EXHIBIT 2.9
AMENDMENT NO. 4, WAIVER AND CONSENT
This Amendment No. 4, Waiver and Consent dated as of February 22, 2002
("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 by Amendment No. 1 and
Consent dated as of June 12, 2001, Amendment No. 2 and Waiver dated as of August
31, 2001, and Amendment No. 3, Waiver and Consent dated as of October 12, 2001
(as amended, 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 waive compliance with certain covenants
in the Credit Agreement and 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.
(a) The definition of Consolidated EBITDA in Section 1.1 of the Credit
Agreement is amended in its entirety to read as follows:
"Consolidated EBITDA": for any period, Consolidated Net Income
for such period plus, without duplication and to the extent reflected
as a charge in the statement of such Consolidated Net Income for such
period, the sum of (a) income tax expense, (b) interest expense,
amortization or writeoff of debt discount and debt issuance costs and
commissions, discounts and other fees and charges associated with
Indebtedness (including the Loans), (c) depreciation and amortization
expense, (d) amortization of intangibles (including, but not limited
to, goodwill) and organization costs, (e) with respect to the fiscal
quarter of
Holdings ending December 31, 2000 only, any extraordinary or
non-recurring non-cash expenses or losses (including, whether or not
otherwise includable as a separate item in the statement of such
Consolidated Net Income for such period, non-cash losses on sales of
assets outside of the ordinary course of business) attributable to the
sale of the Borrower's pallet manufacturing business, provided, that
the amounts referred to in this clause (e) shall not, in the
aggregate, exceed $65,000,000, (f) with respect to the fiscal quarter
of Holdings ending December 31, 2000 only, any other non-recurring
non-cash expenses or losses substantially in accordance with Exhibit
1.1 attached hereto which shall not, in the aggregate, exceed
$15,600,000, and (g) with respect to the calendar year of Holdings
ending December 31, 2001 only, any other extraordinary or
non-recurring cash and non-cash expenses or losses in an aggregate
amount not to exceed $7,350,000, and minus, to the extent included in
the statement of such Consolidated Net Income for such period, the sum
of (a) interest income, (b) any extraordinary or non-recurring
non-cash income or gains (including, whether or not otherwise
includable as a separate item in the statement of such Consolidated
Net Income for such period, gains on the sales of assets outside of
the ordinary course of business) and (c) any other non-cash income,
all as determined on a consolidated basis. Notwithstanding anything
herein to the contrary, for the purposes of the calculation of
Consolidated EBITDA, any non-cash income and losses derived solely
from foreign exchange gains or losses shall be excluded from such
calculation. For the purposes of calculating Consolidated EBITDA for
any period of four consecutive fiscal quarters (each, a "Reference
Period") pursuant to any determination of the Consolidated Total
Leverage Ratio, Consolidated Senior Leverage Ratio or Consolidated
Interest Coverage Ratio, (i) if at any time during such Reference
Period Holdings or any Subsidiary shall have made any Material
Disposition, the Consolidated EBITDA for such Reference Period shall
be reduced by an amount equal to the Consolidated EBITDA (if positive)
attributable to the property that is the subject of such Material
Disposition for such Reference Period or increased by an amount equal
to the Consolidated EBITDA (if negative) attributable thereto for such
Reference Period; (ii) if during such Reference Period Holdings or any
Subsidiary shall have made a Material Acquisition, Consolidated EBITDA
for such Reference Period shall be calculated after giving pro forma
effect thereto as if such Material Acquisition occurred on the first
day of such Reference Period; provided that, Consolidated EBITDA shall
not be adjusted to include projected post-acquisition cost savings,
synergies or similar amounts; and (iii) if such Reference Period is
prior to the effect of the Merger, Consolidated EBITDA will be
calculated after giving pro forma effect to the combination of
Holdings and the Borrower consistent with SEC regulations.
