EXHIBIT 10.7
FIRST AMENDMENT TO
CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is entered
into as of August 6, 2004 among PACKAGING DYNAMICS OPERATING COMPANY, a
Delaware corporation (the "Borrower"), PACKAGING DYNAMICS CORPORATION, a
Delaware corporation (the "Parent"), each of the Domestic Subsidiaries of the
Borrower (together with the Parent, the "Guarantors"; the Guarantors, together
with the Borrower, the "Credit Parties"), the Persons identified as "Existing
Lenders" on the signature pages hereto (the "Existing Lenders"), the persons
identified as "New Lenders" on the signature pages hereto (the "New Lenders")
and BANK OF AMERICA, N.A., a national banking association, as Administrative
Agent (the "Administrative Agent") for the Lenders. Capitalized terms used
herein and not otherwise defined herein shall have the respective meanings
given to them in the Credit Agreement hereinafter defined.
RECITALS
WHEREAS, the Borrower, the Guarantors, the Lenders and the
Administrative Agent are parties to that certain Amended and Restated Credit
Agreement dated as of September 29, 2003 (the "Credit Agreement");
WHEREAS, the Credit Parties have requested that the Lenders agree to
amend certain provisions of the Credit Agreement; and
WHEREAS, the Lenders have agreed to amend certain provisions of the
Credit Agreement as more fully set forth below.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
AMENDMENTS TO CREDIT AGREEMENT
1.1 DEFINITION OF AGGREGATE REVOLVING COMMITMENTS. The definition of
"Aggregate Revolving Commitments" in Section 1.1 of the Credit Agreement is
hereby amended and restated in its entirety to read as follows:
"Aggregate Revolving Commitments" means the Revolving
Commitments of all the Lenders. The amount of the Aggregate Revolving
Commitments in effect on the First Amendment Effective Date is FIFTY
MILLION DOLLARS ($50,000,000).
1.2 DEFINITION OF APPLICABLE PERCENTAGE. The definition of "Applicable
Percentage" in Section 1.1 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
"Applicable Percentage" means the appropriate applicable
percentages corresponding to the Leverage Ratio in effect as of the
most recent Calculation Date as shown below:
=======================================================================================================================
Applicable Percentage
-----------------------------------------------------------------------------------------------------
Eurodollar Rate Loans Base Rate Loans
--------------------------------------------------------------
Revolving Revolving Standby Commercial
Pricing Leverage Loans and Tranche B Term Loans and Tranche B Term Letter of Letter of Commitment
Level Ratio Tranche A Term Loans Tranche A Term Loans Credit Fee Credit Fee Fee
Loans Loans
-----------------------------------------------------------------------------------------------------------------------
I <= 1.5 to 2.00% 3.00% 1.00% 2.00% 2.00% 1.00% 0.375%
1.0
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<= 2.0 to
II 1.0 but 2.25% 3.00% 1.25% 2.00% 2.25% 1.125% 0.500%
> 1.5 to
1.0
-----------------------------------------------------------------------------------------------------------------------
<= 2.75 to
III 1.0 but 2.50% 3.00% 1.50% 2.00% 2.50% 1.25% 0.500%
> 2.0 to
1.0
-----------------------------------------------------------------------------------------------------------------------
IV <= 3.50 to 2.75% 3.00% 1.75% 2.00% 2.75% 1.375% 0.500%
1.0 but
> 2.75 to
1.0
-----------------------------------------------------------------------------------------------------------------------
V > 3.50 to 3.00% 3.00% 2.00% 2.00% 3.00% 1.50% 0.500%
1.0
=======================================================================================================================
The Applicable Percentage for purposes of calculating the applicable interest rate for any day for any
Loan, the Applicable Percentage of the Commitment Fee for any day for purposes of Section 2.8(a), the
Applicable Percentage of the Standby Letter of Credit Fees for any day for purposes of Section 2.3(i)(i) and
the Commercial Letter of Credit Fees for any day for purposes of Section 2.3(i)(ii) shall, in each case, be
determined and adjusted quarterly on the date (each a "Calculation Date") five (5) Business Days after the date
by which the Borrower is required to provide the officer's certificate in accordance with the provisions of
Section 7.1(c); provided that (a) if the Borrower fails to provide the officer's certificate required by
Section 7.1(c) on or before the most recent Calculation Date, the Applicable Percentages for such Calculation
Date shall be based on Pricing Level V from such Calculation Date until such time that an appropriate officer's
certificate is provided whereupon the Pricing Level shall be determined by the then current Leverage Ratio and
(b) the initial Pricing Level on the First Amendment Effective Date shall be set at Level V and shall remain at
Level V until the first Calculation Date following the First Amendment Effective Date. Each Applicable
Percentage shall be effective from one Calculation Date until the next Calculation Date. Any adjustment in the
Applicable Percentages shall be applicable to all existing Loans and Letters of Credit as well as any new Loans
made or Letters of Credit issued.
The Borrower shall promptly deliver to the Administrative Agent, at the Administrative Agent's Office,
at the time the officer's certificate is required to be delivered by Section 7.1(c), information regarding any
change in the Leverage Ratio that would change the existing Pricing Level pursuant to the preceding paragraph.
1.3 DEFINITION OF COLLATERAL DOCUMENTS. The definition of "Collateral
Documents" in Section 1.1 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
"Collateral Documents" means the Security Agreement, the
Canadian Security Agreement, the Pledge Agreement, the Canadian Pledge
Agreement, the Mortgage Documents and such other documents executed
and delivered in connection with the attachment and perfection of the
Lenders' security interests in the Property of the Credit Parties,
including without limitation, UCC financing statements and patent and
trademark filings with respect to the Intellectual Property of the
Credit Parties.
1.4 DEFINITION OF CREDIT DOCUMENTS. The definition of "Credit
Documents" in Section 1.1 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
"Credit Documents" means this Credit Agreement, the Notes,
any Joinder Agreement, the Collateral Documents, any Letter of Credit
Application, the Papercon Intercreditor Agreement and all other
related agreements and documents issued or delivered by any Credit
Party hereunder or thereunder or pursuant hereto or thereto.
1.5 DEFINITION OF EBITDA. Clause (b) of the definition of "EBITDA" in
Section 1.1 of the Credit Agreement is hereby amended and restated in its
entirety to read as follows:
(b) an amount which, in the determination of Net Income for
such period, has been deducted for:
(i) Interest Expense for such period;
(ii) total Federal, state, foreign or other income
or franchise taxes for such period;
(iii) all depreciation and amortization for such
period;
(iv) non-cash expenses relating to the granting of
options to any employee, officer or director of the Parent or
any of its Subsidiaries;
(v) cash and non-cash charges and/or losses with
respect to the sale of all or part of the Detroit Paper Mill
and/or the closure of the Detroit Paper Mill or any part
thereof (including, without limitation, severance payments
related thereto) in an aggregate amount up to $35,000,000;
provided that such charges shall have been incurred on or
prior to December 31, 2005, all as determined in accordance
with GAAP; and
(vi) charges related to the Papercon owner bonus
program as set forth on Schedule 1.1(d), minus
1.6 DEFINITION OF ELIGIBLE ASSIGNEE. The definition of "Eligible
Assignee" in Section 1.1 of the Credit Agreement is hereby amended and restated
in its entirety to read as follows:
"Eligible Assignee" means (a) a Lender; (b) an Affiliate of a
Lender (other than a natural person); (c) an Approved Fund; and (d)
any other Person (other than a natural person) approved by (i) the
Administrative Agent and the L/C Issuer, and (ii) unless an Event of
Default has occurred and is continuing, the Borrower (each such
approval not to be unreasonably withheld or delayed (it being
understood that the Borrower may refuse to consent to an assignment to
a potential competitor of the Borrower)); provided that
notwithstanding the foregoing, "Eligible Assignee" shall not include
the Borrower or any of the Borrower's Affiliates (other than accounts
managed by Oak Hill Advisors, Inc. or its Affiliates) or Subsidiaries.
1.7 DEFINITION OF EQUITY ISSUANCE. The definition of "Equity Issuance"
in Section 1.1 of the Credit Agreement is hereby amended and restated in its
entirety to read as follows:
"Equity Issuance" means any issuance by a Credit Party to any
Person (other than (x) a Credit Party, (y) with respect to any
issuance by the Parent, a member of the Sponsor Group or (z) with
respect to any issuance by GMG International Inc., the Canadian
Numbered Company) of (a) shares of its Capital Stock or (b) with
respect to the Parent, any shares of its Capital Stock pursuant to (i)
the exercise of options or warrants or (ii) the conversion of any debt
securities to equity (other than, in each case, stock or options
issued to managers, officers or directors pursuant to stock or option
plans or equity plans). The term "Equity Issuance" shall not include
(A) any Asset Disposition or (B) any Capital Stock of the Parent
issued (1) as consideration in connection with a Permitted Acquisition
or (2) where and to the extent the Net Cash Proceeds of such issuance
are used as consideration in connection with a Permitted Acquisition
within six (6) months after such issuance; provided that 75% of such
Net Cash Proceeds shall be deposited in an interest bearing account
(such interest to be for the account of the applicable Credit Party)
with the Administrative Agent and shall be released (x) to the
Borrower to consummate such Permitted Acquisition if such Permitted
Acquisition is consummated within such six (6) month period or (y) if
such Net Cash Proceeds are not used to consummate such Permitted
Acquisition, to the Administrative Agent and applied as a mandatory
prepayment in accordance with the terms of Section 2.4(b)(iv) and
Section 2.4(c).
