EXHIBIT 10.22
SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this "AMENDMENT") is entered
into as of December 30, 1998, among DRYPERS CORPORATION, a Delaware corporation
(the "BORROWER"), the bank or banks listed on the signature pages hereof
(collectively, the "BANKS"), BANKBOSTON, N.A., a national banking association,
individually and as agent for itself and the other Banks and as issuer of
Letters of Credit (in its capacity as agent, the "AGENT").
R E C I T A L S:
A. The Agent, the Borrower and the Banks have entered into that certain
Credit Agreement dated as of April 1, 1998 (as amended by a certain First
Amendment to Credit Agreement dated September 9, 1998, and as the same may
hereafter be amended, modified, or supplemented from time to time, the "CREDIT
AGREEMENT"), pursuant to which the Banks established a revolving credit facility
for the Borrower in an amount not to exceed $50,000,000.
B. The Borrower has requested the Agent or its Affiliates to provide
additional financing to the Borrower or one or more Restricted Subsidiaries
separate and apart from the Commitments under the Credit Agreement, which the
Agent or such Affiliates are willing to do, provided that the Borrower's
obligations with respect to such additional financing are secured by the
Collateral.
C. The Borrower, the Agent and the Banks desire to amend the Credit
Agreement as set forth herein.
A G R E E M E N T S:
NOW, THEREFORE, in consideration of the premises and other valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
Borrower, the Banks and the Agent agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 DEFINITIONS. Unless otherwise specified herein,
terms defined in the Credit Agreement have the same meaning when used herein.
ARTICLE II
AMENDMENTS
Section 2.1 AMENDMENT TO DEFINITION OF OBLIGATIONS. Effective as of the
date hereof, the definition of "Obligations" appearing in SECTION 1.1 of the
Credit Agreement is hereby amended in its entirety to read as follows:
"OBLIGATIONS" means all obligations, indebtedness, and liabilities
of the Borrower to the Agent, the Affiliates of the Agent and the Banks,
or any of them, whether arising pursuant to any of the Loan Documents or
in connection with any other transaction or agreement, now existing or
hereafter arising, whether direct, indirect, related, unrelated, fixed,
contingent, liquidated, unliquidated, joint, several, or joint and several
(including, without limitation, all of the Borrower's contingent
reimbursement obligations in respect of Letters of Credit, Guarantees and
Hedging Obligations), and all interest accruing thereon and all attorneys'
fees and other expenses incurred in the enforcement or collection thereof.
Section 2.2 AMENDMENT TO SCHEDULE 8.14. Effective as of the date hereof,
Schedule 8.14 of the Credit Agreement is hereby amended in its entirety to read
as set forth in Exhibit 1 attached to this Amendment.
ARTICLE III
CONDITIONS PRECEDENT
Section 3.1 CONDITIONS. The effectiveness of this Amendment is
subject to the satisfaction of the following conditions precedent:
(a) The Agent shall have received all of the following, in form and
substance satisfactory to the Agent:
(1) RESOLUTIONS. Resolutions of the Board of Directors of the
Borrower certified by its secretary or an assistant secretary which
authorize the execution, delivery and performance by the Borrower of
this Amendment and any other Loan Documents executed and/or
delivered in connection herewith;
(2) INCUMBENCY CERTIFICATE. A certificate of incumbency
certified by the secretary or an assistant secretary of the Borrower
certifying the names of the officers of the Borrower who are
authorized to sign this Amendment and any other Loan Documents
executed and/or delivered in connection herewith, together with
specimen signatures of such officers;
(3) GOVERNMENTAL CERTIFICATES. Certificates of the appropriate
governmental officials of the jurisdiction of incorporation of the
Borrower as to the existence and good standing of the Borrower, each
dated a current date;
(4) OPINION OF COUNSEL. A favorable opinion of Fulbright &
Xxxxxxxx, L.L.P., legal counsel to the Borrower, as to such matters
as the Agent may reasonably request; and
(5) ADDITIONAL INFORMATION. Such additional documents,
instruments and information as the Agent or its legal counsel,
Xxxxxxxx Xxxxxxxx & Xxxxxx P.C., may reasonably request.
