Exhibit B
FIRST AMENDMENT TO RECAPITALIZATION AGREEMENT
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THIS FIRST AMENDMENT TO RECAPITALIZATION AGREEMENT ("First Amendment")
is entered into effective as of April 1, 2002, among DARLING INTERNATIONAL INC.,
a Delaware corporation, as Borrower ("Borrower"), CREDIT LYONNAIS NEW YORK
BRANCH, as Agent ("Agent"), and the other Banks party to the hereinafter defined
Recapitalization Agreement (the "Banks").
Reference is made to the Recapitalization Agreement dated effective as
of March 15, 2002, by and among Borrower, Agent and the Banks (the
"Recapitalization Agreement").
RECITALS
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A. Borrower, Agent and the Banks are party to the Recapitalization
Agreement which, among other things, modified that certain Amended and Restated
Credit Agreement dated effective as of January 22, 1999 (as the same may have
been heretofore amended, supplemented, or modified, the "Original Agreement")
and provides for the amendment and restatement of the Original Agreement in
accordance with the terms and provisions of the New Credit Agreement (as defined
in the Recapitalization Agreement), subject to the other terms and conditions
contained in the Recapitalization Agreement.
B. Borrower has requested that Agent and the Banks modify and amend
certain terms and provisions of the Recapitalization Agreement, and Agent and
the Banks are agreeable to so modify and amend the Recapitalization Agreement
subject to the terms and conditions set forth herein.
Accordingly, for adequate and sufficient consideration, the parties
hereto agree as follows:
Paragraph 1. Definitions. Unless otherwise defined in this First
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Amendment, capitalized terms used herein shall have the meaning set forth in the
Recapitalization Agreement.
Paragraph 2 First Amendment. The Recapitalization Agreement is
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hereby amended by:
(a) deleting the definition of the term "St. Xxxx Letter of
Credit" in Section 1.1 in its entirety and substituting the following
definition therefor:
"St. Xxxx Letter of Credit" means the letter of credit
contemplated to be issued under the Original Agreement on terms
acceptable to the Agent in the approximate maximum face amount of
$8,000,000 in favor of an acceptable financial institution, which
letter of credit shall secure the Company's reimbursement
obligations under or related to a letter of credit contemplated to
be issued contemporaneously by such financial institution in an
equivalent maximum face amount and containing similar terms and
conditions in favor of St. Xxxx Fire and Marine Insurance Company
(or an affiliate thereof) upon receipt by the Company from St.
Xxxx Fire and Marine Insurance Company (or its affiliate, as
applicable) of an equivalent amount of cash, such cash to be
contemporaneously paid to Agent, for the ratable benefit of the
Banks and applied to reduce the outstanding Revolving Loans under
the Original Agreement without any permanent reduction in the
aggregate Revolving Commitments of the Banks (all of the foregoing
being collectively referred to herein as the "St. Xxxx Collateral
Substitution Transaction")."
(b) adding the definition of the term "Royal Letter of
Credit" to Section 1.1, such definition to read as follows:
"Royal Letter of Credit" means the letter of credit
contemplated to be issued under the Original Agreement on or about
April 3, 2002, in an amount not to exceed $2,350,000, in favor of
Royal Indemnity Company (or an affiliate thereof) in connection
with the renewal or replacement of certain insurance policies by
the Company."
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(c) adding new Subsections(D) and (E) to Section 2.1, such
new Subsections 2.1(D) and (E) to read as follows:
"D. Notwithstanding the foregoing, in the event that
on the Consummation Date, the Royal Letter of Credit has been
issued and remains undrawn upon by the beneficiary thereof, the
New Credit Agreement shall be appropriately revised to reflect an
increase in the aggregate Revolving Commitments (as defined in the
New Credit Agreement) by the face amount of the Royal Letter of
Credit.
E. Notwithstanding the foregoing, in the event that
on the Consummation Date the St. Xxxx Letter of Credit has not
been issued, the New Credit Agreement shall be appropriately
revised to delete Section 5.4(b)(i) of Exhibit L to the
Recapitalization Agreement in its entirety and substitute the
following therefor:
"(i) Asset Dispositions, Income Tax Refunds and Cash
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Refunds from St. Xxxx.
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(A) Required Prepayment. The Borrower shall
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make a prepayment of the Loans in the amount of the Net
Cash Proceeds received from the following:
(1) any disposition of assets pursuant to
the permissions set forth in subsections 10.8(e),
(f), (g), or (h);
(2) any disposition of an asset pursuant to
the permissions set forth in subsection 10.8(b)
if the Net Cash Proceeds from such disposition
equal or exceed Fifty Thousand Dollars ($50,000);
(3) any income tax refund received by
Borrower (other than any such refund reflected as
being due to Borrower on any return and which is
elected to be applied to the following year's
estimated tax liability payments of the Borrower
and it Subsidiaries, if any); or
(4) any return of cash collateral, refund
of premiums or other amounts received by the
Borrower or any of its Subsidiaries from and
after the Closing Date from St. Xxxx Fire and
Marine Insurance Company (or an Affiliate
thereof) in connection with the insurance
policies which expired March 31, 2002 and related
claims.
