EXHIBIT 10.2
AMENDMENT NO. 7 (this
"Amendment"), dated as of March 14,
2003, by and among PW EAGLE, INC., a
Minnesota corporation (the "Company")
and the investors party to the
Securities Purchase Agreement referred
to below on the date hereof (the
"Investors").
WHEREAS, the Company and the Investors are parties to a
Securities Purchase Agreement, dated as of September 20, 1999 (as amended,
supplemented or otherwise modified through the date hereof, including pursuant
to Amendments No.1 through No. 6, the "Purchase Agreement") pursuant to which
the Investors purchased $32,500,000 principal amount of the Company's senior
subordinated notes; and
WHEREAS, Extrusion Technologies, Inc., a Colorado corporation and
a direct, wholly owned subsidiary of the Company, as Buyer ("Merger Sub") and
Uponor North America, Inc., a Delaware corporation, as Seller entered into a
Stock Purchase Agreement made as of March 13, 2003 (the "Stock Purchase
Agreement") pursuant to which Merger Sub is purchasing (the "Stock Purchase")
all of the issued and outstanding shares of capital stock of Uponor ETI Company
(d/b/a Extrusion Technologies, Inc.), a Colorado corporation ("ETI"); and
WHEREAS, in connection with the Stock Purchase, Merger Sub will
merge (the "ETI Merger") with and into ETI, with ETI being the surviving
corporation; and
WHEREAS, Mid-States Plastics, Inc., a Kentucky corporation
("Mid-States") is a direct, wholly owned subsidiary of ETI; and
WHEREAS, in connection with the Stock Purchase and the ETI
Merger, the Company is making a $7,000,000 equity contribution to Merger Sub;
and
WHEREAS, in connection with the Stock Purchase and the ETI
Merger, ETI and Mid-States, as Borrowers, are entering into a Loan and Security
Agreement made as of the date hereof with Fleet Capital Corporation, as Agent,
and the other financial institutions listed therein as Lenders (the "ETI Credit
Agreement") pursuant to which the Lenders are providing the Borrowers with a
secured credit facility of up to $25,000,000; and
WHEREAS, the Company has requested, and the Investors party
hereto are willing (subject to the terms and conditions hereof), to amend the
Purchase Agreement as provided herein;
NOW, THEREFORE, the parties hereto agree as follows:
1. Defined Terms. Capitalized terms used and not otherwise
defined in this Amendment shall have the meanings given to them in the
Purchase Agreement.
2. Amendments to Section 1.1 (Defined Terms) of the Purchase
Agreement.
(a) Section 1.1 of the Purchase Agreement is hereby
amended by adding the following new definitions to read in their entirety
as follows:
"ETI" means Uponor ETI Company (d/b/a Extrusion
Technologies, Inc.), a Colorado corporation.
"ETI Credit Agreement" means the Loan and Security Agreement
made as of March 14, 2003, by and among ETI
and Mid-States as Borrowers, Fleet Capital Corporation as
Agent and the other financial institutions listed therein as Lenders.
"ETI Credit Documents" means the ETI Credit Agreement,
together with all exhibits, schedules and related documents."
"ETI Group" means ETI and its Subsidiaries, including
without limitation, Mid-States."
"ETI Stock Purchase" means, collectively, the purchase by
Merger Sub of all of the issued and outstanding shares of capital stock of ETI
and the merger of Merger Sub with and into ETI, with ETI being the surviving
corporation."
"ETI Stock Purchase Agreement" means that certain Stock
Purchase Agreement dated effective as of March 13, 2003, by and between Merger
Sub, as Buyer and Uponor North America, Inc., a Delaware corporation, as
Seller."
"ETI Stock Purchase Documents" means the ETI Stock Purchase
Agreement, together with all exhibits, schedules and related documents."
"Merger Sub" means Extrusion Technologies, Inc., a Colorado
corporation.
"Mid-States" means Mid-States Plastics, Inc., a Kentucky
corporation, a direct, wholly owned subsidiary of ETI.
"2003 Warrant Agreement" means the Warrant Agreement dated
as of March 14, 2003 among the Company and the other signatories thereto, as
such Agreement may be amended, supplemented or otherwise modified from time to
time."
"2003 Warrants" has the meaning given to the term "Warrants"
in the 2003 Warrant Agreement."
(b) Section 1.1 of the Purchase Agreement is hereby
amended by the addition of the following text immediately after the
reference to "the Warrant Agreement" in the definition of "Transaction
Documents":
", the 2003 Warrants, the 2003 Warrant Agreement".
2
3. Consent to Transactions Contemplated by the ETI Credit
Documents and the ETI Stock Purchase Documents. In reliance upon and subject to
the accuracy of the representations set forth in this Amendment, upon the
Effective Date, the Investors hereby waive compliance by the Company with
Sections 7.12, 8.1, 8.2, 8.3, 8.4, 8.5 and 8.8 of the Purchase Agreement, solely
to the extent necessary to permit the transactions contemplated by the ETI
Credit Documents and the ETI Stock Purchase Documents and the formation by the
Company of Merger Sub and the $7 million equity contribution by the Company to
Merger Sub.
