AMENDMENT NO. 8 AND WAIVER NO. 2 TO THE SECOND AMENDED AND RESTATED CREDIT AGREEMENT
Exhibit 4.2
Execution
Version
AMENDMENT
NO. 8 AND WAIVER NO. 2 TO THE
SECOND
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as
of September 28, 2008
AMENDMENT
NO. 8 AND WAIVER NO. 2 (this “Amendment and
Waiver”) TO THE SECOND AMENDED AND RESTATED CREDIT AGREEMENT among
Chesapeake Corporation, a Virginia corporation (the “U.S. Borrower”),
Chesapeake U.K. Holdings Limited, Chesapeake U.K. Acquisitions plc, Boxmore
International Limited, Chesapeake plc (formerly known as Field Group plc)
(collectively, the “U.K. Borrowers”), the
banks, financial institutions and other institutional lenders party to the
Credit Agreement referred to below (collectively, the “Lenders”) and
Wachovia Bank, National Association, as administrative agent for the Lenders (in
such capacity, the “Administrative
Agent”).
PRELIMINARY
STATEMENTS:
WHEREAS,
the U.S. Borrower, the U.K. Borrowers, the Lenders, the Administrative Agent,
Bank of America, N.A. and Citicorp North America, Inc., as syndication agents,
HSBC Bank plc, as documentation agent, Wachovia Capital Markets, LLC, as a
co-lead arranger and the sole bookrunner, and Banc of America Securities LLC and
Citicorp North America, Inc., as co-lead arrangers, have entered into a Second
Amended and Restated Credit Agreement dated as of February 23, 2004, as amended
by Amendment No. 1 dated as of June 10, 2004, Amendment No. 2 dated as of
February 23, 2006, the Letter Waiver and Amendment No. 3 dated as of August
4, 2006, Amendment No. 4 dated as of June 18, 2007, Amendment No. 5 dated as of
January 18, 2008, but effective as of December 28, 2007, Amendment No. 6 dated
as of March 5, 2008 and Amendment No. 7 (“Amendment No. 7”)
dated as of July 15, 2008 (as so amended, the “Credit Agreement;”
capitalized terms not otherwise defined in this Amendment and Waiver have the
same meanings as specified in the Credit Agreement); and
WHEREAS,
the Borrowers, the Lenders and the Administrative Agent have agreed to amend and
waive certain provisions of the Credit Agreement as hereinafter set forth,
including the potential Events of Default notified by the U.S. Borrower to the
Administrative Agent in connection with Section 7.2.4 of the
Credit Agreement;
NOW,
THEREFORE, in consideration of the premises and for other good and valuable
consideration (the receipt and sufficiency of which are hereby acknowledged),
the parties hereto hereby agree as follows:
SECTION
1. Amendments to the Credit
Agreement. The Credit Agreement is, effective as of the Eighth
Amendment Effective Date (as defined in Section 3 below) and subject to the
satisfaction of the conditions precedent set forth in Section 3, hereby
amended as follows:
(a) Section
1.1 is hereby amended by inserting therein the following definitions in the
proper alphabetical order:
““Eighth Amendment”
means Amendment No. 8 and Waiver No. 2 to this Agreement dated as of September
28, 2008.”
““Eighth Amendment Effective
Date” means the date on which all conditions to effectiveness set forth
in Section 3 of the Eighth Amendment have been satisfied.”
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(b) The
definition of “Applicable Margin”
contained in Section 1.1 is hereby amended, for the period commencing with the
Eighth Amendment Effective Date and continuing through and including the
Termination Date, by deleting the pricing grid contained therein and
substituting in lieu thereof the following pricing grid:
|
“Leverage
Ratio
|
Applicable
Margin for LIBO Rate Loans
|
Applicable
Margin for Base Rate Loans
|
|
Greater
than or equal to 4.50:1
|
7.00%
|
6.00%
|
|
Less
than 4.50:1
|
4.25%
|
3.25%”
|
(c) The
definition of “LIBO
Rate” contained in Section 1.1 is hereby amended, for the period
commencing with the Eighth Amendment Effective Date and continuing through and
including the Termination Date, by inserting after the last sentence contained
therein the following:
“Notwithstanding
the calculation of LIBO Rate set forth herein, commencing with the Eighth
Amendment Effective Date and continuing through and including the Termination
Date and for all purposes under the Loan Documents, if the calculation of the
LIBO Rate in accordance with the foregoing results in a LIBO Rate that is less
than 3.25%, then the LIBO Rate shall be deemed to be 3.25% and such rate shall
remain in effect until such time as the LIBO Rate, as calculated in accordance
with the foregoing, is greater than 3.25%."
