Exhibit 10.1
FIFTH AMENDMENT TO AMENDED AND
RESTATED CREDIT AGREEMENT AND THIRD
AMENDMENT TO AMENDED AND
RESTATED SECURITY AGREEMENT
THIS FIFTH AMENDMENT
TO AMENDED AND RESTATED CREDIT AGREEMENT AND THIRD AMENDMENT TO
AMENDED AND RESTATED SECURITY AGREEMENT (this “
Amendment ”) is made and entered into this 31
st
day of October,
2008, by and among CARAUSTAR INDUSTRIES, INC., a North
Carolina corporation (“ Caraustar ”), each
subsidiary of Caraustar listed on the signature pages hereto as a
“Borrower” (Caraustar and each such subsidiary shall be
referred to herein, collectively, as the “ Borrowers
” and each individually as a “ Borrower
”), each subsidiary of Caraustar listed on the signature
pages hereto as a “Guarantor” (each such subsidiary
shall he referred to herein, collectively, as the “
Guarantors ” and each individually as a “
Guarantor ”), the financial institutions party to the
Credit Agreement (as defined below) from time to time as lenders
(such financial institutions, together with their respective
successors and assigns, shall be referred to herein, collectively,
as “ Lenders ” and each individually as “
Lender ”), and BANK OF AMERICA, N.A. , a
national banking association, in its capacity as agent for the
Lenders (together with its successors and assigns in such capacity,
“ Agent ”).
Recitals
:
The Borrowers, the Guarantors, the
Lenders and the Agent are parties to (i) that certain Amended
and Restated Credit Agreement dated as of March 30, 2006 (as
at any time amended, restated, modified or supplemented, the
“ Credit Agreement ”), pursuant to which the
Agent and the Lenders have made certain revolving credit and term
loans and other financial accommodations to the Borrowers, and
(ii) that certain Amended and Restated Security Agreement
dated as of March 30, 2006 (as at any time amended, restated,
modified or supplemented, the “ Security Agreement
”), pursuant to which the Borrowers and the Guarantors have
granted to the Agent, for the benefit of the Lenders, a continuing
Lien on the Collateral to secure the Obligations.
The parties desire to amend the
Credit Agreement and the Security Agreement as hereinafter set
forth.
NOW, THEREFORE, for TEN DOLLARS
($10.00) in hand paid and other good and valuable consideration,
the receipt and sufficiency of which are hereby severally
acknowledged, the parties hereto, intending to be legally bound
hereby, agree as follows:
1. Definitions
. All capitalized terms
used in this Amendment, unless otherwise defined herein, shall have
the meanings ascribed to such terms in the Credit
Agreement.
2. Amendments to Credit
Agreement . The
Credit Agreement is hereby amended as follows:
(a) By deleting
Section 2.5 of the Credit Agreement in its entirety and
by substituting in lieu thereof the following new
Section 2.5 :
2.5 Unused Line Fee. On the first
day of each month, and on the Termination Date, the Borrowers agree
to pay to the Agent, for the account of the Lenders, in accordance
with their respective Pro Rata Shares, an unused line fee (the
“ Unused Line Fee ”) equal to:
(A) 0.50% per annum times the Unused Line Amount, if the
Unused Line Percentage for the immediately proceeding month (or
shorter period, if applicable) is greater than or equal to 50%, or
(B) 0.375% per annum times the Unused Line Amount, if the
Unused Line Percentage for the immediately preceding month (or
shorter period, if applicable) is less than 50%. As used herein,
the term “ Unused Line Amount ” shall mean the
amount by which the Maximum Revolver Amount exceeded the sum of the
average daily outstanding amount of Revolving Loans and the average
daily undrawn face amount of outstanding Letters of
Credit during the immediately
preceding month or shorter period if calculated on the Termination
Date. As used herein, the term “ Unused Line
Percentage ” shall mean an amount determined by dividing
the Unused Line Amount for a given month (or shorter period, if
applicable) by the Maximum Revolver Amount. The Unused Line Fee
shall be computed on the basis of a 360-day year for the actual
number of days elapsed. For purposes of calculating the Unused Line
Fee pursuant to this Section 2.5 , all principal
payments received by the Agent which have been credited to the
Borrowers’ Loan Account shall be deemed to be credited to the
Borrowers’ Loan Account on the date that such credit actually
occurs.
(b) By deleting sub-clause
(i) of clause (b) of Section 5.4 of the
Credit Agreement and by substituting in lieu thereof the following
new sub-clause (i):
(i) If requested by the Agent,
together with each Borrowing Base Certificate delivered pursuant to
Section 5.4(a) , a schedule of each Borrower’s
Accounts created, credits issued, cash collected and other
adjustments to such Borrower’s Accounts since the last such
schedule; provided that , if Availability is less
than $10,000,000 at any time, Borrowers will, whether or not
requested by the Agent, furnish the aforementioned schedule to the
Agent and each Lender on the first Tuesday that follows such
failure and on each Tuesday thereafter until such time as the
Accounts Reporting Requirement is subsequently met (
provided that , notwithstanding the foregoing, the
schedule shall only be required to include credits issued and other
adjustments to Borrowers’ Accounts on a monthly basis when
delivered in connection with the delivery of each Borrowing Base
Certificate);
(c) By deleting clause (b) of
Section 7.4 of the Credit Agreement and by substituting
in lieu thereof the following new clause (b):
(b) Each Obligor shall permit
representatives and independent contractors of the Agent to visit
and inspect any of such Obligor’s or any of its
Subsidiaries’ properties, to examine such Obligor’s and
Subsidiaries’ corporate, financial and operating records, and
make copies thereof or abstracts therefrom and to discuss such
Obligor’s and Subsidiaries’ affairs, finances and
accounts with their respective directors, officers and independent
public accountants, at such reasonable times during normal business
hours and as soon as may be reasonably desired, upon reasonable
advance notice to the Borrowers’ Agent. If the Agent
initiates an inspection and audit as of a date when the Average
Availability as of the most recently ended fiscal month of the
Obligors (i) is less than or equal to $15,000,000, the
Obligors shall be responsible for the expense of such inspection
and audit if more than 120 days have elapsed since the date of the
initiation of the last inspection and audit, (ii) is less than
or equal to $45,000,000 but greater than $15,000,000, the Obligors
shall be responsible for the expense of such inspection and audit
if more than 180 days have elapsed since the date of the initiation
of the last inspection and audit, or (iii) is greater than
$45,000,000, the Obligors shall be obligated to pay the expense of
such inspection and audit if more than 360 days have elapsed since
the date of the initiation of the last inspection and audit. In
addition, when an Event of Default exists, the Agent may do any of
the foregoing at the expense of the Obligors at any time during
normal business hours and without advance notice.
(d) By deleting clause (a) of
Section 7.14 of the Credit Agreement and by
substituting in lieu thereof the following new clause
(a):
(a) Neither any Obligor nor any of
its Subsidiaries shall prepay any Debt (whether through a
prepayment, redemption, open market purchase of notes, defeasance
or
- 2 -
otherwise), except: (i) for
prepayments of the Obligations in accordance with the terms of this
Agreement; (ii) as required under clause (c) or
(d) ; and (iii) that the Obligors may prepay (including
through redemptions and purchases) any Debt so long as (A) no
Default or Event of Default exists immediately before or
immediately after giving effect to such prepayment,
(B) immediately after giving effect to such prepayment
(including any Loans made hereunder to finance such prepayment),
and with all of the Obligors’ obligations current,
Availability is greater than $20,000,000, (C) in the case of
any prepayment of Debt outstanding under the Indentures, such
repayment shall be a repayment, redemption or defeasance in full
and not a partial repayment of the applicable lndenture, (D) in the
case of any prepayment of Debt outstanding under the Indentures, a
Responsible Officer delivers to the Agent a certificate
(1) demonstrating compliance with clause (B) and
(C) above, and (2) stating that no Default or Event of
Default exists immediately before or immediately after giving
effect to such prepayment, and (E) in the case of Debt other than
Debt outstanding under the Indentures (“ Non-Indenture
Debt ”), prepayments made after the Fifth Amendment Date,
when aggregated with all other prepayments of Non-Indenture Debt
made by Obligors after the Fifth Amendment Date, do not exceed
$50,000.
(e) By deleting clause (c) of
Section 7.14 of the Credit Agreement and by
substituting in lieu thereof the following new clause
(c):
(c) No later than March 1,
2009, the Borrowers shall provide the Agent (i) evidence of
the repayment or redemption in full of the Senior Notes
(2009) through a Permitted Senior Note Refinancing or of the
defeasance of the Borrowers’ obligations under the covenants
under the Senior Note Indenture (2009) in accordance with the
terms thereof or (ii) notice of the principal amount of the
Senior Notes (2009) that remain or will remain outstanding on
March 1, 2009, in which event the Agent may (and upon the
written request of Required Lenders shall) establish Reserves in an
amount of up to the outstanding principal amount of the Senior
Notes (2009), which Reserves will be released by the Agent on the
date of any repayment or redemption in full of the Senior Notes
(2009) (or defeasance of the Borrowers’ obligations
under the covenants under the Senior Note Indenture
(2009)) permitted hereunder. In any event, the Borrowers agree
that they shall repay or redeem the Senior Notes (2009) in
full through a Permitted Senior Note Refinancing or defease their
obligations under the covenants under the Senior Note Indenture
(2009) at least 60 days prior to the maturity
thereof.
(f) By deleting
Section 7.22 of the Credit Agreement and by
substituting in lieu thereof the following new
Section 7.22 :
7.22 Reserved.
(g) By adding the following new
definitions of “Fifth Amendment Date” and “Fifth
Amendment Reserve” to Annex A to the Credit Agreement
in proper alphabetical sequence:
“ Fifth Amendment Date
” means October 31, 2008.
“ Fifth Amendment
Reserve ” means a Reserve of $5,000,000.
(h) By deleting the definitions of
“Accounts Reporting Requirement,” “Applicable
Margin,” “Maximum Revolver Amount,”
“Permitted Acquisition” and “Reserves”
contained in A