1.8 DEFINITION OF EXCESS CASH FLOW. The definition of "Excess Cash
Flow" in Section 1.1 of the Credit Agreement is hereby amended and restated in
its entirety to read as follows:
"Excess Cash Flow" means, with respect to any fiscal year
period of the Parent and its Subsidiaries on a consolidated basis, an
amount equal to, without duplication, (a) EBITDA for such period minus
(b) Capital Expenditures for such period minus (c) the aggregate cash
consideration paid (not including any consideration financed) during
such period for Permitted Acquisitions minus (d) Interest Expense for
such period minus (e) Cash Tax Payments made during such period minus
(f) Scheduled Funded Debt Payments for such period minus (g) voluntary
prepayments made with respect to the Term Loans or (to the extent
accompanied by a permanent reduction in the Revolving Commitment) the
Revolving Loans (other than a prepayment required under Section
2.4(b)) made during such period minus (h) the amount of any dividends
paid in cash by the Parent to the extent permitted by Section 8.8
minus (i) to the extent added back to Net Income in calculating EBITDA
for such period pursuant to clause (b)(v) of the definition of EBITDA,
cash and non-cash charges and/or losses with respect to the sale of
all or any part of the Detroit Paper Mill or closure of the Detroit
Paper Mill or any part thereof (including, without limitation,
severance payments related thereto) minus (j) losses from discontinued
operations and, prior to the date on which DPM Losses/Gains consisting
of operating losses are treated as losses from discontinued
operations, such DPM Losses/Gains plus (k) gains from discontinued
operations and, prior to the date on which DPM Losses/Gains consisting
of operating gains are treated as gains from discontinued operations,
such DPM Losses/Gains minus (l) principal payments on the Papercon
Seller Note made during such period to the extent permitted by the
terms of Section 8.9.
1.9 DEFINITION OF FUNDED DEBT. The definition of "Funded Debt" in
Section 1.1 of the Credit Agreement is hereby amended by adding the following
clause (h) thereto and by making the appropriate grammatical and punctuation
changes thereto to read as follows:
and (h) all payment obligations of such Person under noncompete
agreements entered into on or after the First Amendment Effective Date
(including, without limitation, the Papercon Noncompete Agreement).
1.10 DEFINITION OF L/C OBLIGATIONS. The definition of "L/C
Obligations" in Section 1.1 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
"L/C Obligations" means, as at any date of determination, the
aggregate amount available to be drawn under all outstanding Letters
of Credit plus the aggregate of all Unreimbursed Amounts, including
all L/C Borrowings. For purposes of computing the amount available to
be drawn under any Letter of Credit, the amount of such Letter of
Credit shall be determined in accordance with Section 1.7. For all
purposes of this Agreement, if on any date of determination a Letter
of Credit has expired by its terms but any amount may still be drawn
thereunder by reason of the operation of Rule 3.14 of the ISP, such
Letter of Credit shall be deemed to be "outstanding" in the amount so
remaining available to be drawn.
1.11 DEFINITION OF LENDER AFFILIATE. The definition of "Lender
Affiliate" in Section 1.1 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
"Lender Affiliate" means, with respect to any Lender, any
other Person (other than a natural person) directly or indirectly
controlling, controlled by or under direct or indirect common control
with such Lender. A Person shall be deemed to control another Person
if such Person possesses, directly or indirectly, the power (a) to
vote 25% or more of the securities having ordinary voting power for
the election of directors, managing general partners, members or the
equivalent of such Person or (b) to direct or cause direction of the
management and policies of such Person, whether through the ownership
of voting securities, by contract or otherwise.
1.12 DEFINITION OF LETTER OF CREDIT SUBLIMIT. The definition of
"Letter of Credit Sublimit" in Section 1.1 of the Credit Agreement is hereby
amended and restated in its entirety to read as follows:
"Letter of Credit Sublimit" means an amount equal to
$8,000,000. The Letter of Credit Sublimit is part of, and not in
addition to, the Aggregate Revolving Commitments.
1.13 DEFINITION OF LEVERAGE RATIO. The definition of "Leverage Ratio"
in Section 1.1 of the Credit Agreement is hereby amended and restated in its
entirety to read as follows:
"Leverage Ratio" means, as of the last day of any fiscal
quarter, the ratio of (a) total Funded Debt of the Parent and its
Subsidiaries on a consolidated basis as of such date, to (b) EBITDA of
the Parent and its Subsidiaries on a consolidated basis for the twelve
(12) month period then ended; provided that, for purposes of
calculating the Leverage Ratio as of September 30, 2004, the total
Funded Debt of the Parent and its Subsidiaries shall be reduced by the
amount of cash and Cash Equivalents in the Papercon Account as of such
date.
1.14 DEFINITION OF PERMITTED ACQUISITION. The definition of "Permitted
Acquisition" in Section 1.1 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
"Permitted Acquisition" means (1) the Papercon Acquisition,
(2) the Iuka Acquisition and (3) any other Acquisition by the Borrower
or any of its Subsidiaries; provided that, with respect to clause (3)
only, (a) the Property acquired (or the Property of the Person
acquired) in such Acquisition is used or useful in the same or a
similar line of business as the Borrower and its Subsidiaries were
engaged in on the Closing Date (or any reasonable extensions or
expansions thereof), (b) the Administrative Agent shall have received
all items in respect of the Capital Stock or Property acquired in such
Acquisition (and/or the seller thereof) required to be delivered by
the terms of Section 7.9 and/or Section 7.12, (c) in the case of an
Acquisition of the Capital Stock of another Person, the board of
directors (or other comparable governing body) or stockholders, as
appropriate, of such Person shall have approved such Acquisition, (d)
the Borrower shall have delivered to the Administrative Agent a Pro
Forma Compliance Certificate demonstrating that, upon giving effect to
such Acquisition on a Pro Forma Basis, the Credit Parties shall be in
compliance with all of the covenants set forth in Section 7.2, (e) the
representations and warranties made by the Credit Parties in any
Credit Document shall be true and correct in all material respects at
and as if made as of the date of such Acquisition (after giving effect
thereto) except to the extent such representations and warranties
expressly relate to an earlier date, (f) if such transaction involves
the purchase of an interest in a partnership between the Borrower (or
a Subsidiary of the Borrower) as a general partner and entities
unaffiliated with the Borrower or such Subsidiary as the other
partners, such transaction shall be effected by having such equity
interest acquired by a corporate holding company directly or
indirectly wholly-owned by the Borrower newly formed for the sole
purpose of effecting such transaction, (g) after giving effect to such
Acquisition, there shall be at least $10,000,000 of availability
existing under the Aggregate Revolving Commitments, (h) with respect
to any such Acquisition, (i) the aggregate cash consideration for such
Acquisition (excluding cash proceeds from Equity Issuances made and
Subordinated Indebtedness incurred in connection with such
Acquisition) shall not exceed $20,000,000 and (ii) the total
consideration (including cash and non-cash consideration and any
assumption of liabilities (other than current working capital
liabilities not constituting Indebtedness)) for such Acquisition shall
not exceed $25,000,000, and (i) with respect to all such Acquisitions
during the term of this Credit Agreement, (i) the aggregate cash
consideration for such Acquisitions (excluding cash proceeds from
Equity Issuances made and Subordinated Indebtedness incurred in
connection with such Acquisitions) shall not exceed $30,000,000 and
(ii) the total consideration (including cash and non-cash
consideration and any assumption of liabilities (other than current
working capital liabilities not constituting Indebtedness)) for such
Acquisitions shall not exceed $50,000,000.
1.15 DEFINITION OF PERMITTED INVESTMENTS. The definition of "Permitted
Investments" in Section 1.1 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
"Permitted Investments" means Investments which are (a) cash
or Cash Equivalents, (b) accounts receivable or notes receivable
created, acquired or made in the ordinary course of business and
payable or dischargeable in accordance with customary trade terms and
Investments received in satisfaction or partial satisfaction thereof
from financially troubled account debtors to the extent reasonably
necessary or desirable in order to prevent or limit loss, (c)
inventory, raw materials and general intangibles acquired in the
ordinary course of business, (d) Investments by a Credit Party or the
Canadian Numbered Company in another Credit Party other than the
Parent, (e) Investments by a Credit Party in the Canadian Numbered
Company; provided that, promptly (and in any event within one (1)
Business Day) after any such Investment is made, such Investment
(other than Investments in an aggregate amount not to exceed
$1,000,000) shall be transferred by the Canadian Numbered Company to
(or a corresponding Investment (in the same form as such Investment)
shall be made by the Canadian Numbered Company in) a Credit Party, (f)
to the extent permitted by Law, loans to directors, officers or
employees (i) in the ordinary course of business for reasonable
business expenses, not to exceed $1,000,000 in aggregate principal
amount at any one time outstanding and (ii) in connection with their
acquisition of Capital Stock of the Parent, not to exceed $1,000,000
in aggregate principal amount at any one time outstanding, (g)
Investments in Capital Expenditures, (h) Permitted Acquisitions, (i)
Investments existing as of the Closing Date and set forth on Schedule
1.1(a), (j) any deposit arrangement permitted by Section 8.2, (k)
other Investments not to exceed $5,000,000 in the aggregate
(determined on an incurrence basis and such amount shall be increased
by the amount of any cash received from such Investments), and (l)
guaranties of any obligation of another Credit Party (other than the
Parent) to the extent the incurrence of such primary obligation is not
prohibited by the terms of this Credit Agreement.
1.16 DEFINITION OF PRO RATA SHARE. The definition of "Pro Rata Share"
in Section 1.1 of the Credit Agreement is hereby amended and restated in its
entirety to read as follows:
"Pro Rata Share" means as to each Lender (a) with respect to
such Lender's Revolving Commitment at any time, a fraction (expressed
as a percentage, carried out to the ninth decimal place), the
numerator of which is the amount of the Revolving Commitment of such
Lender at such time and the denominator of which is the amount of the
Aggregate Revolving Commitments at such time; provided that if the
commitment of each Lender to make Revolving Loans and the obligation
of the L/C Issuer to make L/C Credit Extensions have been terminated
pursuant to Section 9.2, then the Pro Rata Share of such Lender shall
be determined based on the Pro Rata Share of such Lender immediately
prior to such termination and after giving effect to any subsequent
assignments made pursuant to the terms hereof, (b) with respect to
such Lender's outstanding Tranche A Term Loan at any time, a fraction
(expressed as a percentage, carried out to the ninth decimal place),
the numerator of which is the principal amount of the Tranche A Term
Loan held by such Lender at such time and the denominator of which is
the aggregate principal amount of the Tranche A Term Loan at such
time, (c) with respect to such Lender's outstanding Closing Date
Tranche B Term Loan at any time, a fraction (expressed as a
percentage, carried out to the ninth decimal place), the numerator of
which is the principal amount of the Closing Date Tranche B Term Loan
held by such Lender at such time and the denominator of which is the
aggregate principal amount of the Closing Date Tranche B Term Loan at
such time and (d) with respect to such Lender's outstanding
Incremental Tranche B Term Loan at any time, a fraction (expressed as
a percentage, carried out to the ninth decimal place), the numerator
of which is the principal amount of the Incremental Tranche B Term
Loan held by such Lender at such time and the denominator of which is
the aggregate principal amount of the Incremental Tranche B Term Loan
at such time. The initial Pro Rata Share of each Lender as of the
Closing Date is set forth opposite the name of such Lender on Schedule
2.1.
1.17 DEFINITION OF RESTRICTED PAYMENT. The definition of "Restricted
Payment" in Section 1.1 of the Credit Agreement is hereby amended and restated
in its entirety to read as follows:
"Restricted Payment" means (i) any dividend or other similar
payment or distribution, direct or indirect, on account of any shares
of any Capital Stock, now or hereafter outstanding, in any Credit
Party, or to the holders, in their capacity as such, of any shares of
any Capital Stock, now or hereafter outstanding, in any Credit Party
(other than (x) dividends or distributions payable in the same class
of Capital Stock in the applicable Person, (y) dividends or
distributions payable to any Credit Party other than the Parent
(directly or indirectly through Subsidiaries) or (z) dividends or
distributions payable to the Canadian Numbered Company; provided that,
promptly (and in any event within one (1) Business Day) after any such
dividend or distribution is made, the amount of such dividend or
distribution (other than dividends or distributions in an aggregate
amount not to exceed $1,000,000) shall be transferred (by dividend or
distribution) to a Credit Party, (ii) any redemption, retirement,
sinking fund or similar payment, purchase or other acquisition for
value, direct or indirect, of any shares of any Capital Stock, now or
hereafter outstanding, in any Credit Party, (iii) any payment made to
retire, or to obtain the surrender of, any outstanding warrants,
options or other rights to acquire shares of any Capital Stock, now or
hereafter outstanding, in any Credit Party and (iv) any payment or
prepayment of any obligations (including without limitation principal,
interest, premiums and fees) evidenced by, arising under or relating
to any Subordinated Indebtedness.
1.18 DEFINITION OF SCHEDULED FUNDED DEBT PAYMENTS. The definition of
"Scheduled Funded Debt Payments" in Section 1.1 of the Credit Agreement is
hereby amended and restated in its entirety to read as follows:
"Scheduled Funded Debt Payments" means, as of the end of each
fiscal quarter of the Borrower, for the Credit Parties and their
Subsidiaries on a consolidated basis, the sum of all scheduled
payments of principal on Funded Debt (other than the Papercon Seller
Note) for the applicable period ending on such date (including the
principal component of payments due on Capital Leases and Synthetic
Leases during the applicable period ending on such date); it being
understood that Scheduled Funded Debt Payments shall not include
voluntary prepayments or the mandatory prepayments of the Loans
required pursuant to Section 2.4(b).
1.19 DEFINITION OF SENIOR LEVERAGE RATIO. The definition of "Senior
Leverage Ratio" in Section 1.1 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
"Senior Secured Leverage Ratio" means, as of the last day of
any fiscal quarter, the ratio of (a) total secured Funded Debt (other
than Subordinated Indebtedness) of the Parent and its Subsidiaries on
a consolidated basis as of such date, to (b) EBITDA of the Parent and
its Subsidiaries on a consolidated basis for the twelve (12) month
period then ended; provided that, for purposes of calculating the
Senior Secured Leverage Ratio as of September 30, 2004, the total
secured Funded Debt of the Parent and its Subsidiaries shall be
reduced by the amount of cash and Cash Equivalents in the Papercon
Account as of such date.
1.20 DEFINITION OF SUBORDINATED INDEBTEDNESS. The last sentence of the
definition of "Subordinated Indebtedness" in Section 1.1 of the Credit
Agreement is hereby amended and restated in its entirety to read as follows:
The term "Subordinated Indebtedness" shall not include any of the
Xxxxxx Springs Debt or any Indebtedness evidenced by the Papercon
Seller Note.
1.21 DEFINITION OF TRANCHE B TERM LOAN COMMITMENT. The definition of
"Tranche B Term Loan Commitment" in Section 1.1 of the Credit Agreement is
hereby amended and restated in its entirety to read as follows:
"Tranche B Term Loan Commitment" means, with respect to each
Tranche B Term Lender, collectively, (a) the commitment of such Lender
to make its portion of the Closing Date Tranche B Term Loan in a
principal amount equal to such Lender's Pro Rata Share of the Closing
Date Tranche B Term Loan and (a) the commitment of such Lender to make
its portion of the Incremental Tranche B Term Loan in a principal
amount equal to such Lender's Pro Rata Share of the Incremental
Tranche B Term Loan.
1.22 NEW DEFINITIONS. The following new definitions are hereby added
to Section 1.1 of the Credit Agreement in the appropriate alphabetical order to
read as follows:
"Canadian Numbered Company" means 3141276 Canada Inc., a
Canadian numbered holding company.
"Canadian Pledge Agreement" means the Canadian Pledge
Agreement, dated as of the First Amendment Effective Date, to be
executed in favor of the Agent by the Nova Scotia Subsidiary.
"Canadian Security Agreement" means the Canadian Security
Agreement, dated as of the First Amendment Effective Date, to be
executed in favor of the Agent by the Nova Scotia Subsidiary.
"Closing Date Tranche B Term Loan" has the meaning set forth
in Section 2.1(c).
"First Amendment Effective Date" has the meaning set forth in
Section 2.2 of the First Amendment to Credit Agreement, dated as of
August 6, 2004, among the Credit Parties, the Lenders, the L/C Issuer
and the Administrative Agent.
"Incremental Tranche B Term Loan" has the meaning set forth
in Section 2.1(c).
"ISP" means, with respect to any Letter of Credit, the
"International Standby Practices 1998" published by the Institute of
International Banking Law & Practice (or such later version thereof as
may be in effect at the time of issuance).
"Iuka Acquisition" means the acquisition by the Parent and/or
its Subsidiaries of substantially all of the Property of the Iuka
Lamination Division of Ormet Aluminum Mill Products Corporation, which
Property was located in Iuka, Mississippi.
"Nova Scotia Subsidiary" means a Nova Scotia unlimited
liability company to be formed by the Credit Parties for purposes of
consummating the Papercon Acquisition.
"Papercon" means Papercon, Inc., a Georgia corporation,
together with its successors and assigns.
"Papercon Account" means a deposit or securities account of
Papercon established at Bank of America in connection with the
Papercon Acquisition.
"Papercon Acquisition" means the acquisition by the Parent
through one or more of its Subsidiaries of the Capital Stock of
Papercon pursuant to the terms of the Papercon Acquisition Documents.
"Papercon Acquisition Agreement" means the Acquisition
Agreement, dated as of August 6, 2004, among the Parent, the Canadian
Numbered Company, GMG International Inc., a Georgia corporation,
Papercon and the Papercon Seller.
"Papercon Acquisition Documents" means the Papercon
Acquisition Agreement (including all schedules and exhibits thereto),
the Papercon Seller Note, the Papercon Noncompete Agreement and any
other agreement or instrument entered into or executed in connection
with the foregoing.
"Papercon Intercreditor Agreement" means the Intercreditor
Agreement, dated as of the First Amendment Effective Date, between the
Papercon Seller and the Agent, on behalf of the Lenders.
"Papercon Noncompete Agreement" means the Non-Competition
Agreement, dated as of the First Amendment Effective Date, between the
Papercon Seller and the Parent.
"Papercon Seller" means Xxxx X. Ajram, an individual and
resident of the United States of America.
"Papercon Seller Note" means the Seller Note issued by the
Parent to the Papercon Seller in the original principal amount of
$7,000,000 as part of the consideration for the Papercon Acquisition.
1.23 LETTER OF CREDIT AMOUNTS. Section 1.7 of the Credit Agreement is
hereby amended and restated in its entirety to read as follows:
1.7 LETTER OF CREDIT AMOUNTS.
Unless otherwise specified herein, the amount of a Letter of
Credit at any time shall be deemed to be the stated amount of such
Letter of Credit in effect at such time; provided, however, that with
respect to any Letter of Credit that, by its terms or the terms of any
L/C Document related thereto, provides for one or more automatic
increases in the stated amount thereof, the amount of such Letter of
Credit shall be deemed to be the maximum stated amount of such Letter
of Credit after giving effect to all such increases, whether or not
such maximum stated amount is in effect at such time.
1.24 INCREMENTAL TRANCHE B TERM LOAN. Section 2.1(c) of the Credit
Agreement is hereby amended and restated in its entirety to read as follows:
(c) Tranche B Term Loan. Subject to the terms and conditions
set forth herein, each Tranche B Lender severally agrees to make (i)
its Pro Rata Share of a term loan (the "Closing Date Tranche B Term
Loan") to the Borrower on the Closing Date in an aggregate principal
amount of FORTY MILLION DOLLARS ($40,000,000) and (ii) its Pro Rata
Share of a term loan (the "Incremental Tranche B Term Loan"; together
with the Closing Date Tranche B Term Loan, the "Tranche B Term Loan")
to the Borrower on the First Amendment Effective Date in an aggregate
principal amount of FORTY-FIVE MILLION DOLLARS ($45,000,000). Amounts
repaid on the Tranche B Term Loan may not be reborrowed. The Tranche B
Term Loan may consist of Base Rate Loans or Eurodollar Rate Loans, as
further provided herein.
1.25 LETTERS OF CREDIT. Section 2.3(a) of the Credit Agreement is
hereby amended by amending and restating clauses (ii) and (iii) thereof and by
adding the following clauses (iv), (v) and (vi) thereto, in each case to read
as follows:
(ii) The L/C Issuer shall not issue any Letter of
Credit if:
(A) subject to Section 2.3(b)(iii), the
expiry date of such requested Letter of Credit would
occur more than twelve (12) months after the date of
issuance unless all of the Revolving Lenders have
approved such expiry date; or
(B) the expiry date of such requested
Letter of Credit would occur after the Letter of
Credit Expiration Date, unless such Letter of Credit
has been Cash Collateralized to the reasonable
satisfaction of the Administrative Agent and the L/C
Issuer or unless all of the Revolving Lenders have
approved such expiry date.
