EXHIBIT 10.09
SIXTH AMENDMENT TO CREDIT AGREEMENT
THIS SIXTH AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is entered
into as of March 28, 2003 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,
that certain Fourth Amendment to Credit Agreement dated as of September 23,
2002, and that certain Fifth Amendment to Credit Agreement dated as of December
27, 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 1.1 of the Credit Agreement is hereby amended by
substituting each of the following new definitions for the respective existing
definitions set forth therein:
"Aggregate Revolving Credit Commitment" means, as to all
Lenders, the aggregate Revolving Credit Commitment of all Lenders, as
such amount may be reduced or modified at any time or from time to time
pursuant to the terms hereof. The Aggregate Revolving Credit Commitment
as of the Sixth Amendment Effective Date shall be Forty-Seven Million
Dollars ($47,000,000).
"Applicable Percentage" means, for purposes of calculating (a)
the interest rate applicable to Offshore Rate Loans for purposes of
Section 4.1(a); (b) the interest rate applicable to Base Rate Loans for
purposes of Section 4.1(a); (c) the L/C Fee for purposes of Section
3.3(a); or (d) the Commitment Fee for purposes of Section 4.3, the rate
set forth below opposite the applicable Total Leverage Ratio then in
effect:
Applicable Applicable Applicable Applicable
Total Percentage for Percentage for Percentage for Percentage
Pricing Leverage Offshore Rate Base Rate Commitment for
Level Ratio Loans Loans Fee L/C Fee
---------------------------------------------------------------------------------------------------------
I < 45.0% 2.25% 1.00% 0.40% 2.25%
II < 55.0% but 2.50% 1.25% 0.50% 2.50%
=> 45.0%
III < 60.0% but 2.75% 1.50% 0.50% 2.75%
=> 55.0%
IV < 65.0% but 3.00% 1.75% 0.50% 3.00%
=> 60.0%
V => 65.0% 3.25% 2.00% 0.55% 3.25%
The Applicable Percentage shall be determined and adjusted
quarterly on the date (each a "Rate Determination Date") five (5)
Business Days after the date by which the annual or quarterly
compliance certificates, as applicable, and related financial
statements and information are required in accordance with the
provisions of Sections 7.1(a) and (b) and Section 7.2, as appropriate;
provided that in the event an annual or quarterly compliance
certificate and related financial statements and information are not
delivered timely to the Administrative Agent's Office by the date
required by Sections 7.1(a) and (b) and Section 7.2, as appropriate,
the Applicable Percentages shall be based on Pricing Level V until such
time as an appropriate compliance certificate and related financial
statements and information are delivered.
Each Applicable Percentage shall be effective from a Rate
Determination Date until the next such Rate Determination Date. The
Administrative Agent shall determine the appropriate Applicable
Percentages in the pricing matrix promptly upon receipt of the
quarterly or annual compliance certificate and related financial
information and shall promptly notify the Borrower and the Lenders of
any change thereof. Such determinations by the Administrative Agent
shall be conclusive absent manifest error. Adjustments in the
Applicable Percentages shall be effective as to existing Extensions of
Credit as well as any new Extension of Credit made thereafter.
"Asset Disposition" means the disposition of any or all of the
assets (including without limitation the Capital Stock of a Subsidiary
and accounts and notes receivable) of the Borrower or any of its
Subsidiaries whether by sale, lease, transfer or otherwise. The
2
term "Asset Disposition" shall not include (i) the sale of inventory in
the ordinary course of business, (ii) the sale or disposition of
machinery and equipment no longer used or useful in the conduct of such
Person's business, (iii) any Equity Issuance or (iv) transfers to a
Credit Party or from a Subsidiary that is not a Credit Party to another
Subsidiary that is not a Credit Party.
"L/C Commitment" means an amount equal to Forty-Three Million
Dollars ($43,000,000). The L/C Commitment is part of, and not in
addition to, the Aggregate Revolving Credit Commitment.
"Net Cash Proceeds" means the aggregate cash proceeds
received, directly or indirectly, by any Credit Party in respect of any
Asset Disposition, Equity Issuance, Debt Issuance or Involuntary
Disposition, net of (a) direct costs (including, without limitation,
legal, accounting and investment banking fees and sales commissions),
(b) taxes paid or payable as a result thereof and (c) in the case of
any Asset Disposition, the amount necessary to retire Debt secured by a
Lien permitted by Section 9.2 (ranking senior to any Lien of the
Administrative Agent) on the related Property; it being understood that
"Net Cash Proceeds" shall include, without limitation, any cash
received upon the sale or other disposition of any non-cash
consideration received, directly or indirectly, by any Credit Party in
any Asset Disposition, Equity Issuance, Debt Issuance or Involuntary
Disposition.
"Permitted Investments" means Investments which are (a) cash
or Cash Equivalents, (b) accounts receivable created, acquired or made
in the ordinary course of business and payable or dischargeable in
accordance with customary trade terms, (c) Investments in a Credit
Party, (d) Investments by a Subsidiary that is not a Credit Party in a
Subsidiary that is not a Credit Party as permitted hereunder, (e) the
Investments set forth on Schedule 9.7, (f) transactions permitted under
Section 9.6 and Section 9.8, (g) Investments consisting of Debt
permitted under Section 9.3, (h) loans and advances to employees,
officers and directors made in the ordinary course of business, (i)
deposits for utilities, security deposits, leases and similar prepaid
expenses incurred in the ordinary course of business, (j) purchases of
inventory, supplies, materials and equipment or licenses, contributions
or leases of intellectual property, in each case in the ordinary course
of business, (k) so long as, at the time such Investment is made, the
Fixed Charge Coverage Ratio as of the most recently ended fiscal
quarter for which the Administrative Agent and the Lenders have
received an Officer's Compliance Certificate pursuant to Section 7.2
(which certificate must relate to a fiscal quarter ending March 31,
2003 or later) is greater than 1.50:1.0, Investments in joint ventures
formed after the Closing Date in an amount not to exceed in the
aggregate $15,000,000 at any time outstanding, and (l) so long as, at
the time such Investment is made, the Fixed Charge Coverage Ratio as of
the most recently ended fiscal quarter for which the Administrative
Agent and the Lenders have received an Officer's Compliance Certificate
pursuant to Section 7.2 (which certificate must relate to a fiscal
quarter ending March 31, 2003 or later) is greater than 1.50:1.0, other
Investments in the same or a related line of business in an amount
(when combined with Investments in joint
3
ventures made pursuant to clause (k) above that are outstanding at the
time of determination) not to exceed in the aggregate $25,000,000 at
any time outstanding.
"Specified Maturity Date" means April 1, 2004.
(b) Section 1.1 of the Credit Agreement is further amended by
adding the following parenthetical at the end of clause (iv) of the definition
of "EBITDA" contained therein:
"(but only to the extent such non-cash charges are taken in or prior to
the first quarter of the Borrower's 2003 Fiscal Year)"
(c) Section 1.1 of the Credit Agreement is further amended by
inserting the following definitions where alphabetically appropriate:
"Application Period" means, in respect of the Net Cash
Proceeds of any Asset Disposition and/or the Excess Proceeds of any
Involuntary Disposition, the period of 270 days following receipt of
such Net Cash Proceeds by the Borrower or any Consolidated Subsidiary
(or such earlier date as provided for reinvestment of the proceeds
thereof under any of the Senior Note Indenture, the Senior Subordinated
Note Indenture, the New Senior Note Indenture or the New Senior
Subordinated Note Indenture following the receipt of such Net Cash
Proceeds by the Borrower or any Consolidated Subsidiary).
"Asset Disposition Prepayment Event" means, with respect to
any Asset Disposition, the failure of the Credit Parties to apply (or
cause to be applied) the Net Cash Proceeds of such Asset Disposition to
Eligible Reinvestments during the Application Period for such Asset
Disposition.
"Audit" has the meaning given to such term in Section 8.10
hereof.
"Borrowing Base" means, as of any day, the amount by which (a)
the sum of (i) 60% of Eligible Receivables and (ii) 30% of Eligible
Inventory, in each case as set forth in the most recent Borrowing Base
Certificate delivered to the Administrative Agent and the Lenders in
accordance with the terms of Section 7.7, exceeds (b) the sum of (i)
the maximum aggregate principal amount of the Borrower's obligations
under (A) the Standard Gypsum Guaranty (but only to the extent the
Borrower's obligations under such guaranty continue to be secured
pursuant to the Security Agreement), and (B) the Premier Boxboard
Guaranty (but only to the extent the Borrower's obligations under such
guaranty continue to be secured pursuant to the Security Agreement) and
(ii) the aggregate of the Credit Parties' obligations under all Hedging
Agreements (without taking into account any such agreement where a
Credit Party is owed money from an account party) with a Lender or an
Affiliate of a Lender. The Borrowing Base is subject to modification in
accordance with the terms of Section 8.10. For the purposes of the
foregoing calculation, the amount of any obligations under any Hedging
Agreement on any date shall be deemed to be the Hedging Agreement
Termination Value thereof as of such date.
4
"Borrowing Base Certificate" shall have the meaning assigned
to such term in Section 7.7.
"Debt Issuance" means the issuance by the Borrower or any
Consolidated Subsidiary of any Debt of the type referred to in clause
(a), (b), (l) or (m) of the definition thereof set forth in this
Section 1.01.
"Debt Issuance Prepayment Event" means the receipt by the
Borrower or any Consolidated Subsidiary of proceeds from any Debt
Issuance other than an Excluded Debt Issuance.
"Eligible Inventory" means, as of any date of determination
and without duplication, the lower of the aggregate book value (based
on a FIFO or a moving average cost valuation, consistently applied) or
fair market value of all raw materials and finished goods inventory
owned by the Borrower or any of its Subsidiaries less appropriate
reserves determined in accordance with GAAP but excluding in any event
(a) inventory which is not subject to a perfected, first priority Lien
in favor of the Administrative Agent to secure the Obligations subject
to any other Lien permitted by Section 9.2 hereof, (b) inventory which
is not in good condition or fails to meet standards for sale or use
imposed by governmental agencies, departments or divisions having
regulatory authority over such goods, (c) inventory which is not
useable or salable at prices approximating their cost in the ordinary
course of the business, (d) inventory located outside of the United
States, (e) inventory located at a location not owned by the Borrower
or any of its Subsidiaries with respect to which the Administrative
Agent shall not have received a landlord's, warehousemen's, bailee's or
appropriate waiver satisfactory to the Administrative Agent, (f)
inventory which is leased or on consignment, and (g) inventory which
fails to meet such other specifications and requirements as may from
time to time be established by the Administrative Agent in its
reasonable discretion.
"Eligible Receivables" means, as of any date of determination
and without duplication, the aggregate book value of all accounts
receivable, receivables, and obligations for payment created or arising
from the sale of inventory or the rendering of services in the ordinary
course of business (collectively, the "Receivables"), owned by or owing
to the Borrower or any of its Subsidiaries, net of allowances and
reserves for doubtful or uncollectible accounts and sales adjustments
consistent with such Person's internal policies and in any event in
accordance with GAAP, but excluding in any event (a) any Receivable
which is not subject to a perfected, first priority Lien in favor of
the Administrative Agent to secure the Obligations subject to any other
Lien permitted by Section 9.2 hereof, (b) Receivables which are more
than 60 days past due or 90 days past invoice date, (c) 50% of the book
value of any Receivable not otherwise excluded by clause (b) above but
owing from an account debtor which is the account debtor on any
existing Receivable then excluded by such clause (b), unless (1) the
exclusion by such clause (b) is a result of a legitimate dispute by the
account debtor and the applicable Receivable is no more than 90 days
past due, or (2) the applicable Receivable so excluded
5
by such clause (b) is for an amount of less than $100,000, (d)
Receivables evidenced by notes, chattel paper or other instruments,
unless such notes, chattel paper or instruments have been delivered to
and are in the possession of the Administrative Agent, (e) Receivables
owing by an account debtor which the Borrower has determined to be not
solvent or which is subject to any bankruptcy or insolvency proceeding
of any kind, (f) Receivables owing by an account debtor located outside
of the United States (unless payment for the goods shipped is secured
by an irrevocable letter of credit in a form and from an institution
acceptable to the Administrative Agent or otherwise on guaranty or
acceptance terms acceptable to the Administrative Agent), (g) to the
extent not already reflected in the face value thereof, Receivables
which are contingent or subject to offset, deduction, counterclaim,
dispute or other defense to payment, in each case to the extent of such
offset, deduction, counterclaim, dispute or other defense, (h)
Receivables for which any direct or indirect Subsidiary or any
Affiliate is the account debtor, (i) Receivables representing a sale to
the government of the United States or any agency or instrumentality
thereof unless the Federal Assignment of Claims Act has been complied
with to the satisfaction of the Administrative Agent with respect to
the granting of a security interest in such Receivable, with or other
similar applicable law and (j) Receivables which fail to meet such
other specifications and requirements as may from time to time be
established by the Administrative Agent in its reasonable discretion.
"Eligible Reinvestment" means any acquisition permitted
pursuant to Section 9.6 hereof or any other acquisition of Property
(including Capital Expenditures) permitted hereunder. The term
"Eligible Reinvestment" shall not include any item which is not a
permitted application of proceeds of an "Asset Sale" (or any comparable
term) under, and as defined in, the New Senior Note Indenture, the
Senior Note Indenture, the Senior Subordinated Note Indenture or the
New Senior Subordinated Note Indenture.
"Equity Issuance Prepayment Event" means the receipt by the
Borrower or any Consolidated Subsidiary of proceeds from any Equity
Issuance other than an Excluded Equity Issuance.
"Excess Proceeds" shall have the meaning assigned to such term
in Section 8.3.
"Excluded Debt Issuance" means any Debt Issuance permitted by
Section 9.3 (other than (i) under clauses (f) and (g) thereof and (ii)
with respect to any Debt Issuance under clause (h) thereof, the amount
of such Debt Issuance in excess of $5,000,000).
"Excluded Equity Issuance" means (a) any Equity Issuance by
the Borrower or any Consolidated Subsidiary to any Credit Party, (b)
any Equity Issuance by the Borrower to the seller of a business
acquired in an acquisition permitted by Section 9.6, (c) any Equity
Issuance by the Borrower the proceeds of which are used to finance an
acquisition permitted by Section 9.6, or (d) any Equity Issuance in
connection with stock option plans, restricted stock grants and other
employee benefit plans approved by the board of directors of the
applicable Credit Party (including any Equity Issuance upon the
exercise or conversion of options or rights granted under any such
plan); provided, however, that the term "Excluded
6
Equity Issuance" shall not include any Equity Issuance to the extent
that any portion of the proceeds of such Equity Issuance would be
required under the Senior Note Indenture, the New Senior Note
Indenture, the Senior Subordinated Note Indenture and/or the New Senior
Subordinated Note Indenture to be applied to permanently retire Debt of
the Borrower or any Consolidated Subsidiaries.
"Hedging Agreement Termination Value" means in respect of any
one or more Hedging Agreements, after taking into account the effect of
any legally enforceable netting agreement relating to such Hedging
Agreements, (a) for any date on or after the date such Hedging
Agreements have been closed out and termination value(s) determined in
accordance therewith, such termination value(s), and (b) for any date
prior to the date referenced in clause (a), the amount(s) determined as
the xxxx-to-market value(s) for such Hedging Agreements, as determined
based upon one or more mid-market or other readily available quotations
provided by any recognized dealer in such Hedging Agreements (which may
include a Lender or any Affiliate of a Lender).
"Involuntary Disposition" means any loss of, damage to or
destruction of, or any condemnation or other taking for public use of,
any Property of the Borrower or any Consolidated Subsidiary.
"Involuntary Disposition Prepayment Event" means, with respect
to any Involuntary Disposition, the failure of the Credit Parties to
apply (or cause to be applied) an amount equal to the Excess Proceeds
of such Involuntary Disposition, if any, either (a) to prepay the Loans
(and provide cash collateral in respect to the L/C Obligations) in
accordance with the terms of Section 2.3(b)(ii)(B) or (b) to make
Eligible Reinvestments (including but not limited to the repair or
replacement of the Property affected by such Involuntary Disposition)
during the Application Period for such Involuntary Disposition, subject
to the terms and conditions of Section 8.3.
"Premier Boxboard Guaranty" means that certain Guaranty
Agreement dated as of July 30, 1999 (as amended, modified, extended,
renewed or replaced from time to time) in favor of SunTrust Bank,
pursuant to which the Borrower has guaranteed 50% of the obligations of
Premier Boxboard to SunTrust Bank under the Premier Boxboard Credit
Facility.
"Sixth Amendment Effective Date" means March 28, 2003.
"Standard Gypsum Guaranty" means that certain Second Amended
and Restated Parent Guaranty dated as of August 1, 1999 in favor of
Toronto Dominion (as amended, modified, extended, renewed or replaced
from time to time), pursuant to which the Borrower has guaranteed 50%
of the obligations of Standard Gypsum to Toronto Dominion under the
Standard Gypsum Credit Facility.
"Toronto Dominion" means Toronto Dominion (Texas), Inc.
7
(d) Section 2.1(a) of the Credit Agreement is hereby amended by
deleting such section in its entirety and replacing it with the following:
"(a) Description of Facilities. Upon the terms and subject
to the conditions set forth in this Agreement, the Lenders hereby grant
to the Borrower a revolving credit facility pursuant to which each
Lender severally agrees to make Revolving Credit Loans to the Borrower
in Dollars in accordance with Section 2.2 and the Swingline Lender
agrees to make Swingline Loans to the Borrower in Dollars in accordance
with Section 2.5; provided that (i) the aggregate principal amount of
all outstanding Revolving Credit Loans (after giving effect to any
amount requested) plus the aggregate principal amount of all
outstanding Swingline Loans (after giving effect to the amount of any
Swingline Loans requested and exclusive of Swingline Loans made which
are repaid with the proceeds of, and simultaneously with the incurrence
of, Revolving Credit Loans) shall not exceed the lesser of (A) the
Aggregate Revolving Credit Commitment less the sum of all outstanding
L/C Obligations and (B) the Borrowing Base; and (ii) the aggregate
principal amount of outstanding Revolving Credit Loans made by any
Lender shall not at any time exceed such Lender's Revolving Credit
Commitment. Each Revolving Credit Loan made by a Lender shall be in a
principal amount equal to such Lender's Commitment Percentage of the
aggregate principal amount of Revolving Credit Loans requested on such
occasion."
(e) Section 2.3(b) of the Credit Agreement is hereby amended by
deleting such section in its entirety and replacing it with the following:
"(b) Mandatory Prepayment of Loans.
(i) Aggregate Revolving Credit Commitment. If at any time
the sum of the outstanding principal amount of all
Loans and all outstanding L/C Obligations exceeds the
lesser of (A) the Aggregate Revolving Credit
Commitment and (B) the Borrowing Base then in effect,
the Borrower agrees to repay immediately upon notice
from the Administrative Agent, by payment to the
Administrative Agent for the account of the Lenders,
Revolving Credit Loans or Swingline Loans and/or
furnish cash collateral reasonably satisfactory to
the Administrative Agent in connection with L/C
Obligations, as applicable in an amount sufficient to
eliminate such excess; provided, however, that the
Borrower shall not be required to furnish cash
collateral for the L/C Obligations pursuant to this
Section 2.3(b)(i) unless (and only to the extent
that) after the prepayment in full of all Loans the
aggregate amount of all outstanding L/C Obligations
exceeds the lesser of (A) the L/C Commitment and (B)
the Borrowing Base then in effect. Any such cash
collateral shall be applied in accordance with
Section 11.2(b). Any repayment of such Offshore Rate
Loans other than on the last day of the Interest
Period applicable thereto shall be accompanied by any
amount required to be paid pursuant to Section 4.9
hereof.
8
(ii) (A) Asset Dispositions. Promptly upon the occurrence
of any Asset Disposition Prepayment Event, the
Borrower shall prepay the Loans in an aggregate
amount equal to 100% of the Net Cash Proceeds of the
related Asset Disposition not applied (or caused to
be applied) by the Credit Parties during the related
Application Period to make Eligible Reinvestments as
contemplated by the terms of Section 9.5 (such
prepayment to be applied as set forth in subsection
(e) below).
(B) Involuntary Dispositions. Promptly upon the
occurrence of an Involuntary Disposition Prepayment
Event, the Borrower shall prepay the Loans in an
aggregate amount equal to 100% of the Excess Proceeds
of the related Involuntary Disposition (such
prepayment to be applied as set forth in subsection
(e) below).
(iii) Debt Issuances. Promptly upon the occurrence of a
Debt Issuance Prepayment Event, the Borrower shall
prepay the Loans in an aggregate amount equal to 100%
of the Net Cash Proceeds of the related Debt Issuance
(such prepayment to be applied as set forth in
subsection (e) below).
(iv) Equity Issuances. Promptly upon the occurrence of an
Equity Issuance Prepayment Event, the Borrower shall
prepay the Loans in an aggregate amount equal to 100%
of the Net Cash Proceeds of the related Equity
Issuance (such prepayment to be applied as set forth
in subsection (e) below)."
(f) Section 3.1 of the Credit Agreement is hereby amended by
deleting the first sentence of such section and replacing it with the following:
"Subject to the terms and conditions hereof, each Issuing
Lender, in reliance on the agreements of the other Lenders set forth in
Section 3.4(a), agrees to issue standby and/or commercial Letters of
Credit for the account of the Borrower on any Business Day from the
Closing Date through the date thirty (30) days prior to the Termination
Date in such form as may be approved from time to time by such Issuing
Lender; provided, that no Issuing Lender shall have any obligation to
issue any Letter of Credit if, after giving effect to such issuance,
(a) the L/C Obligations would exceed the L/C Commitment or (b) the sum
of (i) the aggregate principal amount of outstanding Revolving Credit
Loans, (ii) the aggregate principal amount of outstanding Swingline
Loans and (iii) the aggregate principal amount of L/C Obligations,
would exceed the lesser of (A) the Aggregate Revolving Credit
Commitment and (B) the Borrowing Base then in effect."
(g) Section 3.1 of the Credit Agreement is further amended by
adding the following sentence to the end of such section:
9
"Notwithstanding the foregoing or anything else to the contrary herein,
no Issuing Lender shall have any obligation to issue a Letter of Credit
naming (x) Toronto Dominion as beneficiary and intended to support or
replace the Borrower's guaranty obligations under the Standard Gypsum
Guaranty (or any other Letter of Credit issued in connection with
Standard Gypsum's industrial revenue bond obligations) unless Toronto
Dominion acknowledges in writing that upon its receipt of such Letter
of Credit Toronto Dominion will have no further rights or benefits
under the Security Agreement or (y) SunTrust Bank as beneficiary and
intended to support or replace the Borrower's guaranty obligations
under the Premier Boxboard Guaranty (or any other Letter of Credit to
be issued in connection with Premier Boxboard's Debt obligations)."
(h) Section 3.3 of the Credit Agreement is amended by adding the
following as a new subsections (d) and (e) thereof:
"(d) In addition to the fees described in subsections (a)
and (c) of this Section 3.3, with respect to any Letter of Credit
naming Toronto Dominion as beneficiary, the Borrower agrees to pay to
the Administrative Agent an additional upfront issuance fee equal to
0.500% multiplied by the aggregate stated amount of such Letter of
Credit, such fee being for the account of each Lender pro rata
according to such Lender's Revolving Credit Commitment as of the date
of the issuance thereof.
(e) To the extent the Aggregate Revolving Credit
Commitment remains outstanding, the Borrower shall pay to the
Administrative Agent on (i) July 1, 2003 and (ii) the first day of each
month thereafter, a fee equal to 1.00% multiplied by the Aggregate
Revolving Credit Commitment on such date, such fee being for the
account of each Lender pro rata according to such Lender's Revolving
Credit Commitment on such date."
(i) Section 5.2 of the Credit Agreement is amended by adding the
following as a new subsection (d) thereof:
"(d) On and as of the date of such Extension of Credit,
both (i) immediately prior to giving effect to the Loans to be made on
such date and/or Letters of Credit to be issued on such date and (ii)
after taking into account the proceeds from such Extension of Credit to
be received and retained by the Borrower or any of its Subsidiaries on
such date after giving effect to any payments in the ordinary course of
business to be made on such date or the next succeeding Business Day
thereafter, the amount of the Borrower's Consolidated current assets
consisting of freely available cash and Cash Equivalents is less than
$10,000,000."
(j) Section 7.1 of the Credit Agreement is amended by adding the
following language to the end of clause (i) of subsection (b) thereof:
"and that does not contain any qualification or exception
which is of a "going concern" or similar nature or any other material
qualifications or exceptions."
10
(k) Section 7.1 of the Credit Agreement is further amended by
adding the following as new subsections (d) and (e) thereto:
"(d) Monthly Financial Statements.
(i) As soon as practicable and in any event
within twenty-five (25) days after the end of each calendar
month, an unaudited Consolidated balance sheet of the Borrower
and its Subsidiaries as of the close of such calendar month
and unaudited Consolidated statements of income and cash flows
for the calendar month then ended, all in reasonable detail
setting forth in comparative form the corresponding figures
for the corresponding calendar month of (or, in the case of
the balance sheet, as of the end of) the preceding Fiscal Year
and prepared by the Borrower in accordance with GAAP and, if
applicable, containing disclosure of the effect on the
financial position or results of operations of any change in
the application of accounting principles and practices during
the period, and certified by a Responsible Officer of the
Borrower to present fairly in all material respects the
financial condition of the Borrower and its Subsidiaries as of
their respective dates and the results of operations of the
Borrower and its Subsidiaries for the respective periods then
ended, subject to normal year end adjustments and to the
absence of notes required by GAAP.
(ii) As soon as practicable and in any event
within twenty-five (25) days after the end of each calendar
month, unaudited Consolidated balance sheets of Standard
Gypsum, Premier Boxboard and each other Material Joint Venture
as of the close of such calendar month and unaudited
Consolidated statements of profit and loss for the calendar
month then ended, all in reasonable detail setting forth in
comparative form the corresponding figures for the
corresponding calendar month of (or, in the case of the
balance sheet, as of the end of) the preceding Fiscal Year and
prepared by the Borrower in accordance with GAAP and, if
applicable, containing disclosure of the effect on the
financial position or results of operations of any change in
the application of accounting principles and practices during
the period, and certified by a Responsible Officer of the
Borrower to present fairly in all material respects the
financial condition of each such joint venture as of their
respective dates and the results of operations of each such
joint venture for the respective periods then ended, subject
to normal year end adjustments and to the absence of notes
required by GAAP.
(e) Auditor's Reports. Promptly upon receipt thereof, a
copy of any other report or "management letter" submitted by
independent accountants to the Borrower or any Consolidated Subsidiary
in connection with any annual, interim or special audit of the books of
such Person.
(l) The following is added as a new Section 7.7 to the Credit
Agreement:
"SECTION 7.7 BORROWING BASE CERTIFICATE.
11
"Within twenty-five (25) days after the end of each calendar
month, a certificate as of the end of the immediately preceding month,
substantially in the form of Exhibit J and certified by an Responsible
Officer to be true and correct as of the date thereof (a "Borrowing
Base Certificate")."
(m) Section 8.3 of the Credit Agreement is amended by deleting the
last sentence of the second paragraph of such section and replacing it with the
following:
"In the event that the Borrower or any Consolidated Subsidiary
receive Net Cash Proceeds in excess of $1,000,000 in aggregate amount
during any Fiscal Year ("Excess Proceeds") on account of Involuntary
Dispositions, the Credit Parties shall, within the applicable
Application Period, apply (or cause to be applied) an amount equal to
such proceeds to (x) make Eligible Reinvestments (including but not
limited to the repair or replacement of the related Property) or (y)
prepay the Loans (including by cash collateralizing L/C Obligations) in
accordance with the terms of Section 2.3(b)(ii)(B); provided that if
the Borrower receives Excess Proceeds as a result of an Involuntary
Disposition of Collateral, and the Borrower does not otherwise apply
such proceeds to make Eligible Reinvestments, the Borrower shall apply
an amount equal to the amount of such proceeds received in respect of
such Collateral to prepay the Secured Obligations (as defined in the
Security Agreement) (including by cash collateralizing letters of
credit (but only after all outstanding loans under the same facility
have been prepaid) or guaranty obligations) on a pro rata basis.
Pending final application of any Excess Proceeds, the Credit Parties
may apply such Excess Proceeds to temporarily reduce the Revolving
Credit Loans or to make Investments in Cash Equivalents."
(n) Section 8.10 of the Credit Agreement is amended by adding the
following sentences to the end of such section:
"Without limiting the generality of the foregoing, the Credit
Parties shall cooperate with the Administrative Agent and its
representatives and/or subcontractors in the completion by June 30,
2003, at the Credit Parties' expense, of a field examination of the
accounts receivable and inventory of the Credit Parties (the "Audit").
The parties acknowledge and agree that the Borrowing Base will be
subject to modification after the Sixth Amendment Effective Date based
upon the results of the Audit, and that the Borrowing Base shall
automatically and immediately be adjusted based upon the results
thereof (and the Borrowing Base Certificate shall be adjusted
accordingly)."
(o) Section 9.1 of the Credit Agreement is hereby amended by
deleting such section in its entirety and replacing it with the following:
"SECTION 9.1 FINANCIAL COVENANTS.
12
(a) Maximum Total Leverage Ratio. As of the end of each
fiscal quarter, commencing with the end of the fiscal quarter ending
March 31, 2003, the Credit Parties will not permit the Total Leverage
Ratio to be greater than or equal to:
Period Ratio
------ -----
fiscal quarter ending March 31, 2003 70.0%
fiscal quarter ending June 30, 2003 70.0%
fiscal quarter ending September 30, 2003 70.0%
fiscal quarter ending December 31, 2003 70.0%
fiscal quarter ending March 31, 2004 and each 67.5%
fiscal quarter ending thereafter
(b) Minimum Fixed Charge Coverage Ratio. As of the end of
each fiscal quarter, commencing with the end of the fiscal quarter
ending March 31, 2003, the Credit Parties will not permit the Fixed
Charge Coverage Ratio to be less than:
Period Ratio
------ -----
fiscal quarter ending March 31, 2003 0.95:1.0
fiscal quarter ending June 30, 2003 0.85:1.0
fiscal quarter ending September 30, 2003 0.85:1.0
fiscal quarter ending December 31, 2003 1.05:1.0
fiscal quarter ending March 31, 2004 and each 1.50:1.0
fiscal quarter thereafter
(c) Minimum Tangible Net Worth. At all times on and after
March 31, 2003, the Credit Parties will not permit Tangible Net Worth
to be less than $65,000,000 plus, as of the end of each fiscal quarter,
commencing with the end of the fiscal quarter ending June 30, 2003, (i)
50% of Net Income (to the extent positive) for the fiscal quarter then
ended, such increases to be cumulative, and (ii) 100% of the Net Cash
Proceeds of Equity Issuances during the fiscal quarter then ended, such
increases to be cumulative.
(d) Maximum Capital Expenditures. Capital Expenditures in
any Fiscal Year shall not exceed the amount set forth below with
respect to such Fiscal Year:
Fiscal Year Amount
----------- ------
Fiscal Year ending December 31, 2003 $30,000,000
Fiscal Year ending December 31, 2004 $30,000,000
Fiscal Year ending December 31, 2005 $30,000,000
13
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, (I) with respect to the charges
referenced in the foregoing clause (a), shall not exceed $30,000,000
(calculated on an after-tax basis) and (II) 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."
(p) Section 9.3(c) is hereby amended by deleting such section in
its entirety and replacing it with the following:
"(c) Capital Lease obligations and Debt incurred, in each
case, to provide all or a portion of the purchase price or costs of
construction of an asset or, in the case of a Sale and Leaseback
Transaction, to finance the value of such asset owned by the Borrower
or any of its Subsidiaries, provided that (i) such Debt when incurred
shall not exceed the purchase price or cost of construction of such
asset or, in the case of a Sale and Leaseback Transaction, the fair
market value of such asset, (ii) no such Debt shall be refinanced for a
principal amount in excess of the principal balance outstanding thereon
at the time of such refinancing, (iii) the aggregate amount of all such
Debt shall not exceed $15,000,000 at any time outstanding, and (iv)
after giving effect to any such Debt on a pro forma basis, the Fixed
Charge Coverage Ratio as of the most recently ended fiscal quarter for
which the Administrative Agent and the Lenders have received an
Officer's Compliance Certificate pursuant to Section 7.2 (which
certificate must relate to a fiscal quarter ending March 31, 2003 or
later) is greater than 1.50:1.0;"
(q) Section 9.3(h) is hereby amended by deleting such section and
replacing it with the following:
14
"(h) other unsecured Debt of the Borrower and its
Subsidiaries which may be incurred in accordance with the terms of the
Senior Subordinated Note Indenture and which does not exceed
$15,000,000 in the aggregate at any time outstanding; provided, that
after giving effect to any such Debt on a pro forma basis, the Fixed
Charge Coverage Ratio as of the most recently ended fiscal quarter for
which the Administrative Agent and the Lenders have received an
Officer's Compliance Certificate pursuant to Section 7.2 (which
certificate must relate to a fiscal quarter ending March 31, 2003 or
later) is greater than 1.50:1.0; and"
(r) Section 9.5 of the Credit Agreement is amended by deleting
such section in its entirety and replacing it with the following:
"SECTION 9.5 LIMITATIONS ON ASSET DISPOSITIONS.
No Credit Party will, nor will it permit any of its
Subsidiaries to, make any Asset Disposition (including, without
limitation, in connection with any Sale and Leaseback Transaction), in
one transaction or a series of transactions, except (a) Sale Leaseback
Transactions permitted by the terms of Section 9.12, (b) so long as (i)
no Default or Event of Default shall exist on the date of, or shall
result from, any such transaction (including after giving effect to
such transaction on a pro forma basis) and (ii) such transaction is
permitted under the Senior Subordinated Note Indenture, Permitted Asset
Dispositions, and (c) so long as (i) no Default or Event of Default
shall exist on the date of, or shall result from, any such transaction
(including after giving effect to such transaction on a pro forma
basis), (ii) such transaction is permitted under the Senior
Subordinated Note Indenture, and (iii) such transaction is permitted
under Section 9.15 (if applicable), other Asset Dispositions; provided
that (x) the aggregate amount of all such Asset Dispositions (other
than the Permitted Asset Dispositions) does not exceed (A) in any
Fiscal Year, five percent (5%) of Total Assets (measured as of the last
day of the immediately preceding Fiscal Year) or (B) during the term of
this Agreement, fifteen percent (15%) of Total Assets (measured as of
December 31, 2000), and (y) the Credit Parties shall within the
Application Period, apply (or cause to be applied) an amount equal to
the Net Cash Proceeds of any such Asset Disposition to (I) make
Eligible Reinvestments or (II) prepay the Loans (and provide cash
collateral in respect of the L/C Obligations) in accordance with the
terms of Section 2.3(b)(ii)(A); provided that if such Asset Disposition
includes any Collateral, and the Borrower does not otherwise apply such
proceeds to make Eligible Reinvestments, the Borrower shall apply an
amount equal to the amount of such proceeds received in respect of such
Collateral to prepay the Secured Obligations (as defined in the
Security Agreement) (including by cash collateralizing letters of
credit (but only after all outstanding loans under the same facility
have been prepaid) or guaranty obligations) on a pro rata basis. Upon a
sale of assets permitted by this Section 9.5 and the Security
Agreement, the Administrative Agent shall (to the extent applicable)
deliver to the Credit Parties, upon the Credit Parties' request and at
the Credit Parties' expense, such documentation as is reasonably
necessary to evidence the release of the Administrative Agent's
security interest, if any, in such assets, including, without
limitation, amendments or terminations of UCC financing statements, if
any, and the release of such
15
Credit Party from all of its obligations, if any, under the Loan
Documents. Pending final application of the Net Cash Proceeds of any
Asset Disposition, the Borrower or any Consolidated Subsidiary may
apply such Net Cash Proceeds to temporarily reduce the Revolving Credit
Loans or to make investments in Cash Equivalents."
(s) Section 9.6 of the Credit Agreement is hereby amended by
deleting such section in its entirety and replacing it with the following:
"SECTION 9.6 LIMITATIONS ON ACQUISITIONS.
Other than transactions permitted under Section 9.7 (other
than those permitted pursuant to clause (f) of the definition of
Permitted Investments as it relates to Section 9.6), no Credit Party
will, nor will it permit any of its Subsidiaries to, acquire all or any
portion of the Capital Stock or other ownership interest in any Person
which is not a Subsidiary or all or any substantial portion of the
assets, property and/or operations of a Person which is not a
Subsidiary, unless (i) the Person, assets, property and/or operations
being acquired engage in or are engaged in the same line of business as
that engaged in by the Borrower and its Subsidiaries on the Closing
Date or a business reasonably related thereto, (ii) in the case of an
acquisition of Capital Stock or other ownership interest of a Person,
the Board of Directors of the Person which is the subject of such
acquisition shall have approved the acquisition, (iii) no Default or
Event of Default shall exist on the date of, or shall result from, any
such acquisition (including after giving effect to such transaction on
a pro forma basis), (iv) the aggregate cash consideration for each such
acquisition does not exceed $25,000,000 and the aggregate consideration
(cash and noncash) for all such acquisitions consummated in any
twelve-month period does not exceed $50,000,000, and (v) after giving
effect to any such acquisition on a pro forma basis, the Fixed Charge
Coverage Ratio as of the most recently ended fiscal quarter for which
the Administrative Agent and the Lenders have received an Officer's
Compliance Certificate pursuant to Section 7.2 (which certificate must
relate to a fiscal quarter ending March 31, 2003 or later) is greater
than 1.50:1.0, as certified by a Responsible Officer in a certificate
demonstrating such pro forma compliance."
(t) Section 9.8 of the Credit Agreement is hereby amended by
deleting such section in its entirety and replacing it with the following:
"SECTION 9.8 LIMITATION ON RESTRICTED PAYMENTS.
No Credit Party will, nor will it permit any of its
Subsidiaries to, directly or indirectly, declare, order, make or set
apart any sum for or pay any Restricted Payment."
(u) Section 9.13 of the Credit Agreement is amended by deleting
such section in its entirety and replacing it with the following:
SECTION 9.13 LIMITATION ON ACTIONS WITH RESPECT TO OTHER
DEBT.
16
"No Credit Party will, nor will it permit any of its
Subsidiaries to:
(a) if any Default or Event of Default has
occurred and is continuing or would be directly or indirectly
caused as a result thereof, after the issuance thereof (i)
amend or modify any of the terms of any Debt of such Person
(other than Debt arising under the Loan Documents) if such
amendment or modification would add or change any terms in a
manner adverse to such Person or to the Lenders, or (ii)
shorten the final maturity or average life to maturity thereof
or require any payment thereon to be made sooner than
originally scheduled or increase the interest rate applicable
thereto, or (iii) unless the Fixed Charge Coverage Ratio as of
the most recently ended fiscal quarter for which the
Administrative Agent and the Lenders have received an
Officer's Compliance Certificate pursuant to Section 7.2
(which certificate must relate to a fiscal quarter ending
March 31, 2003 or later) is greater than 1.50:1.0, make (or
give any notice with respect thereto) any voluntary or
optional payment or prepayment thereof, or make (or give any
notice with respect thereto) any redemption or acquisition for
value or defeasance (including without limitation, by way of
depositing money or securities with the trustee with respect
thereto before due for the purpose of paying when due),
refund, refinance or exchange with respect thereto;
(b) after the issuance thereof, amend or modify
any of the terms of any Subordinated Debt of such Person if
such amendment or modification would (i) add or change any
terms in a manner adverse to such Person or to the Lenders,
(ii) shorten the final maturity or average life to maturity
thereof, (iii) require any payment thereon to be made sooner
than originally scheduled, (iv) increase the interest rate
applicable thereto or (v) change any subordination provision
thereof in a manner adverse to the Lenders;
(c) make interest payments in respect of any
Subordinated Debt in violation of the applicable subordination
provisions;
(d) make (or give any notice with respect
thereto) any voluntary or optional payment or prepayment in
respect of any Subordinated Debt;
(e) make (or give any notice with respect
thereto) any redemption, acquisition for value or defeasance
(including without limitation, by way of depositing money or
securities with the trustee with respect thereto before due
for the purpose of paying when due), refund, refinance or
exchange of any Subordinated Debt; or
(f) designate any other Debt of such Person as
"Designated Senior Debt" (as such term is used in the Senior
Subordinated Note Indenture) other than Debt designated as
"Designated Senior Debt" as of the Closing Date and identified
as such on Schedule 9.3.
17
Notwithstanding the foregoing, but subject to the following proviso,
the Borrower may acquire (and thereafter retire or redeem) up to
$30,000,000 in aggregate principal amount of the Senior Subordinated
Notes so long as no Default or Event of Default shall exist on the date
of, or shall result from, any such transaction (including after giving
effect to such transaction on a pro forma basis); provided, however,
the foregoing provision shall not be effective and the Borrower shall
not be permitted to acquire Senior Subordinated Notes in reliance
thereon until the first date after the Sixth Amendment Effective Date
(the "Liquidity Restoration Date") on which (A) the aggregate
outstanding principal amount of the Revolving Credit Loans equals
$0.00, (B) the Borrower's unaudited Consolidated balance sheet shows a
balance for cash and Cash Equivalents of not less than $50,000,000
(which balance sheet shall be certified by a Responsible Officer of the
Borrower, shall have been delivered to the Administrative Agent and
shall be in form and substance reasonably satisfactory to the
Administrative Agent), and (C) the Fixed Charge Coverage Ratio as of
the most recently ended fiscal quarter for which the Administrative
Agent and the Lenders have received an Officer's Compliance Certificate
pursuant to Section 7.2 (which certificate must relate to a fiscal
quarter ending March 31, 2003 or later) is greater than 1.50:1.0. Upon
the occurrence of the Liquidity Restoration Date, such provision shall
be effective automatically and without the necessity of any further
action on the part of any party hereto.
Notwithstanding the foregoing, the Credit Parties may amend the terms
of the Premier Boxboard Guaranty and/or the Premier Boxboard Credit
Facility in order to shorten the final maturity thereof; provided that
such final maturity shall not occur in either case prior to January 5,
2004.
(v) Schedule 1.1(a) is hereby amended by deleting such schedule in
its entirety and replacing it with Schedule 1.1(a) attached hereto.
(w) Each of Exhibit B-1 and Exhibit B-2 to the Credit Agreement is
hereby amended by adding the following as a new paragraph 7 to each such
exhibit:
"7. As of the date set forth in paragraph 2 above, (i) prior
to giving effect to the Loan(s) requested by the Borrower pursuant to
paragraph 1 above, the amount of the Borrower's Consolidated current
assets consisting of freely available cash and Cash Equivalents is
$________________ , and (ii) after taking into account the proceeds
from such Extension of Credit to be received and retained by the
Borrower or any of its Subsidiaries on such date after giving effect to
any payments in the ordinary course of business to be made on such date
or the next succeeding Business Day thereafter, the amount of the
Borrower's Consolidated current assets consisting of freely available
cash and Cash Equivalents is $_____________."
(x) A new Exhibit J in the form of Exhibit J attached hereto is
hereby added to the Credit Agreement immediately following Exhibit I thereof.
18
2. Amendment to Security Agreement. The Security Agreement shall
be amended substantially in the form of the First Amendment to Security
Agreement to be dated as of the Sixth Amendment Effective Date, a copy of which
is attached as Annex I hereto. The Required Lenders hereby consent to such
amendment.
3. Conditions Precedent to Effectiveness. The amendments to the
Credit Agreement set forth herein shall be deemed effective as of March 28, 2003
(the "Sixth Amendment Effective Date") when (and only when) each of the
following conditions precedent has been satisfied:
(a) Amendment. The Administrative Agent shall have
received from the Credit Parties and the Required Lenders duly executed
counterparts of this Amendment.
(b) Amendment Fee. The Administrative Agent shall have
received from the Borrower an amendment fee equal to 0.375% 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 Sixth 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 Thursday, March 27, 2003, as directed by the Administrative Agent.
(c) Out of Pocket Costs. The Borrower shall have paid any
and all out-of-pocket costs (to the extent invoiced) incurred by the
Administrative Agent (including the reasonable fees and expenses of the
Administrative Agent's legal counsel), and fees and other amounts
payable to the Administrative Agent, in each case in connection with
the arrangement, negotiation, preparation, execution and delivery of
this Amendment.
(d) Accuracy of Representations and Warranties. The
representations and warranties contained in Sections 4 and 6 of this
Amendment shall be true and correct in all material respects on and as
of the Sixth Amendment Effective Date with the same effect as if made
on and as of such date.
(e) Borrowing Base Report. Receipt by the Administrative
Agent of a Borrowing Base Certificate as of February 28, 2003
substantially in the form of Exhibit J to the Credit Agreement and
certified by a Responsible Officer to be true and correct as of
February 28, 2003.
(f) Guaranty Amendments. The Administrative Agent shall
have received evidence satisfactory to it that the Borrower shall have
obtained amendments to its guaranties in connection with the Premier
Boxboard Credit Facility and the Standard Gypsum Credit Facility that
conform to the applicable terms of this Agreement, including, without
limitation, modification or elimination of financial covenants so that
such provisions are not more restrictive than those contained in the
Credit Agreement.
19
(g) Amendment to Security Agreement. The Administrative
Agent shall have received from the Credit Parties duly executed
counterparts of an amendment to the Security Agreement in form and
substance satisfactory to the Administrative Agent providing for, among
other things, a springing Lien on the Borrower's owned machinery and
equipment that will attach on July 1, 2003.
4. 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 Sixth 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.
5. 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.
6. 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
20
bound or any Governmental Approval relating to such Person except as
could not reasonably be expected to have a Material Adverse Effect.
7. Expenses. The Borrower agrees to pay all reasonable costs and
expenses in connection with the preparation, execution and delivery of this
Amendment, including without limitation the reasonable fees and expenses of
Xxxxx & Xxx Xxxxx PLLC, special counsel to the Administrative Agent.
8. 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.
9. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH
CAROLINA.
10. 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.
11. 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.
12. 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.
21
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 Chief Financial Officer
Signature Page to Sixth Amendment to
Caraustar Industries, Inc. Credit Agreement
March 2003
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
CARAUSTAR MILL GROUP, INC.,
an Ohio corporation f/k/a Caraustar Paperboard Corporation
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 Chief Financial Officer
of each of the foregoing Guarantors
Signature Page to Sixth Amendment to
Caraustar Industries, Inc. Credit Agreement
March 2003
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 Chief Financial Officer
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 Chief Financial Officer
RECCMG, LLC,
a Georgia limited liability company
PARADIGM CHEMICAL & CONSULTING, LLC,
a Georgia limited liability company
By: CARAUSTAR MILL GROUP, INC.,
an Ohio corporation f/k/a Caraustar Paperboard
Corporation, sole member of each of the foregoing
Guarantors
By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President and Chief Financial Officer
CICPG, LLC,
a North Carolina limited liability company
By: CARAUSTAR INDUSTRIAL AND CONSUMER PRODUCTS GROUP, INC.,
a Delaware corporation, sole member
By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President and Chief Financial Officer
Signature Page to Sixth Amendment to
Caraustar Industries, Inc. Credit Agreement
March 2003
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 Sixth Amendment to
Caraustar Industries, Inc. Credit Agreement
March 2003
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 Sixth Amendment to
Caraustar Industries, Inc. Credit Agreement
March 2003
DEUTSCHE BANK TRUST COMPANY AMERICAS
individually as an Issuing Lender and a Lender
By: /s/ Xxxxx Xxxxxxx
-------------------------------------------------
Name: XXXXX XXXXXXX
-----------------------------------------------
Title: DIRECTOR
----------------------------------------------
Signature Page to Sixth Amendment to
Caraustar Industries, Inc. Credit Agreement
March 2003
CREDIT SUISSE FIRST BOSTON
By: /s/ Xxxxx X. Xxxxx
-------------------------------------------------
Name: XXXXX X. XXXXX
-----------------------------------------------
Title: DIRECTOR
----------------------------------------------
By: /s/ Xxx X. Xxxxxx
-------------------------------------------------
Name: XXX X. XXXXXX
-----------------------------------------------
Title: ASSOCIATE
----------------------------------------------
Signature Page to Sixth Amendment to
Caraustar Industries, Inc. Credit Agreement
March 2003
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ Xxx Xxxxx
-------------------------------------------------
Name: Xxx Xxxxx
-----------------------------------------------
Title: Vice President
----------------------------------------------
Signature Page to Sixth Amendment to
Caraustar Industries, Inc. Credit Agreement
March 0000
XXX XXXX XX XXX XXXX
By: /s/ Xxxxxxxx X. Xxxxxxx
-------------------------------------------------
Name: Xxxxxxxx X. Xxxxxxx
-----------------------------------------------
Title: Senior Vice President
----------------------------------------------
Signature Page to Sixth Amendment to
Caraustar Industries, Inc. Credit Agreement
March 2003
SCHEDULE 1.1(A)
REVOLVING CREDIT COMMITMENTS
REVOLVING CREDIT
LENDER COMMITMENT COMMITMENT PERCENTAGE
------ ---------------- ---------------------
Bank of America, N.A. $10,026,667 21.00000000%
Deutsche Bank Trust Company Americas $10,026,667 21.33333333%
Credit Suisse First Boston $10,026,667 21.33333333%
Credit Lyonnais New York Branch $10,026,667 21.00000000%
The Bank of New York $ 6,893,332 14.66666667%
----------- ------------
Total $47,000,000 100.00000000%
=========== ============
EXHIBIT J
FORM OF
BORROWING BASE CERTIFICATE
For the calendar month ended _______________, 20__.
I, ______________________, [TITLE] of Caraustar Industries, Inc. (the
"Borrower") hereby certify that, to the best of my knowledge and belief, with
respect to that certain Credit Agreement dated as of March 29, 2001 (as amended,
modified, restated or supplemented from time to time, the "Credit Agreement";
all of the defined terms in the Credit Agreement are incorporated herein by
reference) among the Borrower, the Guarantors, the Lenders and Bank of America,
N.A., as Administrative Agent:
RECEIVABLES
1. Receivables (as defined in the definition of Eligible Receivables in
Section 1.1 of the Credit Agreement) $_____________
2. (i) Receivables of the Borrower subject to any Lien, other than
a Lien permitted by Section 9.2 of the Credit Agreement. $_____________
(ii) Receivables of the Borrower which are more than 90 days from the
date of invoice (net of reserves for bad debts in connection with any
such Receivables of the Borrower) $_____________
(iii) 50% of the book value of any Receivable of the Borrower not
otherwise excluded by clause (ii) above but owing from an account
debtor which is the account debtor on any existing Receivable of the
Borrower then excluded by such clause (ii) (unless (A) the exclusion by
such clause (ii) is a result of a legitimate dispute by the account
debtor and the applicable Receivable of the Borrower
is no more than 90 days past due or (B) the applicable Receivable so
excluded by such clause (ii) is for an amount of less than $100,000) $_____________
(iv) Receivables of the Borrower evidenced by notes, chattel paper or
other instruments (unless such notes, chattel paper or instruments have
been delivered to and are in the possession of the Agent) $_____________
(v) Receivables of the Borrower owing by an account debtor which the
Borrower has determined to be not solvent or is subject to
any bankruptcy or insolvency proceeding of any kind $_____________
(vi) Receivables of the Borrower owing by an account debtor located
outside of the United States (unless payment for the goods shipped is
secured by an irrevocable letter of credit in a form and from an
institution acceptable to the Administrative Agent or otherwise on
guaranty or acceptance terms acceptable to the Administrative Agent) $_____________
(vii) To the extent not already reflected in the calculation of the
face amount thereof, Receivables of the Borrower which are contingent
or subject to offset, deduction, counterclaim, dispute or other defense
to payment, in each case to the extent of such offset, deduction,
counterclaim, dispute or other defense $_____________
(viii) Receivables of the Borrower for which any direct or indirect Subsidiary
of the Borrower or any Affiliate of the Borrower is the account debtor $_____________
(ix) Receivables of the Borrower representing a sale to the government of
the United States or any agency or instrumentality thereof (unless the
Borrower has complied (to the satisfaction of the Administrative Agent)
with the Federal Assignment of Claims Act or other similar applicable
law with respect to the Administrative Agent's security interest in
such Receivable) $_____________
(x) Receivables of the Borrower which fail to meet such other specifications
as have been established by the Administrative Agent $_____________
(xi) Sum of lines (i) through (x) $_____________
3. Eligible Receivables
(Line 1 less Line 2(xi)) $_____________
4. Eligible Receivables Borrowing
Base (60% of Eligible Receivables) $_____________
INVENTORY
5. Inventory (the lower of the aggregate book value (based on a FIFO or a
moving average cost valuation, consistently applied) or fair market
value of all raw materials, work in process and finished goods
inventory owned by the Borrower less appropriate reserves
determined in accordance with GAAP) $_____________
6. (i) Inventory subject to any Lien, other than any Lien permitted by
Section 9.2 of the Credit Agreement $_____________
(ii) Inventory which is not in good condition or fails to meet
standards for sale or use imposed by governmental agencies, departments
or divisions having regulatory authority over such goods $_____________
(iii) Inventory which is not useable or salable at prices approximating
their cost in the ordinary course of the Borrower's business (including
without duplication the amount of any reserves for obsolescence,
unsalability or decline in value) $_____________
(iv) Inventory located outside of the United States $_____________
(v) Inventory located at a location leased by the Borrower with respect
to which the Administrative Agent shall not have received a landlord's
waiver satisfactory to the Administrative Agent $_____________
(vi) Inventory which is leased or on consignment $_____________
(vii) Inventory which fails to meet such other specifications as have
been established by the Agent $_____________
(viii) Sum of lines (i) through (vii) $_____________
7. Eligible Inventory
(Line 6 less Line 7(viii)) $_____________
8. Eligible Inventory Borrowing Base (30% of Eligible Inventory) $_____________
BORROWING BASE
9. Sum of (a) the maximum aggregate principal amount of the
Borrower's obligations under (i) the Standard Gypsum
Guaranty (but only to the extent the Borrower's obligations
under such guaranty continue to be secured pursuant to the Security
Agreement), and (ii) the Premier Boxboard Guaranty (but only to the
extent the Borrower's obligations under such guaranty continue to be
secured pursuant to the Security Agreement)
and (b) the aggregate of the Credit Parties' obligations under all Hedging
Agreements (without taking into account any such agreement where a Credit
Party is owed money from an account party) with a Lender or any Affiliate of a
Lender. For the purposes of the foregoing calculation, the amount of
any obligations under any Hedging Agreement on any date shall be deemed
to be the Hedging Agreement Termination Value thereof as of such date $_____________
10. Total Borrowing Base availability
((Line 4 plus Line 8) minus Line 9) $_____________
11. Aggregate Revolving Credit Commitment $_____________
12. Aggregate Outstanding Revolving Credit Loans
and L/C Obligations under the Credit
Agreement $_____________
13. If Line #10 is greater than Line #11, then the difference
between Line #11 and Line #12 ($__________________________________________________________________________)
is available for Extensions of Credit; If Line #10 is less than Line #11,
then the difference between Line #10 and Line #12 ($______________________________________________________)
is available for Extensions of Credit. If Line #12 is greater than Line #10,
then the Borrower shall prepay or otherwise reduce so much of
the outstanding Revolving Credit Loans and L/C Obligations as shall be necessary to
eliminate such excess ($_________).
With reference to this Borrowing Base certificate, I hereby certify
that the above statements are true and correct.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this _____ day
of ______________, 20___.
CARAUSTAR INDUSTRIES, INC.
By:
Name:
Title:
