1
EXHIBIT 10.16
CARAUSTAR INDUSTRIES, INC.
AMENDMENT NO. 2
TO CREDIT AGREEMENT
AMENDMENT NO. 2, dated as of October 30, 1998 (the "Amendment"), to the
CREDIT AGREEMENT, dated as of July 23, 1997, by and among CARAUSTAR INDUSTRIES,
INC., a North Carolina corporation (the "Borrower"), BANKERS TRUST COMPANY, as
Administrative Agent, NATIONSBANK, NA, as Syndication Agent, SUNTRUST BANK,
ATLANTA, as Documentation Agent, FIRST UNION NATIONAL BANK, as Managing Agent,
and the lenders party thereto (the "Lenders").
W I T N E S S E T H :
WHEREAS, the Borrower, the Administrative Agent, the Syndication Agent,
the Documentation Agent, the Managing Agent and the Lenders have entered into a
Credit Agreement, dated as of July 23, 1997 (as amended, the "Credit
Agreement");
WHEREAS, the Borrower has requested and the Lenders have agreed to amend
the Credit Agreement as set forth herein;
NOW, THEREFORE, upon the terms and conditions hereinafter set forth, the
parties hereto hereby agree to amend the Credit Agreement as follows:
ARTICLE 1
AMENDMENTS
Section 1.01 Amendment to Section 1.1 of the Credit Agreement. Section
1.1 of the Credit Agreement shall be amended by deleting the terms
"Intercompany Subordination Agreement" and "Subsidiary Guarantee" in their
entirety and by deleting the references thereto in the term "Loan Documents".
Section 1.02 Amendment to Section 2.10 of the Credit Agreement. Section
2.10 of the Credit Agreement shall be deleted in its entirety.
Section 1.03 Amendment to Section 4.1(c)(i). Whereas Section 9.1 of the
Credit Agreement has been amended to prohibit the Leverage Ratio of the
Borrower to be greater than 3.50 to 1.00, reference to the Leverage Ratio of
"Greater than 3.50 to 1.00" and the corresponding Eurodollar Margin under
Section 4.1(c)(i) of the Credit Agreement shall be deleted and the words "but
less than or equal to 3.50 to 1.00" under the Leverage Ratio referred to as
"Greater than 3.00 to 1.00 but less than or equal to 3.50 to 1.00" under
Section 4.1(c)(i) shall be deleted.
2
Section 1.04 Amendment to Section 8.11 of the Credit Agreement. Section
8.11 of the Credit Agreement shall be deleted in its entirety.
Section 1.05 Amendment to Section 9.1 of the Credit Agreement. Section
9.1 of the Credit Agreement shall be amended by deleting the words "4.00 to
1.00" and inserting the words "3.50 to 1.00" in lieu thereof.
Section 1.06 Amendment to Section 9.2 of the Credit Agreement. Section
9.2 of the Credit Agreement shall be amended by deleting the words "2.50 to
1.00" and inserting the words "3.00 to 1.00" in lieu thereof.
Section 1.07 Amendment to Section 10.1 of the Credit Agreement. Section
10.1 of the Credit Agreement shall be amended (i) by deleting the last proviso
in clause (e) thereof; (ii) by deleting clause (f) in its entirety and inserting
the following clause (f) in lieu thereof: "(f) additional Debt of the Borrower
(excluding the Subsidiaries); provided, that, after giving effect to the
incurrence of such Debt, there does not exist a Default or Event of Default;
and"; (iii) deleting clauses (g) and (i) in their entirety; and (iv) by
re-lettering clause (h) as clause (g).
Section 1.08 Amendment to Section 10.3 of the Credit Agreement. Section
10.3 (g) of the Credit Agreement shall be amended by deleting subclause (v)
thereof in its entirety.
Section 1.09 Amendment to Section 10.10 of the Credit Agreement. Section
10.10 of the Credit Agreement shall be amended by inserting the following
proviso at the end thereof: "provided, that the Borrower may enter into
agreements evidencing Debt issued by the Borrower pursuant to an effective
registration statement under the Securities Act of 1933, as amended or under
Rule 144A thereunder if the covenants set forth in such agreements are no more
restrictive than the covenants set forth on Annex I to Amendment No. 2 hereto".
Section 1.10 Amendment to Section 11.1 of the Credit Agreement. Section
11.1 of the Credit Agreement shall be amended by inserting the following
subclause (C) to clause (f)(ii) thereof; "(C) an event of default shall occur
under the indenture (as amended, supplemented or otherwise modified) relating
to the debt securities described in the Description of Debt Securities
attached as Annex II to Amendment No. 2 hereto or any other agreement governing
Debt in an aggregate principal amount in excess of $10,000,000 entered into
after the date of Amendment No. 2 hereto".
ARTICLE II
EFFECTIVENESS OF AMENDMENTS
This Amendment shall become effective on the opening of business in New
York on the Business Day on which the Administrative Agent has notified the
Borrower and the Banks that the Administrative Agent has executed a counterpart
-2-
3
signature page of this Amendment and has received executed counterpart
signature pages of this Amendment from the Borrower and the Required Lenders.
ARTICLE III
MISCELLANEOUS
3.01 Expenses. The Borrower agrees to pay all reasonable expenses incurred
by the Administrative Agent and the Lenders in connection with the preparation,
execution and delivery of this Amendment by the Administrative Agent and the
Lenders, including, without limitation, reasonable fees and expenses of counsel
to the Administrative Agent and the Lenders.
3.02 Reference to and Effect on the Credit Agreement and the Other Loan
Documents.
(a) This Amendment modifies the Credit Agreement to the extent set
forth herein, is hereby incorporated by reference into the Credit
Agreement and is made a part thereof. On and after the effective date,
each reference in the Credit Agreement to "this Agreement", "hereunder",
"hereof", "herein" or words of like import referring to the Credit
Agreement, and each reference in the other Loan Documents to the "Credit
Agreement", "thereunder", "thereof" or words of like import referring to
the Credit Agreement shall mean and be a reference to the Credit Agreement
as amended by this Amendment.
(b) Except as specifically amended by this Amendment, the Credit
Agreement and the other Loan Documents shall remain in full force and
effect and are hereby ratified and confirmed.
(c) The execution, delivery and performance of this Amendment shall
not, except as expressly provided herein, constitute a waiver of any
provision of, or operate as a waiver of any right, power or remedy of the
Administrative Agent or any Lender under, the Credit Agreement or any of
the other Loan Documents.
3.03 Headings. Section and subsection headings in this Amendment are
included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose or be given any substantive effect.
3.04 Applicable Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.
3.05 Counterparts. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when
-3-
4
so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute one and the same instrument.
[Remainder of Page Intentionally Blank]
-4-
5
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of October 30, 1998.
CARAUSTAR INDUSTRIES, INC.,
as Borrower
By: /s/ H. Xxx Xxxxxx III
-------------------------------
Name: H. Xxx Xxxxxx III
Title: V.P. & CFO
BANKERS TRUST COMPANY,
as Administrative Agent, a
Lender and Swingline Lender
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------
Name: XXXXXX X. XXXXXXX
Title: ASSISTANT VICE PRESIDENT
NATIONSBANK, N.A.,
as Syndication Agent and a Lender
By: /s/ Xxxxxxx X. Short
-------------------------------
Name: Xxxxxxx X. Short
Title: Senior Vice President
SUNTRUST BANK, ATLANTA,
as Documentation Agent and a
Lender
By: /s/ Xxxxx X. Xxxxx
-------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
By: /s/ Xxxxxx X. Xxxxxxxx, Xx.
-------------------------------
Name: Xxxxxx X. Xxxxxxxx, Xx.
Title: Banking Officer
FIRST UNION NATIONAL BANK,
as Managing Agent and a Lender
By: /s/ Xxxxx Santa Xxxx
------------------------------
Name: Xxxxx Santa Xxxx
Title: Vice President
6
THE BANK OF TOKYO - MITSUBISHI LTD.,
as Co-Agent and a Lender
By:
--------------------------------
Name:
Title:
THE BANK OF NEW YORK,
as Co-Agent and a Lender
By: /s/ Xxxxx X. Xxxxxx
--------------------------------
Name: XXXXX X. XXXXXX
Title: Vice President
THE BANK OF NOVA SCOTIA,
as Co-Agent and a Lender
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Relationship Manager
CREDIT LYONNAIS ATLANTA AGENCY,
as Co-Agent and a Lender
By:
---------------------------------
Name:
Title:
WACHOVIA BANK,
as Co-Agent and a Lender
By: /s/ XXXXXX X. XXXXXXXX
---------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
7
CHRISTIANA BANK,
as a Lender
By: /s/ Xxxx Xxxxxx Xxxxxxxx
--------------------------------
Name: XXXX XXXXXX XXXXXXXX
Title: SENIOR VICE PRESIDENT
/s/ Xxxxx X. Xxxxx
--------------------------------
Name: XXXXX X. XXXXX
Title: SENIOR VICE PRESIDENT
FLEET BANK,
as a Lender
By: /s/ Xxxxxxx X. Xxxxxxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: SVP
THE FUJI BANK, LIMITED,
as a Lender
By:
--------------------------------
Name:
Title:
THE INDUSTRIAL BANK OF JAPAN,
LIMITED, ATLANTA AGENCY,
as a Lender
By:
--------------------------------
Name:
Title:
MELLON BANK, N.A.,
as a Lender
By:
--------------------------------
Name:
Title:
8
THE SANWA BANK LIMITED,
as a Lender
By:
--------------------------------
Name:
Title:
TORONTO DOMINION (TEXAS), INC.
as a Lender
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
Name: XXXXXX X. XXXXXX
Title: VICE PRESIDENT
