EXHIBIT 2.6
AMENDMENT NO.1 AND CONSENT
This Amendment No. 1 and Consent dated as of June 12, 2001 ("Agreement") is
among IFCO Systems, N.V., a public limited liability company organized under the
laws of the Netherlands ("Holdings"), IFCO Systems North America, Inc., a
Delaware corporation ("Borrower"), the Lenders (as defined below) executing this
Agreement, and Bank One, NA, as administrative agent for the Lenders
("Administrative Agent").
INTRODUCTION
A. The Borrower is party to the Second Amended and Restated Credit
Agreement dated as of December 31, 2000 (as amended, modified, or revised from
time to time, the "Credit Agreement") with Holdings, the financial institutions
parties thereto ("Lenders"), CIBC World Markets Corp. and Banc One Capital
Markets, Inc., as co-lead arrangers and co-book runners, CIBC World Markets
Corp., as syndication agent, and the Administrative Agent.
B. The Borrower, the Lenders, and the Administrative Agent desire to
amend the Credit Agreement in certain respects as set forth herein and the
Borrower has requested that the Lenders consent to certain Asset Sales (as
defined in the Credit Agreement).
THEREFORE, the Borrower, the Lenders, and the Administrative Agent hereby
agree as follows:
Section 1. Definitions; References. Unless otherwise defined in this
-----------------------
Agreement, terms used in this Agreement which are defined in the Credit
Agreement shall have the meanings assigned to such terms in the Credit
Agreement.
Section 2. Amendments.
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(a) The definition of "Consolidated EBITDA" in Section 1.1 of the Credit
Agreement is amended by amending clause (f) in its entirety to read as follows:
(f) with respect to the fiscal quarter of Holdings ending December
31, 2000 only, any other non-recurring expenses or losses substantially in
accordance with Exhibit 1.1 attached hereto shall not, in the aggregate,
exceed $15,600,000,
(b) Effective as of May 30, 2001, Section 6.1(a)(i) of the Credit
Agreement is amended by replacing "150" with "180".
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(c) Section 7.6 of the Credit Agreement is amended in its entirety to read
as follows:
Restricted Payments. (i) Declare or pay any dividend (other than
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dividends payable solely in common stock of the Person making such
dividend) on, or make any payment on account of, or set apart assets
for a sinking or other analogous fund for, the purchase, redemption,
defeasance, retirement or other acquisition of, any Capital Stock of
Holdings or any of its Subsidiaries, whether now or hereafter
outstanding, or make any other distribution in respect thereof, either
directly or indirectly, whether in cash or property or in obligations
of Holdings or any of its Subsidiaries, and (ii) any payment or
prepayment of principal of, premium or penalty, if any, interest on,
or redemption, purchase, retirement, defeasance (including in-
substance or legal defeasance), sinking fund or similar payment with
respect to the Senior Subordinated Notes or the Subordinated Seller
Notes (collectively, "Restricted Payments"), except that:
-------------------
(a) any Subsidiary of Holdings may make Restricted Payments to
Holdings or any Wholly Owned Subsidiary Guarantor;
(b) so long as no Default or Event of Default shall have occurred
and be continuing, the Borrower may pay dividends to Holdings
to permit Holdings to make interest payments on the Senior
Subordinated Notes; and
(c) so long as no Default or Event of Default shall have occurred
and be continuing, the Borrower, Holdings or any subsidiary of
Holdings may make scheduled interest payments on the
Subordinated Seller Notes.
(d) Section 7.8 of the Credit Agreement is amended by adding "and the
Subordinated Seller Notes" after each instance of "Senior Subordinated Notes".
Section 3. Consent. The Administrative Agent and the Lenders consent to
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the Asset Sale of the operating assets and owned real property of Borrower's
Sonoma, California, Salinas, California, and Yuma, Arizona, pallet manufacturing
operations ("Sonoma Pacific Operations"), pursuant to a purchase agreement
between the Borrower and Sonoma Pacific Company, an Oregon corporation
("Purchaser") reasonably acceptable to the Administrative Agent, for total
consideration not less than $5,500,000, adjusted downward or upward for the
amount of any decrease or increase in inventory totals, which shall be payable
to the Borrower (i) $1,000,000 in cash on the closing date; (ii) the balance of
$4,500,000, subject to adjustment for changes in inventory levels after April
30, 2001, evidenced by secured promissory notes due within one year after
closing.
