FIRST AMENDMENT AGREEMENT
Dated as of September 13, 1999
among
PHOTRONICS, INC.
The Lenders Party Hereto
THE CHASE MANHATTAN BANK,
as Administrative Agent
and
THE BANK OF NEW YORK,
as Documentation Agent
FIRST AMENDMENT AGREEMENT, dated as of September 13, 1999, among
PHOTRONICS, INC., a Connecticut corporation (the "Company"), the LENDERS
party hereto, THE CHASE MANHATTAN BANK, as Administrative Agent, and THE
BANK OF NEW YORK, as Documentation Agent.
WHEREAS, the Company, the Borrowing Subsidiaries, the Lenders, the
Administrative Agent and the Documentation Agent have entered into that
certain Credit Agreement dated as of November 19, 1998 (as in effect prior
to the effectiveness of this Agreement, the "Existing Credit Agreement,"
and, as amended by this Agreement, the "Amended Credit Agreement"), pursuant
to which the Lenders have agreed, subject to the terms and conditions
therein set forth, to make or participate in Loans to, and to issue or
participate in Letters of Credit for the account of, the Borrowers;
WHEREAS, the Company, the Lenders, the Administrative Agent and the
Documentation Agent have agreed to enter into this Agreement to provide for,
among other things, the modification of certain covenants and the waivers
of certain Defaults and Events of Default; and
WHEREAS, the Loan Documents (including, without limitation, this
Agreement and the Amended Credit Agreement), as amended and supplemented by
this Agreement and as each may be amended or supplemented from time to time,
are referred to herein as the "Amended Loan Documents".
NOW THEREFORE, for valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
Amendments to Existing Credit Agreement.
Each of the Company and, subject to the satisfaction of the conditions
set forth in Article III, the Lenders hereby consents and agrees to the
amendments to the Existing Credit Agreement set forth below:
(a) The definition of "Capital Expenditure Ratio" contained in
Section 1.01 of the Existing Credit Agreement is hereby amended and restated
to read as follows:
"Capital Expenditure Ratio" means, on any date, the ratio of
(a) Consolidated Capital Expenditures (exclusive of amounts
expended in connection with Permitted Business Acquisitions) for
the period of four consecutive fiscal quarters of the Company
most recently ended as of such date to (b) (i) Consolidated
EBITDA for the period of four consecutive fiscal quarters of the
Company most recently ended as of such date, plus (ii) solely for
the purpose of determining the Capital Expenditure Ratio for the
fiscal quarter of the Company ending on January 30, 2000,
$10,000,000.
(b) Section 6.13 of the Existing Credit Agreement is hereby
amended and restated to read as follows:
SECTION 6.13. Interest Coverage Ratio. The Company will
not permit the Interest Coverage Ratio as determined as of the
end of each fiscal quarter of the Company to be less than (a) if
such fiscal quarter ends on October 31, 1999, 3.00 to 1.00 or (b)
if such fiscal quarter ends thereafter, 4.00 to 1.00.
(c) Section 6.14 of the Existing Credit Agreement is hereby
amended and restated to read as follows:
SECTION 6.14. Fixed Charge Coverage Ratio. The Company
will not permit the Fixed Charge Coverage Ratio as determined as
of the end of each fiscal quarter of the Company ending on or
after July 30, 2000 to be less than (a) if such fiscal quarter
ends on July 30, 2000, 1.25 to 1.00 or (b) if such fiscal quarter
ends thereafter, 2.00 to 1.00.
(d) Section 6.16 of the Existing Credit Agreement is hereby
amended and restated to read as follows:
SECTION 6.16. Capital Expenditure Ratio. The Company
will not permit the Capital Expenditure Ratio as determined as of
the end of each fiscal quarter of the Company to exceed (a) if
such fiscal quarter ends on October 31, 1999, 1.25 to 1.00, (b)
if such fiscal quarter ends on January 30, 2000 or on April 30,
2000, 1.00 to 1.00 or (c) if such fiscal quarter ends after April
30, 2000, 1.25 to 1.00.
ARTICLE II
Representations and Warranties
The Company hereby represents and warrants that as of the Effective
Date:
Section 2.01 Existing Representations and Warranties. Each of the
representations and warranties contained in Article III of the Existing
Credit Agreement and in each of the other Loan Documents is true and
correct, except that any representation or warranty limited by its terms
to a specific date shall be true and correct as of such specific date.
Section 2.02 No Defaults. After giving effect to the waivers
granted under Article IV, no event has occurred and no condition exists
which would constitute a Default or an Event of Default as defined in the
Existing Credit Agreement, and no event has occurred and no condition
exists which would constitute a Default or an Event of Default as defined
in the Amended Credit Agreement.
Section 2.03 Power and Authority; No Conflicts. The execution,
delivery and performance by each of the Loan Parties of the Amended Loan
Documents to which it is a party are within such Loan Party's corporate,
partnership or limited liability company powers and have been duly
authorized by all necessary corporate, partnership or limited liability
company and, if required, stockholder, partner or member action. Each
Amended Loan Document to which any Loan Party is a party has been duly
executed and delivered by such Loan Party and constitutes a legal, valid
and binding obligation of such Loan Party, enforceable in accordance with
its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors' rights generally and subject
to general principles of equity, regardless of whether considered in a
proceeding in equity or at law.
Section 2.04 Governmental Approvals; No Conflicts. The execution,
delivery and performance by each of the Loan Parties of the Amended Loan
Documents to which it is a party (a) do not require the Company or any
Subsidiary to obtain or make any consent or approval of, registration or
filing with, or other action by, any Governmental Authority, except such
as have been obtained or made and are in full force and effect or that
could not reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect, (b) will not violate any law or
regulation applicable to the Company or any Subsidiary, or the charter,
by-laws or other organizational documents of the Company or any
Subsidiary, or any order of any Governmental Authority applicable to the
Company or any Subsidiary, except as to any law, regulation or order the
violation of which could not reasonably be expected, individually or in
the aggregate, to result in a Material Adverse Effect, (c) will not
violate or result in a default under any indenture, agreement or other
instrument binding upon the Company or any Subsidiary or their respective
assets, or give rise to a right thereunder to require any payment to be
made by the Company or any of its Subsidiaries, except for any such
violations, defaults or rights to require payment that could not
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect, and (d) will not result in the creation or
imposition of any Lien on any asset of the Company or any of its
Subsidiaries.
Section 2.05 Financial Condition; No Material Adverse Change. (a)
The Company has heretofore furnished to the Lenders the consolidated and
consolidating balance sheets of the Company and its consolidated
Subsidiaries and the related statements of income, stockholders equity and
cash flows (i) as of and for the fiscal years ended October 31, 1996,
November 2, 1997 and November 1, 1998, such consolidated financial
statements being reported on by Deloitte & Touche LLP, independent public
accountants, and (ii) as of and for the fiscal quarter and the portion of
the fiscal year ended August 1, 1999. Such financial statements present
fairly, in all material respects, the financial condition and results of
operations and cash flows of the Company and its consolidated Subsidiaries
as of such dates and for such periods in accordance with GAAP, subject to
year-end audit adjustments and the absence of footnotes in the case of the
statements referred to in clause (ii) above.
(b) Since August 1, 1999, there has been no material adverse
change in the business, assets, operations, prospects or condition,
financial or otherwise, of the Company and the Subsidiaries, taken as a
whole.
ARTICLE III
Conditions Precedent
The effectiveness of this Agreement is subject to the condition
precedent that the Administrative Agent, the Documentation Agent and the
Lenders shall have received on or before September 13, 1999 (the
"Effective Date") each of the following, in form and substance
satisfactory to the Administrative Agent, the Documentation Agent and the
Required Lenders:
(a) counterparts of this Agreement executed by each of the
Company, the Required Lenders, the Administrative Agent and the
Documentation Agent;
(b) certified complete and correct copies of each of the
financial statements referred to in Section 2.05; and
(c) an amendment fee for the account of each Lender equal to
.04% of such Lender's Commitment together with all fees and disbursements
required to be paid pursuant to Section 5.04.
ARTICLE IV
Waivers
Subject to the satisfaction of the conditions set forth in Article
III, each of the Lenders hereby waives any Default or Event of Default
arising from noncompliance by the Company with Section 6.13 of the
Existing Credit Agreement for the fiscal quarter of the Company ended
August 1, 1999 so long as the Interest Coverage Ratio as determined for
such fiscal quarter is not less than 3.00 to 1.00.
ARTICLE V
Miscellaneous
Section 5.01 Defined Terms. The terms used herein and not defined
herein shall have the meanings assigned to such terms in the Existing
Credit Agreement.
Section 5.02 Nonwaiver. Except as set forth in Article IV, the
terms of this Agreement shall not operate as a waiver by the
Administrative Agent, the Issuing Bank or any Lender or otherwise
prejudice the rights, remedies or powers of the Administrative Agent, the
Issuing Bank or any Lender under the Amended Credit Agreement, under any
other Amended Loan Document or under applicable law. Except as set forth
in Article I: (x) no terms and provisions of the Loan Documents are
modified or changed by this Agreement; and (y) the terms and provisions of
the Loan Documents shall continue in full force and effect.
Section 5.03 Waivers; Amendments. Any provision of this Agreement
may be amended or modified only by an agreement or agreements in writing
signed by the Company and the Required Lenders, or by the Company and the
Administrative Agent acting with the consent of the Required Lenders.
Section 5.04 Expenses. The Company shall pay all reasonable
out-of-pocket expenses incurred by the Administrative Agent and its
Affiliates, including the reasonable fees, charges and disbursements of
counsel for the Administrative Agent, in connection with the preparation
and administration of this Agreement, the other Amended Loan Documents or
any amendments, modifications or waivers of the provisions hereof or
thereof (whether or not the transactions contemplated hereby or thereby
shall be consummated).
Section 5.05 Notices. All notices and other communications provided
for herein shall be in writing and shall be delivered by hand or overnight
courier service, mailed by certified or registered mail or sent by
telecopy in accordance with the terms of the Amended Credit Agreement.
Section 5.06 Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part
of this Agreement and shall not affect the construction of, or be taken
into consideration in interpreting, this Agreement.
Section 5.07 Severability. Any provision of this Agreement held to
be invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality
or unenforceability without affecting the validity, legality and
enforceability of the remaining provisions hereof; and the invalidity of
a particular provision in a particular jurisdiction shall not invalidate
such provision in any other jurisdiction.
Section 5.08 Counterparts; Integration; Effectiveness. This
Agreement may be executed in counterparts (and by different parties hereto
on different counterparts), each of which shall constitute an original,
but all of which when taken together shall constitute a single contract.
The Amended Loan Documents and the separate letter agreements with respect
to fees payable to the Administrative Agent and the Documentation Agent
constitute the entire contract among the parties relating to the subject
matter thereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof.
Subject to the satisfaction of the conditions set forth in Article III,
this Agreement shall become effective when it shall have been executed by
the Administrative Agent and when the Administrative Agent shall have
received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns. Delivery of an executed counterpart of
a signature page of this Agreement by telecopy shall be effective as
delivery of a manually executed counterpart of this Agreement.
Section 5.09 Governing Law. This Agreement shall be construed in
accordance with and governed by the law of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
PHOTRONICS, INC., a Connecticut corporation
By _______________________________________
Name:
Title:
THE CHASE MANHATTAN BANK, individually
and as Administrative Agent,
By _____________________________________
Name:
Title:
THE BANK OF NEW YORK, individually and as
Documentation Agent
By _____________________________________
Name:
Title:
FIRST UNION NATIONAL BANK
By _____________________________________
Name:
Title:
FLEET NATIONAL BANK
By _____________________________________
Name:
Title:
HSBC BANK USA
By _____________________________________
Name:
Title:
PEOPLE'S BANK
By _____________________________________
Name:
Title:
STATE STREET BANK AND TRUST COMPANY
By _____________________________________
Name:
Title: