EXHIBIT 10.07
EXECUTION COPY
FOURTH AMENDMENT TO CREDIT AGREEMENT
This Fourth Amendment to Credit Agreement (this "Amendment") is entered
into as of September 23, 2002 among (i) CARAUSTAR INDUSTRIES, INC. (the
"Borrower"), (ii) the subsidiaries of the Borrower identified as Guarantors on
the signature pages hereto, (iii) the Lenders identified on the signature pages
hereto and (iv) BANK OF AMERICA, N.A., as Administrative Agent (the
"Administrative Agent"). All capitalized terms used herein and not otherwise
defined shall have the meanings ascribed to such terms in the Credit Agreement
referred to below.
RECITALS
A. A Credit Agreement dated as of March 29, 2001 (as amended by that
certain First Amendment to Credit Agreement dated as of September 10, 2001, that
certain Second Amendment to Credit Agreement dated as of November 30, 2001 and
that certain Third Amendment to Credit Agreement dated as of January 22, 2002
and as further modified or amended from time to time, the "Credit Agreement")
has been entered into by and among the Borrower, the Guarantors party thereto
(the "Guarantors"), the financial institutions party thereto (the "Lenders") and
the Administrative Agent.
B. The parties previously entered into that certain Fourth Amendment
to Credit Agreement dated as of June 3, 2002, as modified as of July 11, 2002
(as so modified, the "June 2002 Amendment"), which contained certain amendments
to the Credit Agreement and other agreements among the parties with respect to
the Credit Agreement.
C. Notwithstanding the fact that the June 2002 Amendment was
executed by the parties and deemed closed as of July 3, 2002, the June 2002
Amendment contained certain conditions to effectiveness, which conditions have
not been satisfied, and, accordingly, the June 2002 Amendment has not become
effective except to the extent provided therein.
D. The Borrower has requested, and the Required Lenders have agreed,
to the amendments to the Credit Agreement and other agreements as set forth in
this Amendment, and the parties intend that this Amendment shall amend, restate
and replace the June 2002 Amendment in its entirety, and the June 2002 Amendment
shall have no further force or effect.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree that, as
of the Fourth Amendment Effective Date (as hereinafter defined), the June 2002
Amendment is amended, restated and replaced in its entirety as follows:
1. Amendment to Section 1.1 of the Credit Agreement. Section 1.1 of
the Credit Agreement is hereby amended by adding the following definitions in
appropriate alphabetical order:
(a) "Cash Taxes" means, for any period, the aggregate of all income
taxes paid in cash by the Borrower and its Consolidated
Subsidiaries during such period (irrespective of when such taxes
were accrued or assessed), as determined and computed on a
Consolidated basis in accordance with GAAP.
(b) "Collateral" means all the accounts receivable and inventory of
the Credit Parties, now existing or hereafter acquired and with
respect to which Liens in favor of the Administrative Agent are
purported to be granted, pursuant to and in accordance with the
terms of the Collateral Documents.
(c) "Collateral Documents" means a collective reference to the
Security Agreement and all financing statements and/or other
documents reasonably requested by the Administrative Agent to
create and/or perfect its security interest, for the benefit of
the secured parties referred to therein, in the Collateral of the
Credit Parties.
(d) "Dividends" has the meaning given to such term in the definition
of "Restricted Payment" contained herein.
(e) "Fixed Charge Coverage Ratio" means, as of the last day of any
fiscal quarter, the ratio of (a) the remainder of EBITDA minus
Capital Expenditures to (b) the sum of (i) Interest Expense plus
(ii) Cash Taxes plus (iii) Dividends plus (iv) Scheduled Debt
Payments, in each case for the period of four (4) consecutive
fiscal quarters ending as of such day.
(f) "Fourth Amendment" means that certain Fourth Amendment to Credit
Agreement dated as of September 23, 2002 among the Borrower, the
Guarantors, the Lenders party thereto and the Administrative
Agent.
(g) "Fourth Amendment Effective Date" means September 23, 2002.
(h) [Intentionally Omitted]
(i) "JS Industrial Packaging Group Acquisition" means the Borrower's
acquisition from Jefferson Smurfit Corporation of the business
referred to as the "JS Industrial Packaging Group" for an
aggregate consideration (including any assumed Debt) of
approximately $90 million (plus approximately $5 million of
transaction costs).
(j) "New Senior Subordinated Note Indenture" means the Indenture, to
be dated on or about the issue date of the New Senior
Subordinated Notes, between the Borrower, the Subsidiaries of the
Borrower identified as guarantors therein and
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The Bank of New York, as Trustee, as amended, modified and
supplemented from time to time to the extent permitted under this
Agreement.
(k) "New Senior Subordinated Notes" means the Senior Subordinated
Notes issued pursuant to the New Senior Subordinated Note
Indenture, as amended, modified and supplemented from time to
time to the extent permitted under this Agreement.
(l) "Security Agreement" means that certain Security Agreement,
substantially in the form of Exhibit I hereto, to be dated as of
the Fourth Amendment Effective Date among the Credit Parties and
the Administrative Agent, pursuant to which Liens in favor of the
Administrative Agent, in its capacity as Collateral Agent, for
the ratable benefit of (i) the Administrative Agent and the
Lenders (and, with respect to Obligations under Hedging
Agreements, Affiliates of the Lenders as well as the Lenders),
(ii) the lenders under the Premier Boxboard Credit Facility and
(iii) the lenders under the Standard Gypsum Credit Facility, are
purported to be granted, as such Security Agreement is amended,
modified, restated or supplemented from time to time.
