Exhibit 10.3.1
EXECUTION COPY
SECOND AMENDMENT
SECOND AMENDMENT, dated as of June 6, 2002 (this "Amendment"), to the
Credit Agreement, dated as of November 8, 2001 (as amended from time to time,
the "Credit Agreement"), among Paperweight Development Corp., a Wisconsin
corporation ("Holdings"), Appleton Papers Inc., a Delaware corporation (the
"Borrower"), the several banks and other financial institutions or entities from
time to time parties to the Credit Agreement (the "Lenders"), Bear, Xxxxxxx &
Co. Inc., as sole lead arranger and sole bookrunner (in such capacity, the "Lead
Arranger"), Bear Xxxxxxx Corporate Lending Inc., as syndication agent (in such
capacity, the "Syndication Agent"), U.S. Bank, N.A. and LaSalle Bank National
Association, each as documentation agent (in such capacity, the "Documentation
Agents"), M&I Xxxxxxxx & Xxxxxx Bank, as managing agent (in such capacity, the
"Managing Agent"), Associated Bank, N.A., as co-agent (in such capacity, the
"Co-Agent"), and Toronto Dominion (Texas), Inc., as administrative agent (in
such capacity, the "Administrative Agent"; together with the Syndication Agent,
the Documentation Agents, the Managing Agent, and the Co-Agent, the "Agents").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, pursuant to the Credit Agreement, the Lenders have agreed to make,
and have made, certain loans and other extensions of credit to the Borrower;
WHEREAS, Holdings and the Borrower have requested certain amendments to the
Credit Agreement as more fully set forth herein; and
WHEREAS, the Lenders have agreed to such amendments but only on the terms
and conditions contained in this Amendment.
NOW, THEREFORE, the parties hereto hereby agree as follows:
SECTION 1. Defined Terms. Unless otherwise defined herein, terms defined in
the Credit Agreement and used herein shall have the meanings given to them in
the Credit Agreement.
SECTION 2. Amendments to Subsection 1.1. (a) The definitions of "Applicable
Margin", "Commitment", "Facility", "Term Lenders" and "Term Loans" contained in
Section 1.1 of the Credit Agreement are hereby amended in their respective
entireties to read as follows:
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"Applicable Margin": for each Type of Loan, the rate per annum
set forth under the relevant column heading below:
Base Rate Loans Eurodollar Loans
--------------- ----------------
Revolving Loans and 2.50% 3.50%
Swingline Loans
Tranche A Term Loans 2.50% 3.50%
Tranche C Term Loans 2.25% 3.25%
; provided, that, on and after the first Adjustment Date (as defined
in the Pricing Grid) occurring after the date which is six months
after the Closing Date, the Applicable Margin with respect to
Revolving Loans, Swingline Loans and Tranche A Term Loans will be
determined pursuant to the Pricing Grid. Notwithstanding the
foregoing or anything set forth in the Pricing Grid, at any time upon
the occurrence and during the continuation of an Event of Default, the
Applicable Margin for each Type of Loan shall be the highest rate set
forth in the Pricing Grid for such Type of Loan.
"Commitment": as to any Lender, the sum of the Tranche A Term
Commitment, the Tranche C Term Commitment and the Revolving Commitment
of such Lender.
"Facility": each of (a) the Tranche A Term Commitments and the
Tranche A Term Loans made thereunder (the "Tranche A Term Facility"),
(b) the Tranche C Term Commitments and the Tranche C Term Loans made
thereunder (the "Tranche C Term Facility") and (c) the Revolving
Commitments and the extensions of credit made thereunder (the
"Revolving Facility").
"Term Lenders": the collective reference to the Tranche A Term
Lenders and the Tranche C Term Lenders.
"Term Loans": the collective reference to the Tranche A Term
Loans and the Tranche C Term Loans.
(b) The definition of "Eurodollar Base Rate" in Section 1.1 of the
Credit Agreement is hereby amended by deleting in its entirety the proviso at
the end thereof.