Section 4. Representations and Warranties. The Borrower represents and
------------------------------
warrants to the Administrative Agent and the Lenders that:
(a) the representations and warranties set forth in the Credit Agreement
are true and correct in all material respects as of the date of this Agreement,
except to the extent any such
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representation or warranty is stated to relate solely to an earlier date, in
which case such representation or warranty was true and correct in all material
respects as of such earlier date;
(b) (i) the execution, delivery, and performance of this Agreement have
been duly authorized by appropriate proceedings, and (ii) this Agreement
constitutes a legal, valid, and binding obligation of the Borrower, enforceable
in accordance with its terms, except as limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or similar laws affecting the rights of
creditors generally and general principles of equity; and
(c) as of the effectiveness of this Agreement, no Default or Event of
Default has occurred and is continuing.
Section 5. Effectiveness. This Agreement shall become effective and the
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Credit Agreement shall be amended as provided in this Agreement upon the
occurrence of the following conditions precedent:
(a) the Borrower, Holdings, the Guarantors, the Administrative Agent, and
the Required Lenders shall have delivered duly and validly executed originals of
this Agreement to the Administrative Agent;
(b) the representations and warranties in this Agreement shall be true and
correct in all material respects;
(e) the Administrative Agent and Lenders executing this Agreement shall
have received the required work fee from the Borrower;
(f) the Borrower shall have delivered duly and validly executed originals
of the Note Assignment Agreement directly assigning the Sonoma Notes to the
Administrative Agent for the benefit of the Lenders; and
(g) the Borrower shall have delivered to the Administrative Agent duly and
validly executed copies of all security documents concerning the Sonoma Pacific
transaction.
Section 6. Effect on Loan Documents.
------------------------
(a) Except as amended herein, the Credit Agreement and the Loan Documents
remain in full force and effect as originally executed and amended heretofore.
Nothing herein shall act as a waiver of any of the Administrative Agent's or
Lenders' rights under the Loan Documents, as amended, including the waiver of
any Event of Default or Default, however denominated.
(b) This Agreement is a Loan Document for the purposes of the provisions
of the other Loan Documents. Without limiting the foregoing, any breach of
representations, warranties, and covenants under this Agreement may be an Event
of Default or Default under other Loan Documents.
Section 7. Choice of Law. This Agreement shall be governed by and
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construed and enforced in accordance with the laws of the State of New York.
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Section 8. Counterparts. This Agreement may be signed in any number of
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counterparts, each of which shall be an original.
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EXECUTED as of the date first above written.
IFCO SYSTEMS, N.V.
By: /s/ Xxxxxx Xxxxx
------------------------------------------
Xxxxxx Xxxxx
Executive Vice President
IFCO SYSTEMS NORTH AMERICA, INC.
By: /s/ Xxxxxx Xxxxx
------------------------------------------
Xxxxxx Xxxxx
Vice President
BANK ONE, NA, as Administrative Agent and as a
Lender
By: /s/ Xxxx X. Xxxxxxxxx, XX
------------------------------------------
Name: Xxxx X. Xxxxxxxxx, XX
----------------------------------------
Title: Associate Director
---------------------------------------
CANADIAN IMPERIAL BANK OF COMMERCE, as Lender
By: /s/ Xxxxxxx Xxxxxx
------------------------------------------
Name: Xxxxxxx Xxxxxx
----------------------------------------
Title: CIBC World Markets Corp. as Agent
----------------------------------
DRESDNER BANK AG, NEW YORK AND GRAND CAYMAN
BRANCHES, as Lender
By: /s/ Xxxx Xxxxxxxx
------------------------------------------
Name: Xxxx Xxxxxxxx
----------------------------------------
Title: Director
----------------------------------------
By: /s/ Xxxxxxx Xxxx
------------------------------------------
Name: Xxxxxxx Xxxx
----------------------------------------
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Title: Assistant Treasurer
---------------------------------------
COMERICA BANK, as Lender
By: /s/ Xxxx X. Xxxxxxxxx
------------------------------------------
Name: Xxxx X. Xxxxxxxxx
----------------------------------------
Title: VP
--------------------------------------
BNP PARIBAS, as Lender
By: /s/ Xxxx Xxxxxxx
-------------------------------------------
Name: Xxxx Xxxxxxx
----------------------------------------
Title: Associate
---------------------------------------
By: /s/ Xxxxx X. Xxxxxx
-------------------------------------------
Name: Xxxxx X. Xxxxxx
-----------------------------------------
Title: Vice President
----------------------------------------
NATIONAL CITY BANK, as Lender
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------------
Name: Xxxxxxx X. Xxxxxx
----------------------------------------
Title: Vice President
--------------------------------------
THE ROYAL BANK OF SCOTLAND, as Lender
By: /s/ Gerd Bieding
-----------------------------------------
Name: Gerd Bieding
---------------------------------------
Title: Director
---------------------------------------
THE BANK OF NOVA SCOTIA, as Lender
By: /s/ Xxxxxx X. Xxxxx
------------------------------------------
Name: Xxxxxx X. Xxxxx
---------------------------------------
Title: Director
--------------------------------------
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ACKNOWLEDGMENT AND CONSENT BY GUARANTORS
Each of the undersigned Guarantors (i) acknowledges its receipt of a copy
of and hereby consents to all of the terms and conditions of the foregoing
Consent and (ii) reaffirms its obligations under the Guarantee and Collateral
Agreement dated as of March 8, 2000 in favor of Bank One, NA, as Administrative
Agent.
