Exhibit 99
as of April 17, 2001
Xxxxxxx-Xxxxxxx Holdings, Inc.
Xxxxxxx-Xxxxxxx Corp.,
Xxxxxxx-Xxxxxxx, Inc.,
RSLPCO, Inc.,
Xxxxxxx-Xxxxxxx, L.P.,
Container Management Services, Inc.,
Hunter Drums Limited,
New England Container Co., Inc.
000 Xxxxx 000/000
Xxxxxxxxxxx, XX 00000
Attention: Xx. Xxxxxx X. Xxxxxxxxxxx
Re: Forbearance and Amendment Agreement
Ladies and Gentlemen:
Reference is made to the Fifth Amended and Restated Revolving Credit
Agreement, dated as of February 10, 1999 (as amended and in effect from time
to time, the "Credit Agreement"), among XXXXXXX-XXXXXXX HOLDINGS, INC., a
Delaware corporation, XXXXXXX-XXXXXXX CORP., a New Jersey corporation,
Xxxxxxx-Xxxxxxx, Inc. (f/k/a Xxxxxxx-Xxxxxxx Midwest, Inc., successor by
merger to Xxxxxxx-Xxxxxxx West, Inc., Xxxxxxx-Xxxxxxx Southwest, Inc. and R-S
Southwest Realty, Inc.), an Illinois corporation, RSLPCO, INC., a Delaware
corporation, XXXXXXX-XXXXXXX, L.P., a Texas limited partnership, CONTAINER
MANAGEMENT SERVICES, INC. (successor by merger to CMS Acquisition, Inc.), a
South Carolina corporation, HUNTER DRUMS LIMITED (successor by amalgamation to
HDL Acquisition Inc.), an Ontario corporation, and NEW ENGLAND CONTAINER CO.,
INC., a Rhode Island corporation. (collectively, the "Borrowers"), Fleet
National Bank (formerly known as BankBoston, N.A.) and the other lending
institutions set forth on Schedule 1 to the Credit Agreement (collectively,
the "Banks"), and Fleet National Bank (formerly known as BankBoston, N.A.), as
agent (the "Agent") for the Banks (the Banks and the Agent, collectively, "us"
or "we").
You have notified us that you have failed to comply with the covenants
contained in xx.xx. 12.1 and 12.4 of the Credit Agreement for the period ended
December 31, 2000 and may fail to comply with such covenants for the period
ending March 31, 2001, each of which failures constitutes an Event of Default
under ss.15.1(c) of the Credit Agreement and that you have failed to pay
interest due on the Senior Subordinated Notes on February 15, 2001, which
constitutes an Event of Default under ss.15.1(f) of the Credit
Agreement (collectively, the "Specified Events of Default"). You have
requested us to continue to advance Revolving Credit Loans to support your
working capital needs, and to forbear from making demand upon the Notes issued
under the Credit Agreement or pursuing our remedies under the Credit Agreement
and the other Loan Documents until the Forbearance Termination Date (as
hereinafter defined). All capitalized terms used herein without definition
shall have the same meanings herein as in the Credit Agreement. In
consideration for our agreeing to continue to advance Revolving Credit Loans,
subject to the limitations contained herein, and to forbear from making demand
upon the Obligations under the Credit Agreement and the Notes and pursuing our
remedies under the Credit Agreement and the other Loan Documents, all upon the
terms and subject to the conditions contained in this Agreement, you hereby
agree with us as follows.
1. Ratification of Existing Agreements. All of your obligations to the
Banks and the Agent under the Credit Agreement, the Notes and any and all
other obligations at any time and from time to time owed by you to the Banks
and the Agent are secured pursuant to the Security Agreement and Security
Documents referred to and as defined in the Credit Agreement, by which you
have granted to the Agent, for the benefit of the Agent and the Banks, a
security interest in all of your assets, whether now owned or hereafter
acquired, and in any and all proceeds thereof. All of your obligations to the
Banks and the Agent as evidenced by the Credit Agreement and the Notes, all of
your obligations to the Banks arising under the Security Documents, and all of
your obligations to the Banks and the Agent arising under any other Loan
Document or other instrument creating or evidencing any of your obligations to
the Banks and the Agent are, by your execution of this Agreement, ratified and
confirmed in all respects.
