Exhibit 10.3
FORM OF SECOND AMENDMENT TO CREDIT AGREEMENT
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SECOND AMENDMENT TO CREDIT AGREEMENT (this "Second Amendment"), dated
as of February 25, 2004, among XXXXXX PACKAGING HOLDINGS COMPANY, a Pennsylvania
limited partnership ("Holdings"), XXXXXX PACKAGING COMPANY, L.P., a Delaware
limited partnership (the "Borrower"), GPC CAPITAL CORP. I, a Delaware
corporation (the "Co-Borrower"), the lenders party thereto (each, a "Lender"
and, collectively, the "Lenders"), CITIGROUP GLOBAL MARKETS INC. (f/k/a Xxxxxxx
Xxxxx Xxxxxx Inc.), as Syndication Agent (in such capacity, the "Syndication
Agent"), LASALLE BANK NATIONAL ASSOCATION, as documentation agent (in such
capacity, the "Documentation Agent"), DEUTSCHE BANK TRUST COMPANY AMERICAS, as
Administrative Agent (in such capacity, the "Administrative Agent") and as
collateral agent (in such capacity, the "Collateral Agent") for the Lenders, and
DEUTSCHE BANK SECURITIES INC., as sole lead arranger and sole book runner (in
such capacity, the "Sole Lead Arranger"). Unless otherwise indicated, all
capitalized terms used herein and not otherwise defined shall have the
respective meanings provided such terms in the Credit Agreement referred to
below.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, Holdings, the Borrower, the Co-Borrower, the Lenders from
time to time party thereto, and the Agents are parties to a Credit Agreement,
dated as of February 14, 2003 (as amended, modified and/or supplemented to, but
not including, the date hereof, the "Credit Agreement");
WHEREAS, the Borrower pursuant to the Credit Agreement has, prior to
the date hereof, repaid in full the principal of all outstanding Tranche II Term
Loans;
WHEREAS, on the date hereof, there are outstanding Tranche I Term
Loans (for purposes of this Second Amendment, herein called the "Refinanced
Tranche I Term Loans") in an aggregate principal amount of $568,000,000 million;
WHEREAS, in accordance with the provisions of Section 9.08(c)(ii) of
the Credit Agreement, the Borrower wishes to amend the Credit Agreement to
enable it to convert and/or refinance in full the outstanding Tranche I Term
Loans described in the immediately preceding paragraph through (x) the
conversion of outstanding Tranche I Term Loans into replacement Tranche I Term
Loans and/or (y) its incurrence of replacement Tranche I Term Loans (for
purposes of this Second Amendment, the replacement Tranche I Term Loans
described in preceding changes (x) and (y) collectively being herein called the
"Replacement Tranche I Term Loans") as more fully provided herein, in each case
with the same terms as were theretofore applicable to the Tranche I Term Loans
except that the pricing applicable thereto shall be as more fully described
herein; and
WHEREAS, the parties hereto wish to amend the Credit Agreement as
herein provided;
NOW, THEREFORE, it is agreed:
Amendments to Credit Agreement.
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1. On, or within five Business Days after the occurrence of, the
Second Amendment Execution Date (as hereinafter defined) (subject to the receipt
of a Borrowing Request in form and substance reasonably satisfactory to the
Administrative Agent and substantially in accordance with the requirements of
Section 2.03 of the Credit Agreement, and subject to a notice of prepayment of
the Refinanced Tranche I Term Loans in accordance with the relevant requirements
of Section 2.12(a) of the Credit Agreement, and subject to the relevant
conditions specified in Section 4.01 of the Credit Agreement and the occurrence
of the Second Amendment Effective Date (as hereinafter defined)), each Lender
with a Tranche I Term Loan Commitment as shown on Schedule 2.01 to this Second
Amendment hereby agrees to make a Tranche I Term Loan in the respective
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principal amount set forth opposite its name under the heading "Tranche I Term
Loan Commitment" on Schedule 2.01 to this Second Amendment, in each case in
accordance with the relevant requirements of the Credit Agreement except that
(i) the date of the making of the Tranche I Term Loans described in this
paragraph, other than those Tranche I Term Loans being converted into
Replacement Tranche I Term Loans, shall be as set forth above and (ii) each
Lender with a Tranche I Term Loan Commitment as set forth in Schedule 2.01 to
this Second Amendment shall make the respective Tranche I Term Loan available
(through the Administrative Agent) in cash, except that each Lender with a
Tranche I Term Loan Commitment as shown on Schedule 2.01 to this Second
Amendment with existing Tranche I Term Loans outstanding immediately prior to
the occurrence of the Second Amendment Effective Date shall convert its
theretofore outstanding Tranche I Term Loans (in a principal amount up to, but
not in excess of, the Tranche I Term Loan of such Lender as specified in
Schedule 2.01 hereto) into Replacement Tranche I Term Loans hereunder without
any requirement that it make cash proceeds available to the Borrower (except to
the extent that the Tranche I Term Loan Commitment of such Lender as specified
on Schedule 2.01 hereto exceeds the principal amount of its therefore
outstanding Tranche I Term Loans). The Borrower shall direct the Administrative
Agent to apply (and the Administrative Agent shall apply) all cash proceeds of
Replacement Tranche I Term Loans made hereunder to refinance then outstanding
Refinanced Tranche I Term Loans pursuant to the Credit Agreement (before giving
effect to the Second Amendment) other than those Tranche I Term Loans being
converted into Replacement Tranche I Term Loans. It is understood that the
Replacement Tranche I Term Loans being made pursuant to this Second Amendment
(whether by conversion or the making of cash proceeds available to the Borrower
to refinance Refinanced Tranche I Term Loans) shall constitute Replacement Term
Loans pursuant to Section 9.08(c) of the Credit Agreement and the Tranche I Term
Loans being refinanced or converted shall constitute Refinanced Term Loans as
described therein. It is understood and agreed by all parties hereto that the
aggregate principal amount of Tranche I Term Loans outstanding after giving
effect to the Second Amendment Effective Date shall be equal to the aggregate
amount of Tranche I Term Loans which were outstanding immediately prior to
giving effect thereto. Any Lender holding outstanding Tranche I Term Loans
immediately prior to the Second Amendment Effective Date, that does not (in its
sole discretion) provide a Tranche I Term Loan Commitment pursuant hereto, shall
have its outstanding Tranche I Term Loans repaid in full on the Second Amendment
Effective Date (if same occurs). On the Second Amendment Effective Date, the
aggregate amount of Replacement Tranche I Term Loans (including those made by
conversion or the making of cash proceeds available to the Borrower) shall be
comprised of the same number of Borrowings as were applicable to the outstanding
Refinanced Tranche I Term Loan immediately prior to the Second Amendment
Effective Date, which Borrowings shall be of the same Types and in the same
amounts as the Borrowings theretofore applicable to the Refinanced Tranche I
Term Loans, and in the case of any such Borrowings of Eurodollar Loans shall
have the same Interest Period (i.e. continuing to the date of the expiration
Interest Period theretofore applicable to the corresponding Borrowing of
Refinanced Tranche I Term Loan) and the same Adjusted LIBO Rate (although, from
and after the Second Amendment Effective Date, the LIBOR Margins and ABR Margins
applicable thereto shall be determined in accordance with Schedule A to the
Credit Agreement, as amended pursuant to following paragraph numbered 4)
applicable thereto on the Second Amendment Effective Date. Each Lender with
Replacement Tranche I Term Loans shall participate on a pro rata basis in each
outstanding Borrowing of Replacement Tranche I Term Loans as described in the
immediately preceding sentence. In connection with the incurrence of the
Replacement Tranche I Term Loans and the repayment of Refinanced Tranche I Term
Loans in accordance with this Second Amendment, the Borrower hereby agrees that,
notwithstanding anything to the contrary contained in the Credit Agreement, (i)
if requested by any Lender making cash proceeds available to the Borrower
pursuant to the Replacement Tranche I Term Loans (but not with respect to that
portion of the Replacement Tranche I Term Loans of any Lender constituting a
conversion of Refinanced Tranche I Term Loans of such Lender), the Borrower
shall pay to such Lender such amounts necessary, as reasonably determined by
such Lender, to compensate such Lender for making such Replacement Tranche I
Term Loans in the middle of an existing Interest Period (rather than at the
beginning of the respective Interest Period, based upon the rates then
applicable thereto) and (ii) the Borrower shall be obligated to pay to each
Lender whose Tranche I Term Loans are being repaid in cash (rather than
converted into Replacement Tranche I Term Loans on the Second Amendment
Effective Date) amounts of the type referred to in Section 2.15 of the Credit
Agreement in connection with its repayment in cash (but not by way of conversion
of Refinanced Tranche I Term Loans into Replacement Tranche I Term Loans as
contemplated above) of such Refinanced Tranche I Term Loans of such Lender.
incurred in connection with the conversion of Refinanced Tranche I Term Loans
and/or the actions taken pursuant to the preceding sentence of this Section I.1.
2. For the avoidance of doubt, it is understood and agreed that the
amounts of the remaining scheduled prepayments of principal of the Tranche I
Term Loans after giving effect to this Second Amendment shall remain unchanged
from the schedule set forth in Section 2.11(a)(i) of the Credit Agreement,
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except that the scheduled repayments for September 30, 2003 and December 31,
2003 have already been repaid in full. The schedule of remaining repayments, as
calculated on the date hereof, for the Replacement Tranche I Term Loans is set
forth below:
Tranche I Term
Date Loan
Amount
March 31, 2004 $1,000,000
June 30, 2004 $1,000,000
September 30, 2004 $1,000,000
December 31, 2004 $1,000,000
March 31, 2005 $5,000,000
June 30, 2005 $5,000,000
September 30, 2005 $5,000,000
December 31, 2005 $5,000,000
March 31, 2006 $11,250,000
June 30, 2006 $11,250,000
September 30, 2006 $11,250,000
December 31, 2006 $11,250,000
March 31, 2007 $11,250,000
June 30, 2007 $11,250,000
September 30, 2007 $11,250,000
December 31, 2007 $11,250,000
March 31, 2008 $50,000,000
June 30, 2008 $50,000,000
September 30, 2008 $50,000,000
December 31, 2008 $50,000,000
March 31, 2009 $50,000,000
June 30, 2009 $50,000,000
September 30, 2009 $50,000,000
December 31, 2009 $50,000,000
Term Loan Maturity Date $54,000,000
; notwithstanding the foregoing, all then outstanding principal of the
Replacement Tranche I Term Loans shall be due and payable on the Term
Loan Maturity Date (even if same occurs prior to one or more of the
dates set forth in the table above)."
3. Section 5 of the Credit Agreement is hereby amended by inserting
the following new subsection 5.16 at the end of said Section:
"5.16 Second Amendment Mortgage Amendments. Within 60 days
following the Second Amendment Effective Date (unless otherwise agreed
by the Collateral Agent), if and to the extent requested by the
Collateral Agent, the Borrower shall have delivered to the Collateral
Agent, or caused to be delivered to the Collateral Agent, fully
executed counterparts of amendments (the "Second Amendment Mortgage
Amendments"), in form and substance reasonably satisfactory to the
Administrative Agent, to each of the Mortgages covering the Mortgaged
Properties, together with evidence that counterparts of each of the
Second Amendment Mortgage Amendments have been delivered to the title
company insuring the Lien on the Mortgages for recording in all places
to the extent necessary or desirable, in the judgment of the
Collateral Agent, effectively to maintain a valid and enforceable
perfected mortgage lien superior to and prior to the rights of all
third parties (except Liens under Section 6.02) and subject to no
other Liens except as are permitted by Section 6.02 on the Mortgaged
Properties in favor of the Collateral Agent for the benefit of the
Secured Parties securing all of the Obligations (including the
Replacement Tranche I Term Loans), provided that the actions required
to be taken by the Borrower pursuant to this subsection 5.16 shall not
be required in the event that each Lender holding outstanding Tranche
I Term Loans immediately prior to the Second Amendment Effective Date
provides a Tranche I Term Loan Commitment pursuant to the Second
Amendment."
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4. Schedule A to the Credit Agreement is hereby amended by deleting
same in its entirety and inserting in lieu thereof a new Schedule A in the form
of Schedule A attached hereto; provided that (x) new Schedule A shall only apply
for periods from and after the Second Amendment Effective Date and (y) the
provisions of the Credit Agreement (including old Schedule A) as in effect
before giving effect to this Second Amendment shall apply for all periods prior
to the Second Amendment Effective Date and shall apply to all Refinanced Tranche
I Term Loans outstanding pursuant to the Credit Agreement before giving effect
to any conversion thereof to Replacement Tranche I Term Loans pursuant to this
Second Amendment and shall apply to all Tranche II Term Loans which were
outstanding at the time prior to the Second Amendment Effective Date.
5. Schedule 2.01 to the Credit Agreement is hereby amended by deleting
same in its entirety and inserting in lieu thereof a new Schedule 2.01 in the
form of Schedule 2.01 attached hereto.
Miscellaneous Provisions.
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1. In order to induce the Lenders to enter into this Second Amendment,
the Borrower hereby represents and warrants that (i) no Default or Event of
Default exists as of the Second Amendment Effective Date after giving effect to
this Second Amendment and the making of Replacement Tranche I Term Loans as
contemplated herein, and (ii) all of the representations and warranties
contained in the Credit Agreement or the other Loan Documents are true and
correct in all material respects on the Second Amendment Effective Date after
giving effect to this Second Amendment and the making of Replacement Tranche I
Term Loans as contemplated herein, with the same effect as though such
representations and warranties had been made on and as of the Second Amendment
Effective Date (it being understood that any representation or warranty made as
of a specific date shall be true and correct in all material respects as of such
specific date).
2. This Second Amendment is limited as specified and shall not
constitute a modification, acceptance or waiver of any other provision of the
Credit Agreement or any other Credit Document.
3. This Second Amendment may be executed in any number of counterparts
and by the different parties hereto on separate counterparts, each of which
counterparts when executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A complete set of
counterparts shall be lodged with the Borrower and the Administrative Agent.
4. THIS SECOND AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE
STATE OF NEW YORK.
5. This Second Amendment shall become effective on the date (the
"Second Amendment Effective Date") when each of the following conditions shall
have been satisfied:
(i) the Administrative Agent, the Borrower, each other Loan
Party, and each Lender with a Tranche I Term Loan Commitment as shown
in Schedule 2.01 to this Second Amendment (which in aggregate total
amount shall equal $568,000,000 million) shall have signed a
counterpart hereof (whether the same or different counterparts) and
shall have delivered (including by way of facsimile transmission) the
same to White & Case LLP, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, XX
00000 Attention: Xxxxxx Xxxx (facsimile number 212-354-8113) (with the
date of the satisfaction of the condition described in this clause (i)
being herein called the "Second Amendment Execution Date");
(ii) the Borrower shall have paid in full (w) all accrued
and unpaid interest on all Tranche I Term Loans through the Second
Amendment Effective Date (regardless of whether or not the Credit
Agreement otherwise requires a payment of such interest at such time),
(x) all fees, costs and expenses (including legal fees and expenses)
then due and payable pursuant to the Credit Agreement, (y) any amounts
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owing to a Lender pursuant to the last sentence of paragraph numbered
1 of Part I hereof, to the extent requested by such Lender of the
Borrower at least one Business Day prior to the date when all other
conditions to the Second Amendment Effective Date have been satisfied
and (z) the principal of all outstanding Tranche I Term Loans which
are not being converted into Replacement Tranche I Term Loans in
accordance with the terms of this Second Amendment;
(iii) there shall have been delivered to Administrative
Agent copies of resolutions of the board of directors of each Loan
Party approving and authorizing the execution, delivery and
performance of this Second Amendment and the Loan Documents as amended
by this Second Amendment, certified as of the Second Amendment
Effective Date by the corporate secretary or an assistant secretary of
such Loan Party as being in full force and effect without modification
or amendment; and
(iv) the Administrative Agent shall have received from Xxxxxxx
Xxxxxxxx & Xxxxxxxx LLP, special New York counsel to the Borrower, an
opinion addressed to each Agent, the Collateral Agent and each of the
Lenders and dated the Second Amendment Effective Date, which opinion
shall be in form and substance reasonably satisfactory to the
Administrative Agent.
6. By executing and delivering a copy hereof, each Loan Party hereby
agrees that all Loans (including, without limitation, the Replacement Tranche I
Term Loans) shall be fully guaranteed pursuant to the Guarantee Agreements in
accordance with the terms and provisions thereof and shall be fully secured
pursuant to the Security Documents.
7. From and after the Second Amendment Effective Date, all references
in the Credit Agreement and each of the other Loan Documents to the Credit
Agreement shall be deemed to be references to the Credit Agreement, as modified
hereby.
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Schedule A
to Credit Agreement
LIBOR Margin for LIBOR Margin for ABR Margin for ABR Margin for
Category Period Revolving Loans Tranche I Term Revolving Loans Tranche I Term
Loans Loans
Category A Period 3.75% 2.75% 2.75% 1.75%
Category B Period 3.50% 2.75% 2.50% 1.75%
Category C Period 3.25% 2.75% 2.25% 1.75%
Category D Period 3.00% 2.75% 2.00% 1.75%
Category E Period 3.00% 2.75% 2.00% 1.75%
Category F Period 2.75% 2.50% 1.75% 1.50%
The "LIBOR Margin" and the "ABR Margin" for any date shall be
determined by reference to the "Category Period" in effect as of the last day of
the fiscal quarter most recently ended as of such date and any change shall
become effective upon the delivery to the Administrative Agent of the financial
statements to be delivered pursuant to Section 5.04 for the most recently ended
fiscal quarter together with a certificate of a Responsible Officer of the
Borrower (a) setting forth in reasonable detail the calculation of the Net
Leverage Ratio for the end of such fiscal quarter and (b) stating that such
Responsible Officer has reviewed the terms of this Agreement and the other Loan
Documents and has made, or caused to be made under his or her supervision, a
review in reasonable detail of the transactions and condition of Holdings, the
Borrower and their Subsidiaries during the accounting period, and that such
Responsible Officer does not have knowledge of the existence as at the date of
such officers' certificate of any Event of Default or Default. It is understood
that the foregoing certificate of a Responsible Officer shall be permitted to be
delivered prior to, but in no event later than, the time of the actual delivery
of the financial statements required to be delivered pursuant to Section 5.04.
