EXHIBIT 4.3
EXECUTION COPY
$115,000,000
SECOND AMENDMENT AND RESTATEMENT
dated as of June 27, 2000
of
CREDIT AGREEMENT
dated as of July 15, 1998
among
Republic Group Incorporated
The Banks Party Hereto
The LC Issuing Banks Referred to Herein
and
Bank of America, N.A.,
as Administrative Agent
________________________________
Banc of America Securities LLC,
Arranger
SECOND AMENDMENT AND RESTATEMENT
SECOND AMENDMENT AND RESTATEMENT OF CREDIT AGREEMENT dated as of June
27, 2000 among REPUBLIC GROUP INCORPORATED, the BANKS listed on the
signature pages hereof, the LC ISSUING BANKS referred to herein and BANK OF
AMERICA, N.A., (successor to NationsBank, N.A.), as Administrative Agent.
W I T N E S S E T H :
WHEREAS, the parties hereto have heretofore entered into a Credit
Agreement dated as of July 15, 1998, as amended and restated by the First
Amendment and Restatement, dated as of March 1, 2000 (the "Agreement"); and
WHEREAS, the parties hereto desire to amend the Agreement as set forth
herein and to restate the Agreement in its entirety to read as set forth in
the Agreement with the amendments specified below;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Definitions; References. Unless otherwise specifically
defined herein, each capitalized term used herein which is defined in the
Agreement shall have the meaning assigned to such term in the Agreement.
Each reference to "hereof", "hereunder", "herein" and "hereby" and each
other similar reference and each reference to "this Agreement" and each
other similar reference contained in the Agreement shall from and after the
date hereof refer to the Agreement as amended and restated hereby.
SECTION 2. Amendment of the Agreement.
(a) The definition of "Interest Period" is amended to (i) delete the
word "and" at the end of clause (c); (ii) insert "; and" at the end of
clause (d); and (iii) insert the following as clause (e);
(e) no Interest Period for a Revolving Credit Loan beginning
before the Reduction Date shall extend beyond the Reduction Date if,
after giving effect thereto, the aggregate principal amount of
Revolving Credit Loans
having Interest Periods extending beyond the Reduction Date exceeds
$40,000,000.
(b) The following new defined terms are added to Section 1.01 in the
appropriate alphabetical position:
"Consolidated Net Senior Debt" means, at any date, Consolidated
Net Debt other than Qualifying Subordinated Debt.
"Qualifying Subordinated Debt" means, at any date, the
Subordinated Notes and all other Debt of the Borrower which is
subordinated to the Loans pursuant to subordination provisions, and
which is issued on such other terms and conditions, as are
satisfactory to the Administrative Agent.
"Reduction Date" means April 2, 2001 (or if such date is not a
Euro-dollar Business Day the next preceding Euro-Dollar business Day).
(c) A new subsection 2.08(c) is added to the Agreement to read in its
entirety as follows:
(c) Reduction Date. On the Reduction Date, if not theretofore
reduced to the same or a lesser amount, the Revolving Credit
Commitments shall be ratably reduced to an aggregate amount of
$40,000,000.
(d) Section 5.11 is amended to read as follows:
SECTION 5.11. Net Debt to EBITDA. At any date during each
period set forth below, the ratio of (i) Consolidated Net Debt at
such date to (ii) Consolidated EBITDA for the period of four
consecutive Fiscal Quarters most recently ended on or prior to
such date will not exceed the ratio set forth below opposite such
period:
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Period Ratio
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3/31/2001 - 9/29/2001 4.00:1
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9/30/2001 - 9/29/2002 3.00:1
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9/30/2002 and thereafter 2.50:1
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(e) Section 5.14 is amended as follows: (i) changing the figure
"$69,915,200" to "$100,000,000" and (ii) replacing each reference to March
31, 1998" with "June 30, 2000".
(f) A new Section 5.20 is added to the Agreement to read in its
entirety as follows:
SECTION 5.20. Net Senior Debt to EBITDA. At any date, the ratio of (i)
Consolidated Net Senior Debt at such date to (ii) Consolidated EBITDA for
the period of four consecutive Fiscal Quarters most recently ended on or
prior to such date will not exceed 2.50 to 1.00.
SECTION 3. Waiver. The Banks hereby waive any Default arising from a
violation of Section 5.14 existing prior to the Second Restatement
Effective Date.