(b) Section 6.1(c) is amended in its entirety to read as follows:
(c) as soon as available, but in any event not later than 45 days
after (i) the end of each calendar month commencing with the calendar month
ending July 31, 2001 through the calendar month ending June 30, 2002, the
unaudited unconsolidated monthly internal financial statements and
management reports of Holdings and its Subsidiaries, and (ii) the end of
each calendar month
commencing with the calendar month ending July 31, 2002 and
thereafter, the unaudited consolidated balance sheets of Holdings and
its consolidated Subsidiaries as at the end of such calendar month and
the related unaudited consolidated statements of income and of cash
flows for such calendar month and the portion of the fiscal year
through the end of such calendar month, setting forth in each case in
comparative form the figures for the previous year, certified by a
Responsible Officer as being fairly stated in all material respects
(subject to normal year-end audit adjustments); and
(c) The Consolidated Total Leverage Ratio in Section 7.1(a) of the Credit
Agreement is amended in its entirety by replacing the ratio table with
the following:
Fiscal Year Fiscal Quarter Ratio
2000 Fourth 5.05 to 1.00
2001 First 5.70 to 1.00
Second 5.95 to 1.00
Third 5.45 to 1.00
Fourth 5.90 to 1.00
2002 First 7.55 to 1.00
Second 7.55 to 1.00
Third 6.50 to 1.00
Fourth 5.50 to 1.00
2003 First 5.50 to 1.00
(d) The Consolidated Senior Leverage Ratio in Section 7.1(b) of the Credit
Agreement is amended in its entirety by replacing the ratio table with
the following:
Fiscal Year Fiscal Quarter Ratio
2000 Fourth 2.35 to 1.00
2001 First 2.90 to 1.00
Second 3.20 to 1.00
Third 2.30 to 1.00
Fourth 2.35 to 1.00
2002 First 3.25 to 1.00
Second 3.25 to 1.00
Third 2.75 to 1.00
Fourth 2.25 to 1.00
Fiscal Year Fiscal Quarter Ratio
2003 First 2.25 to 1.00
(e) The Consolidated Interest Coverage Ratio in Section 7.1(c) of the
Credit Agreement is amended in its entirety by replacing the ratio
table with the following:
Fiscal Year Fiscal Quarter Ratio
2000 Fourth 1.85 to 1.00
2001 First 1.65 to 1.00
Second 1.55 to 1.00
Third 1.50 to 1.00
Fourth 1.50 to 1.00
2002 First 1.15 to 1.00
Second 1.10 to 1.00
Third 1.25 to 1.00
Fourth 1.50 to 1.00
2003 First 1.50 to 1.00
(f) The Minimum Consolidated Net Worth covenant in Section 7.1(e) of the
Credit Agreement is amended in its entirety to read as follows:
(e) Minimum Consolidated Net Worth. Permit Consolidated Net Worth
at any time to be less than the sum of (i) (A) for the fiscal quarter
of Holdings ending September 30, 2001 and any prior fiscal quarter,
$190,000,000, or (B) for the fiscal quarter ending December 31, 2001,
$140,000,000, (C) for the fiscal quarters ending March 31, 2002, June
30, 2002, and September 30, 2002, $85,000,000, or (D) for the fiscal
quarter ending December 31, 2002 and any fiscal quarter thereafter,
$90,000,000, plus (ii) 80% of cumulative Consolidated Net Income for
each fiscal quarter of Holdings (beginning with the fiscal quarter
ending March 31, 2003) for which Consolidated Net Income is positive,
plus (iii) 100% of the Net Cash Proceeds of any offering by Holdings
of common or preferred equity consummated after January 1, 2000 plus
(iv) 100% of any capital contribution made to Holdings or any of its
Subsidiaries after January 1, 2000 by any holder of Holding's Capital
Stock.
