EXHIBIT 10.20
AMENDMENT NO. 2 TO
THE AMENDED AND RESTATED
CREDIT AGREEMENT
AMENDMENT NUMBER 2 TO THE AMENDED AND RESTATED CREDIT AGREEMENT, dated
December 1, 1998 between Disc Graphics, Inc., 00 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxx
Xxxx 00000 ("Borrower") and KeyBank National Association, now known as The Dime
Savings Bank of New York, FSB, 0000 Xxxxx Xxxxxxx, Xxxxxxxx, Xxx Xxxx 00000 (the
"Bank").
RECITALS:
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Bank and Borrower entered in an Amended and Restated Credit Agreement,
dated December 1, 1998, which was previously amended on July 1, 1999 (the
Amended and Restated Credit Agreement and the July 1, 1999 amendment thereto are
together referred to as the "Credit Agreement").
The parties hereto desire to further amend the Credit Agreement on the
terms and conditions hereinafter set forth.
Accordingly, the parties agree as follows:
ARTICLE 1.
AMENDMENTS TO CREDIT AGREEMENT.
Section 1.1. General. Capitalized words and phrases used herein which
are not defined in this Amendment shall have the meanings given to them in the
Credit Agreement. This Amendment constitutes an amendment to the Credit
Agreement and shall not be construed in any way as a replacement or substitution
therefor. All of the terms and provisions of this Amendment are hereby
incorporated by reference into the Credit Agreement as if such terms were set
forth in full therein.
Section 1.2. Amendments to Definitions. Section 1.01 of the Credit
Agreement is hereby amended by deleting the existing definitions of "Current
Debt", "Revolving Credit Commitment", "Revolving Credit Termination Date" and
"Term Loan Maturity Date" and substituting the following in their respective
places:
"Current Debt" means, on the date of determination with
respect to any entity, that portion of such entity's Total
Funded Debt (including Capital Leases) that is due and
payable within 12 months of the date of determination,
excluding however, for the period beginning on January 1,
2000 through and including February 25, 2001, the aggregate
outstanding principal balance of all Revolving Credit Loans.
"Revolving Credit Commitment" means the obligation of the
Bank to extend revolving credit to Borrower in accordance
with the terms hereof in the aggregate principal amount not
to exceed $15,000,000, as such amount may be reduced or
otherwise modified from time to time in accordance with the
terms hereof.
"Revolving Credit Termination Date" means the earlier of (i)
the date on which all Revolving Credit Loans are paid in
full and the Revolving Credit Commitment shall terminate
hereunder and the obligations of Borrower in connection
therewith have been satisfied or (ii) February 25, 2002,
unless such date is not a Banking Day, then the next
succeeding Banking Day.
"Term Loan Maturity Date" means February 25, 2006.
Section 1.3. Financial Covenants. The last sentence which now appears
in Section 10.06 of the Credit Agreement is deleted, effective for the purposes
of compliance with the financial covenants contained in Article 10 as of January
1, 2000.
Section 1.4. The Notes. The form of Notes annexed as Exhibits A-1 and
A-2 to the Credit Agreement is deleted and the Notes annexed hereto as Exhibits
A-1 and A-2 are substituted in their respective places. Exhibit A-1 is herein
referred to as the "Substitute Note". Each reference in the Credit Agreement or
the other Loan Documents to the Revolving Credit Note (whether as such, or as
one of the Notes) shall be deemed to refer to the Substitute Note.
ARTICLE 2.
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Bank as follows:
Section 2.1. Confirm Warranties and Representations. Except as
disclosed in the following sentence, Borrower confirms that each of the
representations and warranties set forth in Article 7 of the Credit Agreement is
true in all material respects as of the date hereof with respect to the Borrower
and, to the extent applicable, the Guarantors, with the same effect as though
made on the date hereof (except when such representation or warranty by its
terms relates to a specific date other than the date hereof), and each is hereby
incorporated herein in full by reference as if fully restated in its entirety.
With respect to the representations contained in section 7.14 of the Credit
Agreement, the Bank acknowledges the occurrence of an event of default under the
terms of the Lease Agreement dated September 1, 1998 between Borrower and the
Suffolk County Industrial Development Agency (the "Lease Agreement"). Since
September 30, 1999, there has been no material adverse change in the business,
operations, assets or financial or other condition of the Borrower, or of the
Borrower and the Guarantors.
Section 2.2. No Default. No Default or Event of Default, as defined in
the Agreement now exists, except as specifically waived in Article 4.
Section 2.3. Corporate Power. The Borrower has the requisite corporate
power and authority to enter into, perform and deliver this Amendment and the
Substitute Note, and any other documents, instruments, agreements or other
writings to be delivered in connection herewith. This Amendment and the
Substitute Note, and all documents contemplated hereby or delivered in
connection herewith, have each been duly authorized, executed and delivered and
the transactions contemplated herein have been duly authorized by all necessary
action.
Section 2.4. Enforceability. This Amendment and the Substitute Note
and any other documents, agreements or instruments now or hereafter executed and
delivered to the Bank by the Borrower in connection herewith constitute (or
shall, when delivered, constitute) valid and legally binding obligations of
Borrower, each of which is and shall be enforceable against Borrower in
accordance with their respective terms.
Section 2.5. Consents. No consent, waiver or approval of any entity is
or will be required in connection with the execution, delivery, performance,
validity or enforcement or priority of this Amendment and the Substitute Note,
or any other agreements, instruments or documents to be executed or delivered in
connection herewith.
Section 2.6. No Omission. No representation, warranty or statement by
the Borrower contained herein or in any other document to be furnished by the
Borrower in connection herewith contains, or at the time of delivery shall
contain, any untrue statement of material fact, or omits or at the time of
delivery shall omit to state a material fact necessary to make such
representation, warranty or statement not misleading.
ARTICLE 3.
CONDITIONS
Section 3.1. Conditions to Effectiveness. This Amendment shall become
effective only upon satisfaction of the following conditions precedent:
(a) The Bank shall have received each of the following
documents, in form and substance reasonably satisfactory to the Bank and its
counsel:
(i) this Amendment and the Substitute Note, duly executed by
the Borrower;
(ii) copies of resolutions of Borrower's Board of Directors
authorizing the execution, delivery and performance of this Amendment
and each other document to be delivered pursuant to this Amendment,
together with a certificate of Borrower's secretary that the articles
of incorporation and the by-laws of the Borrower have not been
amended, modified, revoked or rescinded since the Original Closing
Date;
(iii) Guarantor Confirmation Agreements from each Guarantor;
(iv) Security Agreement confirmations from Borrower and each
Guarantor;
(v) satisfactory evidence that the Borrower and the
Guarantors are duly organized, validly existing and in good standing
under the laws of their respective jurisdictions of incorporation and
each other jurisdiction where qualification is necessary; and
(vi) such other documents, instruments, approvals, opinions
and evidence as the Bank may reasonably require.
(b) The Borrower shall have paid the Bank a fee of $5,000 and the fees
and expenses of the Bank's counsel in connection with the preparation, execution
and delivery of this amendment and the other documents referred to herein.
(c) The Borrower and the Guarantors shall obtain all consents, permits
and approvals required in connection with the execution, delivery and
performance by the Borrower and the Guarantors of their obligations hereunder
and such consents, permits and approvals shall continue in full force and
effect.
(d) All legal matters in connection with this Amendment and financing
shall be reasonably satisfactory to the Bank and their counsel.
ARTICLE 4.
WAIVERS
Section 4.1. Waiver of Non-Compliance with Financial Covenants. The
Bank waives Borrower's non-compliance with the covenants described in Sections
10.02 and 10.04 of the Credit Agreement, but only with respect to the fiscal
quarters ended September 30, 1999 and December 31, 1999, and for the fiscal year
ended December 31, 1999.
Section 4.2. Waiver of Cross Default. (a) Subject to 4.2(b), the Bank
waives Borrower's Default under subsection (e)(iii) of Section 11.01 of the
Credit Agreement, but only with respect to Borrower's obligations under Section
8.22 (violation of current ratio), Section 8.4(c)(iii) (asset purchase which
resulted in an event of default), and Section 10.1(g) (occurrence of an Event of
Taxability) of the Lease Agreement in connection with the issuance of a
$2,003,657 1998 Industrial Development Revenue Bond, issued as of September 1,
1998 (the "Bond").
(b) The waiver of Borrower's default under the Bond is conditional
upon Borrower's refinancing all the Debt represented thereby on or before March
15, 2000, under circumstances where Borrower is not in default under the Debt
then or formerly represented by the Bond, and no other Default or Extent of
Default exists at such time.
Section 4.3. No Other Waiver. The foregoing waivers shall not
constitute a waiver of any further non-compliance with Sections 10.02 or 10.04
or 11.01(e)(iii), or of any other breach, Default or other failure to comply
with any other term or provision of the Credit Agreement.
ARTICLE 5
MISCELLANEOUS
Section 5.1. Counterparts. This Amendment may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument, and any party hereto may execute this Amendment by signing any
such counterpart.
Section 5.2. Credit Agreement. Except as specifically amended hereby,
the Credit Agreement shall remain in full force and effect in accordance with
its terms, unaffected by this Amendment or the waiver contained in Article 4.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment.
The Dime Savings Bank of Disc Graphics, Inc.
