger of ▇▇▇▇▇▇▇ with
Coolbrands International, Inc. (the “Coolbrands Merger”). The consummation of the Proposed
Transaction and the consent thereto and other agreements of the Bank set forth in this Amendment
are necessary to consummate the Coolbrands Merger, and without such consummation or such consent
and agreements, the Coolbrands Merger could not and would not be consummated. ▇▇▇▇▇▇▇ is not
requesting any consent from the Bank at this time to the consummation of the Coolbrands Merger.
▇. ▇▇▇▇▇▇▇ is currently in default under the ▇▇▇▇▇▇▇ Credit Agreement as a result of the
Events of Default set forth on Schedule A hereto which have occurred and are continuing as
of the date hereof (collectively, the “▇▇▇▇▇▇▇ Specified Events of Default”). ▇▇▇▇▇▇▇ has
requested that the Bank waive the ▇▇▇▇▇▇▇ Specified Events of Default.
G. HB Service is currently in default under the HB Service Credit Agreement as a result of the
Events of Default set forth on Schedule B hereto which have occurred and are continuing as
of the date hereof (collectively, the “HB Service Specified Events of Default”). HB
Service has requested that the Bank waive the HB Service Specified Events of Default.
H. The Bank has agreed to consent to the Proposed Transaction, to amend the HB Service
Credit Agreement and the ▇▇▇▇▇▇▇ Credit Agreement, and to waive the HB Service Specified Events of
Default and the ▇▇▇▇▇▇▇ Events of Default, as requested by ▇▇▇▇▇▇▇ and HB Service, on the terms and
subject to the conditions set forth herein.
STATEMENT OF AGREEMENT
NOW, THEREFORE, in consideration of the foregoing premises, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
ARTICLE I
LIMITED CONSENT
The Bank hereby offers its limited consent to the Proposed Transaction, provided that, (i) the
Proposed Transaction shall have been consummated no later than 90 days after the date hereof; (ii)
the Proposed Transaction shall have been approved by the board of directors (or other similar
governing body) of ▇▇▇▇▇▇▇, and each such approval shall not have been withdrawn or
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modified in a manner adverse to the Lenders; and (iii) there has not been a change in the proposed
terms or structure of the Proposed Transaction, except for those not adverse in any material
respect to the interests of the Bank as reasonably certified by ▇▇▇▇▇▇▇ and HB Service to the Bank.
The limited consent given by the Bank herein shall not be construed to be a consent to the
consummation of the Coolbrands Merger.
ARTICLE II
AMENDMENTS TO ▇▇▇▇▇▇▇ CREDIT AGREEMENT
2.1 Amendments to Section 1.1 (Defined Terms) of the ▇▇▇▇▇▇▇ Credit Agreement.
(a) The definition of “$15,000,000 HB Service Credit Agreement” is hereby deleted in its
entirety and replaced with the following:
“$15,000,000 HB Service Credit Agreement” means that certain
Credit Agreement dated as of September 8, 2006 between HB Service
and Bank, as amended by that certain First Amendment and Waiver to
Credit Agreement dated as of June 30, 2009, that certain Second
Amendment to Credit Agreement dated as of November 18, 2009, and
that certain Amendment Agreement, Limited Consent and Waiver, dated
as of August 13, 2010, and as further amended, modified or
supplemented from time to time.
(b) The following defined term is hereby added to Section 1.1 in appropriate alphabetical
order:
“HB Service Transaction” means the proposed transaction
pursuant to which the Borrower will acquire all of the outstanding
equity interests in HB Service and that is consummated in accordance
with the terms of the Amendment Agreement, Limited Consent and
Waiver, dated as of August 13, 2010, by and among the Borrower, HB
Service, the Bank and certain other Persons party thereto.
2.2 Amendments to Section 5.1 (Financial and Business Information) of the ▇▇▇▇▇▇▇ Credit
Agreement. Subsections (a), (b) and (c) of Section 5.1 of the ▇▇▇▇▇▇▇ Credit Agreement are
hereby deleted in their entirety and replaced with the following:
(a) Within forty-five (45) days after the close of each of the first
three Fiscal Quarters of each Fiscal Year of the Borrower and HB
Service, beginning with the Fiscal Quarter ending September 30,
2010, a consolidated balance sheet of the Borrower and its
Subsidiaries and HB Service and its Subsidiaries, on a combined
basis (or following the consummation of the HB Service Transaction,
of the Borrower and its Subsidiaries), as of the close of such
Fiscal Quarter, and consolidated statements of income and
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cash flows for the Borrower and its Subsidiaries and HB Service and its Subsidiaries, on a
combined basis (or following the consummation of the HB Service Transaction, of the Borrower and
its Subsidiaries), for the Fiscal Quarter then ended and for that portion of the Fiscal Year then
ended, all in reasonable detail setting forth in comparative form the corresponding figures for
the preceding Fiscal Year, all prepared in accordance with GAAP applied on a basis consistent with
that of the preceding period or containing disclosure of the effect on the financial position or
results of operation of any change in the application of accounting principles and practices
during the period, subject only to audit and year-end adjustments, and certified by the Borrower’s
president or chief financial officer to be true and accurate;
(b) Within one hundred twenty (120) days after the close of each Fiscal Year of the Borrower and HB
Service, beginning with the fiscal year ending December 31, 2010, an audited consolidated balance
sheet of the Borrower and its Subsidiaries and HB Service and its Subsidiaries, on a combined basis