Section 3. Waiver. The Administrative Agent and the Lenders hereby,
notwithstanding any provisions in the Credit Agreement and the Loan
Documents to the contrary, waive compliance with (a) the reporting
requirements in Section 6.1(c) of the Credit Agreement for the
calendar months ending July 31, 2001, August 31, 2001, September 30,
2001, October 31, 2001, November 30, 2001, and December 31, 2001 only,
(b) the financial
covenants in Sections 7.1(a), (b) and (c) of the Credit Agreement, for
the fiscal quarter ending December 31, 2001 only, and (c) the
financial covenants in Section 7.1(e) for the fiscal quarters ending
September 30, 2001 and December 31, 2001 only. This waiver is limited
to the extent described herein and shall not be construed to be a
waiver of any other non-compliance, Defaults or Events of Default that
may have occurred or any other actions prohibited by the Credit
Agreement. The Administrative Agent and the Lenders reserve the right
to exercise any rights and remedies available to them in connection
with any future violations, non-compliance or defaults with respect to
Sections 6.1(c) and 7.1 of the Credit Agreement or any other provision
of any Loan Document.
Section 4. Consent. The Administrative Agent and the Lenders consent to the
Asset Sale of the assets, owned real property and certain liabilities
of the Borrower's drum reconditioning operations ("Drum Operations");
provided that (a) such Asset Sale of the Drum Operations ("Drum Asset
Sale") must be pursuant to an asset purchase agreement ("Drum Asset
Purchase Agreement") between Holdings, certain of Holdings'
wholly-owned subsidiaries, and Industrial Container Services, LLC
("Drum Buyer") which is reasonably acceptable to the Administrative
Agent and substantially on the terms and conditions as set forth in
that certain memorandum dated January 28, 2002 from Edward Rhyne of
Gardere Wynne Sewell LLP, which has modified by the Agreed Revisions
to Deal Terms dated as of February 20, 2002; (b) such Drum Asset Sale
must be for a total consideration of (i) an assumption by the Drum
Buyer of certain working capital liabilities on the closing date of
such Drum Asset Sale, and (ii) approximately $46,750,000, which shall
be payable to the Borrower by (A) approximately $41,250,000 in cash,
of which, in accordance with Section 2.10(e) of the Credit Agreement,
approximately $21,950,000 shall be applied to the Revolving Credit
Loan, and (B) approximately $5,500,000 in other non-cash
consideration; (c) the Borrower shall, simultaneously upon the
completion of the Drum Asset Sale, permanently reduce the Revolving
Credit Commitment to $85,000,000; (d) any proceeds from the Drum Asset
Sale shall be applied first to the Revolving Credit Loan in an amount
equal to the amount by which the Borrowing Base is reduced as a result
of such Drum Asset Sale (but, notwithstanding anything to the contrary
in the Credit Agreement, with no reduction of the Revolving Credit
Commitment except as set forth in clause (c) above); and (e)
approximately $16,470,000 shall be applied to the Term Loan.
Section 5. 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 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 6. Effectiveness. This Agreement shall become effective and the
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;
(c) the Administrative Agent and Lenders executing this Agreement shall
have received the required work fee from the Borrower;
(d) the Borrower shall have delivered to the Administrative Agent duly and
validly executed copies of the Drum Asset Purchase Agreement and any
amendments thereto; and
(e) the Borrower shall have paid all costs, fees and expenses which have
been invoiced and are payable pursuant to the terms of the Credit
Agreement.
Section 7. Effect on Loan Documents.
(a) Except as amended or waived 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 8. Notice of Permanent Commitment Reduction. The parties hereto
agree that this Agreement shall serve as notice to the Administrative
Agent of the Borrower's election to reduce the Revolving Credit
Commitment to $85,000,000 upon the completion and effectiveness of the
Drum Asset Sale.
Section 9. Choice of Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of New
York.
Section 10. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original.
[Remainder of page intentionally left blank]
EXECUTED as of the date first above written.
IFCO SYSTEMS, N.V.
By: /s/ Karl Pohler
-----------------------------------
Karl Pohler
Chief Executive Officer
IFCO SYSTEMS NORTH AMERICA, INC.