Dated as June 12, 2001.
BORROWER:
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IFCO SYSTEMS NORTH AMERICA, INC.
By: /s/ Xxxxxx Xxxxx
-----------------------------------
Name: Xxxxxx Xxxxx
---------------------------------
Title: Vice President
--------------------------------
GRANTORS:
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IFCO SYSTEMS, N.V.
By: /s/ Xxxxxx Xxxxx
-------------------------------------
Name: Xxxxxx Xxxxx
---------------------------------
Title: Executive Vice President
--------------------------------
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IFCO SYSTEMS VIRGINIA, INC.
IFCO SYSTEMS FLORIDA, INC.
SONOMA PACIFIC COMPANY
NEW LONDON PALLET, INC.
NLD, INC.
IFCO SYSTEMS CALIFORNIA, INC.
SOUTHERN PALLET, INC.
IFCO SYSTEMS PENNSYLVANIA, INC.
SHIPSHEWANA PALLET CO., INC.
XXXXXXX LUMBER INCORPORATED
VALLEY CRATING AND PACKAGING, INC.
XXXXXXX PALLET CO., INC.
XXXXXXXX LUMBER COMPANY
BLACK RIVER FOREST PRODUCTS, INC.
PALEX-TEXAS, INC.
IFCO SYSTEMS IOWA, INC.
SHEFFIELD LUMBER AND PALLET
COMPANY, INC.
By: /s/ Xxxxxx Xxxxx
----------------------------------------
Name: Xxxxxx Xxxxx
--------------------------------------
Title: Vice President
-------------------------------------
AZ PALLET, INC.
BROMLEY ACQUISITION COMPANY, INC.
IFCO SYSTEMS OHIO, INC.
By: /s/ Xxxxxx Xxxxx
----------------------------------------
Name: Xxxxxx Xxxxx
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Title: Vice President
------------------------------------
PALLET MANAGEMENT SERVICES, INC.
By: /s/ Xxxxxx Xxxxx
----------------------------------------
Name: Xxxxxx Xxxxx
--------------------------------------
Title: Vice President
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PALEX-TEXAS, L.P.
By: PalEx-Texas, Inc., its General Partner
By: /s/ Xxxxxx Xxxxx
-----------------------------------------
Name: Xxxxxx Xxxxx
---------------------------------------
Title: Vice President
--------------------------------------
IFCO ICS-CHICAGO, INC.
IFCO INDUSTRIAL CONTAINER SYSTEMS
HOLDING COMPANY
IFCO ICS-WASHINGTON, INC.
IFCO ICS-CALIFORNIA, INC.
ENVIRONMENTAL RECYCLERS OF
COLORADO, INC.
IFCO ICS-FLORIDA, INC.
IFCO ICS-MINNESOTA, INC.
IFCO ICS-GEORGIA, INC.
IFCO ICS-ILLINOIS, INC.
IFCO ICS-NORTH CAROLINA, INC.
IFCO ICS-MIAMI, INC.
CONTAINER RESOURCES CORPORATION
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxx
---------------------------------------
Title: V.P.
--------------------------------------
IFCO ICS-MICHIGAN, INC.
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxx
---------------------------------------
Title: V.P.
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IFCO ICS-WESTERN LLC
By: IFCO ICS-Chicago, Inc., its Manager
By: /s/ Xxxxx X. Xxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxx
------------------------------------
Title: V.P.
