EXHIBIT 10.26
SECOND AMENDMENT TO AGREEMENT AND FOURTH
AMENDMENT TO CREDIT AGREEMENT
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THIS SECOND AMENDMENT TO AGREEMENT AND FOURTH AMENDMENT TO CREDIT
AGREEMENT, dated as of March 17, 1997 (this "Second Amendment") is entered into
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by and among XXXXXXX INTERNATIONAL, INC. (the "Borrower"), PMC LIQUIDATION, INC.
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and PRINTING AND PACKAGING EQUIPMENT FINANCE CORPORATION (individually a
"Guarantor" and together, the "Guarantors"), and BANK OF AMERICA TEXAS, N.A.
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(the "Bank").
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W I T N E S S E T H:
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WHEREAS, Borrower, Guarantors and Bank entered into that certain
Agreement and Fourth Amendment to Credit Agreement dated as of December 31, 1996
(the "Fourth Amendment"); and
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WHEREAS, Borrower, Guarantors and Bank entered into that certain First
Amendment to Agreement and Fourth Amendment to Credit Agreement dated as of
February 28, 1997 (the "First Amendment"), which First Amendment extended the
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Expiration Date (as such term is defined in the Fourth Amendment) from February
28, 1997 to March 17, 1997 (the Fourth Amendment, as amended by the First
Amendment, hereinafter referred to as the "Fourth Amendment"); and
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WHEREAS, Borrower, Guarantors and Bank wish to further amend the Fourth
Amendment as set forth below.
THEREFORE, in consideration of the mutual covenants and agreements herein
contained, Borrower, Guarantors and Bank agree as follows:
1. Borrowing Base Advance Cap Definition. Section 3(b) of the Fourth
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Amendment, Additional Definitions, is amended by deleting the definition of
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"Borrowing Base Advance Cap" in its entirety and replacing it with the
following:
"Borrowing Base Advance Cap" means at any time an amount equal to the
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lesser of:
(i) $15,000,000.00; or
(ii) the sum of:
(A) 80% of the amount of Eligible Accounts; plus
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(B) the lesser of (A) $4,500,000.00; or (B) 25% of the amount of
Eligible Inventory; plus
(C) $7,387,000.00.
2. Revolving Line of Credit Definition. Section 3(b) of the Fourth
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Amendment, Additional Definitions, is amended by deleting the definition of
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"Revolving Line of Credit" in its entirety and replacing it with the following:
"Revolving Line of Credit" means the committed line of credit for
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advances in an amount outstanding at any time not to exceed
$15,000,000.00.
All references in the Fourth Amendment to the Revolving Line of Credit being an
amount of up to $27,000,000.00 are hereby amended to refer to an amount of up to
$15,000,000.00.
3. Extension of Expiration Date. Section 3(b) of the Fourth Amendment,
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The Loans, is amended by deleting the first sentence of subsection (a) of
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Section 2.2, Revolving Line of Credit, in its entirety and replacing it with the
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following:
2.2 Revolving Line of Credit.
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(a) The term "Expiration Date" is amended to mean the earliest to
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occur of (i) the date any holder of any portion of the Subordinated Debt
accelerates the maturity of any principal of the Subordinated Debt or
otherwise pursues any rights or remedies it may have pursuant to the
documents evidencing the Subordinated Debt, or (ii) the date any Default or
Potential Default other than the Existing Defaults occurs under the Loan
Documents, or (iii) 5:00 p.m., May 1, 1997.
Except as set forth above, the Fourth Amendment shall continue in full
force and effect in accordance with its original provisions.
4. Fee. In consideration of Bank's agreement to extend the Expiration
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Date, Borrower agrees to pay Bank, on or before the Expiration Date as amended
hereby, a forbearance fee in the amount of $20,000.00.
5. Section 3(e) of the Fourth Amendment is amended such that the phrase
"On January 30, 1997, February 20, 1997 and the Xxxxxx Sale Date" as appearing
in each of subsections (d), (e) and (f) thereof is replaced in each such
subsection with the phrase "On the 20th day of each month."
6. Section 3(f) of the Fourth Amendment is amended such that the phrase
"On January 30, 1997, February 20, 1997 and the Xxxxxx Sale Date" as appearing
in each of subsections (k), (l), (m), (n), (o), (q) and (r) thereof is replaced
in each such subsection with the phrase "On the 20th day of each month."
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7. Representations. To induce Bank to enter into this Second
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Amendment, Borrower ratifies and confirms each representation and warranty set
forth in the Fourth Amendment as if such representations and warranties were
made on even date herewith, and further represents and warrants that (a) except
as has been previously disclosed by Borrower to Bank, no material adverse change
has occurred in the financial condition or business prospects of Borrower since
the date of the last financial statements delivered to the Bank, and (b) that
Borrower is fully authorized to enter into this Second Amendment.
8. Miscellaneous.
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a. Defined Terms. Capitalized terms used herein which are not
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otherwise defined shall have the meanings set forth in the Fourth Amendment.
b. Costs and Expenses. Borrower agrees to pay to Bank the
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reasonable attorneys' fees and expenses of Bank's counsel and other reasonable
expenses incurred by Bank in connection with this Second Amendment and the
transactions contemplated hereby.
c. NO COMMITMENT. BORROWER AND EACH GUARANTOR AGREE THAT BANK
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HAS MADE NO COMMITMENT OR OTHER AGREEMENT REGARDING THE NOTE, THE CREDIT
AGREEMENT, OR THE LOAN DOCUMENTS, EXCEPT AS EXPRESSLY SET FORTH IN THE LOAN
DOCUMENTS AND THE FOURTH AMENDMENT, AS MODIFIED BY THIS SECOND AMENDMENT.
BORROWER AND EACH GUARANTOR WARRANT AND REPRESENT THAT NEITHER BORROWER NOR
EITHER GUARANTOR WILL RELY ON ANY COMMITMENT, FURTHER AGREEMENT TO FORBEAR OR
OTHER AGREEMENT ON THE PART OF BANK UNLESS SUCH COMMITMENT OR AGREEMENT IS IN
WRITING AND SIGNED BY BANK.
d. Survival. All representations, warranties, covenants and
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agreements of the parties made in this Second Amendment shall survive the
execution and delivery hereof, until such time as all of the obligations of the
parties hereto shall have lapsed in accordance with their respective terms or
shall have been discharged in full.
e. Successors and Assigns. This Second Amendment shall be
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binding upon and shall inure to the benefit of the parties hereto and their
respective heirs, successors and assigns.
f. Modifications and Waivers. No delay on the part of Bank in
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exercising any right, power or privilege hereunder, shall operate as a waiver
thereof, nor shall any waiver of any right, power or privilege hereunder operate
as a waiver of any other right, power or privilege hereunder, nor
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shall any single or partial exercise of any right, power or privilege hereunder
preclude any other or further exercise thereof, or the exercise of any other
right, power or privilege hereunder. All rights and remedies herein provided are
cumulative and are not exclusive of any rights or remedies which the parties
hereto may otherwise have at law or in equity. No waiver or modification,
discharge or amendment of this Second Amendment will be valid in the absence of
the written and signed consent of the party against which enforcement of such is
sought.
g. Entire Agreement. This Second Amendment, together with the
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other documents and instruments referenced herein, contains the entire agreement
between the parties relating to the transactions contemplated hereby. All prior
or contemporaneous agreements, understandings, representations and statements,
whether written or oral, are merged herein.
h. Governing Law. This Agreement shall be construed in
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accordance with the applicable laws of the State of Texas and applicable federal
law. In the event of a dispute involving this Second Amendment or any other
instruments executed in connection herewith, the undersigned irrevocably agrees
that venue for such dispute shall lie in any court of competent jurisdiction in
Dallas County, Texas.
i. Counterparts. This Second Amendment may be executed in one or
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more counterparts, all of which when taken together shall be deemed to be one
original.
j. Time of Essence. The parties to this Second Amendment have
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agreed specifically with regard to the times for performance set forth in this
Second Amendment. Further, the parties to this Second Amendment acknowledge
that the agreements with regard to the times for performance are material to
this Second Amendment. Therefore, the parties agree and acknowledge that time
is of the essence to this Second Amendment.
k. Acknowledgment of Debt and Ratification of Security Documents.
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Borrower and each Guarantor agree that those certain security documents (as
heretofore amended, including amendments to same contained in the Fourth
Amendment, the "Security Documents"), which are more fully described in Exhibit
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A attached to that certain Master Amendment to Security Documents, dated May 16,
1995, executed by Guarantors and Borrower in favor of the Bank remain unchanged;
and the same are in full force and effect as of the date hereof. Borrower and
each Guarantor hereby ratify the rights, titles, liens and security interests
under the Security Documents existing in favor of Bank, excluding the liens of
Bank partially released pursuant to those certain UCC-3 partial releases
releasing the liens of Bank on the assets sold pursuant to the Asset Purchase
Agreement between Xxxxxxx International, Inc. and Xxxxxx International, Inc.
described in such Asset Purchase Agreement as "Xxxxxx Assets".
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l. Ratification of Guaranties. The Guarantors agree that that
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certain Business Loan Continuing Guaranty, dated May 16, 1995 (as heretofore
amended, including amendments to same
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contained in the Fourth Amendment, the "Guaranty"), executed by the Guarantors
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in favor of the Bank, remains in full force and effect and continues to be the
legal, valid and binding obligation of the Guarantors enforceable against
Guarantors in accordance with its terms. Furthermore, the Guarantors hereby
agree and acknowledge that (a) as of the date hereof, the Guaranty is not
subject to any claims, defenses or offsets, (b) nothing contained in this Second
Amendment shall adversely affect any right or remedy of Bank under the Guaranty,
and (c) the execution and delivery of this Second Amendment shall in no way
reduce, impair or discharge any obligations of the Guarantors pursuant to the
Guaranty.
m. NO ORAL AGREEMENTS. THIS WRITTEN AGREEMENT REPRESENTS THE
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FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
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PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
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THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
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Executed effective the date first written above.
BANK OF AMERICA TEXAS, X.X. XXXXXXX INTERNATIONAL, INC.,
formerly known as Xxxxxxx Graphics Corporation
By: /s/ Xxx X. Xxxxx By: /s/ Xxxxxx X. Xxxxxxxxxxxxx
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Name: Xxx X. Xxxxx Name: Xxxxxx X. Xxxxxxxxxxxxx
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Title: Vice President Title: Treasurer & Chief Accounting Officer
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GUARANTORS:
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PMC LIQUIDATION, INC.
By: /s/ Xxxxxx X. Xxxxxxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxxxxxx
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Title: Chief Accounting Officer
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PRINTING & PACKAGING EQUIPMENT
FINANCE CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxxxxxx
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Title: Treasurer & Chief Accounting
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Officer
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AND FOURTH AMENDMENT TO CREDIT
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