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EXHIBIT 4.8
THIRD AMENDMENT TO
AMENDED AND RESTATED CREDIT AGREEMENT,
CONSENT AND WAIVER
THIS THIRD AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT, CONSENT
AND WAIVER (this "Amendment") is entered into as of August 19, 1998 among IPC,
INC., a Delaware corporation (the "Borrower"), IVEX PACKAGING CORPORATION, a
Delaware corporation ("Holdings"), each of the Borrower's Domestic Subsidiaries
(the Borrower's Domestic Subsidiaries, together with Holdings, individually a
"Guarantor" and collectively the "Guarantors"), the Lenders party to the Credit
Agreement defined below (the "Lenders"), NATIONSBANK, N.A., as Administrative
Agent (the "Administrative Agent") for the Lenders and BANKERS TRUST COMPANY, as
Documentation Agent (the "Documentation Agent") for the Lenders (the
Documentation Agent, together with the Administrative Agent, collectively the
"Agents"). Capitalized terms used herein and not otherwise defined herein shall
have the respective meanings given to them in the Credit Agreement.
RECITALS
WHEREAS, the Borrower, the Guarantors, the Administrative Agent, the
Documentation Agent and the Lenders are parties to that certain Amended and
Restated Credit Agreement dated as of October 2, 1997 (as amended by that
certain First Amendment to Amended and Restated Credit Agreement dated as of
October 10, 1997, by that certain Second Amendment to Amended and Restated
Credit Agreement dated as of April 3, 1998 and as may be further amended,
modified, supplemented, extended or restated from time to time, the "Credit
Agreement");
WHEREAS, the Borrower wishes to increase the Revolving Committed Amount
from $175 million to $265 million;
WHEREAS, the Borrower wishes to either (a) contribute or sell certain
assets owned by IPMC, Inc., commonly known as the Detroit Paper Mill, or (b)
contribute or sell the stock of IPMC, Inc. to a joint venture to be formed;
WHEREAS, the Borrower wishes to increase its ability to consummate
additional acquisitions beginning in 1999; and
WHEREAS, the Agents, the Required Lenders, the Lenders holding at least
51% of the Tranche A Term Loans and the Lenders holding at least 51% of the
Tranche B Term Loans, have agreed to amend certain terms of the Credit
Agreement, as more fully set forth below.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
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1. Definitions.
(a) Clause (b)(v) of the definition of "Permitted Acquisition"
set forth in Section 1.1 of the Credit Agreement is amended and
restated in its entirety to read as follows:
(v) not including any acquisition or portion thereof made with
the issuance of capital stock, (A) during calendar year 1998, the total
cost of any one acquisition shall not exceed $40,000,000, and together
with other acquisitions made by the Credit Parties and their
Subsidiaries during such calendar year, the aggregate acquisition costs
of the Credit Parties and their Subsidiaries taken as a whole shall not
exceed $75,000,000 and (B) during calendar year 1999 and during each
calendar year thereafter, the total cost of any one acquisition shall
not exceed $50,000,000 and together with other acquisitions made by the
Credit Parties and their Subsidiaries during such calendar year, the
aggregate acquisition costs of the Credit Parties and their
Subsidiaries taken as a whole shall not exceed $100,000,000.
(b) The definition of "Revolving Committed Amount" set forth
in Section 1.1 of the Credit Agreement is amended and restated in its
entirety to read as follows:
"Revolving Committed Amount" means TWO HUNDRED SIXTY FIVE
MILLION DOLLARS ($265,000,000) or such lesser amount as the Revolving
Committed Amount may be reduced pursuant to Section 2.1(d) or Section
3.3(c).
(c) A new definition is added to Section 1.1 of the Credit
Agreement to read as follows:
"Year 2000 Problem" means any risk that any computer hardware,
software or other equipment used by a Credit Party or any of its
Subsidiaries will not function as effectively and reliably with respect
to recognition of dates and times on and after January 1, 2000 as it
does prior to January 1, 2000, to the extent such risk would cause or
be reasonably expected to cause a Material Adverse Effect.
2. Year 2000 Compliance.
(a) A new Section 6.28 is added to the Credit Agreement to
read as follows:
Each Credit Party has (a) reviewed and assessed all areas
within its and each of its Subsidiaries' businesses and operation that
reasonably would be expected to be materially adversely affected by the
Year 2000 Problem, (b) developed a plan and timeline, as necessary, to
address the Year 2000 Problem and (c) implemented or is in the process
of implementing such plan in accordance with its timetable. Each Credit
Party reasonably believes that the Year 2000 Problem has been
appropriately addressed or is in the process of being appropriately
addressed by it and the Year 2000 Problem will not exist with respect
to it or any of its Subsidiaries on or after January 1, 2000.
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(b) Section 7.1 of the Credit Agreement is amended by adding
a new subsection (n) to read as follows:
(n) Year 2000 Information. Upon the written request
of the Administrative Agent, such information, assurances and
documentation (including, but not limited to, the results of
internal and external audit reports prepared in connection
therewith) reasonably acceptable to the Administrative Agent
that the Credit Parties and their Subsidiaries will not have a
Year 2000 Problem on or after January 1, 2000.
3. Leverage Ratio. Section 7.2(a) of the Credit Agreement is amended and
restated in its entirety to read as follows:
(a) Leverage Ratio. The Leverage Ratio, as of the end of each
fiscal quarter, for the twelve month period ending on such date, shall
be less than or equal to:
(i) From April 1, 1998 to and including September
30, 1998, 4.75 to 1.0;
(ii) From October 1, 1998 to and including March
31, 1999, 4.50 to 1.0;
(iii) From April 1, 1999 to and including
September 30, 1999, 4.25 to 1.0;
(iv) From October 1, 1999 to and including
September 30, 2000, 3.75 to 1.0; and
(v) From October 1, 2000 and thereafter, 3.50 to
1.0.
4. Schedule 1.1(a).
Schedule 1.1(a) to the Credit Agreement is amended and restated in its
entirety in the form attached hereto as Exhibit A.
5. Consent and Waiver.
(a) Notwithstanding any term or provision contained in the
Credit Documents to the contrary, subject to the conditions set forth
in clause (c) below, the Lenders irrevocably consent to the following
actions (collectively, the "Investment"):
(i) either (A) the contribution or sale of all of the
assets of IPMC, Inc., commonly known as the Detroit Paper
Mill, or (B) the contribution or sale of all of the shares of
IPMC, Inc. to a new joint venture (the "Joint Venture") in
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consideration for no less than $20 million in the form of
cash, subordinated notes and/or equity or a combination
thereof.
(ii) the Credit Parties will not be required to use
any proceeds received in consideration from the Investment to
prepay the Credit Party Obligations.
(iii) with respect to all assets being transferred
pursuant to the Investment, the Lenders shall release all of
their Liens on such assets, and the Lenders hereby authorize
the Collateral Agent to take such actions as are consistent
with such agreement to release the Liens.
(iv) if the stock of IPMC, Inc. is contributed or
sold to the Joint Venture, the guaranty obligations of IPMC,
Inc. shall be fully released, and the Lenders hereby authorize
the Collateral Agent to execute such release.
(b) The Lenders agree that any Default or Event of Default
that may be caused by the Investment is hereby irrevocably waived,
including, without limitation, any violation that may occur with
respect to Section 3.3, Section 8.5 or Section 8.7 of the Credit
Agreement. This is a one time waiver and does not constitute a waiver
of any other Default or Event of Default that may exist or an agreement
to waive any Default or Event of Default that may occur in the future.
(c) The consent and waiver by the Lenders set forth in this
Section 5 is subject to satisfaction of the following conditions:
(i) the Investment occurs on or before November 30,
1998 on terms reasonably satisfactory to the Administrative
Agent;
(ii) no Default or Event of Default shall have
occurred and be continuing on the date of the Investment
unless such Default or Event of Default shall have been waived
in accordance with the Credit Agreement; and
(iii) the Collateral Agent receives, on behalf of the
Lenders, a first priority perfected security interest in all
rights of the Credit Parties in (A) any debt instrument
received in consideration for the Investment and (B) any
equity interest in the Joint Venture received in consideration
for the Investment, together with such documents, instruments,
certificates and opinions as reasonably requested.
6. Conditions Precedent.
The effectiveness of this Amendment is subject to the satisfaction of
each of the following conditions:
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(a) The Administrative Agent shall have received copies of
this Amendment duly executed by the Credit Parties, the Required
Lenders, Lenders holding at least 51% of the Tranche A Term Loans and
Lenders holding at least 51% of the Tranche B Term Loans.
(b) The Administrative Agent shall have received copies of
resolutions of the Board of Directors of each Credit Party approving
and adopting this Amendment, the transactions contemplated herein and
authorizing execution and delivery hereof, certified by a secretary or
assistant secretary of such Credit Party to be true and correct and in
full force and effects as of the date hereof.
(c) The Administrative Agent shall have received duly executed
copies of modifications to Mortgage Documents, together with such real
estate opinions and title update information as requested by the
Administrative Agent.
(d) Each Lender, as appropriate, shall have received a duly
executed replacement Revolving Note from the Borrower in the face
amount of such Lender's Revolving Loan Commitment Percentage of the
Revolving Committed Amount (as amended hereby) in substantially the
form of Exhibit 2.1(e) to the Credit Agreement.
(e) Each Lender that is increasing its Revolving Commitment
Amount shall have received a fee equal to .125% of such increase.
(f) Each Lender who executes and delivers this Amendment shall
have received an amendment fee in an amount equal to .05% of its total
Commitment under the Credit Agreement.
(g) The Administrative Agent shall have received an opinion
from counsel to the Credit Parties, in form and substance satisfactory
to the Administrative Agent, addressed to the Administrative Agent on
behalf of the Lenders and dated as of the date hereof.
(h) The Administrative Agent shall have received such other
documents and information as it deems reasonably necessary.
7. Miscellaneous.
(a) The term "Credit Agreement" as used in each of the Credit
Documents shall hereafter mean the Credit Agreement as amended by this
Amendment. Except as herein specifically agreed, the Credit Agreement,
and the obligations of the Credit Parties thereunder and under the
other Credit Documents, are hereby ratified and confirmed and shall
remain in full force and effect according to their terms.
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(b) Each of the Borrower, the Guarantors, the Agents and the
Lenders party hereto represents and warrants as follows:
(i) It has taken all necessary action to authorize
the execution, delivery and performance of this Amendment.
(ii) This Amendment has been duly executed and
delivered by such party and constitutes such party'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).
(iii) 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 party of this Amendment
other than any filing required in connection with the amendments or
modifications to the Mortgage Documents contemplated by Section 6(c) of
this Amendment.
(c) Each Credit Party represents and warrants to the Lenders
that (i) the representations and warranties of the Credit Parties set
forth in Section 6 of the Credit Agreement are true and correct as of
the date hereof, (ii) no unwaived event has occurred and is continuing
which constitutes a Default or an Event of Default and (iii) it has no
claims, counterclaims, offsets, credits or defenses to its obligations
under the Credit Documents or to the extent it has any they are hereby
released.
(d) This Amendment may be executed in any number of
counterparts, each of which when so executed and delivered shall be an
original, but all of which shall constitute one and the same
instrument. Delivery of an executed counterpart of this Amendment by
telecopy shall be effective as an original and shall constitute a
representation that an executed original shall be delivered.
(e) THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
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Each of the parties hereto has caused a counterpart of this Amendment
to be duly executed and delivered as of the date first above written.
BORROWER: IPC, INC.
a Delaware corporation
By:
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Name: Xxxxxxx X. Xxxx
Title: Vice President and Treasurer
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GUARANTORS: IVEX PACKAGING CORPORATION
a Delaware corporation
IVEX PAPER MILL CORPORATION
a Delaware corporation
IPMC HOLDING CORPORATION
a Delaware corporation
IPMC, INC.
a Delaware corporation
VALLEY EXPRESS LINES, INC.
a Delaware corporation
KAMA OF ILLINOIS CORPORATION
a Delaware corporation
PACKAGING PRODUCTS, INC.
a Delaware corporation
CFI INDUSTRIES, INC.
a Delaware corporation
CFI RECYCLING, INC.
a Delaware corporation
PLASTOFILM INDUSTRIES, INC.
a Delaware corporation
TRIO PRODUCTS, INC.
a Delaware corporation
CRYSTAL THERMOPLASTICS, INC.
a Rhode Island corporation
ULTRA PAC, INC.
a Minnesota corporation
By:
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Name: Xxxxxxx X. Xxxx
Title: Vice President and Treasurer
of each of the above named Guarantors
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Signature Page to Third Amendment to Amended and Restated Credit Agreement,
Consent and Waiver among IPC, Inc., as Borrower, Ivex Packaging Corporation and
the Domestic Subsidiaries of IPC, Inc., as Guarantors, the Lenders party
thereto, NationsBank, N.A., as Administrative Agent and Bankers Trust Company,
as Documentation Agent.
LENDERS:
NATIONSBANK, N.A.,
individually in its capacity as a
Lender and in its capacity as Administrative Agent and
Collateral Agent
By:
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Name:
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Title:
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BANKERS TRUST COMPANY,
individually in its capacity as a Lender and in its capacity
as Documentation Agent
By:
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Name:
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Title:
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