Exhibit 10.4(b)
FIRST AMENDMENT TO CREDIT AGREEMENT
This First Amendment to Credit Agreement ("Amendment") is made this
31st day of March, 1999, by and among Phoenix Color Corp. ("Phoenix"), a
Delaware corporation, PCC Express, Inc. ("PCC"), a Delaware corporation, Phoenix
(MD.) Realty, LCC ("Realty"), a Maryland limited liability company, and
TechniGraphix, Inc. ("TechniGraphix"), a Maryland corporation (singly a
"Borrower" and collectively, "Borrowers"), the lending institutions listed from
time to time on Schedule A to the Credit Agreement (as defined below) (singly, a
"Lender" and collectively, "Lender"), First Union National Bank, a national
banking association, as issuer agent for Issuer and Lenders (in such capacity,
"Agent").
Background
A. Borrowers, Agent, Issuer, and Lenders are parties to a Credit Agreement
dated September 15, 1998, as supplemented on February 12, 1999 (collectively,
"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, Issuer and Lenders modify, in
certain respects, the Credit Agreement and Agent, Issuer and Lenders have agreed
to make such modifications, all as more fully set forth herein and subject to
the terms and conditions thereof.
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. Amendments to Credit Agreement.
a. Definitional Amendment. Upon satisfaction of the Effectiveness
Conditions (as defined below), the following definitions in the Credit
Agreement are hereby amended and restated in its entirety and shall read as
follows:
Consolidated Capital Expenditures - For any period, the aggregate of
all expenditures (including that portion of Capitalized Lease Obligations
incurred during that period) made by Borrowers and their Subsidiaries
during such period in respect of the purchase, construction or other
acquisition of fixed or capital assets determined in accordance with GAAP;
provided however, Consolidated Capital Expenditures shall not include the
fair market value of any assets acquired by Borrower as a result of an
acquisition or merger permitted by written consent of Lenders (it being
understood that such consent may be withheld by Lenders in their sole and
absolute discretion). For the purposes hereof, any deposits made by
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any Borrower or its Subsidiaries for the purpose of acquiring fixed or
capital assets shall be deemed Consolidated Capital Expenditures.
Consolidated EBITDA - For any period, Borrowers' Consolidated Net
Income (or deficit) plus (a) Consolidated Interest Expense, (b)
Consolidated Tax Expense, (c) Consolidated Depreciation Expense, (d)
Consolidated Amortization Expense minus, (e) extraordinary gains and plus
(f) extraordinary non-cash loses, all as determined in accordance with
GAAP. In addition to the foregoing, for the measurement period in which an
acquisition or merger by any Borrower occurs which is permitted by written
consent of Lenders (it being understood that such consent may be withheld
by Lenders in their sole and absolute discretion), and for the next
succeeding three (3) measurement periods, Consolidated EBITDA shall be
calculated by giving effect to such acquisition or merger as if it has
occurred on the first day of the applicable measurement period.
Consolidated Interest Expense - For any period, the aggregate,
consolidated amount of interest expense required to be paid or accrued
during such period on all Indebtedness of Borrowers outstanding during all
or any part of such period, as determined in accordance with GAAP; provided
however, for the period commencing January 1, 1999 through March 31, 1999,
Consolidated Interest Expense shall not include the following one-time
charges associated with the closing of the high yield bond transaction: (i)
charges associated with a certain unamortized bridge loan fee in the amount
of $1,140,000 and (ii) payment of breakage fees on a certain capitalized
lease in the amount of $1, 168,000.
b. Technical Amendment - Upon satisfaction of the Effectiveness
Conditions, the following technical amendments to the Credit Agreement
shall be effective:
(i) The reference to subparagraph (d) contained in the fourth
line of Section 6.3(e) of the Credit Agreement is hereby amended so
that the reference is to subparagraph (e);
(ii) The reference to Section 6.3 (d) contained in the fifth line
of Section 6.7 of the Credit Agreement is hereby amended so that the
reference is to Section 6.3(e).
(iii) The reference to Section 6.7 contained in the second line
of Section 6.8 of the Credit Agreement is hereby amended so that the
reference is to Section 6.6.
c. Financial Covenant Amendments - Upon satisfaction of the Effective
Conditions, Section 5.8 of the Credit Agreement is hereby amended and
restated in its entirety and shall read as follows:
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5.8 Financial Covenants: Borrowers shall maintain and comply with the
following financial covenants:
(a) Total Leverage Ratio: Borrowers shall have and maintain a Total
Leverage Ration of not more than the following during the following periods
(measured quarterly on a rolling four quarter basis):
Period Maximum Ratio
------ -------------
1/1/99 through 3/31/99 5.50:1
4/1/99 through 6/30/99 5.50:1
7/1/99 through 9/30/99 5.25:1
0/1/99 through 12/31/99 5.00:1
1/1/00 through 3/31/00 4.75:1
4/1/00 through 6/30/00 4.75:1
7/1/00 through 9/30/00 4.50:1
10/1/00 through 12/31/00 4.25:1
1/1/01 through 3/31/01 4.25:1
4/1/01 through 6/30/01 4.00:1
7/1/01 through 9/30/01 3.75:1
10/1/01 through 12/31/01 3.50:1
1/1/02 through 3/31/02 3.25:1
4/1/02 and thereafter 3.00:1
(b) Interest Coverage Ratio: Borrowers shall have and maintain an
Interest Coverage Ration of not less than the following during the
following periods (measured quarterly on a rolling four quarter basis;
provided that the measurement at March 31, 1999 shall be based on nine
months):
Period Minimum Ratio
------ -------------
1/1/99 through 3/31/99 2.25:1
4/1/99 through 6/30/99 2.25:1
7/1/99 through 9/30/99 2.25:1
10/1/99 through 12/31/99 2.25:1
1/1/00 through 3/31/00 2.25:1
4/1/00 through 6/30/00 2.25:1
7/1/00 through 9/30/00 2.25:1
10/1/00 through 12/31/00 2.25:1
1/1/01 through 3/31/01 2.25:1
4/1/01 through 6/30/01 2.25:1
7/1/01 through 9/30/01 2.50:1
10/1/01 through 12/31/01 2.50:1
1/1/02 through 3/31/02 2.50:1
4/1/02 and thereafter 2.50:1
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(c) Minimum Consolidated EBITDA: Borrowers shall have and maintain a
Consolidated EBITDA of not less than the following during the Following
periods (measured quarterly on a rolling four quarter basis):
Period Minimum Amount
------ --------------
1/1/99 through 3/31/99 $20,000,000
4/1/99 through 6/30/99 $21,000,000
7/1/99 through 9/30/99 $22,000,000
10/1/99 through 12/31/99 $23,000,000
1/1/00 through 3/31/00 $24,000,000
4/1/00 through 3/31/00 $25,000,000
7/1/00 through 6/30/00 $26,000,000
10/1/00 through 12/31/00 $27,000,000
1/1/01 through 3/31/01 $28,000,000
4/1/01 through 6/30/01 $29,000,000
7/1/01 through 9/30/01 $31,500,000
10/1/01 through 12/31/01 $34,000,000
1/1/02 through 3/31/02 $35,000,000
4/1/02 and thereafter $35,000,000
(d) Consolidated Capital Expenditures: Borrowers shall not expend for
Consolidated Capital Expenditures more than the following amounts during
the following periods (measured quarterly on a rolling four quarter basis):
Period Maximum Amount
------ --------------
1/1/99 through 3/31/99 $55,000,000
4/1/99 through 6/30/99 $55,000,000
7/1/99 through 9/30/99 $40,000,000
10/1/99 through 12/31/99 $35,000,000
1/1/00 through 3/31/00 $35,000,000
4/1/00 through 6/30/00 $25,000,000
7/1/00 through 9/30/00 $20,000,000
10/1/00 through 12/31/00 $15,000,000
1/1/01 through 3/31/01 $15,000,000
4/1/01 through 6/30/01 $15,000,000
7/1/01 through 9/30/01 $15,000,000
10/1/01 through 12/31/01 $15,000,000
1/1/02 through 3/31/02 $15,000,000
4/1/02 and thereafter $15,000,000
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2. 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 of this Amendment
3. Representations and Warranties. Each Borrower warrants and represents to
Agent, Issuer and Lenders that:
a. Prior Representations. As of this date of the 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.
4. 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.
5. Miscellaneous.
a. Headings. The headings of any paragraph of this Amendment
are for convenience only and shall not be used to interpret any
provision thereof.
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. 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.
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e. 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.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties have executed this Amendment the day
and year First above written.
First Union National Bank, as Agent, Phoenix Color Corp.
Issuer, and Lender
By: /s/ Xxxxxxxx Xxxxx By: /s/ Xxxxxx Xxxxxxxxx
-------------------------------- ----------------------------
Name: Xxxxxxxx Xxxxx Name: Xxxxxx Xxxxxxxxx
-------------------------------- ----------------------------
Title: Vice President Title: Chief Financial Officer
-------------------------------- ----------------------------
PCC Express, Inc.
By: /s/ Xxxxxx Xxxxxxxxx
----------------------------
Name: Xxxxxx Xxxxxxxxx
----------------------------
Title: Chief Financial Officer
----------------------------
Phoenix (MD.) Realty, LLC
By: /s/ Xxxxxx Xxxxxxxxx
----------------------------
Name: Xxxxxx Xxxxxxxxx
----------------------------
Title: Chief Financial Officer
----------------------------
TechniGraphix, Inc.
By: /s/ Xxxxxx Xxxxxxxxx
----------------------------
Name: Xxxxxx Xxxxxxxxx
----------------------------
Title: Chief Financial Officer
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