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EXHIBIT 10.2
THIRD AMENDMENT AND SUPPLEMENT TO
LOAN AGREEMENT
THIS THIRD AMENDMENT AND SUPPLEMENT TO LOAN AGREEMENT (this "Third
Amendment"), dated as of November 1, 1996, is entered into by and between
TRANSFER PRINT FOILS, INC., a New Jersey corporation (the "Borrower"), and
FIRST UNION NATIONAL BANK, formerly known as First Fidelity Bank, National
Association (the "Bank").
RECITALS:
A. The Borrower and the Bank are parties to a certain Loan
Agreement, dated March 17, 1993, as amended by First Amendment to Loan
Agreement and Confirmation of Guaranties, dated as of March 10, 1995 (the
"First Amendment"), and by Second Amendment to Loan Agreement and Confirmation
of Guaranties, dated June 28, 1996 (the "Second Amendment;" the Loan Agreement,
as amended by the First Amendment and Second Amendment, the "Loan Agreement");
and
B. The Borrower has requested that the Bank make available to the
Borrower a revolving credit facility in the maximum amount of $2,000,000 (the
"New Revolver"); and
C. The Bank is willing to make the New Revolver available to the
Borrower, upon and subject to the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the covenants and
agreements set forth herein, and for value received by each party, the parties
hereto agree as follows:
SECTION 1. DEFINITIONS
1.1 EXISTING DEFINITIONS. Unless otherwise defined herein,
capitalized terms used herein shall have the meanings set forth in the Loan
Agreement. The definitions of the following defined terms are amended as set
forth herein and such amended definitions shall apply wherever such defined
terms are used in the Loan Documents.
(a) ADJUSTED LIBO RATE. The definition of the term "Adjusted LIBO
Rate" set forth in the Loan Agreement is amended to insert the words "and New
Interest Period" after the words "Interest Period" in the first line thereof.
(b) ADVANCE. The definition of the term "Advance" set forth in the
Loan Agreement is deleted and the following is substituted therefor:
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"ADVANCE" means an amount loaned by the Bank, as lender, to the
Borrower, as borrower, under the New Revolver."
(c) AGREEMENT. The definition of the term "Agreement" set forth in the
Loan Agreement is deleted and the following is substituted therefor:
"AGREEMENT" means the Loan Agreement, as amended, modified and
supplemented from time to time, and any appendices, exhibits or
schedules to any of the foregoing."
(d) BORROWING DATE. The definition of the term "Borrowing Date" set
forth in the Loan Agreement is deleted and the following is substituted
therefor:
"BORROWING DATE" means the Business Day or Working Day on which
an Advance is to be made under the New Revolver."
(e) EURODOLLAR RATE. The definition of the term "Eurodollar Rate" set
forth in the Loan Agreement is amended to insert the words "or outstanding
portion of the New Term Loan" after the words "Acquisition Term Loan" in the
third line thereof.
(f) LOANS. The definition of the term "Loans" set forth in the Loan
Agreement is deleted and the following is substituted therefor:
" LOANS' means, collectively, the Term Loan, the Acquisition
Term Loan, the New Revolver and the New Term Loan."
(g) LOAN DOCUMENTS. The definition of the term "Loan Documents" set
forth in the Agreement is hereby deleted and the following is substituted
therefor:
"LOAN DOCUMENTS' means the Agreement, the Notes, the Guaranties,
the Security Agreements and all instruments, agreements,
certificates and other documents executed and/or delivered in
connection with the Loans, and any amendments or supplements to,
or restatements of, any thereof."
(h) NOTES. The definition of the term "Notes" set forth in the Loan
Agreement is deleted and the following is substituted therefor:
"`NOTES' means, collectively, the Term Note, the Acquisition
Term Note, the New Revolver Note and the New Term Note."
(i) REPAYMENT INDEMNITY. The definition of the term "Repayment
Indemnity" set forth in the Loan Agreement is amended to insert the words; (i)
"or the New Term Loan" after the words "Term Loan" in the fifth line and
forty-first line thereof, (ii) "of the Loan Agreement and/or Section 2.10 of the
Third Amendment" after the words "Section 2.02(d))" in the seventh
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line thereof: and (iii) "or the outstanding principal amount of the New Term
Loan" after the word "Loan" in the eleventh line thereof.
(j) TANGIBLE NET WORTH. The definition of the term "Tangible Net Worth"
set forth in the Loan Agreement is amended to delete the words "less
intangibles" in the second line thereof and to substitute the words "less
Intangible Assets" therefor.
