AMENDMENTNO. 7 TO THE

 

 

 

 

AMENDMENT NO. 7 (this “Amendment”) TO THE SECOND AMENDED AND RESTATED CREDIT AGREEMENT among Chesapeake Corporation, a Virginia corporation (the “U.S. Borrower”), Chesapeake U.K. Holdings Limited, Chesapeake U.K. Acquisitions plc, Boxmore International Limited, Chesapeake plc (formerly known as Field Group plc) (collectively, the “U.K. Borrowers”), the banks, financial institutions and other institutional lenders party to the Credit Agreement referred to below (collectively, the “Lenders”) and Wachovia Bank, National Association, as administrative agent for the Lenders (in such capacity, the “Administrative Agent”).

 

 

WHEREAS, the U.S. Borrower, the U.K. Borrowers, the Lenders, the Administrative Agent, Bank of America, N.A. and Citicorp North America, Inc., as syndication agents, HSBC Bank plc, as documentation agent, Wachovia Capital Markets, LLC, as a co-lead arranger and the sole bookrunner, and Banc of America Securities LLC and Citicorp North America, Inc., as co-lead arrangers, have entered into a Second Amended and Restated Credit Agreement dated as of February 23, 2004, as amended by Amendment No. 1 dated as of June 10, 2004, Amendment No. 2 dated as of February 23, 2006, the Letter Waiver and Amendment No. 3 dated as of August 4, 2006, Amendment No. 4 dated as of June 18, 2007, Amendment No. 5 dated as of January 18, 2008, but effective as of December 28, 2007 and Amendment No. 6 (“Amendment No. 6”) dated as of March 5, 2008 (as so amended, the “Credit Agreement;” capitalized terms not otherwise defined in this Amendment have the same meanings as specified in the Credit Agreement); and

 

WHEREAS, the Borrowers, the Lenders and the Administrative Agent have agreed to amend the Credit Agreement as hereinafter set forth;

 

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the parties hereto hereby agree as follows:

 

SECTION 1.   Amendments to Credit Agreement.  The Credit Agreement is, effective as of the Seventh Amendment Effective Date and subject to the satisfaction of the conditions precedent set forth in Section 2, hereby amended as follows:

 

(a)     Section 1.1 is hereby amended by inserting therein the following definitions in proper alphabetical order:

 

““Chesapeake plc Obligations” means the obligations of Chesapeake plc as set forth in the Recovery Plan in respect of the Field Group Pension Plan.”

 

““Intercreditor Deed” means the Intercreditor Deed by and between Chesapeake plc, the Administrative Agent, the Pension Trustee and the other parties listed on the signature pages thereto providing the Pension Trustee with a second priority Lien on certain Collateral of Chesapeake plc and the other Charging Companies (as defined in the Pension Trustee Debenture), to be substantially in the form of Exhibit A hereto or otherwise in a form reasonably satisfactory to the Administrative Agent.”

 

““Pension Trustee” means Field Group Pension Trustee Limited.”

 

““Pension Trustee Debenture” means the debenture to be entered into by and among the U.S. Borrower, Chesapeake plc, the other Charging Companies (as defined therein) and the Pension Trustee reasonably satisfactory to the Administrative Agent.”

 

““Pension Trustee Liens” means the Liens to secure the Chesapeake plc Obligations granted in favor of the Pension Trustee pursuant to the Pension Trustee Debenture and other security and collateral documents; provided that such Pension Trustee Liens shall be subject to the terms of the Intercreditor Deed.”

 

““Recovery Plan” means the recovery plan in place from time to time in relation to the Field Group Pension Plan prepared in accordance with the requirements of section 226 Pensions Act 2004.”

 

““Seventh Amendment” means Amendment No. 7 to this Agreement dated as of July 15, 2008.”

 

““Seventh Amendment Effective Date” means the date on which all conditions to effectiveness set forth in Section 2 of the Seventh Amendment have been satisfied.”

