AMENDMENT NO. 3 TO NOTE PURCHASE AGREEMENT
This Amendment No. 3 to Note Purchase Agreement (this "Amendment"),
dated as of April 14, 1998, by and among SOUTHLAND CONTAINER PACKAGING
CORP., a Texas corporation (as successor by merger to SHC Acquisition
Corp., a Florida corporation, and formerly called Southland Holding
Company, herein the "Company"), JOTAN, INC., a Florida corporation
("Parent"), RICE PARTNERS II, L.P., a Delaware limited partnership
("Rice"), F-SOUTHLAND, L.L.C., a North Carolina limited liability company
("F-Southland"), and FF-SOUTHLAND, L.P., a Delaware limited partnership
("FF-Southland") (F-Southland and FF-Southland are individually or
collectively, as the context requires, referred to herein as "Southland
Purchasers") (Rice and Southland Purchasers are individually or
collectively, as the context requires, referred to herein as the
"Purchaser").
RECITALS
A. The Company, Parent, Rice and the Southland Purchasers have
entered into that certain Note Purchase Agreement, dated as of February
28, 1997, as the same has been amended by that certain Amendment No. 1
dated as of August 19, 1997 and Amendment No. 2 dated as of November 6,
1997 (the "Original Agreement" and, as amended hereby, the "Note
Agreement").
B. SHC Acquisition Corp. has merged with and into Southland Holding
Company, with Southland Holding Company surviving and assuming all the
obligations of SHC Acquisition Corp. under the Original Agreement. On
July 31, 1997, all of the subsidiaries of Southland Holding Company and
Atlantic Bag & Paper Company, a Subsidiary of Parent, merged with and into
Southland Holding Company (which concurrently changed its name to
Southland Container Packaging Corp.), with the result that the Company, as
of July 31, 1997, had no Subsidiaries.
C. The Company has advised the Purchaser, the Senior Lender and the
Senior Agent that certain defaults have occurred under the Original
Agreement and under the Senior Loan Agreement.
D. The Company and Parent have requested that the Senior Lender (1)
make certain amendments to the Senior Loan Agreement (as the same has been
amended by that certain letter amendment dated April 30, 1997, that
certain Second Amendment to Credit Agreement dated as of June 20, 1997,
that certain Third Amendment to Credit Agreement dated as of August 19,
1997 and that certain Fourth Amendment to Credit Agreement, dated as of
November 6, 1997), pursuant to the Fifth Amendment to Credit Agreement
among the Company, Parent, Senior Agent and the Senior Lender, which
Purchaser has reviewed and approved (the "Senior Loan Amendment"), and (2)
waive all defaults under the Senior Loan Agreement, and Senior Lender is
willing to do so subject to the terms and conditions set forth in the
Senior Loan Amendment.
E. The Company has requested that the Purchaser make (1) certain
amendments to the Original Agreement, (2) waive all defaults under the
Original Agreement and (3) consent to the subordination of the
indebtedness of the Company to the Purchasers under the Original Agreement
to $1,250,000 of "Priority Senior Subordinated Notes" to be purchased by
Rice under that certain Priority Note Purchase Agreement, dated as of
April 14, 1998 (the "Priority Note Agreement") among Rice, the Company and
Parent (such subordination to be as provided in the Senior Subordination
Agreement, as amended, and this Amendment.
F. The Purchaser is willing to take the actions described in
Recital E above subject to the terms and conditions set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the premises herein contained and
other good and valuable consideration, the sufficiency of which is hereby
acknowledged, the parties hereto, intending to be legally bound, agree as
follows:
1. DEFINITIONS. All capitalized terms used but not otherwise defined in
this Amendment shall have the meanings ascribed to them in the Note
Agreement. Unless otherwise specified, all section references herein
refer to sections of the Original Agreement.
2. AMENDMENTS. The Original Agreement is hereby amended as follows:
2.1 Amendment to Section 2.1. Sections 2.1(a) and (b) are hereby
amended by deleting them in their entirety and substituting the following
in lieu thereof:
(a) Principal, including the capitalized PIK Interest evidenced
by the PIK Notes, shall be due and payable in full on the Termination
Date.
(b) Interest shall be due and payable (i) on May 30, 1998 (for
the period from and including the Closing Date to but excluding May
30, 1998), (ii) and thereafter quarterly in arrears on the last
Business Day of each February, May, August and November, commencing
August 31, 1998 and (iii) on the Termination Date; provided, however,
that with respect to interest payable pursuant to clauses (i) and
(ii), the Company shall satisfy its obligation to pay interest in
cash on such dates by the issuance to the Purchaser of one or more
Senior Subordinated Notes substantially in the form of Exhibit A-2 to
this Amendment (each a "PIK Note") evidencing the Company's
obligation to pay such accrued interest (the "PIK Interest") which
shall be due and payable in accordance with 2.1(a) above. Each such
PIK Note shall be in an amount equal to the interest due on such
respective date and shall constitute the capitalization of the PIK
Interest evidenced thereby. The Company shall have no obligation to
pay PIK Interest due on such dates in cash. Each Purchaser
acknowledges that the PIK Notes delivered pursuant to this Section
2.1(b) are "Junior Subordinate Loan Documents" and the Obligations
evidenced thereby are "Subordinate Debt" as both such terms are
defined in the Senior Subordination Agreement. The PIK Notes shall
bear interest at a fixed rate of 12.5% per annum; provided, however,
that upon the occurrence of a Potential Default under Section 8.1
hereof or any Event of Default, and during the continuation thereof,
the unpaid principal amount of the PIK Notes shall bear interest at a
rate of 15.5% per annum. All accrued interest on the PIK Notes shall
be due and payable on the Termination Date.
