Exhibit 10.3
SECOND AMENDMENT TO CREDIT AGREEMENT
SECOND AMENDMENT TO CREDIT AGREEMENT (this "Amendment"), dated as of
November 27, 1996, among BIG FLOWER PRESS HOLDINGS, INC. ("Holdings"), TREASURE
CHEST ADVERTISING COMPANY, INC. (the "Borrower"), the financial institutions
party to the Credit Agreement (as defined below) (the "Banks"), BANK OF AMERICA
NT & SA, THE INDUSTRIAL BANK OF JAPAN, LIMITED and NATIONSBANK, N.A., as
Co-Agents (the "Co-Agents"), CREDIT SUISSE, as Documentation Agent (the
"Documentation Agent"), and BANKERS TRUST COMPANY, as Administrative Agent (the
"Administrative Agent") for the Banks. All capitalized terms used herein and not
otherwise defined shall have the respective meanings provided such terms in the
Credit Agreement.
W I T N E S S E T H :
WHEREAS, Holdings, the Borrower, the Banks, the Co-Agents, the
Documentation Agent and the Administrative Agent are parties to a Credit
Agreement, dated as of November 28, 1995 and amended and restated as of March
19, 1996 (as amended, modified or supplemented to the date hereof, the "Credit
Agreement");
WHEREAS, Laser Tech Color, Inc., a Wholly-Owned Subsidiary of
Holdings ("Laser Tech"), desires to purchase 100% of the capital stock of
Digital Dimensions, Inc., a Missouri corporation ("DDI"), in a transaction (the
"DDI Acquisition") which, after giving effect to this Amendment, will constitute
a Permitted Acquisition effected in accordance with the requirements of the
Credit Agreement;
WHEREAS, Laser Tech desires to (i) acquire 100% of the capital stock
of Designer Color Systems, Ltd., a Missouri corporation ("DCS"), pursuant to a
merger of DCS with and into Laser Tech, with Laser Tech as the surviving
corporation of such merger and (ii) contribute all of the assets and liabilities
of DCS acquired pursuant to said merger to a newly-created Wholly-Owned
Subsidiary of Laser Tech (the transactions described in clauses (i) and (ii),
collectively, the "DCS Acquisition"), which transaction, after giving effect to
this Amendment, will constitute a Permitted Acquisition effected in accordance
with the requirements of the Credit Agreement;
WHEREAS, Holdings and the Borrower have requested certain amendments
to the Credit Agreement in connection with the transactions described in the two
preceding recitals; and
WHEREAS, the parties hereto wish to amend the Credit Agreement as
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herein provided;
NOW, THEREFORE, it is agreed:
I. Amendments and Modifications to Credit Agreement.
1. The Banks hereby acknowledge and agree that the DDI Acquisition
may be effected as a Permitted Acquisition so long as same meets all applicable
requirements for a Permitted Acquisition under the Credit Agreement (including,
without limitation, Sections 8.11, 8.14, 9.11 and 9.12 thereof); provided that,
notwithstanding anything to the contrary contained in the Credit Agreement, the
Banks hereby waive any requirement for a determination by the Agents pursuant to
Section 8.14(a)(xi) of the Credit Agreement in connection with the DDI
Acquisition, although the Borrower shall remain obligated to provide the
certification required thereby.
2. The Banks hereby acknowledge and agree that the DCS Acquisition
may be effected as a Permitted Acquisition in accordance with all applicable
requirements of the Credit Agreement (including, without limitation, Sections
8.11, 8.14, 9.11 and 9.12 thereof); provided that, notwithstanding anything to
the contrary contained in the Credit Agreement, the following deviations from
the requirements of the Credit Agreement shall be permitted (and only such
deviations shall be permitted) in connection with the DCS Acquisition so long as
same otherwise meets all applicable requirements for a Permitted Acquisition
pursuant to the Credit Agreement:
(i) the DCS Acquisition may be effected in accordance with the
requirements of the definition thereof;
(ii) Holdings and/or Laser Tech may make cash payments to certain
employees of DCS pursuant to a stay-in-place incentive bonus arrangement
(the "DCS Bonus Arrangement"), so long as (x) no Default or Event of
Default then exists or would result therefrom, (y) the cash payments by
Holdings and/or Laser Tech pursuant thereto do not exceed $750,000 in the
aggregate (the "DCS Cash Incentive Amount") and (z) prior to the making of
such payments, the DCS Cash Incentive Amount is included as Indebtedness
for purposes of determining compliance with Section 9 of the Credit
Agreement (including, without limitation, Sections 9.08 and 9.09 thereof);
and
(iii) the Banks hereby waive any requirement for a determination by
the Agents pursuant to Section 8.14(a)(xi) of the Credit Agreement in
connection with the DCS Acquisition, although the Borrower shall remain
obligated to provide the certification required thereby.