(or following the consummation of the HB Service Transaction, of the Borrower and its
Subsidiaries), as of the close of such Fiscal Year, and audited consolidated statements of income
and cash flows for the Borrower and its Subsidiaries and HB Service and its Subsidiaries, on a
combined basis (or following the consummation of the HB Service Transaction, of the Borrower and
its Subsidiaries), for the Fiscal Year then ended, including the notes to each, all in reasonable
detail setting forth in comparative form the corresponding figures for the preceding Fiscal Year,
each prepared by an independent certified public accountant reasonably acceptable to the Bank, in
accordance with GAAP applied on a basis consistent with that of the preceding year or containing
disclosure of the effect on the financial position or results of operation of any change in the
application of accounting principles and practices during the year, and each accompanied by a
report thereon by such certified public accountant containing an opinion that is not qualified with
respect to scope limitations imposed by the Borrower or HB Service, or any of their respective
Subsidiaries or with respect to accounting principles followed by such entity or its Subsidiaries
not in accordance with GAAP;
(c) Concurrently with the delivery of the financial statements described in subsection (b) above,
a certificate addressed to the Bank from the independent certified public accountant certifying
(i) that in making its audit as set forth in clause (b) above, it obtained no knowledge of the
occurrence or existence of any Default or Event of Default under this Agreement, or specifying the
nature and period of existence of any such Default or Event of
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Default; provided, however, that such accountant shall
not be liable to anyone by reason of its failure to obtain knowledge of
any such Default or Event of Default that would not be disclosed in the
course of an audit conducted in accordance with generally accepted
auditing standards and (ii) as to the aggregate Consolidated EBITDA of
the Borrower and HB Service (or following the consummation of the HB
Service Transaction, of the Borrower) for the Fiscal Year then ended
and the Borrower’s compliance with the financial covenants set forth in
Article VI hereof;
2.3 Amendments to Section 6.3 (Consolidated EBITDA of the Borrower and HB Service) of
the ▇▇▇▇▇▇▇ Credit Agreement. Section 6.3 of the ▇▇▇▇▇▇▇ Credit Agreement is hereby deleted in
its entirety and replaced with the following:
6.3 Consolidated EBITDA of the Borrower and HB Service.
Permit the Consolidated EBITDA of the Borrower and HB Service on a
combined basis (or following the consummation of the HB Service
Transaction, of the Borrower) (i) for the period of the three
consecutive Fiscal Quarters ending on September 30, 2009, to be less
than $2,000,000, (ii) for the period of the four consecutive Fiscal
Quarters ending as of any Fiscal Quarter to be less than the amount set
forth below opposite such Fiscal Quarter (or opposite the period that
includes such Fiscal Quarter):
| Minimum Consolidated | ||
| Period | EBITDA | |
| 4th Fiscal Quarter of 2009 | $3,000,000 | |
| 1st Fiscal Quarter of 2010 | $4,000,000 | |
| 2nd Fiscal Quarter of 2010 and thereafter | $5,000,000 |
The Consolidated EBITDA of the Borrower and HB Service on a combined
basis shall be calculated on the basis of the combined financial
statements of the Borrower and HB Service and shall reflect all
eliminations appropriate for the calculation of such EBITDA.
2.4 Amendments to Section 7.5 (Restricted Investments) of the ▇▇▇▇▇▇▇ Credit
Agreement. Section 7.5 is hereby amended by (a) deleting the “and” at the end of clause (xi)
thereof, (b) re-numbering clause (xii) thereof as the new clause (xiii) and (c) inserting a new
clause (xii) as follows:
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(xii) Investments in connection with the HB
Service Transaction; and
2.5 Amendments to Section 7.6 (Restricted Payments) of the ▇▇▇▇▇▇▇ Credit
Agreement. Section 7.6(iii) of the ▇▇▇▇▇▇▇ Credit Agreement is hereby deleted in its entirety
and replaced with the following:
(iii) Reserved
ARTICLE III
AMENDMENTS TO HB SERVICE CREDIT AGREEMENT
3.1 Amendments to Section 1.1 (Defined Terms) of the HB Service Credit
Agreement.
(a) The definition of “$10,000,000 Credit Agreement” is hereby deleted in its entirety and
replaced with the following:
“10,000,000 Credit Agreement” shall mean the Credit
Agreement dated as of November 14, 2005, between the Bank and
▇▇▇▇▇▇▇, as amended by that certain First Amendment to Credit
Agreement dated as of April 26, 2006, that certain Second Amendment
and Waiver to Credit Agreement dated as of September 8, 2006, that
certain Third Amendment and Waiver to Credit Agreement dated as of
March 21, 2008, that certain Fourth Amendment and Waiver to Credit
Agreement dated as of June 25, 2008, that certain Fifth Amendment
and Waiver to Credit Agreement dated as of June 30, 2009, that
certain Sixth Amendment to Credit Agreement, dated as of November
18, 2009, and that certain Amendment Agreement, Limited Consent and
Waiver, dated as of August 13, 2010, and as further amended,
modified or supplemented from time to time.
(b) The following defined term is hereby added to Section 1.1 in appropriate alphabetical
order:
“▇▇▇▇▇▇▇ Transaction” means the proposed transaction
pursuant to which ▇▇▇▇▇▇▇ will acquire all of the outstanding equity
interests in the Borrower and that is consummated in accordance with
the terms of the Amendment Agreement, Limited Consent and Waiver,
dated as of August 13, 2010, by and among ▇▇▇▇▇▇▇, the Borrower, the
Bank and certain other Persons party thereto.
