FIFTH AMENDMENT TO CREDIT AGREEMENT
THIS FIFTH AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is entered
into as of December 27, 2002 among (i) CARAUSTAR INDUSTRIES, INC. (the
"Borrower"), (ii) the subsidiaries of the Borrower identified as Guarantors on
the signature pages hereto, (iii) the Lenders identified on the signature pages
hereto and (iv) BANK OF AMERICA, N.A., as Administrative Agent (the
"Administrative Agent"). All capitalized terms used herein and not otherwise
defined shall have the meanings ascribed to such terms in the Credit Agreement
referred to below.
RECITALS
A. A Credit Agreement dated as of March 29, 2001 (as amended by
that certain First Amendment to Credit Agreement dated as of September 10,
2001, that certain Second Amendment to Credit Agreement dated as of November
30, 2001, that certain Third Amendment to Credit Agreement dated as of January
22, 2002 and that certain Fourth Amendment to Credit Agreement dated as of
September 23, 2002, and as further modified or amended from time to time, the
"Credit Agreement") has been entered into by and among the Borrower, the
Guarantors party thereto (the "Guarantors"), the financial institutions party
thereto (the "Lenders") and the Administrative Agent.
B. The Borrower has requested, and the Required Lenders have
agreed to, an amendment of the terms of the Credit Agreement as set forth
below.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Amendments to Credit Agreement.
(a) Section 9.1 of the Credit Agreement is hereby amended by
inserting the following as a new last paragraph of such Section 9.1:
"For the purpose of calculating (i) Net Worth as part of the
calculation of the Total Leverage Ratio with respect to Section 9.1(a)
above and (ii) Tangible Net Worth with respect to Section 9.1(c)
above, such calculations shall exclude (i.e., there will be added back
to Net Worth or Tangible Net Worth, as the case may be) (a) for each
fiscal year beginning with the 2002 fiscal year, any year-end non-cash
adjustment (on an after-tax basis) to other comprehensive income to
reflect any Additional Minimum Liability (as defined below), and (b)
for the fiscal quarters ending December 31, 2002 and March 31, 2003,
any restructuring charges (cash or non-cash) taken during such fiscal
quarters
in connection with the Borrower retiring or taking other action on
idle or underperforming assets; provided, however, that the aggregate
incremental amount of all such charges added back to Net Worth or
Tangible Net Worth, as the case may be, with respect to the charges
referenced in the foregoing clause (b) shall not exceed $16,000,000
(calculated on an after-tax basis). For purposes hereof, "Additional
Minimum Liability" means, as of any date, with respect to any Pension
Plan, the sum of the absolute values of (x) the unfunded accumulated
benefit obligation existing as of the end of the fiscal year then
ending or the most recently ended fiscal year, as applicable, plus (y)
the Borrower's prepaid pension asset position existing as of the end
of the fiscal year then ending or the most recently ended fiscal year,
as applicable."
(b) Section 9.10 of the Credit Agreement is amended by deleting
the period at the end of such Section 9.10 and inserting the following proviso:
"; provided, however, that the foregoing shall not prohibit any Credit
Party from changing its assumptions regarding the useful life of
assets so long as such changes are consistent with then-current
industry practice."
2. Conditions Precedent to Effectiveness. The amendments to the
Credit Agreement set forth herein shall be deemed effective as of the date (the
"Fifth Amendment Effective Date") when (and only when) each of the following
conditions precedent has been satisfied:
(a) The Administrative Agent shall have received from
the Credit Parties and the Required Lenders duly executed counterparts
of this Amendment.
(b) The Administrative Agent shall have received from
the Borrower an amendment fee equal to 0.10% multiplied by the
aggregate Revolving Credit Commitments of the Consenting Lenders
(defined below), such fee being for the account of each such
Consenting Lender pro rata according to such Lender's Revolving Credit
Commitment as of the Fifth Amendment Effective Date; provided,
however, that such fee shall be payable only to those Lenders (the
"Consenting Lenders") that shall have returned (including via
telecopy) executed signature pages to this Amendment on or before 5:00
p.m., Eastern Standard Time, on Friday, December 27, 2002, as directed
by the Administrative Agent; and
(c) the Borrower shall have paid any and all
out-of-pocket costs (to the extent invoiced) incurred by the
Administrative Agent or Banc of America Securities LLC, as an Arranger
(including the reasonable fees and expenses of the Administrative
Agent's legal counsel), and fees and other amounts payable to the
Administrative Agent or Banc of America Securities LLC, as an
Arranger, in each case in connection with the arrangement,
negotiation, preparation, execution and delivery of this Amendment.
(d) The representations and warranties contained in
Sections 3 and 5 of this Amendment shall be true and correct in all
material respects on and as of the Fifth Amendment Effective Date with
the same effect as if made on and as of such date.
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3. Representations and Warranties. Each Credit Party hereby
represents and warrants to the Administrative Agent and the Lenders that (a) no
Default or Event of Default exists; (b) all of the representations and
warranties set forth in the Loan Documents are true and correct in all material
respects as of the Fifth Amendment Effective Date (except for those that
expressly state that they are made as of an earlier date, in which case they
shall be true and correct as of such earlier date); and (c) it has no claims,
counterclaims, offsets, credits or defenses to its obligations under the Loan
Documents or, to the extent it does, they are hereby released in consideration
of the Required Lenders entering into this Amendment.
4. Ratification of Credit Agreement. Except as expressly
modified and amended in this Amendment, all of the terms, provisions and
conditions of the Loan Documents shall remain unchanged and in full force and
effect. The term "this Agreement" or "Credit Agreement" and all similar
references as used in each of the Loan Documents shall hereafter mean the
Credit Agreement as amended by this Amendment. Except as herein specifically
agreed, the Credit Agreement is hereby ratified and confirmed and shall remain
in full force and effect according to its terms.
5. Authority/Enforceability. Each of the Credit Parties hereto
represents and warrants as follows:
(a) It has taken all necessary action to authorize the
execution, delivery and performance of this Amendment.
(b) This Amendment has been duly executed and delivered
by such Person and constitutes such Person's legal, valid and binding
obligations, enforceable in accordance with its terms, except as such
enforceability may be subject to (i) bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer, moratorium or
similar laws affecting creditors' rights generally and (ii) general
principles of equity (regardless of whether such enforceability is
considered in a proceeding at law or in equity).
(c) No consent, approval, authorization or order of, or
filing, registration or qualification with, any court or governmental
authority or third party is required in connection with the execution,
delivery or performance by such Person of this Amendment. The
execution, delivery and performance by such Person of this Amendment
do not and will not conflict with, result in a breach of or constitute
a default under the articles of incorporation, bylaws or other
organizational documents of any Credit Party or any of its
Subsidiaries or any indenture or other material agreement or
instrument to which such Person is a party or by which any of its
properties may be bound or any Governmental Approval relating to such
Person except as could not reasonably be expected to have a Material
Adverse Effect.
6. Expenses. The Borrower agrees to pay all reasonable costs and
expenses in connection with the preparation, execution and delivery of this
Amendment, including without
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limitation the reasonable fees and expenses of Xxxxx & Xxx Xxxxx PLLC, special
counsel to the Administrative Agent.
7. Counterparts/Telecopy. This Amendment may be executed in any
number of counterparts, each of which when so executed and delivered shall be
an original, but all of which shall constitute one and the same instrument.
Delivery of executed counterparts by telecopy shall be effective as an original
and shall constitute a representation that an original will be delivered.
8. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH
CAROLINA.
9. Entirety. This Amendment and the other Loan Documents embody
the entire agreement between the parties and supersede all prior agreements and
understandings, if any, relating to the subject matter hereof. These Loan
Documents represent the final agreement between the parties and may not be
contradicted by evidence of prior, contemporaneous or subsequent oral
agreements of the parties. There are no oral agreements between the parties.
10. Acknowledgment of Guarantors. The Guarantors acknowledge and
consent to all of the terms and conditions of this Amendment and agree that
this Amendment and any documents executed in connection herewith do not operate
to reduce or discharge the Guarantors' obligations under the Credit Agreement
or the other Loan Documents.
11. Affirmation of Liens. Each Credit Party affirms the liens and
security interests created and granted by it in the Loan Documents (including,
but not limited to, the Security Agreement) and agrees that this Amendment
shall in no manner adversely affect or impair such liens and security
interests.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment, to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
BORROWER: CARAUSTAR INDUSTRIES, INC.,
a North Carolina corporation
By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President and CFO
Signature Page to Fifth Amendment to
Caraustar Industries, Inc. Credit Agreement
December 2002
GUARANTORS: AUSTELL HOLDING COMPANY, LLC,
a Georgia limited liability company
CAMDEN PAPERBOARD CORPORATION,
a New Jersey corporation
CARAUSTAR CUSTOM PACKAGING GROUP, INC.,
a Delaware corporation
CARAUSTAR CUSTOM PACKAGING GROUP (MARYLAND), INC.,
a Maryland corporation
CARAUSTAR INDUSTRIAL AND CONSUMER PRODUCTS GROUP,
INC.,
a Delaware corporation (on behalf of itself and
CICPG, LCC, a North Carolina limited liability
company, in its capacity as sole member thereof)
CARAUSTAR MILL GROUP, INC.,
an Ohio corporation f/k/a Caraustar Paperboard
Corporation (on behalf of itself and RECCMG, LCC, a
Georgia limited liability company, in
its capacity as sole member thereof)
CARAUSTAR RECOVERED FIBER GROUP, INC.,
a Delaware corporation
CHICAGO PAPERBOARD CORPORATION,
an Illinois corporation
FEDERAL TRANSPORT, INC.,
an Ohio corporation
GYPSUM MGC, INC.,
a Delaware corporation
HALIFAX PAPER BOARD COMPANY, INC.,
a North Carolina corporation
XXXXXXXXX GYPSUM COMPANY,
a Delaware corporation
XXXXXXXX GYPSUM COMPANY, LLC,
a Delaware limited liability company
PBL INC.,
a Delaware corporation
XXXXXXX PAPERBOARD, INC.,
a Connecticut corporation
By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President and Secretary
of each of the foregoing Guarantors
Signature Page to Fifth Amendment to
Caraustar Industries, Inc. Credit Agreement
December 2002
CARAUSTAR, G.P.,
a South Carolina general partnership
By: CARAUSTAR INDUSTRIES, INC.,
a North Carolina corporation, general partner
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President and Secretary
By: CARAUSTAR INDUSTRIAL AND CONSUMER PRODUCTS
GROUP, INC., a Delaware corporation, general
partner
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President and Secretary
Signature Page to Fifth Amendment to
Caraustar Industries, Inc. Credit Agreement
December 2002
ADMINISTRATIVE
AGENT: BANK OF AMERICA, N.A., in its capacity
as Administrative Agent
By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
Signature Page to Fifth Amendment to
Caraustar Industries, Inc. Credit Agreement
December 2002
LENDERS: BANK OF AMERICA, N.A.,
as an Issuing Lender and a Lender
By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
Signature Page to Fifth Amendment to
Caraustar Industries, Inc. Credit Agreement
December 2002
DEUTSCHE BANK TRUST COMPANY AMERICAS
individually as an Issuing Lender and a Lender
By: /s/ Xxxx Xx Xxxxx
-------------------------------------------------
Name: Xxxx Xx Xxxxx
Title: Assistant Vice President
Signature Page to Fifth Amendment to
Caraustar Industries, Inc. Credit Agreement
December 2002
CREDIT SUISSE FIRST BOSTON
By: /s/ Xxx Xxxxx
-------------------------------------------------
Name: Xxx Xxxxx
Title: Director
By: /s/ Xxxxxxxxx Xxxxxxx
-------------------------------------------------
Name: Xxxxxxxxx Xxxxxxx
Title: Associate
Signature Page to Fifth Amendment to
Caraustar Industries, Inc. Credit Agreement
December 2002
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ Xxxxx X. Xxxxxxxxx
-------------------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President
Signature Page to Fifth Amendment to
Caraustar Industries, Inc. Credit Agreement
December 0000
XXX XXXX XX XXX XXXX
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President
Signature Page to Fifth Amendment to
Caraustar Industries, Inc. Credit Agreement
December 2002