New York, FSB
By: /s/ Xxxxxx X. Xxxxx By: /s/ Xxxxxxxx Xxxxxxxx
-------------------- --------------------------------
Name: Xxxxxx X. Xxxxx Name: Xxxxxxxx Xxxxxxxx
Title: Vice President Title: Senior V.P. and CFO
EXHIBIT A-1
AMENDED AND RESTATED
REVOLVING CREDIT NOTE
$15,000,000 February 25, 2000
For value received, Disc Graphics, Inc., a Delaware corporation
("Borrower"), hereby promises to pay to the order of The Dime Savings Bank of
New York, FSB (the "Bank"), at the Bank's office at 0000 Xxxxx Xxxxxxx,
Xxxxxxxx, Xxx Xxxx 00000, on or before February 25, 2002, the principal amount
of $15,000,000, or the actual amount loaned by the Bank to Borrower pursuant to
the "Credit Agreement" (defined below), in lawful money of the United States of
America and in immediately available funds, on the date and in the manner
provided in the Credit Agreement. Borrower also promises to pay interest on the
unpaid principal balance hereof at the rate or rates of interest as provided in
the Credit Agreement, on the dates and in the manner provided therein.
The holder of this Revolving Credit Note shall record the date and
amount of each Revolving Credit Loan made by the Bank, and the date and amount
of each payment of principal or interest, either on the schedule attached
hereto, or on such computer, magnetic disk, tape or other such electronic data
storage and retrieval system as the Bank considers adequate for such purpose, in
its sole and absolute discretion. Any such record shall constitute prima facie
evidence of the accuracy of the information so recorded, but no failure so to
record, or any error in so recording, shall affect the obligation of the
Borrower to repay any Revolving Credit Loans, with interest thereon, as provided
herein or in the Credit Agreement.
This is the Revolving Credit Note referred to in that certain
Revolving Credit Agreement dated February 26, 1997 between Borrower and the Bank
as amended and restated on December 1, 1998, and further amended on July 1, 1999
and February ___, 2000 (the "Credit Agreement"), and evidences the Revolving
Credit Loans made by the Bank thereunder. This Note is a substitute for and
replaces the one given by Borrower in the amount of $10,000,000 on December 1,
1998. All terms not defined herein shall have the meanings given to them in the
Credit Agreement.
The Credit Agreement provides for the acceleration of the maturity of
principal upon the occurrence of certain Events of Default, for a Default Rate
of interest and for pre- payments on the terms and conditions specified therein.
Borrower waives presentment, notice of dishonor, protest and any other
notice or formality with respect to this Revolving Credit Note, except as set
forth in the Credit Agreement.
The terms of this Revolving Credit Note may not be changed orally, but
only by an instrument duly executed by Borrower and the Bank. This Revolving
Credit Note shall be governed by, and interpreted and construed in accordance
with, the laws of the State of New York.
DISC GRAPHICS, INC.
By:_______________________________
Name:
Title:
SCHEDULE OF REVOLVING CREDIT LOANS
Date Type Principal Principal
of of Interest Amount of Maturity Paid or
Loan Loan Rate Loan of Loan Unpaid
---- ---- -------- ----------- ------ -------
EXHIBIT A-2
TERM NOTE
$_______________________ February 25, 2002
For value received, Disc Graphics, Inc., a Delaware corporation
("Borrower"), hereby promises to pay to the order of The Dime Savings Bank of
New York, FSB, a national banking association (the "Bank"), at the Bank's office
at 0000 Xxxxx Xxxxxxx, Xxxxxxxx, Xxx Xxxx 00000, the principal sum of [insert
amount between $2,000,000 and $15,000,000] in 48 equal consecutive monthly
installments of [insert principal amount divided by 48], in lawful money of the
United States of America and in immediately available funds, in the manner
provided in the "Credit Agreement" (defined below) on the first day of each
calendar month commencing on __________, 2002 and ending with a final
installment of all unpaid principal hereunder on the Term Loan Maturity Date.
Borrower also promises to pay interest on the unpaid principal balance hereof at
the fluctuating annual rate of interest equal to the Base Rate plus a margin of
0.5%, as provided in the Credit Agreement, on the dates and in the manner set
forth therein.
This is the Term Loan Note referred to in that certain Credit
Agreement dated February 26, 1997 by and between Borrower and the Bank, as
amended and restated on December 1, 1998 and further amended on July 1, 1999 and
February ___, 2000 (the "Credit Agreement"), and evidences the Term Loan made by
the Bank thereunder. All terms not defined herein shall have the meanings given
to them in the Credit Agreement.
The Credit Agreement provides for the acceleration of the maturity of
principal upon the occurrence of certain Events of Default, for a Default Rate
of interest and for pre-payments on the terms and conditions specified therein.
Borrower waives presentment, notice of dishonor, protest and any other
notice or formality with respect to this Term Loan Note. The terms of this Term
Loan Note may not be changed orally, but only by an instrument duly executed by
Borrower and the Bank.
This Term Loan Note shall be governed by, and interpreted and
construed in accordance with, the laws of the State of New York.
DISC GRAPHICS, INC.
By:_______________________________
Name:
Title:
