EXHBIT 10.16
FIRST AMENDMENT TO CREDIT AND SECURITY AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AND SECURITY AGREEMENT (this "Amendment") is
dated as of September 3, 2002, by and among BUCKEYE RECEIVABLES INC., a Delaware
corporation (the "Purchaser"), and WACHOVIA BANK, NATIONAL ASSOCIATION (formerly
known as Wachovia Bank, N.A., the "Lender");
W I T N E S S E T H:
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WHEREAS, Purchaser and Lender executed and delivered that certain
Credit and Security Agreement dated as December 5, 2001 (as the same may be
amended, restated, supplemented, or otherwise modified from time to time, the
"Credit Agreement");
WHEREAS, Purchaser has requested, and Lender has agreed to, certain
amendments to the Credit Agreement, subject to the terms and conditions hereof;
NOW, THEREFORE, for and in consideration of the above premises and
other good and valuable consideration, the receipt and sufficiency of which
hereby is acknowledged by the parties hereto, Purchaser and Lender hereby
covenant and agree as follows:
1. Definitions. Unless otherwise specifically defined herein, each term
used herein which is defined in the Credit Agreement shall have the meaning
assigned to such term in the Credit Agreement. Each reference to "hereof,"
"hereunder," "herein," and "hereby" and each other similar reference and each
reference to "this Amendment" and each other similar reference contained in the
Credit Agreement shall from and after the date hereof refer to the Credit
Agreement as amended hereby.
2. Amendments to Credit Agreement.
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(a)Amendment to Section 1.01. Section 1.01 of the Credit
Agreement hereby is amended by deleting the definition of "Interest Rate" and
substituting the following therefor:
"Interest Rate" means (a) a variable rate of interest per
annum equal to Adjusted LIBOR, plus (i) up to the end of the
Settlement Period ending on September 6, 2002, 0.95%, and (ii)
immediately upon commencement of the first Settlement Period
commencing on or after September 6, 2002, 0.75%, which rate in
the case of either subclause (i) or (ii) shall be adjusted for
each Settlement Period as set forth herein or (b) such other
rate of interest applicable to the Aggregate Advances as
determined from time to time in accordance with Article 7.
(b)Amendment to Section 1.01. Section 1.01 of the Credit
Agreement hereby is amended by deleting the definition of "Policy"
and substituting the following therefor:
"Policy" means, in each case in form and substance
satisfactory to Lender, (a) a receivables insurance policy and
all endorsements and other agreements, documents, and
instruments relating thereto, issued by Underwriter to
Purchaser, and (b) any replacement, substitution, or extension
of, or amendments to, such receivables insurance policy (and
all endorsements and other agreements, documents, and
instruments relating thereto) issued by Underwriter to
Purchaser.
(c) Amendment to Section 1.01. Section 1.01 of the Credit
Agreement hereby is amended by deleting the definition of "Purchase Termination
Date" and substituting the following therefor:
"Purchase Termination Date" means the earliest to occur of the
following: (a) the date on which the Policy is initially
scheduled to expire (or, if the Policy is replaced,
substituted, extended, or amended, with Lender's consent and
approval, to provide a later expiration date, then such later
expiration date); (b) December 4, 2003; and (c) if the Fleet
Agreement has been terminated, is no longer of any force and
effect with respect to Buckeye Technologies, or Lender is no
longer a party thereto, any date determined by Lender and
declared in writing to Purchaser after the occurrence of (i)
any default (after the expiration of any applicable cure or
grace periods) by any Seller or Sellers under any note,
indenture, loan agreement, mortgage, lease, deed, guaranty, or
other similar agreement relating to any Debt of such Seller or
Sellers in an aggregate amount greater than $5,000,000 or (ii)
any judgment rendered against any Seller or Sellers in an
aggregate amount greater than $5,000,000 (in excess of any
insurance coverage), unless such judgment is within thirty
days discharged or stayed pending appeal and, if stayed, is
discharged within thirty days after the expiration of such
stay; provided that, in any of the foregoing cases, if such
date is not a Business Day, the Business Day immediately
preceding such date; provided further that the Purchase
Termination Date is subject to extension for an additional 364
days, in Lender's sole and absolute discretion, upon
Purchaser's request made in writing not more than sixty and
not less than thirty days before the then-pending Purchase
Termination Date.
(d)Amendment to Section 2.08(d). The introductory clause of
Section 2.08(d) of the Credit Agreement hereby is amended so that it reads, in
its entirety, as follows:
(d) Except as set forth in Section 2.08(e), on each
Settlement Date the amount of (x) the Advance (if any) being
made on such Settlement Date, plus (y) the collected balance
in the Purchaser's Account as of the open of business on the
Preparation Date immediately preceding such Settlement Date
(other than that portion of such collected balance which
represents collections which have been received, but not yet
identified and applied to a specific Account Debtor in an IRPF
Receivables Report delivered to Purchaser by Servicer), plus
(z) subject to the proviso clause below, the principal balance
of, and interest accrued on, any and all of Purchaser's
Investments shall be applied in the following order (and in no
other order without Lender's prior written consent until the
amounts owing in each category are fully paid):
(e) Amendment to Section 2.08(d). Clause (xi) of Section 2.08(d)
of the Credit Agreement hereby is amended so that it reads, in its entirety,
as follows:
(xi) eleventh, to Purchaser to replenish or maintain the
Minimum Balance in the Purchaser's Account or to invest in
accordance with Section 5.13(f) and subject to the conditions
set forth therein;
(f) Amendment to Section 2.08(d). Section 2.08(d) of the Credit
Agreement hereby is amended by adding the following proviso clause to the end
thereof:
; provided further that, (A) so long as Purchaser has
sufficient funds in the Purchaser's Account to satisfy all
payments in clauses (i) through and including (x), and (B) the
Purchaser is in compliance with all conditions set forth in
Section 5.13(f) with respect to all of its Investments, the
Purchaser need not apply the principal balance of, and
interest accrued on, any of Purchaser's Investments to the
payments provided for in this Section 2.08(d).
(g) Amendment to Section 2.08(e). The introductory clause of
Section 2.08(e) of the Credit Agreement hereby is amended so that it reads, in
its entirety, as follows:
(e) During the existence of any Default or Event of
Default or at all times after the Purchase Termination Date or
at all times after the Obligations have become due and payable
for whatever reason, all monies in the Purchaser's Account on
any Business Day, plus the principal balance of, and interest
accrued on, any and all of Purchaser's Investments shall be
applied in the following order (and in no other order without
Lender's prior written consent until all amounts owing within
each category are fully paid):
(h) Amendment to Section 5.02. Section 5.02 of the Credit
Agreement hereby is amended by adding themfollowing sentence to the end thereof:
In addition to any audits performed pursuant to the foregoing
sentence, Purchaser agrees it shall pay all costs and expenses
related to an additional field audit of all of Purchaser's
books and records in any way related to the Program, which
additional audit shall be performed (i) by a third-party
accounting firm, selected by Purchaser (and reasonably
satisfactory to Lender), but engaged for the purposes of such
additional audit by Lender, and (ii) as of a date between
September 3, 2002, and the December 4, 2003, as selected by
Lender, in its discretion. With respect to such additional
audit, Purchaser agrees to (i) provide reasonable cooperation
to such accounting firm in the conduct of its audit and (ii)
actively assist such accounting firm in gaining access to the
Seller's books and records relating to the Program, to the
extent such books and records are reasonably relevant to the
audit.
(i) Amendment to Section 5.13(e). Section 5.13(e) of the Credit
Agreement hereby is amended so that it reads, in its entirety, as follows:
(e) declare or make any Restricted Payment; provided
that Purchaser may from time to time make a dividend to
Buckeye Technologies so long as, at the time of such dividend
is made, (i) no Event of Default or Default shall have
occurred and be continuing; (ii) after giving effect to such
dividend, the aggregate amount of the Purchaser's Account,
plus any of Purchaser's Investments permitted by subclauses
(i), (ii), and (iii) of Section 5.13(f), hereof, will equal or
exceed the Minimum Balance; (iii) the principal and interest
payable on the Subordinated Notes is, in the aggregate, zero;
(iv) the dividend is made on a Settlement Date; and (v) the
Aggregate Advances at such time are less than or equal to the
Borrowing Base;
(j) Amendment to Section 5.13(f). Section 5.13(f)of the Credit Agreement
hereby is amended so that it reads, in its entirety, as follows:
(f) make Investments in any Person except Investments
in (i) direct obligations of the United States Government
maturing within ninety days; (ii) certificates of deposit
issued by a commercial bank whose credit is satisfactory to
Lender and for a term satisfactory to Lender; (iii) other
Investments which have been specifically approved in writing
from time to time by Lender; and (iv) loans evidenced by the
Subordinated Notes; provided, however, that, with respect to
Investments made pursuant to clauses (i), (ii), and (iii),
hereof, (A) all actions necessary to preserve Lender's first
priority security interest in the Collateral have been taken,
as required by Lender in its discretion; (B) the aggregate
amount of all such Investments, including any interest accrued
thereon, shall not exceed the Minimum Balance (excluding from
the calculation thereof (x) the amount of any interest accrued
on such Investments, to the extent such interest has been paid
over to the Purchaser's Account, and (y) the principal amount
of any Investments otherwise approved as set forth herein and
made on an overnight or Business-Day-to-Business-Day basis, to
the extent such Investments are, in fact, made and returned to
the Purchaser's Account on such basis); (C) Purchaser hereby
agrees that it shall take whatever action is necessary to
liquidate such Investment to the extent the principal or
interest (or both) of such Investment is necessary for
Purchaser to pay any amounts due and payable under this
Agreement or any other Program Document; (D) all interest and
other income generated by such Investment shall be reinvested
(subject to the limitations set forth herein) or paid over to
the Purchaser's Account; and (E) immediately after giving
effect to the making of any Investment permitted hereunder, no
Default or Event of Default shall have occurred and be
continuing;
(k) Amendment to Section 6.01(f). Section 6.01(f)of the
Credit Agreement hereby is amended so that it reads, in its entirety, as
follows:
(f) the aggregate balance of (i) the Purchaser's
Account, plus (ii) the balance of any and all Investments
permitted by subclauses (i), (ii), and (iii) of Section
5.13(f) shall be less than the Minimum Balance for a period in
excess of thirty consecutive days or shall at any time be less
than an amount equal to ninety percent of the Minimum Balance;
(l) Amendment to Section 6.01(g). Section 6.01(g)of the
Credit Agreement hereby is amended so that it reads, in its entirety, as
follows:
(g) the Policy shall at any time be cancelled,
terminated, suspended, declared unenforceable or unlawful, or
otherwise ineffective, other than by the natural expiration of
the Policy on (i) the date it was initially scheduled to
expire or (ii) if the Policy is replaced, substituted,
extended, or amended, with Lender's consent and approval, to
provide a later scheduled expiration date, such later
scheduled expiration date;
3. Restatement of Representations and Warranties. Purchaser hereby
restates and renews each and every representation and warranty heretofore made
by it in the Credit Agreement and the other Program Documents as fully as if
made on the date hereof and with specific reference to this Amendment and all
other loan documents executed and/or delivered in connection herewith.
4. Effect of Amendment. Except as set forth expressly hereinabove, all
terms of the Credit Agreement and the other Program Documents shall be and
remain in full force and effect, and shall constitute the legal, valid, binding
and enforceable obligations of Purchaser. The amendments contained herein shall
be deemed to have prospective application only, unless otherwise specifically
stated herein.
5. Ratification. Purchaser hereby restates, ratifies and reaffirms each
and every term, covenant and condition set forth in the Credit Agreement and the
other Program Documents effective as of the date hereof.
6. Counterparts. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which may be delivered by facsimile and which when so executed and delivered
(including counterparts delivered by facsimile) shall be deemed to be an
original and all of which counterparts, taken together, shall constitute but one
and the same instrument.
7. Section References. Section titles and references used in this
Amendment shall be without substantive meaning or content of any kind whatsoever
and are not a part of the agreements among the parties hereto evidenced
hereby.
8. No Default. To induce Lender to enter into this Amendment and to
continue to make Advances pursuant to the Credit Agreement, Purchaser hereby
acknowledges and agrees that, as of the date hereof, and after giving effect to
the terms hereof, there exists (i) no Default, Event of Default, or Servicing
Agreement Event of Default, and (ii) no right of offset, defense, counterclaim,
claim or objection in favor of Purchaser arising out of or with respect to any
of the Advances or other obligations of Purchaser owed to Lender under the
Credit Agreement.
9. Further Assurances. Purchaser agrees to take such further actions
as Lender shall reasonably request in connection herewith to evidence the
amendments herein contained to Purchaser.
10.Governing Law. This Amendment shall be governed by and construed and
interpreted in accordance with, the laws of the State of Georgia.
11.Conditions Precedent. This Amendment shall become effective only upon
the satisfaction of each of the following conditions precedent (unless waived in
writing by Lender, in its sole and absolute discretion): (a) execution and
delivery of this Amendment by each of the parties hereto; (b) Lender's receipt
of the Amendment Fee referred to in that certain letter from Lender to Purchaser
dated on or about August 27, 2002, regarding the amendments contained herein;
(c) Lender's receipt of certificates of good standing (or their equivalent) for
each of Sellers and Purchaser from their respective states of incorporation or
formation, as the case may be; and (d) Lender's receipt of a certificate
executed and delivered by Sellers (in form and substance satisfactory to Lender)
in which Sellers acknowledge the amendments contained herein.
[SIGNATURES ON FOLLOWING PAGE]
IN WITNESS WHEREOF, each of Purchaser and Lender has caused this
Amendment to be duly executed, under seal, by its duly authorized officer as of
the day and year first above written.
BUCKEYE RECEIVABLES INC., as Purchaser
(SEAL)
BY: /S/ XXXXXXX X. XXXXXX
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TITLE: PRESIDENT
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WACHOVIA BANK, NATIONAL
ASSOCIATION, as Lender
(SEAL)
BY: /S/ XXXXX X. XXXX
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TITLE: DIRECTOR
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