(m) "Scheduled Debt Payments" means, as of any date for the Borrower
and its Consolidated Subsidiaries, the sum of all payments of
principal on Debt for borrowed money which, at the time of
issuance thereof, had an original maturity of more than one year
from the date of issuance, that are (x) required to be paid and
(y) either actually paid or required to be paid and as to which a
default in the payment thereof has occurred and is continuing, in
each case under (x) and (y) for the applicable period ending on
the date of determination (including the principal component of
payments due on Capital Leases during such period), as determined
and computed on a Consolidated basis in accordance with GAAP.
(n) "Standard Gypsum Credit Facility" means, collectively, (i) the
Reimbursement Agreement dated as of May 1, 1999 and (ii) the
Reimbursement Agreement dated as of August 1, 1999, each between
Standard Gypsum, the issuing bank party thereto, and Toronto
Dominion (Texas), Inc., as administrative agent.
2. Further Amendment to Section 1.1 of the Credit Agreement.
(a) The definition of "Applicable Percentage" in Section 1.1 of the
Credit Agreement is hereby amended by replacing the pricing grid found therein
with the following:
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Applicable Applicable Applicable Applicable
Percentage for Percentage for Percentage for Percentage
Pricing Total Offshore Rate Base Rate Commitment for
Level Leverage Ratio Loans Loans Fee L/C Fee
-------------------------------------------------------------------------------------------------
I * 45.0% 1.75% 0.50% 0.40% 1.75%
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II * 55.0% but ** 2.00% 0.75% 0.50% 2.00%
45.0%
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III * 60.0% but ** 2.25% 1.00% 0.50% 2.25%
55.0%
-------------------------------------------------------------------------------------------------
IV * 65.0% but ** 2.50% 1.25% 0.50% 2.50%
60.0%
-------------------------------------------------------------------------------------------------
V ** 65.0% 2.75% 1.50% 0.55% 2.75%
-------------------------------------------------------------------------------------------------
* less than
** greater than or equal to
(b) The definition of "Applicable Percentage" is further amended by
adding the following paragraph as the last paragraph of such definition:
"Notwithstanding the foregoing, in the event that the Borrower (i)
consummates the JS Industrial Packaging Group Acquisition and (ii) by November
15, 2002 has not (x) issued New Senior Subordinated Notes on terms and
conditions reasonably satisfactory to the Administrative Agent, (y) received
gross proceeds from the issuance of such New Senior Subordinated Notes in an
aggregate amount of not less than $50,000,000, and (z) (I) reduced the aggregate
principal amount of the Revolving Credit Loans to $0.00, and (II) delivered to
the Administrative Agent an unaudited Consolidated balance sheet for the
Borrower that shows a balance for cash and Cash Equivalents of not less than
$50,000,000 (which balance sheet shall be certified by a Responsible Officer of
the Borrower and shall be in form and substance reasonably satisfactory to the
Administrative Agent), the Applicable Percentages set forth above shall, on
November 15, 2002 (or, if the JS Industrial Packaging Group Acquisition is
consummated on a later date, such later date) increase by 0.25% at each Pricing
Level (but excluding the Applicable Percentage for Commitment Fee), and shall
thereafter increase by an additional 0.25% as of each three month anniversary of
November 15, 2002 (or such later date, as the case may be), until the first date
(the "Pricing Restoration Date") thereafter on which both (A) the aggregate
outstanding principal amount of the Revolving Credit Loans equals $0.00 and (B)
the Borrower's unaudited Consolidated balance sheet shows a balance for cash and
Cash Equivalents of not less than $50,000,000 (which balance sheet shall be
certified by a Responsible Officer of the Borrower, shall have been delivered to
the Administrative Agent and shall be in form and substance reasonably
satisfactory to the Administrative Agent); provided, however, notwithstanding
any such increases, the maximum Applicable Percentage hereunder for (i) Offshore
Rate Loans and L/C Fees shall be 3.75%, and (ii) Base Rate Loans shall be 2.50%;
and provided further, that upon the occurrence of the Pricing Restoration Date,
any prior increase in the Applicable Percentages pursuant to this paragraph
shall cease to have effect and the Applicable Percentage for the purpose of
calculating any applicable interest rate and/or fee hereunder shall,
automatically and without the necessity of any further action on the part of any
party hereto, again be as set forth in the table above."
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3. Further Amendment to Section 1.1 of the Credit Agreement. The
definition of "Debt" is hereby amended by deleting clause (g) thereof (which
reads "(g) all Support Obligations of such Person,") and replacing it with the
following:
"(g) all Support Obligations of such Person in respect of
Debt,"
4. Further Amendment to Section 1.1 of the Credit Agreement. The
definition of "EBITDA" is hereby amended by:
(a) inserting the following at the end of clause (b)(v)
therein:
"and one-time charges, fees and expenses paid or incurred by the
Borrower in connection with the issuance of the New Senior
Subordinated Notes and the consummation of the other transactions
contemplated by the Fourth Amendment in an aggregate amount of up
to $3,000,000"; and
(b) inserting the following immediately after the words
"Section 9.6" in the proviso therein:
"(other than the JS Industrial Packaging Group
Acquisition)".
5. Further Amendment to Section 1.1 of the Credit Agreement. The
definition for "Loan Documents" is hereby amended in its entirety by replacing
it with the following:
"Loan Documents" means, collectively, this Agreement, the Notes,
the L/C Applications (except that L/C Applications shall not constitute
Loan Documents for the purposes of Section 13.11), any Guarantor Joinder
Agreement, the Collateral Documents and each other document, instrument
and agreement executed and delivered by any Credit Party or its
Subsidiaries in connection with this Agreement or otherwise referred to
herein or contemplated hereby, all as may be amended, restated or
otherwise modified.