2. Forbearance and Amendment.
(a) Forbearance. So long as this Agreement is in effect and no Event of
Default (as defined in ss.6) has occurred and is continuing, (i) the Banks and
the Agent shall forbear from making demand upon the Notes or pursuing their
remedies under the Credit Agreement, the Security Documents or the other Loan
Documents, provided, however that the agreement of the Banks and the Agent to
forbear shall not limit in any way the Agent's and the Banks' rights to send a
Payment Blockage Notice (as defined in the Senior Subordinated Indenture) to
block payment in respect of the Senior Subordinated Notes as a result of the
existence of the Specified Events of Default or any other Events of Default,
and (ii) the Lenders having Revolving Credit Commitments shall continue to
advance Revolving Credit Loans to the Borrowers as Base Rate Loans, provided,
that notwithstanding the amount of the Total Revolving Credit Commitment, at
no time shall the Lenders be required to advance any Revolving Credit Loans or
issue, extend or renew any Letters of Credit in excess of an aggregate of US
$60,000,000 for all Revolving Credit Loans and Letters of Credit outstanding
at any time. During the period from the date hereof until the Forbearance
Termination Date, the Banks and the Agent agree with the Borrowers that
ss.2.2(a) of the Credit Agreement shall be
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temporarily amended to replace the reference to "Total Revolving Credit
Commitment" with a reference to the amount of "$60,000,000."
(b) Amendment.
(i) Section 1.1 of the Credit Agreement is hereby amended
(A) by restating the chart contained in the definition of Pricing
Table as follows:
------------------------ ----------------------- ----------------------
Ratio of Funded Debt Revolving Credit Loan Revolving Credit Loan
to Adjusted EBITDA Margin for Base Rate Margin for Eurodollar
Loans Rate Loans
------------------------ ----------------------- ----------------------
Less than 3.25:1.00 0.50% 2.00%
------------------------ ----------------------- ----------------------
3.25:1.00 or more but 0.75% 2.25%
less than 3.75:1.00
------------------------ ----------------------- ---------------------
3.75:1.00 or more but 1.00% 2.50%
less than 4.25:1.00
------------------------ ----------------------- ---------------------
4.25:1.00 or more 2.00% 3.50%
------------------------ ---------------------- ---------------------
and (B) by amending the definition of "Term Loan Rate" by
replacing the percentage "9.98" with the percentage "10.23."
(ii) Section 2.1(b) of the Credit Agreement is hereby
amended by inserting the following phrase after the word
"Date," in the fifth line thereof: "either by direct
advances by the Hunter Fronting Bank to Hunter's demand
deposit account with the Hunter Fronting Bank in an
aggregate amount not to exceed C$1,000,000 at any time, to
cover checks or other charges which Hunter has drawn or made
against such account, or".
3. Representations and Warranties. Each of you hereby represents and
warrants to the Banks and the Agent as follows:
(a) You have adequate corporate or other power and authority to
execute and deliver this Agreement and to perform your obligations
hereunder. This Agreement has been duly authorized, executed and
delivered by you and does not contravene any (i) law, rule or regulation
applicable to you or (ii) any of the terms of your charter documents,
by-laws, or other governing document or (iii) any other indenture,
agreement or undertaking to which you are a party except, in the case of
clauses (i) and (iii), any breach, the consequence of which could not
reasonably be expected to have a materially adverse effect on Holdings
and its Subsidiaries taken as a whole or which could not reasonably be
expected
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to have any adverse effect on the enforceability of the Loan Documents.
Your obligations contained in this Agreement, the Credit Agreement, taken
together with your obligations under the Notes, and your obligations to
us arising under the Security Agreement and other Security Documents,
constitute your legal, valid and binding obligations enforceable against
you in accordance with their respective terms except as limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
or other laws relating to or affecting creditors' rights generally,
general equitable principles (whether considered in equity or at law) and
an implied covenant of good faith and fair dealing.
(b) Other than as specified herein, except for the representation
contained in Section 9.9 of the Credit Agreement, and except to the
extent that such representations and warranties relate expressly to an
earlier date, all the representations and warranties made by you in the
Loan Documents to which you are a party are true and correct on the date
hereof as if made on and as of the date hereof and are so repeated herein
as if expressly set forth herein or therein.
(c) Other than as specified herein, no Default or Event of Default
(as defined in the Credit Agreement or as defined in ss.6 hereof) has
occurred and is continuing on the date hereof.
4. Conditions Precedent. Our agreement to forbear provided herein is
subject to the receipt by the Agent of this forbearance agreement duly
executed by the Borrowers, the Guarantors, and the Banks, and to the payment
to the Agent for the pro rata benefit of the Banks, of a forbearance fee in
the amount of $127,500.
5. Covenants. So long as this Agreement is in effect, you covenant and
agree with us as follows:
(a) You shall comply and continue to comply with all of the terms,
covenants and provisions contained in the Loan Documents to which you are
a party and any other instruments evidencing or creating any of your
obligations to the Banks, except as such terms, covenants and provisions
are expressly modified by this Agreement upon the terms set forth herein.
(b) You will not purchase, redeem or otherwise retire any
outstanding shares of your capital stock of any class or pay any
dividends or make any loans or other distributions to any holders of your
capital stock of any class, advance any loans to any shareholder, or
forgive any indebtedness of any shareholder owed to you, except for
payment of dividends by one Borrower to another Borrower, or loans or
advances by any Borrower to another Borrower in the ordinary course of
business.
