Exhibit 10.1
FIRST AMENDMENT TO AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
This First Amendment to Amended and Restated Loan and Security Agreement
("Amendment") is made this 12th day of August, 2004, by and among PHOENIX COLOR
CORP., PCC EXPRESS, INC., TECHNIGRAPHIX, INC., PHOENIX (MD.) REALTY, LLC, and
PHOENIX COLOR FULFILLMENT, INC., (each is referred to individually as a
"Borrower" and collectively, as the "Borrowers"), the lending institutions
listed from time to time on Schedule 1.1(a) to the Credit Agreement (as defined
below) (singly, a "Lender" and collectively, "Lenders"), and Wachovia Bank,
National Association, as administrative agent for Lenders (in such capacity,
"Agent").
BACKGROUND
A. Borrowers, Agent and Lenders are parties to a Amended and Restated Loan
and Security Agreement dated September 30, 2003 (as amended or otherwise
modified from time to time, the "Credit Agreement"), pursuant to which certain
financing arrangements were established for the benefit of Borrowers. All
capitalized terms not otherwise defined herein shall have the respective
meanings ascribed thereto in the Credit Agreement.
B. Borrowers have requested that Agent and Lenders modify, in certain
respects, the Credit Agreement and Agent and Lenders have agreed to make such
modifications, all as more fully set forth herein and subject to the terms and
conditions hereof.
NOW, THEREFORE, with the foregoing Background incorporated by reference
herein and made part hereof, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. Waiver. Borrowers have failed to comply with the requirements of the
Credit Agreement and the following Event of Default has occurred (such Event of
Default for the period so referenced is referred to as the "Existing Default"):
Borrowers' noncompliance with the financial covenant set forth in Section 9.1
(Fixed Charge Coverage Ratio) of the Credit Agreement for the fiscal quarter
ending June 30, 2004. Borrowers have requested that Agent and Lenders waive the
Existing Default. Upon the effectiveness of this Amendment, Agent and Lenders
hereby waive the Existing Default. The waiver of the Existing Default shall not
constitute a waiver of any other Default or Event of Default. Nothing contained
herein shall obligate Agent or Lenders to grant any future waiver of any other
Default or Event of Default or be deemed to constitute a course of conduct.
2. Amendment. The Credit Agreement is amended as follows:
(a) Financial Covenants. Sections 9.1 and 9.2 of the Credit
Agreement are amended and restated as follows:
9.1 Fixed Charge Coverage:
Borrowers shall maintain a Fixed Charge Coverage Ratio of not less
than 1.2 to 1 as of the end of each fiscal quarter, each calculated
on a rolling four (4) quarter basis; provided, however, such
calculation for the fiscal quarter ending September 30, 2004 shall
be based upon the three months ending on such date, such calculation
for the fiscal quarter ending December 31, 2004 shall be based upon
the six months ending on such date, and such calculation for the
fiscal quarter ending March 31, 2005 shall be based upon the nine
months ending on such date.
9.2 Consolidated Capital Expenditures:
Borrowers shall not make more than $3,500,000 less the Net Cash
Proceeds from the sale of any equipment during the applicable
periods in Consolidated Capital Expenditures, measured on the last
day of each fiscal quarter and calculated on a rolling four (4)
quarter basis; provided, however, for the fiscal quarters ending
September 30, 2004, December 31, 2004, March 31, 2005 and June 30,
2005 such covenant shall be calculated as follows:
Period Amount
------ ------
3 months ending September 30, 2004 $ 625,000
6 months ending December 31, 2004 $1,250,000
9 months ending March 31, 2005 $1,875,000
12 months ending June 30, 2005 $2,500,000
3. Amendment Fee. Upon the effectiveness of this Amendment Agent and
Lenders shall have fully earned a non-refundable amendment fee in an amount
equal to $60,000 ("Amendment Fee"), which fee shall be due and payable by
Borrowers to Agent as follows: (a) $30,000 in immediately available funds on or
before the effectiveness of this Amendment and (b) $30,000 in immediately
available funds on January 3, 2005.
4. Effectiveness Conditions. This Amendment shall become effective upon
the satisfactory completion, as determined by Agent in its discretion, of the
following conditions ("Effectiveness Conditions") (all documents to be in form
and substance satisfactory to Agent):
(a) Execution and delivery by all parties of this Amendment;
(b) Delivery of all consents and approvals of the boards of
directors, shareholders and other applicable third parties necessary in
connection with this transaction shall have been obtained;
(c) After giving effect to Section 1 of this Agreement, no Default
or Event of Default exists;
(d) Payment of the initial portion of the Amendment Fee in the
amount of $30,000 in immediately available funds; and
(e) Payment of Expenses.