(iii) The L/C Issuer shall be under no obligation to
issue any Letter of Credit if:
(A) any order, judgment or decree of any
Governmental Authority or arbitrator shall by its
terms purport to enjoin or restrain the L/C Issuer
from issuing such Letter of Credit, or any Law
applicable to the L/C Issuer or any request or
directive (whether or not having the force of law)
from any Governmental Authority with jurisdiction
over the L/C Issuer shall prohibit, or request that
the L/C Issuer refrain from, the issuance of letters
of credit generally or such Letter of Credit in
particular or shall impose upon the L/C Issuer with
respect to such Letter of Credit any restriction,
reserve or capital requirement (for which the L/C
Issuer is not otherwise compensated hereunder) not
in effect on the Closing Date, or shall impose upon
the L/C Issuer any unreimbursed loss, cost or
expense which was not applicable on the Closing Date
and which the L/C Issuer in good xxxxx xxxxx
material to it;
(B) the issuance of such Letter of Credit
would violate one or more written policies of the
L/C Issuer;
(C) if such Letter of Credit (1) is a
standby Letter of Credit, such standby Letter of
Credit is in an initial stated amount less than
$500,000 or (2) is a commercial Letter of Credit,
such commercial Letter of Credit is in an initial
stated amount less than $250,000;
(D) such Letter of Credit contains any
provisions for automatic reinstatement; or
(E) such Letter of Credit is to be used for
a purpose other than as specified in Section 2.3(a)
or is to be denominated in a currency other than
Dollars.
(iv) The L/C Issuer shall not amend any Letter of
Credit if the L/C Issuer would not be permitted at such time
to issue such Letter of Credit in its amended form under the
terms of Section 2.3(a)(ii).
(v) The L/C Issuer shall be under no obligation to
amend any Letter of Credit if (A) the L/C Issuer would have
no obligation at such time to issue such Letter of Credit in
its amended form under the terms hereof, or (B) the
beneficiary of such Letter of Credit does not accept the
proposed amendment to such Letter of Credit.
(vi) The L/C Issuer shall act on behalf of the
Lenders with respect to any Letters of Credit issued by it
and the documents associated therewith, and the L/C Issuer
shall have all of the benefits and immunities (A) provided to
the Administrative Agent in Section 10 with respect to any
acts taken or omissions suffered by the L/C Issuer in
connection with Letters of Credit issued by it or proposed to
be issued by it and L/C Documents pertaining to such Letters
of Credit as fully as if the term "Administrative Agent" as
used in Section 10 included the L/C Issuer with respect to
such acts or omissions, and (B) as additionally provided
herein with respect to the L/C Issuer.
1.26 LETTER OF CREDIT FEES. Sections 2.3(i) and (j) of the Credit
Agreement are hereby amended and restated in their entirety to read as follows:
(i) Letter of Credit Fees.
(i) The Borrower shall pay to the Administrative
Agent for the account of each Revolving Lender in accordance
with its Pro Rata Share a fee (the "Standby Letter of Credit
Fee") for each standby Letter of Credit equal to the
Applicable Percentage times the daily amount available to be
drawn under such standby Letter of Credit. For purposes of
computing the daily amount available to be drawn under any
Letter of Credit, the amount of such Letter of Credit shall
be determined in accordance with Section 1.7. The Standby
Letter of Credit Fees shall be computed on a quarterly basis
in arrears, and shall be due and payable on the first
Business Day after the end of each March, June, September and
December, commencing with the first such date to occur after
the issuance of such standby Letter of Credit, on the Letter
of Credit Expiration Date and thereafter on demand. If there
is any change in the Applicable Percentage during any
quarter, the daily amount available to be drawn under each
standby Letter of Credit shall be computed and multiplied by
the Applicable Percentage separately for each period during
such quarter that such Applicable Percentage was in effect.
(ii) The Borrower shall pay to the Administrative
Agent for the account of each Revolving Lender in accordance
with its Pro Rata Share a fee (the "Commercial Letter of
Credit Fee") for each commercial Letter of Credit equal to
the Applicable Percentage times the daily amount available to
be drawn under such commercial Letter of Credit. For purposes
of computing the daily amount available to be drawn under any
Letter of Credit, the amount of such Letter of Credit shall
be determined in accordance with Section 1.7. The Commercial
Letter of Credit Fees shall be computed on a quarterly basis
in arrears, and shall be due and payable on the first
Business Day after the end of each March, June, September and
December, commencing with the first such date to occur after
the issuance of such commercial Letter of Credit, on the
Letter of Credit Expiration Date and thereafter on demand. If
there is any change in the Applicable Percentage during any
quarter, the daily amount available to be drawn under each
commercial Letter of Credit shall be computed and multiplied
by the Applicable Percentage separately for each period
during such quarter that such Applicable Percentage was in
effect.
(j) Fronting Fee and Processing Charges Payable to L/C
Issuer. The Borrower shall pay directly to the L/C Issuer for its own
account a fronting fee for each Letter of Credit equal to 0.125% times
the daily amount available to be drawn under such Letter of Credit.
For purposes of computing the daily amount available to be drawn under
any Letter of Credit, the amount of such Letter of Credit shall be
determined in accordance with Section 1.7. Such fronting fee for each
Letter of Credit shall be computed on a quarterly basis in arrears,
and shall be due and payable on the first Business Day after the end
of each March, June, September and December, commencing with the first
such date to occur after the issuance of such Letter of Credit, on the
Letter of Credit Expiration Date and thereafter on demand. In
addition, the Borrower shall pay directly to the L/C Issuer for its
own account the customary issuance, presentation, amendment and other
processing fees, and other standard costs and charges, of the L/C
Issuer relating to letters of credit as from time to time in effect.
Such customary fees and standard costs and charges are due and payable
on demand and are nonrefundable.
1.27 APPLICATION OF MANDATORY PREPAYMENTS. The last sentence of
Section 2.4(c) of the Credit Agreement is hereby amended and restated in its
entirety to read as follows:
Notwithstanding anything in this Section 2.4(c) to the contrary, the
Aggregate Revolving Commitments shall not be reduced below $40,000,000
as a result of any reduction of the Aggregate Revolving Commitments
corresponding to a mandatory prepayment of Revolving Loans and/or Cash
Collateralization of L/C Obligations hereunder.
1.28 TRANCHE B TERM LOAN AMORTIZATION. Section 2.6(c) of the Credit
Agreement is hereby amended and restated in its entirety to read as follows:
(c) Tranche B Term Loan. The Borrower shall repay the
outstanding principal amount of the Tranche B Term Loan in twenty-one
(21) consecutive quarterly installments (as such installments may
hereafter be adjusted as a result of prepayments made pursuant to
Section 2.4) on the last Business Day of each month set forth below
and on the applicable Maturity Date, unless accelerated sooner
pursuant to Section 9.2:
===============================================================
PAYMENT DATES PRINCIPAL AMORTIZATION PAYMENT
---------------------------------------------------------------
September, 2004 $210,625
---------------------------------------------------------------
December, 2004 $210,625
---------------------------------------------------------------
March, 2005 $210,625
---------------------------------------------------------------
June, 2005 $210,625
---------------------------------------------------------------
September, 2005 $210,625
---------------------------------------------------------------
December, 2005 $210,625
---------------------------------------------------------------
March, 2006 $210,625
---------------------------------------------------------------
June, 2006 $210,625
---------------------------------------------------------------
September, 2006 $210,625
---------------------------------------------------------------
December, 2006 $210,625
---------------------------------------------------------------
March, 2007 $210,625
---------------------------------------------------------------
June, 2007 $210,625
---------------------------------------------------------------
September, 2007 $210,625
---------------------------------------------------------------
December, 2007 $210,625
---------------------------------------------------------------
March, 2008 $210,625
---------------------------------------------------------------
June, 2008 $210,625
---------------------------------------------------------------
September, 2008 $210,625
---------------------------------------------------------------
December, 2008 $210,625
---------------------------------------------------------------
March, 2009 $210,625
---------------------------------------------------------------
June, 2009 $210,625
---------------------------------------------------------------
Maturity Date $80,037,500
===============================================================
1.29 ORGANIZATION AND GOOD STANDING. Section 6.3 of the Credit
Agreement is hereby amended and restated in its entirety to read as follows:
6.3 ORGANIZATION AND GOOD STANDING.
Each Credit Party (a) is a corporation or limited liability
company or other legal entity duly incorporated or organized, validly
existing and, if applicable, in good standing under the Laws of the
State (or other jurisdiction) of its incorporation or organization,
(b) is duly qualified and, if applicable, in good standing as a
foreign organization and authorized to do business in every
jurisdiction where the failure to be so qualified, in good standing or
authorized would have a Material Adverse Effect and (c) has the
requisite organizational power and authority to own its Properties and
to carry on its business as now conducted and as proposed to be
conducted..
1.30 INTELLECTUAL PROPERTY. Section 6.19 of the Credit Agreement is
hereby amended and restated in its entirety to read as follows:
6.19 INTELLECTUAL PROPERTY.
Each Credit Party owns, or has the legal right to use, all
material trademarks, service marks tradenames, patents, copyrights,
technology, know-how, processes and other trade secrets (the
"Intellectual Property") owned or licensed by it. Set forth on
Schedule 6.19 is a list as of the First Amendment Effective Date of
all registrations and applications for material Intellectual Property
owned by each Credit Party or that any Credit Party has the right to
use and a list of all license agreements to which a Credit Party is a
party relating to material Intellectual Property that any Credit Party
has the right to use as of the First Amendment Effective Date. Except
as provided on Schedule 6.19 or except as would not result or be
reasonably expected to result in a Material Adverse Effect, no claim
has been asserted by any Person against any Credit Party in writing
and is pending challenging or questioning the use of any Intellectual
Property owned by a Credit Party or that any Credit Party has a right
to use or the validity or effectiveness of any such Intellectual
Property, nor does any Credit Party have knowledge of any such claim,
and to the Credit Parties' knowledge the use of any Intellectual
Property by the Credit Parties does not infringe on the rights of any
Person. Except as set forth on Schedule 6.19, as of the First
Amendment Effective Date, none of the material Intellectual Property
owned by a Credit Party is subject to any licensing or franchise
agreement.