3.2 Amendments to Section 5.1 (Financial and Business Information) of the HB Service
Credit Agreement. Subsections (a), (b) and (c) of Section 5.1 of the HB Service Credit
Agreement are hereby deleted in their entirety and replaced with the following:
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(a) Within forty-five (45) days after the close of each of the first three Fiscal Quarters of each
Fiscal Year of ▇▇▇▇▇▇▇ and the Borrower, beginning with the Fiscal Quarter ending September 30,
2010, a consolidated balance sheet of ▇▇▇▇▇▇▇ and its Subsidiaries and the Borrower and its
Subsidiaries, on a combined basis (or following the consummation of the ▇▇▇▇▇▇▇ Transaction, of
▇▇▇▇▇▇▇ and its Subsidiaries), as of the close of such Fiscal Quarter, and consolidated statements
of income and cash flows for ▇▇▇▇▇▇▇ and its Subsidiaries and the Borrower and its Subsidiaries,
on a combined basis (or following the consummation of the ▇▇▇▇▇▇▇ Transaction, of ▇▇▇▇▇▇▇ and its
Subsidiaries), for the Fiscal Quarter then ended and for that portion of the Fiscal Year then
ended, all in reasonable detail setting forth in comparative form the corresponding figures for
the preceding Fiscal Year, all prepared in accordance with GAAP applied on a basis consistent with
that of the preceding period or containing disclosure of the effect on the financial position or
results of operation of any change in the application of accounting principles and practices
during the period, subject only to audit and year-end adjustments, and certified by ▇▇▇▇▇▇▇’▇
president or chief financial officer to be true and accurate;
(b) Within one hundred twenty (120) days after the close of each Fiscal Year of ▇▇▇▇▇▇▇ and the
Borrower, beginning with the Fiscal Year ending December 31, 2010, an audited consolidated balance
sheet of ▇▇▇▇▇▇▇ and its Subsidiaries, and the Borrower and its Subsidiaries, on a combined basis
(or following the consummation of the ▇▇▇▇▇▇▇ Transaction, of ▇▇▇▇▇▇▇ and its Subsidiaries), as of
the close of such Fiscal Year, and audited consolidated statements of income and cash flows for
▇▇▇▇▇▇▇ and its Subsidiaries and the Borrower and its Subsidiaries, on a combined basis (or
following the consummation of the ▇▇▇▇▇▇▇ Transaction, of ▇▇▇▇▇▇▇ and its Subsidiaries), for the
Fiscal Year then ended, including the notes to each, all in reasonable detail setting forth in
comparative form the corresponding figures for the preceding Fiscal Year, each prepared by an
independent certified public accountant reasonably acceptable to the Bank, in accordance with GAAP
applied on a basis consistent with that of the preceding year or containing disclosure of the
effect on the financial position or results of operation of any change in the application of
accounting principles and practices during the year, and each accompanied by a report thereon by
such certified public accountant containing an opinion that is not qualified with respect to scope
limitations imposed by ▇▇▇▇▇▇▇ or the Borrower, or any of their respective Subsidiaries or with
respect to accounting principles followed by such entity or its Subsidiaries not in accordance with
GAAP;
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(c) Concurrently with the delivery of the financial statements
described in subsection (b) above, a certificate addressed to the
Bank from the independent certified public accountant certifying (i)
that in making its audit as set forth in clause (b) above, it
obtained no knowledge of the occurrence or existence of any Default
or Event of Default under this Agreement, or specifying the nature
and period of existence of any such Default or Event of Default;
provided, however, that such accountant shall not be
liable to anyone by reason of its failure to obtain knowledge of any
such Default or Event of Default that would not be disclosed in the
course of an audit conducted in accordance with generally accepted
auditing standards and (ii) as to the aggregate Consolidated EBITDA
of ▇▇▇▇▇▇▇ and the Borrower (or following the consummation of the
▇▇▇▇▇▇▇ Transaction, of ▇▇▇▇▇▇▇) for the Fiscal Year then ended and
the Borrower’s compliance with the financial covenants set forth in
Article VI hereof;
3.3 Amendments to Section 6.1 (Consolidated EBITDA of the Borrower and ▇▇▇▇▇▇▇) of
the HB Service Credit Agreement. Section 6.1 of the HB Service Credit Agreement is hereby
deleted in its entirety and replaced with the following:
6.1 Consolidated EBITDA of the Borrower and ▇▇▇▇▇▇▇. Permit
the Consolidated EBITDA of the Borrower and ▇▇▇▇▇▇▇ on a combined basis
(or following the consummation of the ▇▇▇▇▇▇▇ Transaction, of ▇▇▇▇▇▇▇)
(i) for the period of the three consecutive Fiscal Quarters ending on
September 30, 2009, to be less than $2,000,000, (ii) for the period of
the four consecutive Fiscal Quarters ending as of any Fiscal Quarter to
be less than the amount set forth below opposite such Fiscal Quarter (or
opposite the period that includes such Fiscal Quarter):
| Minimum Consolidated | ||
| Period | EBITDA | |
| 4th Fiscal Quarter of 2009 | $3,000,000 | |
| 1st Fiscal Quarter of 2010 | $4,000,000 | |
| 2nd Fiscal Quarter of 2010 and thereafter | $5,000,000 |
The Consolidated EBITDA of the Borrower and ▇▇▇▇▇▇▇ on a combined
basis shall be calculated on the basis of the combined financial
statements of the Borrower and ▇▇▇▇▇▇▇ and shall reflect all
eliminations appropriate for the calculation of such EBITDA.
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3.4 Amendments to Section 7.6 (Restricted Payments) of the HB Service Credit
Agreement. Section 7.6(iii) of the HB Service Credit Agreement is hereby deleted in its
entirety and replaced with the following:
(iii) Reserved
3.5 Amendments to Section 8.1 (Events of Default) of the HB Service Credit Agreement.
Section 8.1(q) of the HB Service Credit Agreement is hereby deleted in its entirety and replaced
with the following:
(q) Prior to the consummation of the ▇▇▇▇▇▇▇ Transaction, ▇▇▇▇▇
▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ cease collectively to own, either
directly or indirectly through their company, HB Fairview Holdings,
LLC, a Delaware limited liability company, on a fully diluted basis
(x) a majority of the Capital Stock entitled to vote in the election
of directors of the Borrower, or (y) a majority of Capital Stock
entitled to share in the profits of the Borrower generally, and
following the consummation of the ▇▇▇▇▇▇▇ Transaction, the Borrower
shall cease to be a wholly owned Subsidiary of ▇▇▇▇▇▇▇.
ARTICLE IV
WAIVER
Based upon the representations and warranties contained herein, the Bank hereby waives each of
the HB Service Specified Events of Default and the ▇▇▇▇▇▇▇ Specified Events of Default and any
remedy the Bank would be entitled to as a result thereof. This waiver is limited as specified and
shall not constitute or be deemed to constitute an amendment, modification or waiver of any
provision of the HB Service Credit Agreement or the ▇▇▇▇▇▇▇ Credit Agreement or a waiver of any
Default or Event of Default (as defined in each of the HB Service Credit Agreement and the ▇▇▇▇▇▇▇
Credit Agreement) except as expressly set forth herein with respect to the HB Service Specified
Events of Default and the ▇▇▇▇▇▇▇ Specified Events of Default.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Each of ▇▇▇▇▇▇▇ and HB Service hereby represents and warrants that:
5.1 Representations in Credit Agreement. The representations and warranties of
▇▇▇▇▇▇▇ set forth in the ▇▇▇▇▇▇▇ Credit Agreement and of HB Service set forth in the HB Service
Credit Agreement are true and correct in all material respects as of the date hereof, except to the
extent such representations and warranties relate solely to or are specifically expressed as of a
particular date or period.
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5.2 Compliance with Credit Agreement. After giving effect to this Amendment, each of
HB Service and ▇▇▇▇▇▇▇ is in compliance with all covenants, terms and provisions set forth in the
HB Service Credit Agreement and the ▇▇▇▇▇▇▇ Credit Agreement, respectively, to be observed or
performed by it.
5.3 Due Authorization. This Amendment has been duly authorized, validly executed and
delivered by one or more authorized officers of ▇▇▇▇▇▇▇, ▇▇ Service and each of their respective
subsidiaries and each of this Amendment, the HB Service Credit Agreement and the ▇▇▇▇▇▇▇ Credit
Agreement, constitutes the legal, valid and binding obligation of HB Service and ▇▇▇▇▇▇▇, to the
extent each is a party thereto, enforceable against it in accordance with its terms and each of the
other Credit Documents (as defined in each of the HB Service Credit Agreement and the ▇▇▇▇▇▇▇
Credit Agreement) constitutes the legal, valid and binding obligation of ▇▇▇▇▇▇▇, ▇▇ Service, and
each of their respective Subsidiaries, to the extent party thereto, enforceable against each such
party in accordance with its terms.
5.4 No Event of Default. No Default or Event of Default under the HB Service Credit
Agreement or the ▇▇▇▇▇▇▇ Credit Agreement has occurred or is continuing (after giving effect to
this Amendment).
5.5 Continuing Security Interests. All obligations of ▇▇▇▇▇▇▇, the Subsidiary
Guarantors and HB Service and its Subsidiaries under the ▇▇▇▇▇▇▇ Credit Agreement and the other
Credit Documents (as defined in the ▇▇▇▇▇▇▇ Credit Agreement) continue to be or will be secured by
the Bank’s security interests in all of the collateral granted under the ▇▇▇▇▇▇▇ Credit Agreement
and the Security Documents (as defined in the ▇▇▇▇▇▇▇ Credit Agreement), and nothing herein will
affect the validity, enforceability, perfection or priority of such security interests.
5.6 No Defenses. Neither ▇▇▇▇▇▇▇ nor HB Service has any right of setoff, counterclaim,
or defense to payment of its respective liabilities or obligations under the ▇▇▇▇▇▇▇ Credit
Agreement or HB Service Credit Agreement, respectively. The Bank hereby expressly reserves all
rights and remedies it may have against ▇▇▇▇▇▇▇, ▇▇ Service and all other Persons (as defined in
both the ▇▇▇▇▇▇▇ Credit Agreement and the HB Service Credit Agreement) who may be or may hereafter
become secondarily liable for the repayment of the obligations thereunder.
