SIXTH AMENDMENT TO CREDIT AGREEMENT
THIS SIXTH AMENDMENT TO CREDIT AGREEMENT (the "Amendment"), dated as of
May 29, 1998, is among JOTAN, INC. ("Holding"), SOUTHLAND CONTAINER PACKAGING
CORP. (formerly Southland Holding Company, successor in interest by merger to
SHC Acquisition Corp., each of its own subsidiaries and Atlantic Bag & Paper
Company and herein the "Borrower"), each of the banks or other lending
institutions which are signatories hereto (collectively, the "Banks") and BANQUE
PARIBAS, individually as a Bank, and as agent for the Banks (the "Agent").
RECITALS:
A. Holding, SHC Acquisition Corp., Agent and Banque Paribas, in its
individual capacity, entered into that certain Credit Agreement dated as of
February 28, 1997 (as amended by that certain letter amendment dated April 30,
1997, that certain Second Amendment to Credit Agreement dated as of June 20,
1997, that certain Third Amendment to Credit Agreement dated as of August 19,
1997, that certain Fourth Amendment dated as of November 6, 1997, and that
certain Fifth Amendment dated as of April 14, 1998, as so amended, the "Credit
Agreement").
B. SHC Acquisition Corp. has merged with and into Southland Holding
Company, with Southland Holding Company surviving and assuming all the
obligations of SHC Acquisition Corp. under the Credit Agreement and the Loan
Documents (as defined in the Credit Agreement).
C. Banque Paribas has assigned certain of its rights and interests
under the Credit Agreement and the other Loan Documents to the other Banks
pursuant to those certain Assignment and Acceptances, each dated April 18, 1997.
D. Southland Holding Company has changed its name to Southland
Container Packaging Corp. and each Obligated Party (as defined in the Credit
Agreement) other than Holding has merged with and into Southland Container
Packaging Corp. with Southland Container Packaging Corp. as the surviving
entity. Southland Container Packaging Corp. is the only Subsidiary (as defined
in the Credit Agreement).
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E. The Borrower and Holding have requested that the Agent and the Banks
amend certain provisions of the Credit Agreement. The Banks have agreed to do so
subject to and on the terms and conditions of this Amendment and the Credit
Agreement, as amended hereby.
NOW, THEREFORE, in consideration of the premises herein contained and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1
Definitions
Section 1.1 Definitions. Capitalized terms used in this Amendment, to
the extent not otherwise defined herein, shall have the same meanings as in the
Credit Agreement, as amended hereby.
ARTICLE 2
Amendments
Section 2.1 Amendment of Section 1.1. The definition of "Eligible
Accounts" contained in Section 1.1 of the Credit Agreement is hereby amended by
deleting clause (xii) and replacing it in its entirety with the following:
(xii) during the period from April 14, 1998 through
July 31, 1998, not more than fifty percent (50%) of the
aggregate amount of the accounts owed by the account debtor
and its Affiliates to Holding and the Subsidiaries on an
aggregate basis, are more than sixty (60) days past due; and
after July 31, 1998, not more than twenty-five percent (25%)
of the aggregate amount of the accounts owed by the account
debtor and its Affiliates to Holding and the Subsidiaries on
an aggregate basis, are more than sixty (60) days past due.
Section 2.2 Amendment of Section 6.6. Section 6.6 of the Credit
Agreement is hereby amended by inserting after the words "Libor Accounts" in the
first sentence thereof the phrase "and the Interest Deferral Notes".
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Section 2.3 Amendment of Section 11.15.
(a) Section 11.15 of the Credit Agreement is hereby amended by
deleting Schedule 11.15(b) and replacing it in its entirety with the Schedule
which is annexed hereto as Exhibit A.