3. Section 9.04 of the Credit Agreement is hereby amended by
inserting the phrase "and the DCS Bonus Arrangement" immediately following the
text "in
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connection with the Scanforms Non-Compete Agreement" appearing in
clause (xviii) thereof.
4. The definition of "Consolidated EBITDA" appearing in Section
11.01 of the Credit Agreement is hereby amended by inserting the following new
clause (v) immediately following the phrase "adding thereto" appearing in said
definition:
"(v) to the extent Consolidated EBITDA is being determined for any period
that includes all or any portion of the six-month period ended March 31,
1997, then to the extent that Consolidated EBITDA (whether directly or
through reductions to Consolidated Net Income) has been reduced by not
more than (I) $750,000 in cash payments pursuant to the DCS Bonus
Arrangement, (II) $1,750,000 in incentive payments in the form of Holdings
Common Stock issued to employees of DCS pursuant to the DCS Bonus
Arrangement and (III) $75,000 in incentive payments in the form of
Holdings Common Stock issued to employees of DDI pursuant to the DDI Bonus
Arrangement, in each case in such six-month period, the aggregate amount
of such reductions,".
5. The definition of "Permitted Acquisition" appearing in Section
11.01 of the Credit Agreement is hereby amended by deleting clause (z) thereof
in its entirety and inserting in lieu thereof the following new clause (z):
"(z) in determining whether each of the Printco Acquisition, the Scanforms
Acquisition, the DDI Acquisition and the DCS Acquisition is a Permitted
Acquisition, effect shall be given to the provisions of the First
Amendment and the Second Amendment relating thereto".
6. Section 11.01 of the Credit Agreement is hereby further amended
by inserting in appropriate alphabetical order the following new definitions:
"DCS" shall mean Digital Color Systems, Ltd., a Missouri
corporation.
"DCS Acquisition" shall mean (i) the acquisition by Laser Tech of
100% of the equity interests in DCS, which acquisition shall be effected
by the merger of DCS with and into Laser Tech, with Laser Tech as the
surviving corporation of said merger and (ii) the contribution of all of
the assets and liabilities of DCS so acquired to a newly-created
Wholly-Owned Subsidiary of Laser Tech.
"DCS Bonus Arrangement" shall mean a stay-in-place incentive bonus
arrangement between Holdings and/or Laser Tech and certain employees of
DCS.
"DDI" shall mean Digital Dimensions, Inc., a Missouri corporation.
"DDI Acquisition" shall mean the purchase by Laser Tech of 100% of
the
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outstanding common stock of DDI.
"DDI Bonus Arrangement" shall mean a stay-in-place incentive bonus
arrangement between Holdings and/or Laser Tech and certain employees of
DDI.
"Second Amendment" shall the mean the Second Amendment to this
Agreement, dated as of November 27, 1996.
"Second Amendment Effective Date" shall mean the Second Amendment
Effective Date under, and as defined in, the Second Amendment.
II. Miscellaneous Provisions.
I. In order to induce the Banks to enter into this Amendment, the
Borrower hereby represents and warrants that:
(a) no Default or Event of Default exists as of the Second Amendment
Effective Date, both before and after giving effect to this Amendment; and
(b) all of the representations and warranties contained in the
Credit Agreement and the other Credit Documents are true and correct in
all material respects on the Second Amendment Effective Date both before
and after giving effect to this Amendment, with the same effect as though
such representations and warranties had been made on and as of the Second
Amendment Effective Date (it being understood that any representation or
warranty made as of a specific date shall be true and correct in all
material respects as of such specific date).
2. This Amendment is limited as specified and shall not constitute a
modification, acceptance or waiver of any other provision of the Credit
Agreement or any other Credit Document.
3. This Amendment may be executed in any number of counterparts and
by the different parties hereto on separate counterparts, each of which
counterparts when executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A complete set of
counterparts shall be lodged with the Borrower and the Administrative Agent.
4. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE
STATE OF NEW YORK.
5. This Amendment shall become effective on the date (the "Second
Amendment Effective Date") when each of Holdings, the Borrower and the Required
Banks shall have signed a counterpart hereof (whether the same or different
counterparts) and shall
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have delivered (including by way of facsimile transmission) the same to the
Administrative Agent at its Notice Office.
6. From and after the Second Amendment Effective Date, all
references in the Credit Agreement and each of the other Credit Documents to the
Credit Agreement shall be deemed to be references to the Credit Agreement as
amended hereby.
* * *
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IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Amendment as of the date first
above written.
BIG FLOWER PRESS HOLDINGS, INC.
By /s/ Xxxx X. Xxxxxxxx
-----------------------------------
Title: Executive Vice President
TREASURE CHEST ADVERTISING
COMPANY, INC.
