Exhibit 10.5
SECOND AMENDMENT TO
CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is entered
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into as of November 12, 1999 among PACKAGING DYNAMICS, L.L.C., a Delaware
limited liability company ("Packaging"), INTERNATIONAL CONVERTER, INC., a
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Delaware corporation ("ICI"; together with Packaging, the "Borrower"), the
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Persons identified as "Guarantors" on the signature pages hereto (the
"Guarantors"), the Persons identified as "Lenders" on the signature pages hereto
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(the "Lenders") and BANK OF AMERICA, N.A., a national banking association,
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formerly known as NationsBank, N.A., as Agent (the "Agent") for the Lenders.
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Capitalized terms used herein and not otherwise defined herein shall have the
respective meanings given to them in the Credit Agreement hereinafter defined or
in this Amendment.
RECITALS
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WHEREAS, the Borrower, the Guarantors, the Agent and the Lenders are
parties to that certain Credit Agreement dated as of November 20, 1998 (as
amended, modified, supplemented, extended or restated from time to time, the
"Credit Agreement");
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WHEREAS, the Borrower has requested that the Lenders agree to amend certain
provisions of the Credit Agreement; and
WHEREAS, the Agent and the Lenders have agreed to amend certain provisions
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:
PART 1
AMENDMENTS TO CREDIT AGREEMENT
SUBPART 1.1 Amendments to Section 1.1. Section 1.1 of the Credit
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Agreement is hereby amended in the following respects:
(a) The definition of "EBITDA" is hereby amended in its entirety to
read as follows:
"EBITDA" means, for any period, with respect to the Borrower and
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its Subsidiaries on a consolidated basis, the sum of (a) Net Income
for such period (excluding the effect of any extraordinary or other
non-recurring gains or losses (including any gain or loss from the
sale of Property) or non-cash losses (including any non-cash charges
resulting from the Stock Option Plan)) plus (b)
an amount which, in the determination of Net Income for such period,
has been deducted for (i) Interest Expense for such period, (ii) total
Federal, state, foreign or other income or franchise taxes and
Restricted Payments for Taxes for such period and (iii) all
depreciation and amortization for such period, all as determined in
accordance with GAAP; provided, however, that (1) EBITDA for each of
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the fiscal quarters of the Borrower ended December 31, 1997, March 31,
1998, June 30, 1998 and September 30, 1998 shall be equal to the sum
(where applicable) of (A) EBITDA for each such period as set forth on
Schedule 1.1(d) plus (B) ICI EBITDA for each such period as set forth
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on Schedule 1.1(d) plus (C) ICI EBITDA Synergies for each such period
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as set forth on Schedule 1.1(d), (2) EBITDA for each of the fiscal
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quarters of the Borrower ending December 31, 1998 and March 31, 1999
(A) shall be determined without giving effect to non-cash purchase
price accounting adjustments of up to $2.5 million relating to the
Transactions and (B) shall be equal to the sum of (w) the amount
determined pursuant to the provisions of this definition prior to the
proviso with respect to the Borrower and its Subsidiaries other than
ICI plus (x) ICI EBITDA for each such period as set forth on Schedule
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1.1(d) plus (y) ICI EBITDA Synergies for each such period as set forth
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on Schedule 1.1(d) plus (z) only with respect to the fiscal quarter of
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the Borrower ending December 31, 1998, $900,000, (3) EBITDA for the
fiscal quarter of the Borrower ending June 30, 1999 (A) shall be
determined without giving effect to non-cash purchase price accounting
adjustments relating to the Alupac Acquisition and (B) shall be equal
to the sum of (x) the amount determined pursuant to the provisions of
this definition prior to the proviso with respect to the Borrower and
its Subsidiaries (including ICI) plus (y) ICI EBITDA Synergies for
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such period as set forth on Schedule 1.1(d) and (4) EBITDA for the
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fiscal quarter of the Borrower ending September 30, 1999 shall be
determined without giving effect to non-cash purchase price accounting
adjustments relating to the Alupac Acquisition.