SECTION 4. Change in Commitments. With effect from and including the
date this Second Amendment and Restatement becomes effective in accordance
with Section 8 hereof, the Revolving Credit Commitment of each Bank shall
be the amount set forth opposite the name of such Bank on the attached
Commitment Schedule, which shall replace the existing Commitment Schedule.
SECTION 5. Change in Pricing Schedule. With effect from and including
the date this Second Amendment and Restatement becomes effective in
accordance with Section 8 hereof, the attached Pricing Schedule shall
replace the existing Pricing Schedule.
SECTION 6. Representations and Warranties. The Borrower hereby
represents and warrants that as of the date hereof and after giving effect
hereto:
(a) no Default has occurred and is continuing; and
(b) each representation and warranty of the Borrower set forth in the
Agreement after giving effect to this Second Amendment and Restatement is
true and correct as though made on and as of such date;
SECTION 7. Governing Law. This Second Amendment and Restatement shall
be governed by and construed in accordance with the laws of the State of
New York.
SECTION 8. Counterparts; Effectiveness. This Second Amendment and
Restatement may be signed in any number of counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and
hereto were upon
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the same instrument. This Second Amendment and Restatement shall become
effective as of the date hereof when the Administrative Agent shall have
received:
(a) duly executed counterparts hereof signed by each of the
parties hereto (or, in the case of any party as to which an executed
counterpart shall not have been received, telegraphic, telex or other
written confirmation from such party of execution of a counterpart
hereof by such party);
(b) a consent to this Second Amendment and Restatement in form
and substance satisfactory to the Administrative Agent, duly executed
by each of the Subsidiary Guarantors;
(c) a modification to the Mortgage, Assignment of Leases and
Rents, Security Agreement and Financing Statement dated as of July 15,
1998 by Republic Paperboard in favor of NationsBank, N.A. (predecessor
to Bank of America, N.A.), in form and substance satisfactory to the
Administrative Agent, duly executed by Republic Paperboard, it being
understood that such modification will not increase the principal
amount of Loans secured thereby;
(d) a certificate of a duly authorized officer of the Borrower
as to the accuracy of the representations and warranties set forth in
Section 6 hereof;
(e) an opinion of ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, Dallas, Texas,
substantially to the effect of Exhibit F-1 to the Agreement with
reference to this Second Amendment and Restatement and the Agreement
as amended and restated hereby;
(f) all documents it may reasonably request relating to the
existence of the Borrower, the corporate authority for and the
validity of the Agreement as amended and restated hereby, and any
other matters relevant hereto, all in form and substance satisfactory
to the Administrative Agent; and
(g) payment by the Borrower of (i) an amendment fee in the
amount of $5,000 for each Bank which signs this Second Amendment and
Restatement; (ii) a participation fee for each Bank whose Credit
Exposure after giving effect to this Second Amendment and Restatement
exceeds its Credit Exposure under the Agreement, in an amount equal to
0.25% of such excess; and (iii) all fees and expenses payable by the
Borrower pursuant to Section 9.03 of the Agreement in connection
herewith.
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The Administrative Agent shall promptly notify the Borrower and the Banks
of the effectiveness of this Second Amendment and Restatement, and such
notice shall be conclusive and binding on all parties hereto.
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IN WITNESS WHEREOF, the parties hereto have caused this Second
Amendment and Restatement to be duly executed by their respective
authorized officers as of the day and year first above written.
REPUBLIC GROUP INCORPORATED
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title: Executive Vice President and CFO
BANK OF AMERICA, N.A.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: Senior Vice President
COMERICA BANK - TEXAS
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: Vice President
COMMERCE BANK, N.A.
By: /s/ ▇▇▇▇▇▇ ▇. Block
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Title: Senior Vice Presient
FIRST UNION NATIONAL BANK
By: /s/ J. ▇▇▇▇▇▇ ▇▇▇▇▇▇
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Title: Vice President
FIRSTAR BANK, N.A.
