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EXHIBIT 10
FIRST AMENDMENT TO CREDIT AGREEMENT
This First Amendment to CREDIT Agreement dated as of April 6, 2001 (the
"Amendment") by and among ROCK-TENN COMPANY, a Georgia corporation (the
"Borrower"), SUNTRUST BANK, a banking corporation organized under the laws of
the State of Georgia ("SunTrust"), the other banks and financial institutions
listed on the signature pages hereof, (SunTrust, and such other banks, lending
institutions, and assignees referred to collectively herein as the "Lenders"),
SUNTRUST BANK, in its capacity as Agent for the Lenders (the "Agent"), BANK OF
AMERICA, N.A., as Syndication Agent (the "Syndication Agent") and WACHOVIA BANK,
N.A., as Documentation Agent (the "Documentation Agent").
WHEREAS, the Borrower, the Agent and the Lenders are parties to that
certain Credit Agreement dated as of June 30, 2000, by and among the Borrower,
the Agent and the other Lenders (the "Credit Agreement"; all capitalized terms
not otherwise defined herein shall have the meanings set forth in the Credit
Agreement), pursuant to which the Lenders have made available certain financial
accommodations to the Borrower;
WHEREAS, the parties wish to amend the Credit Agreement to, among other
things, (i) modify the manner in which certain financial covenants are
calculated, (ii) reduce the revolving credit commitment, and (iii) modify the
restricted payments covenant, but only on the terms and conditions contained
herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, the parties
hereto agree as follows:
Section 1. Amendments.
(a) The Credit Agreement is hereby amended by deleting the
definition of "Applicable Margin" from Section 1.1 and substituting in lieu
thereof the following new definition of "Applicable Margin":
"Applicable Margin shall mean with respect
to all Revolving Loans outstanding on any date, a
percentage per annum determined by reference to the
applicable ratio of Total Funded Debt to EBITDA as
calculated as of the end of the immediately
preceding fiscal quarter determined by reference to
the table set forth on Schedule 1.01(a) attached
hereto; provided, however, that in determining Total
Funded Debt to EBITDA for purposes of determining
the Applicable Margin, the items referenced in
clause (vii) of the definition of EBITDA shall be
omitted.
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Notwithstanding the foregoing, the initial
Applicable Margin shall be determined as set forth
in Section 4.6 hereof. Any changes to the Applicable
Margin will be effective as of the date specified in
Section 4.6."
(b) The Credit Agreement is hereby amended by deleting the
definition of "EBITDA" from Section 1.1 and substituting in lieu thereof the
following new definition of "EBITDA":
"EBITDA shall mean for any fiscal period,
Consolidated Net Income (or Consolidated Net Loss,
as the case may be) for such period plus (a) the
aggregate amount deducted in determining such
Consolidated Net Income (Loss) in respect of (i)
Interest Expense, (ii) Income Taxes of the
Consolidated Companies determined in accordance with
GAAP, (iii) depreciation and amortization expense of
the Consolidated Companies determined in accordance
with GAAP, in each case for the applicable fiscal
period, (iv) the amount of any non-cash charges
relating to plant shut-downs and asset impairment
charges actually taken by the Borrower for the
quarter ending March 31, 2000, (v) any non-cash
charges actually taken by the Consolidated Companies
after March 31, 2000 which are associated with the
accelerated write-off of any tangible or intangible
assets related to the acquisition of Waldorf
Corporation provided such amounts do not exceed
$100,000,000 in the aggregate through the Maturity
Date, (vi) any non-cash charges actually taken which
are associated with the accelerated write-off of any
tangible or intangible assets provided such amounts
do not exceed $50,000,000 in the aggregate through
the Maturity Date and (vii) the amount of cash
charges actually taken which resulted from the Home
Office and Folding Carton Division reorganizations
and the closing of the Borrower's Downingtown,
Pennsylvania converting facility, Norcross, Georgia
folding facility, Lynchburg, Virginia converting
facility, Augusta, Georgia folding facility,
Madison, Wisconsin folding facility, and Chicago,
Illinois folding facility in an aggregate amount not
to exceed $4,832,000 for the fiscal quarter ending
June 30, 2000, $5,637,000 for the fiscal quarter
ending September 30, 2000, $1,906,000 for the fiscal
quarter ending December 31, 2000 and an aggregate of
$7,000,000 thereafter; in each case for the
Consolidated Companies determined on a consolidated
basis in accordance with GAAP, (b) actual rental
expense associated with any Synthetic Lease and (c)
cash distributions of earnings of Unrestricted
Subsidiaries made to a Consolidated Company to the
extent previously excluded in the
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determination of Consolidated Net Income or
Consolidated Net Loss by virtue of clause (i) of the
respective definitions thereof."
(c) The Credit Agreement is hereby further amended by deleting the
definition of "EBITR" from Section 1.1 and substituting in lieu thereof the
following new definition of "EBITR":
"EBITR shall mean for any fiscal period,
Consolidated Net Income (or Consolidated Net Loss,
as the case may be) for such period plus (a) the
aggregate amount deducted in determining such
Consolidated Net Income (Loss) in respect of (i)
Interest Expense, (ii) Income Taxes of the
Consolidated Companies determined in accordance with
GAAP, (iii) 100% of lease expense (including any
rental expense under any Synthetic Lease but
excluding expenses incurred in respect of Capital
Leases) of the Consolidated Companies determined in
accordance with GAAP, in each case for the
applicable fiscal period, (iv) any non-cash charges
relating to plant shut-downs and asset impairment
charges actually taken by the Consolidated Companies
for the quarter ending March 31, 2000, (v) any
non-cash charges actually taken by the Consolidated
Companies after March 31, 2000 which are associated
with the accelerated write-off of any tangible or
intangible assets related to the acquisition of
Waldorf Corporation provided such amounts do not
exceed $100,000,000 in the aggregate through the
Maturity Date, (vi) any non-cash charges actually
taken which are associated with the accelerated
write-off of any tangible or intangible assets
provided such amounts do not exceed $50,000,000 in
the aggregate through the Maturity Date and (vii)
the amount of cash charges actually taken which
resulted from the Home Office and Folding Carton
Division reorganizations and the closing of the
Borrower's Downingtown, Pennsylvania converting
facility, Norcross, Georgia folding facility,
Lynchburg, Virginia converting facility, Augusta,
Georgia folding facility, Madison, Wisconsin folding
facility, and Chicago, Illinois folding facility in
an aggregate amount not to exceed $4,832,000 for the
fiscal quarter ending June 30, 2000, $5,637,000 for
the fiscal quarter ending September 30, 2000,
$1,906,000 for the fiscal quarter ending December
31, 2000 and an aggregate of $7,000,000 thereafter;
in each case for the Consolidated Companies
determined on a consolidated basis in accordance
with GAAP and (b) cash distributions of earnings of
Unrestricted Subsidiaries made to a Consolidated
Company to the extent previously excluded in the
determination of Consolidated
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Net Income or Consolidated Net Loss by virtue of
clause (i) of the respective definitions thereof."
(d) The Credit Agreement is hereby further amended by deleting the
definition of "Facility Fee Percentage" from Section 1.1 and substituting in
lieu thereof the following new definition of "Facility Fee Percentage":
"Facility Fee Percentage shall mean, with
respect to the Facility Fee, as of any date, the
percentage per annum determined by reference to the
applicable ratio of Total Funded Debt to EBITDA as
calculated as of the end of the immediately
preceding fiscal quarter determined by reference to
the table set forth on Schedule 1.01(a) attached
hereto; provided, however, that in determining Total
Funded Debt to EBITDA for purposes of determining
the Facility Fee Percentage, the items referenced in
clause (vii) of the definition of EBITDA shall be
omitted. Notwithstanding the foregoing, the initial
Facility Fee Percentage shall be determined as set
forth in Section 4.6 hereof. Any changes to the
Facility Fee Percentage will be effective as of the
date specified in Section 4.6."
(e) The Credit Agreement is hereby further amended by deleting the
definition of "Revolving Credit Commitment" from Section 1.1 and substituting in
lieu thereof the following new definition of "Revolving Credit Commitment":
"Revolving Credit Commitment shall mean,
with respect to each Lender, the obligation of such
Lender to make Revolving Loans to the Borrower and
to participate in Swing Line Loans in an aggregate
principal amount not exceeding the amount set forth
with respect to such Lender on Schedule 1.1(c), or
in the case of a Person becoming a Lender after
April 6, 2001, the amount of the assigned "Revolving
Credit Commitment" as provided in the Assignment and
Acceptance Agreement executed by such Person as an
assignee, as the same may be changed pursuant to the
terms hereof, as the same may be increased or
decreased from time to time as a result of any
reduction thereof pursuant to Section 2.3., any
assignment thereof pursuant to Section 11.6., or any
amendment thereof pursuant to Section 11.2."