(b) The definition of "Interest Expense" is hereby amended in its
entirety to read as follows:
"Interest Expense" means, for any period, with respect to the
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Borrower and its Subsidiaries on a consolidated basis, all cash
interest expense (paid or accrued to be paid), including the interest
component under Capital Leases, as determined in accordance with GAAP;
provided, however, that (a) Interest Expense for each of the fiscal
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quarters of the Borrower ended December 31, 1997, March 31, 1998, June
30, 1998, September 30, 1998 and December 31, 1998 shall be equal to
the sum (where applicable) of the amount of Interest Expense and ICI
Interest Expense for each such period as set forth on Schedule 1.1(d)
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and (b) Interest Expense for each of the fiscal quarters of the
Borrower ended March 31, 1999 and June 30, 1999 shall be equal to the
sum of (i) with respect to the Borrower and its Subsidiaries (other
than ICI), the amount determined for each such period pursuant to the
foregoing terms of this definition plus (ii) with respect
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to ICI, the amount of ICI Interest Expense for each such period as set
forth on Schedule 1.1(d).
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(c) The definition of "Scheduled Funded Debt Payments" is hereby
amended in its entirety to read as follows:
"Scheduled Funded Debt Payments" means, as of the end of each
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fiscal quarter of the Borrower, for the Borrower and its Subsidiaries
on a consolidated basis, the sum of all scheduled payments of
principal on Funded Debt for the applicable period ending on such date
(including the principal component of payments due on Capital Leases
during the applicable period ending on such date); it being understood
that (a) Scheduled Funded Debt Payments shall not include voluntary
prepayments or the mandatory prepayments required pursuant to Section
3.3, (b) Scheduled Funded Debt Payments for each of the fiscal
quarters of the Borrower ended December 31, 1997, March 31, 1998, June
30, 1998, September 30, 1998 and December 31, 1998 shall be equal to
the sum (where applicable) of the amount of Scheduled Funded Debt
Payments and ICI Scheduled Funded Debt Payments for each such period
as set forth on Schedule 1.1(d) and (c) Scheduled Funded Debt Payments
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for each of the fiscal quarters of the Borrower ended March 31, 1999
and June 30, 1999 shall be equal to the sum of (i) with respect to the
Borrower and its Subsidiaries (other than ICI), the amount determined
for each such period pursuant to the foregoing terms of this
definition plus (ii) with respect to ICI, the amount of ICI Scheduled
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Funded Debt Payments for each such period as set forth on Schedule
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1.1(d).
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SUBPART 1.2 Amendment to Schedule 1.1(d). Schedule 1.1(d) to the Credit
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Agreement is hereby amended and replaced in its entirety by the corresponding
schedule attached hereto.
PART 2
CONDITIONS TO EFFECTIVENESS
This Amendment shall be and become effective, and shall be deemed effective
as of the date of this Amendment, upon receipt by the Agent of counterparts of
this Amendment, which collectively shall have been duly executed on behalf of
(i) the Credit Parties and (ii) the Required Lenders.
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PART 3
MISCELLANEOUS
SUBPART 3.1 Representations and Warranties. Each of the Credit Parties
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hereby represents and warrants to the Agent and the Lenders that, after giving
effect to this Amendment, (a) no Default or Event of Default exists under the
Credit Agreement or any of the other Credit Documents and (b) the
representations and warranties set forth in Section 6 of the Credit Agreement
are, subject to the limitations set forth therein, true and correct in all
material respects as of the date hereof (except for those which expressly relate
to an earlier date).
SUBPART 3.2 Reaffirmation of Credit Party Obligations. Each Credit Party
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hereby ratifies the Credit Agreement and acknowledges and reaffirms (a) that it
is bound by all terms of the Credit Agreement applicable to it and (b) that it
is responsible for the observance and full performance of its respective Credit
Party Obligations.