(b) Section 11.15 is further amended by adding a new
subsection (f) at the end thereof, as follows:
(f) Other Accounts. Borrower and Holding shall not maintain
any bank accounts other than (i) the Concentration Account, (ii) the
Local Accounts, (iii) the Operating Account, (iv) the accounts set
forth on Schedule 11.15(f) (collectively, the "▇▇▇▇▇ Cash Accounts"),
(v) account number ▇▇▇▇▇▇▇▇▇▇ located at Bank One, Corsicana, Texas
(the "Tax Account"), and (vi) account number 0490005139 located at Bank
One, Corsicana, Texas (the "Employee Benefit Plan Account"). The
Borrower and Holding covenant and agree that they shall deposit into
the Tax Account only the amount necessary from time to time to make
payments of sales and use taxes to state and local authorities in
Texas, and that the amounts deposited in the Tax Account shall be
utilized solely for such tax payments. The Borrower and Holding
covenant and agree that they shall deposit into the Employee Benefit
Plan Account only the amount necessary from time to time to fund their
employees' health and medical claims. If at any time the amount in any
▇▇▇▇▇ Cash Account exceeds $5,000, the Borrower or Holding promptly
shall transfer such excess by wire transfer to the following Local
Account: account number 2090002759859 located at First Union National
Bank.
Section 2.4 Amendment of Section 11.16. Section 11.16 of the Credit
Agreement is hereby amended by deleting the date "April 30, 1998" and inserting
the date "June 5, 1998" in lieu thereof.
ARTICLE 3
Conditions
Section 3.1 Conditions Precedent. The effectiveness of this Amendment
is subject to the satisfaction of the following conditions precedent:
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(a) The representations and warranties contained herein and in
all other Loan Documents, as amended hereby, shall be true and correct
as of the date hereof as if made on the date hereof except to the
extent such representations and warranties expressly relate solely to
another date;
(b) After giving effect to this Amendment, no Default or Event
of Default shall exist;
(c) All proceedings taken in connection with the transactions
contemplated by this Amendment and all documents, instruments, and
other legal matters incident thereto, shall be reasonably satisfactory
to Agent and its legal counsel, Weil, Gotshal & ▇▇▇▇▇▇ LLP;
(d) Holding and the Borrower shall have paid all fees and
expenses of Agent and the Banks incurred in the preparation,
negotiation and execution of this Amendment; and
(e) The Agent shall have received a letter agreement executed
by the signatories thereto, substantially in the form of Exhibit B
hereto.
ARTICLE 4
Ratifications, Representations and Warranties, Release
Section 4.1 Ratifications. The terms and provisions set forth in this
Amendment shall modify and supersede all inconsistent terms and provisions set
forth in the Credit Agreement. The terms and provisions of the Credit Agreement,
as amended and modified by this Amendment, and the terms and provisions of the
other Loan Documents are ratified and confirmed and shall continue in full force
and effect. Borrower, Holding, Agent and each Bank agree that the Credit
Agreement, as amended hereby, and the other Loan Documents shall continue to be
legal, valid, binding and enforceable in accordance with their respective terms.
Without in any way limiting any of the foregoing, Holding hereby ratifies and
confirms all of the terms and provisions of the Holding Guaranty and the Holding
Security Agreement, and Borrower hereby ratifies and confirms all of the terms
and provisions of the Borrower Security Agreement.
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Section 4.2 Representations and Warranties. Borrower and Holding
represent and warrant to Agent and each Bank that (i) the execution, delivery
and performance of this Amendment and all documents required hereby or related
hereto have been authorized by all requisite action on the part of Borrower and
Holding and will not violate the articles of incorporation, bylaws or any
similar governing document of any such parties, (ii) the representations and
warranties contained in the Credit Agreement, as amended hereby, and any other
Loan Document are true and correct on and as of the date hereof as though made
on and as of the date hereof except to the extent those representations and
warranties expressly relate solely to another date, and (iii) Borrower and
Holding are in full compliance with all covenants, agreements, terms and
provisions contained in the Credit Agreement, as amended hereby, and the other
Loan Documents.