1.2. ADDITIONAL DEFINITIONS. For purposes of the Agreement and the other
Loan Documents, the following terms shall have the meanings assigned to them in
this Section 1.2:
"AVAILABLE COMMITMENT" means, at any time, an amount equal to the
excess, if any, of (i) the amount of the New Commitment, over (ii) the aggregate
principal amount of all Advances then outstanding.
"BASE RATE LOANS" means, with regard to Advances and the New Term Loan.
Loans whose interest rate is based on the Base Rate.
"COLLATERAL" means all present and future property in which the Borrower
and the Guarantors shall grant to the Bank a lien as security for their
obligations to the Bank.
"COMMITMENT PERIOD" means the period from and including the date of this
Third Amendment to but not including the Term Loan Commencement Date or such
earlier date on which the New Commitment shall terminate as provided herein.
"CURRENT ASSETS" means, as of any date, the current assets which would
be reflected on a balance sheet of the Borrower and the Guarantors on a
consolidated basis prepared as of such date in accordance with GAAP, but
excluding: (i) accounts receivable which did not arise from the sale of goods or
from services rendered in the ordinary course of business and for which adequate
reserves have not been established, (ii) Intangible Assets, and (iii) amounts
due from affiliates and from employees who are not affiliates.
"CURRENT LIABILITIES" means as of any date, the current liabilities
which would be reflected on a balance sheet of the Borrower and the Guarantors
on a consolidated basis prepared as of such date in accordance with GAAP.
"DIVIDENDS" means dividends, distributions of payments of any kind made
by Borrower or any of the Guarantors in respect of the capital stock of any of
them.
"EURODOLLAR LOANS" means, with regard to Advances and the New Term Loan,
Loans whose rate of interest is based upon the Adjusted LIBO Rate.
"INTANGIBLE ASSETS" means, as to any person or entity, those assets
which are (i) deferred assets, other than prepaid insurance and prepaid taxes,
(ii) trademarks, tradenames, copyrights, technology, know-how and processes,
(iii) goodwill and other assets which would be classified as intangible assets
on a balance sheet of such person or entity prepared in accordance with
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GAAP, (iv) unamortized debt discount and expense, and (v) costs in excess of
fair value of net assets acquired.
"INTEREST PAYMENT DATE" means with regard to Advances and the New Term
Loan; (i) as to any Base Rate Loan, the last day of each month to occur while
such Loan is outstanding, and (ii) as to any Eurodollar Loan, the last day of
the New Interest Period applicable to such Loan. Interest shall accrue from and
including the first day of a New Interest Period to but excluding the last day
of such New Interest Period.
"LIBO MARGIN" means, for any day; (i) for Advances outstanding under the
New Revolver, one percent (1.0%) per annum, and (ii) for amounts outstanding
under the New Term Loan, one and one-quarter percent (1.25%) per annum.
"NEW COMMITMENT" means the agreement of Bank to make Advances to the
Borrower under the New Revolver in an aggregate principal amount at any one time
outstanding not to exceed the sum of $2,000,000, as such amount may be reduced
from time to time in accordance with the terms of this Third Amendment.
"NEW INTEREST PERIOD" means, with respect to any Eurodollar Loan; (a)
initially, the period commencing on the Borrowing Date, date of conversion under
Section 2.8 or Term Loan Commencement Date, as the case may be, with respect to
such Eurodollar Loan and ending one or three months thereafter, as selected by
the Borrower; and (b) thereafter for each such Eurodollar Loan, each period
commencing on the last day of the next preceding New Interest Period applicable
to such Eurodollar Loan and ending one or three months thereafter, as selected
by the Borrower by irrevocable notice to the Bank not less than three Working
Days prior to the last day of the then current New Interest Period with respect
thereto; provided that the foregoing provisions relating to New Interest Periods
are subject to the following:
(i) any New Interest Period which would otherwise end on
a date which is not a Working Day shall be extended to the next
succeeding Working Day unless such Working Day falls in another
calendar month, in which case such New Interest Period shall end
on the next preceding Working Day;
(ii) any New Interest Period which begins on the last
Working Day of a calendar month (or a day for which there is no
numerically corresponding day in the calendar month at the end
of such New Interest Period) shall end, subject to clause (iii)
below, on the last Working Day of a calendar month; and
(iii) with respect to any principal to be repaid, in no
event shall any New Interest Period extend beyond the date on
which such principal sum is due.
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"NEW MATURITY DATE" means the first Business Day which is five years
after the Term Loan Commencement Date.
