Amendment No. 10 to Securities Purchase Agreement by and among PW Eagle, Inc. and Investors

Summary

PW Eagle, Inc. and its investors have agreed to amend their existing Securities Purchase Agreement, originally dated September 20, 1999. This amendment updates certain financial covenants, including leverage and interest coverage ratios, and changes the interest rate on the company's senior subordinated notes to 16% per year. The amendment also sets limits on how much interest the company can defer. The changes become effective once all parties sign and certain fees are paid. All other terms of the original agreement remain in effect.

EX-10.9 11 dex109.txt AMENDMENT NO. 10 TO THE SECURITIES PURCHASE AGREEMENT Exhibit 10.9 AMENDMENT NO. 10 (this "Amendment"), dated as of September __, 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. 9, the "Purchase Agreement") pursuant to which the Investors purchased $32,500,000 principal amount of the Company's senior subordinated notes; and WHEREAS, the Company has requested, and the Investors party hereto are willing (subject to the terms and conditions hereof), to amend certain provisions of 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. Amendment to Leverage Ratio Covenant. Section 8.9(a) of the Purchase Agreement is hereby amended by deleting the portion of the table contained in such Section (as set forth in Section 2 of Amendment No. 6) addressing the (i) trailing 12-month period ending September 30, 2003 and (ii) trailing 12-month period ending December 31, 2003, and substituting in lieu thereof the following: - -------------------------------------------------------------------------------- Trailing 12-month period ending 8.75 to 1.00 September 30, 2003 - -------------------------------------------------------------------------------- 28.75 railing 12-month period ending .50 to 1.00 December 31, 2003 - -------------------------------------------------------------------------------- 3. Amendment to Interest Coverage Ratio Covenant. Section 8.9(b) of the Purchase Agreement is hereby amended by deleting the portion of the table contained in such Section (as set forth in Section 3 of Amendment No. 6) addressing the (i) trailing 12-month period ending September 30, 2003 and (ii) trailing 12-month period ending December 31, 2003, and substituting in lieu thereof the following: - -------------------------------------------------------------------------------- Trailing 12-month period ending 0.35 to 1.00 September 30, 2003 - -------------------------------------------------------------------------------- 1. Trailing 12-month period ending 0.65 to 1.00 December 31, 2003 - ------------------------------------------------------------------------------- 4. Amendments to the Notes and Section 3.3 of the Purchase Agreement. Notwithstanding anything to the contrary contained in the Purchase Agreement, the Notes or otherwise, effective as of the Effective Date (x) the Stated Rate shall be amended to equal 16% per annum and (y) the maximum amount of interest the Company may elect to defer on any Interest Payment Date shall be an amount equal to the interest accrued on the Notes during such Interest Period at a rate equal to 4% per annum; provided, that any adjustment of the Stated Rate or the maximum amount of interest the Company may elect to defer on any Interest Payment Date (in each case as such adjustments are contemplated by Section 7 of Amendment No. 9 to the Purchase Agreement) shall be effective in accordance with the terms thereof. 5. Representations and Warranties. In order to induce the Investors to enter into this Amendment, the Company hereby represents and warrants that, (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, (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 of 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. 6. 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), and (ii) each Investor shall have received, by wire transfer to an account designated by such Investor, an amendment fee in an amount for such Investor equal to 0.50% of the outstanding principal amount of the Notes held by such Investor (and such amendment fee shall be fully earned and non-refundable on the Effective Date), and 2 (iii) the Company shall have paid all fees and expenses of O'Melveny & Myers 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 & Myers LLP incurred by the Investors in 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, and (iv) the Investors shall have received a copy of a duly executed amendment of, and consent with respect to the increase in the Stated Rate contemplated by this Amendment, the Senior Credit Agreement in form and substance reasonably satisfactory to the Required Investors. 7. 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. 3 IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this AMENDMENT NO. 10 to be duly executed and delivered as of the date first above written. PW EAGLE, INC. By: /s/ Dobson West ----------------------------------- Name: Dobson West Title: CAO J.P. MORGAN PARTNERS (23A SBIC), LLC By: J.P. MORGAN PARTNERS (23A SBIC MANAGER), INC., Its Managing Member By: /s/ Richard D. Waters ----------------------------------- Name: Richard D. Waters Title: Managing Director MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY By: David L. Babson & Company Inc. as Investment Advisor By: /s/ Mark A. Ahmed ----------------------------------- Name: Mark A. Ahmed Title: Managing Director MASSMUTUAL CORPORATE INVESTORS By: /s/ Michael L. Klofas ----------------------------------- Name: Michael L. Klofas Title: Vice President 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 4 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/ Michael L. Klofas ----------------------------------- Name: Michael L. Klofas 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: David L. Babson & Company Inc. under delegated authority from Massachusetts Mutual Life Insurance Company, as Investment Manager By: /s/ Mark A. Ahmed ----------------------------------- Name: Mark A. Ahmed Title: Managing Director 5