4. Amendments to Purchase Agreement in Connection with
Transactions Contemplated by the ETI Credit Documents and the ETI Stock Purchase
Documents. In reliance upon and subject to the accuracy of the representations
set forth in this Amendment, upon the Effective Date, the Investors and the
Company hereby agree that:
(a) In no event shall any provision (including without
limitation, any representation, warranty, covenant, default or event of
default) of the Purchase Agreement apply to the ETI Group;
(b) By way of example, and not in limitation of Section
4(a) above, any reference to "Company", "Obligor", "Subsidiary",
"Subsidiaries" or "Consolidated" in the Purchase Agreement shall expressly
exclude the ETI Group;
(c) By way of example, and not in limitation of Section
4(a) above, and notwithstanding anything to the contrary contained in GAAP,
all computations of financial covenants in the Purchase Agreement shall
exclude the results of operations and financial condition of the ETI Group;
(d) Notwithstanding anything to the contrary contained in
this Section 4 or otherwise (but subject to the proviso at the end of this
clause (d)), each Person within the ETI Group shall be expressly included
as an Subsidiary of the Company for the purposes of Section 7.7
(Maintenance of Books and Records; Financial Statements, Reports, Etc.) of
the Purchase Agreement; provided, however, that with respect to the monthly
financial statements contemplated by Section 7.7(ii), each Person within
the ETI Group shall be expressly excluded as an Subsidiary of the Company;
(e) Notwithstanding anything to the contrary contained in
this Section 4 or otherwise, each Person within the ETI Group shall be
expressly included as an Affiliate of the Company for the purposes of
Section 8.3 (Affiliate Transactions) of the Purchase Agreement;
(f) Notwithstanding anything to the contrary contained in
this Section 4 or otherwise, the Company may enter into a tax sharing
agreement with the ETI Group; provided that the tax obligations owing by
the Company, on the
3
one hand, and the ETI Group, on the other hand, do not exceed the tax
obligations that either such party would have on a stand-alone basis; and
(g) Notwithstanding anything to the contrary contained in
this Section 4 or otherwise, the Company shall operate the ETI Group
(including, without limitation, with respect to ERISA law compliance,
environmental law compliance and tax law compliance) with the same care and
diligence as the Company is operated.
5. Clarifying Amendments to Purchase Agreement. In reliance
upon and subject to the accuracy of the representations set forth in this
Amendment, upon the Effective Date, the Investors and the Company hereby agree
that:
(a) Section 1.1 of the Purchase Agreement is hereby
amended by deleting the reference to "(or added)" in the definition of
"EBITDA".
(b) Section 8.3 of the Purchase Agreement is hereby
amended by amending and restating such Section in its entirety to read as
follows:
"Enter into, or be a party to, or permit any Subsidiary of such Obligor to
enter into or be a party to, any transaction with any Affiliate or
stockholder of such Obligor or such Subsidiary, except in the ordinary
course of and pursuant to the reasonable requirements of such Obligor's or
such Subsidiary's business and upon fair and reasonable terms which are
fully disclosed to the Investors and so long as the terms thereof are no
less favorable to such Obligor or such Subsidiary than what would be
obtainable in a comparable arm's length transaction with a Person not an
Affiliate or stockholder of such Obligor or such Subsidiary."
6. Representations and Warranties. In order to induce the
Investors to enter into this Amendment, the Company hereby represents and
warrants that (v) the ETI Credit Documents and the ETI Stock Purchase Documents
and the transactions contemplated thereby do not violate, or conflict with, the
Transaction Documents, the Sale and Leaseback Documents or the Loan Documents
(as defined in the Senior Credit Agreement), each as amended after giving effect
to the amendments to such documents referred to herein, (w) no Default or Event
of Default exists on the Effective Date, after giving effect to this Amendment,
(x) no Event of Default (as defined in the Sale and Leaseback Documents) exists
on the Effective Date, after giving effect to the amendment to the Sale and
Leaseback Documents referred to herein, (y) no Default or Event of Default (in
each case as defined in the Senior Credit Agreement) exists on the Effective
Date, after giving effect to the amendment to the Senior Credit Agreement
referred to herein and (z) all of the representations and warranties contained
in the Note Documents shall be true and correct in all respects on the Effective
Date, after giving effect to this Amendment, with the same effect as though such
representations and warranties had been made on and as of the Effective Date (it
being understood that any representation or warranty made as of a specified date
shall be true and correct in all material respects as of such specific date), in
each case except as previously disclosed in writing to the Investors.