"NEW REVOLVER NOTE" means the promissory note, in substantially the form
of Exhibit "A" annexed to this Third Amendment, executed and delivered by the
Borrower to the Bank, evidencing the New Revolver, and any amendment,
modification, restatement or renewal thereof or replacement or substitution
therefor.
"NEW TERM LOAN" means the term loan described in Section 2.6 hereof
arising upon the Term Loan Commencement Date.
"NEW TERM NOTE" means the promissory note, in substantially the form of
Exhibit "B" annexed to this Third Amendment, to be executed and delivered by the
Borrower to the Bank on the Term Loan Commencement Date, evidencing the New Term
Loan, and any amendment, modification, restatement or renewal thereof or
replacement or substitution therefor.
"RENT" means as to any person or entity for any period, the aggregate
amount of fixed and contingent rentals (other than capital lease obligations)
payable by such person or entity for such period with respect to leases of real
and personal property.
"TERM LOAN COMMENCEMENT DATE" means the earlier of the following to
occur; (i) the first day on which the full principal amount of the Commitment
shall be outstanding, or (ii) November 1, 1997.
"THIRD AMENDMENT" means this Third Amendment and Supplement to Loan and
Security Agreement.
"TYPE means, as to any Advance or amount outstanding under the New Term
Loan, its nature as a Base Rate Loan or a Eurodollar Loan.
SECTION 2. THE NEW REVOLVER
2.1. COMMITMENT.
(a) Subject to the terms and conditions of this Third Amendment,
provided that no Event of Default has occurred and is continuing, the Bank
agrees from time to time during the Commitment Period to make Advances to the
Borrower; provided, however, that at no time shall the sum of the aggregate
amount of Advances outstanding exceed the amount of the New Commitment then in
effect; and provided further that the amount of any Advance shall not exceed an
amount equal to eighty percent (80%) of the aggregate amount of the Capital
Expenditure being financed therewith.
(b) If at any time the sum of the aggregate amount of Advances
outstanding exceeds the amount of the New Commitment then in effect, Borrower
shall immediately pay to
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Bank, without demand by Bank, the amount of such excess. Subject to the
foregoing, Borrower may borrow, repay and reborrow hereunder up to the full
amount permitted.
(c) Advances may from time to time be (i) Eurodollar Loans, (ii)
Base Rate Loans, or (iii) a combination thereof, as determined by the Borrower
and notified to the Bank in accordance with subsections 2.3 and 2.8. provided
that no Advance shall be made as a Eurodollar Loan after the day that is one
month prior to the Term Loan Commencement Date.
2.2. NEW REVOLVER NOTE.
The Advances shall be evidenced by the New Revolver Note, payable to the
order of Bank and in a principal amount equal to the amount of the New
Commitment. Bank is hereby authorized to record the date, Type and amount of
each Advance made by Bank, each continuation thereof, each conversion of all or
a portion thereof to another Type, the date and amount of each payment or
prepayment of principal thereof and, in the case of Eurodollar Loans, the length
of each New Interest Period with respect thereto, on the schedule annexed to and
constituting a part of the New Revolver Note, and any such recordation shall
constitute prima facie evidence of the accuracy of the information so recorded.
The New Revolver Note shall (i) be dated the date hereof, (ii) be stated to
mature on the Term Loan Commencement Date, and (iii) provide for the payment of
interest in accordance with subsection 2.9.
2.3. PROCEDURE FOR ADVANCES.
(a) The Borrower may borrow under the New Commitment during the
Commitment Period on any Working Day, in the case of Eurodollar Loans, or on any
Business Day, otherwise. Not less than three (3) Working Days, in the case of
Eurodollar Loans, or one (1) Business Day, in the case of Base Note Loans, not
later than 11:00 a.m., New York City time, prior to the requested Borrowing
Date, Borrower shall give the Bank irrevocable notice specifying the amount to
be borrowed, the requested Borrowing Date, whether the borrowing is to be a
Eurodollar Loan, Base Rate Loan or a combination thereof and, if the borrowing
is to be entirely or partly a Eurodollar Loan, the amount of such Advance and
the length of the initial New Interest Period therefor. Upon making any request
for an Advance, the Borrower shall provide to the Bank a true and complete copy
of the documentation, including without limitation, the purchase orders,
relating to the Capital Expenditures in connection with which the Advance is
being requested. Each borrowing under the New Commitment shall be in an amount
equal to (x) in the case of Base Rate Loans, $100,000 or a whole multiple of
$100,000 in excess thereof (or, if the then Available Commitment is less than
$100,000, such lesser amount) and (y) in the case of Eurodollar Loans, $250,000
or a whole multiple of $100,000 in excess thereof (or, if the then Available
Commitment is less than $250,000, such lesser amount).