------------------------------------
PALEX TEXAS HOLDINGS, INC.
By: /s/ Xxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxxx
-----------------------------------
Title: President
--------------------------------
IFCO SYSTEMS EUROPE GMBH
By: /s/ Xxxxxxx Nimtsch /s/ Xxxx Xxxxxx
-------------------------------------
Name: Xxxxxxx Nimtsch Xxxx Xxxxxx
-----------------------------------
Title: CFO CEO
---------------------------------
SCHOELLER-U.S., INC.
By: /s/ Xxxxxx Xxxxx
-------------------------------------
Name: Xxxxxx Xxxxx
-----------------------------------
Title: Vice President
----------------------------------
IFCO - U.S., L.L.C.
By: /s/ Xxxxxx Xxxxx
-------------------------------------
Name: Xxxxxx Xxxxx
-----------------------------------
Title: Vice President
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EXHIBIT 1.1
Amendment No. 1 to the Second Amended and Restated Credit Agreement dated as of December 31, 2000
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IFCO SYSTEMS N.V. CALCULATION OF ADJUSTED PRO FORMA | PRELIMINARY |
EBITDA 2000 | |
-----------------------------------------------------------------------------------------------------------------------------------
| | | |
-------------------------|--------------------------------------------------------|----------------|---------------|---------------
| | $ | |
----------------------------------------------------------------------------------|----------------|---------------|---------------
Proforma EBITDA from Annual Report Presentation | 49,768 | |
----------------------------------------------------------------------------------|--------------------------------|---------------
Discontinued operations | 10,594 | |
----------------------------------------------------------------------------------|----------------|---------------|---------------
| | 60,362 | |
-------------------------|--------------------------------------------------------|----------------|---------------|---------------
| | | |
-------------------------|--------------------------------------------------------|----------------|---------------|---------------
Restructuring charge | | 1,161 | |
----------------------------------------------------------------------------------|----------------|---------------|---------------
One-time and non recurring items | | |
----------------------------------------------------------------------------------x----------------x---------------x---------------
Xxxxx Xxxxxxx | 8,007 | |
----------------------------------------------------------------------------------|----------------|---------------|---------------
IFCO Systems N.V. | 2,600 | |
----------------------------------------------------------------------------------|----------------|---------------|---------------
Europe and ROW | 1,893 | |
----------------------------------------------------------------------------------|----------------|---------------|---------------
IFCO Online | 1,251 | |
----------------------------------------------------------------------------------|----------------|---------------|---------------
ISL | 647 | |
----------------------------------------------------------------------------------|----------------|---------------|---------------
| | 14,398 | |
----------------------------------------------------------------------------------|================|---------------|---------------
TOTAL ADJUSTED PRO FORMA EBITDA | $75,921 | |
----------------------------------------------------------------------------------|================|---------------|---------------
| | | |
----------------------------------------------------------------------------------|----------------|---------------|---------------
DETAIL OF ONE-TIME AND SPECIAL ITEMS | NON | RESTRUCTURING | TOTAL
| RECURRING | |
----------------------------------------------------------------------------------|----------------|---------------|---------------
North America | | |
----------------------------------------------------------------------------------|----------------|---------------|---------------
| Early termination of offices - restructuring. Non cash | 0 | 420 | 420
-------------------------|---------------------------------------------------------------------------------------------------------
| Compensation (salaries, severance payments, RIF) related to permanent headcount reductions. In
| conjunction with the IPO and the merger management decided to size down infrastructure in NA. This was
| previously charged to goodwill or restructuring charge.