(b) The representations and warranties contained herein and in all
other Loan Documents, as amended hereby, shall be true and correct as of
the date hereof as if made
on the date hereof, except for such representations and warranties as are
limited by their express terms to a specific date.
(c) No Default shall have occurred and be continuing.
(d) All corporate proceedings taken in connection with the
transactions contemplated by this Amendment and all documents,
instruments, and other legal matters incident thereto shall be reasonably
satisfactory to the Agent and its legal counsel, Xxxxxxxx Xxxxxxxx &
Xxxxxx P.C.
ARTICLE IV
CONSENTS
Section 4.1 CONSENT TO MEXICAN RESTRUCTURING. The Borrower has
restructured its Mexican operations as follows: (i) the Borrower formed a new
Subsidiary, Drypers Holding de Mexico SRL de CV ("DRYPERS HOLDING"), which
acquired a 99% permanent capital interest and a 100% variable capital interest
in Drypers Mexico SA de CV ("DRYPERS MEXICO"), (ii) Drypers Limited retained a
99% permanent capital interest in Drypers Mexico, and a .91% variable capital
interest therein, (iii) Drypers Holding formed two new Subsidiaries,
Commercializadora y Distribuidora Drypers de Mexico SRL de CV
("COMMERCIALIZADORA") and Drypers Servicios de Mexico SRL de CV ("Servicios"),
and obtained a 99% permanent capital interest therein, as well as a 99.089%
variable capital interest in Drypers Mexico, and (iv) Drypers Limited acquired a
minority interest of 1% in Drypers Holding and (v) the Borrower acquired or
retained 1% minority interests in Commercializadora, Servicios and Drypers
Mexico (such transactions described in clauses (i) through (v) above being
hereinafter referred to as the "MEXICAN Restructuring"). Pursuant to Sections
10.3, 10.5, 10.6, 10.7 and 10.14 of the Credit Agreement, the Borrower has
requested that the Agent consent to the Mexican Restructuring. Subject to the
conditions described in SECTION 4.2 below, the Agent hereby consents to the
Mexican Restructuring and agrees that such transactions shall not constitute a
breach or violation of the Credit Agreement. The consent granted herein is
limited to the Mexican Restructuring, and nothing contained herein shall be
construed as a consent by the Agent or the Banks with respect to any other
transaction.
Section 4.2 CONDITIONS TO CONSENT. The consent to the Mexican
Restructuring granted under SECTION 4.1 above is subject to compliance with the
following conditions:
(a) The original share certificates (and accompanying stock powers
duly executed in blank) of Drypers Holding, Commercializadora and
Servicios, issued to the Borrower in connection with the Mexican
Restructuring, but in any event not exceeding 65% of the issued and
outstanding capital stock of Drypers Holding, shall be promptly delivered
to the Agent pursuant to the Borrower Pledge Agreement;
(b) Drypers Holding shall promptly execute and deliver to the Agent
a Negative Pledge Agreement in the form of Exhibit "G" to the Credit
Agreement; and
(c) Drypers Limited shall deliver a new Schedule I to the Negative
Pledge Agreement of Drypers Limited which reflects its ownership of
one-percent (1%) of Drypers Holding.
ARTICLE V
RATIFICATIONS, REPRESENTATIONS AND WARRANTIES
Section 5.1 RATIFICATIONS. The terms and provisions set forth in this
Amendment shall modify and supersede all inconsistent terms and provisions set
forth in the Credit Agreement and, except as expressly modified and superseded
by this Amendment, the terms and provisions of the Credit Agreement and the
other Loan Documents are ratified and confirmed and shall continue in full force
and effect. The Borrower, the Agent, and the Banks agree that the Credit
Agreement as amended hereby and the other Loan Documents shall continue to be
legal, valid, binding and enforceable in accordance with their respective terms.