(b) Subject to all other terms and conditions of this Agreement,
the Bank will make the proceeds of Advances available to the Borrower on the
Borrowing Date by crediting the account of the Borrower on the Bank's books with
the aggregate of the amount of the Advances requested.
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2.4. FACILITY FEE.
The Borrower agrees to pay to the Bank a facility fee during the
Commitment Period, computed at the rate of one-quarter of one percent (0.25%)
per annum, on the average daily amount of the Available Commitment during the
period for which payment is made, payable quarterly in arrears on the last
Business Day of each March, June, September and December and on the Term Loan
Commencement Date or such earlier date as the New Commitment shall terminate or
be no longer available as provided herein, commencing on the first of such dates
to occur after the date hereof.
2.5. TERMINATION OR REDUCTION OF NEW COMMITMENT.
The Borrower shall have the right, upon not less than five (5)
Business Days' notice to the Bank, to terminate the New Commitment or, from time
to time, to reduce the amount of the New Commitment. Any such reduction shall be
in an amount equal to $250,000 or a whole multiple thereof and shall reduce
permanently the New Commitment then in effect. Simultaneously with any
termination or reduction of the New Commitment, the Borrower shall pay the
facility fee required pursuant to Section 2.4 hereof due on the amount
terminated or reduced through the date of such termination or reduction. Any
amounts so reduced may not be reborrowed.
2.6. CONVERSION TO NEW TERM LOAN.
(a) Provided that no Event of Default has occurred and is continuing,
the outstanding principal balance of Advances shall be converted to a term loan
(the "New Term Loan") on the Term Loan Commencement Date, with the principal
amount of such New Term Loan payable in equal calendar quarterly installments
over a period of five (5) years from such date, together with interest as
provided in Section 2.9. Such term loan shall be evidenced by the New Term Note,
with appropriate insertions as to the amount thereof and payments thereunder, to
be executed and delivered by the Borrower to the Bank on the Term Loan
Commencement Date.
(b) Amounts outstanding under the New Term Loan may from time to time be
Eurodollar Loans, Base Rate Loans or a combination thereof, as determined by the
Borrower and notified to the Bank in accordance with this subsection and
subsection 2.8. The Borrower shall give the Bank irrevocable notice (which
notice must be received by the Bank prior to 10:00 A.M., New York City time,
three (3) Working Days prior to the Term Loan Commencement Date, if all or any
part of the New Term Loan is to be initially Eurodollar Loans, or prior to 12:00
noon, New York City time, one (1) Business Day prior to the Term Loan
Commencement Date, if all of the New Term Loan is to be initially a Base Rate
Loan) requesting that the Bank make the New Term Loan on the Term Loan
Commencement Date and specifying whether the New Term Loan to be initially
Eurodollar Loans or Base Rate Loans or a combination thereof, and if the New
Term Loan is to be entirely or partly Eurodollar Loans, the amounts of such
Eurodollar Loans and the length of the initial New Interest Period or New
Interest Periods therefor.
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(c) Other than the outstanding principal balance of Advances on the Term
Loan Commencement Date, amounts outstanding under the New Term Loan shall be in
amounts equal to (i) in the case of Base Rate Loans, $100,000 or a whole
multiple of $100,000 in excess thereof, and (ii) in the case of Eurodollar
Loans, $250,000 or a whole multiple of $100,000 in excess thereof.
2.7. OPTIONAL PREPAYMENTS.
(a) From time to time the Borrower may prepay the Loans, in whole or in
part upon at least one Business Day's irrevocable notice to the Bank with
respect to Base Rate Loans and three (3) Working Business Days' irrevocable
notice to the Bank with respect to Eurodollar Loans, specifying the date and
amount of prepayment and whether the prepayment is of Eurodollar Loans, Base
Rate Loans or a combination thereof, and, if a combination thereof, the amount
allocable to each. In the event that the Borrower shall prepay a Eurodollar Loan
on a date other than the last day of the New Interest Period applicable thereto,
Borrower shall also pay to the Bank the Repayment Indemnity with respect to such
payment. Partial prepayments shall be in an aggregate principal amount of
$250,000 or a whole multiple thereof.
(b) If any notice of prepayment is given, the amount specified in such
notice shall be due and payable on the date specified therein, together with
accrued interest to the payment date on the amount prepaid. The Repayment
Indemnity shall be payable by Borrower upon a voluntary or involuntary
prepayment, whether upon acceleration after the occurrence of an Event of
Default or otherwise.
