EXHIBIT 10.8
FIFTH AMENDMENT TO
CREDIT AGREEMENT
THIS FIFTH AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is entered
into as of March 18, 2003 among PACKAGING DYNAMICS, L.L.C., a Delaware limited
liability company ("Packaging"), INTERNATIONAL CONVERTER, INC., a Delaware
corporation ("ICI"; together with Packaging, individually a "Borrower" and
collectively the "Borrowers"), the Persons identified as "Guarantors" on the
signature pages hereto (the "Guarantors"), the Persons identified as "Lenders"
on the signature pages hereto (the "Lenders") and BANK OF AMERICA, N.A., a
national banking association, formerly known as NationsBank, N.A., as Agent (the
"Agent") for the Lenders. Capitalized terms used herein and not otherwise
defined herein shall have the respective meanings set forth, or incorporated by
reference, in the Credit Agreement (defined below).
RECITALS
WHEREAS, the Borrowers, the Guarantors, the Agent and the Lenders are
parties to that certain Credit Agreement dated as of November 20, 1998 (as
previously amended and as amended, modified, supplemented, extended or restated
from time to time, the "Credit Agreement");
WHEREAS, the Borrowers and the Guarantors have requested that the
Lenders agree to amend certain provisions of the Credit Agreement; and
WHEREAS, the Lenders have agreed to do so, as more fully set forth
below, but only upon the terms and conditions set forth herein.
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
The Credit Agreement is hereby amended in accordance with this Part 1.
SUBPART 1.1 Amendment to Section 1.1. Section 1.1 of the Credit
Agreement is hereby amended in the following respects:
(a) The definition of "Agency Services Address" is hereby
replaced by the definition of "Agency Management Address" to read as
follows:
"Agency Management Address" means Bank of America, N.A., 000
Xxxxx Xxxxx Xxxxxx, 8th Floor, NCI-001-08-19, Xxxxxxxxx, Xxxxx Xxxxxxxx
00000, Attn: Agency
Management, or such other address as may be identified by written
notice from the Agent to the Borrower.
(b) The definition of "Applicable Percentage" is hereby
amended in its entirety to read as follows:
"Applicable Percentage" means the appropriate applicable
percentages corresponding to the Leverage Ratio in effect as of the
most recent Calculation Date as shown below:
Applicable Percentage
---------------------------------------------------------------------------------------------------
Eurodollar Loans Base Rate Loans
---------------------------- -----------------------------
Revolving Loans Revolving Loans Standby Commercial
Pricing Leverage and Tranche A Tranche B and Tranche A Tranche B Letter of Letter of Commitment
Level Ratio Term Loans Term Loans Term Loons Term Loans Credit Fee Credit Fee Fee
--------------------------------------------------------------------------------------------------------------------------
<2.5 to 1.0 2.75% 3.75% 1.75% 2.75% 2.75% 1.375% 0.50%
--------------------------------------------------------------------------------------------------------------------------
<3.0 to 1.0
II but 3.00% 3.75% 2.00% 2.75% 3.00% 1.500% 0.50%
>2.5 to 1.0
-
--------------------------------------------------------------------------------------------------------------------------
<3.5 to 1.0
III but 3.25% 3.75% 2.25% 2.75% 3.25% 1.625% 0.50%
>3.0 to 1.0
-
--------------------------------------------------------------------------------------------------------------------------
<4.0 to 1.0
IV but 3.50% 4.00% 2.50% 3.00% 3.50% 1.750% 0.50%
>3.5 to 1.0
-
--------------------------------------------------------------------------------------------------------------------------
V >4.0 to 1.0 3.75% 4.25% 2.75% 3.25% 3.75% 1.875% 0.50%
-
--------------------------------------------------------------------------------------------------------------------------
The Applicable Percentage for purposes of calculating
the applicable interest rate for any day for any Loan, the
applicable rate of the Commitment Fee for any day for purposes
of Section 3.4(a), the applicable rate of the Standby Letter
of Credit Fees for any day for purposes of Section 3.4(b) and
the Commercial Letter of Credit Fees for any day for purposes
of Section 3.4(b)(ii) shall, in each case, be determined and
adjusted quarterly on the date (each a "Calculation Date" five
Business Days after the date by which the Borrower is required
to provide the officer's certificate in accordance with the
provisions of Section 7.1(d); provided that if the Borrower
fails to provide the officer's certificate required by Section
7.1(d) on or before the most recent Calculation Date, the
Applicable Percentages for such Calculation Date shall be
based on Pricing Level V from such Calculation Date until such
time that an appropriate officer's certificate is provided
whereupon the Pricing Level shall be determined by the then
current Leverage Ratio. Each Applicable Percentage shall be
effective from one Calculation Date until the next Calculation
Date. Any adjustment in the Applicable Percentages shall be
applicable to all existing Loans and Letters of Credit as well
as any new Loans made or Letters of Credit issued.
The Borrower shall promptly deliver to the Agent, at
the address set forth on Schedule 11.1 and at the Agency
Management Address, at the time the officer's
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certificate is required to be delivered by Section 7.1(d),
information regarding any change in the Leverage Ratio that
would change the existing Pricing Level pursuant to the
preceding paragraph.
(c) Clause (c) of the definition of "Change of Control" is
hereby amended in its entirety to read as follows:
(c) members of the Sponsor Group shall fail to own
beneficially, directly or indirectly, in the aggregate at
least 42.5% of the outstanding Voting Stock of the Parent,
SUBPART 1.2 Amendments to Section 7.2. Sections 7.2(a) and (d) of the
Credit Agreement are hereby amended in their entirety to read as follows:
7.2 Financial Covenants.
(a) Leverage Ratio. The Credit Parties shall cause
the Leverage Ratio, measured as of the last day of each fiscal
quarter, to be less than or equal to the ratio shown below for
the period corresponding thereto:
Period Ratio
------ -----
January 1, 2001 through June 30, 2001 4.35 to 1.00
July 1, 2001 through September 30, 2001 4.10 to 1.00
October 1, 2001 through December 31, 2001 4.00 to 1.00
January 1, 2002 through March 31, 2002 3.75 to 1.00
April 1, 2002 through September 30, 2002 3.50 to 1.00
October 1, 2002 through December 31, 2002 3.25 to 1.00
January 1, 2003 through March 31, 2003 3.10 to 1.00
April 1, 2003 through June 30, 2003 3.00 to 1.00
July 1, 2003 through December 31, 2003 2.75 to 1.00
January 1, 2004 through March 31, 2004 2.50 to 1.00
April 1, 2004 and thereafter 2.00 to 1.00
************
(d) Fixed Charge Coverage Ratio. The Credit Parties
shall cause the Fixed Charge Coverage Ratio, for the twelve
month period ending on the last day of each fiscal quarter of
the Borrower, to be greater than or equal to the ratio shown
below for the period corresponding thereto:
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Period Ratio
------ -----
January 1, 2002 through September 30, 2002 1.10 to 1.00
October 1, 2002 through December 31, 2002 1.15 to 1.00
January 1, 2003 and thereafter 1.15 to 1.00
PART 2
CONDITIONS PRECEDENT TO EFFECTIVENESS
SUBPART 2.1 Conditions Precedent. This Amendment shall become effective
as of the date hereof upon the satisfaction (or waiver in writing by each of the
Lenders) of each of the following conditions precedent:
(a) Executed Amendment. Receipt by the Agent of counterparts
of this Amendment, which collectively shall have been duly executed on
behalf of (i) the Borrowers, (ii) the Guarantors and (iii) the Required
Lenders.
(b) Resolutions and Incumbency. Receipt by the Agent of (i)
copies of resolutions of the Board of Directors or their equivalent for
the Credit Parties, each approving and adopting this Amendment and
authorizing execution and delivery hereof and (ii) an incumbency
certificate of each Credit Party, in each case certified by a secretary
or assistant secretary of the applicable Credit Party to be true and
correct.
(c) Fees. The Agent shall have received (i) on behalf of each
Lender that approves this Amendment by delivery to the Agent of an
executed signature page on or before 5:00 p.m. EDT, March 18, 2003, a
fee equal to 0.125% of the Commitments of such Lender (after giving
effect to this Amendment) and (ii) such fees due and payable pursuant
to that certain fee letter agreement dated as of the date hereof among
the Borrowers and Bank of America, N.A.
PART 3
MISCELLANEOUS
SUBPART 3.1 Authority/Enforceability. Each of the Credit Parties, the
Agent and the Lenders party 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,
4
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).
(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.
SUBPART 3.2 Representation and Warranties. The Credit Parties represent
and warrant to the Lenders that:
(a) The representations and warranties of the Credit Parties
set forth in Section 6 of the Credit Agreement are true and correct in
all material respects as of the date hereof except for those that
specifically relate to an earlier date.
(b) No event has occurred and is continuing which constitutes
a Default or an Event of Default.
(c) The Collateral Documents continue to create a valid
security interest in, and Lien upon, the Collateral, in favor of the
Agent, for the benefit of the Lenders, which security interests and
Liens are perfected in accordance with the terms of the Collateral
Documents and prior to all Liens other than Permitted Liens.
(d) The Credit Party Obligations are not reduced or modified
by this Amendment and are not subject to any offsets, defenses or
counterclaims.
SUBPART 3.3 Reaffirmation of Credit Party Obligations. Each Credit
Party 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 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 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
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.
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SUBPART 3.7 Further Assurances, The Credit Parties agree to promptly
take such action, upon the request of the Agent, as is necessary to carry out
the intent of this Amendment.
SUBPART 3.8 GENERAL RELEASE. IN CONSIDERATION OF THE REQUIRED LENDERS
ENTERING INTO THIS AMENDMENT, THE CREDIT PARTIES HEREBY RELEASE THE AGENT, THE
LENDERS, AND THE AGENT'S AND THE LENDERS' RESPECTIVE OFFICERS, EMPLOYEES,
REPRESENTATIVES, AGENTS, COUNSEL AND DIRECTORS FROM ANY AND ALL ACTIONS, CAUSES
OF ACTION, CLAIMS, DEMANDS, DAMAGES AND LIABILITIES OF WHATEVER KIND OR NATURE,
IN LAW OR IN EQUITY, NOW KNOWN OR UNKNOWN, SUSPECTED OR UNSUSPECTED TO THE
EXTENT THAT ANY OF THE FOREGOING ARISES FROM ANY ACTION OR FAILURE TO ACT UNDER
THE CREDIT AGREEMENT OR UNDER THE OTHER CREDIT DOCUMENTS ON OR PRIOR TO THE DATE
HEREOF.
SUBPART 3.9 GOVERNING LAW. 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.
SUBPART 3.10 Counterparts/Telecopy. This Amendment may be executed by
the 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 3.11 Successors and Assigns. This Amendment shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
SUBPART 3.12 General. Except as amended hereby, the Credit Agreement
and all other Credit Documents shall continue in full force and effect.
[The remainder of this page has been left blank intentionally.]
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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.
By: /s/ Xxxxx X. Xxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxx
-------------------------------
Title: Chief Financial Officer
------------------------------
INTERNATIONAL CONVERTER, INC.,
as a Borrower and a Guarantor
By: /s/ Xxxxx X. Xxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxx
-------------------------------
Title: Chief Financial Officer
------------------------------
GUARANTORS: PACKAGING HOLDINGS, L.L.C.
By: /s/ Xxxxx X. Xxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxx
-------------------------------
Title: Chief Financial Officer
------------------------------
BAGCRAFT PACKAGING, L.L.C.
(F/K/A BAGCRAFT ACQUISITION, L.L.C.)
By: /s/ Xxxxx X. Xxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxx
-------------------------------
Title: Chief Financial Officer
------------------------------
IPMC ACQUISITION, L.L.C.
By: /s/ Xxxxx X. Xxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxx
-------------------------------
Title: Chief Financial Officer
------------------------------
WOLF PACKAGING, INC.
By: /s/ Xxxxx X. Xxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxx
-------------------------------
Title: Chief Financial Officer
------------------------------
PACKAGING DYNAMICS, L.L.C.
INTERNATIONAL CONVERTER, INC.
FIFTH AMENDMENT
LENDERS: BANK OF AMERICA, N.A., a national banking
association, formerly known as NationsBank,
N.A., in its individual capacity and as Agent
By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxxx
-------------------------------
Title: Vice President
------------------------------
PACKAGING DYNAMICS, L.L.C.
INTERNATIONAL CONVERTER, INC.
FIFTH AMENDMENT
WACHOVIA BANK, NATIONAL ASSOCIATION
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------
Name: Xxxxx X. Xxxxxxxx
------------------------
Title: Managing Director
-----------------------
PACKAGING DYNAMICS, L.L.C.
INTERNATIONAL CONVERTER, INC.
FIFTH AMENDMENT
NATIONAL CITY BANK
By: /s/ Xxxxxxxxx Pass
--------------------------
Name: Xxxxxxxxx Pass
------------------------
Title: Vice President
------------------------
PACKAGING DYNAMICS, L.L.C.
INTERNATIONAL CONVERTER, INC.
FIFTH AMENDMENT
LASALLE BANK, NA
By: /s/ Xxxxx X. Xxxxxx
----------------------------
Name: Xxxxx X. Xxxxxx
--------------------------
Title: Assistant Vice President
--------------------------
PACKAGING DYNAMICS, L.L.C.
INTERNATIONAL CONVERTER, INC.
FIFTH AMENDMENT
XXX XXXXXX SENIOR INCOME TRUST
By: Xxx Xxxxxx Investment Advisory Corp.
By: /s/ Xxxxxxxxx Xxxxxxxx
----------------------------
Name: Xxxxxxxxx Xxxxxxxx
--------------------------
Title: Vice President
--------------------------
PACKAGING DYNAMICS, L.L.C.
INTERNATIONAL CONVERTER, INC.
FIFTH AMENDMENT
XXX XXXXXX PRIME RATE INCOME TRUST
By: Xxx Xxxxxx Investment Advisory Corp.
By: /s/ Xxxxxxxxx Xxxxxxxx
----------------------------
Name: Xxxxxxxxx Xxxxxxxx
--------------------------
Title: Vice President
--------------------------
PACKAGING DYNAMICS, L.L.C.
INTERNATIONAL CONVERTER, INC.
FIFTH AMENDMENT
THE CIT GROUP EQUIPMENT FINANCING, INC.
By: /s/ Xxxxx X. Xxxxxxxx
----------------------------
Name: Xxxxx X. Xxxxxxxx
--------------------------
Title: Senior Credit Analyst
--------------------------
PACKAGING DYNAMICS, L.L.C.
INTERNATIONAL CONVERTER, INC.
FIFTH AMENDMENT
COMERICA BANK
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxx
----------------------------
Title: Comerica Bank
--------------------------
PACKAGING DYNAMICS, L.L.C.
INTERNATIONAL CONVERTER, INC.
FIFTH AMENDMENT
SENIOR DEBT PORTFOLIO
BY: BOSTON MANAGEMENT AND RESEARCH,
AS INVESTMENT ADVISOR
By: /s/ Payson X. Xxxxxxxxx
----------------------------
Name: Payson X. Xxxxxxxxx
--------------------------
Title: Vice President
--------------------------
PACKAGING DYNAMICS, L.L.C.
INTERNATIONAL CONVERTER, INC.
FIFTH AMENDMENT
AIM FLOATING RATE FUND
By: INVESCO Senior Secured Management, Inc.
As Attorney in fact
By: /s/ Xxxxxx Xxxxxxx
----------------------------
Name: Xxxxxx Xxxxxxx
--------------------------
Title: Authorized Signatory
--------------------------
PACKAGING DYNAMICS, L.L.C.
INTERNATIONAL CONVERTER, INC.
FIFTH AMENDMENT
AVALON CAPITAL LTD.
By: INVESCO Senior Secured Management, Inc.
As Portfolio Advisor
By: /s/ Xxxxxx Xxxxxxx
----------------------------
Name: Xxxxxx Xxxxxxx
--------------------------
Title: Authorized Signatory
--------------------------
PACKAGING DYNAMICS, L.L.C.
INTERNATIONAL CONVERTER, INC.
FIFTH AMENDMENT
AVALON CAPITAL LTD. 2
By: INVESCO Senior Secured Management, Inc.
As Portfolio Advisor
By: /s/ Xxxxxx Xxxxxxx
----------------------------
Name: Xxxxxx Xxxxxxx
--------------------------
Title: Authorized Signatory
--------------------------
PACKAGING DYNAMICS, L.L.C.
INTERNATIONAL CONVERTER, INC.
FIFTH AMENDMENT
CHARTER VIEW PORTFOLIO
By: INVESCO Senior Secured Management, Inc.
As Investment Advisor
By: /s/ Xxxxxx Xxxxxxx
----------------------------
Name: Xxxxxx Xxxxxxx
--------------------------
Title: Authorized Signatory
--------------------------
PACKAGING DYNAMICS, L.L.C.
INTERNATIONAL CONVERTER, INC.
FIFTH AMENDMENT