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5. Representations and Warranties. Each Borrower warrants and represents
to Agent and Lenders that:
(a) Prior Representations. As of the date of this Amendment, all
warranties and representations set forth in the Credit Agreement and Loan
Documents are true and correct in all material respects, both before and after
giving effect to this Amendment.
(b) No Default. After giving effect to this Amendment, no Default or
Event of Default is outstanding or would exist after giving effect to this
Amendment.
6. Incorporation into Existing Loan Documents. The parties acknowledge and
agree that this Amendment is incorporated into and made part of the Credit
Agreement and Loan Documents, the terms and provisions of which, unless
expressly modified herein, are hereby ratified and confirmed and continue
unchanged and in full force and effect. Any future reference to the Credit
Agreement or Loan Documents shall mean the Credit Agreement or Loan Documents as
amended hereby. To the extent that any term or provision of this Amendment is or
may be deemed expressly inconsistent with any term or provision in the Loan
Documents, the terms and provisions hereof shall control.
7. Miscellaneous.
(a) Headings. The headings of any paragraph of this Amendment are
for convenience only and shall not be used to interpret any provision hereof.
(b) Other Instruments. Each Borrower shall execute any other
documents, instruments and writings, in form and substance satisfactory to
Agent, as Agent may reasonably request, to carry out the intentions of the
parties hereunder.
(c) Modifications. No modification hereof or any agreement referred
to herein shall be binding or enforceable unless in writing and signed on behalf
of the party against whom enforcement is sought.
(d) Third Party Rights. No rights are intended to be created
hereunder for the benefit of any third party donee, creditor, or incidental
beneficiary.
(e) Governing Law. The terms and conditions of this Amendment shall
be governed by and construed in accordance with the substantive laws of the
Commonwealth of Pennsylvania without regard to its otherwise applicable
principles of conflicts and laws.
(f) Counterparts. This Amendment may be executed in counterpart all,
of which counterparts taken together shall constitute one completed fully
executed document. A photocopied or facsimile signature shall be deemed to be
the functional equivalent of a manually executed original for all purposes.
(g) WAIVER OF JURY TRIAL. BORROWERS, AGENT AND LENDERS, BY THEIR
EXECUTION OF THIS AMENDMENT, EACH REAFFIRM THEIR WAIVER OF THE RIGHT TO TRIAL BY
JURY IN ANY ACTION, SUIT OR PROCEEDING OR COUNTERCLAIM OF ANY KIND ARISING OUT
OF OR
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RELATED TO ANY OF THE LOAN DOCUMENTS, THE OBLIGATIONS OR THE COLLATERAL.
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Dated the date and year first written above.
BORROWERS: PHOENIX COLOR CORP.
By: /s/ Xxxxxx Xxxxxxxxx
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Name: Xxxxxx Xxxxxxxxx
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Title: Chief Financial Officer
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PCC EXPRESS, INC.
By: /s/ Xxxxxx Xxxxxxxxx
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Name: Xxxxxx Xxxxxxxxx
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Title: Chief Financial Officer
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TECHNIGRAPHIX, INC.
By: /s/ Xxxxxx Xxxxxxxxx
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Name: Xxxxxx Xxxxxxxxx
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Title: Chief Financial Officer
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PHOENIX (MD.) REALTY, LLC
By: /s/ Xxxxxx Xxxxxxxxx
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Name: Xxxxxx Xxxxxxxxx
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Title: Chief Financial Officer
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PHOENIX COLOR FULFILLMENT, INC.
By: /s/ Xxxxxx Xxxxxxxxx
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Name: Xxxxxx Xxxxxxxxx
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Title: Chief Financial Officer
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[SIGNATURE PAGE A&R LOAN AND SECURITY AGREEMENT]
S-1
AGENT: WACHOVIA BANK, NATIONAL ASSOCIATION
By: /s/ Xxxxxxxx X. Xxxxx
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Name: Xxxxxxxx X. Xxxxx
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Title: Vice President
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LENDER: WACHOVIA BANK, NATIONAL ASSOCIATION
By: /s/ Xxxxxxxx X. Xxxxx
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Name: Xxxxxxxx X. Xxxxx
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Title: Vice President
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