2.8. CONVERSION AND CONTINUATION OPTIONS.
The Borrower shall have the right at any time upon prior irrevocable
notice to the Bank (i) not later than 12:00 noon, New York City time, one (1)
Business Day prior to conversion, to convert any Eurodollar Loan to a Base Rate
Loan, (ii) not later than 10:00 a.m., New York City time, three (3) Working Days
prior to conversion or continuation, to convert any Base Rate Loan into a
Eurodollar Loan or to continue any Eurodollar Loan as a Eurodollar Loan for any
additional Interest Period and (iii) not later than 10:00 a.m., New York City
time, three (3) Working Days prior to conversion, to convert the New Interest
Period with respect to any Eurodollar Loan to another permissible New Interest
Period, subject in each case to the following:
(a) a Eurodollar Loan may not be converted at a time other than the
last day of the New Interest Period applicable thereto;
(b) any portion of a Loan maturing or required to be repaid in less
than one month may not be converted into or continued as a
Eurodollar Loan;
(c) no Eurodollar Loan may be continued as such and no Base Rate
Loan may be converted to a Eurodollar Loan when any Event of
Default has occurred
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and is continuing and the Bank has determined that such a
continuation is not appropriate;
(d) any portion of a Eurodollar Loan that cannot be converted into
or continued as a Eurodollar Loan by reason of paragraphs (b) or
(c) automatically shall be converted at the end of the New
Interest Period in effect for such Loan to a Base Rate Loan; and
(e) on the last day of any New Interest Period for Eurodollar Loans,
if the Borrower has failed to give notice of conversion or
continuation as described in this subsection or if such
conversion or continuation is not permitted, such Loans shall be
converted to Base Rate Loans on the last day of such then
expiring New Interest Period.
2.9. INTEREST RATES AND PAYMENT DATES.
(a) Each Base Rate Loan shall bear interest at a rate per annum equal to
the Base Rate.
(b) Each Eurodollar Loan shall bear interest at a rate per annum equal
to the Adjusted LIBO Rate for the New Interest Period in effect for such
Eurodollar Loan plus the applicable LIBO Margin.
(c) Interest shall be payable in arrears on each Interest Payment Date,
and shall be charged automatically to Borrower's account with Bank.
(d) As soon as practicable the Bank shall notify the Borrower of each
determination of an Adjusted LIBO Rate and the effective date and the amount of
each change in the interest rate on a Loan. Any change in the Base Rate shall be
effective on the day on which such change occurs. Each determination of an
interest rate by the Bank pursuant to any provision of this Third Amendment
shall be conclusive and binding on the Borrower in the absence of clearly
demonstrable error. At the request of the Borrower, the Bank shall deliver to
the Borrower a statement showing the quotations used by the Bank in determining
any interest rate pursuant to subsections 2.9(a) or (b).
2.10. CHANGE IN LEGALITY.
Notwithstanding any other provision herein, if any change in any
requirement of law or in the interpretation or application thereof shall make it
unlawful for Bank to make or maintain Eurodollar Loans as contemplated by this
Third Amendment, then; (a) the Bank's agreement hereunder to make Eurodollar
Loans, continue Eurodollar Loans as such and convert Base Rate Loans to
Eurodollar Loans forthwith shall be cancelled, and (b) Loans then outstanding as
Eurodollar Loans, if any, automatically shall be converted to Base Rate Loans on
the respective last days of the then current New Interest Periods with respect
to such Loans or within such earlier period as required by law. If any such
conversion of a Eurodollar Loan occurs on a day
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which is not the last day of the then current New Interest Period with respect
thereto, the Borrower shall pay to such Lender such amounts, if any, as may be
required pursuant to the Repayment Indemnity.
2.11. AMENDMENT OF CERTAIN APPLICABLE PROVISIONS.
(a) Section 2.05 of the Loan Agreement is amended to insert the words
"or Advances or the New Term Loan" after the words "Revolving Loan or the Term
Loan," in the third paragraph thereof.
(b) Section 2.09 of the Loan Agreement is amended to:
(i) insert the words "or New Interest Period" after the
words "Interest Period" whenever the words "Interest
Period" appear therein, and
(ii) in the event that the provisions of Section 2.09 of the
Loan Agreement shall become applicable to Advances or to
the New Term Loan, delete the words "minus
three-quarters percent (3/4%)" in the second sentence
thereof.
(c) In all other respects, the provisions of Sections 2.05, 2.06, 2.07,
2.08 and 2.09 of the Loan Agreement shall apply with full force and effect to
amounts outstanding under the New Revolver and the New Term Loan as if set forth
at length herein.
2.12. USE OF PROCEEDS. The proceeds of the New Revolver shall be used by
the Borrower to make Capital Expenditures.
SECTION 3. CONDITIONS PRECEDENT
3.1. CONDITIONS TO THE NEW REVOLVER AND NEW TERM LOAN. Notwithstanding
any other provision of this Third Amendment, the Bank shall not be obligated to
make Advances or to agree to the conversion of Advances outstanding on the Term
Loan Commencement Date to the New Term Loan unless, in each case, no Event of
Default shall have occurred and be continuing and the Bank shall have received
(or waived receipt of, in writing) the following, all in form and substance
satisfactory to the Bank and its counsel:
(a) The New Revolver Note, duly executed and delivered by the Borrower
to the Bank;
(b) The Guarantors Agreement, in substantially the form of Exhibit "C"
annexed hereto, duly executed and delivered by the Guarantors to the Bank;
(c) The Security Agreements, in substantially the form of Exhibit "D"
annexed hereto duly executed and delivered by the Borrower and the Guarantors to
the Bank;
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(d) Resolutions of the boards of directors of the Borrower and the
Guarantors, certified by the Secretary of each of them as of the date hereof to
be duly adopted and in full force and effect on such date, authorizing (i) the
consummation of each of the transactions contemplated by this Third Amendment,
and (ii) specific officers to execute and deliver this Third Amendment and the
other Loan Documents in connection therewith;
(e) Certificates of the chief financial officers of the Borrower and the
Guarantors stating that all of the representations and warranties of Borrower
and the Guarantors contained herein and in any of the Loan Documents are true
and complete on and as of the date hereof as though made on and as of such date,
and that no event has occurred and is continuing, or would result from the
making of Advances, which constitutes or would constitute an Event of Default;
(f) Certificates of the Secretaries of each of the Borrower and the
Guarantors certifying the names of the officers of each of them authorized to
sign this Third Amendment and each of the Loan Documents in connection herewith,
together with true signatures of each of such officers;
(g) Certificates of the appropriate governmental authorities, dated the
most recent practicable date prior to the hereof, showing that Borrower and the
Guarantors are in good standing in the State of New Jersey and in such other
jurisdictions as the Bank shall reasonably request;
(i) Opinions of counsel to Borrower and the Guarantors, in substantially
the form of Exhibits "E" and "F", respectively, annexed hereto;
(j) UCC financing statements and other filings or recordings deemed
necessary by the Bank in order to perfect its security interests in the
Collateral;
(k) Landlords' consents and waivers with respect to the premises located
at 9, 15 and 00 Xxxxxxx Xxxx, Xxxx Xxxxxxxxx, Xxx Xxxxxx, and at 000 Xxxxx xx
Xxxxxxx, Xxxxxxxx, Xxxxxx, X0X 0X0, Xxxxxx, duly executed and delivered by the
landlord thereof;
(l) Results of UCC, judgment, tax and other lien searches relating to
the Borrower and the Guarantors disclosing no liens other than liens for which
termination statements or discharges have been obtained;
(m) Evidence that the insurance policies provided for in Section 5.01(g)
of the Loan Agreement are in full force and effect, with appropriate loss payee
and additional insured clauses in favor of the Bank, certified by the insurer;
(n) Payment of a $5,000 commitment fee to the Bank, which shall be
non-refundable and shall be deemed fully earned upon the payment thereof, and
all fees and expenses incurred by the Bank in connection with this Third
Amendment including, but not limited to, fees and expenses of attorneys;
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(o) On the Term Loan Commencement Date, the New Term Note, completed in
all applicable respects and duly executed and delivered by the Borrower to the
Bank; and
(p) Such additional information and documents as the Bank may request.
SECTION 4. RATIFICATION OF THE FIRST AMENDMENT
4.1. The parties hereto agree that the substantive terms of the First
Amendment, a copy of which is annexed hereto as Exhibit "F", are ratified and
confirmed, effective as of March 10, 1995, notwithstanding the fact that certain
conditions precedent have not been satisfied, subject to the amendment and
modification of certain terms as set forth in this Third Amendment.