The Net Cash Proceeds from any asset disposition of the
type described in the foregoing clauses (1) or (2) shall
be delivered by the Borrower to the Agent, within two
(2) Business Days after the receipt thereof. The Net
Cash Proceeds from any income tax refund shall be
delivered by the Borrower to the Agent, within two (2)
Business Days after the receipt thereof. The Net Cash
Proceeds from any amount of the type described in the
foregoing clause (4) shall be delivered by the Borrower
(or applicable Subsidiary) to the Agent within two (2)
Business Days after the receipt thereof.
(B) Application of Net Cash Proceeds. Any Net
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Cash Proceeds so delivered under this subsection
5.4(b)(i) to the Agent shall be applied as follows: (1)
first, to the installments of the Term Loans in inverse
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order of maturity thereof until the Term Loans have been
paid in full; (2) second, to the Swingline Loans until
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paid in full; (3) third, to the Revolving Loans until
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paid in full, (4) fourth, to unpaid accrued interest on
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the Primary Obligations; (5) fifth, to any due and
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unpaid Primary Obligation; and (6) sixth, as collateral
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(and held by the Agent as such) in an interest bearing
account over which the Agent shall
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have the sole right of withdrawal) for the
Obligations. The amount of such proceeds so held as
collateral shall (x) not exceed an amount equal to
One Hundred Five percent (105%) of the sum of the
maximum anticipated amount of such Contingent Primary
Obligations plus the maximum anticipated amount of
all Secondary Obligations and (y) shall be applied to
the Obligations as proceeds of Collateral as set
forth in subsection 5.6(b). No holder of any
Secondary Obligation shall have any right to such
collateral until (x) all Primary Obligations are paid
in full and (y) all Contingent Primary Obligations
are terminated, cash secured by an amount not to
exceed One Hundred Five Percent (105%) of the amount
thereof or otherwise satisfied. If no Event of
Default exists and any proceeds remain after the
applications described above, the remaining amount of
such proceeds shall be delivered to the Borrower.
(C) Definition of Net Cash Proceeds; Application of
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Estimated Taxes. The phrase "Net Cash Proceeds" means (1),
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with respect to a tax refund, the cash amount thereof net of
the direct and reasonable costs of obtaining such refund
incurred in good faith (including any accountant's or
attorney's fees and other professional fees attributable
thereto irrespective of when incurred or paid, other than any
such professional fees incurred in connection with the
preparation of tax returns in the ordinary course of
business), (2) with respect to amounts received from St. Xxxx
Fire and Marine Insurance Company (or an Affiliate thereof),
the gross amount of funds so received, and (3), with respect
to asset dispositions, the cash proceeds received therefrom by
the Borrower or any Subsidiary (including, without limitation,
payments under notes or other debt securities received in
connection with any disposition of assets and any proceeds
received from any escrow or holdback, in each case, as and
when actually received) net of, without duplication, (x) the
direct and reasonable costs of such disposition incurred in
good faith (including in such costs any estimated federal
capital gains taxes; title insurance premiums; survey costs;
costs of environmental reports and assessments; purchase price
adjustments; filing fees; any transfer or documentary taxes;
brokerage fees; attorney's fees; and other professional fees
attributable thereto) and (y) amounts applied to repayment of
Debt (other than the Obligations) secured by a Lien prior to
the Lien of the Agent on the asset or property disposed. The
cash proceeds received from an asset disposition subject to
this subsection 5.4(b)(i) in an amount equal to the estimated
amount of any federal capital gains taxes attributable thereto
shall be applied as a prepayment of the outstanding Revolving
Loans without reducing the Revolving Commitment."
(d) deleting the reference to the number "2,139,065" in
clause (ii) of the third sentence of Section 3.4 and
substituting the number "2,155,065" therefor.
(e) adding a new Subsection D to Section 4.4, such new
Subsection 4.4D to read as follows:
"D. The Company shall use reasonable efforts to
effect and consummate the St. Xxxx Collateral Substitution
Transaction prior to the Consummation Date."
