Exhibit 99
as of February 15, 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 Sections 12.1 and 12.4 of the Credit Agreement for the period
ended December 31, 2000, each of which failures constitutes an Event of
Default under Section 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 a Default under Section 15.1(f) of the Credit
Agreement and will constitute an Event of Default thereunder if it continues
until the end of the grace period contained in the Senior Subordinated
Indenture (collectively, the "Specified Default and 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 Section 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
Default and 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, 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 Section 2.2(a) of the Credit Agreement shall be temporarily
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amended to replace the reference to "Total Revolving Credit
Commitment" with a reference to the amount of "$60,000,000."
(b) AMENDMENT. The Credit Agreement shall be amended as follows:
(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:
Revolving Credit Revolving Credit
Ratio of Funded Debt Loan Margin for Loan Margin for
to Adjusted EBITDA Base Rate Loans Eurodollar Rate Loans
-------------------- ---------------- ---------------------
Less than 3.25:1.00 0.50% 2.00%
3.25:1.00 or more but
less than 3.75:1.00 0.75% 2.25%
3.75:1.00 or more but
less than 4.25:1.00 1.00% 2.50%
4.25:1.00 or more 1.75% 3.25%
and (B) by amending the definition of "Term Loan Rate" by replacing
the percentage "9.48%" with the percentage "9.98%."
(ii) Section 10.4 of the Credit Agreement is hereby amended by
deleting the word "and" at the end of the paragraph (d), replacing
the period at the end of the paragraph (e) with "; and" and
inserting the following new paragraph (f):
(f) as soon as practicable, but not later than Wednesday of each
week, (i) a cash flow projection for the thirteen week period
commencing at the beginning of such week, with the first four weeks
of such period prepared on a weekly basis and the remainder of such
period prepared on a monthly (four or five week) basis, together
with (ii) a comparison of actual cash flow for the preceding week
to the projected cash flow for such preceding week most recently
delivered to the Lenders.
(iii) Section 12.4 of the Credit Agreement is hereby amended by
amending the heading to read "Minimum Adjusted EBITDA less
Container Purchases", by replacing the words "of its" in the second
line thereof with the words "period of four consecutive" and by
inserting the word "end" after the word "period" in the ninth line
thereof and by replacing the word "Quarterly" in the heading to the
table therein with the phrase "four Quarter."
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
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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 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 Section 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 $ 37,500.
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.
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(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 Section 6).
(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.
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 Section 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 Default and Events of Default) shall occur.
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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
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 Section 6 hereof, (ii)
April 17, 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 Section 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
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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 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
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accordance with the laws of the Commonwealth of Massachusetts and shall take
effect as a sealed instrument under such laws.
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:
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XXXXXXXX LIFE INSURANCE COMPANY
By:_______________________________
Name:
Title:
By:_______________________________
Name:
Title:
COMERICA BANK
By:_______________________________
Name:
Title:
SUMMIT BANK
By:_______________________________
Name:
Title:
THE BANK OF NOVA SCOTIA
By:_______________________________
Name:
Title:
BHF (USA) CAPITAL CORPORATION
By:_______________________________
Name:
Title:
By:_______________________________
Name:
Title:
KEY CORPORATE CAPITAL INC.
By:_______________________________
Name:
Title:
ALLFIRST BANK
By:_______________________________
Name:
Title:
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ACCEPTED and AGREED
as of February ____, 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:
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CONTAINER MANAGEMENT SERVICES, INC.
By:_________________________
Name:
Title:
HUNTER DRUMS LIMITED
By:_________________________
Name:
Title:
NEW ENGLAND CONTAINER CO., INC.
By:_________________________
Name:
Title:
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