SECTION 5. RATIFICATION AND AMENDMENT OF REPRESENTATIONS, WARRANTIES AND
COVENANTS
5.1. RATIFICATION. Borrower hereby ratifies, confirms and restates, as
if set forth herein in their entirety, all representations, warranties,
covenants, acknowledgments and agreements set forth in Sections 4 and 5 of the
Loan Agreement, as amended prior the date hereof, at and as of the date hereof
(other than representations, warranties and covenants which expressly speak only
as of a different date), and affirmatively states that all of the same are true
and accurate and shall be and remain in full force and effect, subject only to
changes effected by this Third Amendment and/or changes previously disclosed to
the Bank in writing. In addition, Borrower represents and warrants to the Bank
that:
(a) Borrower has the power and authority to enter into this Third
Amendment;
(b) the audited consolidated financial statements of Borrower as at
March 31, 1996 and unaudited consolidated financial statements of Borrower as at
June 30, 1996, which were furnished previously to the Bank, were prepared in
accordance with GAAP consistently applied throughout the period involved, and
present fairly the financial position of Borrower as at the date thereof and the
results of operations and cash flows of Borrower for the period then ended;
(c) no changes having a material adverse effect have occurred since the
date of such financial statements referred to in Section 5.1(b) above;
(d) the execution, delivery and performance of this Third Amendment and
the instruments and agreements executed and delivered in connection herewith by
the Borrower have been duly authorized by all requisite corporate action and
this Third Amendment and the instruments and agreements executed and delivered
in connection herewith constitute the legal, valid and binding obligations of
the Borrower, enforceable against it in accordance with their terms;
(e) the Borrower is not in default with respect to any judgment, writ,
injunction, decree, rule or regulation of any court or other governmental
authority which would have a material adverse effect;
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(f) (i) the Borrower has no defenses, offsets or counterclaims against
the Bank as to the repayment of any of the obligations under the Loan Agreement
or any of the other Loan Documents, and (ii) the principal amount outstanding
under (a) the Term Loan is $1,890,000 plus accrued and unpaid interest and late
charges, if any, and (b) the Acquisition Term Loan is $1,818,750 plus accrued
and unpaid interest and late charges, if any, and (c) a certain line of credit
evidenced by a note dated June 1, 1996 is $550,000 plus accrued and unpaid
interest and late charges, if any; and
(g) no Event of Default has occurred and is continuing or will result
from the execution, delivery and performance of this Third Amendment and the
instruments and agreements executed and delivered in connection herewith.
5.2. AMENDMENT OF CERTAIN COVENANTS.
(a) Section 5.01(c)(3) of the Loan Agreement is deleted and the
following is substituted therefor:
"(3) concurrently with the statements required under Paragraphs
(c)(1) and (2) hereof, a certificate of the Borrower's chief financial
officer certifying (i) that no Event of Default, or an event which, with
notice or lapse of time, or both, would constitute an Event of Default,
has occurred or is continuing, and if such an event has occurred, a
statement of the Borrower's chief financial officer as to the nature
thereof and the action which the Borrower proposes to take with respect
thereto, (ii) that all Rent due and owing during such period by the
Borrower and any Guarantor with respect to leases of real property has
been paid in full, and (iii) as to the computations called for in the
financial covenants set forth in Section 5.02(k), (l), (n) and (o); and"
(b) Section 5.01(g) of the Loan Agreement is amended to add the
following words before the period: ",and to deliver to the Bank a policy or
policies of insurance with an additional insured provision or lender's loss
payee endorsement providing that the coverage of said policy shall not be
terminated without thirty (30) days written notice to the Bank".
(c) Section 5.02(a)(vii) of the Loan Agreement is deleted and the
following is substituted therefor:
"(vii) operating or capital leases and purchase money obligations up to
an aggregate amount of $500,000 in any fiscal year and $1,000,000 in the
aggregate over the term of the Loans."
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(d) Section 5.02(b) of the Loan Agreement is amended to delete
subsection (6) thereof and to renumber subsection (7) accordingly.
(e) Section 5.02(d) of the Loan Agreement is deleted and the following
is substituted therefor:
"(d) Merger, Reorganization, Dissolution. Other than the Acquisition,
the Sandler Purchase, and except as permitted under this Agreement,
enter into any merger, consolidation, reorganization or recapitalization
or take any steps in contemplation or dissolution or liquidation without
the prior written consent of the Bank."
(f) Section 5.02(h) of the Loan Agreement is amended to delete
subsections (vii) and (viii) thereof and to substitute the following therefor:
", and (vii) loans to the Borrower or any Guarantor that arise in the
ordinary course of business."
(g) Section 5.02 (k) of the Loan Agreement is deleted and the following
is substituted therefor:
"(k) TANGIBLE NET WORTH. Permit Tangible Net Worth, as measured on a
quarterly basis, to be less than:
(i) $19,500,000 on the date of the Third Amendment,
(ii) $19,500,000 on December 31, 1996, and
(ii) at fiscal year end 1997 and at the end of each fiscal
quarter thereafter, an amount equal to the sum of (i) the amount of
Tangible Net Worth at the end of the immediately preceding fiscal year
end (but not less than $19,500,000), plus (ii) an amount not less than
$1,000,000."