SUBPART 3.4 Cross-References. References in this Amendment to any Part or
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Subpart are, unless otherwise specified, to such Part or Subpart of this
Amendment.
SUBPART 3.5 Instrument Pursuant to Credit Agreement. This Amendment is a
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Credit Document executed pursuant to the Credit Agreement and shall (unless
otherwise expressly indicated therein) be construed, administered and applied in
accordance with the terms and provisions of the Credit Agreement.
SUBPART 3.6 References in Other Credit Documents. At such time as this
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Amendment shall become effective pursuant to the terms of Part 2, all references
in the Credit Documents to the "Credit Agreement" shall be deemed to refer to
the Credit Agreement as amended by this Amendment.
SUBPART 3.7 Counterparts/Telecopy. This Amendment may be executed by the
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parties hereto in several counterparts, each of which shall be deemed to be an
original and all of which shall constitute together but one and the same
agreement. Delivery of executed counterparts of the Amendment by telecopy shall
be effective as an original and shall constitute a representation that an
original shall be delivered.
SUBPART 3.8 Governing Law. THIS AMENDMENT SHALL BE DEEMED TO BE A
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CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK.
SUBPART 3.9 Successors and Assigns. This Amendment shall be binding upon
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and inure to the benefit of the parties hereto and their respective successors
and assigns.
SUBPART 3.10 General. Except as amended hereby, the Credit Agreement and
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all other Credit Documents shall continue in full force and effect.
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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.
BORROWERS: PACKAGING DYNAMICS, L.L.C.
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By: /s/ X.X. Xxxx
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Name: X.X. Xxxx
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Title: Vice President
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INTERNATIONAL CONVERTER, INC.,
as a Borrower and a Guarantor
By: /s/ X.X. Xxxx
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Name: X.X. Xxxx
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Title: Vice President
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GUARANTORS: PACKAGING HOLDINGS, L.L.C.
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By: /s/ X.X. Xxxx
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Name: X.X. Xxxx
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Title: Vice President
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BAGCRAFT PACKAGING, L.L.C.
(f/k/a Bagcraft Acquisition, L.L.C.)
By: /s/ X.X. Xxxx
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Name: X.X. Xxxx
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Title: Vice President
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IPMC ACQUISITION, L.L.C.
By: /s/ X.X. Xxxx
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Name: X.X. Xxxx
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Title: Vice President
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LENDERS: BANK OF AMERICA, N.A., a national banking
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N.A., in its individual capacity and as
Agent
By: /s/ Xxxx X. Xxxxxxxx
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Name: Xxxx X. Xxxxxxxx
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Title: Managing Director
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ABN AMRO BANK N.V.
By: /s/ Xxxxxx X. Xxxx
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Name: Xxxxxx X. Xxxx
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Title: Senior Vice President
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By: /s/ Xxxx X. Xxxxxxxxxxxxx
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Name: Xxxx X. Xxxxxxxxxxxxx
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Title: Vice President
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FIRST UNION NATIONAL BANK
By: /s/ Xxxxx Santa Xxxx
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Name: Xxxxx Santa Xxxx
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Title: Vice President
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FLOATING RATE PORTFOLIO
By: INVESCO Senior Secured
Management, Inc., as attorney in
fact
By: /s/ Xxxxxx Xxxxxxx
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Name: Xxxxxx Xxxxxxx
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Title: Authorized Signatory
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XXX XXXXXX SENIOR INCOME TRUST
By: Xxx Xxxxxx Investment Advisory
Corp.
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
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Title: Vice President
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XXX XXXXXX PRIME RATE INCOME TRUST
By: Xxx Xxxxxx Investment Advisory
Corp.
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
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Title: Vice President
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COMERICA BANK
By: /s/ Xxxxx X. Light
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Name: Xxxxx X. Light
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Title: Vice President
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