By: /s/ David Russell
-----------------------------------
David Russell
President
BANK ONE, NA, as Administrative Agent and
as a Lender
By: /s/ Frank L. Grossman
-----------------------------------
Name: Frank L. Grossman
----------------------------------
Title: Director - Capital Markets
---------------------------------
CIBC INC., as Lender
By: /s/ Katherine Bass
-----------------------------------
Name: Katherine Bass
----------------------------------
Title: Executive Director
---------------------------------
CIBC World Markets Corp. As Agent
DRESDNER BANK AG, NEW YORK AND
GRAND CAYMAN BRANCHES, as Lender
By: /s/ Ulrich Kahlow
-----------------------------------
Name: Ulrich Kahlow
----------------------------------
Title: Vice President
----------------------------------
By: /s/ Dominik Rowe
-----------------------------------
Name: Dominik Rowe
----------------------------------
Title: Analyst
----------------------------------
COMERICA BANK, as Lender
By: /s/ John R. Grundstad
----------------------------
Name: John R. Grundstad
--------------------------
Title: Vice President
--------------------------
BNP PARIBAS, as Lender
By:_____________________________
Name:___________________________
Title:__________________________
By:_____________________________
Name:___________________________
Title:__________________________
NATIONAL CITY BANK, as Lender
By:_____________________________
Name:___________________________
Title:__________________________
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/ Olivia L. Braun
----------------------------
Name: Olivia L. Braun
Title: Director
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
Agreement 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 February 22, 2002.
BORROWER:
IFCO SYSTEMS NORTH AMERICA, INC.
By: /s/ David Russell
---------------------------
David Russell
President
GUARANTORS:
IFCO SYSTEMS, N.V.
By: /s/ Karl Pohler
---------------------------
Karl Pohler
Chief Executive Officer
IFCO SYSTEMS VIRGINIA, INC.
IFCO SYSTEMS FLORIDA, INC.
IFCO SYSTEMS WISCONSIN, INC.
NLD, INC.
IFCO SYSTEMS CALIFORNIA, INC.
IFCO SYSTEMS BUTNER, INC.
IFCO SYSTEMS PENNSYLVANIA, INC.
IFCO SYSTEMS INDIANA, INC.
VALLEY CRATING AND PACKAGING, INC.
IFCO SYSTEMS WATERLOO, INC.
IFCO SYSTEMS MAINE, INC.
BLACK RIVER FOREST PRODUCTS, INC.
PALEX-TEXAS, INC.
IFCO SYSTEMS IOWA, INC.
IFCO SYSTEMS NORTH CAROLINA, INC.
IFCO SYSTEMS LOUISIANA, INC.
IFCO SYSTEMS ARIZONA, INC.
NLP TRANSPORT, INC.
AZ PALLET, INC.
BROMLEY ACQUISITION COMPANY, INC.
IFCO SYSTEMS OHIO, INC.
PALLET MANAGEMENT SERVICES, INC.
IFCO SYSTEMS WESTERN REGION, INC.
By: /s/ David Russell
------------------------------
David Russell
President
IFCO SYSTEMS CANADA, INC.
By: /s/ David Russell
------------------------------
Name: David Russell
-----------------------------
Title: President
----------------------------
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PALEX-TEXAS, L.P.
By: PalEx-Texas, Inc., its General Partner
By: /s/ David Russell
---------------------------------
David Russell
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
IFCO ICS-SOUTH CAROLINA, INC.
PALEX-KANSAS, INC.
IFCO ICS-MICHIGAN, INC.
By: /s/ Calvin Lee
---------------------------------
Calvin Lee
President
IFCO ICS-LLC
By: IFCO ICS-Chicago, Inc., its Manager
By: /s/ Calvin Lee
----------------------------------
Calvin Lee
President
PALEX TEXAS HOLDINGS, INC.
By: /s/ David Russell
---------------------------
David Russell
President
IFCO SYSTEMS EUROPE GMBH
By: /s/ Karl Pohler
--------------------------
Karl Pohler
Chief Executive Officer
By: /s/ Michael Nimtsch
--------------------------
Michael Nimtsch
Chief Financial Officer
SCHOELLER-U.S., INC.
By: /s/ David Russell
--------------------------
David Russell
President
IFCO - U.S., L.L.C.
By: /s/ David Russell
--------------------------
David Russell
President
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