(f) deleting subparagraph 2.(c) of Exhibit B to the
Recapitalization Agreement in its entirety and substituting the
following therefor:
"deleting Section 4.1 in its entirety and substituting the
following therefor:
4.1 Commitment During Forbearance Period; Additional
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Mandatory Prepayments. During the Forbearance Period, and
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provided that no Agreement Default has occurred and is
continuing, (i) the aggregate Revolving Commitments of the
Banks shall be $126,500,000, inclusive of a reduced Swingline
Commitment of $5,000,000; and (ii) Borrower may continue to
request Loans and Letters of Credit under and pursuant to the
terms and provisions of the Credit Agreement up to the amount
of such Commitments
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(provided, however, that (a) no Letter of Credit issued during
the remainder of the Forbearance Period shall expire after
April 30, 2002 except that the Borrower may request the
issuance of (I) a Letter of Credit in a maximum face amount
not to exceed $2,350,000 in favor of Royal Indemnity Company
(or an Affiliate thereof) with an expiry date no later than
one year from its date of issuance, in connection with the
renewal or replacement of certain insurance policies of the
Borrower, and (II) the St. Xxxx Letter of Credit (as defined
in the Recapitalization Agreement) pursuant to the St. Xxxx
Collateral Substitution Transaction (as defined in the
Recapitalization Agreement), and (b) that certain Letter of
Credit in the face amount of $750,000.00, with an expiry date
of May 26, 2002, in favor of the Commissioner of Insurance for
the State of Colorado, may be either reissued or amended to
extend the expiry date thereof for up to an additional
one-year period and shall not be included in the calculation
of the Outstanding Revolving Credit during the Forbearance
Period for so long as an amount in immediately available funds
equal to the then established Contingent Primary Obligations
associated with such Letter of Credit remains subject to a
first and prior security interest and pledge to Successor
Agent or Collateral Agent, as applicable to secure the
Obligations, such funds to be held in a cash collateral
account without any rights of withdrawal by the Borrower). In
addition to any other mandatory prepayment required under the
terms of the Existing Credit Agreement, the Borrower shall
make a prepayment of the Loans in an amount equal to any
return of cash collateral, refund of premiums or other amounts
received by the Borrower or any of its Subsidiaries from St.
Xxxx Fire and Marine Insurance Company (or an Affiliate
thereof) in connection with existing or prior insurance
policies and related claims. Except as otherwise provided in
clause (a)(II) of the proviso in the first sentence of this
Section 4.1, any such prepayments shall be made by the
Borrower (or such Subsidiary, as applicable) within two (2)
Business Days of its receipt of any such funds from St. Xxxx
Fire and Marine Insurance Company (or an Affiliate thereof)
and the aggregate Revolving Commitments of the Banks shall
immediately and without further notice or other action be
reduced by the amount thereof."
Paragraph 3. Effective Date. This First Amendment shall be effective on
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the date (the "Effective Date") Agent shall have received (i) counterparts of
this First Amendment, executed by Borrower, Agent and the Holders, and (ii)
satisfactory evidence that the Borrower's worker's compensation, general
liability, property and casualty insurance has been placed with Royal Indemnity
Company (or its affiliate) on terms and conditions satisfactory to the Agent for
a period of at least one (1) year from March 31, 2002.
Paragraph 4. Acknowledgment and Ratification. As a material inducement
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to Agent and the Banks to execute and deliver this First Amendment, Borrower (a)
consents to the agreements in this First Amendment and (b) agrees and
acknowledges that the execution, delivery, and performance of this First
Amendment shall in no way release, diminish, impair, reduce, or otherwise affect
the respective obligations of Borrower under the Recapitalization Agreement,
which shall remain in full force and effect, and all rights thereunder are
hereby ratified and confirmed.
Paragraph 5. Representations. As a material inducement to Agent and the
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Banks to execute and deliver this First Amendment, Borrower represents and
warrants to Agent and the Banks that as of the Effective Date of this First
Amendment and as of the date of execution of this First Amendment, (a) all
representations and warranties in the Recapitalization Agreement are true and
correct in all material respects as though made on the date hereof, except to
the extent that any of them speak to a different specific date, and (b) no
default or event or condition exists which, with the passage of time or the
giving of notice, or both, would constitute a default under the Recapitalization
Agreement.
Paragraph 6. Expenses. Borrower shall pay all costs, fees, and expenses
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paid or incurred by Agent incident to this First Amendment, including, without
limitation, the fees and expenses of Agent's counsel in connection with the
negotiation, preparation, delivery, and execution of this First Amendment and
any related documents.
Paragraph 7. Miscellaneous. Unless stated otherwise (a) the singular
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number includes the plural and vice versa and words of any gender include each
other gender, in each case, as appropriate, (b) headings and captions
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may not be construed in interpreting provisions, (c) this First Amendment shall
be governed by Delaware law, (d) if any part of this First Amendment is for any
reason found to be unenforceable, all other portions of it nevertheless remain
enforceable, and (e) this First Amendment may be executed in any number of
counterparts with the same effect as if all signatories had signed the same
document, and all of those counterparts must be construed together to constitute
the same document.