Notwithstanding the foregoing, at the time (i) the Tranche II Term Loans have
been refinanced in full pursuant to the Tranche II Term Loan Refinancing or (ii)
Holdings shall have received gross cash proceeds of at least $200,000,000 from
the sale after the Closing Date of its Equity Interests pursuant to a public
offering of common stock, if a Responsible Officer of Holdings shall deliver to
the Administrative Agent a certificate demonstrating in reasonable detail that
the Borrower would qualify for a different Category Period (determined on a Pro
Forma Basis as of the last day of the last Test Period ended prior to the date
on which (i) the Tranche II Term Loans have been refinanced in full pursuant to
the Tranche II Term Loan Refinancing or (ii) Holdings shall have received gross
cash proceeds of at least $200,000,000 from the sale after the Closing Date of
its Equity Interests pursuant to a public offering of common stock, as the case
may be, for which financial statements have been made available (or were
required to be made available) pursuant to Section 5.04), then the Category
Period that would otherwise be applicable as set forth in such certificate shall
thereafter be applicable (until same is changed or ceases to apply in accordance
with the second preceding sentence). For the purposes of this Schedule A:
"Category A Period" shall exist at any time no other Category Period
is then in effect.
"Category B Period" shall exist at any time (i) the Tranche II Term
Loans have been refinanced in full pursuant to the Tranche II Term Loan
Refinancing and (ii) a Category E Period or Category F Period is not then in
effect.
"Category C Period" shall exist at any time (i) Holdings has received
gross cash proceeds of at least $200,000,000 from the sale after the Closing
Date of its Equity Interests pursuant to a public offering of common stock, (ii)
any Tranche II Term Loans remain outstanding and (iii) the Net Leverage Ratio is
greater than or equal to 4.50 to 1.00.
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"Category D Period" shall exist at any time (i) Holdings has received
gross cash proceeds of at least $200,000,000 from the sale after the Closing
Date of its Equity Interests pursuant to a public offering of common stock, (ii)
any Tranche II Term Loans remain outstanding and (iii) the Net Leverage Ratio is
less than 4.50 to 1.00; provided that in determining the LIBOR Margin and ABR
Margin for Tranche I Term Loans only, a Category D Period shall not exist at any
time when a Category F Period is then in effect.
"Category E Period" shall exist at any time (i) Holdings has received
gross cash proceeds of at least $200,000,000 from the sale after the Closing
Date of its Equity Interests pursuant to a public offering of common stock, (ii)
no Tranche II Term Loans remain outstanding and (iii) the Net Leverage Ratio is
greater than or equal to 4.50 to 1.00; provided that in determining the LIBOR
Margin and ABR Margin for Tranche I Term Loans only, a Category E Period shall
not exist at any time when a Category F Period is then in effect.
"Category F Period" shall exist at any time (i) Holdings has received
gross cash proceeds of at least $200,000,000 from the sale after the Closing
Date of its Equity Interests pursuant to a public offering of common stock, (ii)
no Tranche II Term Loans remain outstanding and (iii) the Net Leverage Ratio is
less than 4.50 to 1.00. Notwithstanding the foregoing, in determining the LIBOR
Margin and ABR Margin for Tranche I Term Loans only, a Category F Period shall
be deemed to exist (a) if the test in the preceding clause (iii) is satisfied or
(b) if (and for so long as) the indebtedness under the Credit Agreement then has
a rating in effect of at least B+ from Standard & Poor's Rating Services and at
least B1 from Xxxxx'x Investors Service, Inc.
Notwithstanding the foregoing, at any time during which (i) the Borrower has
failed to deliver the certificate required under Section 5.04(c) with respect to
a fiscal quarter following the date the delivery thereof is due or (ii) a
Default or Event of Default is in existence, the Category Period shall be
deemed, solely for the purposes of this Schedule A, to be a Category A Period,
until such time as the Borrower shall deliver such certificate or such Default
or Event of Default shall be cured or waived.
Note: Schedule 2.01 is omitted from the filing of this Annual Report on Form
10-K. The Registrant agrees to furnish supplementally a copy of Schedule 2.01 to
the Securities and Exchange Commission upon request.
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