EXHIBIT 4.1
WAIVER AND AMENDMENT TO CREDIT AGREEMENT
WAIVER AND AMENDMENT TO CREDIT AGREEMENT dated as of
November __, 1997 (this "Waiver and Amendment"), among American Bank
Note Company, a New York corporation ("ABN"), American Bank Note
Holographics, Inc., a Delaware corporation (together with ABN, the
"Borrowers"), American Banknote Corporation, a Delaware corporation
("ABNC"), the Guarantors (the "Guarantors") named in the Credit
Agreement (as hereinafter defined), the lenders (the "Lenders") named
in Schedule 2.01 to the Credit Agreement and The Chase Manhattan Bank
(formerly known as Chemical Bank), a New York banking corporation, as
agent (in such capacity, the "Agent") for the Lenders.
WHEREAS, the Borrowers, ABNC, the Guarantors, the Lenders
and the Agent are party to the Credit Agreement dated as of
January 29, 1996 (as amended, modified or supplemented from time to
time in accordance with its terms, the "Credit Agreement");
WHEREAS, the Borrowers have requested that the Lenders
amend and waive certain provisions of the Credit Agreement.
NOW, THEREFORE, for good and valuable consideration, the
receipt of which is hereby acknowledged, the parties hereto agree as
follows:
1. Defined Terms. Unless otherwise specifically defined
herein, all capitalized terms used herein shall have the respective
meanings ascribed to such terms in the Credit Agreement.
2. Amendments to Credit Agreement. Subject to the
conditions as to effectiveness set forth in Paragraph 5 of this Waiver
and Amendment, the Credit Agreement is hereby amended as follows:
(a) The reference in the preamble to "$20,000,000" is
hereby amended to read "$25,000,000 (as subsequently reduced pursuant
to the terms hereof)" and Article I - Definitions of the Credit
Agreement is hereby amended by adding the following definitions in the
appropriate alphabetical order:
"Overadvance Amount" shall mean $10,000,000, reducing
to $5,000,000 if ABN Australasia Limited shall have entered
into credit facilities aggregating $90,000,000 (Australian)
or more.
"Overadvance Termination Date" shall mean the earliest
to occur of: (x) May 31, 1998 and (y) the sale by ABNC of
equity or debt securities in any single or series of
transactions resulting in net proceeds of $25,000,000 or
greater.
(b) Section 2.01 of the Credit Agreement is hereby
amended in its entirety to read as follows:
SECTION 2.01. Revolving Credit Commitments.
Subject to the terms and conditions and relying upon the
representations and warranties herein set forth, each
Lender, severally and not jointly, agrees to make Revolving
Credit Loans to the Borrowers, at any time and from time to
time from the date hereof to the Revolving Credit
Termination Date, in an aggregate principal amount at any
time outstanding not to exceed the amount of such Lender's
Revolving Credit Commitment set forth opposite its name in
Schedule 2.01 annexed hereto, as such Revolving Credit
Commitment may be reduced from time to time in accordance
with the provisions of this Agreement, including, without
limitation, Section 2.07 hereof. Notwithstanding the
foregoing, (A) the aggregate principal amount of Revolving
Credit Loans outstanding at any time to the Borrowers shall
not exceed (i) the lesser of (x) the Total Commitment (as
such amount may be reduced from time to time pursuant to
this Agreement) and (y) the Borrowing Base (as hereinafter
defined) plus the Overadvance Amount until the Overadvance
Termination Date minus (ii) all accrued interest, fees and
expenses at such time and (B) the aggregate principal amount
of Revolving Credit Loans outstanding at any time to (i) ABN
shall not exceed an amount equal to the sum (the "ABN
Borrowing Base") of (x) up to 85% of the Net Amount of
Eligible Accounts of ABN, plus (y) up to 50% of the Net
Amount of Eligible Inventory of ABN and, plus 50% of the
Overadvance Amount until the Overadvance Termination Date
minus the Letter of Credit Usage of ABN at such time and
(ii) ABNH shall not exceed an amount equal to the sum (the
"ABNH Borrowing Base" and, together with the ABN Borrowing
Base, the "Borrowing Base") of (x) up to 85% of the Net
Amount of Eligible Accounts of ABNH plus (y) up to 50% of
the Net Amount of Eligible Inventory of ABNH and, plus 50%
of the Overadvance Amount until the Overadvance Termination
Date minus the Letter of Credit Usage of ABNH at such time.
Notwithstanding the foregoing, it is hereby
acknowledged and agreed that (i) the advance rate with
respect to Eligible Receivables may be reduced at any time
by the Agent in its reasonable discretion if a receivable
dilution percentage in excess of five percent (5%) is
confirmed in any field examination conducted by or on behalf
of the Agent and (ii) reserves may be reasonably established
at any time by the Agent in its sole reasonable discretion
including, without limitation, reserves with respect to
(x) exposure under foreign exchange contracts, hedging and
other financial instruments and (y) collateral locations for
which landlord waiver and consent agreements in form and
substance satisfactory to the Agent have not been obtained.
Subject to the foregoing and within the foregoing
limits, the Borrowers may borrow, repay (or, subject to the
provisions of Section 2.09 hereof, prepay) and reborrow
Revolving Credit Loans, on and after the Closing Date and
prior to the Revolving Credit Termination Date, subject to
the terms, provisions and limitations set forth herein,
including, without limitation, the requirement that no
Revolving Credit Loan shall be made hereunder if after
giving effect thereto (A) with respect to all Borrowers, the
sum of (I) the aggregate principal amount of the Revolving
Credit Loans outstanding hereunder, plus (ii) the Letter of
Credit Usage, plus (iii) accrued interest, fees and
expenses, would exceed the lesser of (i) the Total
Commitment (as such amount may be reduced pursuant to the
provisions of this Agreement) and (ii) the Borrowing Base
plus the Overadvance Amount until the Overadvance
Termination Date, (B) with respect to ABN, the sum of
(i) the aggregate principal amount of the Revolving Credit
Loans outstanding hereunder to ABN plus (ii) the Letter of
Credit Usage with respect to Letters of Credit issued for
the account of ABN, would exceed the lesser of (i) the Total
Commitment (as such amount may be reduced pursuant to the
provisions of this Agreement) and (ii) the ABN Borrowing
Base plus 50% of the Overadvance Amount until the
Overadvance Termination Date and (C) with respect to ABNH,
the sum of (i) the aggregate principal amount of Revolving
Credit Loans outstanding hereunder to ABNH plus (ii) the
Letter of Credit Usage with respect to Letters of Credit
issued for the account of ABNH, would exceed the lesser of
(i) the Total Commitment (as such amount may be reduced
pursuant to the provisions of this Agreement) and (ii) the
ABNH Borrowing Base plus 50% of the Overadvance Amount until
the Overadvance Termination Date. In accordance with
Section 6.05(i) hereof, a Responsible Officer of each
Borrower shall furnish on each date required thereunder a
separate Borrowing Base Certificate substantially in the
form of Exhibit E hereto with respect to such Borrower with
appropriate modification satisfactory to the Agent to
reflect the Overadvance Amount until the Overadvance
Termination Date.
(c) The proviso in Section 2.17 of the Credit
Agreement is hereby amended in its entirety to read as follows:
"; provided, however, that the face amount of any
Letter of Credit that (A) the Borrowers may request the
Agent to open at any time shall not exceed the lesser of
(i) the Total Commitment at such time (as such may have been
reduced in accordance with the terms of this Agreement) and
(ii) the Borrowing Base at such time plus the Overadvance
Amount until the Overadvance Termination Date minus (i) the
Letter of Credit Usage at such time and (ii) the aggregate
principal amount of Revolving Credit Loans, accrued
interest, fees and expenses outstanding at such time,
(B) ABN may request the Agent to open at any time shall not
exceed the ABN Borrowing Base plus 50% of the Overadvance
Amount until the Overadvance Termination Date minus the
undrawn amount of all outstanding Letters of Credit at such
time as to which ABN is the account party and the aggregate
principal amount of the Revolving Credit Loans outstanding
to ABN at such time, and (C) ABNH may request the Agent to
open at any time shall not exceed the ABNH Borrowing Base
plus 50% of the Overadvance Amount until the Overadvance
Termination Date minus the undrawn amounts of all Letters of
Credit at such time as to which ABNH is the account party
and the aggregate outstanding principal amount of the
Revolving Credit Loans outstanding to ABNH at such time."
(d) Section 2.05 of the Credit Agreement is hereby
amended by adding thereto a new subsection (d) to read in its entirety
as follows:
"(d) Subject to the provisions of Section 2.05(c)
and Section 2.08 hereof, and notwithstanding the provisions
of Sections 2.05(a) and (b) hereof, each Loan which
constitutes an Overadvance Amount as determined by the Agent
shall bear interest at a rate per annum equal to the
Alternate Base Rate plus the applicable Interest Margin."
(e) The first sentence of Section 2.09(c) of the
Credit Agreement is hereby amended in its entirety to read as follows:
"The Borrowers shall make prepayments of the
Revolving Credit Loans from time to time such that each of
ABN Availability (plus 50% of the Overadvance Amount until
the Overadvance Termination Date), ABNH Availability (plus
50% of the Overadvance Amount until the Overadvance
Termination Date) and Total Availability (plus the
Overadvance Amount until the Overadvance Termination Date)
equals or exceeds zero at all times."
(f) Section 4.14 of the Credit Agreement is hereby
amended by adding thereto the following sentence at the end thereof:
"From time to time proceeds constituting the
Overadvance Amount up to $10,000,000 may be dividended or
loaned to ABNC to be utilized for general corporate
purposes, without requiring the delivery of a Compliance
Certificate."
(g) Schedule 2.01 annexed to the Credit Agreement
shall be replaced by Schedule 2.01 annexed hereto.
3. Waivers to Credit Agreement. Subject to the
conditions as to effectiveness set forth in Paragraph 5 of this Waiver
and Amendment, the Lenders hereby waive (x) until the Overadvance
Termination Date the requirement set forth in Section 10.01(a) of the
Credit Agreement that collections be immediately applied to reduce
Revolving Credit Loans once Total Availability is less than $2,500,000
(but not the requirement that such application be made upon the
occurrence of a Default or Event of Default) and (y) the restrictions
set forth in Section 7.03 of the Credit Agreement to permit the
issuance of up to $5,000,000 of convertible subordinated debentures by
ABNC and the guarantee by ABNC of a $650,000 loan made by CoreStates
Bank, N.A. to American BankNote Card Services, Inc. and American
BankNote Merchant Services, Inc.
4. Representations and Warranties. Each of the Borrowers
hereby jointly and severally represents and warrants as of the date
hereof, after giving effect to the amendments and waivers set forth in
Paragraphs 2 and 3 of this Waiver and Amendment, as follows (which
representations and warranties shall survive the execution and
delivery of this Waiver and Amendment):
(a) All representations and warranties contained in
the Credit Agreement and each of the other Loan Documents are true and
correct as of the date hereof with the same force and effect as if
made on such date (except to the extent that any such representation
or warranty relates expressly to an earlier date).
(b) Each of the Loan Parties has the power to
execute, deliver and carry out the terms and provisions of this Waiver
and Amendment.
(c) This Waiver and Amendment has been duly executed
and delivered and constitutes the legal, valid and binding obligation
of each Loan Party, and is enforceable in accordance with its terms.
(d) No event has occurred and is continuing which
constitutes or would constitute, with the giving of notice or the
lapse of time or both, a Default or an Event of Default under the
Credit Agreement.
