1
EXHIBIT 10.1
SECOND AMENDMENT TO
CREDIT AND SECURITY AGREEMENT
Preamble. THIS SECOND AMENDMENT TO CREDIT AND SECURITY AGREEMENT (hereinafter,
together with all schedules and exhibits hereto, and any supplements, additions,
modifications or amendments thereto made from time to time called the "Second
Amendment"), dated as of April 1, 1999 (the "Second Amendment Date"), is made by
and among THOMASTON ▇▇▇▇▇, INC., a Georgia corporation (hereinafter, together
with its successors and permitted assigns called the "Borrower"); THOMASTON
▇▇▇▇▇ FSC, INC., a U.S. Virgin islands corporation (hereafter, together with its
successors and permitted assigns, called "FSC"); NATIONSBANK, N.A., a national
banking association (hereinafter, together with its successors and permitted
assigns, called "NationsBank"; NationsBank, together with SunTrust and Wachovia,
each as hereinafter defined, called collectively, the "Lenders" and,
individually, a "Lender"); SUNTRUST BANK, ATLANTA, a Georgia banking corporation
(hereinafter, together with its successors and permitted assigns, called
"SunTrust"), individually and as "Administrative Agent" and "Syndication Agent"
(as those terms are defined in the Credit Agreement defined below), on behalf of
the Lenders; WACHOVIA BANK, N.A., a national banking association (hereinafter,
together with its successors and permitted assigns, called "Wachovia"), as
"Special Issuer," "Documentation Agent" and "Collateral Agent" (as those terms
are defined in the Credit Agreement defined below), on behalf of the Lenders;
and SUNTRUST EQUITABLE SECURITIES CORPORATION, a Tennessee corporation
(hereinafter, together with its successors and permitted assigns called
"SunTrust Equitable Securities"), as "Arranger" and "Lead Manager" (as those
terms are defined in the Credit Agreement defined below), on behalf of the
Lenders.
The Borrower, FSC, SunTrust (in its respective capacities
described above), Wachovia (in its respective capacities described above),
NationsBank as a Lender and SunTrust Equitable Securities (in its respective
capacities described above) (the foregoing parties herein sometimes collectively
called the "Parties" and individually called a "Party") are Parties to a certain
Credit and Security Agreement, dated as of August 19, 1998 (which is, as amended
to date pursuant to the First Amendment, called herein the "Credit Agreement"),
pursuant to which, among other things, the Lenders agreed to extend credit and
other financial accommodations to the Borrower.
As of the Second Amendment Date, certain Events of Default
have occurred and are continuing, portions of which heretofore have been waived
by the Lenders, subject to the Borrower's fulfillment of certain conditions,
which have not been fulfilled. The Borrower has requested that the Lenders waive
(or, as appropriate, continue to waive) these Events of Default and also waive
the Borrower's continuing compliance with certain financial covenants contained
in the Loan Agreement, in exchange for a shortening of the Termination Date to
June 1, 1999 and the Borrower's commitment to pursue diligently the full payment
of all Obligations by not later than such date. The Lenders have considered the
Borrower's proposal, and are agreeable thereto. The Parties have agreed to
modify and amend the Credit Agreement in the manner, and subject to the terms
and conditions, set forth hereinbelow in order to memorialize and give effect to
the Parties' agreement.
2
NOW, THEREFORE, in consideration of the foregoing premises,
the mutual covenants herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby mutually
acknowledged, the Parties, each intending to be legally bound, hereby agree as
follows:
SECTION 1. Definitions. Capitalized terms used in this Second Amendment
and not defined herein are defined in the Credit Agreement. In addition thereto,
the following capitalized terms, as used hereinbelow, shall have these meanings:
"Binding Commitment" shall mean a bona fide
commitment (or series of related commitments) on the part of
one Person (or a group of Persons acting in concert) to effect
the full payment and discharge of all Obligations (including
all Letter of Credit Obligations) by not later than June 1,
1999, through one or more Full Payment Alternatives, which (i)
are unconditional (or, if conditional, contain only conditions
which are acceptable to the Lenders, in their sole
discretion); (ii) are issued by Person(s) having sufficient
creditworthiness (or access to credit) to support such
commitment(s), as determined by the Lenders, in their sole
discretion; and (iii) do not include, as part of the
commitment, any requirement that any Lender participate in, or
accept a discount or deferral of payment of any Obligations
owing to it as part of, any such commitment.