ARTICLE VI
COVENANTS
6.1 Delivery of 2009 Audited Financial Statements. Prior to August 31,
2010, ▇▇▇▇▇▇▇ and HB Service shall deliver to the Bank:
(a) an audited consolidated balance sheet of ▇▇▇▇▇▇▇ and its Subsidiaries and HB Service and
its Subsidiaries for the fiscal year ending December 31, 2009, on a consolidated, combined basis,
as of the close of such fiscal year and audited consolidated statements of income and cash flows
for ▇▇▇▇▇▇▇ and its Subsidiaries and HB Service and its Subsidiaries, for the fiscal year then
ended, including the notes to each, all in reasonable detail setting forth in
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comparative form the corresponding figures for the preceding Fiscal Year, prepared by an
independent certified public accountant reasonably acceptable to the Bank, in accordance with GAAP
applied on a basis consistent with that of the preceding year or containing disclosure of the
effect on the financial position or results of operation of any change in the application of
accounting principles and practices during the year, and each accompanied by a report thereon by
such certified public accountant containing an opinion that is not qualified with respect to scope
limitations imposed by ▇▇▇▇▇▇▇, ▇▇ Service or their respective Subsidiaries or with respect to
accounting principles followed by such entity or its Subsidiaries not in accordance with GAAP;
(b) a certificate addressed to the Bank from the independent certified public accountant
referenced in subsection (a) above certifying (i) that in making its audit of the financial
statements of ▇▇▇▇▇▇▇ and its Subsidiaries and HB Service and its Subsidiaries, it obtained no
knowledge of the occurrence or existence of any Default or Event of Default under this Agreement
(other than the HB Service Specified Events of Default and the ▇▇▇▇▇▇▇ Specified Events of Default,
which have been waived by the Bank pursuant to the terms hereof), or specifying the nature and
period of existence of any such Default or Event of Default; provided, however, that such
accountant shall not be liable to anyone by reason of its failure to obtain knowledge of any such
Default or Event of Default that would not be disclosed in the course of an audit conducted in
accordance with generally accepted auditing standards and (ii) as to the aggregate Consolidated
EBITDA of ▇▇▇▇▇▇▇ and HB Service, on a combined basis, for the Fiscal Year then ended, and to the
extent feasible from such financial statements, ▇▇▇▇▇▇▇’▇ compliance with the financial covenants
set forth in Article VI of the ▇▇▇▇▇▇▇ Credit Agreement (prior to the amendment thereof pursuant to
this Amendment), and HB Service’s compliance with the financial covenants set forth in Article VI
of the HB Service Credit Agreement (prior to the amendment thereof pursuant to this Amendment);
(c) a Compliance Certificate with respect to such fiscal year together with a Covenant
Compliance Worksheet reflecting, to the extent feasible from such financial statements, the
computation of the financial covenants set forth in Article VI of the ▇▇▇▇▇▇▇ Credit Agreement and
Article VI of the HB Service Credit Agreement, in each case prior to giving effect to any
amendments thereto pursuant to the terms hereof, as of the last day of such fiscal year, executed
by the president or chief financial officer of ▇▇▇▇▇▇▇;
6.2 Delivery of Quarterly Financial Statements for the Fiscal Quarter ending June 30,
2010. Prior to August 31, 2010, ▇▇▇▇▇▇▇ and HB Service shall deliver to the Bank:
(a) a consolidated balance sheet of each of the Borrower and its Subsidiaries and HB
Service and its Subsidiaries, on a combined basis, for the fiscal quarter ending June 30, 2010, as
of the close of such Fiscal Quarter and consolidated statements of income and cash flows for each
of the Borrower and its Subsidiaries and HB Service and its Subsidiaries, on a combined basis, for
such fiscal quarter then ended and for that portion of the fiscal year then ended, all in
reasonable detail setting forth in comparative form the corresponding figures for the preceding
fiscal year, all prepared in accordance with GAAP applied on a basis consistent with that of the
preceding period or containing disclosure of the effect on the financial position or results of
operation of any change in the application of accounting principles and practices during the
11
period, subject only to audit and year-end adjustments, and certified by ▇▇▇▇▇▇▇’▇ president or
chief financial officer to be true and accurate;
(b) a Compliance Certificate with respect to such fiscal quarter together with a Covenant
Compliance Worksheet reflecting, to the extent feasible from such financial statements, the
computation of the financial covenants set forth in Article VI of the ▇▇▇▇▇▇▇ Credit Agreement and
Article VI of the HB Service Credit Agreement, in each case prior to giving effect to any
amendments thereto pursuant to the terms hereof, as of the last day of such fiscal quarter,
executed by the president or chief financial officer of ▇▇▇▇▇▇▇;
6.3 Further Assurances. Following the consummation of the Proposed Transaction, each
Amendment Party (as defined below) hereby agrees to make, execute, endorse, acknowledge and deliver
any amendments, modifications or supplements hereto and restatements hereof and any other
agreements, instruments or documents, and take any and all such other actions as reasonably
requested by the Bank to demonstrate or reaffirm its obligations under the Loan Documents (as
defined in the ▇▇▇▇▇▇▇ Credit Agreement and the HB Service Credit Agreement) in connection with the
consummation of the Proposed Transaction.
6.4 ▇▇▇▇▇▇▇▇ Signature. On or before August 18, 2010, ▇▇▇▇▇▇▇ and HB Service shall
cause to be delivered to the Bank, a signature page hereto executed by ▇▇▇▇▇▇▇▇ individually, and
not by an attorney-in-fact for ▇▇▇▇▇▇▇▇.
