BUCKEYE TECHNOLOGIES INC.
CREDIT AGREEMENT
Amendment No. 3
This Agreement, dated as of March 18, 2002 (this "Agreement"), is among
Buckeye Technologies Inc., a Delaware corporation, its subsidiaries set forth on
the signature pages hereto, and Fleet National Bank, as Agent for itself and the
other Lenders under the Credit Agreement referred to below. The parties agree as
follows:
1. Credit Agreement; Definitions. This Agreement amends the Credit Agreement
dated as of April 16, 2001 among the parties hereto and certain lenders (as
amended and in effect prior to giving effect to this Agreement, the "Credit
Agreement"). Terms defined in the Credit Agreement as amended hereby (the
"Amended Credit Agreement") and not otherwise defined herein are used with the
meaning so defined.
2. Amendment of Credit Agreement. Effective on the date all the
conditions set forth in Section 5 hereof are satisfied (the "Amendment Date"),
the Credit Agreement is amended as follows:
2.1. Amendments of Section 1.
2.1.1. The definition of "Applicable Margin" in Section 1 of
the Credit Agreement is amended to read in its entirety as follows:
"Applicable Margin" means (a) through the third
Banking Day after quarterly financial statements have been
forwarded by the Company to the Lenders in accordance with
Section 6.4.2 for the fiscal quarter ended March 31, 2001, the
second highest applicable percentage rate set forth in the
table below and (b) on each day thereafter, the percentage in
the table below indicated by the ratio which (a) Consolidated
Total Net Debt on the last day of the most recently ended
fiscal quarter for which financial statements have been (or
are required to have been) furnished by the Company to the
Lenders in accordance with Section 6.4.1 or 6.4.2, as the case
may be, prior to the first day of such month bore to (b)
Consolidated EBITDA for the period of four consecutive fiscal
quarters ended on the last day of such fiscal quarter:
Ratio of Consolidated Total Net LIBOR Base Rate Commitment
Debt to Consolidated EBITDA Applicable Margin Applicable Margin Fee Rate
--------------------------- ----------------- ----------------- --------
Greater than or equal to 5.25 3.750% 2.250% 0.500%
Greater than or equal to 4.75 3.250% 1.750% 0.400%
but less than 5.25
Greater than or equal to 4.25 3.000% 1.750% 0.400%
but less than 4.75
Less than 4.25 2.750% 1.750% 0.375%
Changes in the Applicable Margin shall occur on the third Banking Day
after quarterly financial statements have been furnished to the Agent
in accordance with Sections 6.4.1 or 6.4.2 from time to time. In the
event that the financial statements required to be delivered pursuant
to Section 6.4.1 or 6.4.2, as applicable, are not delivered when due,
then during the period from the third Banking Day following the date
such financial statements were due until the third Banking Day
following the date on which they are actually delivered, the Applicable
Margin shall be the maximum amount set forth in the table above.
Commencing on the effective date of Amendment No. 3 hereto,
the Applicable Margin will be 3.75% for interest computed on the basis
of the LIBOR Rate and 2.25% for interest computed on the basis of the
Base Rate and the Commitment Fee Rate will be 0.500% until financial
statements for the first fiscal quarter ending after such effective
date are provided to the Lenders by the Company in accordance with
Section 6.4.2, whereupon the Applicable Margin and the Commitment Fee
Rate will be determined in accordance with the table above."
2.1.2. The definition of "Base Rate" in Section 1 of the
Credit Agreement is amended to read in its entirety as follows:
"Base Rate" means, on any date, the sum of the Applicable
Margin plus the greater of (a) the rate of interest announced by Fleet
at the Boston Office as its prime rate or (b) the sum of 1/2% plus the
Federal Funds Rate."
2.1.3. The definition of "Consolidated Total Net Senior Debt"
in Section 1 of the Credit Agreement is amended to read in its
entirety as follows:
"Consolidated Total Net Senior Debt" means, at any date, the
remainder of (a) Consolidated Total Net Debt minus (b) the principal
amount of Financing Debt contractually subordinated to the Credit
Obligations in a manner permitted hereby or otherwise satisfactory to
the Required Lenders minus (c) the outstanding principal amount of the
Stac-Pac notes described in Exhibit 7.7."
2.1.4. The definition of "Subsidiary" in Section 1 of the
Credit Agreement is amended to read in its entirety as follows:
"Subsidiary" means any Person of which the Company (or other
specified Person) shall at the time, directly or indirectly through
one or more of its Subsidiaries, (a) own at least 50% of the
outstanding capital stock (or other shares of beneficial interest)
entitled to vote generally, (b) hold at least 50% of the partnership,
joint venture or similar interests or (c) be a general partner or
joint venturer, provided, however, that Buckeye Receivables Inc. shall
not be deemed a "Subsidiary" so long as its operations are limited to
implementing and facilitating the Receivables Securitization."
2.1.5. The definition of "Swingline Rate" in Section 1 of the
Credit Agreement is amended to read in its entirety as follows:
"Swingline Rate" means the rate equal to the sum of (a) the
Applicable Rate calculated on the basis of the Base Rate, minus
(i) 1/2% per annum at any time when Consolidated Total Net Debt is less
than 525% of Consolidated EBITDA for the most recent period of four
consecutive fiscal quarters for which financial reports have been (or
are required to have been) furnished to the Lenders in accordance with
Section 6.4.2 and (ii) 0% at all other times, plus (b) an additional
2% per annum effective on the day the Agent notifies the Company that
the interest rates hereunder are increasing as a result of the
occurrence and continuance of an Event of Default until the earlier of
such time as (i) such Event of Default is no longer continuing or
(ii) such Event of Default is deemed no longer to exist, in each case
pursuant to Section 8.3."
2.2. Amendment of Section 2.1.2. Section 2.1.2 of the
Credit Agreement is amended to read in its entirety as follows:
"2.1.2. Maximum Amount of Revolving Credit. The term "Maximum
Amount of Revolving Credit" means the lesser of:
(a)(i) $215,000,000 minus (ii) Net Asset Sale Proceeds to the
extent (A) such Net Asset Sale Proceeds exceed both (1) $5,000,000 in
any fiscal year and (2) $25,000,000 in the aggregate after the Initial
Closing Date and (B) the amount of such excess in the foregoing clause
(A) is not allocated to an effective Permitted Reinvestment Reserve
Amount, minus (iii) Receivables Securitization Proceeds to the
extent such Receivables Securitization Proceeds exceed $30,000,000 in
the aggregate after the Initial Closing Date, minus (iv) (A) prior to
March 31, 2003: (1) if at the time of receipt of Net Equity Proceeds,
Consolidated EBITDA minus Capital Expenditures of the Company and its
Subsidiaries is greater than 200% of Consolidated Interest Expense for
the most recent period of four consecutive fiscal quarters for
which financial reports have been (or are required to have been)
furnished to the Lenders in accordance with Section 6.4.2, the sum of
(x) 50% of the Net Equity Proceeds in excess of $30,000,000 in the
aggregate but less than or equal to $50,000,000 in the aggregate plus
(y) 100% of the Net Equity Proceeds in excess of $50,000,000 in the
aggregate or (2) otherwise (x) 0% of Net Equity Proceeds less than or
equal to $50,000,000 in the aggregate and (y) 100% of the Net Equity
Proceeds in excess of $50,000,000 in the aggregate and (B)from on and
after March 31, 2003, Net Equity Proceeds received at any time when
Consolidated Total Net Debt is greater than 350% of Consolidated EBITDA
for the most recent period of four consecutive fiscal quarters for
which financial reports have been (or are required to have been)
furnished to the Lenders in accordance with Section 6.4.2, minus
(v) $15,000,000 at any time when neither a Supported Irish Loan nor a
Letter of Credit for the benefit of an Irish Lender is outstanding; or
(b) the amount (in an integral multiple of $1,000,000) to which
the Maximum Amount of Revolving Credit shall have been irrevocably
reduced from time to time by notice from the Company to the Agent."
2.3. Amendment of Section 4.2.5. Section 4.2.5 of the Credit
Agreement is amended to read in its entirety as follows:
"4.2.5. Net Equity Proceeds. Upon receipt of Net Equity
Proceeds by the Company or any of its Subsidiaries (a) prior to
March 31, 2003: (1) at any time when Consolidated EBITDA minus
Capital Expenditures of the Company and its Subsidiaries is
greater than 200% of Consolidated Interest Expense for the most
recent period of four consecutive fiscal quarters for which
financial reports have been (or are required to have been)
furnished to the Lenders in accordance with Section 6.4.2 the
Company shall within one Banking Day pay to the Agent as a
prepayment of the Loan to be applied as provided in Section
4.4.2 the lesser of (i) the sum of (A) 50% of the amount of such
Net Equity Proceeds in excess of $30,000,000 in the aggregate
but less than or equal to $50,000,000 in the aggregate plus
(B) 100% of the amount of such the Net Equity Proceeds in excess
of $50,000,000 in the aggregate or (ii) the amount of the
Revolving Loan or (2) otherwise the Company shall within one
Banking Day pay to the Agent as a prepayment of the Loan to be
applied as provided in Section 4.4.2 the lesser of (i) 100% of
the amount of such the Net Equity Proceeds in excess of
$50,000,000 in the aggregate or (ii) the amount of the Revolving
Loan or (b) from on or after March 31, 2003, at any time when
Consolidated Total Net Debt is greater than 350% of Consolidated
EBITDA for the most recent period of four consecutive fiscal
quarters for which financial reports have been (or are required
to have been) furnished to the Lenders in accordance with
Section 6.4.2, the Company shall within one Banking Day pay to
the Agent as a prepayment of the Loan to be applied as provided
in Section 4.4.2 the lesser of (i) the amount of such Net Equity
Proceeds or (ii) the amount of the Revolving Loan."
2.4. Amendment of Section 6.5.2. Section 6.5.2 of
the Credit Agreement is amended to read in its entirety as
follows:
"6.5.2. Consolidated Total Net Debt to Consolidated EBITDA.
Consolidated Total Net Debt as of the end of any fiscal quarter of the
Company shall not exceed the applicable percentage set forth in the
table below of Consolidated EBITDA for the period of four consecutive
fiscal quarters then ending:
Fiscal Quarter Ending Percentage
--------------------- ----------
December 31, 2001 650%
March 31, 2002 785%
June 30, 2002 840%
September 30, 2002 830%
December 31, 2002 810%
March 31, 2003 710%
June 30, 2003 635%
September 30, 2003 375%
through December 31, 2003
March 31, 2004 350%"
and thereafter
2.5. Amendment of Section 6.5.3. Section 6.5.3 of
the Credit Agreement is amended to read in its entirety as
follows:
"6.5.3. Consolidated EBITDA to Consolidated Interest Expense.
For each period of four consecutive fiscal quarters of the Company,
Consolidated EBITDA shall equal or exceed the percentage of
Consolidated Interest Expense set forth in the table below:
Fiscal Quarter Ending Percentage
--------------------- ----------
December 31, 2001 215%
March 31, 2002 185%
June 30, 2002 170%
September 30, 2002 170%
December 31, 2002 175%
March 31, 2003 200%
June 30, 2003 220%
September 30, 2003 325%"
and thereafter
2.6. Amendment of Section 6.5.4. Section 6.5.4 of
the Credit Agreement is amended to read in its entirety as
follows:
"6.5.4. Consolidated EBITDA Minus Capital Expenditures to
Consolidated Interest Expense. For each period of four consecutive
fiscal quarters of the Company, the excess of Consolidated EBITDA minus
Capital Expenditures of the Company and its Subsidiaries shall equal or
exceed the percentage of Consolidated Interest Expense set forth in the
table below; provided, however, that for the purposes of this Section
6.5.4, Capital Expenditures shall exclude capital expenditures for the
construction of an air-laid facility in Gaston, North Carolina in an
amount not exceeding $85,000,000 for any fiscal quarter and $95,000,000
in the aggregate:
Fiscal Quarter Ending Percentage
--------------------- ----------
December 31, 2001 100%
March 31, 2002 115%
June 30, 2002 115%
September 30, 2002 110%
December 31, 2002 110%
March 31, 2003 125%
June 30, 2003 140%
September 30, 2003 175%"
and thereafter
2.7. Amendment of Section 6.5.5. Section 6.5.5 of
the Credit Agreement is amended to read in its entirety as
follows:
"6.5.5. Consolidated Total Net Senior Debt to Consolidated
EBITDA. Consolidated Total Net Senior Debt as of the end of any fiscal
quarter of the Company set forth in the table below shall not exceed
the applicable percentage set forth in the table below of Consolidated
EBITDA for the period of four consecutive fiscal quarters then ending:
Fiscal Quarter Ending Percentage
--------------------- ----------
December 31, 2001 270%
March 31, 2002 330%
June 30, 2002 335%
September 30, 2002 325%
December 31, 2002 315%
March 31, 2003 265%
June 30, 2003 235%
September 30, 2003 225%"
and thereafter
2.8. Addition of Section 6.5.6. Section 6.5 of the
Credit Agreement is amended by adding immediately after Section
6.5.5 new Section 6.5.6 to read in its entirety as follows:
"6.5.6. Capital Expenditures. The aggregate
amount of Capital Expenditures for any period of four
consecutive fiscal quarters shall not exceed (a)
$45,000,000 for such periods ending prior to June 30,
2002 and (b) $55,000,000 for such periods ending after
June 29, 2002 and prior to June 30, 2003; provided,
however, that for purposes of this Section 6.5.6,
Capital Expenditures shall exclude capital expenditures
for the construction of an airlaid facility in Gaston,
North Carolina in an amount not exceeding $85,000,000
for any fiscal quarter and $95,000,000 in the
aggregate."
3. Certain Consents.
3.1. Notwithstanding Section 8.1.12 of the Credit
Agreement, the Lenders consent to the Company's providing the
Lenders with a perfected security interest in Buckeye Lumberton
Inc d/b/a/ Buckeye ▇▇▇▇▇▇'▇ real property located in ▇▇▇▇▇▇
County, North Carolina after December 31, 2001 but prior to
February 2, 2002.
3.2. The Lenders consent to the transfer by the
Company of all or a portion of the capital stock of Buckeye
Technologies Ireland Ltd (Ireland) to one or more wholly owned
Subsidiaries (other than any Foreign Subsidiaries); provided,
however, that any such wholly owned Subsidiary joins the Credit
Agreement as a Guarantor and joins the Security Agreement as an
Obligor, in accordance with Section 9.9 of the Credit Agreement;
and provided, further, that any such wholly owned Subsidiary
grants and assigns to the Agent for the benefit of the Lenders
a security interest in such capital stock to the extent
required by the Security Agreement.
3.3. Notwithstanding Section 6.10 of the Credit
Agreement, the Lenders consent to the transfer by Buckeye
Lumberton Inc. of certain assets to Buckeye Mt. ▇▇▇▇▇ LLC.
4. Special Covenant. The Company agrees that by August 31, 2002 it
shall sell its nonredeemable capital stock on arm's length terms in return for
at least $30,000,000 in net sale proceeds.
5. Representations and Warranties. In order to induce the Agent and
the documentation agents to enter into this Agreement, each of the Company and
the Guarantors jointly and severally represents and warrants that after giving
effect to this Agreement, (a) no Default exists and (b) the representations and
warranties contained in Section 7 of the Credit Agreement are true and correct
in on and as of the date hereof with the same force and effect as though made on
and as of such date (except as to any representation or warranty which refers to
a specific earlier date).
6. Conditions to Effectiveness.
6.1. Proper Proceedings. This Agreement, each other
Credit Document and the transactions contemplated hereby and
thereby shall have been authorized by all necessary proceedings
of the Company and the Guarantors. All necessary consents,
approvals and authorizations of any governmental or
administrative agency or any other Person with respect to any of
the transactions contemplated hereby or by any other Credit
Document shall have been obtained and shall be in full force and
effect. The Agent shall have received copies of all documents,
including acquisition agreements, certificates, records of
corporate and partnership proceedings and opinions of counsel,
which the Agent may have reasonably requested in connection
therewith, such documents where appropriate to be certified by
proper corporate, partnership or governmental authorities.
6.2. Payment of Fees and Expenses. The Company shall
have paid to the Agent (a) for the account of the Lenders, an
amendment fee in an amount equal to 0.25% of the respective
Commitments of the Lenders and (b) the reasonable legal fees and
expenses of the Agent with respect to this Agreement and the
transactions contemplated hereby.
7. General. The Amended Credit Agreement and all of the Credit
Documents are each confirmed as being in full force and effect. This Agreement,
the Amended Credit Agreement and the other Credit Documents referred to herein
or therein constitute the entire understanding of the parties with respect to
the subject matter hereof and thereof and supersede all prior and current
understandings and agreements, whether written or oral. Interest and fees under
the Credit Agreement shall be calculated for all periods as provided in the
Amended Credit Agreement. Each of this Agreement and the Amended Credit
Agreement is a Credit Document and may be executed in any number of
counterparts, which together shall constitute one instrument, and shall bind
and inure to the benefit of the parties and their respective successors and
assigns, including as such successors and assigns all holders of any Credit
Obligation. This Agreement shall be governed by and construed in accordance with
the laws (other than the conflict of law rules) of The Commonwealth of
Massachusetts.
[The rest of this page is intentionally blank]
8752335.9
Each of the undersigned has caused this Agreement to be executed and
delivered by its duly authorized officer as an agreement under seal as of the
date first above written.
BUCKEYE TECHNOLOGIES INC.
BUCKEYE FLORIDA CORPORATION
BUCKEYE ▇▇▇▇▇ CORPORATION
BUCKEYE LUMBERTON INC.
BKI FINANCE CORPORATION
BKI INTERNATIONAL INC.
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------
As an authorized officer of each of the
foregoing corporations
BUCKEYE FLORIDA, LIMITED PARTNERSHIP
By Buckeye Florida Corporation, general partner
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------
Title:
BUCKEYE MT. ▇▇▇▇▇ LLC
By Buckeye Lumberton Inc., manager
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------
Title:
BKI ASSET MANAGEMENT CORPORATION
BKI HOLDING CORPORATION
By: /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
Title: PRESIDENT
BKI LENDING INC.
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------
Title: PRESIDENT
BFC I CORP.
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇, Secretary
BFOL 1 CORP.
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇, President
BFC 2 LP
By: BFOL 1 Corp., its general partner
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇, President
BFOL 2 LP
By: BFC I Corp., its general partner
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇, Secretary
BFC 3 LLC
By: BFOL 2 LP, its manager
By: BFC I Corp., its general partner
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇, Secretary
BFOL 3 LLC
By: BFC 2 LP, its manager
By: BFOL 1 Corp., its general partner
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇, President
MERFIN SYSTEMS INC.
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------
Title:
FLEET NATIONAL BANK
By /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------
Title: DIRECTOR
ABN AMRO BANK, N.V.
By /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------
Title: GROUP VICE PRESIDENT
By: /S/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------
Title: ASSISTANT VICE PRESIDENT
BANK OF AMERICA, N.A.
By /S/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------
Title: SR. VICE PRESIDENT
THE BANK OF NOVA SCOTIA
By /S/ M. D. ▇▇▇▇▇
---------------
Title: AGENT, OPERATIONS
FIRST PIONEER FARM CREDIT, ACA
By /S/ ▇▇▇ ▇▇▇▇▇
-------------
Title: COMMERCIAL LOAN OFFICER
FIRST UNION NATIONAL BANK
By /S/ ▇▇▇▇▇ ▇▇▇▇▇
---------------
Title: VICE PRESIDENT
FIRSTAR BANK, NATIONAL ASSOCIATION
By /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
Title: VICE PRESIDENT
TORONTO DOMINION (TEXAS), INC.
By /S/ ▇▇▇ ▇. ▇▇▇▇▇▇
-----------------
Title: VICE PRESIDENT
UNION PLANTERS BANK, NA
By /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------
Title: SR. VICE PRESIDENT
WACHOVIA BANK, NA
By /S/ ▇▇▇▇▇ ▇▇▇▇▇
---------------
Title: VICE PRESIDENT