2.2 Amendments to Section 2.2 and Section 2.3. Sections 2.2 and 2.3
are hereby amended by deleting them in their entirety and substituting the
following in lieu thereof:
2.2 Optional Prepayments. Upon payment in full of the Senior
Debt and the termination of all commitments of the Senior Lender with
respect thereto, at the Company's option, upon notice given as
provided below, the Company may, at any time and from time to time,
prepay all or any part of the principal of the Senior Subordinated
Notes, by payment to the Holders (ratably based on the stated
principal amount of each such Purchaser's Senior Subordinated Note)
of the principal amount to be prepaid, plus (a) any accrued and
unpaid interest on the principal amount so prepaid, plus (b) any
expenses and/or damages for which Purchase may be entitled to receive
payment or reimbursement hereunder or, if the Senior Subordinated
Notes are being prepaid in full, the aggregate amount of all other
Senior Subordinated Obligations, plus (c) a premium equal to the
percentage of the principal amount so prepaid which is applicable in
accordance with the following table based on the date on which such
prepayment is made (a "Prepayment Fee"):
Prepayment Date Premium
Closing Date through February 28, 1998 12.50%
March 1, 1998 through February 28, 1999 10.71%
March 1, 1999 through February 29, 2000 8.92%
March 1, 2000 through February 28, 2001 7.14%
March 1, 2001 through February 28, 2002 5.36%
March 1, 2002 and thereafter 0.00%
Each partial prepayment under this Section 2.2 shall be in a
principal amount of not less than $250,000 or, if greater than
$250,000, then in integral multiples of $100,000. Each prepayment
under this Section 2.2 shall be applied first to any expenses or
costs to which Purchaser may be entitled, second to accrued and
unpaid interest on the principal amount so prepaid, third to any
applicable Prepayment Fee, fourth to installments of principal in the
inverse order of their maturities, and fifth to any damages to which
Purchaser may be entitled. The amount of any such prepayment may not
be reborrowed by the Company. The Company shall give notice of any
optional prepayment to each Purchaser not less than fifteen (15) days
nor more than sixty (60) days before the date for prepayment,
specifying in each such notice the date upon which such prepayment is
to be made and the principal amount (together with accrued and unpaid
interest, if any, thereon and any applicable Prepayment Fee) to be
prepaid on such date. Notice of prepayment having been so given, the
applicable prepayment amount shall become due and payable on the
specified prepayment date. The Company shall have no right to prepay
the Senior Subordinated Notes except as provided in this Section 2.2
or in Section 2.3.
2.3 Mandatory Prepayments. Any prepayment under this
Section 2.3 shall be applied first to any expenses to which any
Purchaser may be entitled, second to accrued interest (including
accrued interest on the PIK Notes), third to any applicable
Prepayment Fee, fourth to principal installments in the inverse order
of their maturities (including capitalized PIK Interest evidenced by
the PIK Notes), and fifth to any damages to which any Purchaser may
be entitled. The amount of any such mandatory prepayment may not be
reborrowed by the Company. The Company shall make mandatory
prepayments to the Holders on a pro rata basis of the original
principal amount of each such Holder's Senior Subordinated Note in
each of the following circumstances:
(a) If during any fiscal year after the Senior Debt is
paid in full and after all commitments of the Senior Lender with
respect thereto have been terminated, Parent or any of its
Subsidiaries (including without limitation the Company) shall
sell or otherwise dispose of (other than as permitted by
Section 6.8 or Section 7.3) any property or properties in excess
of five percent (5%) of its total assets (including as a result
of a Casualty Event (to the extent the net cash proceeds
therefrom are not subsequently applied or committed to apply
toward replacement, restoration, rebuilding or repair of the
damaged property within ninety (90) days after the receipt of
such net cash proceeds)), then the Company shall prepay the
Senior Subordinated Notes in an amount equal to the lesser of
(i) the aggregate net cash proceeds of such sale or other
disposition (minus the cost of any replacement assets or
properties purchased within ninety (90) days either before or
after such sale) or (ii) the aggregate amount of all Senior
Subordinated Obligations (including any applicable Prepayment
Fee), such prepayment and premium to be made within ten (10)
Business Days of receipt of such net proceeds.
(b) In the event of any sale or other disposition of all
or substantially all of the stock or assets of Parent or any of
its Subsidiaries (including without limitation the Company) in a
single transaction or series of transactions or a Casualty Event
(to the extent not subsequently applied or committed to apply
toward replacement, restoration, rebuilding or repair of the
damaged property within 90 days after the receipt of such net
cash proceeds), the Company shall, after the Senior Debt has
been paid in full and after all commitments of the Senior Lender
with respect thereto have been terminated, prepay the Senior
Subordinated Notes in an amount equal to the lesser of (i) the
aggregate net cash proceeds of such sale or other disposition
(minus the cost of any replacement assets or properties
purchased within ninety (90) days either before or after such
sale) or (ii) the aggregate amount of all Senior Subordinated
Obligations (including any applicable Prepayment Fee), such
prepayment to be made within ten (10) Business Days of receipt
of such net proceeds.
2.3 Amendment to Section 6.1(a). The last sentence of Section
6.1(a) is hereby amended by deleting such last sentence in its entirety
and substituting the following in lieu thereof:
The annual audit report required hereby shall not be
qualified or limited because of restricted or limited
examination by the accountant of any material portion
of any of the records of the Company.
2.4 Amendment to Section 6.20. Sections 6.20(a), (b), (c), (d) and
(e) are each hereby amended as follows:
(a) Section 6.20(a), (b) and (e) are hereby deleted in their
entirety, and the capitalized terms, if any, used exclusively in such
sections shall likewise be deemed deleted.
(b) Section 6.20(c) is hereby amended by deleting it in its
entirety and substituting the following in lieu thereof:
(c) Fixed Charge Coverage. Parent shall not permit
the ratio of Operating Cash Flow to Fixed Charges computed
on the basis of the Operating Cash Flow and Fixed Charges
for the twelve (12) month period ending on the last day of
each month (beginning with the month ending January 31,
1999) to be less than the ratio of 0.9:1.
(c) Section 6.20(d) is hereby amended by deleting it in its entirety
and substituting the following in lieu thereof:
(d) EBITDA. Parent shall not permit EBITDA for the
nine (9) month period ending September 30, 1998 to be less
than $2,009,000; and for the twelve (12) month period
ending December 31, 1998, to be less than $2,825,000:
2.5. Amendment to Section 7.9. Section 7.9 is hereby amended by
deleting it in its entirety and substituting the following in lieu
thereof:
7.9 Capital Expenditure Limits. Parent and the Company shall
not make or incur Capital Expenditures during the 1998 Fiscal
Year in excess of the aggregate amount of $400,000. In
calculating compliance with this Section 7.9, the aggregate
amount of all payments due under a Capital Lease for the entire
term thereof (excluding, however, the interest portion of
capitalized lease payments) shall be considered expended in full
on the date that the Capital Lease is entered into.
2.6. Amendment to Article IX. Subordination. Article IX is hereby
amended by deleting it in its entirety and substituting the following in
lieu thereof:
IX. SUBORDINATION
Notwithstanding any provision in this Agreement to the
contrary, the Indebtedness evidenced by the Senior Subordinated
Notes shall be subordinate to the Senior Debt, and any
Purchaser's rights and remedies hereunder shall be subordinate
to the rights and remedies of the Senior Lender, all in
accordance with the terms of the Senior Subordination Agreement.
Nothing contained in this Article IX or elsewhere in this
Agreement, in the Senior Subordinated Notes or the Senior
Subordination Agreement is intended to or shall impair, as
between the Company and Purchaser, the obligations of the
Company, which are absolute and unconditional, to pay to
Purchaser the principal of, Prepayment Fee (if any) and interest
on the Senior Subordinated Notes and all other Senior
Subordinated Obligations as and when the same shall become due
and payable in accordance with their terms, or is intended to or
shall affect the relative rights of Purchaser and creditors of
the Company other than the holders of the Senior Debt.
2.7. Amendment to Section 11.1; Amendment and Restatement of Certain
Definitions. The following definitions appearing in Section 11.1 are
hereby amended and restated in their entirety to read as follows:
"EBITDA" means, for any period and any Person, the total of the
following each calculated without duplication for such Person on
a consolidated basis for such period: (a) Net Income; plus (b)
any provision for (or less any benefit from) income or franchise
taxes included in determining Net Income; plus (c) interest
expense deducted in determining Net Income; plus (d)
amortization and depreciation expense deducted in determining
Net Income; plus (e) other noncash charges deducted in
determining consolidated net income and not already deducted in
accordance with clause (d) above or clauses (b) and (c) of the
definition of Net Income; plus (f) all restructuring expenses,
litigation or arbitration costs related to recovery of proceeds
of the Golden State Litigation or the Selling Shareholder
Arbitration, contingency allocations and other non-recurring
non-operating expenses, but, in each case, only to the extent
such amounts were deducted in calculating Net Income.
"Fixed Charges" means, for any period, the total of the
following for Parent and the Company calculated on a
consolidated basis without duplication for such period: (A) cash
interest expense; plus (B) cash federal and state income taxes
paid; plus (C) scheduled amortization of Indebtedness paid or
payable (excluding, to the extent included, nonpermanent
principal repayments under the Revolving Loans (as defined in
the Senior Loan Agreement) and scheduled principal payments with
respect to the unsecured promissory notes issued to trade
creditors and the Company's auditors).
"Operating Cash Flow" means, for any period, the total of the
following for Parent and the Company calculated on a consolidated
basis without duplication for such period: (a) EBITDA; minus (b) all
Capital Expenditures which are not financed with Indebtedness of the
Company as permitted by Section 12.1(f) of the Senior Loan Agreement
but including Capital Expenditures financed with proceeds of the
Revolving Loans (as defined in the Senior Loan Agreement).
"Senior Loan Agreement" means the Credit Agreement by and among
Parent, the Company, the Senior Agent and the Senior Lender, dated as
of the February 28, 1997, as amended by that certain letter amendment
dated April 30, 1997, that certain Second Amendment to Credit
Agreement dated as of June 20, 1997, that certain Third Amendment to
Credit Agreement dated as of August 20, 1997, that certain Fourth
Amendment to Credit Agreement dated as of November 6, 1997, and that
certain Fifth Amendment to Credit Agreement dated as of April 14,
1998, and as further amended from time to time in accordance with the
express provisions of the Senior Subordination Agreement, and all
documents and instruments delivered pursuant thereto in connection
with the loans and advances made thereunder.
"Senior Loan Documents" means the Senior Loan Agreement and all
amendments thereto, including the Senior Loan Amendment, the "Loan
Documents" (as defined in the Senior Loan Agreement), and all
agreements, documents and instruments executed in connection
therewith or contemplated thereby, and all amendments to all the
foregoing.
"Senior Subordination Agreement" means that certain Senior
Subordination Agreement of even date herewith executed by and among
Parent, the Senior Agent and each Purchaser, as amended as of April
14, 1998, and as the same may be further amended, modified, extended
or restated from time to time, including as amended by the amendment
thereto dated as of April 14, 1998.
2.8 New Definitions in Section 11.1. The following new definitions
shall be added to Section 11.1 in alphabetical order:
"Golden State Litigation" means any litigation commenced or
claims asserted (whether now existing or hereafter arising) by
the Parent, Company or any Subsidiary against Golden State
Container, Inc. n/k/a Victory Packaging, Inc., Xxxxx Xxxxxx,
Xxxx Xxxxxxxxx, Xxxx Xxxxx, Xxxx Xxxxxx, Xxxxx Xxxxxx, Xxx
Xxxxxxx, Xxxx Xxxxx, Xxxx X'Xxxxxx, Xxxxxx Xxxxxx, Xxxxxx
Xxxxxx, Xxxxx Xxxx or any other former employees of Parent or
Company or any of their respective successors and assigns.
"Selling Shareholder Arbitration" means any arbitration, claim,
demand or proceeding commenced by or against the Company and/or
Parent (whether now existing or hereafter arising) and involving
Xxxxxx X. Xxxxxxxxxxx, Xxxx X. Xxxxxxx, Xx. or Xxxxxxx X.
Xxxxxxx.
"Senior Loan Amendment" means the Fifth Amendment to the Credit
Agreement by and among Parent, the Company, the Senior Agent,
and the Senior Lender dated as of April 14, 1998 and all
documents and instruments delivered pursuant thereto or in
connection therewith.
2.9. Amendment to Section 12.5. Section 12.5 is hereby amended by
deleting it in its entirety and substituting the following in lieu
thereof:
12.5 Assignment, Sale of Interest. Neither Parent nor the
Company may sell, assign or transfer this Agreement, or the
Other Agreements or any portion thereof, including, without
limitation, Parent's or the Company's rights, title, interests,
remedies, powers and/or duties hereunder or thereunder. Parent
and the Company hereby consent to Rice's participation, sale,
assignment, transfer or other disposition (collectively, a
"Transfer"), at any time or times hereafter at the Company's
expense, of this Agreement, or the Other Agreements to which
Parent or any Subsidiary is a party, or of any portion hereof or
thereof, including, without limitation, Rice's rights, title,
interests, remedies, powers and/or duties hereunder or
thereunder; provided, however, that except in the case of an
assignment of all of Purchaser's rights under this Agreement and
the Priority Senior Subordinated Notes, the outstanding
principal amount of the Priority Senior Subordinated Notes of
the assigning Purchaser being assigned, pursuant to each
assignment shall in no event be less than One Million Dollars
($1,000,000). In connection with any Transfer, Parent and the
Company agree to cooperate fully with Rice and any potential
Transferee. Such cooperation shall include, but is not limited
to, cooperating with any audits or other due diligence
investigation undertaken by any potential Transferee.