(d) Section
7.1.1(a) of the Credit Agreement is hereby amended, for the period commencing
with the Eighth Amendment Effective Date, (i) by deleting the “50” appearing in
the first sentence thereof and substituting therefor “30” and (ii) by inserting
immediately before the semi-colon contained therein the following:
“(it being understood that with respect
to the financial statements in respect of the third Fiscal Quarter of 2008
delivered to the Administrative Agent, such financial statements shall be
substantially similar to those filed with the SEC)”
SECTION
2. Limited Waiver to Credit
Agreement. In accordance with Section 10.1 of the Credit
Agreement, and notwithstanding any other provisions set forth in the Credit
Agreement, as of the Eighth Amendment Effective Date, in response to the
notification by the U.S. Borrower to the Administrative Agent of the potential
occurrence of the Events of Default in connection with Section 7.2.4 of the
Credit Agreement for the third Fiscal Quarter of 2008, the Required Lenders
hereby waive, for the period commencing with the Eighth Amendment Effective Date
through and including October 31, 2008 (the “Waiver Expiration
Date”), any Default or Event of Default arising under Section 8.1.3 of
the Credit Agreement resulting from the Borrowers failure to perform their
obligations set forth in Section 7.2.4 of the Credit Agreement for the third
Fiscal Quarter of 2008.
SECTION
3. Conditions of
Effectiveness. This Amendment and Waiver shall be effective as
of September 28, 2008 (the “Eighth Amendment Effective
Date”) when, and only when,
(a) a
Borrower shall have paid, on or before October 1, 2008 to the Administrative
Agent for the ratable account and benefit of each Lender executing this
Amendment and Waiver on or before 5:00 p.m. Eastern time on October 1, 2008, a
fee equal to 0.10% of the Total Exposure Amount of each such
Lender;
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(b) the
Administrative Agent shall have received, on or before October 1, 2008, the
following documents, each such document (unless otherwise specified) dated the
date of receipt thereof by the Administrative Agent (unless otherwise specified)
and in sufficient copies for each Lender, in form and substance satisfactory to
the Administrative Agent:
(i) Counterparts
of this Amendment and Waiver executed by each Borrower and the Required Lenders
or, as to any of the Required Lenders, advice satisfactory to the Administrative
Agent that such Required Lender has executed this Amendment and
Waiver;
(ii) Counterparts
of the Consent and Confirmation attached hereto executed by each
Subsidiary
Guarantor;
(iii) In
accordance with Section 6, evidence reasonably satisfactory to the
Administrative Agent that any and all expenses of all counsel to the
Administrative Agent for services rendered since the date of their last invoice,
or since they commenced work, as well as all expenses in connection with this
Amendment and Waiver shall have been paid in full in accordance with Section 10.3 of the
Credit Agreement;
(iv) A
certificate signed by a duly authorized officer of each Borrower stating
that:
(A) All
representations and warranties made by such Borrower in Section 4 hereof and in
the Credit Agreement and the other Loan Documents are true and correct in all
material respects as of the date hereof as if made on the date hereof (unless
stated to relate solely to an earlier date, in which case such representations
and warranties shall be true and correct in all material respects as of such
earlier date); and
(B) after
giving effect to this Amendment and Waiver, no Default shall have
occurred
and be continuing.
(c) Within 15
days after the Eighth Amendment Effective Date, the Administrative Agent shall
have received (i) corporate resolutions of the Borrowers authorizing the
transactions contemplated under this Amendment and Waiver and (ii) legal
opinions of Hunton & Xxxxxxxx LLP, counsel to the U.S. Borrower, addressed
to the Administrative Agent and the Lenders, as to such matters as the
Administrative Agent may reasonably request including, without limitation,
corporate formalities, due authorization and delivery and, enforceability of
this Amendment and Waiver.
SECTION
4. Representations and
Warranties of the
Borrowers. Each Borrower represents and warrants as
follows:
(a) Such
Borrower and each Subsidiary Guarantor is a corporation or limited liability
company duly organized or formed, validly existing and in good standing under
the laws of its jurisdiction of organization or formation
(b) The
execution, delivery and performance by such Borrower of this Amendment and
Waiver and the Loan Documents, as modified hereby, and by each Subsidiary
Guarantor of the Consent and Confirmation attached hereto, are in each case
within such Person’s powers,
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have been
duly authorized by all necessary action, and do not result in a default under or
contravene any such Person’s Organic Documents.
(c) No
authorization or approval or other action by, and no notice to or filing with,
any Governmental Authority or other Person (other than those that have been duly
obtained or made and which are in full force and effect) is required for the due
execution, delivery or performance by such Borrower of this Amendment and Waiver
or any of the Loan Documents, as modified hereby, to which it is or is to be a
party, or by each Subsidiary Guarantor of the Consent and Confirmation attached
hereto.
