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EXHIBIT 10.16
SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT (the "SECOND AMENDMENT")
dated as of November 15, 1996, is to that Credit Agreement dated as of June 6,
1995 as amended by that First Amendment to Credit Agreement dated as of July 2,
1996 (as amended and modified hereby and as further amended and modified from
time to time hereafter, the "CREDIT AGREEMENT"; terms used but not otherwise
defined herein shall have the meanings assigned in the Credit Agreement), by and
among DAY INTERNATIONAL GROUP, INC., a Delaware corporation (the "BORROWER"),
certain Subsidiaries of the Borrower, as Guarantors, the Lenders party thereto,
and NATIONSBANK OF TEXAS, N.A., as Agent (the "AGENT").
WITNESSETH
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WHEREAS, the Lenders have, pursuant to the terms of the Credit Agreement,
made available to the Borrower an $80,000,000 credit facility;
WHEREAS, the Borrower wishes to amend the Credit Agreement to modify
certain provisions contained therein;
WHEREAS, the Required Lenders have agreed to the requested changes on the
terms and conditions hereinafter set forth;
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
A. The Credit Agreement is amended in the following respects:
1. The definition of "PERMITTED INVESTMENTS" in Section 1.1 of
the Credit Agreement is hereby amended and restated in its entity to read as
follows:
"PERMITTED INVESTMENTS" means Investments which are (i) cash
or Cash Equivalents, (ii) accounts receivable created, acquired or made
in the ordinary course of business and payable or dischargeable in
accordance with customary trade terms, (iii) supplies, inventory or
other assets of any kind or nature (other than those constituting a
Capital Expenditure) acquired or made in the ordinary course of
business, (iv) loans to directors, officers, employees, agents,
customers or suppliers in the ordinary course for reasonable business
expenses in an aggregate maximum principal amount at any one time
outstanding of not more than $1,000,000, (v) subject to the limitations
on Capital Expenditures in Section 8.6 hereof, (A) Investments by a
Credit Party in a Credit party and (B) Investments by a Foreign
Subsidiary in another Foreign Subsidiary or in a Credit Party, (vi) (A)
Investments by a Credit Party in a Foreign Subsidiary (subject to the
limitations on Capital Expenditures in Section 8.6 hereof) to be used
solely for Capital
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Expenditures for such Foreign Subsidiary, and not to exceed, in the
aggregate, (1) $750,000 during 1995, (2) $2,000,000 during 1996 and (3)
$1,500,000 during 1997 and each year thereafter and (B) Investments by
a Credit Party in a Foreign Subsidiary if 100% of the Net Proceeds are
concurrently used by such Foreign Subsidiary to purchase the
outstanding equity securities of another Foreign Subsidiary from a
Credit Party, and the resulting Investment by such first Foreign
Subsidiary in such second Foreign Subsidiary, (vii) purchases or
redemptions of capital stock from directors, officers or employees as
provided in Section 8.8(b) hereof, (viii) any Investment occurring as a
result of any and all interest rate protection agreements, if any,
(including swaps, collars and xxxxxx) and currency xxxxxx, (ix) any
pledges or deposits permitted by Section 8.2 hereof to the extent
considered an Investment, (x) evidences of Indebtedness from officers
or directors of the Borrower or any Subsidiary of the Borrower which
represent payment in whole or in part for shares of the capital stock
of the Borrower, (xi) Investments made in connection with the
Acquisition as set forth on SCHEDULE 8.9 attached hereto, (xii) Capital
Expenditures in accordance with Section 8.6 hereof, (xiii) Investments
in connection with the acquisition of Xxxxx X. Company in an aggregate
amount not to exceed the sum of (A) $11,250,000 for the purchase of
assets, subject to purchase accounting adjustments PLUS (B) $750,000 in
fees associated with the acquisition, (xiv) other Investments not to
exceed, in the aggregate, $6,000,000 during the term of this Credit
Agreement; provided that to the extent such Investment made pursuant to
this subparagraph (xiv) is an advance, loan or other extension of
credit is repair then such repaid funds can be reinvested in accordance
with the terms hereof and such $6,000,000 limitation shall only be
reduced by the amount not to repaid and (xv) Investments in Day
International France S.A.R.L., Day International (Canada Holdings),
Ltd. and Day International (BRD), GMBH for use as working capital, not
to exceed, at any one time $600,000 in aggregate.
2. Section 8.6 entitled "Capital Expenditures" is hereby amended
and restated in its entirety to read as follows:
8.6 CAPITAL EXPENDITURES The Borrower and its Subsidiaries on
a consolidated basis shall not make Capital Expenditures (excluding
intercompany items) that, in the aggregate, exceed (a) from the Closing
Date to December 31, 1995, $3,000,000, (b) for fiscal year 1996,
$6,500,000, (c) for fiscal year 1997, $6,000,000 and (d) for any fiscal
year thereafter, $5,500,000; provided, however, that in addition to the
amounts set forth above (i) a Credit party may use the Net Proceeds
from the issuance of capital stock or a capital contribution to make
additional Capital Expenditures to the extent such Net Proceeds are not
required to be forwarded to the Lenders pursuant to Section 3.3(b)
hereof, (ii) the Borrower or its Subsidiaries may use the Net Proceeds
from the disposition of assets (as the result of a Recovery Event or
otherwise) to make additional Capital Expenditures in conformance with
Section 8.5(v) above and (iii) the Borrower and its Subsidiaries shall
be permitted to carry forward (to the immediately succeeding fiscal
year only) the lesser of (A) the unused portion of the amount for each
such year shown in the "Amount" column for such year or (B) fifty
percent (50%) of the amount for such year shown in the "Amount" column
for such year. For purposes hereof Capital
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Expenditures shall first be applied against the amounts carried-over
from the prior year and then to the amount permitted for the year in
which they are made. Notwithstanding anything contained herein to the
contrary, the carry-over amount for any year shall be limited if, and
to the extent, that the making or incurrence of such Capital
Expenditures in the original year would have been prohibited or
resulted in a Default hereunder (including by reason of the Fixed
Charge Coverage Ratio).
B. The Borrower hereby represents and warrants that:
(i) any and all representations and warranties made by the
Borrower and contained in the Credit Agreement (other than those which
expressly relate to a prior period) are true and correct in all
material respects as of the date of this Second Amendment; and
(ii) No Default or Event of Default currently exists and is
continuing under the Credit Agreement as of the date of this Second
Amendment.
C. The effectiveness of this Second Amendment is conditioned
upon receipt by the Agent of the following:
1. Copies of this Second Amendment executed by the Credit
Parties and the Required Lenders;
2. Copies of the resolutions of the Credit Parties
approving the terms and authorizing execution and delivery of this
Second Amendment;
3. Legal opinion of counsel to the Credit Parties in a
form acceptable to the Agent;
4. Executed copy of the purchase agreement and other
acquisition documents (including all environmental reports, insurance
documentation and appraisals) in connection with the acquisition of
Xxxxx X. Company by the Borrower, the terms and conditions of which
shall be acceptable to the Agent and the Required Lenders; and
5. Such agreements, documents and instruments (including
mortgages and deeds of trust) as deemed necessary and appropriate by
the Agent in order to attach and perfect the Lenders' security interest
in the assets of Xxxxx X. Company as set forth in the Collateral
Documents, including, without limitation, (i) the stock certificates
evidencing the stock pledged pursuant to the Pledge Agreements, along
with duly executed stock powers attached thereto, (ii) all instruments
and chattel paper held by Xxxxx X. Company, (iii) UCC financing
statements and (iv) patent and trademark filings.
D. The Borrower will execute such additional documents as are
reasonably requested by the Agent to reflect the terms and conditions of this
Second Amendment.
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E. The Borrower and the Guarantors, as applicable, affirm the liens and
security interests created and granted in the Credit Agreement and the other
Credit Documents and agree that this Second Amendment shall in no manner
adversely affect or impair such liens and security interests.
F. The Guarantors acknowledge and consent to all of the terms and
conditions of this Second Amendment and agree that this Second Amendment does
not operate to reduce or discharge the Guarantors' obligations under the Credit
Agreement or the other Credit Documents. The Guarantors acknowledge and agree
that the Guarantors have no claims, counterclaims, offsets, credits or defenses
to the Credit Documents and the performance of the Guarantors' obligations
thereunder or if the Guarantors have any such claims, counterclaims, offsets,
credits or defenses to the Credit Documents or any transaction related to the
Credit Documents, the same are hereby waived, relinquished and released in
consideration of the Lender's execution and delivery of this Second Amendment.
G. Except as modified hereby, all of the terms and provisions of the
Credit Agreement (and Exhibits) remain in full force and effect.
H. The Borrower agrees to pay all reasonable costs and expenses in
connection with the preparation, execution and delivery of this Second
Amendment, including without limitation the reasonable fees and expenses of the
Agent's legal counsel.
I. This Second Amendment may be executed in any number of counterparts,
each of which when so executed and delivered shall be deemed an original and it
shall not be necessary in making proof of this Second Amendment to produce or
account for more than one such counterpart.
J. This Second Amendment and the Credit Agreement, as amended hereby,
shall be deemed to be contracts made under, and for all purposes shall be
construed in accordance with the laws of the State of New York.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this Second Amendment to Credit Agreement to be duly executed under seal and
delivered as of the date and year first above written.
BORROWER: DAY INTERNATIONAL GROUP, INC.
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By /s/ Xxxxx X. Xxxxxxxx
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Name Xxxxx X. Xxxxxxxx
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Title V.P. - CFO
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GUARANTORS: DAY INTERNATIONAL, INC.
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By /s/ Xxxxx X. Xxxxxxxx
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Name Xxxxx X. Xxxxxxxx
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Title V.P. - CFO
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BANKS: NATIONSBANK OF TEXAS, N.A.,
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as a Lender and in its
capacity as Agent
By /s/ Xxxx X. XxXxxxxx
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Name Xxxx X. XxXxxxxx
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Title Vice President
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BANK OF SCOTLAND
By /s/ Xxxxxxxxx X. Omffrey
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Name Xxxxxxxxx X. Omffrey
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Title Vice President
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MIDLAND BANK PLC
By /s/ Xxxx Xxxxxxxx
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Name Xxxx Xxxxxxxx
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Title Director
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BANK ONE, DAYTON, NA
By /s/ Xxxx X. Xxxxxxxxxx
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Name Xxxx X. Xxxxxxxxxx
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Title Vice President
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PNC BANK, OHIO, NATIONAL
ASSOCIATION
By /s/ Xxxxxx X. Xxxxx
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Name Xxxxxx X. Xxxxx
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Title AVP
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THE PROVIDENT BANK
By /s/ Xxxx X. Xxxxxxx
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Name Xxxx X. Xxxxxxx
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Title Vice President
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U.S. NATIONAL BANK OF OREGON
By /s/ Xxxxx X. Xxxxxx
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Name Xxxxx X. Xxxxxx
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Title Vice President
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NATIONAL CITY BANK
By /s/ Xxxxx X. Xxxxxxxx
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Name Xxxxx X. Xxxxxxxx
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Title Vice President
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