"Existing Events of Default" shall mean and include
(i) the Borrower's failure to comply in all respects with
Section 5.42 in respect of the Mortgaged Real Property, (ii)
Borrower's failure to comply in all respects with the
Financial Covenants, and (iii) the Borrower's failure to
comply in all respects with one or more of the conditions to
the Waivers.
"Financial Covenants" shall mean the covenants set
forth in Sections 5.20 through 5.24 of the Credit Agreement.
"Full Payment Alternatives" shall mean such
alternatives effecting payment and discharge in full of all
Obligations (including all Letter of Credit Obligations) as
the Borrower shall pursue (or continue pursuing) between the
Second Amendment Date and the Termination Date (as amended
hereby), including, by way of the investment of additional
equity in the Borrower, the sale of the assets or capital
stock of the Borrower, the refinancing by one or more other
lenders of the Obligations, or by some combination of the
foregoing.
"Mortgage Documentation Requirements" shall mean all
those requirements set forth in SECTION 5.42 of the Credit
Agreement in respect of the Mortgaged Real Property.
2
3
"Waivers" shall mean: (A) Amended and Restated
Consent and Waiver No. 1 to Credit and Security Agreement,
dated as of February 16, 1999, made among the Parties, and (B)
Consent and Waiver No. 2 to Credit and Security Agreement,
dated as of March 5, 1999.
SECTION 2. Amendments to Credit Agreement. The Parties hereby amend the
Credit Agreement as follows:
a. Incorporated Definitions. The terms "Second Amendment" and
"Second Amendment Date," defined and described in the Preamble hereinabove, are
incorporated by reference into, and made an integral part of, SECTION 1.1, as
defined terms therein in the appropriate alphabetic order.
b. Revised Definition of Borrowing Base. The amended defined
term "Borrowing Base," set forth in SECTION 1.1 of the Credit Agreement, is
further amended by deleting existing, amended clause (x) thereof, in its
entirety, therefrom, and substituting in its place the following revised clause
(x):
(x) a fixed and continuing reserve, in the amount of
Ten Million Dollars ($10,000,000), from the Closing Date
through January 18, 1999, reducing to Five Million Dollars
($5,000,000) on January 19, 1999 and continuing in such
reduced amount until the
Termination Date.
c. Definition of Termination Date. The defined term
"Termination Date," set forth in SECTION 1.1 of the Credit Agreement, is amended
by deleting the existing definition, in its entirety, and substituting in its
place the following revised definition:
"Termination Date" means the earliest, whichever is
applicable, of (i) June 1, 1999; (ii) the date that the
Commitments are terminated pursuant to SECTION 6.01 following
the occurrence of an Event of Default; or (iii) with respect
to Revolving Loans, the date that the Borrower terminates the
Revolving Loan Commitments entirely pursuant to SECTION 2.07.
d. Interest Rates. Amended SECTION 2.05 of the Credit
Agreement is further amended by deleting existing subsection (f) therefrom,
added by the First Amendment, and substituting for it the following revised
subsection (f):
(f) Notwithstanding any of the foregoing provisions
of this SECTION 2.05, excepting therefrom only subsections (d)
and (e) hereof, effective on and at all times after the Second
Amendment Date, the following provisions shall govern the
interest rate payable on the Loans:
3
4
(i) all Loans made, continued or
converted shall be made, continued as or converted
into Base Rate Loans only;
(ii) all Base Rate Loans existing on the
Second Amendment Date, together with any and all
Loans made, continued or converted into Base Rate
Loans after the First Amendment Date, shall bear
interest at the Base Rate plus an Applicable Margin
of two percent (2%) per annum (without any subsequent
performance pricing adjustment);
(iii) the interest rate payable on all Euro-
Dollar Loans (if any) outstanding on the Second
Amendment Date shall be increased by two percent (2%)
per annum, effective as of the Second Amendment Date,
and all such Euro-Dollar Loans shall by converted
into Base Rate Loans effective upon the expiration of
the current Interest Period respective thereto;
e. Reporting. SECTION 5.01 of the Credit Agreement is amended
by adding thereto, at the end thereof, the following new subsection (q):
(q) without limitation of the foregoing clauses (a)
through (p), and in supplementation thereof, effective on the
Second Amendment Date, and continuing at all relevant times
thereafter, upon execution by each Lender of a confidentiality
agreement substantially in the form of Exhibit A attached
hereto, the Borrower will report to the Lenders the status of
its pursuit of Full Payment Alternatives on a weekly basis, on
the third Business Day of each calendar week (or, more
frequently, at Lenders' request), which report may be given
orally or in a writing delivered to the Administrative Agent
by 2:00 p.m. (Atlanta time) on such Business Day summarizing
all Full Payment Alternatives then being pursued by the
Borrower and any proposals involving Full Payment Alternatives
received by the Borrower for its consideration (whether or not
solicited), each in reasonable detail; and the Borrower will
review such Full Payment Alternatives with the Lenders prior
to its acceptance (or rejection) thereof.