By /s/ Xxxx X. Xxxxxxxx
-----------------------------------
Title: Secretary
BANKERS TRUST COMPANY,
Individually and
as Administrative Agent
By /s/ Xxx Xxxxxx
-----------------------------------
Title: Vice President
CREDIT SUISSE,
Individually
By /s/ Xxxx Xxxxxxxxx
-----------------------------------
Title: member of senior management
By /s/ Xxxxx X. Xxxxx
-----------------------------------
Title: Associate
CREDIT SUISSE,
as Documentation Agent
By /s/ Xxxx Xxxxxxxxx
-----------------------------------
Title: member of senior management
By /s/ Xxxxx X. Xxxxx
-----------------------------------
Title: Associate
ABN AMRO BANK N.V.,
NEW YORK BRANCH
By /s/ Xxxxxx Xxxxxx
-----------------------------------
Title: Assistant Vice President
By /s/ Xxxxxxx X'Xxxxxx Xxxxx
-----------------------------------
Title: Vice President
BANK OF AMERICA NT & SA
By /s/ Xxxxx X. Xxxxx
-----------------------------------
Title: Vice President
BANK OF IRELAND
By /s/ Xxxxx Xxxxxxx
-----------------------------------
Title: Account Manager
THE BANK OF NEW YORK
By /s/ Xxxxxxx Xxxxxxx
-----------------------------------
Title: Vice President
BANK OF TOKYO-MITSUBISHI LIMITED
By /s/ Xxxx X. Xxxxxxx
-----------------------------------
Title: Vice President
CERES FINANCE LTD.
By /s/ Xxxxxx Xxxxx
-----------------------------------
Title: Director
CORESTATES BANK
By /s/ Xxxxxx Xxxx
-----------------------------------
Title: Vice President
COMERICA BANK
By /s/ Xxxxxx X. Xxxxx
-----------------------------------
Title: Account Officer
CREDIT LYONNAIS -
NEW YORK BRANCH
By /s/ Xxxx Xxxxxx
-----------------------------------
Title: Senior Vice President
CREDIT LYONNAIS -
CAYMAN ISLAND BRANCH
By /s/ Xxxx Xxxxxx
-----------------------------------
Title: Authorized Signature
DAI-ICHI KANGYO BANK, LIMITED
By __________________________________
Title:
DRESDNER BANK AG, New York and
Grand Cayman Branches
By _________________________________
Title:
THE FUJI BANK, LIMITED
By /s/ Xxxx Xxxxxxxx
-----------------------------------
Title: Vice President and Manager
GIROCREDIT BANK AG DER
SPARKASSEN, GRAND CAYMAN
ISLAND BRANCH
By /s/ Xxxx Xxxxxxx
-----------------------------------
Title: Vice President
THE INDUSTRIAL BANK OF JAPAN, LIMITED
By /s/ Xxxxx Xxx
----------------------------------------
Title: Senior Vice President and Senior
Manager
KEYPORT LIFE INSURANCE
COMPANY
BY: Chancellor LGT Senior Secured
Management Inc. as Portfolio Advisor
By /s/ Xxxxxxxxxxx X. Xxxxx
-----------------------------------
Title: Vice President
THE LTCB TRUST COMPANY
By /s/ Xxxx X. XxXxxxx
-----------------------------------
Title: Senior Vice President
MEDICAL LIABILITY MUTUAL INSURANCE
COMPANY
BY: Chancellor LGT Senior Secured
Management, Inc. as Investment Manager
By /s/ Xxxxxxxxxxx X. Xxxxx
-----------------------------------
Title: Vice President
XXXXXXX XXXXX PRIME RATE
PORTFOLIO
BY: XXXXXXX XXXXX ASSET
MANAGEMENT, L.P., as Investment
Advisor
By /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------------
Title: Authorized Signatory
XXXXXXX XXXXX SENIOR FLOATING
RATE FUND, INC.
By /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------------
Title: Authorized Signatory
THE MITSUBISHI TRUST AND
BANKING CORPORATION
By /s/ Xxxxxxxx Xxxxx xx Xxxx
-----------------------------------
Title: Senior Vice President
NATIONSBANK, N.A.
By /s/ Xxxxxxx X. Xxxxxxx
---------------------------------
Title: Vice President
SUMITOMO BANK OF CALIFORNIA
By /s/ Xxxxxx X. Xxxxxxx
---------------------------------
Title: Vice President
UNION BANK OF CALIFORNIA, N.A.
By /s/ Xxxxx Xxxxxxxxx
---------------------------------
Title: Vice President
XXX XXXXXX AMERICAN CAPITAL
PRIME RATE INCOME TRUST
By /s/ Xxxxxxx X. Xxxxxxx
---------------------------------
Title: Senior Vice President
