Contract

EXHIBIT 10.1 SECOND AMENDMENT TO CREDIT AGREEMENT THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is entered into as of April 12, 2005 among PACKAGING DYNAMICS OPERATING COMPANY, a Delaware corporation (the "Borrower"), PACKAGING DYNAMICS CORPORATION, a Delaware corporation (the "Parent"), each of the Domestic Subsidiaries of the Borrower (together with the Parent, the "Guarantors"; the Guarantors, together with the Borrower, the "Credit Parties"), the Lenders party hereto (the "Lenders") and BANK OF AMERICA, N.A., a national banking association, as Administrative Agent (the "Administrative Agent") for the Lenders. Capitalized terms used herein and not otherwise defined herein shall have the respective meanings given to them in the Credit Agreement hereinafter defined. RECITALS -------- WHEREAS, the Borrower, the Guarantors, the lenders from time to time parties thereto (the "Lenders") and the Administrative Agent are parties to that certain Amended and Restated Credit Agreement dated as of September 29, 2003 (as previously amended or modified, the "Credit Agreement"); WHEREAS, the Credit Parties have requested that the Lenders consent to a decrease in the Applicable Percentage; and WHEREAS, the Lenders have agreed to amend the Applicable Percentage subject to 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: ARTICLE I AMENDMENT TO CREDIT AGREEMENT 1.1 Definition of Applicable Percentage. The pricing grid in the definition of "Applicable Percentage" set forth in Section 1.1 of the Credit Agreement is hereby amended and replaced in its entirety by the following pricing grid:

====================================================================================================================== | | | Applicable Percentage | | | |------------------------------------------------------------------------------------------------ | | | Eurodollar Rate Loans | Base Rate Loans | | | | | | |---------------------------|--------------------------| | | | | | | Revolving | | Revolving | | | | | |Pricing| Leverage | Loans and | Tranche B | Loans and | Tranche B | Standby | Commercial | | | Level | Ratio | Tranche A | Term | Tranche A | Term | Letter of | Letter of | Commitment | | | | Term Loans | Loans | Term Loans | Loans | Credit Fee | Credit Fee | Fee | |-------|------------|-------------|-------------|-------------|------------|------------|--------------|------------| | | | | | | | | | | | | 2.0 to | | | | | | | | | | 1.0 | | | | | | | | |-------|------------|-------------|-------------|-------------|------------|------------|--------------|------------| | | | | | | | | | | | III | 2.75 to | | | | | | | | | | 1.0 | | | | | | | | |-------|------------|-------------|-------------|-------------|------------|------------|--------------|------------| | | | | | | | | | | | IV | > 3.50 to | 2.25% | 2.25% | 1.25% | 1.25% | 2.25% | 1.125% | 0.500% | | | 1.0 | | | | | | | | =====================================================================================================================
ARTICLE II CONDITIONS TO EFFECTIVENESS 2.1 Closing Conditions. This Amendment shall become effective as of the date hereof upon satisfaction of the following conditions (the "Second Amendment Effective Date"): (a) Executed Amendment. Receipt by the Administrative Agent of a copy of this Amendment duly executed by each of the Credit Parties and the Lenders. (b) Conditions to New Extensions of Credit. Each of the conditions set forth in Section 5.2 of the Credit Agreement shall have been satisfied as of the date hereof. ARTICLE III MISCELLANEOUS 3.1 Amended Terms. All references to the Credit Agreement in each of the Credit Documents shall hereafter mean the Credit Agreement as amended by this Amendment. Except as specifically amended hereby or otherwise agreed, the Credit Agreement is hereby ratified and confirmed and shall remain in full force and effect according to its terms. 