(c) The definition of "Interest Period" in Section 1.1 of the Credit
Agreement is hereby amended by replacing the words "Tranche B" therein with the
words "Tranche C".
(d) Section 1.1 of the Credit Agreement is hereby amended by inserting
the following new definitions in the appropriate alphabetical order:
"Mandatory Prepayment Date": as defined in Section 4.2(e).
"Prepayment Option Notice": as defined in Section 4.2(e).
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"Second Amendment": the Second Amendment, dated as of June [__], 2002,
to this Agreement.
"Tranche C Closing Date": The Second Amendment Effective Date as
defined in Section 14 of the Second Amendment, which date is June 6, 2002.
"Tranche C Prepayment Amount": as defined in Section 4.2(e).
"Tranche C Term Commitment": as to any Lender, the obligation of such
Lender, if any, to make a Tranche C Term Loan to the Borrower hereunder on
the Tranche C Closing Date in a principal amount equal to the amount set
forth under the heading "Tranche C Term Commitment" opposite such Lender's
name on Schedule 1.1A. The original aggregate amount of the Tranche C Term
Commitments is $112,374,675.
"Tranche C Term Lender": each Lender that has a Tranche C Term
Commitment or that holds a Tranche C Term Loan.
"Tranche C Term Loan": as defined in Section 2.1.
"Tranche C Term Percentage": as to any Tranche C Term Lender at any
time, the percentage which such Lender's Tranche C Term Commitment then
constitutes of the aggregate Tranche C Term Commitments (or, at any time
after the Tranche C Closing Date, the percentage which the aggregate
principal amount of such Lender's Tranche C Term Loans then outstanding
constitutes of the aggregate principal amount of the Tranche C Term Loans
then outstanding).
SECTION 3. Amendment to Section 2.1. Section 2.1 of the Credit Agreement is
hereby amended by (a) deleting the word "and" at the end of clause (a) in the
first sentence thereof and substituting "," in lieu thereof and (b) adding the
following language immediately after clause (b) thereof:
and (c) each Tranche C Term Lender severally agrees to make a term loan (a
"Tranche C Term Loan") to the Borrower on the Tranche C Closing Date in an
amount equal to the Tranche C Term Commitment of such Lender.
SECTION 4. Amendments to Section 2.3. Section 2.3 of the Credit Agreement
is hereby amended by adding a new paragraph (c), as follows:
(c) The Tranche C Term Loan of each Tranche C Term Lender shall mature
in 18 consecutive quarterly installments, commencing on June 30, 2002 each
of which shall be in an amount equal to such Lender's Tranche C Term
Percentage multiplied by the amount set forth below opposite such
installment:
Installment Date Principal Amount
June 30, 2002 $281,750
September 30,2002 $281,750
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Installment Date Principal Amount
December 31, 2002 $281,750
March 31, 2003 $281,750
June 30, 2003 $281,750
September 30, 2003 $281,750
December 31, 2003 $281,750
March 31, 2004 $281,750
June 30, 2004 $281,750
September 30, 2004 $281,750
December 31, 2004 $281,750
March 31, 2005 $281,750
June 30, 2005 $281,750
September 30, 2005 $281,750
December 31, 2005 $281,750
March 31, 2006 $281,750
June 30, 2006 $281,750
November 8, 2006 $107,584,925
SECTION 5. Amendment to Section 4.2(e). Section 4.2(e) of the Credit
Agreement is hereby amended in its entirety to read as follows:
(e) Notwithstanding anything to the contrary in Section 4.2(d) or
Section 4.8, with respect to 50% of the amount of any mandatory prepayment
described in Section 4.2 that is allocated to Tranche C Term Loans (such
amounts, the "Tranche C Prepayment Amount"), at any time when Tranche A