6.5 Failure to Comply. The failure of HB Service or ▇▇▇▇▇▇▇ or any other Amendment
Party to comply with the covenants set forth in this Article VI shall constitute an Event of
Default under, and as defined in, each of the HB Service Credit Agreement and the ▇▇▇▇▇▇▇ Credit
Agreement.
ARTICLE VII
CONDITIONS TO EFFECTIVENESS
This Amendment shall become effective as of the date hereof upon the satisfaction of each of
the following conditions precedent:
(a) The Bank shall have received a duly executed counterpart of this Amendment from each of
▇▇▇▇▇▇▇, the Subsidiary Guarantors (as defined in the ▇▇▇▇▇▇▇ Credit Agreement), HB Service and
each of its subsidiaries and ▇▇▇▇▇▇▇▇ (collectively, the “Amendment Parties”);
(b) The Bank shall have received resolutions of the board of directors (or other similar
governing body) of each of ▇▇▇▇▇▇▇ and HB Service, in form and substance reasonably acceptable to
the Bank, authorizing the execution and delivery of this Amendment;
(c) ▇▇▇▇▇▇▇ and HB Service shall have paid all reasonable out-of-pocket costs and expenses of
the Bank in connection with the preparation, negotiation, execution and delivery of this Amendment
(including, without limitation, the reasonable fees and out-of-pocket expenses of counsel for the
Bank with respect thereto); and
12
(d) The Bank shall have received such other documents, certificates, opinions,
instruments and other evidence as the Bank may reasonably request, all in a form and substance
satisfactory to the Bank and its counsel.
ARTICLE VIII
ACKNOWLEDGEMENTS; REPRESENTATIONS
8.1 Amendment Parties. Each of the Amendment Parties hereby approves and consents to
the transactions contemplated by this Amendment and the Proposed Transaction, confirms and agrees
that, after giving effect to this Amendment, each of the ▇▇▇▇▇▇▇ Credit Agreement, the HB Service
Credit Agreement and the other Credit Documents (as defined in each of the ▇▇▇▇▇▇▇ Credit Agreement
and the HB Service Credit Agreement) to which it is a party, remains in full force and effect and
enforceable against it in accordance with its terms and shall not be discharged, diminished,
limited or otherwise affected in any respect, and represents and warrants to the Bank that it has
no knowledge of any claims, counterclaims, offsets, or defenses to or with respect to its
obligations under the Credit Documents (as defined in each of the ▇▇▇▇▇▇▇ Credit Agreement and the
HB Service Credit Agreement), or if it has any such claims, counterclaims, offsets, or defenses to
such Credit Documents or any transaction related to such Credit Documents, the same are hereby
waived, relinquished, and released in consideration of the execution of this Amendment. Without
limiting the generality of the foregoing, ▇▇▇▇▇▇▇▇ hereby specifically reaffirms all of his
obligations and covenants under each of the ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Guaranty and the HB Service ▇▇▇▇▇▇▇▇
Guaranty and agrees that none of such obligations and covenants shall be affected by the execution
and delivery of this Amendment and the consummation of the Proposed Transaction. The
acknowledgements and confirmations by each of the Amendment Parties herein is made and delivered to
induce the Bank to enter into this Amendment and continue to extend credit to ▇▇▇▇▇▇▇, ▇▇ Service
and the other Amendment Parties, and each of the Amendment Parties acknowledges that the Bank would
not enter into this Amendment and continue to extend such credit in the absence of the
acknowledgement and confirmation contained herein.
8.2 ▇▇▇▇▇▇▇ Guarantors. Each of the Subsidiary Guarantors, HB Service and each of its
Subsidiaries and H. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (collectively, the “▇▇▇▇▇▇▇ Guarantors”) further
represents that it has knowledge of ▇▇▇▇▇▇▇’▇, ▇▇ Service’s and the other Amendment Parties’
financial condition and affairs and that it has adequate means to obtain from ▇▇▇▇▇▇▇, ▇▇ Service
and the other Amendment Parties on an ongoing basis information relating thereto and to ▇▇▇▇▇▇▇’▇,
▇▇ Service’s and the other Amendment Parties’ ability to pay and perform the their respective
obligations under the Credit Documents (as defined in each of the ▇▇▇▇▇▇▇ Credit Agreement and the
HB Service Credit Agreement), and agrees to assume the responsibility for keeping, and to keep, so
informed for so long as the guaranty of each such ▇▇▇▇▇▇▇ Guarantor remains in effect. Each ▇▇▇▇▇▇▇
Guarantor agrees that the Bank shall have no obligation to investigate the financial condition or
affairs of ▇▇▇▇▇▇▇, ▇▇ Service or any of the Amendment Parties for the benefit of any ▇▇▇▇▇▇▇
Guarantor nor to advise any ▇▇▇▇▇▇▇ Guarantor of any fact respecting, or any change in, the
financial condition or affairs of ▇▇▇▇▇▇▇, ▇▇ Service or any of the Amendment Parties that might
become known to the Bank at any time, whether or not the Bank knows or believes or has reason to
know or believe that any such fact or change is unknown to any ▇▇▇▇▇▇▇ Guarantor, or might (or
does) materially increase the risk of any
13
▇▇▇▇▇▇▇ Guarantor as guarantor, or might (or would) affect the willingness of any ▇▇▇▇▇▇▇ Guarantor
to continue as a guarantor of the obligations of ▇▇▇▇▇▇▇ or HB Service, as the case may be, under
the Credit Documents (as defined in each of the ▇▇▇▇▇▇▇ Credit Agreement and the HB Service Credit
Agreement). These representations and agreements by each of the ▇▇▇▇▇▇▇ Guarantors are made and
delivered to induce the Bank to enter into this Amendment and continue to extend credit to ▇▇▇▇▇▇▇,
▇▇ Service and the other Amendment Parties under the Credit Documents (as defined in each of the
▇▇▇▇▇▇▇ Credit Agreement and the HB Service Credit Agreement), and each of the ▇▇▇▇▇▇▇ Guarantors
acknowledges that the Bank would not enter into this Amendment and continue to extend such credit
in the absence of the representations and agreements contained herein.