(d) This
Amendment and Waiver has been duly executed and delivered by such Borrower, and
the Consent and Confirmation attached hereto has been duly executed and
delivered by each Subsidiary Guarantor. This Amendment and Waiver and
each of the other Loan Documents, as modified hereby, to which such Borrower is
a party, and the Consent and Confirmation attached hereto, are legal, valid and
binding obligations of such Borrower or such Subsidiary Guarantor, as
applicable, enforceable against such entity in accordance with their respective
terms (except, in any case, as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization or similar laws affecting creditors’
rights generally and by general principles of equity).
SECTION
5. Reference to and Effect on
the Loan Documents. (a) On and after the Eighth
Amendment Effective Date, each reference in the Credit Agreement to “this
Agreement”, “hereunder”, “hereof” or words of like import referring to the
Credit Agreement, and each reference in the Notes and each of the other Loan
Documents to “the Credit Agreement”, “thereunder”, “thereof” or words of like
import referring to the Credit Agreement, shall mean and be a reference to the
Credit Agreement, as modified by this Amendment and Waiver.
(b) The
Credit Agreement (including, without limitation, the guarantees by the Borrowers
set forth in Section
4.10 thereof), the Notes and each of the other Loan Documents (including,
without limitation, the covenants set forth in Section 6 of Amendment No. 7 and
any written agreements with respect to the security interests contemplated under
Section 7.1.14 of the Credit Agreement) are and shall continue to be in full
force and effect and are hereby in all respects ratified and
confirmed. Without limiting the generality of the foregoing, the
Collateral Documents and all of the Collateral described therein do and shall
continue to secure the payment of all Obligations of the Loan Parties under the
Loan Documents, in each case as modified by this Amendment and
Waiver.
(c) The
execution, delivery and effectiveness of this Amendment and Waiver shall not,
except as expressly provided herein, operate as a waiver of any right, power or
remedy of any Lender or the Administrative Agent under any of the Loan
Documents, nor constitute a waiver of any provision of any of the Loan Documents
(including, without limitation, the covenants set forth in Section 6 of
Amendment No. 7 and any written agreements with respect to the security
interests contemplated under Section 7.1.14 of the Credit
Agreement.
SECTION
6. Costs and
Expenses. The Borrowers agree to pay on demand all costs and
expenses of the Administrative Agent in connection with the preparation,
execution, delivery and administration, modification and amendment of this
Amendment and Waiver and the other instruments and documents to be delivered
hereunder and prior amendments and agreements as well as ongoing advice relating
to the rights and remedies of the Lenders and effecting additional Collateral
under the Loan Documents (including, without limitation, the reasonable fees and
expenses of counsel for the Administrative Agent (including, Shearman and
Sterling LLP, Wragge & Co LLP, local counsel in all foreign jurisdictions
where collateral has been sought and Xx. Xxxxxxx Xxxx QC)) in accordance with
the
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terms of
Section 10.3 of
the Credit Agreement, with any invoice submitted prior to the Eighth Amendment
Effective Date to be paid on the Eighth Amendment Effective Date.
SECTION
7. Other
Covenants. In consideration of the agreements contained
herein, the Borrowers further agree (it being understood that failure to comply
with the covenants contained in this Section 7 shall constitute an Event of
Default):
(a) To use
commercially reasonable efforts to re-allocate, in a manner reasonably
satisfactory to the Administrative Agent, (the “Debt Re-allocation”),
no earlier than October 1, 2008 but no later than October 15, 2008 (it being
understood that written details of such Debt Re-allocation shall be provided to
the Administrative Agent prior to the effectiveness thereto), any Borrowings of
the U.S. Borrower to Chesapeake U.K. Holdings Limited (“CSK UK Holdings”) in
an amount (denominated in U.S. Dollars or Other Currency equivalent) equal to
the greater of (A) $50,000,000 or (B) the amount of the cumulative tax basis net
operating losses of the U.S. Borrower reasonably expected to be available to the
U.S. Borrower during the current taxable year on a current or carryover basis
plus an amount equal to the foreign source taxable income that during the
current taxable year of the U.S. Borrower could be reasonably be expected to be
offset, after the use of such net operating losses, for U.S. federal income tax
purposes by U.S. foreign tax credits available to such Borrower, as
calculated as of the most recent computation date (consistent with past
practices of the Borrowers and done in the ordinary course of business);
provided that, in any event, the aggregate principal amount of Borrowings by the
U.S. Borrower, after the date of such re-allocation, shall not exceed
$111,000,000 at anytime, and in connection with the foregoing, deliver to the
Administrative Agent, prior to the effectiveness thereof, the
following:
(i) Shareholder
and board resolutions of CSK UK Holdings authorizing the Debt Re-allocation and
the entering into of any loan documentation or other agreements in respect of
the Debt Re-allocation, in each case, in form and substance reasonably
satisfactory to the Administrative Agent,
(ii) Officer
certificates with respect to CSK UK Holdings in form and substance reasonably
satisfactory to the Administrative Agent,
(iii) A drawing
request or applicable borrowing notice,
(iv) Evidence
satisfactory to the Administrative Agent regarding the prepayment of the
intercompany promissory notes, if applicable, and
(v) Evidence
that Chesapeake PLC has registered as a private limited company if necessary to
effect the Debt-Reallocation in a lawful manner.
(b) In
connection with the Debt-Reallocation, or otherwise, to provide any collateral
documents, security agreements and guarantees (along with legal opinions (other
than in connection with the Debt-reallocation) that are consistent with other
legal opinions provided in connection with the Loan Documents, corporate
resolutions, and other items reasonably related thereto) reasonably requested by
the Administrative Agent in connection with the security interests and
guarantees contemplated under the Loan Documents.
SECTION
8. Delivery of Third Quarter
Financial Statements. Notwithstanding Section 8.1.4 of the
Credit Agreement to the contrary, the Borrowers hereby acknowledge and agree
that the failure to deliver the financial statements referred to in Section
7.1.1(a) of the Credit Agreement, as
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amended
hereby, within 30 days after the end of the third Fiscal Quarter of 2008, along
with a Compliance Certificate concurrently therewith, as required under Section
7.1.1(c) of the Credit Agreement, shall constitute an Event of Default for all
purposes under the Loan Documents.
SECTION
9. Execution in
Counterparts. This Amendment and Waiver may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute but one and the same
agreement. Delivery of an executed counterpart of a signature page to
this Amendment and Waiver by telecopier (or other electronic transmission) shall
be effective as delivery of a manually executed counterpart of this Amendment
and Waiver.
SECTION
10. Governing
Law. This Amendment and Waiver shall be governed by, and
construed in accordance with, the laws of the State of
New York.
IN
WITNESS WHEREOF, the parties hereto have caused this Amendment and Waiver to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
CHESAPEAKE
CORPORATION
By /s./ Xxxx X.
Xxxxxxx
Name:
Xxxx X Xxxxxxx
Title:
Executive Vice President & CFO
CHESAPEAKE
U.K. HOLDINGS LIMITED
By /s/ X. X. Xxxxxx
Xx.
Name: X.
X. Xxxxxx Xx.
Title:
Director
CHESAPEAKE
U.K. ACQUISITIONS PLC
By /s/ X. X. Xxxxxx
Xx.
Name: X.
X. Xxxxxx Xx.
Title:
Director
BOXMORE
INTERNATIONAL LIMITED
By /s/ X. X. Xxxxxx
Xx.
Name: X.
X. Xxxxxx Xx.
Title:
Director
CHESAPEAKE
PLC (FORMERLY KNOWN AS
FIELD
GROUP PLC)
By /s/ X. X. Xxxxxx
Xx.
Name: X.
X. Xxxxxx Xx.
Title:
Director
Agreed as
of the date first above written:
WACHOVIA
BANK, NATIONAL ASSOCIATION,
as a
Lender and Administrative Agent
By: /s/ Xxxxxxxx X.
Xxxxxx
Name:
Xxxxxxxx X. Xxxxxx
Title:
Managing Director
BANK OF
AMERICA INC as a Lender
By: /s/ Xxxxxxx
Honey
Name:
Xxxxxxx Honey
Title:
Senior Vice President
HSBC Bank
plc as a Lender
By: /s/ Xxxxx X.
Xxxxxxx
Name:
Xxxxx X. Xxxxxxx
Title:
Senior Corporate Manager
KBC Bank
N.V., as a Lender
By: /s/ Xxxxxxxxx X.
XxXxxxxx
Name:
Xxxxxxxxx X. XxXxxxxx
Title:
Director
By: /s/ Xxxxxx X.
Xxxxxxx
Name:
Xxxxxx X. Xxxxxxx
Title:
Managing Director
CREDIT
INDUSTRIEL ET COMMERCIAL, as a Lender
By: /s/ Xxxx
Xxxxxxx
Name:
Xxxx Xxxxxxx
Title:
Vice President
By: /s/ Nicolas
Courtaigne
Name:
Nicolas Courtaigne
Title:
Assistant Vice President
Allied Irish Banks p.l.c. as a Lender
By: /s/ Xxxxx
XxXxxxxxx
Name:
Xxxxx XxXxxxxxx
Title:
Manager
By: /s/ Xxxxx
Xxxxx
Name:
Xxxxx Xxxxx
Title:
Assistant Manager
Citicorp North America, Inc.,
as a Lender
By: /s/ Xxxxxx
Van
Name:
Xxxxxx Van
Title:
Vice President