6. Further Amendment to Section 1.1 of the Credit Agreement. The
definition for "Restricted Payment" is hereby amended in its entirety by
deleting the comma at the end of clause (i) thereof and replacing it with the
following:
"(any such dividend or other payment or distribution, a
"Dividend"),
7. Further Amendment to Section 1.1 of the Credit Agreement. The
definition of "Senior Subordinated Note Indenture" is hereby amended by
inserting the following at the end thereof:
"Except as otherwise expressly provided herein or as the context
otherwise requires, references herein to the Senior Subordinated Note
Indenture shall also be deemed references to the New Senior Subordinated
Note Indenture."
8. Further Amendment to Section 1.1 of the Credit Agreement. The
definition of "Senior Subordinated Notes" is hereby amended by inserting
the following at the end thereof:
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"Except as otherwise expressly provided herein or as the context
otherwise requires, references herein to the Senior Subordinated Notes
shall also be deemed references to the New Senior Subordinated Notes."
9. Further Amendment to Section 1.1 of the Credit Agreement. The
definition of "Specified Maturity Date" is hereby deleted in its entirety and
replaced with the following:
""Specified Maturity Date" means March 29, 2005."
10. Amendment to Section 8.3 of the Credit Agreement. Section 8.3 of
the Credit Agreement is hereby amended by inserting the following at the end of
the sentence found therein:
"Within ten Business Days after the occurrence of the Fourth
Amendment Effective Date, the Administrative Agent, in its capacity as
Collateral Agent under the Security Agreement (for the ratable benefit
of the Secured Parties named therein), shall be named as loss payee, as
its interest may appear, and/or additional insured with respect to any
such insurance providing coverage in respect of any Collateral, and each
provider of any such insurance shall agree, by endorsement upon the
policy or policies issued by it or by independent instruments furnished
to the Administrative Agent, that it will give the Administrative Agent
thirty (30) days prior written notice before any such policy or policies
shall be altered or canceled.
In the event there occurs any material loss, damage to or
destruction of the Collateral of any Credit Party or any part thereof,
such Credit Party shall promptly give written notice thereof to the
Administrative Agent generally describing the nature and extent of such
loss, damage or destruction. Subsequent to any loss, damage to or
destruction of the Collateral of any Credit Party or any part thereof,
and subject to the provisions of the last sentence of this paragraph,
such Credit Party, whether or not the insurance proceeds, if any,
received on account of such damage or destruction shall be sufficient
for that purpose, at such Credit Party's cost and expense, will promptly
repair or replace the Collateral of such Credit Party so lost, damaged
or destroyed; provided, however, that such Credit Party need not repair
or replace the Collateral of such Credit Party so lost, damaged or
destroyed to the extent the failure to make such repair or replacement
(a) is desirable to the conduct of the business of such Credit Party in
the ordinary course and otherwise is in the best interest of such Credit
Party and (b) would not materially impair the rights and benefits of (i)
the Administrative Agent or the Lenders under this Credit Agreement or
any other Loan Document or (ii) the Collateral Agent and Secured Parties
under (and as defined in) the Security Agreement. So long as no Event of
Default has occurred and is continuing, the Administrative Agent, in its
capacity as Collateral Agent under the Security Agreement, agrees to
release any insurance proceeds received by it to the applicable Credit
Party for replacement or restoration of the portion of the Collateral of
such Credit Party lost, damaged or destroyed. In the event a Credit
Party shall receive any insurance proceeds as a result of any loss,
damage or destruction of Collateral in a net amount in excess of
$1,000,000, the Credit Parties shall, within the period of 180 days
following the date of receipt of such proceeds, apply (or cause
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to be applied) an amount equal to such proceeds to (x) make
reinvestments consisting of acquisitions of assets 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 (including but not limited to the
repair or replacement of the related Collateral) or (y) prepay the
Secured Obligations (as defined in the Security Agreement) (including by
cash collateralizing letter of credit (but only after all outstanding
loans under the same facility have been prepaid) or guaranty
obligations) on a pro rata basis.
The Administrative Agent is authorized, but not obligated, as the
attorney-in-fact of each of the Credit Parties and for the benefit of
the Lenders (and any other secured parties under the Security
Agreement), upon the occurrence and during the continuance of an Event
of Default, without the consent of the applicable Credit Party, (i) to
adjust and compromise proceeds payable under such insurance policies,
(ii) to collect, receive and give receipts for such insurance proceeds
in the name of such Credit Party, the Administrative Agent and the
Lenders (and any other secured parties under the Security Agreement) and
(iii) to endorse such Credit Party's name upon any instrument in payment
thereof.
All insurance proceeds shall be subject to the security interest
of the Secured Parties (as defined in the Security Agreement) under the
Collateral Documents."
11. Amendment to Section 8.10 of the Credit Agreement. Section 8.10
of the Credit Agreement is hereby amended by inserting the following at the end
of the sentence found therein:
"After the occurrence and during the continuance of an Event of
Default, any such action shall be at the expense of the Credit Parties.
In addition, the Credit Parties agree that the Administrative Agent, and
its representatives, may conduct an audit of the Collateral annually
(or, after the occurrence and during the continuance of an Event of
Default, more frequently), at the expense of the Credit Parties."
12. Amendment to Article VIII of the Credit Agreement. Article VIII
of the Credit Agreement is hereby amended by inserting the following Sections in
numerical order:
"(a) SECTION 8.13 Pledged Assets.
Each Credit Party will (i) cause all of its Property that
constitutes (or pursuant to the terms hereof is intended to constitute)
Collateral to be subject at all times to first priority, perfected Liens
in favor of the Administrative Agent, as Collateral Agent for the
ratable benefit of the Secured Parties referred to in the Collateral
Documents, to secure the Obligations pursuant to the terms and
conditions of the Collateral Documents, subject in any case to Liens
permitted under Section 9.2 and the Security Agreement and (ii) deliver,
or, in the case of agreements or other documents that require the
consent of a non-Affiliate of the Borrower, use commercially reasonable
efforts to deliver, such other documentation as the Administrative Agent
may reasonably request in connection with the foregoing, including,
without limitation, appropriate UCC-1 financing statements, landlord's
waivers (subject to Section 8.14), certified resolutions and other
organizational
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and authorizing documents of such Person, favorable opinions of counsel to such
Person (which shall cover, among other things, the legality, validity, binding
effect and enforceability of the documentation referred to above and the
perfection of the Administrative Agent's Liens thereunder), all in form, content
and scope reasonably satisfactory to the Administrative Agent.
(b) SECTION 8.14 Further Assurances Regarding Collateral.
Each Credit Party shall:
(i) At its expense, from time to time execute and deliver, or
cause to be executed and delivered, such additional instruments,
certificates or documents, and take all such actions, as the
Administrative Agent or the Required Lenders may reasonably request, for
the purposes of implementing or effectuating the provisions of this
Agreement and the other Loan Documents or creating or perfecting or
ensuring the priority or sufficiency or enforceability or enforcement of
a Lien in favor of the Administrative Agent as security for the
Obligations upon any or all of the Collateral (whether owned prior to
the Fourth Amendment Effective Date or thereafter acquired), or more
fully perfecting or renewing any such Lien;
(ii) To the extent requested by the Administrative Agent, at
such Credit Party's expense, if the exercise by the Administrative Agent
or any Lender of any power, right, privilege or remedy pursuant to this
Agreement or the other Loan Documents requires any consent, approval,
recording, qualification or authorization of any Governmental Authority,
execute and deliver, or cause the execution and delivery of, all
applications, certifications, instruments and other documents and papers
that may be required from the Borrower or any of its Subsidiaries or may
reasonably be requested for such governmental consent, approval,
recording, qualification or authorization; and
(iii) Use its commercially reasonable efforts to obtain within
60 days of the Fourth Amendment Effective Date (or in the case of
locations which meet the threshold set forth herein on a date subsequent
to the Fourth Amendment Effective Date, within 45 days of the date on
which a Responsible Officer of the Borrower becomes aware of such
change) such landlord waiver and/or warehousemen and bailee letters, as
applicable, in form and substance satisfactory to the Administrative
Agent with respect to all Collateral located at a leased location or
held by a warehouseman or bailee to the extent the aggregate value of
the Collateral at such location exceeds $1,000,000."
13. Amendment to Section 9.1 of the Credit Agreement.
(a) Section 9.1(a) of the Credit Agreement is hereby amended
by deleting the table therein and replacing it with the following:
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Period Ratio
-------------------------------------------------------------
fiscal quarter ending March 31, 2001 72.5%
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fiscal quarter ending June 30, 2001 72.5%
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fiscal quarter ending September 30, 2001 72.5%
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fiscal quarter ending December 31, 2001 72.5%
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fiscal quarter ending March 31, 2002 70.0%
-------------------------------------------------------------
fiscal quarter ending June 30, 2002 70.0%
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fiscal quarter ending September 30, 2002 70.0%
-------------------------------------------------------------
fiscal quarter ending December 31, 2002 70.0%
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fiscal quarter ending March 31, 2003 70.0%
-------------------------------------------------------------
fiscal quarter ending June 30, 2003 70.0%
-------------------------------------------------------------
fiscal quarter ending September 30, 2003 67.5%
-------------------------------------------------------------
fiscal quarter ending December 31, 2003 and 65.0%
each fiscal quarter ending thereafter
-------------------------------------------------------------
(b) Section 9.1(b) of the Credit Agreement is hereby amended
by deleting the text thereof in its entirety and replacing it with the
following:
"(b) Minimum Fixed Charge Coverage Ratio. As of the end of each
fiscal quarter, commencing with the end of the first fiscal quarter
ending after the Fourth Amendment Effective Date, the Credit Parties
will not permit the Fixed Charge Coverage Ratio to be less than:
-------------------------------------------------------------
Period Ratio
-------------------------------------------------------------
fiscal quarter ending September 30, 2002 1.50:1.0
and each fiscal quarter ending thereafter
-------------------------------------------------------------
(c) Section 9.1(c) of the Credit Agreement is hereby amended
in its entirety by replacing it with the following:
"(c) Minimum Tangible Net Worth. At all times after the Fourth
Amendment Effective Date, the Credit Parties will not permit Tangible
Net Worth to be less than the TNW Floor (as defined below) plus, as of
the end of each fiscal quarter, commencing with the end of the first
fiscal quarter ending after the Fourth Amendment Effective Date, (i) 50%
of Net Income (to the extent positive) for the fiscal quarter then ended
(or, with respect to the fiscal quarter in which the JS Industrial
Packaging Group Acquisition occurs, for the portion of the fiscal
quarter occurring after the date such acquisition is consummated), such
increases to be cumulative, and (ii) 100% of the Net Cash Proceeds of
Equity Issuances during the fiscal quarter then ended (or, with respect
to the fiscal quarter in which the JS Industrial Packaging Group
Acquisition occurs, for the portion of the fiscal quarter occurring
after the date such acquisition is consummated), such increases to be
cumulative. For purposes hereof, "TNW Floor" shall mean (A) initially,
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$108,900,000 and (B) upon the consummation of the JS Industrial
Packaging Group Acquisition, 90% of actual Tangible Net Worth as of the
date of such consummation (and after giving effect thereto), as
calculated in good faith by the Borrower and as certified in writing to
the Administrative Agent on the date of such consummation by a
Responsible Officer of the Borrower."