(c) You will promptly notify us of any material change in your
financial condition or business prospects and of the occurrence of any
Default or Event of Default (as defined in the Credit Agreement or as
defined in ss.6).
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(d) All legal fees and disbursements incurred or sustained by the
Agent and each Bank in connection with this Agreement shall have been
paid by the Borrower within ten (10) days of the date hereof.
(e) You will notify the Agent and the Banks, in writing, at least
five (5) Business Days prior to making any payment in respect of the
Senior Subordinated Notes, as to your intention to make such payment.
(f) You will negotiate in good faith with the Banks and the Agent to
amend the Credit Agreement not later than June 15, 2001, to provide for a
borrowing base governing the outstanding Revolving Credit Loans, which
shall include an advance rate based on each of eligible accounts
receivable and eligible inventory (eligibility criteria to be determined)
and a component to be determined based on assumed other asset coverage.
6. Events of Default and Remedies. So long as any of the following events
have occurred or conditions exist (any such event or condition being herein
referred to as an "Event of Default"):
(a) Any representation or warranty made by you or any other obligor
herein or any certificate, financial statement or other document
delivered in connection herewith shall prove to have been untrue or
incorrect in any material respect as of the date as of which made or
deemed to have been made or repeated; or
(b) You shall fail fully to perform or comply with any terms,
covenants or provisions of ss.5 subject, in the case of the covenants
referred to in Section 5(a) hereof, to the applicable notice provisions
and grace periods, if any, set forth in Section 15.1 of the Credit
Agreement; or
(c) You or another obligor shall fail fully to perform or comply
with any other of the terms, covenants or provisions set forth herein and
such failure shall continue for a period of five (5) calendar days
following our notice to you or such other obligor of such failure; or
(d) Any Default or Event of Default under the Credit Agreement
(other than the Specified Events of Default) shall occur.
then, and in such event, and so long as such Event of Default is continuing,
the Agent may, and upon the request of the Majority Banks shall, by written
notice to you declare this Agreement to be terminated. Upon such termination,
we shall be relieved of our forbearance obligations set forth herein and,
accordingly, each Bank, if owed any amount with respect to the Loans or the
Reimbursement Obligations, may, with the consent of the Majority Banks but not
otherwise, proceed to protect and enforce its rights by suit in equity, action
at law or other appropriate proceeding, whether for the specific performance
of any covenant or agreement contained in the Credit Agreement, the Notes and
the other Loan Documents or any instrument pursuant to which the
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Obligations to such Bank are evidenced, including as permitted by applicable
law the obtaining of the ex parte appointment of a receiver, and, if such
amount shall have become due, by declaration or otherwise, proceed to enforce
the payment thereof or any other legal or equitable right of such Bank. The
remedies specified herein are cumulative and not exclusive of any other
remedy. Our failure or delay to exercise any remedy after any particular Event
of Default shall not operate as a waiver of any remedy in that or in any
subsequent instance.
7. Termination. This Agreement shall terminate on the date (the
"Forbearance Termination Date") which is the earliest to occur of (i) the date
on which this Agreement is terminated pursuant to ss.6 hereof, (ii) June 15,
2001, and (iii) the date on which the Senior Subordinated Notes are
accelerated, at which time the Banks and the Agent shall be relieved of their
forbearance obligations set forth herein (with the same effect as set forth in
ss.6).
8. Interest, Fees and Expenses. You agree to pay to the Agent and each
Bank upon demand from time to time any and all reasonable out-of-pocket costs
or expenses (including reasonable legal fees and disbursements) incurred or
sustained by us in connection with the administration of the Loans and
Obligations or the preservation of or enforcement of our rights under this
Agreement or any of the other Loan Documents or in respect of any of your
other obligations to the Banks and the Agent.
9. No Present Claims. You acknowledge and agree that, based upon the
facts and circumstances existing as of the date hereof: (i) you have no claim
or cause of action against any of the Banks or the Agent (or any of their
directors, officers, employees, agents or Affiliates); (ii) you have no offset
right, counterclaim or defense of any kind against any of your obligations,
indebtedness or liabilities to us; and (iii) each of the Banks and the Agent
has heretofore performed and satisfied in a timely manner all of its
obligations to you. We wish (and you agree) to eliminate any possibility that
any past conditions, acts, omissions, events, circumstances or matters would
impair or otherwise adversely affect any of our rights, interests, contracts,
collateral security or remedies. Therefore, you unconditionally release, waive
and forever discharge (A) any and all liabilities, obligations, duties,
promises or indebtedness of any kind of any of the Banks or the Agent to you,
except the obligations to be performed by the Banks or the Agent hereafter as
expressly stated in this Agreement and the other Loan Documents, and (B) all
claims, offsets, causes of action, suits or defenses of any kind whatsoever
(if any), whether known or unknown, which you might otherwise have against any
of the Banks or the Agent or any of their directors, officers, employees,
agents or Affiliates for their respective actions or omissions occurring prior
to the date hereof, in either case (A) or (B) above, on account of any
condition, act, omission, event, contract, liability, obligation,
indebtedness, claim, cause of action, defense, circumstance or matter of any
kind whatsoever which existed, arose or occurred at any time prior to the date
hereof.