ARTICLE IX
GENERAL
9.1 Full Force and Effect. This Amendment is limited as specified and, except as
specifically set forth herein, shall not constitute a modification, acceptance or waiver of any
other provision of any of the Credit Documents (as defined in each of the ▇▇▇▇▇▇▇ Credit Agreement
and the HB Service Credit Agreement). Each of the ▇▇▇▇▇▇▇ Credit Agreement and the HB Service
Credit Agreement, as amended by the amendments set forth herein, shall continue to be in full force
and effect in accordance with the provisions thereof after giving effect to such amendments. Any
reference to the ▇▇▇▇▇▇▇ Credit Agreement in any of the Security Documents or other Credit
Documents (each as defined in the ▇▇▇▇▇▇▇ Credit Agreement) shall mean the ▇▇▇▇▇▇▇ Credit Agreement
as amended by the Amendment and as may be further amended, modified, restated, or supplemented from
time to time. Any reference to the HB Service Credit Agreement in any of the Credit Documents (as
defined in the HB Service Credit Agreement) shall mean the HB Service Credit Agreement as amended
by the Amendment and as may be further amended, modified, restated, or supplemented from time to
time. This Amendment shall be a Credit Document under (and as defined in) each of the ▇▇▇▇▇▇▇
Credit Agreement and the HB Service Credit Agreement.
9.2 Applicable Law. This Amendment shall be governed by and construed in
accordance with the internal laws and judicial decisions of the State of North Carolina.
9.3 Counterparts; Execution. This Amendment may be executed in two or more
counterparts, each of which shall constitute an original, but all of which when taken together
shall constitute but one instrument. The exchange of copies of this Amendment and of signature
pages by facsimile transmission shall constitute effective execution and delivery of this Amendment
and such copies may be used in lieu of the original Amendment for all purposes. Delivery of an
executed counterpart of a signature page of this Agreement by facsimile transmission shall be
effective as delivery of a manually executed counterpart of this Amendment.
9.4 Expenses. Each of ▇▇▇▇▇▇▇ and HB Service, jointly and severally, agrees to pay on
demand all reasonable out-of-pocket expenses incurred by the Bank in connection with the
14
preparation, execution and delivery of this Amendment, including, without limitation, all
reasonable attorneys’ fees.
9.5 Further Assurances. Each of the Amendment Parties shall execute and deliver to the
Bank such documents, certificates, and opinions as the Bank may reasonably request to effect the
amendments contemplated by this Amendment and, with respect to the ▇▇▇▇▇▇▇ Credit Agreement, to
continue the existence, perfection and first priority of the Bank’s security interests in the
collateral securing the obligations under the Credit Documents (as defined in the ▇▇▇▇▇▇▇ Credit
Agreement).
9.6 Headings. The headings of this Amendment are for the purposes of reference only
and shall not affect the construction of this Amendment.
[The remainder of this page is left blank intentionally.]
15
IN WITNESS WHEREOF, the parties hereto have caused this Omnibus Amendment Agreement,
Limited Consent and Waiver to be executed and delivered by their duly
authorized officers all as of
the date first above written.