(h) The following new subsections (n) through (q) are added to Section
5.02 of the Agreement:
"(n) CURRENT RATIO. Permit the ratio of Current Assets to Current
Liabilities, at the end of any fiscal quarter, to be less than 2.0 to
1.0.
(o) FIXED CHARGE COVERAGE RATIO. Permit the ratio of (i) the sum of Cash
Flow plus Rent minus unfinanced Capital Expenditures, to (ii) the sum of
interest expense due and payable plus the current
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portion of long term debt plus Rent plus capital lease payments, to be
less than 1.1 to 1.0 at the end of any fiscal quarter, for the twelve
(12) month period covering the then ended fiscal quarter and the three
(3) preceding fiscal quarters.
(p) DIVIDENDS. Make Dividends to any shareholders.
(q) CHANGE OF OWNERSHIP. Make or suffer to exist any material change of
ownership of any shares of capital stock of any of the Borrower or the
Guarantors which effects a change of control of the Borrower or any
Guarantor, as applicable."
SECTION 6. EVENTS OF DEFAULT
6.1. ADDITIONAL EVENT OF DEFAULT. An additional Event of Default is
added to Section 6.01 of the Loan Agreement as follows:
"(n) The Borrower or any Guarantor shall fail to make any payment of
Rent with respect to leases of real property when due and owing, and
such failure shall continue after the applicable grace period, if any,
specified in the agreement or instrument relating to such payment of
Rent;"
SECTION 7. MISCELLANEOUS.
7.1. CONTINUED EFFECTIVENESS. Except as specifically amended by and/or
inconsistent with this Third Amendment, all of the terms and conditions of the
Loan Agreement shall remain unchanged and in full force and effect and are
hereby ratified, adopted and confirmed in all respects. All references to the
Agreement in any Loan Document shall hereafter be deemed to refer to the Loan
Agreement as amended prior to the date hereof and by this Third Amendment.
This Third Amendment is a Loan Document.
7.2. PAYMENT OF EXPENSES. Borrower shall pay the reasonable fees and
expenses (including, but not limited to, reasonable attorneys' fees and
expenses) incurred by the Bank in connection with the preparation, negotiation,
execution and delivery and enforcement of this Third Amendment and the documents
executed and delivered in connection herewith and any and all renewals,
modifications, amendments and waivers hereof and hereunder.
7.3. NOTICES.
The address set forth in Section 7.02 of the Loan Agreement for notice
to the Bank is deleted and the following is substituted therefor:
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If to the Bank, at:
First Union National Bank
0000 Xxxxx 00
Xxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxx X. Xxxx, Vice President
Telephone: 000-000-0000
Telecopier: 000-000-0000
With a copy to:
Crummy, Del Deo, Dolan, Griffinger & Xxxxxxxxx
Xxx Xxxxxxxxxx Xxxxx
Xxxxxx, Xxx Xxxxxx 00000
Attn: Xxxx X. Xxxxxxxx, Esq.
Telephone: 000-000-0000
Telecopier: 000-000-0000
7.4. ENTIRE AGREEMENT. This Third Amendment, together with the other
Loan Documents, constitutes the entire agreement between the parties with
respect to the subject matter hereof and supersedes any prior agreements,
written or oral, with respect to such subject matter.
7.5. COUNTERPARTS. This Third Amendment may be executed in one or more
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same agreement, and any party may execute
this Third Amendment by signing any such counterpart.
7.6. GOVERNING LAW. This Third Amendment shall be interpreted, and the
rights and liabilities of the parties hereto, whether arising in contract or
tort and howsoever pertaining to the parties' relationship, shall be determined
in accordance with the laws of the State of New Jersey.
7.7. HEADINGS. The section titles contained in this Third Amendment
shall be without substantive meaning or content of any kind whatsoever and are
not a part of the agreement between the parties.
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IN WITNESS WHEREOF, the parties have executed this Third Amendment the
day and year first above-written.
TRANSFER PRINT FOILS, INC.,
a New Jersey corporation
By: /S/Xxxxx Xxxxxx
_____________________________________
Name: Xxxxx Xxxxxx
Title: Chief Financial Officer
FIRST UNION NATIONAL BANK
By: /S/Xxxxx X. Xxxx
_____________________________________
Name: Xxxxx X. Xxxx
Title: Vice President
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