Paragraph 8. Entire Agreement. This First Amendment represents the final
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agreement between the parties about the subject matter of this First Amendment
and may not be contradicted by evidence of prior, contemporaneous, or subsequent
oral agreements of the parties. There are no unwritten oral agreements between
the parties.
Paragraph 9. Parties. This First Amendment binds and inures to the benefit
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of Borrower, Agent, Banks, and their respective successors and assigns.
The parties hereto have executed this First Amendment in multiple
counterparts to be effective as of the Effective Date.
Remainder of Page Intentionally Blank.
Signature Pages to Follow
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COMPANY:
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DARLING INTERNATIONAL INC.
By: /s/ Xxxx Xxxxxxxx
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Name: Xxxx Xxxxxxxx
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Title: Treasurer
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Address for Notices:
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000 X'Xxxxxx Xxxxx Xxxx., Xxxxx 000
Xxxxxx, Xxxxx 00000
Fax No.: 000-000-0000
Telephone No.: 000-000-0000
Attention: Treasurer
AGENT:
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CREDIT LYONNAIS NEW YORK BRANCH
individually as a Bank and as the Agent
By: /s/ Xxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxxx
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Title: Vice President
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Address for Notices:
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Credit Lyonnais New York Branch
1301 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: 000-000-0000
Facsimile No.: 000-000-0000
Attention: Xx. Xxxxx Xxxxxxx
With a copy to:
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Credit Lyonnais Dallas Branch
0000 Xxxx Xxxxxx, Xxxxx 0000 Xxxx
Xxxxxx, Xxxxx 00000
Telephone No.: 000-000-0000
Facsimile No.: 000-000-0000
Attention: Xxxxx Xxxxx
BANKS:
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ARK CLO 2000-1, LIMITED
By: Patriarch Partners, LLC, its Collateral Manager
By: /s/ Xxxxxx Xxxxx
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Name: Xxxxxx Xxxxx
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Title: Manager
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Address for Notices:
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Ark CLO 2000-1, Limited
c/o Patriarch Partners, LLC
00 Xxxx Xxxxxx, 00/xx/ Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Attention: Xxxxxx Xxxxx/Xxxx Xxxxxx
And
Woodside Capital Management, LLC
00 Xxxxxxxx Xxxxxx
0/xx/ Xxxxx
Xxxxxxxx, XX 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Attention: Xxxxxxx Xxxxxx
BANK ONE N.A.
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
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Title: Senior Vice President
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Address for Notices:
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Bank One N.A.
Mail Code IL1-0631
0 Xxxx Xxx Xxxxx
Xxxxxxx, XX 00000
CERBERUS PARTNERS, L.P.
By: Cerberus Associates, L.L.C., its general partner
By: /s/ Xxxxx Xxxxx
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Name: Xxxxx Xxxxx
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Title: Attorney in Fact
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Address for Notices:
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000 Xxxx Xxxxxx, 00/xx/ Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx Xxxxx
AVENUE SPECIAL SITUATIONS FUND II L.P.
By: Avenue Capital Management II, LLC
Its General Partner
By: GLS Partners II, LLC, Managing Member
Of General Partner
By: /s/ Xxxxx Xxxxxxx
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Name: Xxxxx Xxxxxxx
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Title: Managing Member
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Address for Notices:
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Avenue Special Situations Fund II
000 Xxxxxxx Xxxxxx, 00/xx/ Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
CREDIT AGRICOLE INDOSUEZ
By: /s/ Xxxxxxxx X. Xxxxxxx
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Name: Xxxxxxxx X. Xxxxxxx
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Title: Vice President
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By: /s/ Xxx xxx Xxxxxxx
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Name: Xxxx xxx Xxxxxxx
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Title: Vice President
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Address for Notices:
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Credit Agricole Indosuez, New York Branch
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Telephone No.: 000-000-0000
Facsimile No.: 000-000-0000
Attention: Xxxxxxxx Xxxxxxx
PPM AMERICA SPECIAL INVESTMENTS
FUND, LP
By: PPM America, Inc., as its attorney-in-fact
By: /s/ Xxxxx X. Xxxxxxxxxx
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Name: Xxxxx X. Xxxxxxxxxx
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Title: Senior Managing Director
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Address for Notices:
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PPM America, Inc.
000 Xxxx Xxxxxx Xxxxx, 0/xx/ Xxxxx
Xxxxxxx, XX 00000
Tel No.: 000-000-0000
Fax No.: 000-000-0000
Attention: Xxxxx Xxxxxxxxxx
Senior Managing Director
XXXXX FARGO BANK (TEXAS) NATIONAL
ASSOCIATION
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
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Title: Vice President
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Address for Notices:
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Xxxxx Fargo Bank (Texas) National Association
0000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