2.10. Amendment to Section 8.1. Section 8.1 shall be amended by
adding thereto the following subsection (l) and by deleting the word "or"
at the end of Section 8.1(j):
(l) an Event of Default shall occur and be continuing
under the Priority Note Purchase Agreement.
3. CONDITIONS TO EFFECTIVENESS. The effectiveness of this
Amendment is subject to the satisfaction of the following conditions
precedent, unless specifically waived in writing by the Purchaser:
3.1. Purchaser shall have received (a) this Amendment duly executed
by the Company; (b) a certificate of each of the Secretary of the Company
and of Parent in the forms of Exhibit A and Exhibit A-1 attached hereto,
respectively (hereinafter collectively referred to as the "Company General
Certificate"), certified by the Secretary of the Company or Parent, as
appropriate, and acknowledging (i) that the Company's Board of Directors
has adopted, approved, consented to and ratified resolutions which
authorize the execution, delivery and performance by the Company of the
Senior Loan Amendment, this Amendment and all Other Agreements to which
the Company is or is to be a party, and (ii) the names of the officers of
the Company authorized to sign the Senior Loan Amendment, this Amendment
and each of the Other Agreements to which the Company is or is to be a
party hereunder (including the certificates contemplated herein) together
with specimen signatures of such officers; (c) an executed copy of the
Senior Loan Amendment, or a certificate executed by the Chief Financial
Officer of the Company certifying that the Senior Loan Amendment attached
thereto is a true, correct and complete copy of the Senior Loan Amendment;
(d) a written consent of the Senior Agent on behalf of the Senior Lender
to the execution and delivery of this Amendment and all documents relating
hereto; and (e) such additional documents, instruments and information as
Purchaser or its legal counsel may request.
3.2. The representations and warranties contained herein and in the
Original Agreement and the Other Agreements, as amended hereby, shall be
true and correct on and as of the date hereof, as if made on the date
hereof.
3.3. The Senior Loan Amendment shall have been duly executed and
delivered by the parties thereto and shall be on terms and conditions
satisfactory to Purchaser.
4. RATIFICATIONS, REPRESENTATIONS AND WARRANTIES; CONSENT TO SENIOR
LOAN AMENDMENT; COVENANT TO ISSUE PIK NOTES.
4.1. The terms and provisions set forth in this Amendment shall
modify and supersede all inconsistent terms and provisions set forth in
the Original Agreement and the Other Agreements and, except as expressly
modified and superseded by this Amendment, the terms and provisions of the
Original Agreement and the Other Agreements are ratified and confirmed
and shall continue in full force and effect. The Company, Parent and
Purchaser agree that the Original Agreement and the Other Agreements, as
amended hereby, shall continue to be legal, valid, binding and enforceable
in accordance with their respective terms.
4.2. The Company hereby represents and warrants to Purchaser that (a)
the execution, delivery and performance of this Amendment and any and all
other agreements executed and/or delivered in connection herewith have
been authorized by all requisite corporate action on the part of the
Company and will not violate the Articles of Incorporation or Bylaws of
the Company; (b) the representations and warranties contained in Sections
4.1 through 4.10 of the Priority Note Purchase Agreement (as if the
reference to Purchase Documents therein refers to Purchase Documents as
defined in the Note Agreement, as amended hereby) are true and correct on
and as of the date hereof as though made on and as of such date; (c) no
Potential Default or Event of Default under the Original Agreement, as
amended hereby, has occurred and is continuing, unless such Potential
Default or Event of Default has been specifically waived in writing by
Purchaser; (d) the Company is in full compliance with all covenants and
agreements contained in the Original Agreement, as amended hereby, and the
Other Agreements, as amended; except if (i) the failure to comply has been
disclosed to Purchaser in writing or (ii) Purchaser has actual knowledge
thereof, and (e) the Company has not amended its Articles of Incorporation
or its Bylaws since August 19, 1997, except for such amendments, if any,
as are attached to the Company General Certificate. The foregoing
representations and warranties shall survive the execution and delivery of
this Amendment.
4.3 Each Purchaser hereby represents that it is the holder of the
Senior Subordinated Notes issued to it on February 28, 1997, and consents
to the execution and delivery by the Company and Parent of the Senior Loan
Amendment. This consent is expressly intended for the benefit of, and may
be relied upon by, the Senior Lender and the Senior Agent for all purposes
of the Loan Documents (as defined in the Senior Loan Agreement) including
the Senior Subordination Agreement.
4.4 Each of Parent and the Company hereby consents to the execution
and delivery by the other of this Amendment and the First Amendment to
Senior Subordination Agreement dated as of April 14, 1998, among Rice, the
Southland Purchasers and the Senior Agent; and Parent hereby confirms its
Parent Guaranty and the Company hereby confirms its Company Guaranty for
all purposes, giving effect to this Amendment and the Senior Loan
Amendment, the Priority Note Agreement, such First Amendment to the Senior
Subordination Agreement; and the transactions contemplated hereby and
thereby.