(f) The Credit Agreement is hereby further amended by deleting
Section 2.1(a) in its entirety and substituting in lieu thereof the following
new Section 2.1(a):
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"(a) Subject to and upon the terms and
conditions herein set forth, each Lender severally
agrees to make to Borrower from time to time on and
after the Closing Date, but prior to the Maturity
Date, Revolving Loans; provided that, immediately
after each such Revolving Loan is made, (i) such
Lender's Revolving Credit Exposure does not exceed
such Lender's Revolving Credit Commitment and (ii)
the sum of the aggregate Revolving Credit Exposures
of all Lenders does not exceed the lesser of (y) the
Revolving Credit Commitments of all Lenders or (z)
$400,000,000."
(g) The Credit Agreement is hereby further amended by deleting
Section 7.7(d) in its entirety and substituting in lieu thereof the following
new Section 7.7(d):
"(d) within forty-five (45) days after the end
of each of its quarterly accounting periods, a
statement certified as true and correct by a
Financial Officer of the Borrower setting forth (i)
the Total Funded Debt to EBITDA ratio for purposes
of determining compliance with Article 8 and (ii)
the Total Funded Debt to EBITDA ratio for purposes
of determining the Applicable Margin and the
Facility Fee Percentage, in each case as of the last
day of such quarterly accounting period;"
(h) The Credit Agreement is hereby further amended by deleting
Section 8.13 in its entirety and substituting in lieu thereof the following new
Section 8.13:
"SECTION 8.13. RESTRICTED PAYMENTS.
The Borrower will not, and will not permit its
Restricted Subsidiaries to, declare or make, or
agree to pay or make, directly or indirectly, any
dividend on any class of its stock, or make any
payment on account of, or set apart assets for a
sinking or other analogous fund for, the purchase,
redemption, retirement, defeasance or other
acquisition of, any shares of common stock or any
options, warrants, or other rights to purchase such
common stock, whether now or hereafter outstanding
(each, a "Restricted Payment"), except for (a)
dividends payable by the Borrower solely in shares
of any class of its common stock, (b) Restricted
Payments made by any Subsidiary to the Borrower or
to another Restricted Subsidiary and (c) cash
dividends paid on, and cash repurchases of, the
common stock of the Borrower; provided, that (i) no
Default or Event of Default has occurred or would
occur as a result of paying such dividend or
repurchases, (ii) at the time of
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payment of such dividend and after giving effect to
such payment, the Borrower and any Restricted
Subsidiary could incur an additional $1.00 of Funded
Debt under Section 8.1 and 8.3, respectively, of
this Agreement and (d) repurchases of Borrower's
common stock in an aggregate amount not to exceed,
from the Closing Date through the Maturity Date, the
sum of (i) $20,000,000 plus (ii) 50% of the amount
by which cumulative Consolidated Net Income
commencing with the fiscal year ending September 30,
2001 exceeds $20,000,000; so long as (x) no Default
or Event of Default has occurred or would occur as a
result of such payment and (y) at the time of such
payment and after giving effect to such payment, the
Borrower and any Restricted Subsidiary could incur
an additional $1.00 of Funded Debt under Section 8.1
and 8.3, respectively, of this Agreement, and (z) at
the time of such payment, the Borrower has
Investment Grade Status from at least one Rating
Agency."
(f) The Credit Agreement is hereby further amended by adding
Schedule 1.1(c) attached hereto thereto.
Section 2. Reduction of Revolving Credit Commitment.
Upon the effectiveness of this Amendment, the Revolving Credit
Commitment of all Lenders shall be reduced to $400,000,000 and each Lender's
Revolving Credit Commitment as of the date hereof shall be as set forth on
Schedule 1.1(c) attached hereto. If after giving effect to such reduction of the
Revolving Credit Commitment, the principal amount of outstanding Revolving Loans
and Swing Line Loans exceeds the Revolving Credit Commitment of all Lenders,
then immediately following the effectiveness of this Amendment, the Borrower
shall repay the amount of such excess in accordance with Section 2.3(c) of the
Credit Agreement, together with any payments due under Section 4.13 of the
Credit Agreement.
Section 3. Benefits of Loan Documents.
Each reference to the Credit Agreement in any of the Loan Documents
shall be deemed to be a reference to the Credit Agreement as amended by this
Amendment, and as the Credit Agreement may from time to time be further amended,
supplemented, restated or otherwise modified in the future by one or more other
written amendments or supplemental or modification agreements entered into
pursuant to the applicable provisions thereof.
Section 4. Conditions to Effectiveness of Amendment. The effectiveness
of this Amendment is subject to the condition precedent that each of the
following be received
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by the Agent (unless otherwise waived in writing by the Agent), each of which
shall be satisfactory in form and substance to the Agent:
(a) this Amendment executed by the Borrower and by the Required
Lenders;
(b) the Acknowledgment and Consent of the Guarantors,
substantially in the form of Exhibit A hereto, executed by each of the
Guarantors (as defined below) (the "Acknowledgment");
(c) payment by the Borrower to the Agent of an amendment fee in an
amount equal to .10% of the Revolving Credit Commitments (after giving effect to
the Amendment) of those Lenders who have executed this Amendment ("Approving
Lenders") for distribution by the Agent to the Approving Lenders on a pro rata
basis based upon their Applicable Commitment Percentage; provided, however, no
such amendment fee will be paid to any Lender that fails to return an executed
original of this Amendment to the Agent on or before April 6, 2001;
(d) payment by the Borrower to the Agent, of any and all other
fees and expenses which are due and payable;
(e) a certificate of incumbency signed by the Secretary or
Assistant Secretary (or other individual performing similar functions) of the
Borrower with respect to each of the officers of the Borrower authorized to
execute and deliver this Amendment and attaching and certifying copies of the
resolutions of the board of directors of the Borrower, authorizing the
execution, delivery and performance of this Amendment; and
(f) such other approvals, opinions or documents as the Agent may
reasonably request.
Section 5. Representations. The Borrower represents to the Lenders
that:
(a) The Borrower has the right and power, and has taken all
necessary action to authorize it, to execute and deliver this Amendment, and to
perform this Amendment, and the Credit Agreement, as amended by this Amendment,
in accordance with their respective terms. This Amendment has been duly executed
and delivered by the duly authorized officers of the Borrower, and each of this
Amendment, and the Credit Agreement, as amended by this Amendment, is a legal,
valid and binding obligation of the Borrower enforceable against the Borrower in
accordance with its terms, except as may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or similar laws affecting the
enforcement of creditors' rights generally and by general principles of equity.
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(b) The execution and delivery of this Amendment, and the
performance by the Borrower of this Amendment, and the Credit Agreement, as
amended by this Amendment, in accordance with their respective terms, do not and
will not, by the passage of time or the giving of notice, or otherwise: (i)
violate any Requirement of Law relating to the Borrower; (ii) conflict with,
result in a breach of or constitute a default under the charter or by-laws of
the Borrower, or any of its Material Contractual Obligations; or (iii) result in
or require the creation or imposition of any Lien upon or with respect to any
property now owned or hereafter acquired by the Borrower other than those
permitted by the Credit Agreement.
(c) The articles of incorporation and bylaws of the Borrower have
not changed since delivery of such articles of incorporation and bylaws to the
Lenders in connection with the consummation of the Credit Agreement.
Section 6. Reaffirmation. The Borrower hereby repeats and reaffirms all
representations and warranties made by the Borrower in the Credit Agreement and
the other Loan Documents to which it is a party as of the date hereof with the
same force and effect as if such representations and warranties were set forth
in this Amendment in full except to the extent such representations expressly
relate to an earlier date or have been updated to the extent permitted by the
Credit Agreement.
Section 7. Reaffirmation and Representations by Guarantors. By
execution of the Acknowledgment, each Subsidiary that has executed a Subsidiary
Guarantee (a "Guarantor"):
(a) reaffirms its continuing obligations to the Agent and the
Lenders under the Subsidiary Guarantee to which it is a party, and agrees that
the transactions contemplated by this Amendment shall not in any way affect the
validity and enforceability of such Subsidiary Guarantee, or reduce, impair or
discharge the obligations of such Guarantor thereunder; and
(b) represents to the Lenders that:
(i) Such Guarantor has the right and power, and has taken all
necessary action to authorize it, to execute and deliver this Acknowledgement,
and to perform this Acknowledgement in accordance with its terms. This
Acknowledgement has been duly executed and delivered by the duly authorized
officers of such Guarantor, and the Acknowledgement is a legal, valid and
binding obligation of such Guarantor enforceable against such Guarantor in
accordance with its terms, except as may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or similar laws affecting the
enforcement of creditors' rights generally and by general principles of equity;
and
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(ii) the execution and delivery of this Acknowledgement, and the
performance by such Guarantor of this Acknowledgement, do not and will not, by
the passage of time or the giving of notice, or otherwise: (i) violate any
Requirement of Law relating to such Guarantor; (ii) conflict with, result in a
breach of or constitute a default under the charter or by-laws of such
Guarantor, or any of its Material Contractual Obligations; or (iii) result in or
require the creation or imposition of any Lien upon or with respect to any
property now owned or hereafter acquired by such Guarantor other than those
permitted by the Credit Agreement.
Section 8. Benefits. This Amendment shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors and
assigns.
Section 9. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA.
Section 10. Effect. Except as expressly herein amended, the terms and
conditions of the Credit Agreement shall remain in full force and effect.
Section 11. Counterparts. This Amendment may be executed in any number
of counterparts, each of which shall be deemed to be an original and shall be
binding upon all parties.
[Signatures on following page]
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IN WITNESS WHEREOF, the parties have caused this First Amendment to
Credit Agreement to be executed by their authorized officers all as of the day
and year first above written.
ROCK-TENN COMPANY
(CORPORATE SEAL) By:
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Title:
-----------------------------------
Attest:
By:____________________
Title:
[Signatures Continued on Next Page]
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[SIGNATURE PAGE TO FIRST AMENDMENT TO CREDIT AGREEMENT]
SUNTRUST BANK, AS AGENT, SWING LINE
LENDER AND A LENDER
By:
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Title:
--------------------------------
WACHOVIA BANK, N.A., AS A LENDER
AND DOCUMENTATION AGENT
By:
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Title:
--------------------------------
BANK OF AMERICA, N.A., AS A LENDER
AND SYNDICATION AGENT
By:
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Title:
--------------------------------
THE CHASE MANHATTAN BANK,
AS A LENDER
By:
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Title:
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THE BANK OF TOKYO-MITSUBISHI,
LTD., AS A LENDER
By:
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Title:
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THE BANK OF NEW YORK,
AS A LENDER
By:
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Title:
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[Signatures Continued on Next Page]
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[SIGNATURE PAGE TO FIRST AMENDMENT TO CREDIT AGREEMENT]
FIRST UNION NATIONAL BANK,
AS A LENDER
By:
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Title:
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THE FUJI BANK, LIMITED,
AS A LENDER
By:
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Title:
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BNP PARIBAS, AS A LENDER
By:
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Title:
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By:
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Title:
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SCHEDULE 1.1(C)
REVOLVING CREDIT COMMITMENTS
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Lender Revolving Credit Commitment
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SunTrust Bank $93,333,333
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Wachovia Bank, N.A. $84,444,444
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Bank of America, N.A. $84,444,444
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The Chase Manhattan Bank $35,555,556
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The Bank of Tokyo-Mitsubishi, $35,555,556
Ltd.
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The Bank of New York $17,777,778
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First Union National Bank $17,777,778
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The Fuji Bank, Limited $17,777,778
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BNP Paribas $13,333,333
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ACKNOWLEDGMENT AND CONSENT OF SUBSIDIARY GUARANTORS
Each of the undersigned Subsidiaries hereby (i) acknowledges receipt of
the foregoing First Amendment to Credit Agreement by and among Rock-Tenn
Company, the Lenders under the Credit Agreement (the "Lenders") and SunTrust
Bank, in its capacity as Agent for the Lenders (the "Agent") (the "Amendment"),
(ii) consents to the Amendment, (iii) agrees and acknowledges to the terms
thereof including, without limitation, the representations and agreements of the
each of the undersigned set forth in Section 7 of the Amendment, and (iv)
restates and affirms its respective obligations under its Subsidiary Guarantee
previously executed and delivered in favor of the Agent (for the ratable benefit
of the Lenders) without defense, counterclaim or set-off.
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IN WITNESS WHEREOF, each of the undersigned Subsidiaries has executed
this Acknowledgment and Consent of Subsidiary Guarantors this 6th day of April,
2001.
ROCK-TENN COMPANY, MILL
DIVISION, a Tennessee corporation
ROCK-TENN COMPANY OF TEXAS, a
Georgia corporation
ROCK-TENN COMPANY OF
ARKANSAS, a Georgia corporation
ROCK-TENN COMPANY OF
CALIFORNIA, INC., a Delaware
corporation
ROCK-TENN COMPANY OF ILLINOIS,
INC., an Illinois corporation
ROCK-TENN CONVERTING
COMPANY, a Georgia corporation
CONCORD INDUSTRIES, INC., an Illinois
corporation
WABASH CORPORATION, a Delaware
corporation
WALDORF CORPORATION, a Delaware
corporation
BEST RECYCLING, INC., an Iowa
corporation
WALDORF REALTY, INC., a Delaware
corporation
ROCK-TENN PARTITION COMPANY, a
Georgia corporation
WALDORF CORPORATION OF
MINNESOTA, a Delaware corporation
By:
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Name:
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Title:
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