 

(b)     The definition of “Applicable Margin” contained in Section 1.1 is hereby amended, for the period commencing with July 1, 2008, by deleting the pricing grid contained therein and substituting in lieu thereof the following pricing grid:

 

“Leverage Ratio	Applicable Margin for LIBO Rate Loans	Applicable Margin for Base Rate Loans
Greater than or equal to 4.50:1	5.50%	4.50%
Less than 4.50:1	3.25%	2.25%”

 

(c)     The definition of “Loan Documents” contained in Section 1.1 is hereby amended by inserting therein after the parenthetical contained therein the phrase “, the Intercreditor Deed,”.

 

(d)     Article II is hereby amended by inserting therein immediately following Section 2.9 thereof the following new Section 2.10.

 

“Section 2.10   Limitations on Borrowing.  Notwithstanding anything set forth in this Agreement to the contrary, commencing with the Seventh Amendment Effective Date, the aggregate amount of Loans that the U.S. Borrower may borrow and have outstanding at any one time under the terms of this Agreement shall not exceed $10,000,000 and such amount may remain outstanding for a period no longer than 10 consecutive Business Days, unless otherwise agreed between the Administrative Agent and the U.S. Borrower.”

 

 

Period	Leverage Ratio
The first Fiscal Quarter of 2008	6.25:1
The second Fiscal Quarter of 2008	7.00:1
The third Fiscal Quarter of 2008	6.25:1
Beginning of the fourth Fiscal Quarter of 2008 and thereafter	5:50:1”

 

(g)     Section 7.2.4(b) is hereby amended and restated in its entirety, for the period commencing with the Seventh Amendment Effective Date, to read as follows:

 

 

(h)     Section 7.2.13 is hereby amended by adding at the end thereof, the following:

 

 

For purposes of Section 8.1.7(d):

 

 

“ITEM 6.13. ENVIRONMENTAL MATTERS.  See “Environmental Matters” discussion in Note 11 to the Consolidated Financial Statements included in Chesapeake Corporation’s quarterly report on Form 10-Q for the quarterly period ended March 30, 2008  regarding potential liability of WTM I Company for natural resources damages and certain environmental remediation related to the lower Fox River, Wisconsin, site.”

 

(ii)    Counterparts of the Consent and Confirmation attached hereto executed by each Subsidiary Guarantor;

 

 

(iv)   A certificate signed by a duly authorized officer of each Borrower stating that:

 

 

 

(d)     the Administrative Agent shall have received all reports and other data of the U.S. Borrower and its Subsidiaries setting forth the current liquidity situation of the U.S. Borrower and its Subsidiaries.

 

SECTION 3.   Representations and Warranties of the Borrowers.  Each Borrower represents and warrants as follows:

 

SECTION 4.   Reference to and Effect on the Loan Documents.  (a)  On and after the Seventh Amendment Effective Date, each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import referring to the Credit Agreement, and each reference in the Notes and each of the other Loan Documents to “the Credit Agreement”, “thereunder”, “thereof” or words of like import referring to the Credit Agreement, shall mean and be a reference to the Credit Agreement, as amended by this Amendment.

 

(b)     The Credit Agreement (including, without limitation, the guarantees by the Borrowers set forth in Section 4.10 thereof), the Notes and each of the other Loan Documents, as specifically amended by this Amendment, are and shall continue to be in full force and effect and are hereby in all respects ratified and confirmed.  Without limiting the generality of the foregoing, the Collateral Documents and all of the Collateral described therein do and shall continue to secure the payment of all Obligations of the Loan Parties under the Loan Documents, in each case as amended by this Amendment.

 

(c)     The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of any Lender or the Administrative Agent under any of the Loan Documents, nor constitute a waiver of any provision of any of the Loan Documents.

 

SECTION 5.   Costs and Expenses.  The Borrowers agree to pay on demand all costs and expenses of the Administrative Agent in connection with the preparation, execution, delivery and administration, modification and amendment of this Amendment and the other instruments and documents to be delivered hereunder and prior amendments and agreements (including, without limitation, the reasonable fees and expenses of counsel for the Administrative Agent (including, Shearman and Sterling LLP, Wragge & Co LLP and local counsel in all foreign jurisdictions where collateral is being sought)) in accordance with the terms of Section 10.3 of the Credit Agreement, with any invoice submitted prior to the Seventh Amendment Effective Date to be paid on the Seventh Amendment Effective Date.

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized, as of the date first above written.