EXHIBIT 2.5
AGREEMENT OF AMENDMENT
THIS AGREEMENT OF AMENDMENT (the "Agreement") made this 1st day of
July 1999, between KEYBANK NATIONAL ASSOCIATION, a national banking association,
with an office for the transaction of business located at 0000 Xxxxx Xxxxxxx,
Xxxxxxxx, Xxx Xxxx 00000 ("KeyBank" or "Bank"), and DISC GRAPHICS, INC., a
Delaware corporation, having an office for the transaction of business at 00
Xxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000 (the "Borrower").
WHEREAS, KeyBank and Borrower entered into a credit agreement dated
February 26, 1997 and thereafter entered into an amended and restated credit
agreement dated December 1, 1998 (collectively, "Credit Agreement"); and
WHEREAS, the Borrower is about to purchase all assets of Contemporary
Color Graphics, Inc. ("Contemporary") and Progressive Label and Litho, Inc. and
the Borrower has asked the Bank, in connection with such purchase, to amend
certain requirements under the Credit Agreement; and
WHEREAS, by this Agreement, the parties hereto have agreed to amend
the Credit Agreement such that:
(1) under Section 9.01 of the Credit Agreement, Borrower shall be
permitted to incur (a) the debt evidenced by that certain Promissory Note in the
amount of $1,000,000 made by the Borrower to Contemporary Color Graphics, Inc.,
(b) the debt created by that certain Convertible Debenture in the amount of
$600,000 made by Borrower to Contemporary Color Graphics, Inc., and (c) the debt
evidenced by that certain Supplemental Note in the amount of $1,000,000 made by
Borrower to Contemporary Color Graphics, Inc., each dated on or about July 1,
1999 in connection with Borrower's purchase of Contemporary; and
(2) under Section 9.01 of the Credit Agreement, Borrower shall be
permitted to assume the debt of Contemporary in an amount not to exceed
$1,400,000 relating to Contemporary's existing equipment lease financings; and
(3) under Section 9.02 of the Credit Agreement, (a) the liens on the
specific leased equipment representing the collateral for the debt of
Contemporary Borrower is assuming under Section 9.01 above, shall be permitted,
as some are evidenced by the existing UCC-1 filings set forth on Schedule A
attached hereto, which UCC filings shall be assigned to and assumed by Borrower,
as Debtor and (b) subordinate liens on Borrower's assets held by Contemporary as
collateral for the Promissory Note and Debenture referenced in Section 9.01
above, shall be permitted; and
(4) under Section 10.03 of the Credit Agreement, Maximum Liabilities
to Worth Ratio shall be amended to calculate the ratio on the basis of Total
Liabilities to Net Worth; and
NOW, THEREFORE, in consideration of the mutual covenants and
provisions herein contained and other good and valuable consideration, the
parties hereto agree as follows:
1. The Credit Agreement is hereby amended as follows:
(a) Section 9.01 (a) is hereby amended to add a new subparagraph (v)
which shall read as follows:
(v) Debt of Borrower to Contemporary Color Graphics, Inc. in the
amount of $1,000,000 evidenced by Borrower's Promissory Note dated July 1, 1999,
debt of Borrower to Contemporary Color Graphics, Inc. evidenced by Borrower's
Convertible Debenture dated July 1, 1999 in the amount of $600,000, and debt of
Borrower to Contemporary in the amount of $1,000,000 evidenced by Borrower's
supplemental note dated July 1, 1999.
(b) Section 9.01(a) is further amended to add a new subparagraph (vi)
which shall read as follows:
(vi) The assumption of the existing debt of Contemporary Color
Graphics, Inc. in an amount not to exceed $1,400,000 representing existing
financings of certain equipment leases.
(c) Section 9.02 of the Credit Agreement is hereby amended to add a
new subparagraph (g) and a new subparagraph (h) which shall read as follows:
(g) Liens in connection with Borrower's assumption of equipment
lease financings in an amount not to exceed $1,400,000 in connection with
Borrower's purchase of the assets of Contemporary Color Graphics, Inc., which
liens are on specific pieces of leased equipment and are evidenced by the UCC-1
financing statements listed on Schedule A annexed hereto, to be assigned to and
assumed by Borrower simultaneously herewith.
(h) Subordinate liens on Borrower's assets held by Contemporary
Color Graphics, Inc, as collateral for the Promissory Note and Debenture
referenced in Section 9.01.
(d) Section 10.03 of the Credit Agreement is hereby amended to read as
follows:
"Section 10.03. Maximum Liabilities to Worth Ratio. Borrower shall
maintain on a consolidated basis at all times a ratio of Total Liabilities to
Net Worth of not more than 2.75:1.0. Net Worth means, at any particular date,
the amount of excess of Total Assets over Total Liabilities which would, in
accordance with GAAP, be included under shareholders' equity on a consolidated
balance sheet of Borrower and its Subsidiaries as at such date.
2. Except as specially modified herein the terms and conditions
contained in the Credit Agreement remain in full force and effect and each of
the undersigned specifically approves of, ratifies and reaffirms the terms and
conditions of the Credit Agreement and each
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of the other documents executed in connection with the Credit Agreement to which
the Borrower and the Bank are parties or which the Borrower and/or the
Guarantors (as such term is defined in the Credit Agreement) executed and
heretofore delivered to the Bank.
3. All capitalized terms not defined herein shall have the meanings
ascribed to such terms in the Credit Agreement.
4. This Agreement forms an integral part of the Credit Agreement.
5. This Agreement may be executed in any number of counterparts, and
each such counterpart hereof shall be deemed to be an original instrument, but
all such counterparts together shall constitute but one Agreement.
6. This Agreement shall not become effective until the date on which
the Agreement shall have been duly executed and delivered by each of the parties
hereto and the Bank shall have received an executed copy hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
DISC GRAPHICS, INC
(Borrower)
By: /s/ Xxxxxx Xxxxxx
---------------------
Xxxxxx Xxxxxx
President and Chief Executive Officer
KEYBANK NATIONAL ASSOCIATION
By: /s/ Xxxxxx X. Xxxxx
----------------------
Xxxxxx X. Xxxxx
Vice President
AGREED TO BY:
FOUR SEASONS LITHO, INC.
By: /s/ Xxxxxx Xxxxxx
-----------------
Name: Xxxxxx Xxxxxx
Title: President
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DISC GRAPHICS LABEL GROUP, INC.
By: /s/ Xxxxxx Xxxxxx
-----------------
Name: Xxxxxx Xxxxxx
Title: President
COSMETIC SAMPLING TECHNOLOGIES, INC.
By: /s/ Xxxxxx Xxxxxx
-----------------
Name: Xxxxxx Xxxxxx
Title: President
STATE OF NEW YORK )
)ss.:
COUNTY OF SUFFOLK )
On the 1st day of July, 1999, before me the subscriber personally
appeared, Xxxxxx Xxxxxx, who being by me duly sworn, did depose and say that he
resides at 00 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx; that he is President and Chief
Executive Officer of DISC GRAPHICS, INC., the corporation described in and which
executed the foregoing instrument; and that he signed his name thereto by order
of the Board of Directors of said corporation.
/s/ Xxxxx Xxxxx
---------------
Notary Public
STATE OF NEW YORK )
)ss.:
COUNTY OF SUFFOLK )
On the 1st day of July, 1999, before me the subscriber personally
appeared, XXXXXX X. XXXXX, who being by me duly sworn, did depose and say that
he has an address c/o KeyBank National Association, 0000 Xxxxx Xxxxxxx,
Xxxxxxxx, Xxx Xxxx; that he is a Vice President at KEYBANK NATIONAL ASSOCIATION,
the corporation described in and which executed the foregoing instrument; and
that he signed his name thereto by order of the Board of Directors of said
corporation.
/s/ Xxxxx Xxxxx
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Notary Public
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Schedule A
Permitted Liens
Xxxxxx X. Xxxxxx Co. - Cosigned Inventory consisting of films, photographic
paper, chemistry and supplies
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