Exhibit 10.13
SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is entered
into as of June 30, 1999, by and between SEATTLE FILMWORKS, INC., a Washington
corporation, OPTICOLOR, INC., a Washington corporation, and SEATTLE FILMWORKS
MANUFACTURING COMPANY, INC., a Washington corporation (collectively,
"Borrowers," and each individually, a "Borrower"), and XXXXX FARGO BANK,
NATIONAL ASSOCIATION ("Bank").
RECITALS
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WHEREAS, Borrowers are currently indebted to Bank pursuant to the terms and
conditions of that certain Credit Agreement between Borrowers and Bank dated as
of March 1, 1997, as amended by that certain First Amendment to Credit Agreement
dated as of February 24, 1998 and extended by that certain letter extension
dated as of April 1, 1999, and as the same may be further amended from time to
time ("Credit Agreement").
WHEREAS, Bank and Borrowers have agreed to certain changes in the terms and
conditions set forth in the Credit Agreement and have agreed to amend the Credit
Agreement to reflect said changes.
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree that the Credit
Agreement shall be amended as follows:
1. Section 1.1.(a) is hereby amended by deleting "June 30, 1999" as the
last day on which Bank will make advances under the Line of Credit, and by
substituting for said date "June 30, 2000," with such change to be effective
upon the execution and delivery to Bank of a promissory note substantially in
the form of Exhibit A attached hereto (which promissory note shall replace and
be deemed the Line of Credit Note defined in and made pursuant to the Credit
Agreement) and all other contracts, instruments and documents required by Bank
to evidence such change.
2. The parties acknowledge and agree that no conversion of the Line of
Credit balance has occurred under Section 1.1.(d). Section 1.1.(d) is hereby
deleted in its entirety, without substitution therefor, together with Exhibit B
and all references in the Credit Agreement to the "Converted Term Loan" and the
"Converted Term Loan Note."
3. Section 1.1.(e)(iii) is hereby deleted in its entirety, and the
following substituted therefor:
"(iii) The term "Permitted Acquisition" means an
Acquisition in any given fiscal year which meets the
following conditions: The aggregate consideration paid or to
be paid in the Acquisition for the assets or business to be
acquired from the Target, or the stock, partnership
interests or membership interests of the Target (whether
paid or to be paid in the form of cash, stock, contingent or
non-contingent liabilities assumed, or other consideration)
(collectively, "Aggregate Consideration") shall not, when
combined with (i) all such consideration paid or to be paid
with respect to all other Permitted Acquisitions that have
been consummated in such fiscal year as of the date of the
proposed Acquisition and (ii) the aggregate of all other
fixed asset and capital asset investments by Borrowers in
such fiscal year as of the date of the proposed Acquisition,
does not exceed the greater of (i) $9,000,000.00, less
outstanding bank debt, or (ii) Borrowers' consolidated cash
and marketable securities, less outstanding bank debt, in
either case as reported by Parent Company in its most recent
report filed with the SEC on Form 10-Q or 10-K.
Notwithstanding the foregoing, no Acquisition shall be
considered a Permitted Acquisition at any time that Parent
Company is delinquent in filing its annual or quarterly
report on Form 10-Q or Form 10-K with the SEC."
4. Section 4.3.(a) is hereby amended by deleting the words "...a
consolidated and consolidating financial statement..." in the second line
thereof and substituting therefor the words "...audited consolidated financial
statements...".
5. Sections 4.8.(a) and (b) are hereby deleted in their entirety, and the
following substituted therefor:
"(a) Net income after provision for taxes of not less
than $1.00 on a trailing four-quarter basis, determined as
of each fiscal quarter end (excluding from each such
computation, the amortization expense associated with
certain capitalized
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Acquisition costs in the amount of, at fiscal year end September 26,
1998, $16,800,000.00).
(b) Net Worth measured quarterly at the end of each fiscal
quarter, not less than $28,000,000.00, with "Net Worth" defined as
total stockholders' equity."
6. The following is hereby added to the Credit Agreement as Section
4.8.(e):
"(e) Quick Ratio not at any time less than 1.3 to 1.0,
with "Quick Ratio" defined as the aggregate of unrestricted
cash, unrestricted marketable securities and receivables
convertible into cash divided by total current liabilities."
7. The following is hereby added to the Credit Agreement as Section 4.11.:
"SECTION 4.11. YEAR 2000 COMPLIANCE. Perform all acts
reasonably necessary to ensure that (a) Borrower and any
business in which Borrower holds a substantial interest, and
(b) all customers, suppliers and vendors that are material
to Borrower's business, become Year 2000 Compliant in a
timely manner. Such acts shall include, without limitation,
performing a comprehensive review and assessment of all of
Borrower's systems and adopting a detailed plan, with
itemized budget, for the remediation, monitoring and testing
of such systems. As used herein, "Year 2000 Compliant" shall
mean, in regard to any entity, that all software, hardware,
firmware, equipment, goods or systems utilized by or
material to the business operations or financial condition
of such entity, will properly perform date sensitive
functions before, during and after the year 2000. Borrower
shall, immediately upon request, provide to Bank such
certifications or other evidence of Borrower's compliance
with the terms hereof as Bank may from time to time
require."
8. Section 5.2. is hereby deleted in its entirety, and the following
substituted therefor:
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"CAPITAL EXPENDITURES. Make any additional investment
in fixed or capital assets in any fiscal year, which, when
combined with (a) all other investments in fixed or capital
assets made by Borrowers in such fiscal year as of the date
such proposed additional investment, and (b) the Aggregate
Consideration paid by Borrowers in Permitted Acquisitions
(iii) in such fiscal year as of such date, exceeds the
greater of (i) $9,000,000.00, less outstanding bank debt, or
(ii) Borrowers' consolidated cash and marketable securities,
less outstanding bank debt, in either case as reported by
Parent Company in its most recent report filed with the SEC
on Form 10-Q or 10-K. Notwithstanding the foregoing, no
additional investment in fixed or capital assets shall be
made if Parent Company is then delinquent in filing its
annual or quarterly report on Form 10-Q or Form 10-K with
the SEC."
9. Section 5.3. is hereby amended by deleting the reference to the amount
"$500,000.00" in the first sentence thereof and substituting therefor the amount
"$1,300,000.00".
10. Borrowers shall pay to Bank a non-refundable commitment fee for the
Line of Credit equal to $7,500.00, which fee shall be due and payable in full
upon the execution of this Amendment.
11. Except as specifically provided herein, all terms and conditions of
the Credit Agreement remain in full force and effect, without waiver or
modification. All terms defined in the Credit Agreement shall have the same
meaning when used in this Amendment. This Amendment and the Credit Agreement
shall be read together, as one document.
12. Borrowers hereby remake all representations and warranties contained
in the Credit Agreement and reaffirm all covenants set forth therein. Borrowers
further certify that as of the date of this Amendment there exists no Event of
Default as defined in the Credit Agreement, nor any condition, act or event
which with the giving of notice or the passage of time or both would constitute
any such Event of Default.
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ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR
ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON LAW.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the day and year first written above.
XXXXX FARGO BANK,
SEATTLE FILMWORKS, INC. NATIONAL ASSOCIATION
By: /s/ X. Xxxxxxxx Bond By: /s/Xxxxxx Xxxxxxx
Xxxxxx Xxxxxxx
Title: CFO/Treasurer Vice President
OPTICOLOR, INC.
By: /s/ X. Xxxxxxxx Bond
Title: CFO/Tresurer
SEATTLE FILMWORKS MANUFACTURING COMPANY
By: /s/ X. Xxxxxxxx Bond
Title: CFO/Treasurer
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