(as successor to Mercantile Bank)
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Title: Vice President
UMB BANK N.A.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
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Title: Senior Vice President
PLAINS NATIONAL BANK
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: Senior Vice President
BANK OF AMERICA, N.A.,
as Administrative Agent
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: Senior Vice President
COMMITMENT SCHEDULE
Revolving
Credit
Bank Commitment Term Loans
----------------------------------- -------------- --------------
Bank of America, N.A. $13,750,000.00 $15,000,000.00
Comerica Bank - Texas $ 9,308,750.00 $10,155,000.00
Commerce Bank, N.A. $ 6,063,750.00 $ 6,615,000.00
First Union National Bank $ 5,871,250.00 $ 6,405,000.00
Firstar Bank, N.A. (as successor to
Mercantile Bank) $ 8,456,250.00 $ 9,225,000.00
UMB Bank, N.A. $ 8,250,000.00 $ 9,000,000.00
Plains National Bank $ 3,300,000.00 $ 3,600,000.00
-------------- --------------
Total $ 55,000,000 $ 60,000,000
PRICING SCHEDULE
"Base Rate Margin" means on any date the rate per annum set forth below in
the column corresponding to the Pricing Level that applies on such day:
Pricing Level Level I Level II Level III ▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇
------------- ------- -------- --------- -------- ------- -------- ---------
Base Rate Margin -- -- 0.25% 0.50% 0.75% 0.75% 1.00%
"Commitment Fee Rate" means on any date the rate per annum set forth below
in the column corresponding to the Pricing Level that applies on such day:
Pricing Level Level I Level II Level III ▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇
------------- ------- -------- --------- -------- ------- -------- ---------
Commitment Fee 0.30% 0.35% 0.375% 0.375% 0.40% 0.40% 0.40%
Rate
"Euro-Dollar Margin" means on any date the rate per annum set forth below
in the column corresponding to the Pricing Level that applies on such day:
Pricing Level Level I Level II Level III ▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇
------------- ------- -------- --------- -------- ------- -------- ---------
Euro-Dollar 0.75% 1.00% 1.25% 1.50% 1.75% 2.00% 2.25%
Margin
"LC Fee Rate" means on any date the rate per annum set forth below in the
column corresponding to the Pricing Level that applies on such day:
Pricing Level Level I Level II Level III ▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇
------------- ------- -------- --------- -------- ------- -------- ---------
LC Fee Rate 0.75% 1.00% 1.25% 1.50% 1.75% 2.00% 2.25%
For purposes of this Schedule, the following terms have the following
meanings:
"Applicable Leverage Ratio" means, at any date, the ratio of (i)
Consolidated Debt at the last day (the "Measurement Date") of the Fiscal
Quarter most recently ended on or prior to such date with respect to which
the Borrower has delivered the financial statements required to be
delivered by it pursuant to Section 5.01(a) or 5.01(b), as the case may be,
to (ii) Consolidated EBITDA for the period of four consecutive Fiscal
Quarters ended on the Measurement Date; provided that for each day from and
including the date on which the Borrower is required to deliver the
financial statements described in Section 5.01(a) or 5.01(b), as the case
may be, for its most recently ended Fiscal Quarter to but excluding the
date on which such financial statements are so delivered, the Applicable
Leverage Ratio shall be deemed to exceed 3.50:1.
"Level I Pricing" applies on or after the Conversion Date at any date
if at such date the Applicable Leverage Ratio is less than or equal to
1.0:1.
"Level II Pricing" applies on or after the Conversion Date at any date
if at such date (i) the Applicable Leverage Ratio is less than or equal to
1.5:1 and (ii) Level I Pricing does not apply.
"Level III Pricing" applies on or after the Conversion Date at any
date if at such date (i) the Applicable Leverage Ratio is less than or
equal to 2.0:1 and (ii) neither Level I Pricing nor Level II Pricing
applies.
"Level IV Pricing" applies at any date if at such date (i) the
Applicable Leverage Ratio is less than or equal to 2.5:1 and (ii) none of
Level I Pricing, Level II Pricing and Level III Pricing applies.
"Level V Pricing" applies at any date if at such date (i) the
Applicable Leverage Ratio is less than or equal to 3.0:1 and (ii) none of
Level I Pricing, Level II Pricing, Level III Pricing and Level IV Pricing
applies.
"Level VI Pricing" applies at any date if at such date (i) the
Applicable Leverage Ratio is less than or equal to 3.5:1 and (ii) none of
Level I Pricing, Level II Pricing, Level III Pricing, Level IV Pricing and
Level V Pricing applies.
"Level VII Pricing" applies on any day if no other Pricing Level
applies on such day.
"Pricing Level" refers to the determination of which of ▇▇▇▇▇ ▇, ▇▇▇▇▇
▇▇, ▇▇▇▇▇ ▇▇▇, Level IV, Level V, Level VI or Level VII Pricing applies on
any day.