3.2 Representations and Warranties of Credit Parties. Each of the Credit Parties represents and warrants as of the date hereof as follows: (a) It has been authorized by all necessary organizational action to execute, deliver and perform 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 2 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) Except for consents, approvals and authorizations and orders, filings, registrations and qualifications (i) which have been obtained or made and (ii) the failure of which to obtain or make would not reasonably be excepted to have a Material Adverse Effect, 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. (d) The representations and warranties 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 which expressly relate to an earlier date). 3.3 Acknowledgment of Guarantors. The Guarantors acknowledge and consent to all of the terms and conditions of this Amendment and agree that this Amendment and all documents executed in connection herewith do not operate to reduce or discharge the Guarantors' obligations under the Credit Documents. 3.4 Credit Document. This Amendment shall constitute a Credit Document under the terms of the Credit Agreement. 3.5 Entirety. This Amendment and the other Credit Documents embody the entire agreement between the parties hereto and supersede all prior agreements and understandings, oral or written, if any, relating to the subject matter hereof. 3.6 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 an executed counterpart to this Amendment by telecopy shall be effective as an original and shall constitute a representation that an original will be delivered. 3.7 GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW); PROVIDED THAT THE ADMINISTRATIVE AGENT AND EACH LENDER SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW. 3.8 Consent to Jurisdiction; Service of Process; Waiver of Jury Trial. The consent to jurisdiction, service of process and waiver of jury trial provisions set forth in Sections 11.17(b) and 11.18 of the Credit Agreement are hereby incorporated by reference, mutatis mutandis. 3 3.9 Fees and Expenses. The Credit Parties agree to pay the Administrative Agent for the costs and expenses incurred by the Administrative Agent in connection with the preparation, negotiation, execution and delivery of this Amendment, including, without limitation, the reasonable legal fees and expenses of Moore & Van Allen PLLC. 4 PACKAGING DYNAMICS OPERATING COMPANY SECOND AMENDMENT TO CREDIT AGREEMENT IN WITNESS WHEREOF the Borrower, the Guarantors and the Lenders have caused this Amendment to be duly executed on the date first above written. BORROWER: PACKAGING DYNAMICS OPERATING COMPANY, - -------- a Delaware corporation By: /s/ Patrick T. Chambliss --------------------------------------- Name: Patrick T. Chambliss Title: VP & CFO GUARANTORS: PACKAGING DYNAMICS CORPORATION, - ---------- a Delaware corporation By: /s/ Patrick T. Chambliss ---------------------------------------- Name: Patrick T. Chambliss Title: VP & CFO BAGCRAFT PACKAGING, L.L.C. (f/k/a Bagcraft Acquisition, L.L.C.), a Delaware limited liability company By: /s/ Patrick T. Chambliss ---------------------------------------- Name: Patrick T. Chambliss Title: VP & CFO INTERNATIONAL CONVERTER, INC., a Delaware corporation By: /s/ Patrick T. Chambliss ---------------------------------------- Name: Patrick T. Chambliss Title: VP & CFO PACKAGING DYNAMICS OPERATING COMPANY SECOND AMENDMENT TO CREDIT AGREEMENT IPMC ACQUISITION, L.L.C., a Delaware limited liability company By: /s/ Patrick T. Chambliss ---------------------------------------- Name: Patrick T. Chambliss Title: VP & CFO WOLF PACKAGING, INC., an Iowa corporation By: /s/ Patrick T. Chambliss ---------------------------------------- Name: Patrick T. Chambliss Title: VP & CFO IUKA INCORPORATED, a Delaware corporation By: /s/ Patrick T. Chambliss ---------------------------------------- Name: Patrick T. Chambliss Title: VP & CFO PACKAGING DYNAMICS OPERATING COMPANY SECOND AMENDMENT TO CREDIT AGREEMENT ADMINISTRATIVE AGENT: BANK OF AMERICA, N.A., - -------------------- as Administrative Agent for the Lenders By: /s/ Mollie S. Canup ---------------------------------------- Name: Mollie S. Canup Title: Vice President PACKAGING DYNAMICS OPERATING COMPANY SECOND AMENDMENT TO CREDIT AGREEMENT LENDERS: BANK OF AMERICA, N.A., - ------- as a Lender and as L/C Issuer By: /s/ Charles R. Dickerson ---------------------------------------- Name: Charles R. Dickerson Title: Managing Director PACKAGING DYNAMICS OPERATING COMPANY SECOND AMENDMENT TO CREDIT AGREEMENT Bank of Scotland, as