10. Waiver of Jury Trial. YOU HEREBY WAIVE ANY RIGHTS THAT YOU MAY HAVE
TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE
IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE LOAN DOCUMENTS, ANY RIGHTS OR
OBLIGATIONS
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HEREUNDER OR THEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS AND
OBLIGATIONS. Except as prohibited by law, you hereby waive any right that you
may have to claim or recover in any litigation referred to in the preceding
sentence any special, exemplary, punitive or consequential damages or any
damages other than, or in addition to, actual damages. You hereby (i) certify
that no representative, agent or attorney of ours has represented, expressly
or otherwise, that we would not, in the event of litigation, seek to enforce
the foregoing waivers and (ii) acknowledge that we have been induced to enter
into this Agreement by, among other things, the waivers and certifications
herein.
11. No Waiver. Except to the extent expressly set forth herein, the Agent
and each of the Banks hereby expressly reserves all of its rights and remedies
under the Credit Agreement, the other related Loan Documents and applicable
law in respect of any and all Defaults or Events of Default under the Credit
Agreement and the other Loan Documents. Failure of the Agent or any Bank to
exercise any right or remedy shall not constitute a waiver of that or any
other right or remedy.
12. Miscellaneous. All of your payment obligations to us of any nature
arising under or in respect of this Agreement and all terms, covenants and
provisions of the Loan Documents shall survive the termination of this
Agreement. Any and all notices or other communications required hereunder
shall be in writing and shall be delivered by hand or sent by facsimile or
certified or registered mail, postage prepaid and return receipt requested,
(i) if to the Agent at 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx (Attention:
Xxxxx X. X'Xxxxx), Facsimile No. 000-000-0000 or (ii) if to you, at 000 Xxxxx
000/000, Xxxxxxxxxxx, XX 00000 (Attention: Xxxxxx X. Xxxxxxxxxxx), Facsimile
No. 000-000-0000. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts and shall take
effect as a sealed instrument under such laws.
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If the foregoing terms are acceptable to you, we would request that
you indicate your agreement to these provisions by signing the counterpart of
this letter enclosed herewith and returning such counterpart to us.
Very truly yours,
FLEET NATIONAL BANK, (f/k/a
BankBoston, N.A.), individually and as
Agent
By:_____________________________
Name:
Title:
XXXXXXX XXXXX CREDIT PARTNERS L.P.
By:_______________________________
Name:
Title:
NEW YORK LIFE INSURANCE COMPANY
By:_______________________________
Name:
Title:
NEW YORK LIFE INSURANCE AND
ANNUITY CORPORATION
By: New York Life Investment
Management, LLC, its Investment
Manager
By:_______________________________
Name:
Title:
ALLSTATE LIFE INSURANCE COMPANY
By:_______________________________
Name:
Title:
By:_______________________________
Name:
Title:
COMERICA BANK
By: Not a party to this Agreement
________________________________
Name:
Title:
SUMMIT BANK (by its successor in
interest, Fleet National Bank)
By: ________________________________
Name:
Title:
THE BANK OF NOVA SCOTIA
By: Not a party to this Agreement
_________________________________
Name:
Title:
BHF (USA) CAPITAL CORPORATION
By: ________________________________
Name:
Title:
By: ________________________________
Name:
Title:
KEY CORPORATE CAPITAL INC.
By: ________________________________
Name:
Title:
ALLFIRST BANK
By: ________________________________
Name:
Title:
ACCEPTED and AGREED
as of April ____, 2001
XXXXXXX-XXXXXXX HOLDINGS, INC.
By:_________________________
Name:
Title:
XXXXXXX-XXXXXXX HOLDINGS, INC.
By:_________________________
Name:
Title:
XXXXXXX-XXXXXXX CORP.
By:_________________________
Name:
Title:
RSLPCO, INC.
By:_________________________
Name:
Title:
XXXXXXX-XXXXXXX, L.P.
By: Xxxxxxx-Xxxxxxx, Inc., its General Partner
By:_________________________
Name:
Title:
XXXXXXX-XXXXXXX, INC.
By: _________________________
Name:
Title:
CONTAINER MANAGEMENT SERVICES, INC.
By:_________________________
Name:
Title:
HUNTER DRUMS LIMITED
By:_________________________
Name:
Title:
NEW ENGLAND CONTAINER CO., INC.
By:_________________________
Name:
Title:
