EXHIBIT 10.26
Second Amendment to Loan Documents
THIS SECOND AMENDMENT TO LOAN DOCUMENTS (this "Amendment") is made as of
June ____, 2005, by and between MEDIA SCIENCES, INC. and CADAPULT GRAPHIC
SYSTEMS, INC. (the "Borrower"), and PNC BANK, NATIONAL ASSOCIATION (the "Bank").
BACKGROUND
A. The Borrower has executed and delivered to the Bank (or a
predecessor which is now known by the Bank's name as set forth above), one or
more promissory notes, letter agreements, loan agreements, security agreements,
mortgages, pledge agreements, collateral assignments, and other agreements,
instruments, certificates and documents, some or all of which are more fully
described on attached Exhibit A, which is made a part of this Amendment
(collectively as amended from time to time, the "Loan Documents") which evidence
or secure some or all of the Borrower's obligations to the Bank for one or more
loans or other extensions of credit (the "Obligations").
B. The Borrower and the Bank desire to amend the Loan Documents as
provided for in this Amendment.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and intending to be legally bound hereby, the parties hereto agree as
follows:
1. Certain of the Loan Documents are amended as set forth in Exhibit A.
Any and all references to any Loan Document in any other Loan Document shall be
deemed to refer to such Loan Document as amended by this Amendment. This
Amendment is deemed incorporated into each of the Loan Documents. Any initially
capitalized terms used in this Amendment without definition shall have the
meanings assigned to those terms in the Loan Documents. To the extent that any
term or provision of this Amendment is or may be inconsistent with any term or
provision in any Loan Document, the terms and provisions of this Amendment shall
control.
2. The Borrower hereby certifies that: (a) all of its representations
and warranties in the Loan Documents, as amended by this Amendment, are, except
as may otherwise be stated in this Amendment: (i) true and correct as of the
date of this Amendment, (ii) ratified and confirmed without condition as if made
anew, and (iii) incorporated into this Amendment by reference, (b) no Event of
Default or event which, with the passage of time or the giving of notice or
both, would constitute an Event of Default, exists under any Loan Document which
will not be cured by the execution and effectiveness of this Amendment, (c) no
consent, approval, order or authorization of, or registration or filing with,
any third party is required in connection with the execution, delivery and
carrying out of this Amendment or, if required, has been obtained, and (d) this
Amendment has been duly authorized, executed and delivered so that it
constitutes the legal, valid and binding obligation of the Borrower, enforceable
in accordance with its terms. The Borrower confirms that the Obligations remain
outstanding without defense, set off, counterclaim, discount or charge of any
kind as of the date of this Amendment.
3. The Borrower hereby confirms that any collateral for the
Obligations, including liens, security interests, mortgages, and pledges granted
by the Borrower or third parties (if applicable), shall continue unimpaired and
in full force and effect, and shall cover and secure all of the Borrower's
existing and future Obligations to the Bank, as modified by this Amendment.
4. As a condition precedent to the effectiveness of this Amendment, the
Borrower shall comply with the terms and conditions (if any) specified in
Exhibit A.
5. To induce the Bank to enter into this Amendment, the Borrower waives
and releases and forever discharges the Bank and its officers, directors,
attorneys, agents, and employees from any liability, damage, claim, loss or
expense of any kind that it may have against the Bank or any of them arising out
of or relating to the Obligations. The Borrower further agrees to indemnify and
hold the Bank and its officers, directors, attorneys, agents and employees
harmless from any loss, damage, judgment, liability or expense (including
attorneys' fees) suffered by or rendered against the Bank or any of them on
account of any claims arising out of or relating to the Obligations. The
Borrower further states that it has carefully read the foregoing release and
indemnity, knows the contents thereof and grants the same as its own free act
and deed.
6. This Amendment may be signed in any number of counterpart copies and
by the parties to this Amendment on separate counterparts, but all such copies
shall constitute one and the same instrument. Delivery of an executed
counterpart of a signature page to this Amendment by facsimile transmission
shall be effective as delivery of a manually executed counterpart. Any party so
executing this Amendment by facsimile transmission shall promptly deliver a
manually executed counterpart, provided that any failure to do so shall not
affect the validity of the counterpart executed by facsimile transmission.
7. This Amendment will be binding upon and inure to the benefit of the
Borrower and the Bank and their respective heirs, executors, administrators,
successors and assigns.
8. This Amendment has been delivered to and accepted by the Bank and
will be deemed to be made in the State where the Bank's office indicated in the
Loan Documents is located. This Amendment will be interpreted and the rights and
liabilities of the parties hereto determined in accordance with the laws of the
State where the Bank's office indicated in the Loan Documents is located,
excluding its conflict of laws rules.
9. Except as amended hereby, the terms and provisions of the Loan
Documents remain unchanged, are and shall remain in full force and effect unless
and until modified or amended in writing in accordance with their terms, and are
hereby ratified and confirmed. Except as expressly provided herein, this
Amendment shall not constitute an amendment, waiver, consent or release with
respect to any provision of any Loan Document, a waiver of any default or Event
of Default under any Loan Document, or a waiver or release of any of the Bank's
rights and remedies (all of which are hereby reserved). The Borrower expressly
ratifies and confirms the confession of judgment (if applicable) and waiver of
jury trial provisions contained in the Loan Documents.
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WITNESS the due execution of this Amendment as a document under seal as
of the date first written above.
WITNESS / ATTEST: MEDIA SCIENCES, INC.
____________________________________ By: _______________________________
Print Name:___________________________ Xxxxxxx X. Xxxxx (SEAL)
Title:________________________________ President
(Include title only if an officer of
entity signing to the right)
CADAPULT GRAPHIC SYSTEMS, INC.
____________________________________ By: _______________________________
Print Name:___________________________ Xxxxxxx X. Xxxxx (SEAL)
Title:________________________________ President
(Include title only if an officer of
entity signing to the right)
PNC BANK, NATIONAL ASSOCIATION
By: _______________________________
Xxxxxx Xxxxxxx (SEAL)
Vice President
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EXHIBIT A TO
SECOND AMENDMENT TO LOAN DOCUMENTS
DATED AS OF JUNE ____, 2005
A. The "Loan Documents" that are the subject of this Amendment include the
following (as any of the foregoing have previously been amended, modified or
otherwise supplemented):
1. Loan Agreement dated December 16, 2004 (the "Agreement").
2. $3,000,000.00 Committed Line of Credit Note dated December 16, 2004
(the "Line Note").
3. $500,000 Term Note dated March 28, 2005 (the "Term Note").
4. Security Agreement from Media Sciences, Inc. dated December 16,
2004.
5. Security Agreement from Cadapult Graphic Systems, Inc. dated
December 16, 2004.
6. Guaranty and Suretyship Agreement executed and delivered to the
Bank by Media Sciences International, Inc. dated December 16, 2004.
7. All other documents, instruments, agreements, and certificates
executed and delivered in connection with the Loan Documents listed
in this Section A.
B. The Loan Documents are amended as follows:
1. Paragraph (a) of the Financial Covenants portion of Section 4.2/4.3 of
the Addendum to the Agreement is amended and restated in its entirety
as follows:
"(a) For the fiscal quarter ending June 30, 2005, Media Sciences
International, Inc. will maintain a ratio of: (i) Funded Debt; to (ii)
the sum of EBITDA, measured on a rolling four quarter basis, plus
non-recurring impairment of goodwill plus non-recurring impact of
variable plan accounting treatment of stock options (not to exceed
$1,150,000.00); of not more than 2.50 to 1.00. For the fiscal quarter
ending September 30, 2005 and thereafter, Media Sciences
International, Inc. will maintain a ratio of: (i) Funded Debt; to (ii)
EBITDA, measured on a rolling four quarter basis of not more than 2.50
to 1.00."
C. Conditions to Effectiveness of Amendment: The Bank's willingness to agree to
the amendments set forth in this Amendment is subject to the prior satisfaction
of the following conditions:
1. Execution by all parties and delivery to the Bank of this Amendment,
including the attached Consent.
2. Payment by the Borrower to the Bank of an amendment fee in the amount
of $______________, and reimbursement of the fees and expenses of the
Bank's outside and in-house counsel in connection with this Amendment,
which fees and expenses as of the date of this Amendment are
$____________.
A-1
CONSENT OF GUARANTOR
Each of the undersigned guarantors (jointly and severally if more than
one, the "Guarantor") consents to the provisions of the foregoing Amendment (the
"Amendment") and all prior amendments (if any) and confirms and agrees that: (a)
the Guarantor's obligations under its Guaranty and Suretyship Agreement dated
December 16, 2004 (collectively if more than one, the "Guaranty"), relating to
the Obligations mentioned in the Amendment, shall be unimpaired by the
Amendment; (b) the Guarantor has no defenses, set offs, counterclaims, discounts
or charges of any kind against the Bank, its officers, directors, employees,
agents or attorneys with respect to the Guaranty; and (c) all of the terms,
conditions and covenants in the Guaranty remain unaltered and in full force and
effect and are hereby ratified and confirmed and apply to the Obligations, as
modified by the Amendment. The Guarantor certifies that all representations and
warranties made in the Guaranty are true and correct.
The Guarantor hereby confirms that any collateral for the Obligations,
including liens, security interests, mortgages, and pledges granted by the
Guarantor or third parties (if applicable), shall continue unimpaired and in
full force and effect, shall cover and secure all of the Guarantor's existing
and future Obligations to the Bank, as modified by this Amendment.
By signing below, each Guarantor who is an individual provides written
authorization to the Bank or its designee (and any assignee or potential
assignee hereof) to obtain the guarantor's personal credit profile from one or
more national credit bureaus. Such authorization shall extend to obtaining a
credit profile for the purposes of update, renewal or extension of such credit
or additional credit and for reviewing or collecting the resulting account. A
photocopy or facsimile copy of this authorization shall be valid as the
original. By signature below, each such Guarantor affirms his/her identity as
the respective individual(s) identified in the Guaranty.
The Guarantor ratifies and confirms the indemnification, confession of
judgment (if applicable) and waiver of jury trial provisions contained in the
Guaranty.
WITNESS the due execution of this Consent as a document under seal as
of the date of this Amendment, intending to be legally bound hereby.
WITNESS / ATTEST: MEDIA SCIENCES INTERNATIONAL,
INC.
____________________________________ By: __________________ ____________
Print Name:___________________________ Xxxxxxx X. Xxxxx (SEAL)
Title:________________________________ President
(Include title only if an officer of
entity signing to the right)