5. Conditions Precedent. Notwithstanding any term or
provision of this Waiver and Amendment to the contrary, Paragraphs 2
and 3 hereof shall not become effective until the Agent shall have
determined that each of the following conditions precedent shall have
been satisfied:
(a) All required corporate actions in connection with
the execution and delivery of this Waiver and Amendment shall have
been taken, and each shall be satisfactory in form and substance to
the Agent, and the Agent shall have received all information and
copies of all documents, including, without limitation, records of
requisite corporate action that the Agent may reasonably request, to
be certified by the appropriate corporate person or government
authorities.
(b) All fees, costs and expenses of the Agent in
connection with this Waiver and Amendment, including, without
limitation, reasonable fees, costs and expenses of counsel to the
Agent, shall have been paid in full to the persons entitled thereto in
immediately available funds.
(c) All representations and warranties made by
the Borrowers contained in Paragraph 4 hereof shall be true and
correct with the same effect as though such representations and
warranties had been made on the date of effectiveness of the
amendments and waivers contained in this Waiver and Amendment after
giving effect to such amendments and waivers (unless any such
representation or warranty speaks expressly to an earlier date).
(d) Counterparts of this Waiver and Amendment shall
have been duly executed and delivered on behalf of the Borrowers,
ABNC, the Guarantors, the Lenders and the Agent.
(e) The Agent shall have received a structuring fee
in the amount of $25,000 and an additional fee of $50,000 at the time
that the Overadvance Amount (as defined in the Credit Agreement) is
drawn and an additional fee of $75,000 on May 31, 1998 unless prior to
May 31, 1998 The Chase Manhattan Bank has been designated as the lead
manager and agent with respect to the Loan Parties' hi-yield debt
issue and restated credit facilities (the failure to pay such
additional fees constituting an Event of Default).
(f) The Agent shall have received a replacement
Revolving Credit Note.
6. References to Credit Agreements. The term
"Agreement", "hereof", "herein" and similar terms as used in the
Credit Agreement, and references in the other Loan Documents to the
Credit Agreement, shall mean and refer to, from and after the
effective date of the amendments contained herein as determined in
accordance with Paragraph 5 hereof, the Credit Agreement as amended by
this Waiver and Amendment.
7. Continued Effectiveness. Except for the specific
waivers set forth in Paragraph 3 hereof, nothing herein shall be
deemed to be a waiver of any covenant or agreement contained in, or
any Default or Event of Default under, the Credit Agreement, and each
of the parties hereto agrees that, as amended by this Waiver and
Amendment, all of the covenants and agreements and other provisions
contained in the Credit Agreement and the other Loan Documents are
hereby ratified and confirmed in all respects and shall remain in full
force and effect from and after the date of this Waiver and Amendment.
8. Counterparts. This Waiver and Amendment may be
executed in two or more counterparts, each of which shall be an
original, and all of which, taken together, shall constitute a single
instrument. Delivery of an executed counterpart of a signature page
to this Waiver and Amendment by telecopier shall be effective as
delivery of a manually executed counterpart of this Waiver and
Amendment.
9. Governing Law. This Waiver and Amendment shall be
construed in accordance with and governed by the laws of the State of
New York (other than the conflicts of laws principles thereof).
IN WITNESS WHEREOF, the parties hereto have caused this
Waiver and Amendment to be duly executed by their respective officers
thereunto duly authorized as of the day and year first above written.