Section 5.2 REPRESENTATIONS AND WARRANTIES. The Borrower hereby represents
and warrants to the Agent and the Banks that (a) the execution, delivery and
performance of this Amendment and any and all other Loan Documents executed
and/or delivered in connection herewith have been authorized by all requisite
corporate action on the part of Borrower and will not violate the articles of
incorporation or bylaws of Borrower, (b) the representations and warranties
contained in the Credit Agreement, as amended hereby, and in each other Loan
Document are true and correct on and as of the date hereof as though made on and
as of the date hereof, except for such representations and warranties as are
limited by their express terms to a specific date; (c) no Default has occurred
and is continuing,(d) Borrower is in full compliance with all covenants and
agreements contained in the Credit Agreement as amended hereby and the other
Loan Documents to which it is a party; (e) as a result of the amendment to the
definition of "Obligations" set forth in Section 2.1 hereof, the Collateral
secures, among other things, all obligations, indebtedness and liabilities of
the Borrower to any Affiliate of the Agent; and (f) none of the transactions
effectuated by the Mexican Restructuring constitutes a breach or violation of,
or a default under, the Indenture.
ARTICLE VI
MISCELLANEOUS
Section 6.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made in this Amendment or any Loan Documents
furnished in connection with this Amendment shall survive the execution and
delivery of this Amendment and the other Loan Documents, and no investigation by
the Agent or any closing shall affect the representations and warranties or the
right of the Agent and the Banks to rely upon them.
Section 6.2 REFERENCES. Each of the Loan Documents, including the Credit
Agreement and any and all other agreements, documents, or instruments now or
hereafter executed and delivered pursuant to the terms hereof or pursuant to the
terms of the Credit Agreement as amended hereby, are hereby amended so that any
reference in such Loan Documents to the Credit Agreement shall mean a reference
to the Credit Agreement as amended hereby.
Section 6.3 EXPENSES OF THE AGENT. As provided in the Credit Agreement,
the Borrower agrees to pay on demand all reasonable costs and expenses incurred
by the Agent in connection with the preparation, negotiation, and execution of
this Amendment and the other Loan Documents executed pursuant hereto and any and
all amendments, modifications, and supplements thereto, including without
limitation the costs and reasonable fees of the Agent's
legal counsel, and all costs and expenses incurred by the Agent and the Banks in
connection with the enforcement or preservation of any rights under the Credit
Agreement, as amended hereby, or any other Loan Document, including without
limitation the costs and reasonable fees of legal counsel for the Agent and, at
any time following and during the continuance of an Event of Default, of legal
counsel to each Bank.
Section 6.4 SEVERABILITY. Any provision of this Amendment held by a court
of competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.
Section 6.5 APPLICABLE LAW. THIS AMENDMENT AND ALL OTHER LOAN DOCUMENTS
EXECUTED PURSUANT HERETO SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF
LAWS.
Section 6.6 COUNTERPARTS. This Amendment may be executed in a number of
identical counterparts, each of which shall be deemed an original. In making
proof of this instrument, it shall not be necessary for any party to account for
all counterparts, and it shall be sufficient for any party to produce but one
such counterpart bearing the signatures of all parties hereto.
Section 6.7 HEADINGS. The headings, captions, and arrangements
used in this Amendment are for convenience only and shall not affect the
interpretation of this Amendment.
Section 6.8 PARTIES BOUND. This Amendment is binding upon and shall inure
to the benefit of the Agent, the Banks and the Borrower and their respective
successors and assigns, except the Borrower may not assign or transfer any of
its rights or obligations hereunder without the prior written consent of the
Agent and all of the Banks.
Section 6.9 ENTIRE AGREEMENT. THIS AMENDMENT, THE CREDIT AGREEMENT, THE
LOAN DOCUMENTS, AND ALL OTHER INSTRUMENTS, DOCUMENTS AND AGREEMENTS EXECUTED AND
DELIVERED IN CONNECTION WITH THIS AMENDMENT REPRESENT THE FINAL AGREEMENT AMONG
THE PARTIES HERETO, AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS AMONG THE PARTIES HERETO.
(Balance of page intentionally left blank.)
IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment
to Credit Agreement to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
BORROWER:
DRYPERS CORPORATION
By: /s/ XXXXXXXX X. XXXXXX
Name: Xxxxxxxx X. Xxxxxx
Title:CPO & Executive Vice President
AGENT AND
BANKS:
BANKBOSTON, N.A., as Agent and as a Bank
By: /s/ XXXXXXX X. XXXXXXX
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