1.31 LOCATION OF COLLATERAL. Section 6.22 of the Credit Agreement is
hereby amended and restated in its entirety to read as follows:
6.22 LOCATION OF COLLATERAL.
Set forth on Schedule 6.22(a) is a list as of the First
Amendment Effective Date of all Real Properties with street address,
county and state where located. Set forth on Schedule 6.22(b) is a
list as of the First Amendment Effective Date of all locations where
any personal property of a Credit Party is located (other than
personal property of the Credit Parties not in excess of $100,000 in
the aggregate), including county and state where located. Set forth on
Schedule 6.22(c) is a list as of the First Amendment Effective Date of
the chief executive office and principal place of business of each
Credit Party.
1.32 INSURANCE UPDATE. Section 7.1(d) of the Credit Agreement is
hereby amended and restated in its entirety to read as follows:
(d) Compliance With Certain Provisions of the Credit
Agreement. Within ninety (90) days after the end of each fiscal year
of the Parent, the Borrower shall deliver (i) a certificate containing
information regarding (A) the calculation of Excess Cash Flow, and (B)
the amount of any Asset Dispositions where the Net Cash Proceeds
received or to be received in connection therewith is in excess of
$1,000,000, Debt Issuances and Equity Issuances that were made during
the prior fiscal year and (ii) an updated Schedule 7.7.
1.33 FINANCIAL COVENANTS. Section 7.2 of the Credit Agreement is
hereby amended and restated in its entirety to read as follows:
7.2 FINANCIAL COVENANTS.
(a) Leverage Ratio. The Credit Parties shall cause the
Leverage Ratio, measured as of the last day of each fiscal quarter of
the Parent, to be less than or equal to the ratio shown below for the
period corresponding thereto:
--------------------------------------------------------- ---------------------------------------------
Period Ratio
--------------------------------------------------------- ---------------------------------------------
First Amendment Effective Date through September 30, 4.50 to 1.00
2005
--------------------------------------------------------- ---------------------------------------------
October 1, 2005 through June 30, 2006 4.25 to 1.00
--------------------------------------------------------- ---------------------------------------------
July 1, 2006 and thereafter 4.00 to 1.00
--------------------------------------------------------- ---------------------------------------------
(b) Senior Secured Leverage Ratio. The Credit Parties shall
cause the Senior Secured Leverage Ratio, measured as of the last day
of each fiscal quarter of the Parent, to be less than or equal to the
ratio shown below for the period corresponding thereto:
--------------------------------------------------------- ---------------------------------------------
Period Ratio
--------------------------------------------------------- ---------------------------------------------
First Amendment Effective Date through September 30, 4.00 to 1.00
2004
--------------------------------------------------------- ---------------------------------------------
October 1, 2004 through September 30, 2005 3.75 to 1.00
--------------------------------------------------------- ---------------------------------------------
October 1, 2005 through June 30, 2006 3.50 to 1.00
--------------------------------------------------------- ---------------------------------------------
July 1, 2006 through September 30, 2006 3.25 to 1.00
--------------------------------------------------------- ---------------------------------------------
October 1, 2006 and thereafter 3.00 to 1.00
--------------------------------------------------------- ---------------------------------------------
(c) Net Worth. The Credit Parties shall cause Net Worth,
measured as of the last day of each fiscal quarter of the Parent, to
be greater than or equal to the sum of the following (determined on a
cumulative basis): (i) 80% of the Net Worth as of September 30, 2003
plus (ii) as of the end of each fiscal quarter of the Borrower
commencing with the fiscal quarter ending December 31, 2003, an amount
equal to 50% of Net Income of the Parent and its Subsidiaries (to the
extent positive) for the fiscal quarter then ended plus (iii) as of
the date of any Equity Issuance, 75% of the amount of Net Cash
Proceeds from such Equity Issuance plus (iv) 75% of the amount added
to the equity of the Parent in accordance with GAAP in connection with
the Papercon Acquisition.
(d) Fixed Charge Coverage Ratio. The Credit Parties shall
cause the Fixed Charge Coverage Ratio, measured as of the last day of
each fiscal quarter of the Parent, to be greater than or equal to the
ratio shown below for the period corresponding thereto:
--------------------------------------------------------- ---------------------------------------------
Period Ratio
--------------------------------------------------------- ---------------------------------------------
First Amendment Effective Date through September 30, 1.05 to 1.00
2004
--------------------------------------------------------- ---------------------------------------------
October 1, 2004 through September 30, 2005 1.10 to 1.00
--------------------------------------------------------- ---------------------------------------------
October 1, 2005 through December 31 2006 1.15 to 1.00
--------------------------------------------------------- ---------------------------------------------
January 1, 2007 and thereafter 1.20 to 1.00
--------------------------------------------------------- ---------------------------------------------
1.34 INSURANCE. The last sentence of Section 7.7(a) of the Credit
Agreement is hereby amended and restated in its entirety to read as follows:
The present insurance coverage of the Credit Parties as of the First
Amendment Effective Date or as of the most recent update provided
pursuant to Section 7.1(d), as applicable, is outlined as to carrier,
policy number, expiration date, type and amount on Schedule 7.7, as
updated from time to time.
1.35 COLLATERAL. Section 7.9 of the Credit Agreement is hereby amended
by adding the following sentence at the end of such Section to read as follows:
Notwithstanding the foregoing or any other provision of any Credit
Document, no Foreign Subsidiary shall be required to become a Credit
Party or create any Lien on any of its Property or take any action
described in Section 7.12, if becoming a Credit Party, creating a Lien
or taking any such action could cause adverse tax consequences for the
Parent, the Borrower or any of their respective Subsidiaries.
1.36 ADDITIONAL SUBSIDIARIES. Section 7.12 of the Credit Agreement is
hereby amended by adding the following sentence at the end of such Section to
read as follows:
Notwithstanding the foregoing or any other provision of any Credit
Document, no Foreign Subsidiary shall be required to take any action
described in Section 7.12, if taking any such action could cause
adverse tax consequences for the Parent, the Borrower or any of their
respective Subsidiaries.
1.37 POST-CLOSING COVENANT. Section 7.13 of the Credit Agreement is
hereby amended by adding the following subsections (e) and (f) thereto to read
as follows:
(e) Papercon Account. Within ninety (90) days after the First
Amendment Effective Date, all amounts in the Papercon Account shall
have been applied to reduce the amount of Revolving Loans outstanding.
(f) Mortgage Amendment Documents. Within sixty (60) days
after the First Amendment Effective Date (or such extended period of
time as agreed to by the Administrative Agent), the Borrower shall
deliver the following to the Administrative Agent, in form and
substance reasonably satisfactory to the Administrative Agent:
(i) Mortgages. Fully executed and notarized
amendments to existing Mortgages and Leasehold Mortgages
reflecting the increase to the Aggregate Revolving
Commitments and the Tranche B Term Loan Commitments pursuant
to this Amendment;
(ii) Local Counsel Opinions. Opinions of counsel
with respect to the amendments to the Mortgages and Leasehold
Mortgages referenced in Section 4.1(a) above; and
(iii) Title Policies. Datedown endorsements to
existing Mortgage Policies (or, to the extent required, new
Mortgage Policies), issued by the Title Insurance Company,
with respect to the amendments to the Mortgages and Leasehold
Mortgages referenced in Section 4.1(a) above.
1.38 PERMITTED INDEBTEDNESS. Section 8.1 of the Credit Agreement is
hereby amended by adding the following subsection (j) thereto to read as
follows and by making the appropriate grammatical and punctuation changes
thereto:
(j) Indebtedness arising under the Papercon Seller Note in an
aggregate principal amount not to exceed $7,000,000.
1.39 RESTRICTED PAYMENTS. Section 8.8(d) of the Credit Agreement is
hereby amended and restated in its entirety to read as follows:
(d) so long as no Default or Event of Default exists
before or would result immediately after giving effect to any
such dividend, the Parent may pay cash dividends to its
shareholders in an amount not to exceed $4,000,000 during any
twelve (12) month period;
1.40 RESTRICTIONS ON MODIFICATIONS TO ACQUISITION DOCUMENTS AND
PAYMENTS OF SELLER OBLIGATIONS. Section 8.9 of the Credit Agreement is hereby
amended and restated in its entirety to read as follows:
8.9 RESTRICTIONS ON MODIFICATIONS TO SUBORDINATED
INDEBTEDNESS AND THE PAPERCON ACQUISITION DOCUMENTS AND PAYMENTS OF
CERTAIN INDEBTEDNESS.
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, (i) amend or
modify (or permit the amendment or modification of)
any of the terms of any Indebtedness if such
amendment or modification would add or change any
terms in a manner materially adverse to the issuer
of such Indebtedness, or shorten the final maturity
or average life to maturity or require any payment
to be made sooner than originally scheduled or
increase the interest rate applicable thereto or
change any subordination provision thereof, or (ii)
make (or give any notice with respect thereto) any
voluntary or optional payment or prepayment or
optional redemption or optional acquisition for
value of (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
other Indebtedness (including, without limitation,
any Subordinated Indebtedness);
(b) amend or modify any of the terms (other
than any immaterial terms) of any Papercon
Acquisition Document after the First Amendment
Effective Date without the prior written consent of
the Required Lenders;
(c) make any payments (whether of
principal, interest, fees or other amounts) under
the Papercon Seller Note; provided that, subject to
the terms of the Papercon Intercreditor Agreement,
the Parent may (i) make regularly scheduled interest
payments on the Papercon Seller Note and (ii) pay
the principal amount of the Papercon Seller Note on
or after the second anniversary of the First
Amendment Effective Date so long as, immediately
after giving effect to any such principal payment,
(A) the Credit Parties shall be in compliance with
Section 7.2(a) and Section 7.2(b), calculated on a
pro forma basis and with an assumed Funded Debt (or,
with respect to Section 7.2(b), secured Funded Debt)
in amount that is $10,000,000 greater than the
actual Funded Debt (or secured Funded Debt) of the
Parent and its Subsidiaries on a consolidated basis,
(B) the Credit Parties shall be in pro forma
compliance with Sections 7.2(c) and 7.2(d) and (C)
at least $10,000,000 of the then Aggregate Revolving
Commitments shall be unused;
(d) amend or modify any of the terms of
any Subordinated Indebtedness without the prior
written consent of the Required Lenders; or
(e) make any Subordinated Debt Payment;
provided, however, the Parent may make a
Subordinated Debt Payment if such payment is not
made in violation of the subordination provisions
governing the applicable Subordinated Indebtedness
that are approved in accordance with the terms of
the definition of Subordinated Indebtedness.
Notwithstanding anything to the contrary contained
in this Section 8.9, the Borrower shall be permitted to
prepay any of the Xxxxxx Springs Debt at any time that a
Default or Event of Default has occurred and is continuing
under Section 9.1(g)(ii)(A)(2) in respect of the Xxxxxx
Springs Debt and no other Default or Event of Default is then
existing.
1.41 TRANSACTIONS WITH AFFILIATES. Section 8.10 of the Credit
Agreement is hereby amended and restated in its entirety to read as follows:
8.10 TRANSACTIONS WITH AFFILIATES.
No Credit Party will, nor will it permit any of its
Subsidiaries to, enter into any transaction or series of transactions,
whether or not in the ordinary course of business, with any officer,
director, shareholder, Subsidiary or Affiliate other than (i) Exempt
Affiliate Transactions, (ii) those transactions that are on terms and
conditions substantially as favorable as would be obtainable in a
comparable arm's-length transaction with a Person other than an
officer, director, shareholder, Subsidiary or Affiliate and (iii)
those transactions effecting, or otherwise relating to, the Papercon
Acquisition.
1.42 RESTRICTION ON FOREIGN SUBSIDIARIES. Section 8.15 of the Credit
Agreement is hereby amended and restated in its entirety to read as follows:
8.15 NO FOREIGN SUBSIDIARIES.
No Credit Party will, nor will it permit any of its
Subsidiaries to, create, acquire or permit to exist any Foreign
Subsidiary, except (a) any Foreign Subsidiary that is a Credit Party
or becomes a Credit Party in connection with its creation or
acquisition and (b) the Canadian Numbered Company; provided that the
Canadian Numbered Company shall be merged into a Credit Party within
90 days after the First Amendment Effective Date.
1.43 CROSS-DEFAULT AND JUDGMENT DEFAULT. Sections 9.1(g)(ii) and (h)
are hereby amended and restated in their entirety to read as follows:
************
(ii) With respect to any Indebtedness in excess of
$2,500,000 (other than Indebtedness outstanding under this
Credit Agreement) of a Credit Party (A) such Person shall (1)
default in any payment (beyond the applicable grace period
with respect thereto, if any) with respect to any such
Indebtedness, or (2) default (after giving effect to any
applicable grace period) in the observance or performance of
any term, condition or agreement relating to such
Indebtedness contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event
or condition shall occur or condition exist, the effect of
which default or other event or condition is to cause, or
permit (without regard to any notice requirement), the holder
or holders of such Indebtedness (or trustee or agent on
behalf of such holders) to cause any such Indebtedness to
become due prior to its stated maturity (other than a
regularly scheduled payment or mandatory prepayment); or (B)
any such Indebtedness shall be declared due and payable, or
required to be prepaid other than by a regularly scheduled or
required prepayment prior to the stated maturity thereof; or
(C) any such Indebtedness shall mature and remain unpaid.
(h) Judgments. One or more judgments, orders, or decrees
shall be entered against any one or more of the Credit Parties
involving a liability of $2,500,000 or more in the aggregate (to the
extent not paid or covered by (x) insurance provided by a carrier who
has not denied coverage or (y) any indemnity provided pursuant to
documentation with respect to a Permitted Acquisition to the extent
the indemnifying party has not denied or contested liability) and such
judgments, orders or decrees (i) are the subject of any enforcement
proceeding commenced by any creditor or (ii) shall continue
unsatisfied, undischarged and unstayed for a period ending on the
first to occur of (A) the last day on which such judgment, order or
decree becomes final and unappealable or (B) sixty (60) days.
************
1.44 AUTHORIZATION OF PAPERCON INTERCREDITOR AGREEMENT. A new Section
10.13 is hereby added to the Credit Agreement to read as follows:
10.13 PAPERCON ACQUISITION.
Each of the Lenders hereby acknowledges that it has received
and reviewed the Papercon Intercreditor Agreement and hereby
authorizes the Administrative Agent to enter into the Papercon
Intercreditor Agreement on its behalf.
1.45 USE OF ELECTRONIC MAIL. Section 11.2(c) of the Credit Agreement
is hereby amended and restated in its entirety to read as follows:
(c) Limited Use of Electronic Mail. Notices and other
communications to the Lenders and the L/C Issuer hereunder may be
delivered or furnished by electronic communication (including e-mail
and Internet or intranet websites) pursuant to procedures approved by
the Administrative Agent; provided that the foregoing shall not apply
to notices to any Lender or the L/C Issuer pursuant to Section 2 if
such Lender or the L/C Issuer, as applicable, has notified the
Administrative Agent that it is incapable of receiving notices under
such Section by electronic communication; and provided, further, that
with respect to non-routine communications the Borrower has the right
to prevent the delivery or furnishing thereof by electronic
communication. The Administrative Agent or the Borrower may, in its
discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved
by the Administrative Agent or the Borrower, respectively; provided
that (i) approval of such procedures may be limited to particular
notices or communications and (ii) the terms of the next paragraph
shall apply to such notices and other communications unless the
Administrative Agent or the Borrower, as applicable, otherwise
prescribes.
Unless the Administrative Agent otherwise prescribes, as
between the Administrative Agent and the Lenders, (i) notices and
other communications sent to an e-mail address shall be deemed
received upon the sender's receipt of an acknowledgement from the
intended recipient (such as by the "return receipt requested"
function, as available, return e-mail or other written
acknowledgement); provided that if such notice or other communication
is not sent during the normal business hours of the recipient, such
notice or communication shall be deemed to have been sent at the
opening of business on the next business day for the recipient, and
(ii) notices or communications posted to an Internet or intranet
website shall be deemed received upon the deemed receipt by the
intended recipient at its e-mail address as described in the foregoing
clause (i) of notification that such notice or communication is
available and identifying the website address therefor.
1.46 INDEMNIFICATION BY BORROWER. Section 11.5(d) of the Credit
Agreement is hereby amended and restated in its entirety to read as follows:
(d) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether
based on contract, tort or any other theory (including any
investigation of, preparation for, or defense of any pending or
threatened claim, investigation, litigation or proceeding) and
regardless of whether any Indemnitee is a party thereto (all the
foregoing, collectively, the "Indemnified Liabilities"), in all cases,
whether or not caused by or arising, in whole or in part, out of the
comparative, contributory or sole negligence of the Indemnitee;
provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such liabilities, obligations, losses,
damages, penalties, claims, demands, actions, judgments, suits, costs,
expenses or disbursements are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from
the gross negligence or willful misconduct of such Indemnitee.
1.47 ASSIGNMENTS AND PARTICIPATIONS. Section 11.7 of the Credit
Agreement is hereby amended by amending and restating in their entirety
subsections (a), (b)(i), (b)(iii) and (c) thereof and by adding a new
subsection (i) thereto to read as follows:
(a) Successors and Assigns Generally. The provisions of this
Credit Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns permitted
hereby, except that neither the Borrower nor any other Credit Party
may assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of each Lender and no
Lender may assign or otherwise transfer any of its rights or
obligations hereunder except (i) to an Eligible Assignee in accordance
with the provisions of subsection (b) of this Section, (ii) by way of
participation in accordance with the provisions of subsection (d) of
this Section, or (iii) by way of pledge or assignment of a security
interest subject to the restrictions of subsection (f) or (g) of this
Section (and any other attempted assignment or transfer by any party
hereto shall be null and void). Nothing in this Credit Agreement,
expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and
assigns permitted hereby, Participants to the extent provided in
subsection (d) of this Section and, to the extent expressly
contemplated hereby, the Indemnitees) any legal or equitable right,
remedy or claim under or by reason of this Credit Agreement.
(b) Assignments by Lenders. Any Lender may at any time assign
to one or more Eligible Assignees all or a portion of its rights and
obligations under this Credit Agreement (including all or a portion of
its Commitment and the Loans (including for purposes of this
subsection (b), participations in L/C Obligations) at the time owing
to it); provided that
(i) except in the case of an assignment of the
entire remaining amount of the assigning Lender's Commitment
and the Loans at the time owing to it or in the case of an
assignment to a Lender or an Affiliate of a Lender or an
Approved Fund with respect to a Lender, the aggregate amount
of the Commitment (which for this purpose includes Loans
outstanding thereunder) or, if the Commitment is not then in
effect, the principal outstanding balance of the Loans of the
assigning Lender subject to each such assignment, determined
as of the date the Assignment and Assumption with respect to
such assignment is delivered to the Administrative Agent or,
if "Trade Date" is specified in the Assignment and
Assumption, as of the Trade Date, (A) if such Commitment
assigned is a Revolving Commitment, shall not be less than
$2,500,000 and (B) if such Commitment assigned is a Tranche A
Term Loan Commitment or a Tranche B Term Loan Commitment,
shall not be less than $1,000,000, in each case unless each
of the Administrative Agent and, so long as no Event of
Default has occurred and is continuing, the Borrower
otherwise consents (each such consent not to be unreasonably
withheld or delayed);
************
(iii) the parties to each assignment shall execute
and deliver to the Administrative Agent an Assignment and
Assumption, together with a processing and recordation fee of
$3,500, and the Eligible Assignee, if it shall not be a
Lender, shall deliver to the Administrative Agent an
Administrative Questionnaire; provided that (A) only one such
fee shall be payable in the case of substantially
contemporaneous assignments by or to Approved Funds or
Affiliates of a single Lender, (B) such processing and
recordation fee shall not be required for any assignment from
a Lender to an Affiliate of such Lender and (C) no Credit
Party shall be required to reimburse any such processing and
recordation fee.
(c) Register. The Administrative Agent, acting solely for
this purpose as an agent of the Borrower, shall maintain at the
Administrative Agent's Office a copy of each Assignment and Assumption
delivered to it and a register for the recordation of the names and
addresses of the Lenders, and the Commitments of, and principal
amounts of the Loans and L/C Obligations owing to, each Lender
pursuant to the terms hereof from time to time (the "Register"). The
entries in the Register shall be conclusive, absent manifest error,
and the Borrower, the Administrative Agent and the Lenders may treat
each Person whose name is recorded in the Register pursuant to the
terms hereof as a Lender hereunder for all purposes of this Credit
Agreement, notwithstanding notice to the contrary. The Register shall
be available for inspection by each of the Borrower and the L/C Issuer
at any reasonable time and from time to time upon reasonable prior
notice. In addition, at any time that a request for a consent for a
material or substantive change to the Loan Documents is pending, any
Lender wishing to consult with other Lenders in connection therewith
may request and receive from the Administrative Agent a copy of the
Register.
************
(i) Electronic Execution of Assignments. With respect to the
Administrative Agent and Eligible Assignees only, the words
"execution," "signed," "signature," and words of like import in any
Assignment and Assumption shall be deemed to include electronic
signatures or the keeping of records in electronic form, each of which
shall be of the same legal effect, validity or enforceability as a
manually executed signature or the use of a paper-based recordkeeping
system, as the case may be, to the extent and as provided for in any
applicable law, including the Federal Electronic Signatures in Global
and National Commerce Act, the New York State Electronic Signatures
and Records Act, or any other similar state laws based on the Uniform
Electronic Transactions Act.
1.48 CONFIDENTIALITY. The definition of "Information" in Section 11.8
of the Credit Agreement is hereby amended and restated in its entirety to read
as follows:
For the purposes of this Section, "Information" means all information
received from any Credit Party or the Canadian Numbered Company
relating to any Credit Party or the Canadian Numbered Company or its
respective business, other than any such information that is available
to the Administrative Agent or any Lender on a nonconfidential basis
prior to disclosure by any Credit Party or the Canadian Numbered
Company.
1.49 USA PATRIOT ACT NOTICE. A new Section 11.19 is hereby added to
the Credit Agreement to read as follows:
11.19 USA PATRIOT ACT NOTICE.
Each Lender that is subject to the Act (as hereinafter
defined) and the Administrative Agent (for itself and not on behalf of
any Lender) hereby notifies the Borrower that pursuant to the
requirements of the USA Patriot Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)) (the "Act"), it is required to
obtain, verify and record information that identifies the Borrower,
which information includes the name and address of the Borrower and
other information that will allow such Lender or the Administrative
Agent, as applicable, to identify the Borrower in accordance with the
Act.
1.50 SCHEDULES. Schedules 2.1, 5.1(e), 5.1(h), 6.19, 6.22(a), 6.22(b),
6.22(c) and 7.7 to the Credit Agreement are hereby amended and replaced by
Schedules 2.1, 5.1(e), 5.1(h), 6.19, 6.22(a), 6.22(b), 6.22(c) and 7.7,
respectively, attached to this Amendment or delivered to the Administrative
Agent on or before the First Amendment Effective Date. A new Schedule 1.1(d) is
hereby added to the Credit Agreement in the form of such Schedule attached to
this Amendment or delivered to the Administrative Agent on or before the First
Amendment Effective Date.
ARTICLE II
CONDITIONS TO CLOSING AND EFFECTIVENESS
2.1 CLOSING CONDITIONS.
This Amendment shall be deemed closed (and shall become effective as
of the First Amendment Effective Date) as of the date (the "First Amendment
Closing Date") the following conditions have been satisfied:
(a) Executed Amendment. The Administrative Agent shall have
received of a copy of this Amendment duly executed by each of the
Credit Parties, the Existing Lenders and the New Lenders.
(b) Corporate Documents. The Administrative Agent shall have
received the following:
(i) Charter Documents. Copies of the articles or
certificates of incorporation, articles of organization or
other charter documents of each Credit Party certified to be
true and complete as of a recent date by the appropriate
Governmental Authority of the state or other jurisdiction of
its incorporation or organization and certified by a
secretary or assistant secretary of such Credit Party to be
true and correct as of the First Amendment Closing Date;
(ii) Bylaws; Operating Agreement. A copy of the
bylaws or operating agreement of each Credit Party certified
by a secretary or assistant secretary of such Credit Party to
be true and correct as of the First Amendment Closing Date;
(iii) Resolutions. Copies of resolutions of the
Board of Directors or their equivalent of each Credit Party
approving and adopting this Amendment and the Papercon
Acquisition Documents to which it is a party, the
transactions contemplated herein and therein and authorizing
execution and delivery hereof and thereof, certified by a
secretary or assistant secretary of such Credit Party to be
true and correct and in force and effect as of the First
Amendment Closing Date;
(iv) Good Standing. Copies of certificates of good
standing, existence or its equivalent with respect to each
Credit Party certified as of a recent date by the appropriate
Governmental Authorities of the state or other jurisdiction
of incorporation or organization and each other jurisdiction
in which the failure to so qualify and be in good standing
would have a Material Adverse Effect; and
(v) Incumbency. An incumbency certificate of each
Credit Party certified by a secretary or assistant secretary
to be true and correct as of the First Amendment Closing
Date.
(c) Personal Property Collateral. The Administrative Agent
shall have received, in form and substance reasonably satisfactory to
the Administrative Agent:
(i) searches of Uniform Commercial Code ("UCC") and
Personal Property Security Act ("PPSA") filings in the
jurisdiction of incorporation or organization of each Credit
Party and each Person to be acquired in the Papercon
Acquisition (each an "Acquired Company"), the jurisdiction of
the chief executive office of each Acquired Company and each
jurisdiction where any property of an Acquired Company is
located or where a filing would have been made in order to
perfect the Administrative Agent's security interest in such
property under previous versions of Article 9 of the UCC and
previous versions of the PPSA and copies of the financing
statements on file in such jurisdictions; and
(ii) searches of ownership of intellectual property
of the Canadian Numbered Company, Papercon and GMG
International Inc., a Georgia corporation (collectively, the
"Acquired Companies"), in the appropriate governmental
offices as reasonably requested by the Administrative Agent.
(d) Acquisition Documents. The Administrative Agent shall
have received the most recent versions of (i) the Papercon Acquisition
Agreement, (ii) the Papercon Seller Note, (iii) the Papercon
Noncompete Agreement, (iv) the Papercon Intercreditor Agreement, (v)
the Registration Rights Agreement, dated as of the First Amendment
Effective Date, between the Parent and the Papercon Seller, (vi) the
Net Lease, dated as of the First Amendment Effective Date, between
GHGA Properties, L.P., a Georgia limited partnership, as landlord, and
Papercon, as tenant, and the Guaranty, dated as of the First Amendment
Effective Date, executed by the Parent in favor of GHGA Properties,
L.P. in connection with such Net Lease and (vii) the Release and
Waiver, dated as of the First Amendment Effective Date, executed by
the Papercon Seller, all in form and substance satisfactory to the
Administrative Agent, in each case certified by a Responsible Officer
of the Borrower to be true and correct.
2.2 CONDITIONS TO EFFECTIVENESS.
This Amendment shall be deemed effective as of the date (the "First
Amendment Effective Date") the following conditions have been satisfied:
(a) Executed Notes. Each New Lender shall have received a
copy of a Revolving Note and/or a Tranche B Term Note executed by the
Borrower evidencing the Revolving Commitment and the Tranche B Term
Loan Commitment, as applicable, of such New Lender.
(b) Opinions of Counsel. The Administrative Agent shall have
received, in each case dated as of the First Amendment Effective Date:
(i) a legal opinion of Skadden, Arps, Slate, Xxxxxxx
& Xxxx LLP in form and substance reasonably satisfactory to
the Administrative Agent; and
(ii) a legal opinion of special local counsel for
each Credit Party not incorporated or organized in the States
of Delaware or New York, in each case in form and substance
reasonably satisfactory to the Administrative Agent.
(c) Joinder Documentation. The Administrative Agent shall
have received a Joinder Agreement executed by each of the Acquired
Companies (other than the Canadian Numbered Company, which shall be
merged with and into a Credit Party after the First Amendment
Effective Date), together with such corporation or charter
documentation as may be reasonably required by the Administrative
Agent.
(d) Executed Canadian Collateral Documents. The
Administrative Agent shall have received of a copy of the Canadian
Security Agreement and the Canadian Pledge Agreement, each duly
executed by the Nova Scotia Subsidiary and in form and substance
reasonably satisfactory to the Administrative Agent.
(e) Personal Property Collateral. The Administrative Agent
shall have received, in form and substance reasonably satisfactory to
the Administrative Agent:
(i) UCC and PPSA financing statements for each
appropriate jurisdiction as is necessary, in the
Administrative Agent's reasonable discretion, to perfect the
Administrative Agent's security interest in the Collateral of
the Acquired Companies that will become Credit Parties;
(ii) all certificates, if any, evidencing any
certificated Capital Stock of the Acquired Companies pledged
to the Administrative Agent pursuant to the Pledge Agreement,
together with duly executed in blank undated stock powers
attached thereto;
(iii) to the extent valued in excess of $250,000,
each instrument or chattel paper in the possession of an
Acquired Company that will become a Credit Party, as required
by the Security Agreement or the Canadian Security Agreement,
together with allonges or assignments as may be reasonably
necessary to perfect the Administrative Agent's security
interest in such Collateral;
(iv) evidence that no Liens exist on the assets to
be acquired in the Papercon Acquisition other than Permitted
Liens;
(v) executed patent, trademark and copyright notices
with respect to the intellectual property of the Acquired
Companies in the United States of America; and
(vi) an executed account control agreement with
respect to the Papercon Account.
(f) Papercon Acquisition. The Papercon Acquisition shall have
been consummated substantially in accordance with the terms (unless
waived by the Parent or the Borrower to the extent immaterial or
unless consented to by the Administrative Agent) of the Papercon
Acquisition Documents delivered pursuant to Section 2.1(d) (with such
immaterial modifications thereto as agreed to by the Parent or the
Borrower and with such other modifications thereto as are reasonably
satisfactory to the Administrative Agent).
(g) Evidence of Insurance. Receipt by the Administrative
Agent of copies of insurance policies or certificates of insurance of
the Acquired Companies that will become Credit Parties evidencing
liability and casualty insurance meeting the requirements set forth in
the Credit Documents, including, but not limited to, naming the
Administrative Agent as additional insured or loss payee on behalf of
the Lenders.
(h) Corporate Structure. The corporate capital and ownership
structure of the Parent and its Subsidiaries after giving effect to
the Papercon Acquisition shall be as described in Schedule 5.1(h) to
the Credit Agreement (as amended hereby).
(i) Consents. Receipt by the Administrative Agent of evidence
reasonably satisfactory to the Administrative Agent that all
Xxxx-Xxxxx-Xxxxxx consents and clearances required in connection with
the Papercon Acquisition have been obtained.
(j) Officer's Certificates. The Administrative Agent shall
have received a certificate executed by the chief financial officer or
treasurer of the Borrower as of the First Amendment Effective Date
stating and, with respect to clause (iii), demonstrating that,
immediately after giving effect to this Amendment and the Papercon
Acquisition, (i) no Default or Event of Default exists, (ii) all
representations and warranties made by any Credit Party herein and in
the other Credit Documents are true and correct in all material
respects as of the First Amendment Effective Date except to the extent
any such representation and warranty expressly relates to an earlier
date, and (iii) the Leverage Ratio, calculated on a pro forma basis as
of March 31, 2004, shall not exceed 4.0 to 1.0.
(k) Conditions to New Extensions of Credit. Each of the
conditions set forth in Section 5.2 of the Credit Agreement shall have
been satisfied.
(l) Fees. (i) Receipt by the Administrative Agent, on behalf
of each Lender, of an amendment fee equal to 0.125% of the sum of such
Lender's Revolving Commitment plus such Lender's outstanding Term
Loans (in each case prior to giving effect to this Amendment); (ii)
receipt by the Administrative Agent of the fees due and payable to
Bank of America or BAS pursuant to that certain Fee Letter dated June
2, 2004 among the Parent, Bank of America and BAS and (iii) receipt by
the Administrative Agent of all reasonable fees and expenses of the
Administrative Agent in connection with the preparation, execution and
delivery of this Amendment, including, without limitation, the
reasonable fees and expenses of Xxxxx & Xxx Xxxxx PLLC.
ARTICLE III
ASSIGNMENTS AND ASSUMPTIONS
3.1 INCORPORATION OF NEW LENDERS AND COMMITMENTS. Upon the First
Amendment Effective Date, each Existing Lender shall be deemed to have sold and
assigned, without recourse, to the New Lenders, and the New Lenders shall be
deemed to have purchased and assumed, without recourse, from such Existing
Lender, such interests in such Existing Lender's rights and obligations under
the Credit Agreement (including, without limitation, the Commitments of such
Existing Lender on the First Amendment Effective Date and the Revolving Loans,
L/C Obligations and Tranche B Term Loans owing to such Existing Lender which
are outstanding on the First Amendment Effective Date) as shall be necessary in
order to give effect to the reallocations of the Revolving Commitments, the
Tranche B Term Loan and the Pro Rata Shares effected by the amendment to
Schedule 2.1 to the Credit Agreement set forth above. From and after the First
Amendment Effective Date (i) each of the New Lenders shall be a party to and be
bound by the provisions of the Credit Agreement (as amended hereby) and, to the
extent of the interests assigned hereby, have the rights and obligations of a
Lender thereunder and under the other Credit Documents and (ii) each Existing
Lender shall, to the extent of the interests assigned hereby, relinquish its
rights and be released from its obligations under the Credit Agreement.
ARTICLE IV
MISCELLANEOUS
4.1 AMENDED TERMS. All references to the Credit Agreement in each of
the Credit Documents shall hereafter mean the Credit Agreement as amended by
this Amendment. Except as specifically amended hereby or otherwise agreed, the
Credit Agreement is hereby ratified and confirmed and shall remain in full
force and effect according to its terms.
4.2 REPRESENTATIONS AND WARRANTIES OF CREDIT PARTIES. Each of the
Credit Parties represents and warrants as of the date hereof as follows:
(a) It has been authorized by all necessary organizational
action to execute, deliver and perform 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) Except for consents, approvals and authorizations and
orders, filings, registrations and qualifications (i) which have been
obtained or made and (ii) the failure of which to obtain or make would
not reasonably be excepted to have a Material Adverse Effect, 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.
(d) The representations and warranties set forth in Section 6
of the Credit Agreement are true and correct in all material respects
as of the date hereof (except for those which expressly relate to an
earlier date).
4.3 ACKNOWLEDGMENT OF GUARANTORS. The Guarantors acknowledge and
consent to all of the terms and conditions of this Amendment and agree that
this Amendment and all documents executed in connection herewith do not operate
to reduce or discharge the Guarantors' obligations under the Credit Documents.
4.4 CREDIT DOCUMENT. This Amendment shall constitute a Credit Document
under the terms of the Credit Agreement.
4.5 ENTIRETY. This Amendment and the other Credit Documents embody the
entire agreement between the parties hereto and supersede all prior agreements
and understandings, oral or written, if any, relating to the subject matter
hereof.
4.6 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 an executed counterpart to this Amendment by telecopy shall be
effective as an original and shall constitute a representation that an original
will be delivered.
4.7 GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, the LAW OF THE STATE OF NEW YORK; PROVIDED THAT THE
ADMINISTRATIVE Agent AND EACH LENDER SHALL RETAIN ALL RIGHTS ARISING UNDER
FEDERAL LAW.
4.8 CONSENT TO JURISDICTION; SERVICE OF PROCESS; WAIVER OF JURY TRIAL.
The consent to jurisdiction, service of process and waiver of jury trial
provisions set forth in Sections 11.17(b) and 11.18 of the Credit Agreement are
hereby incorporated by reference, mutatis mutandis.
IN WITNESS WHEREOF the Borrower, the Guarantors and the Lenders have
caused this Amendment to be duly executed on the date first above written.
BORROWER: PACKAGING DYNAMICS OPERATING COMPANY,
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Financial Officer
GUARANTORS: PACKAGING DYNAMICS CORPORATION,
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Financial Officer
BAGCRAFT PACKAGING, L.L.C.
(F/K/A BAGCRAFT ACQUISITION, L.L.C.),
a Delaware limited liability company
By: /s/ Xxxxx X. Xxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Financial Officer
INTERNATIONAL CONVERTER, INC.,
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Financial Officer
IPMC ACQUISITION, L.L.C.,
a Delaware limited liability company
By: /s/ Xxxxx X. Xxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Financial Officer
WOLF PACKAGING, INC.,
an Iowa corporation
By: /s/ Xxxxx X. Xxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Financial Officer
IUKA INCORPORATED,
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Financial Officer
ADMINISTRATIVE AGENT: BANK OF AMERICA, N.A.,
as Administrative Agent for the Lenders
By: /s/ Xxxxxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxxxxx X. Xxxxxxxx
Title: Vice President
EXISTING LENDERS: BANK OF AMERICA, N.A.,
as a Lender and as L/C Issuer
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Managing Director
LASALLE BANK NATIONAL ASSOCIATION
By: /s/ X.X. Xxxxx
--------------------------------
Name: X.X. Xxxxx
Title: F. Vice President
THE NORTHERN TRUST COMPANY
By: /s/ Xxxx X. Xxxxxx
--------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
NATIONAL CITY BANK OF THE MIDWEST
F.K.A. NATIONAL CITY BANK
By: /s/ Xxxxxxxxx Pass
--------------------------------
Name: Xxxxxxxxx Pass
Title: Senior Vice President
FIFTH THIRD BANK (CHICAGO), A MICHIGAN
BANKING CORPORATION
By: /s/ Xxxxxx X. Xxx Xxxxx
--------------------------------
Name: Xxxxxx X. Xxx Xxxxx
Title: Assistant Vice President
BANK OF SCOTLAND
By: /s/ Xxxxx Xxxxxxx
--------------------------------
Name: Xxxxx Xxxxxxx
Title: Assistant Vice President
DENALI CAPITAL CLO I, LTD.
By: /s/ Xxxx X. Xxxxxxx
--------------------------------
Name: Xxxx X. Xxxxxxx
Title: Chief Credit Officer
DENALI CAPITAL CLO II, LTD.
By: /s/ Xxxx X. Xxxxxxx
--------------------------------
Name: Xxxx X. Xxxxxxx
Title: Chief Credit Officer
DENALI CAPITAL CLO III, LTD.
By: /s/ Xxxx X. Xxxxxxx
--------------------------------
Name: Xxxx X. Xxxxxxx
Title: Chief Credit Officer
XXX XXXXXX SENIOR LOAN FUND
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Executive Director
XXX XXXXXX SENIOR INCOME TRUST
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Executive Director
OAK HILL CREDIT PARTNERS I, LIMITED
By: /s/ Xxxxx X. Xxxxx
--------------------------------
Name: Xxxxx X. Xxxxx
Title: Authorized Person
OAK HILL CREDIT PARTNERS II, LIMITED
By: /s/ Xxxxx X. Xxxxx
--------------------------------
Name: Xxxxx X. Xxxxx
Title: Authorized Person
OAK HILL CREDIT PARTNERS III,
LIMITED, F/K/A DOLPHIN INVESTMENT
CO, LTD.
By: /s/ Xxxxx X. Xxxxx
--------------------------------
Name: Xxxxx X. Xxxxx
Title: Authorized Signatory
NEW LENDERS: XXXXX FARGO BANK, N.A.
By: /s/ Xxxx X. X'Xxxx
--------------------------------
Name: Xxxx X. X'Xxxx
Title: Senior Vice President
DENALI CAPITAL CLO IV, LTD.
By: /s/ Xxxx X. Xxxxxxx
--------------------------------
Name: Xxxx X. Xxxxxxx
Title: Chief Credit Officer