AMERICAN BANK NOTE COMPANY, as
a Borrower and Guarantor
s/ Ward Urban
By: Ward Urban
Vice President and Treasurer
AMERICAN BANK NOTE
HOLOGRAPHICS, INC., as a Borrower and
Guarantor
s/ Ward Urban
By: Ward Urban
Vice President and Treasurer
AMERICAN BANKNOTE CORPORATION
s/ Ward Urban
By: Ward Urban
Vice President and Treasurer
UNITED STATES BANKNOTE COMPANY L.P.,
as a Guarantor
By: AMERICAN BANK NOTE
COMPANY, its general partner
s/ Ward Urban
By: Ward Urban
Vice President and Treasurer
HORSHAM HOLDING COMPANY, INC., as
a Guarantor
s/ Ward Urban
By: Ward Urban
Vice President and Treasurer
ABN SECURITY SYSTEMS, INC., as a
Guarantor
s/ Ward Urban
By: Ward Urban
Vice President and Treasurer
THE CHASE MANHATTAN BANK (formerly
known as Chemical Bank),
as Agent and a Lender
REVOLVING CREDIT NOTE
$25,000,000 January 29, 1996
as Replaced November __, 1997
FOR VALUE RECEIVED, the undersigned, AMERICAN BANK NOTE
COMPANY, a New York corporation ("ABN"), and AMERICAN BANK NOTE
HOLOGRAPHICS, INC., a Delaware corporation ("ABNH" and collectively
with ABN, the "Makers"), jointly and severally, hereby promise to pay
to the order of THE CHASE MANHATTAN BANK (the "Lender"), at the office
of THE CHASE MANHATTAN BANK (the "Agent"), at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ on the Revolving Credit Termination Date as
defined in the Credit Agreement dated as of January 29, 1996, among
the Makers, American Bank Note Corporation, a Delaware corporation,
the Guarantors named therein, the Lenders named therein and the Agent
(as the same may be amended, modified or supplemented from time to
time in accordance with its terms, the "Credit Agreement") or earlier
as provided for in the Credit Agreement, the lesser of the principal
sum of Twenty Five Million Dollars ($25,000,000) or the aggregate
unpaid principal amount of all Revolving Credit Loans to the Makers
from the Lender pursuant to the terms of the Credit Agreement, in
lawful money of the United States of America in immediately available
funds, and to pay interest from the date hereof on the principal
amount hereof from time to time outstanding, in like funds, at said
office, at a rate or rates per annum and payable on such dates as
determined pursuant to the terms of the Credit Agreement.
The Makers promise to pay interest, on demand, on any
overdue principal and fees and, to the extent permitted by law,
overdue interest from their due dates at a rate or rates determined as
set forth in the Credit Agreement.
The Makers hereby waive diligence, presentment, demand,
protest and notice of any kind whatsoever. The non-exercise by the
holder of any of its rights hereunder in any particular instance shall
not constitute a waiver thereof in that or any subsequent instance.
All borrowings evidenced by this Note and all payments and
prepayments of the principal hereof and interest hereon and the
respective dates thereof shall be endorsed by the holder hereof on the
schedule attached hereto and made a part hereof, or on a continuation
thereof which shall be attached hereto and made a part hereof, or
otherwise recorded by such holder in its internal records; provided,
however, that the failure of the holder hereof to make such a notation
or any error in such a notation shall not in any manner affect the
obligation of the Makers to make payments of principal and interest in
accordance with the terms of this Note and the Credit Agreement.
This Note is one of the Notes referred to in the Credit
Agreement, which, among other things, contains provisions for the
acceleration of the maturity hereof upon the happening of certain
events, for optional and mandatory prepayment of the principal hereof
prior to the maturity hereof and for the amendment or waiver of
certain provisions of the Credit Agreement, all upon the terms and
conditions therein specified. THIS NOTE SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
(OTHER THAN THE CONFLICTS OF LAWS PRINCIPLES THEREOF) AND ANY
APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.
AMERICAN BANK NOTE COMPANY
By:___________________________
Name:
Title:
AMERICAN BANK NOTE HOLOGRAPHICS, INC.
By:___________________________
Name:
Title:
Loans and Payment
Unpaid
Principal Name of
Amount and Payments Balance of Person Making
Date Type of Loan Principal Interest Note Notation
SCHEDULE 2.01
Revolving Credit Commitments
Approximate Percentage of Total
Lender Revolving Credit Commitment Revolving Credit commitment
Chemical Bank $25,000,000 until the Overadvance 100%
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Date and thereafter
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ $20,000,000
Attention: Credit Deputy