14. Amendment to Section 9.2 of the Credit Agreement. Section 9.2 of
the Credit Agreement is hereby amended by (i) deleting the word "and" at the end
of subclause (i) thereof; (ii) replacing the period at the end of subclause (j)
thereof with "; and" and (iii) adding the following new subclause (k)
immediately to the end of such clause (j):
"(k) prior to the consummation of the JS Industrial Packaging
Group Acquisition, Liens in favor of the trustee for (or escrow agent
with respect to) the New Senior Subordinated Notes granted by the
Borrower on the Borrower's interest in the proceeds from the issuance of
such New Senior Subordinated Notes (it being understood that such Liens
shall secure only the obligation of the Borrower to return such proceeds
to the trustee for the New Senior Subordinated Notes (or such escrow
agent) in the event the JS Industrial Packaging Group Acquisition fails
to close)."
15. Amendment to Section 9.2(e) of the Credit Agreement. Section
9.2(e) of the Credit Agreement is hereby amended in its entirety by replacing it
with the following:
"(e) Liens in favor of the Administrative Agent (or another
collateral agent acceptable to the Administrative Agent and the Required
Lenders) for the benefit of (i) the Administrative Agent and the Lenders
(and, with respect to Obligations under Hedging Agreements, Affiliates
of the Lenders), (ii) to the extent a default would otherwise exist
under the Senior Note Indenture, the holders of the Senior Notes, and
(iii) in connection with the Security Agreement, the Secured Parties (as
defined in the Security Agreement);"
16. Amendment to Section 9.3(f) of the Credit Agreement. Section
9.3(f) of the Credit Agreement is hereby amended in its entirety by replacing it
with the following:
"(f) Debt owing under the Senior Subordinated Notes, New Senior Notes
and the New Senior Subordinated Notes not to exceed in the
aggregate principal at any time outstanding an amount equal to
(i) $375,000,000 less (ii) the aggregate amount of any Senior
Subordinated Notes, New Senior Notes and/or New Senior
Subordinated Notes that have been permanently prepaid, redeemed
or otherwise retired; provided that, in connection with the
issuance of any New Senior Subordinated Notes, the Borrower
shall, promptly upon such issuance, deliver a copy, certified by
an officer of the Borrower as true and complete, of the New
Senior Subordinated Note Indenture and each other material
document executed in connection therewith, in each case as
originally executed and delivered and together with all exhibits
and schedules thereto."
17. Amendment to Section 9.5 of the Credit Agreement. Section 9.5 of
the Credit Agreement is hereby amended by adding the following at the end of the
paragraph found therein:
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"Upon a sale of assets permitted by this Section 9.5 and the
Security Agreement, the Administrative Agent shall (to the extent
applicable) deliver to the Credit Parties, upon the Credit Parties'
request and at the Credit Parties' expense, such documentation as is
reasonably necessary to evidence the release of the Administrative
Agent's security interest, if any, in such assets, including, without
limitation, amendments or terminations of UCC financing statements, if
any, and the release of such Credit Party from all of its obligations,
if any, under the Loan Documents."
18. Amendment to Section 9.6 of the Credit Agreement. Section 9.6 of
the Credit Agreement is hereby amended in its entirety by replacing it with the
following:
"SECTION 9.6 Limitations on Acquisitions.
Other than transactions permitted under Section 9.7, no Credit
Party will, nor will it permit any of its Subsidiaries to, acquire all
or any portion of the Capital Stock or other ownership interest in any
Person which is not a Subsidiary or all or any substantial portion of
the assets, property and/or operations of a Person which is not a
Subsidiary, except (a) the JS Industrial Packaging Group Acquisition and
(b) other acquisitions, so long as, with respect to transactions
permitted under this clause (b), (i) the Person, assets, property and/or
operations being acquired engage in or are engaged in the same line of
business as that engaged in by the Borrower and its Subsidiaries on the
Closing Date or a business reasonably related thereto, (ii) in the case
of an acquisition of Capital Stock or other ownership interest of a
Person, the Board of Directors of the Person which is the subject of
such acquisition shall have approved the acquisition, (iii) no Default
or Event of Default shall exist on the date of, or shall result from,
any such acquisition (including after giving effect to such transaction
on a pro forma basis), and (iv) the aggregate cash consideration for
each such acquisition does not exceed $25,000,000 and the aggregate
consideration (cash and noncash) for all such acquisitions consummated
in any twelve-month period does not exceed $50,000,000."
19. Amendment to Section 9.13 of the Credit Agreement. Section 9.13
of the Credit Agreement is hereby amended in its entirety by deleting the last
paragraph of such section in its entirety and replacing it with the following:
"Notwithstanding the foregoing, but subject to the following
proviso, the Borrower may acquire (and thereafter retire or redeem) up
to $30,000,000 in aggregate principal amount of the Senior Subordinated
Notes so long as no Default or Event of Default shall exist on the date
of, or shall result from, any such transaction (including after giving
effect to such transaction on a pro forma basis); provided, however, in
the event that the Borrower (i) consummates the JS Industrial Packaging
Group Acquisition and (ii) has not, prior to or concurrently with the
consummation of the JS Industrial Packaging Group Acquisition, (x)
issued New Senior Subordinated Notes on terms and conditions reasonably
satisfactory to the Administrative Agent, (y) received gross proceeds
from the issuance of such New Senior Subordinated Notes in an aggregate
amount of not less than $50,000,000, and (z) (I) reduced the aggregate
principal amount of the Revolving Credit Loans to $0.00, and (II)
delivered to the Administrative Agent an
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unaudited Consolidated balance sheet for the Borrower that shows a
balance for cash and Cash Equivalents of not less than $50,000,000
(which balance sheet shall be certified by a Responsible Officer of the
Borrower and shall be in form and substance reasonably satisfactory to
the Administrative Agent), the foregoing provision shall cease to be
effective and the Borrower shall not be permitted to acquire Senior
Subordinated Notes in reliance thereon until the first date thereafter
(the "Liquidity Restoration Date") on which both (A) the aggregate
outstanding principal amount of the Revolving Credit Loans equals $0.00
and (B) the Borrower's unaudited Consolidated balance sheet shows a
balance for cash and Cash Equivalents of not less than $50,000,000
(which balance sheet shall be certified by a Responsible Officer of the
Borrower, shall have been delivered to the Administrative Agent and
shall be in form and substance reasonably satisfactory to the
Administrative Agent). Upon the occurrence of the Liquidity Restoration
Date, such provision shall again be effective automatically and without
the necessity of any further action on the part of any party hereto.
20. Amendment to Section 11.1 of the Credit Agreement. Section 11.1
of the Credit Agreement is hereby amended by adding a new clause (q) at the end
thereof to read as follows:
"(q) JV Debt Cross-Default. The occurrence of (i) any event of
default under the Standard Gypsum Credit Facility or the Premier
Boxboard Credit Facility (beyond the period of grace, if any, provided
therein) or (ii) any demand for payment under (A) the Borrower's
guaranty of Standard Gypsum's obligations under the Standard Gypsum
Credit Facility or (B) the Borrower's guaranty of Premier Boxboard's
obligations under the Premier Boxboard Credit Facility."
21. Amendment to Section 13.9(d) of the Credit Agreement. Section
13.9(d)(iii) of the Credit Agreement which reads "or (iii) release all or
substantially all of the Guarantors from their obligations hereunder" is hereby
deleted and replaced with the following:
", (iii) release all or substantially all of the Guarantors from
their obligations hereunder or (iv) except as a result of or in
connection with an Asset Disposition permitted by Section 9.5, release
all or substantially all of the Collateral."
22. Modification to Section 13.11 of the Credit Agreement. Section
13.11 of the Credit Agreement is modified as follows to fix a typographical
error: The reference to "this Section 13.10" contained in clause (g) of the
proviso found therein is replaced with a reference to "this Section 13.11".
23. Amendment to Article XIII of the Credit Agreement. A new Section
13.20 is hereby added to the Credit Agreement to read as follows:
"SECTION 13.20 MATTERS RELATING TO SECURITY AGREEMENT.
Notwithstanding anything to the contrary contained herein, and
without limiting the generality of Section 12.1, each of the Lenders
hereby (a) irrevocably designates and appoints Bank of America as
Collateral Agent of such Lender under the Security Agreement and the
other Collateral Documents for the term hereof and each such Lender
12
irrevocably authorizes Bank of America as Collateral Agent for such
Lender, to execute and deliver the Security Agreement, to take such
action on its behalf under the provisions of the Security Agreement and
the other Collateral Documents and to exercise such powers and perform
such duties as are expressly delegated to the Collateral Agent by the
terms of the Security Agreement and such other Collateral Documents,
together with such other powers as are reasonably incidental thereto and
(b) acknowledges and agrees that (i) the Security Agreement provides
that the Collateral (and proceeds thereof) are to be shared ratably
among the Secured Parties referred to in the Security Agreement and that
the Required Secured Parties (as defined in the Security Agreement) can
direct the Collateral Agent to act (or refrain from acting) with respect
to the Collateral and (ii) the Security Agreement may not be amended
except in accordance with the provisions of Section 13 thereof (which
provisions may, in certain instances, require the consent of certain
Secured Parties referred to in the Security Agreement in addition to
consent of the Required Lenders hereunder)."
24. Amendment to Exhibit G to the Credit Agreement. Exhibit G to the
Credit Agreement is hereby amended in its entirety by replacing it with the new
Exhibit G attached hereto.
25. New Exhibit I of the Credit Agreement. Exhibit I attached hereto
is hereby added as a new Exhibit I to the Credit Agreement.
26. Representations and Warranties. Each Credit Party hereby
represents and warrants to the Administrative Agent and the Lenders that (a) no
Default or Event of Default exists; (b) all of the representations and
warranties set forth in the Loan Documents are true and correct in all material
respects as of the date hereof (except for those that expressly state that they
are made as of an earlier date); and (c) it has no claims, counterclaims,
offsets, credits or defenses to its obligations under the Loan Documents or, to
the extent it does, they are hereby released in consideration of the Lenders
entering into this Amendment.
27. Conditions Precedent to Effectiveness. This Amendment shall be
effective as of the Fourth Amendment Effective Date when (and only when) each of
the following conditions precedent has been satisfied:
(a) The Administrative Agent shall have received from the
Credit Parties and the Lenders duly executed counterparts of this
Amendment;
(b) The Administrative Agent shall have received from the
Borrower an amendment fee equal to 0.25% multiplied by the aggregate
Revolving Credit Commitments of the Lenders, such fee being for the
account of each such Lender pro rata according to such Lender's
Revolving Credit Commitment as of the Fourth Amendment Effective Date
(it being understood that such fee is in addition to the amendment fee
previously paid by the Borrower to the Administrative Agent for the
benefit of the Lenders consenting to the June 2002 Amendment, upon the
closing of the June 2002 Amendment);
13
(c) The Credit Parties shall have paid any and all
out-of-pocket costs (to the extent invoiced) incurred by the
Administrative Agent (including the reasonable fees and expenses of the
Administrative Agent's legal counsel), and fees and other amounts
payable to the Administrative Agent, in each case in connection with the
arrangement, negotiation, preparation, execution and delivery of this
Amendment;
(d) The Administrative Agent shall have received (i) from the
Credit Parties, duly executed counterparts of the Security Agreement and
(ii) from counsel to the Credit Parties, a legal opinion in form and
substance acceptable to the Administrative Agent and its counsel (which
shall cover, among other things, the legality, validity, binding effect
and enforceability of the Security Agreement and the creation and
perfection of the Administrative Agent's Liens thereunder);
(e) The Administrative Agent shall have received evidence
satisfactory to it that the Borrower shall have obtained amendments to
its guaranties in connection with the Premier Boxboard Credit Facility
and the Standard Gypsum Credit Facility that conform to the applicable
terms of this Amendment; and
(f) The representations and warranties contained in Section 26
of this Amendment shall be true and correct in all material respects on
and as of such Fourth Amendment Effective Date (including after giving
effect to the consummation of the JS Industrial Packaging Group
Acquisition, but only if consummated on or prior to such date) with the
same effect as if made on and as of such date.
28. Ratification of Credit Agreement. Except as expressly modified
and amended in this Amendment, all of the terms, provisions and conditions of
the Loan Documents shall remain unchanged and in full force and effect. The term
"this Agreement" or "Credit Agreement" and all similar references as used in
each of the Loan Documents shall hereafter mean the Credit Agreement as amended
by this Amendment. Except as herein specifically agreed, the Credit Agreement is
hereby ratified and confirmed and shall remain in full force and effect
according to its terms.
29. Authority/Enforceability. Each of the Credit Parties hereto
represents and warrants as follows:
(a) It has taken all necessary action to authorize the
execution, delivery and performance of this Amendment.
(b) This Amendment has been duly executed and delivered by
such Person and constitutes such Person's legal, valid and binding
obligations, enforceable in accordance with its terms, except as such
enforceability may be subject to (i) bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer, moratorium or similar
laws affecting creditors' rights generally and (ii) general principles
of equity (regardless of whether such enforceability is considered in a
proceeding at law or in equity).
14
(c) No consent, approval, authorization or order of, or
filing, registration or qualification with, any court or governmental
authority or third party is required in connection with the execution,
delivery or performance by such Person of this Amendment. The execution,
delivery and performance by such Person of this Amendment do not and
will not conflict with, result in a breach of or constitute a default
under the articles of incorporation, bylaws or other organizational
documents of any Credit Party or any of its Subsidiaries or any
indenture or other material agreement or instrument to which such Person
is a party or by which any of its properties may be bound or any
Governmental Approval relating to such Person except as could not
reasonably be expected to have a Material Adverse Effect.
30. Expenses. The Borrower agrees to pay all reasonable costs and
expenses in connection with the preparation, execution and delivery of this
Amendment, including without limitation the reasonable fees and expenses of
Xxxxx & Xxx Xxxxx PLLC, special counsel to the Administrative Agent.
31. Counterparts/Telecopy. This Amendment may be executed in any
number of counterparts, each of which when so executed and delivered shall be an
original, but all of which shall constitute one and the same instrument.
Delivery of executed counterparts by telecopy shall be effective as an original
and shall constitute a representation that an original will be delivered.
32. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH CAROLINA.
33. Entirety. This Amendment and the other Loan Documents embody the
entire agreement between the parties and supersede all prior agreements and
understandings, if any, relating to the subject matter hereof. These Loan
Documents represent the final agreement between the parties and may not be
contradicted by evidence of prior, contemporaneous or subsequent oral agreements
of the parties. There are no oral agreements between the parties.