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| Non recurring - cash. | 4,909 | 0 | 4,909
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| Payment to third parties for certain bank debt | 217 | 0 | 217
| transactions during the IPO, required to be expensed | | |
| by USGAAP; previously charged to goodwill. Non | | |
| recurring - cash. | | |
-----------------------------------------------------------------------------------------------------------------------------------
| Costs incurred to change the Company name from PalEx | 284 | 0 | 284
| to IFCO and the according change of the signs etc.; | | |
| previously charged to goodwill. Non recurring - cash. | | |
-------------------------|--------------------------------------------------------|----------------|---------------|---------------
| CEO search and moving costs; previously charged to | 275 | 0 | 275
| goodwill. Non recurring - cash. | | |
-------------------------|--------------------------------------------------------|----------------|---------------|---------------
| Operating loss from facilities closed subsequent to | 185 | 0 | 185
| their acquisition in 2000 (Bromley); previously | | |
| charged to goodwill. Non recurring - cash. | | |
-------------------------|--------------------------------------------------------|----------------|---------------|---------------
| Volume related deferral of revenues at RTC operations; | 560 | 0 | 560
| change in accounting policy required by AA. Revenues | | |
| became effective at delivery date. They are now accrued| | |
| over the revenue cycle. Non recurring - non cash. | | |
| Accounting change | | |
-------------------------|--------------------------------------------------------|----------------|---------------|---------------
| Provision for bad debts on asbestos related customer | 1,577 | 0 | 1,577
| accounts. One time item because IFCO NA does not have | | |
| other customers that large with similar exposure. | | |
| Extraordinary and non-recurring - non cash. | | |
-------------------------|--------------------------------------------------------|----------------|---------------|---------------
| | 8,007 | 420 | 8,427
-------------------------|--------------------------------------------------------|================|===============|===============
| | | |
----------------------------------------------------------------------------------|----------------|---------------|---------------
IFCO Systems N.V. | | |
-----------------------------------------------------------------------------------------------------------------------------------
| Compensation related to permanent headcount reductions | 1,197 | 0 | 1,197
| in NA - executive and managerial (VKM, JH, DL) Non | | |
| recurring - cash | | |
-------------------------|--------------------------------------------------------|----------------|---------------|---------------
| Lawyer and audit fees in conjunction with the merger | 1,032 | 0 | 1,032
| and IPO with which we we were not able to capitalize. | | |
| Non recurring - cash | | |
-------------------------|--------------------------------------------------------|----------------|---------------|---------------
| Management restructuring in Europe. Non recurring - | 255 | 0 | 255
| cash | | |
-------------------------|--------------------------------------------------------|----------------|---------------|---------------
| Stop of strategic acquisition initiatives in Europe. | 116 | 0 | 166
| Related lawyer and audit fees. Non recurring - cash. | | |
| | | |
-------------------------|--------------------------------------------------------|----------------|---------------|---------------
| | 2,600 | 0 | 2,600
----------------------------------------------------------------------------------|================|===============|===============
Europe and ROW | | |
----------------------------------------------------------------------------------|----------------|---------------|---------------
| Restructuring expenses in South America. Write off of | 1,204 | 0 | 1,204
| capitalized start up expenses related to Uruguay, | | |
| Columbia, Chile and Mexico. The initiatives in this | | |
| countries were suspended. Non recurring - non cash. | | |
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EXHIBIT 1.1
Amendment No. 1 to the Second Amended and Restated Credit Agreement dated as of December 31, 2000
----------------------------------------------------------------------------------------------------------------------------------
|Restructuring of washing depots in Europe. Built up a | 0 | 741 | 741
|restructuring charge. Non recurring - restructuring - | | |
|non cash. | | |
-------------------------|--------------------------------------------------------|----------------|---------------|---------------
|Permanent reduction and reorganization of headcount | 689 | 0 | 689
|staff, severance payments, search expenses. | | |
|Non recurring - cash | | |
-------------------------|--------------------------------------------------------|----------------|---------------|---------------
| | 1,893 | 741 | 2,634
-------------------------|--------------------------------------------------------|================|===============|===============
IFCO Online | | | |
-------------------------|--------------------------------------------------------|----------------|---------------|---------------
|Expenses for studies of Xxxxxx Xxxxxxxx, AT Xxxxxxx and | 1,251 | 0 | 1,251
|barkawi regarding the transponder technology used on | | |
|crates and other start up expenses. Non recurring - cash| | |
-------------------------|--------------------------------------------------------|----------------|---------------|---------------
| | 1,251 | 0 | 1,251
-------------------------|--------------------------------------------------------|================|===============|===============
ISL | | | |
-------------------------|--------------------------------------------------------|----------------|---------------|---------------
|The company started a business model with the target to | 647 | 0 | 647
|organize the roundtrip of loaded trucks according to the| | |
|RTC cycle. This business model failed. The respective | | |
|company ISL was terminated and closed as of April 2001. | | |
|Non recurring - cash | | |
-------------------------|--------------------------------------------------------|----------------|---------------|---------------
| | | |
-------------------------|--------------------------------------------------------|----------------|---------------|---------------
| | 647 | 0 | 647
----------------------------------------------------------------------------------|================|===============|===============
TOTAL ONE-TIME AND NON RECURRING | $14,398 | $1,161 | $15,559
----------------------------------------------------------------------------------=================================================