a Lender By: /s/ Karen Weich -------------------------------------- Name: Karen Weich Title: Assistant Vice President PACKAGING DYNAMICS OPERATING COMPANY SECOND AMENDMENT TO CREDIT AGREEMENT Denali Capital LLC, managing member of DC Funding Partners LLC, portfolio manager for DENALI CAPITAL CLO I, LTD., or an affiliate, as a Lender By: /s/ John P. Thacker -------------------------------------- Name: John P. Thacker Title: Chief Credit Officer PACKAGING DYNAMICS OPERATING COMPANY SECOND AMENDMENT TO CREDIT AGREEMENT Denali Capital LLC, managing member of DC Funding Partners LLC, portfolio manager for DENALI CAPITAL CLO II, LTD., or an affiliate, as a Lender By: /s/ John P. Thacker -------------------------------------- Name: John P. Thacker Title: Chief Credit Officer PACKAGING DYNAMICS OPERATING COMPANY SECOND AMENDMENT TO CREDIT AGREEMENT Denali Capital LLC, managing member of DC Funding Partners LLC, portfolio manager for DENALI CAPITAL CLO III, LTD., or an affiliate, as a Lender By: /s/ John P. Thacker -------------------------------------- Name: John P. Thacker Title: Chief Credit Officer PACKAGING DYNAMICS OPERATING COMPANY SECOND AMENDMENT TO CREDIT AGREEMENT Denali Capital LLC, managing member of DC Funding Partners LLC, portfolio manager for DENALI CAPITAL CLO IV, LTD., or an affiliate, as a Lender By: /s/ John P. Thacker -------------------------------------- Name: John P. Thacker Title: Chief Credit Officer PACKAGING DYNAMICS OPERATING COMPANY SECOND AMENDMENT TO CREDIT AGREEMENT Fifth Third Bank, as a Lender By: /s/ Clif Gill -------------------------------------- Name: Clif Gill Title: Vice President PACKAGING DYNAMICS OPERATING COMPANY SECOND AMENDMENT TO CREDIT AGREEMENT LaSalle Bank N.A., as a Lender By: /s/ David Knapp -------------------------------------- Name: David Knapp Title: Senior Vice President PACKAGING DYNAMICS OPERATING COMPANY SECOND AMENDMENT TO CREDIT AGREEMENT National City Bank, as a Lender By: /s/ Stephanie Pass -------------------------------------- Name: Stephanie Pass Title: Senior Vice President PACKAGING DYNAMICS OPERATING COMPANY SECOND AMENDMENT TO CREDIT AGREEMENT The Northern Trust Company, as a Lender By: /s/ Mark E. Taylor ------------------------------------- Name: Mark E. Taylor Title: Vice President PACKAGING DYNAMICS OPERATING COMPANY SECOND AMENDMENT TO CREDIT AGREEMENT ________________________________, as a Lender By: _____________________________ Name: ___________________________ Title: __________________________ OAK HILL SECURITIES FUND, L.P. OAK HILL SECURITIES FUND II, L.P. By: Oak Hill Securities GenPar, L.P., By: Oak Hill Securities GenPar II, L.P. its General Partner its General Partner By: Oak Hill Securities MGP, Inc., By: Oak Hill Securities MGP II, Inc., its General Partner its General Partner By: /s/ Scott D. Krase By: /s/ Scott D. Krase -------------------------------- -------------------------------- Name: Scott D. Krase Name: Scott D. Krase Title: Vice President Title: Vice President OAK HILL CAPITAL PARTNERS I, OAK HILL CREDIT PARTNERS II, LIMITED LIMITED By: Oak Hill CLO Management I LLC By: Oak Hill CLO Management II, LLC As Investment Manager As Investment Manager By: /s/ Scott D. Krase By: /s/ Scott D. Krase -------------------------------- -------------------------------- Name: Scott D. Krase Name: Scott D. Krase Title: Authorized Person Title: Authorized Person OAK HILL CREDIT PARTNERS III, LIMITED By: Oak Hill CLO Management III, LLC As Investment Manager By: /s/ Scott D. Krase -------------------------------- Name: Scott D. Krase Title: Authorized Person PACKAGING DYNAMICS OPERATING COMPANY SECOND AMENDMENT TO CREDIT AGREEMENT VAN KAMPEN SENIOR INCOME TRUST By: Van Kampen Asset Management By: /s/ Christina Jamieson ------------------------------- Name: Christina Jamieson Title: Executive Director PACKAGING DYNAMICS OPERATING COMPANY SECOND AMENDMENT TO CREDIT AGREEMENT VAN KAMPEN SENIOR LOAN FUND By: Van Kampen Asset Management By: /s/ Darvin Pierce ------------------------------- Name: Darvin Pierce Title: Executive Director PACKAGING DYNAMICS OPERATING COMPANY SECOND AMENDMENT TO CREDIT AGREEMENT Wells Fargo Bank N.A., as a Lender By: /s/ Paul A. O'Mara ------------------------------- Name: Paul A. O'Mara Title: Senior Vice President