15
IN WITNESS WHEREOF, the parties hereto have caused this Amendment, to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
BORROWER: CARAUSTAR INDUSTRIES, INC.,
a North Carolina corporation
By: /s/ H. XXX XXXXXX, III
----------------------------------------
Name: H. Xxx Xxxxxx, III
Title: Vice President Planning & Development
and Chief Financial Officer
GUARANTORS: AUSTELL HOLDING COMPANY, LLC,
a Georgia limited liability company
CAMDEN PAPERBOARD CORPORATION,
a New Jersey corporation
CARAUSTAR CUSTOM PACKAGING GROUP, INC.,
a Delaware corporation
CARAUSTAR CUSTOM PACKAGING GROUP (MARYLAND), INC.,
a Maryland corporation
CARAUSTAR INDUSTRIAL AND CONSUMER PRODUCTS GROUP, INC.,
a Delaware corporation
CARAUSTAR MILL GROUP, INC.,
an Ohio corporation f/k/a Caraustar Paperboard Corporation
CARAUSTAR RECOVERED FIBER GROUP, INC.,
a Delaware corporation
CHICAGO PAPERBOARD CORPORATION,
an Illinois corporation
FEDERAL TRANSPORT, INC.,
an Ohio corporation
GYPSUM MGC, INC.,
a Delaware corporation
HALIFAX PAPER BOARD COMPANY, INC.,
a North Carolina corporation
XXXXXXXXX GYPSUM COMPANY,
a Delaware corporation
XXXXXXXX GYPSUM COMPANY, LLC,
a Delaware limited liability company
PBL INC.,
a Delaware corporation
XXXXXXX PAPERBOARD, INC.,
a Connecticut corporation
By: /s/ H. XXX XXXXXX, III
----------------------------------------
Name: H. Xxx Xxxxxx, III
Title: Vice President Planning & Development
and Chief Financial Officer
of each of the Foregoing Guarantors
CARAUSTAR, G.P.,
a South Carolina general partnership
By: CARAUSTAR INDUSTRIES, INC.,
a North Carolina corporation, general partner
By: /s/ H. XXX XXXXXX, III
----------------------------------------
Name: H. Xxx Xxxxxx, III
Title: Vice President Planning & Development
and Chief Financial Officer
By: CARAUSTAR INDUSTRIAL AND CONSUMER PRODUCTS
GROUP, INC., a Delaware corporation, general partner
By: /s/ H. XXX XXXXXX, III
----------------------------------------
Name: H. Xxx Xxxxxx, III
Title: Vice President Planning & Development
and Chief Financial Officer
ADMINISTRATIVE
AGENT: BANK OF AMERICA, N.A., in its capacity
as Administrative Agent
By: /s/ XXXXXX X. XXXXXXXX
---------------------------------
Name: Xxxxxx X. Xxxxxxxx
-------------------------------
Title: Vice President
------------------------------
LENDERS: BANK OF AMERICA, N.A.,
as an Issuing Lender and a Lender
By: /s/ XXXXXX X. XXXXXXXX
---------------------------------
Name: Xxxxxx X. Xxxxxxxx
-------------------------------
Title: Vice President
------------------------------
BANKERS TRUST COMPANY,
individually as an Issuing Lender and a Lender
By: /s/ XXXXXX X. XXXXXXXX
---------------------------------
Name: Xxxxxx X. Xxxxxxxx
-------------------------------
Title: Vice President
------------------------------
CREDIT SUISSE FIRST BOSTON
By: /s/ XXX XXXXX
---------------------------------
Name: Xxx Xxxxx
-------------------------------
Title: Director
------------------------------
By: /s/ XXXX XXXXXX
---------------------------------
Name: Xxxx Xxxxxx
-------------------------------
Title: Director
------------------------------
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ XXXXX X. XXXXXXXXX
---------------------------------
Name: Xxxxx X. Xxxxxxxxx
-------------------------------
Title: Vice President
------------------------------
THE BANK OF NEW YORK
By: /s/ XXXXXX X. XXXXX
---------------------------------
Name: Xxxxxx X. Xxxxx
-------------------------------
Title: Vice President
------------------------------
EXHIBIT G
FORM OF OFFICER'S COMPLIANCE CERTIFICATE
The undersigned, on behalf of Caraustar Industries, Inc., a North
Carolina corporation (the "Borrower"), hereby certifies to the Administrative
Agent and the Lenders, each as defined in the Credit Agreement referred to
below, as follows:
1. This Certificate is delivered to you pursuant to Section 6.2 of
the Credit Agreement dated as of March 29, 2001 (as amended, restated or
otherwise modified, the "Credit Agreement") by and among the Borrower, the
Subsidiaries of the Borrower identified therein, the Lenders from time to time
party thereto (the "Lenders") and Bank of America, N.A., as Administrative
Agent. Capitalized terms used herein and not defined herein shall have the
meanings assigned thereto in the Credit Agreement.
2. I have reviewed the financial statements of the Borrower and its
Subsidiaries dated as of ______________ and for the _______________ period[s]
then ended and such statements present fairly in all material respects the
financial condition of the Borrower and its Subsidiaries as of their respective
dates and the results of the operations of the Borrower and its Subsidiaries for
the respective period[s] then ended, subject to normal year end adjustments for
interim statements.
3. I have reviewed the terms of the Credit Agreement and the related
Loan Documents and have made, or caused to be made under my supervision, a
review in reasonable detail of the transactions and the condition of the
Borrower and its Subsidiaries during the accounting period covered by the
financial statements referred to in Paragraph 2 above. Such review has not
disclosed the existence during or at the end of such accounting period of any
condition or event that constitutes a Default or an Event of Default, nor do I
have any knowledge of the existence of any such condition or event as at the
date of this Certificate [except, if such condition or event existed or exists,
describe the nature and period of existence thereof and what action the Borrower
and its Subsidiaries have taken, are taking and propose to take with respect
thereto].
4. The Applicable Percentage Pricing Level and information as to the
financial ratios necessary for determining such figure are set forth on the
attached Schedule 1.
5. The Borrower and its Subsidiaries are in compliance with the
financial covenants contained in Section 9.1 of the Credit Agreement as shown on
such Schedule 1.
[Signature Page Follows]
WITNESS the following signature as of the ___ day of ___________, 200__.
CARAUSTAR INDUSTRIES, INC.,
a North Carolina corporation
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
Schedule 1
Financial Covenant and Applicable Percentage Calculations
See attached
EXHIBIT I
FORM OF SECURITY AGREEMENT
[to be attached]