SECTION 3. Waivers. The Lenders waive the Existing Events of Default
through the Termination Date and also waive the Borrower's compliance with the
Financial Covenants during the period from March 31, 1999 through the
Termination Date; provided, however, that nothing contained herein is intended,
or shall be construed, to waive any other Events of Default, but for the
Existing Events of Default, whether now or hereafter existing, or the Borrower's
continuing
4
5
compliance with any other provisions of the Credit Agreement or any Loan
Documents, but for the Financial Covenants.
SECTION 4. Amendment and Extension Fees. To induce the Lenders to enter
into this Amendment, the Borrower shall pay to Lenders upon this Amendment
becoming effective an amendment fee of $400,000 (to be shared pro rata among
them). In addition, unless the Obligations have been fully paid and discharged
or a Binding Commitment has been received and accepted by the Borrower by not
later than April 19, 1999, which remains effective on such date, the Borrower
shall pay to the Lenders (to be shared pro rata among them) an extension fee of
$100,000 on such date; provided, further, that unless the Obligations have been
fully paid and discharged or a Binding Commitment has been received and accepted
by the Borrower by not later than May 5, 1999, and remains effective on such
date, the Borrower shall pay to the Lenders (to be shared pro rata among them)
an additional extension fee of $500,000 on such date; and, provided, finally,
that if (i) on or before May 5, 1999, a Binding Commitment is received and
accepted by the Borrower, and (ii) pursuant to such Binding Commitment, all
Obligations are fully paid and discharged by June 1, 1999, then, both the
$400,000 amendment fee and, as appropriate, the first extension fee of $100,000,
to the extent then paid to the Lenders, will be rebated to the Borrower by the
Lenders on that date on or prior to June 1, 1999, on which all Obligations are
so fully paid and discharged. Except as expressly provided above, the amendment
fee and each extension fee (if any) shall be fully earned and non-refundable,
and shall be paid by Administrative Agent advancing a Revolving Loan in payment
thereof on the due date for payment on behalf of the Borrower.
SECTION 5. Mortgage Documentation Requirements. The Borrower
acknowledges and agrees that not all Mortgage Documentation Requirements have
been fulfilled to Lenders' satisfaction by the Second Amendment Date,
notwithstanding multiple extensions given by the Lenders in respect thereof and
that if, by April 14,1999, the Borrower has not completed all Mortgage
Documentation Requirements to Lenders' satisfaction, Lenders shall have the
right, on the Borrower's behalf, at the Borrower's expense, through one or more
agents as the Lenders may select, to initiate, continue or complete such
requirements in such manner as the Lenders see fit, with the costs thereof to be
charged as Revolving Loans, and with the Borrower to assist and cooperate fully
with the Lenders in regard thereto; and, at the Lenders' further option, to
collect damages from the Borrower in the form of a fee not to exceed to $50,000,
which shall also be charged as a Revolving Loan.
SECTION 6. Representations and Warranties of Obligors. The Borrower and
FSC, each severally, represents and warrants to the other Parties that:
i. It has the power and authority to enter into and to perform
this Second Amendment, to execute and deliver all documents
relating to this Second Amendment, and or incur the
obligations provided for in this Second Amendment, all of
which have been duly authorized and approved in accordance
with its corporate documents;
ii. This Second Amendment, together with all documents executed
pursuant hereto, shall constitute when executed its valid and
legally binding obligations in accordance with their
respective terms;
5
6
iii. All representations and warranties made by it in the Credit
Agreement are true and correct as of the date hereof, with the
same force and effect as if all representations and warranties
were fully set forth herein;
iv. Its Obligations under the Credit Documents remain valid and
enforceable Obligations, and the execution and delivery of
this Second Amendment and the other documents executed in
connection herewith shall not be construed as a novation of
the Credit Agreement or any of the other Credit Documents;
v. As of the date hereof, it has no offsets, defenses or
counterclaims against the payment of any of the Obligations;
and
vi. As of the Second Amendment Date, and after giving effect to
the terms hereof, no Default Condition or Event of Default
exists.
SECTION 7. Waiver of Claims. As a specific inducement to the other
Parties without which the Borrower and FSC acknowledge the other Parties would
not enter into this Second Amendment and the other documents executed in
connection herewith, each of the Borrower and FSC hereby waives any and all
claims that it may have against any other Party, as of the date hereof, arising
out of or relating to the Credit Agreement or any other Credit Document whether
sounding in contract, tort, or any other basis.
SECTION 8. Conditions of Effectiveness. This Second Amendment shall
become effective when, and only when, the Documentation Agent shall have
received this Second Amendment, executed by each Party, and shall be effective
as of the Second Amendment Date.
SECTION 9. Miscellaneous.
a. Reference to Credit Agreement. Upon the effectiveness of
this Credit Agreement, each reference in the Credit Agreement to "this Credit
Agreement" and each reference in the other Credit Documents to the Credit
Agreement, shall mean and be a reference to the Credit Agreement as amended
hereby.
b. Effect on Credit Documents. Except as specifically amended
above, all terms of the Credit Agreement and all other Credit Documents shall
remain in full force and effect and are hereby ratified and confirmed.
c. No Waiver. The execution, delivery and effectiveness of
this Second Amendment shall not operate as a waiver of any right, power, or
remedy of Lenders or the Agents under any of the Credit Documents, nor
constitute a waiver of any provision of any of the Credit Documents.
d. Costs, Expenses and Taxes. The Borrower agrees to pay on
demand all costs and expenses of the Agents and the Lenders in connection with
the preparation, reproduction, execution, and delivery of this Second Amendment
and the other instruments and documents to be delivered hereunder, including the
reasonable fees and out-of-pocket expenses of counsel for the Agent and the
Lenders with respect hereto.
6
7
e. No Novation. Nothing contained herein intended, or shall be
construed, to constitute a novation to the Credit Agreement or any Credit
Document.
f. Governing Law. This Second Amendment shall be governed by
and construed in accordance with the laws of the State of Georgia, without
giving affect to conflict of law provisions.
g. Counterparts. This Second Amendment may be executed in
counterparts. Each counterpart shall bind the Party or Parties executing same.
All counterparts, taken together, shall constitute one and the same agreement.
IN WITNESS WHEREOF, the Parties have caused this Second
Amendment to be duly executed, under seal, by their respective authorized
officers as of the day and year first above written.
"BORROWER"
THOMASTON ▇▇▇▇▇, INC.
By:/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ (SEAL)
-------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
President and Chief Executive Officer
Attest: /s/ A. ▇▇▇▇▇▇▇ ▇▇▇ (SEAL)
---------------------------------------
A. ▇▇▇▇▇▇▇ ▇▇▇
Vice President-Finance
"SUBSIDIARY GUARANTOR"
THOMASTON ▇▇▇▇▇ FSC, INC.
By:/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ (SEAL)
-------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
President and Chief Executive Officer
Attest: /s/ A. ▇▇▇▇▇▇▇ ▇▇▇ (SEAL)
---------------------------------------
A. ▇▇▇▇▇▇▇ ▇▇▇
Vice President-Finance
7
8
SUNTRUST BANK, ATLANTA,
as Administrative Agent,
Syndication Agent and as a Lender (SEAL)
By: /s/
----------------------------------------
8
9
WACHOVIA BANK, N.A.,
as Special Issuer, Documentation Agent,
Collateral Agent, and as a Lender (SEAL)
By: /s/
-----------------------------------------
9
10
NATIONSBANK, N.A.,
as a Lender (SEAL)
By: /s/
--------------------------------------
10
11
SUNTRUST EQUITABLE SECURITIES
CORPORATION, as Arranger and Lead
Manager (SEAL)
By: /s/
-----------------------------------
11