Term Loans remain outstanding, the Borrower will, in lieu of applying such
amount to the prepayment of Tranche C Term Loans, as provided in paragraph
(d) above, on the date specified in Section 4.2 for such prepayment, give
the Administrative Agent telephonic notice (promptly confirmed in writing)
requesting that the Administrative Agent prepare and provide to each
Tranche C Term Lender a notice (each, a "Prepayment Option Notice") as
described below. As promptly as practicable after receiving such notice
from the Borrower, the Administrative Agent will send to each Tranche C
Term Lender a Prepayment Option Notice, which shall be in the form of
Exhibit G, and shall include an offer by the Borrower to prepay on the date
(each a "Mandatory Prepayment Date") that is 10 Business Days after the
date of the Prepayment Option Notice, the Tranche C Term Loans of such
Lender by an amount equal to the portion of the Tranche C Prepayment Amount
indicated in such Lender's Prepayment Option Notice as being applicable to
such Lender's Tranche C Term Loans. On the Mandatory Prepayment Date, (i)
the Borrower shall pay to the Tranche C Term Lenders the aggregate amount
necessary to prepay that portion of the outstanding Tranche C Term Loans in
respect of which such Tranche C Term Lenders have accepted prepayment as
described above and (ii) the Borrower shall pay to the Tranche A Term
Lenders an amount equal to the portion of the Tranche C Prepayment Amount
not accepted by the Tranche C Term Lenders, and such amount shall be
applied to the prepayment of the Tranche A Term Loans.
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SECTION 6. Amendments to Section 4.8. (a) Section 4.8(a) of the Credit
Agreement is hereby amended by replacing the phrase "Tranche B Term Percentages"
therein with the phrase "Tranche C Term Percentages".
(b) Section 4.8(b) of the Credit Agreement is hereby amended by replacing
the phrase "Tranche B Term Loans" therein with the phrase "Tranche C Term
Loans".
SECTION 7. Amendment to Section 5.16. Section 5.16 of the Credit Agreement
is hereby amended by adding immediately at the end thereof the sentence "The
proceeds of the Tranche C Term Loans shall be used to prepay the Tranche B Term
Loans outstanding on the Tranche C Closing Date."
SECTION 8. Amendment to Section 8.9(a). Section 8.9(a) of the Credit
Agreement is hereby amended by replacing clause (B) therein in its entirety, as
follows:
(B) the repurchase of up to $50,000,000 in aggregate principal amount
of its 12.50% Senior Subordinated Notes due 2008; provided that before and
after giving effect to such repurchase, no Default or Event of Default
shall have occurred and be continuing
SECTION 9. Amendments to Schedule 1.1A. Schedule 1.1A to the Credit
Agreement is hereby supplemented to reflect the Tranche C Term Commitments of
the Tranche C Term Lenders (as notified to each Tranche C Term Lender by the
Lead Arranger).
SECTION 10. Amendment to Exhibit G. Exhibit G to the Credit Agreement is
hereby replaced in its entirety by Exhibit A hereto.
SECTION 11. Consent. Notwithstanding the provisions of Section 4.8(b) of
the Credit Agreement, the Lenders party hereto hereby agree that payments
applied on the Tranche C Closing Date may be applied to prepay the Tranche B
Term Loans without applying any such payments in respect of the Tranche A Term
Loans.
SECTION 12. Joinder. From and after the Second Amendment Effective Date,
each Tranche C Term Lender executing and delivering this Amendment shall become
a party to the Credit Agreement and have the rights and obligations of a Lender
thereunder and under the other Loan Documents and shall be bound by the other
provisions thereof.