4.5 The Southland Purchasers hereby represent and warrant that they
have reviewed the provisions of, and consent to, the execution, delivery
and performance of, the Priority Note Agreement and all "Other Agreements"
(as defined therein) in connection therewith.
5. WAIVER.
Subject to the terms and conditions contained in this Amendment,
Purchaser hereby waives all Potential Defaults and Events of Default which
have occurred and are continuing under the Original Agreement and agrees
not to exercise any rights or remedies arising as a result thereof. The
waiver specifically described in this Section 5 shall not constitute and
shall not be deemed a waiver of any Potential Default or Event of Default
arising after the effectiveness of this Amendment or a waiver of any
rights or remedies arising as a result of such a Potential Default or
Event of Default.
6. MISCELLANEOUS.
6.1. Survival of Representations and Warranties. All representations
and warranties made in the Original Agreement or any Other Agreement,
including, without limitation, any document furnished in connection with
this Amendment, shall survive the execution and delivery of this Amendment
and the Other Agreements, and no investigation by Purchaser or any closing
shall affect the representations and warranties or the right of Purchaser
to rely upon them.
6.2. Reference to Original Agreement. Each of the Original Agreement
and the Other Agreements, and any and all other agreements, documents or
instruments now or hereafter executed and delivered pursuant to the terms
hereof or pursuant to the terms of the Original Agreement, as amended
hereby, are hereby amended so that any reference in the Original Agreement
and such Other Agreements to the Original Agreement shall mean a reference
to the Original Agreement as amended hereby.
6.3. Expenses of Purchaser. As provided in the Original Agreement,
the Company agrees to pay on demand all costs and expenses incurred by
Purchaser in connection with the preparation, negotiation and execution of
this Amendment and any other agreements executed pursuant hereto,
including, without limitation, the reasonable costs and fees of
Purchaser's legal counsel.
6.4. Severability. Any provision of this Amendment held by a court
of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this Amendment and the effect thereof shall
be confined to the provision so held to be invalid or unenforceable.
6.5. Successors and Assigns. This Amendment will inure to the
benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns.
6.6. Headings. The headings of the sections and subsections of this
Amendment are inserted for convenience only and do not constitute a part
of this Amendment.
6.7. Counterparts. This Amendment may be executed in any number of
counterparts, which shall collectively constitute one agreement.
6.8. Law Governing. ALL OBLIGATIONS, RIGHTS AND REMEDIES HEREUNDER,
SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF FLORIDA, WITHOUT GIVING EFFECT TO THE
CHOICE-OF-LAW RULES THEREOF. THE SENIOR SUBORDINATED NOTES SHALL BE
GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF
THE STATE SPECIFIED THEREIN. EACH PURCHASER RETAINS ALL RIGHTS UNDER THE
LAWS OF THE UNITED STATES OF AMERICA, INCLUDING THOSE RELATING TO THE
CHARGING OF INTEREST.
6.9 Waivers; Modification. NO PROVISION OF THIS AMENDMENT MAY BE
WAIVED, AMENDED, CHANGED OR MODIFIED, OR THE DISCHARGE THEREOF
ACKNOWLEDGED, ORALLY, BUT ONLY BY AN AGREEMENT IN WRITING SIGNED BY THE
PARTY AGAINST WHOM THE ENFORCEMENT OF ANY WAIVER, CHANGE, MODIFICATION OR
DISCHARGE IS SOUGHT.
6.10 Waiver of Jury Trial. AFTER REVIEWING THIS SECTION 6.10 WITH
ITS COUNSEL, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, PARENT,
THE COMPANY AND EACH PURCHASER HEREBY KNOWINGLY, INTELLIGENTLY AND
INTENTIONALLY, IRREVOCABLY AND EXPRESSLY WAIVE ALL RIGHT TO A TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED UPON
CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS
AMENDMENT, THE SENIOR SUBORDINATED NOTES OR ANY DOCUMENTS ENTERED INTO IN
CONNECTION THEREWITH OR THE TRANSACTIONS CONTEMPLATED THEREBY OR THE
ACTIONS OF EACH PURCHASER IN THE NEGOTIATION, ADMINISTRATION, OR
ENFORCEMENT THEREOF. THIS PROVISION IS A MATERIAL INDUCEMENT FOR EACH
PURCHASER TO ENTER INTO THIS AGREEMENT.
6.11. Final Agreement. THE ORIGINAL AGREEMENT, AS AMENDED HEREBY,
AND THE OTHER AGREEMENTS REPRESENT THE ENTIRE EXPRESSION OF THE PARTIES
WITH RESPECT TO THE SUBJECT MATTER HEREOF ON THE DATE THIS AMENDMENT IS
EXECUTED. THE ORIGINAL AGREEMENT, AS AMENDED HEREBY, AND THE OTHER
AGREEMENTS MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS
OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
6.12. Release. THE COMPANY HEREBY ACKNOWLEDGES THAT IT HAS NO
DEFENSE, COUNTERCLAIM, OFFSET, CROSS-COMPLAINT, CLAIM OR DEMAND OF ANY
KIND OR NATURE WHATSOEVER THAT CAN BE ASSERTED TO REDUCE OR ELIMINATE ALL
OR ANY PART OF ITS LIABILITY TO REPAY THE "SENIOR SUBORDINATED
OBLIGATIONS" OR TO SEEK AFFIRMATIVE RELIEF OR DAMAGES OF ANY KIND OR
NATURE FROM PURCHASER. THE COMPANY HEREBY VOLUNTARILY AND KNOWINGLY
RELEASES AND FOREVER DISCHARGES PURCHASER, ITS PREDECESSORS, AGENTS,
OFFICERS, DIRECTORS, EMPLOYEES, SUCCESSORS AND ASSIGNS, FROM ALL POSSIBLE
CLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION, DAMAGES, COSTS, EXPENSES, AND
LIABILITIES WHATSOEVER, KNOWN OR UNKNOWN, ANTICIPATED OR UNANTICIPATED,
SUSPECTED OR UNSUSPECTED, FIXED, CONTINGENT, OR CONDITIONAL, AT LAW OR IN
EQUITY, ORIGINATING IN WHOLE OR IN PART ON OR BEFORE THE DATE THIS
AMENDMENT IS EXECUTED, WHICH THE COMPANY MAY NOW OR HEREAFTER HAVE AGAINST
PURCHASER, ITS PREDECESSORS, AGENTS, OFFICERS, DIRECTORS, EMPLOYEES,
SUCCESSORS AND ASSIGNS, IF ANY, AND IRRESPECTIVE OF WHETHER ANY SUCH
CLAIMS ARISE OUT OF CONTRACT, TORT, VIOLATION OF LAW OR REGULATIONS, OR
OTHERWISE, AND ARISING FROM THE "SENIOR SUBORDINATED OBLIGATIONS",
INCLUDING, WITHOUT LIMITATION, ANY CONTRACTING FOR, CHARGING, TAKING,
RESERVING, COLLECTING OR RECEIVING INTEREST IN EXCESS OF THE HIGHEST
LAWFUL RATE APPLICABLE, THE EXERCISE OF ANY RIGHTS AND REMEDIES UNDER THE
ORIGINAL AGREEMENT OR OTHER AGREEMENTS, AND NEGOTIATION FOR AND EXECUTION
OF THIS AMENDMENT.
[BALANCE OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, Parent, the Company and Purchaser have caused
this Amendment to be executed and delivered as of the date first written.
PARENT:
JOTAN, INC.
By:__________________________________
Xxxxxx X. Xxxxxxxx,
Vice President and Chief Financial
Officer
Address for Notices for Parent and all
Subsidiaries:
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attn: Xx. Xxxxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
COMPANY:
SOUTHLAND CONTAINER
PACKAGING CORP. (formerly known as
Southland Holding Company and as
successor by merger to SHC Acquisition
Corp.)
By:__________________________________
Xxxxxx X. Xxxxxxxx,
Vice President and Chief Financial
Officer
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attn: Xx. Xxxxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
PURCHASER:
RICE PARTNERS II, L.P.
By: Rice Capital Group IV,
L.P., Its general partner
By: RMC Fund Management,
L P., Its general partner
By: Rice Mezzanine
Corporation, its
general partner
By:________________________
Xxxxxxx X. Xxxxxxxx
Managing Director
F-SOUTHLAND, L.L.C.
By: Franklin Street/Fairview Capital,
L.L.C., its manager
By:_____________________________
Xxxxx X. Xxxxxxx,
Title:_____________________
FF-SOUTHLAND, L.P.
By: FSFC Associates, L.P.,
its general partner
By: Franklin Capital, L.L.C.,
its general partner
By:________________________
Xxxxx X. Xxxxxxx,
Title:________________
EXHIBIT A
Form of Company General Certificate
[See Attached]
EXHIBIT A-1
Form of Parent General Certificate
[See Attached]
EXHIBIT A-2
Form of PIK Note
[See Attached]
EXHIBIT A-2
FORM OF SENIOR SUBORDINATED NOTE
PIK NOTE
[Rice]
THE TRANSFER OF AND PAYMENTS REFERENCED HEREIN ARE RESTRICTED BY AND
SUBJECT TO THE TERMS AND PROVISIONS OF A SENIOR SUBORDINATION AGREEMENT
DATED AS OF FEBRUARY 28, 1997, AS AMENDED, BY AND AMONG BANQUE PARIBAS, A
BANK ORGANIZED UNDER THE LAWS OF FRANCE ACTING THROUGH ITS HOUSTON AGENCY,
AS AGENT FOR ITSELF AND THE OTHER SENIOR LENDERS, RICE PARTNERS II, L.P.,
A DELAWARE LIMITED PARTNERSHIP, F-SOUTHLAND, L.L.C., A NORTH CAROLINA
LIMITED LIABILITY COMPANY AND FF-SOUTHLAND, L.P., A DELAWARE LIMITED
PARTNERSHIP (AS SUCH AGREEMENT MAY BE FURTHER SUPPLEMENTED, MODIFIED,
AMENDED OR RESTATED FROM TIME TO TIME, THE "SENIOR SUBORDINATION
AGREEMENT"), A COPY OF WHICH IS ON FILE AT THE CHIEF EXECUTIVE OFFICES OF
THE COMPANY.
THIS NOTE HAS BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO OR FOR
SALE IN CONNECTION WITH THE DISTRIBUTION HEREOF. THIS NOTE HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS, AND MAY NOT BE PLEDGED, SOLD, OFFERED FOR SALE,
TRANSFERRED, OR OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION UNDER
OR EXEMPTION FROM SUCH ACT AND ALL APPLICABLE STATE SECURITIES LAWS.
$___________.00 __
FOR VALUE RECEIVED, the undersigned corporation, Southland Container
Packaging Corp., a Texas corporation (as successor by merger to SHC
Acquisition Corp., a Florida corporation, and formerly called Southland
Holding Company, herein the "Company"), hereby promises to pay to the
order of Rice Partners II, L.P. ("Purchaser"), at its offices at 0000 Xxx
Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000 (or at such other place as the
holder may from time to time designate) the principal sum of _____________
DOLLARS ($______________.00) evidencing the accrued interest due for
______________ and _______________ under the Purchase Agreement (as
defined below).
This note is one of the Senior Subordinated Notes and a PIK Note
referred to in the Note Purchase Agreement dated as of February 28, 1997,
as amended, by and between the undersigned, Jotan, Inc., Purchaser, F-
Southland, L.L.C. and FF-Southland, L.P. (the "Purchase Agreement").
Capitalized terms used in this note are defined in the Purchase Agreement,
unless otherwise expressly stated herein. This note is entitled to the
benefits of the Purchase Agreement and is subject to all of the
agreements, terms and conditions contained therein, all of which are
incorporated herein by this reference. This note is subject to the
agreements, terms and conditions contained in the Senior Subordination
Agreement (as defined in the above legend). This note may not be prepaid,
in whole or in part, except in accordance with the terms and conditions
set forth in the Purchase Agreement.
The outstanding principal balance of this note consists solely of
certain interest that is "payable in kind" in respect of the Senior
Subordinated Note issued by the undersigned to Purchaser under the
Purchase Agreement which shall be due and payable as provided in Section
2.1(a) of the Purchase Agreement. Interest on the principal amount of
this note from time to time outstanding shall be due and payable as
provided in Section 2.1(b) of the Purchase Agreement, at the annual rate
of interest set forth in Section 1.1 of the Purchase Agreement (computed
on the basis of the actual number of days elapsed over a 360-day year and
compounded quarterly). In no event, however, shall interest exceed the
maximum rate permitted by law.
As provided in Section 8.2 of the Purchase Agreement, (a) upon the
occurrence of an Event of Default under Section 8.1(f) of the Purchase
Agreement, this note, and all amounts payable hereunder in accordance with
the terms of the Purchase Agreement, shall immediately become due and
payable, without notice of any kind, and (b) upon the occurrence of any
other Event of Default under the Purchase Agreement, this note, and all
amounts payable hereunder in accordance with the terms of the Purchase
Agreement, shall, at the option of the holder, immediately become due and
payable, without notice of any kind.
THIS NOTE SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF FLORIDA APPLICABLE TO AN AGREEMENT EXECUTED,
DELIVERED AND PERFORMED THEREIN WITHOUT GIVING EFFECT TO THE CHOICE-OF-LAW
RULES THEREOF OR ANY OTHER PRINCIPLES THAT COULD REQUIRE THE APPLICATION
OF THE SUBSTANTIVE LAW OF ANY OTHER JURISDICTION.
The undersigned expressly waives any presentment, demand, protest,
notice of default, notice of intention to accelerate, notice of
acceleration or notice of any other kind except as expressly provided in
the Purchase Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
COMPANY:
SOUTHLAND CONTAINER
PACKAGING CORP. (formerly known as
Southland Holding Company and as
successor by merger to SHC Acquisition
Corp.)
By:__________________________________
Xxxxxx X. Xxxxxxxx,
Vice President and Chief Financial
Officer
STATE OF _______________ ]
]
COUNTY OF __________________ ]
This instrument was acknowledged before me on this ___ day of January,
1998 by Xxxxxx X. Xxxxxxxx, Vice President and Chief Financial Officer of
SOUTHLAND CONTAINER PACKAGING CORP. (formerly known as Southland Holding
Company and as successor by merger to SHC Acquisition Corp.).
_____________________________________
Notary Public
_____________________________________
Printed Name
My commission expires:
_______________________
(SEAL)