4
7. Effectiveness of this Amendment. This Amendment shall become
effective on the date (the "Effective Date") when:
(i) the Company and the Required Investors shall have
signed a counterpart hereof (whether the same or different counterparts),
(ii) the Investors shall have received a copy of a duly
executed amendment of the Senior Credit Agreement, in form and substance
satisfactory to the Required Investors,
(iii) the Investors shall have received a copy of a duly
executed amendment of the Sale and Leaseback Documents, in form and
substance satisfactory to the Required Investors,
(iv) the transactions contemplated by the ETI Credit
Documents and the ETI Stock Purchase Documents shall have been consummated,
in form, substance and upon timing satisfactory to the Required Investors,
(v) the Company shall have delivered to the Investors
true and correct copies of the ETI Credit Documents and the ETI Stock
Purchase Documents, in form and substance satisfactory to the Required
Investors,
(vi) the Company shall have delivered to the Investors
true and correct copies of the 2003 Warrant Agreement, in form and
substance satisfactory to the Required Investors,
(vii) the Company shall have delivered to each Investor a
duly executed 2003 Warrant (issued to such Investor), in form and substance
satisfactory to the Required Investors,
(viii) the Company shall have delivered to the Investors
true and correct copies of an acknowledgement to the Registration Rights
Agreement, in form and substance satisfactory to the Required Investors,
(ix) the Company shall have delivered to the Investors a
copy of a letter from [________] in form and substance reasonably
acceptable to the Required Investors confirming (i) [______]'s willingness
to enter into a Supply Agreement with the Company and ETI as provided in
the ETI Credit Agreement and (ii) the Company currently has nominally
equivalent [_____] payment terms,
(x) the Investors shall have received a written opinion
of Xxxxxxxxxx & Xxxxx, P.A., counsel to the Company, in form and substance
satisfactory to the Required Investors, and
(xi) the Company shall have paid all fees and expenses of
O'Melveny & Xxxxx LLP incurred by the Investors in connection with or
relating to the preparation, execution or delivery of this Amendment and
all other unpaid fees and expenses of O'Melveny & Xxxxx LLP incurred by the
Investors in
[_____] confidential treatment requested.
5
connection with the Purchase Agreement to the extent the amount thereof has
been provided to the Company prior to the execution and delivery of this
Amendment; provided, however, that nothing in this Amendment shall limit
the generality of Section 12.4 of the Purchase Agreement.
8. Miscellaneous.
(a) This Amendment is limited as specified and shall not
constitute an amendment, modification or waiver of any other provision of
the Purchase Agreement or any other Note Document.
(b) This Amendment may be executed in any number of
counterparts and by the different parties hereto on separate counterparts,
each of which counterparts when executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument.
(c) THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAW OF THE STATE OF NEW YORK.
(d) The parties hereby agree that this Amendment shall be
a Note Document for all purposes under the Purchase Agreement. From and
after the Effective Date, all references in the Purchase Agreement and each
of the other Note Documents to the Purchase Agreement shall be deemed to be
references to the Purchase Agreement as amended hereby.
(e) All notices, demands and requests of any kind to be
delivered to any party hereto in connection with this Amendment shall be
delivered in accordance with the notice provisions contained in the
Purchase Agreement.
(f) The headings used herein are for convenience of
reference only and shall not affect the construction of, nor shall they be
taken into consideration in interpreting, this Amendment.
6
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this AMENDMENT NO. 7 to be duly executed and delivered as of the
date first above written.
PW EAGLE, INC.
By: /s/ Xxxxxxx Xxxxx
-------------------------------------
Name: Xxxxxxx Xxxxx
Title: CEO
X.X. XXXXXX PARTNERS (23A SBIC), LLC
By: X.X. XXXXXX PARTNERS (23A
SBIC MANAGER), INC., Its
Managing Member
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title:
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY
By: Xxxxx X. Xxxxxx & Company Inc. as
Investment Advisor
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
MASSMUTUAL CORPORATE
INVESTORS
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
S-1
The foregoing is executed on behalf of
MassMutual Corporate Investors,
organized under a Declaration of Trust,
dated September 13, 1985, as amended
from time to time. The obligations of
such Trust are not personally binding
upon, nor shall resort to be had to the
property of, any of the Trustees,
shareholders, officers, employees or
agents of such Trust, but the Trust's
property only shall be bound.
MASSMUTUAL PARTICIPATION
INVESTORS
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
The foregoing is executed on behalf of
MassMutual Participation Investors,
organized under a Declaration of Trust,
dated April 7, 1988, as amended from
time to time. The obligations of such
Trust are not binding upon, nor shall
resort be had to the property of, any of
the Trustees, shareholders, officers,
employees or agents of such Trust
individually, but the Trust's assets and
property only shall be bound.
MASSMUTUAL CORPORATE VALUE
PARTNERS LIMITED
By: Xxxxx X. Xxxxxx & Company Inc. under
delegated authority from
Massachusetts Mutual Life Insurance
Company, as Investment Manager
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
S-2