SECTION 13. Notice of Borrowing. The Borrower shall give the Administrative
Agent irrevocable notice (which notice must be received by the Administrative
Agent prior to 10:00 A.M., New York City time, (a) three Business Days prior to
the anticipated Second Amendment Effective Date (as defined below), in the case
of Eurodollar Loans, provided that such notice shall contain an agreement
satisfactory to the Administrative Agent that the Borrower agrees to indemnify
and hold harmless each Lender from any loss or expense that such Lender may
sustain or incur (but excluding any loss of anticipated profits) as a
consequence of the Tranche C Closing Date not occurring, for any reason, on the
anticipated Second Amendment Effective Date set forth in such notice and that
such indemnification may include an amount calculated pursuant to the terms of
Section 4.11 of the Credit Agreement with respect to a failure to borrow and (b)
one Business Day prior to the anticipated Second Amendment Effective Date
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(as defined below), in the case of Base Rate Loans) requesting that the Tranche
C Term Lenders make the requested Tranche C Term Loans on the Second Amendment
Effective Date, and specifying the amount to be borrowed. The Tranche C Term
Loans made on the Second Amendment Effective Date shall initially be Base Rate
Loans. Upon receipt of such notice the Administrative Agent shall promptly
notify each Tranche C Term Lender thereof. Not later than 12:00 Noon, New York
City time, on the Second Amendment Effective Date, each Tranche C Term Lender
shall make available to the Administrative Agent at the Funding Office an amount
in immediately available funds equal to the Tranche C Term Loan or Tranche C
Term Loans to be made by such Lender; provided, however, that, at the option of
each Tranche C Term Lender that is a Tranche B Term Lender immediately prior to
giving effect to this Amendment, all or a portion of the aggregate amount of
Tranche B Term Loans of such Tranche C Term Lender may be deemed to satisfy the
foregoing funding requirement. Subject to the immediately preceding sentence,
the Administrative Agent shall use the amounts made available to the
Administrative Agent by the Tranche C Term Lenders to repay the amounts due
under the Tranche B Term Loans.
SECTION 14. Conditions to Effectiveness. This Amendment shall become
effective upon the date (the "Second Amendment Effective Date") on which the
Administrative Agent shall have received:
(a) this Amendment, executed and delivered by a duly authorized
officer of each of (i) the Borrower, (ii) the Required Lenders, (iii)
Majority Facility Lenders in respect of the Tranche A Term Facility, (iv)
Majority Facility Lenders in respect of the Tranche B Term Facility and (v)
Majority Facility Lenders in respect of the Revolving Facility and (vi)
each Tranche C Term Lender;
(b) a favorable written opinion (addressed to the Administrative Agent
and the Lenders and dated the Second Amendment Effective Date) of each of
(i) Xxxxxxx & Xxxx, S.C., counsel for the Borrower (ii) special New York
counsel to the Borrower and (iii) the general counsel of the Borrower, in
the case of each such opinion required by this paragraph, covering such
matters relating to the Loan Parties, the Loan Documents or this Amendment
as the Administrative Agent shall reasonably request;
(c) such documents and certificates as the Administrative Agent or its
counsel may reasonably request relating to the organization, existence and
good standing of each Loan Party, the authorization of the Amendment, the
Reaffirmation (as defined below) and the other transactions contemplated
hereby (the "Transactions") and any other legal matters relating to the
Loan Parties, the Loan Documents or the Amendment, all in form and
substance satisfactory to the Administrative Agent and its counsel;
(d) a certificate, dated the Second Amendment Effective Date and
signed by a Responsible Officer of the Borrower, confirming compliance with
the conditions set forth in this Section 14;
(e) satisfactory evidence that all fees and other amounts due and
payable to any Agent on or prior to the Second Amendment Effective Date,
including, to the extent invoiced, reimbursement or payment of all
out-of-pocket expenses (including fees, charges and
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disbursements of counsel) required to be reimbursed or paid by any Loan
Party hereunder or under any other Loan Document;
(f) (i) all documents and instruments, including Uniform Commercial
Code financing statements, required by law or reasonably requested by the
Administrative Agent to be filed, registered or recorded to create or
perfect, or continue the perfection of, the Liens intended to be created
under the Guarantee and Collateral Agreement after giving effect to the
Transactions, (ii) a completed Perfection Certificate in the form of
Exhibit B hereto dated the Second Amendment Effective Date and signed by an
executive officer or Responsible Officer of the Borrower and (iii) all
documents and instruments necessary to create or perfect the Liens intended
to be created under the Guarantee and Collateral Agreement after giving
effect to the Transactions;
(g) (i) amendments to each Mortgage executed in connection with the
Original Credit Agreement and the Existing Credit Agreement providing that
the Tranche C Term Loans (in addition to the other Obligations) shall be
secured by a Lien on each Mortgaged Property, signed on behalf of the
record owner of such Mortgaged Property and (ii) policy or policies of
title insurance or datedown endorsements to existing title insurance
policies issued by a nationally recognized title insurance company,
insuring the Lien of each such Mortgage, as amended by such amendment, as a
valid first Lien on the Mortgaged Property described therein, free of any
other Liens except as permitted by the Loan Documents, together with such
endorsements, coinsurance and reinsurance as the Administrative Agent may
reasonably request;
(h) subject to Section 13 hereof, satisfactory evidence that the
outstanding principal amount of, and all accrued and unpaid interest on,
Tranche B Term Loans shall have been paid in full with the proceeds of the
Tranche C Term Loans;
(i) an amendment fee, for the account of the Lenders that have
delivered an executed commitment letter to the Syndication Agent no later
than 5:00 p.m. New York time, on May 30, 2002, in an amount equal to 0.10%
of the aggregate amount (without duplication) of the Commitments in effect
and Loans outstanding of such Lenders immediately prior to giving effect to
this Amendment; and
(j) a Reaffirmation Agreement, substantially in the form of Exhibit C
hereto, duly executed and delivered by each party thereto.
The Administrative Agent shall notify the Borrower and the Lenders of the Second
Amendment Effective Date, and such notice shall be conclusive and binding.
Notwithstanding the foregoing, the obligations of the Tranche C Lenders to make
Tranche C Term Loans hereunder shall not become effective unless each of the
foregoing conditions is satisfied at or prior to 5:00 p.m., New York City time,
on June 6, 2002 (and, in the event such conditions are not so satisfied, the
Tranche C Commitments shall terminate at such time).
SECTION 15. Representations and Warranties. The Borrower represents and
warrants to the Administrative Agent and the Lenders that as of the Second
Amendment Effective Date, after giving effect to this Amendment, no Default or
Event of Default has occurred and is continuing and the representations and
warranties made by the Borrower in or
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pursuant to the Credit Agreement or any other Loan Document are true and correct
in all material respects on and as of the Second Amendment Effective Date as if
made on such date (except to the extent that any such representations and
warranties expressly relate to an earlier date, in which case such
representations and warranties were true and correct in all material respects on
and as of such earlier date).
SECTION 16. Continuing Effect of the Credit Agreement. This Amendment shall
not constitute an amendment or waiver of or consent to any provision of the
Credit Agreement not expressly referred to herein and shall not be construed as
an amendment, waiver or consent to any action on the part of the Borrowers that
would require an amendment, waiver or consent of the Administrative Agent or the
Lenders except as expressly stated herein. Except as expressly amended hereby,
the provisions of the Credit Agreement are and shall remain in full force and
effect in accordance with its terms.
SECTION 17. Counterparts. This Amendment may be executed by one or more of
the parties to this Amendment on any number of separate counterparts (including
by facsimile), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
SECTION 18. GOVERNING LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES UNDER THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
[The remainder of this page is intentionally left blank.]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their respective proper and duly authorized
officers as of the day and year first above written.
APPLETON PAPERS INC.
By: /s/ Xxxx X. Xxxxx
Name: Xxxx X. Xxxxx
Title: Assistant Secretary
PAPERWEIGHT DEVELOPMENT CORP.
By: /s/ Xxxx X. Xxxxx
Name: Xxxx X. Xxxxx
Title: Assistant Secretary
Bear Xxxxxxx Corporate Lending, Inc.
By: /s/ Xxxxxx X. Xxxxxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxxxxx
Title: Authorized Agent
Toronto Dominion (Texas), Inc. as Administrative
Agent
By: /s/ Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: Vice President
EXHIBIT A
Exhibit G to the
Credit Agreement
Prepayment Option Notice
EXHIBIT B
Form of Perfection Certificate
EXHIBIT C
Form of Reaffirmation