| ▇▇▇▇▇▇▇ INTERNATIONAL, INC. | ||||||
| By: |
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
|
|||||
| Title: Chief Financial Officer | ||||||
[Signature Pages Continued on the Following Page]
Signature Page to Omnibus Amendment Agreement, Limited Consent and Waiver
| ▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION |
||||
| By: | /s/ Cavan ▇. ▇▇▇▇▇▇ | |||
| Cavan ▇. ▇▇▇▇▇▇ | ||||
| Senior Vice President | ||||
[Signature Pages Continued on the Following Page]
Signature Page to Omnibus Amendment Agreement, Limited Consent and Waiver
| SUBSIDIARY GUARANTORS: | ||||||
| ▇▇▇▇▇▇▇ HYGIENE FRANCHISE CORP. | ||||||
| ▇▇▇▇▇▇▇ PEST CONTROL CORP. | ||||||
| ▇▇▇▇▇▇▇ MAIDS, INC. | ||||||
| By: | /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ | |||||
| Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇ | ||||||
| Title: Chief Financial Officer | ||||||
| SHFC BUFFALO, LLC | ||||||
| SHFC MINNEAPOLIS, LLC | ||||||
| SHFC OKLAHOMA, LLC | ||||||
| SHFC OPERATIONS, LLC | ||||||
| SHFC ARIZONA, LLC | ||||||
| SHFC TEXAS, LLC | ||||||
| By: | /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ | |||||
| Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇ | ||||||
| Title: Chief Financial Officer | ||||||
[Signature Pages Continued on the Following Page]
Signature Page to Omnibus Amendment Agreement, Limited Consent and Waiver
| HB SERVICE AND ITS SUBSIDIARIES: | ||||||
| HB SERVICE, LLC | ||||||
| By: | /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ | |||||
| Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇ | ||||||
| Title: Chief Financial Officer | ||||||
| SERVICE BALTIMORE, LLC | ||||||
| SERVICE ▇▇▇▇▇▇▇ HILLS, LLC | ||||||
| SERVICE BIRMINGHAM, LLC | ||||||
| SERVICE CALIFORNIA, LLC | ||||||
| SERVICE CAROLINA, LLC | ||||||
| SERVICE CENTRAL FL, LLC | ||||||
| SERVICE CHARLOTTE LLC | ||||||
| SERVICE CHATTANOOGA, LLC | ||||||
| SERVICE CINCINNATI, LLC | ||||||
| SERVICE COLUMBIA, LLC | ||||||
| SERVICE COLUMBUS, LLC | ||||||
| SERVICE DC, LLC | ||||||
| SERVICE DENVER, LLC | ||||||
| SERVICE FCS, LLC | ||||||
| SERVICE FLORIDA, LLC | ||||||
| SERVICE FRESNO, LLC | ||||||
| SERVICE GAINESVILLE, LLC | ||||||
| SERVICE GOLD COAST, LLC | ||||||
| SERVICE GREENSBORO, LLC | ||||||
| SERVICE GREENVILLE, LLC | ||||||
| SERVICE GULF COAST, LLC | ||||||
| SERVICE HOUSTON, LLC | ||||||
| SERVICE INDIANAPOLIS, LLC | ||||||
| SERVICE LAS VEGAS, LLC | ||||||
| SERVICE LOUISVILLE, LLC | ||||||
| SERVICE MEMPHIS, LLC | ||||||
| SERVICE MIDATLANTIC, LLC | ||||||
| SERVICE MIDWEST, LLC | ||||||
| SERVICE NASHVILLE, LLC | ||||||
| SERVICE NEW ORLEANS, LLC | ||||||
| SERVICE NEW YORK, LLC | ||||||
| By: | /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ | |||||
| Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇ | ||||||
| Title: Chief Financial Officer | ||||||
Signature Page to Omnibus Amendment Agreement, Limited Consent and Waiver
| SERVICE NORTH, LLC SERVICE NORTH-CENTRAL, LLC |
||||||
| SERVICE OKLAHOMA CITY, LLC | ||||||
| SERVICE PHILADELPHIA, LLC | ||||||
| SERVICE PHOENIX, LLC | ||||||
| SERVICE RALEIGH, LLC | ||||||
| SERVICE SALT LAKE CITY, LLC | ||||||
| SERVICE SEATTLE, LLC | ||||||
| SERVICE SOUTH, LLC | ||||||
| SERVICE ST. LOUIS, LLC | ||||||
| SERVICE TALLAHASSEE, LLC | ||||||
| SERVICE TAMPA, LLC | ||||||
| SERVICE TRI-CITIES, LLC | ||||||
| SERVICE VIRGINIA, LLC | ||||||
| SERVICE WEST COAST, LLC | ||||||
| By: | /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ | |||||
| Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇ | ||||||
| Title: Chief Financial Officer | ||||||
[Signature Pages Continued on the Following Page]
Signature Page to Omnibus Amendment Agreement, Limited Consent and Waiver
| /s/ H. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
|
||||
| BY ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ UNDER POWER OF ATTORNEY |
Signature Page to Omnibus Amendment Agreement, Limited Consent and Waiver
EXHIBIT A
▇▇▇▇▇▇▇ SPECIFIED EVENTS OF DEFAULT
1. The failure to deliver the financial statements and other documents required to be delivered by
▇▇▇▇▇▇▇ under Sections 5.1(b), 5.1(c) and 5.1(d) of the ▇▇▇▇▇▇▇ Credit Agreement for the fiscal
year ending December 31, 2009.
2. The failure to deliver the financial statements and other documents required to be delivered by
▇▇▇▇▇▇▇ under Sections 5.1(a) and 5.1(d) of the ▇▇▇▇▇▇▇ Credit Agreement for the fiscal quarter
ending June 30, 2010.
3. The failure of ▇▇▇▇▇▇▇ to comply with Sections 6.1, 6.2 and 6.3 of the ▇▇▇▇▇▇▇ Credit Agreement
for the fiscal quarters ending December 31, 2009, March 31, 2010 and June 30, 2010.
EXHIBIT B
HB SERVICE SPECIFIED EVENTS OF DEFAULT
1. The failure to deliver the financial statements and other documents required to be
delivered by HB Service under Sections 5.1(b), 5.1(c) and 5.1(d) of the HB Service Credit
Agreement for the fiscal year ending December 31, 2009.
2. The failure to deliver the financial statements and other documents required to be delivered by
HB Service under Sections 5.1(a) and 5.1(d) of the HB Service Credit Agreement for the fiscal
quarter ending June 30, 2010.
3. The failure of HB Service to comply with Section 6.1 of the HB Service Credit Agreement for the
fiscal quarters ending December 31, 2009, March 31, 2010 and June 30, 2010.