EXECUTION COPY
FIRST AMENDMENT TO PARTICIPATION AGREEMENT
THIS FIRST AMENDMENT TO PARTICIPATION AGREEMENT (this "AMENDMENT"), dated
as of April 20, 2006 (the "AMENDMENT EFFECTIVE DATE"), by and between LJH, LTD.,
a Texas limited partnership (the "SELLER") and OWL CREEK ASSET MANAGEMENT, L.P.,
a Delaware limited partnership (the "PARTICIPANT").
WHEREAS, the Seller and the Participant have entered into that certain
Participation Agreement, dated as of April 10, 2006 (as amended, restated,
supplemented or otherwise modified from time to time, the "PARTICIPATION
AGREEMENT") for the purposes and consideration therein expressed.
WHEREAS, the Seller and the Participant desire to make certain changes to
the terms and provisions of the Participation Agreement, as provided herein.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree, effective as of the Amendment
Effective Date, as follows:
SECTION 1. DEFINED TERMS. Capitalized terms used herein and defined in
the Participation Agreement or in Section 2 of this Amendment
shall have the meanings given to such terms in the
Participation Agreement or in Section 2 of this Amendment (as
applicable).
SECTION 2. AMENDMENTS TO PARTICIPATION AGREEMENT.
2.1 AMENDMENTS TO SECTION 1. Section 1 of the Financing Agreement is
hereby amended as follows: -----------------------
(a) Section 1 of the Participation Agreement is hereby amended by
adding thereto the following defined term in its appropriate
alphabetical order:
""AGREED MERGER" shall mean a merger of TIMCO that shall be
consummated on or before a date that is no later than October 20,
2006, pursuant to terms and conditions to which both the Seller
and the Participant consent and in which shareholders other than
the Seller and the Participant receive cash for their shares and
the Seller and the Participant continue as owners of TIMCO."
(b) Section 1 of the Participation Agreement is hereby further
amended by amending the following defined terms set forth therein
as follows:
(i) The defined term "TRANSACTION AGREEMENT" is hereby amended
and restated in full to read as follows:
"TRANSACTION AGREEMENT" shall mean that certain Transaction
Agreement dated as of April 10, 2006 among LJH, Ltd., Owl
Creek I, L.P., Owl Creek II, L.P., Owl Creek Overseas Fund,
Ltd., Owl Creek Oversees Fund II, Ltd. and TAS Holding,
Inc., as the same was amended and restated by that certain
Amended and Restated Transaction Agreement, dated as of
April 20, 2006, as may be further amended, restated,
supplemented or otherwise modified from time to time.
(c) Section 1 of the Participation Agreement is hereby further
amended by deleting therefrom the definition of "SHAREHOLDER
AGREEMENT" in its entirety.
2.2 AMENDMENTS TO SECTION 3.1. Section 3.1 of the Participation Agreement
is hereby amended by (a) adding thereto an "and" immediately prior to
subsection (b) and (b) deleting therefrom the phrase ", and (c) the
conditions precedent in Section 2.5 of the Transaction Agreement shall
have been satisfied" and substituting in lieu thereof a ".".
2.3 AMENDMENTS TO SECTION 8. Section 8(d) of the Participation Agreement
is hereby amended by adding thereto the phrase "in the event of an
Agreed Merger," immediately following the phrase "PROVIDED, HOWEVER,
that the Seller may".
2.4 AMENDMENTS TO SECTION 14. Section 14(a) of the Participation Agreement
is hereby amended by deleting therefrom the phrase", the Shareholders'
Agreement" in the first and second line thereof.
2.5 ADDITIONAL AMENDMENTS TO SECTION 14. Section 14 of the Participation
Agreement is hereby further amended by adding thereto a new Section
14(q) to the end thereof to read as follows:
"INTERCREDITOR AGREEMENT. The Seller and the Participant each hereby
acknowledge the existence of, and that their respective rights and
interests in the Loans and the Credit Documents are subject to and
limited by, that certain Intercreditor and Subordination Agreement
dated as of April 20, 2006 by and between The CIT Group/Business
Credit, Inc., the Senior Lenders party thereto and Seller, as amended,
restated, supplemented or otherwise modified from time to time."
2.6 AMENDMENTS TO SCHEDULE 1. Schedule 1 of the Participation Agreement is
hereby amended by amending the following defined terms set forth
therein as follows:
(a) The defined term "THE LOANS" is hereby amended and restated
in full to read as follows:
"THE LOANS" means the Term Loan A-1 in the outstanding
principal amount of $8,190,294.32, the Term Loan A-2 in the
outstanding principal
amount of $7,166,489.67 and the Term Loan B in the
outstanding principal amount of $2,956,471.09.
(b) The defined term "SPECIFIED COMMITMENTS" is hereby amended
and restated in full to read as follows:
"SPECIFIED COMMITMENTS" means, at any time the
commitment to fund the Term Loan C in the principal
amount of $6,000,000, as specified in the Credit
Agreement.
SECTION 3. CONDITIONS TO EFFECTIVENESS. This Amendment shall become
effective as of the date and year first above written when the
Seller shall have received an executed counterpart of this
Amendment from the Participant.
SECTION 4. MISCELLANEOUS.
4.1 PAYMENT OF COSTS AND EXPENSES. Notwithstanding any term or provision
in the Participation Agreement (as amended by this Amendment), all
costs and expenses incurred by the Seller and the Participant in
connection with the preparation, negotiation, execution, delivery and
performance of this Amendment and any other documents prepared in
connection herewith, including, without limitation, the reasonable
fees and disbursements of counsel to the Seller and the Participant,
shall be payable by TIMCO on the Amendment Effective Date to the
Seller and the Participant, respectively.
4.2 NO OTHER AMENDMENTS; CONFIRMATION. Except as expressly amended,
modified and supplemented hereby, the provisions of the Participation
Agreement are and shall remain in full force and effect.
4.3 FURTHER ASSURANCES. Each Party shall, from and after the execution of
this Amendment, (i) execute and deliver, or cause to be executed and
delivered, all such instruments and (ii) take all such actions as the
other Party may reasonably request to give effect to the terms and
conditions of this Amendment.
4.4 INTERPRETATION. In connection with the interpretation of this
Amendment and all other documents, instruments, and agreements
incidental hereto:
(a) The captions of this Amendment are for convenience purposes
only, and shall not be used in construing the intent of the
either Party under this Amendment.
(b) The Seller and the Participant have prepared this Amendment
with the assistance of their respective counsel.
Accordingly, this Amendment shall be deemed to have been
drafted by the Seller and the Participant and shall not be
construed against either the Seller or the Participant.
(c) Any determination that any provision or application of this
Amendment is invalid, illegal, or unenforceable in any
respect, or in any instance, shall
not affect the validity, legality, or enforceability of any
such provision in any other instance, or the validity,
legality, or enforceability of any other provision of this
Amendment.
4.5 BINDING AGREEMENT. This Amendment shall be binding upon each Party and
their employees, representatives, successors, and assigns, and shall
inure to the benefit of the Seller and the Seller's successors and
assigns. This Amendment and all documents, instruments, and agreements
executed in connection herewith incorporate all of the discussions and
negotiations between the parties hereto, either expressed or implied,
concerning the matters included herein and in such other documents,
instruments, and agreements, any statue, custom, or usage to the
contrary notwithstanding. No such discussions or negotiations shall
limit, modify, or otherwise affect the provisions hereof. No
modification, amendment, or waiver of any provision of this Amendment,
or any provision of any other document, instrument, or agreement
between the parties shall be effective unless executed in writing by
the party to be charged with such modification, amendment, or waiver.
4.6 WAIVER OF JURY TRIAL. EACH PARTY HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY RIGHT THAT THEY MAY HAVE TO TRIAL BY JURY OF ANY CLAIM OR
CAUSE OF ACTION, OR IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY
BASED UPON OR ARISING OUT OF THIS AMENDMENT (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT
OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTY HAVE BEEN INDUCED TO ENTER
INTO THIS AMENDMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 4.6.
4.7 INTERCREDITOR AGREEMENT. The Seller and the Participant each hereby
acknowledge the existence of, and that their respective rights and
interests in the Loans and the Credit Documents are subject to and
limited by, that certain Intercreditor and Subordination Agreement
dated as of April 20, 2006 by and between The CIT Group/Business
Credit, Inc., the Senior Lenders party thereto and Seller, as amended,
restated, supplemented or otherwise modified from time to time.
4.8 SCHEDULE 1 AMENDMENTS. Notwithstanding any term or provision in this
Amendment, the amendments and modifications to Schedule 1 of the
Participation Agreement set forth in Section 2.6 hereof shall be
effective as of the Closing Date.
4.9 COUNTERPARTS. This Amendment may be executed in separate counterparts,
each of which when so executed and delivered shall be an original, and
both of which
together shall constitute one instrument. Delivery of an executed
counterpart of a signature page to this Amendment by facsimile shall
be effective as delivery of an original executed counterpart of this
Amendment.
4.10 GOVERNING LAW. This Amendment and the rights and obligations of the
parties hereto shall be governed by, and construed and interpreted in
accordance with, the laws of the State of New York, without regard to
principles of conflict of laws thereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their respective proper and duly authorized
officers as of the day and year first above written.
SELLER
LJH, LTD.
By: DLH Management, LLC, its general partner
By:
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▇▇▇▇ ▇▇▇▇▇▇, President
PARTICIPANT
OWL CREEK ASSET MANAGEMENT, LP
By:
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Name:
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