Section 4.3 RELEASE. EACH OF BORROWER AND HOLDING HEREBY
ACKNOWLEDGES THAT IT HAS NO DEFENSE, COUNTERCLAIM, OFFSET, CROSS-COMPLAINT,
CLAIM OR DEMAND OF ANY KIND OR NATURE WHATSOEVER THAT CAN BE ASSERTED TO REDUCE
OR ELIMINATE ALL OR ANY PART OF ITS LIABILITY TO REPAY THE OBLIGATIONS OR TO
SEEK AFFIRMATIVE RELIEF OR DAMAGES OF ANY KIND OR NATURE FROM THE AGENT OR THE
BANKS. EACH OF BORROWER AND HOLDING, FOR ITSELF AND ITS SUBSIDIARIES AND EACH OF
ITS SUCCESSORS, ASSIGNS, AFFILIATES, DIRECTORS, OFFICERS, EMPLOYEES, AGENTS,
ATTORNEYS, CONSULTANTS AND ADVISORS OF OR TO ANY OF THE FOREGOING (COLLECTIVELY,
THE "RELEASORS") HEREBY ACQUITS, WAIVES, RELEASES AND DISCHARGES THE AGENT, EACH
BANK AND EACH OF THEIR RESPECTIVE SUCCESSORS, ASSIGNS, AFFILIATES, DIRECTORS,
OFFICERS, EMPLOYEES, AGENTS, ATTORNEYS, CONSULTANTS AND ADVISORS OF OR TO ANY OF
THE FOREGOING (COLLECTIVELY, THE "RELEASEES"), OF AND FROM ANY AND ALL CLAIMS
(INCLUDING, WITHOUT LIMITATION, ANY LIABILITIES, DAMAGES, DEMANDS AND CAUSES OF
ACTION TO THE EXTENT ARISING THEREFROM) WHATSOEVER, IN LAW OR IN EQUITY, WHETHER
KNOWN OR UNKNOWN, WHICH THE RELEASORS EVER HAD, NOW HAVE, OR HEREINAFTER CAN,
SHALL OR MAY HAVE AGAINST ANY RELEASEE BY REASON OF ANY MATTER ARISING OUT OF OR
RELATED TO THE CREDIT AGREEMENT, THE OTHER LOAN DOCUMENTS, AND ANY AND ALL OTHER
ACTIONS OR OMISSIONS RELATING IN ANY WAY THERETO, IN EACH CASE LIMITED TO THE
EXTENT ORIGINATING PRIOR TO THIS AMENDMENT BECOMING EFFECTIVE.
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ARTICLE 5
Miscellaneous
Section 5.1 Survival of Representations and Warranties. All
representations and warranties made in this Amendment or any other Loan Document
shall survive the execution and delivery of this Amendment and the other Loan
Documents, and no investigation by Agent or any Bank, or any closing shall
affect the representations and warranties or the right of Agent and the Banks to
rely upon them.
Section 5.2 Reference to Agreement. Each of the Loan Documents, including
the Credit Agreement and any and all other agreements, documents, or instruments
now or hereafter executed and delivered pursuant to the terms hereof or pursuant
to the terms of the Credit Agreement as amended hereby, are hereby amended so
that any reference in such Loan Documents to the Credit Agreement shall mean a
reference to the Credit Agreement as amended hereby.
Section 5.3 Expenses of Agent and Banks. As provided in the Credit
Agreement, Borrower agrees to pay on demand all reasonable out-of-pocket costs
and expenses incurred by Agent and the Banks in connection with the preparation,
negotiation, and execution of this Amendment (including attorneys' fees and
expenses).
Section 5.4 Severability. Any provision of this Amendment held by a
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.
Section 5.5 Applicable Law. This Amendment shall be governed by
and construed in accordance with the laws of the State of Texas.
Section 5.6 Successors and Assigns. This Amendment is binding upon and
shall inure to the benefit of Agent, the Banks, Borrower and Holding and their
respective successors and assigns, except neither Borrower nor Holding may
assign or transfer any of its rights or obligations hereunder without the prior
written consent of the Banks.
Section 5.7 Counterparts. This Amendment may be executed in one or
more counterparts and on telecopy
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counterparts, each of which when so executed shall be deemed to be an original,
but all of which when taken together shall constitute one and the same
agreement.
Section 5.8 Effect of Waiver. No consent or waiver, express or implied,
by Agent or any Bank to or for any breach of or deviation from any covenant,
condition or duty by Borrower or Holding shall be deemed a consent or waiver to
or of any other breach of the same or any other covenant, condition or duty.
Section 5.9 Headings. The headings, captions, and arrangements used in
this Amendment are for convenience only and shall not affect the interpretation
of this Amendment.
Section 5.10 ENTIRE AGREEMENT. THIS AMENDMENT AND ALL OTHER
INSTRUMENTS, DOCUMENTS AND AGREEMENTS EXECUTED AND DELIVERED IN CONNECTION WITH
THIS AMENDMENT EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND
SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS AND
UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THIS AMENDMENT, AND MAY NOT
BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO ORAL
AGREEMENTS AMONG THE PARTIES HERETO.
Executed as of the date first written above.
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BORROWER and HOLDING:
JOTAN, INC.
SOUTHLAND CONTAINER PACKAGING CORP., formerly Southland Holding Company and
successor in interest to SHC Acquisition Corp. and each Obligated Party (other
than Holding)
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Vice President and Chief Financial Officer for both
companies
AGENT:
BANQUE PARIBAS, as Agent and as a Bank
By:
Name:
Title:
By:
Name:
Title:
BANKS:
BANKBOSTON, N.A.,
formerly The First National Bank of Boston, as
Administrative Agent and as a Bank
By:
Name:
Title:
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ANTARES LEVERAGED CAPITAL CORP
By:
Name:
Title:
BHF-BANK AKTIENGESELLSCHAFT
By:
Name:
Title:
By:
Name:
Title:
CREDITANSTALT CORPORATE FINANCE, INC., successor in interest to CREDITANSTALT
AG, formerly known as CREDITANSTALT-BANKVEREIN
By:
Name:
Title:
By:
Name:
Title:
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STATE OF GEORGIA ss.
ss.
COUNTY OF CAMDEN ss.
This instrument was acknowledged before me on June 2, 1998, by ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, Vice President and Chief Financial Officer of Jotan, Inc., on behalf
of said corporation.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Notary Public, State of Georgia
Commission Expires: April 23, 2001
Printed Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
STATE OF GEORGIA ss.
ss.
COUNTY OF ss.
This instrument was acknowledged before me on June 2, 1998, by ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, Vice President and Chief Financial Officer of Southland Container
Packaging Corp., on behalf of said corporation.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Notary Public, State of Georgia
Commission Expires: April 23, 2001
Printed Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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EXHIBIT A
Schedule 11.15(f)
Bank Account Name Account Number
Nations Bank Southland Container - Orlando 3603327683
Tampa FL
Nations Bank Southland Container - Atlanta 0109001173
Atlanta GA
Nations Bank Southland Container - Charlotte 0303765556
Charlotte NC
Nations Bank Southland Container - Maryland 6063607170
Richmond VA
Fleet Bank Southland Container - New Jersey 8103181306
Edison NJ
Fleet Bank Southland Container - Massachusetts 2017342056
Edison NJ
Fleet Bank Southland Container - New York 2017342056
Edison NJ
Bank of America Southland Container - Los Angeles 1219806181
Norwalk CA
Schedule 11.15(b)
Account Name Bank Account Number
Jotan Inc. First Union National Bank 2090000588080
Jotan/Southland SE First Union National Bank 2080000715876
Jotan/Southland First Union National Bank 2090002759859
Jotan/Southland NE First Union National Bank 2090002759846