FIFTH AMENDMENT TO
EXHIBIT 10
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FIFTH AMENDMENT TO
CREDIT AND SECURITY AGREEMENT
BETWEEN
MEDIA SCIENCES INTERNATIONAL, INC.,
a Delaware Corporation,
as Co-Borrower
CADAPULT GRAPHIC SYSTEMS, INC.,
a New Jersey Corporation,
as Co-Borrower
MEDIA SCIENCES, INC.,
a New Jersey Corporation,
as Co-Borrower
AND
SUMMIT BUSINESS CAPITAL CORP.,
previously SUMMIT COMMERCIAL/GIBRALTAR CORP.,
as Lender
DATED:July 1, 2002
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RECORD AND RETURN TO:
XXXXX XXXXXXX XXXXXXX, P.C.
Country Club Plaza
West 000 Xxxxxxx Xxxx
Xxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxxxx X. Xxxxx, Esq.
FIFTH AMENDMENT TO
CREDIT AND SECURITY AGREEMENT
THIS FIFTH AMENDMENT TO CREDIT AND SECURITY AGREEMENT, made as of the 1st
day of July, 2002 by and between MEDIA SCIENCES INTERNATIONAL, INC., CADAPULT
GRAPHIC SYSTEMS, INC. and MEDIA SCIENCES, INC., having an address at 000
Xxxxxxxx Xxxxx, Xxxxxxxxx, Xxx Xxxxxx 00000 now collectively (the
"Co-Borrowers"), and SUMMIT BUSINESS CAPITAL CORP., previously SUMMIT
COMMERCIAL/GIBRALTAR CORP., having an address at 0000 Xxxxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 (the "Lender"),
WITNESSETH:
WHEREAS, the Lender has made a certain revolving credit loan to the
Borrower, Cadapult Graphic Systems, Inc., in the aggregate principal amount of
up to Six Million and 00/100 ($6,000,000.00) Dollars (the "Loan"); and
WHEREAS, the Loan is secured by a certain Credit and Security Agreement
(the "Credit Agreement") dated April 9, 1999; and
WHEREAS, the Borrower, Cadapult Graphic Systems, Inc., requested that the
Lender reduce the interest rate on the Loan; and
WHEREAS, the Lender did reduce the interest rate on the Loan by that
certain First Amendment to Credit and Security Agreement dated as of May 1, 2000
(hereinafter the "First Amendment"); and
WHEREAS, the Borrower, Cadapult Graphic Systems, Inc., had requested that
the Lender use certain assets of its wholly-owned subsidiary, Media Sciences,
Inc., in determining the Advance Limit and otherwise modify certain terms and
conditions of the Loan; and
WHEREAS, the Borrower, Cadapult Graphic Systems, Inc., had requested that
the Lender modify the Credit Agreement; and
WHEREAS, the Lender did modify the Credit Agreement in accordance with the
request of the Borrower by that certain Second Amendment to Credit and Security
Agreement dated as of January 31, 2001 (hereinafter the "Second Amendment"); and
WHEREAS, the Co-Borrowers, Cadapult Graphic Systems, Inc. and Media
Sciences, Inc., had requested that the Lender reduce the credit facility to the
Co-Borrowers from Six Million ($6,000,000.00) Dollars to Four Million
($4,000,000.00) Dollars, and further requested that the Lender extend the
Maturity Date to April 30, 2003 and otherwise modify the said Credit Agreement;
and
WHEREAS, the Lender did modify the said Credit Agreement in accordance with
the request of the Co-Borrowers pursuant to that certain Third Amendment to
Credit and Security Agreement dated as of May 4, 2001 (hereinafter the "Third
Amendment"); and
WHEREAS, Co-Borrowers, Media Sciences International, Inc., formerly
Cadapult Graphic Systems, Inc., a Delaware corporation, and Media Sciences,
Inc., had requested that the Lender further modify the Credit Agreement to
include Cadapult Graphic Systems, Inc., a New Jersey corporation, as a
Co-Borrower, and further requesting that the Lender reduce the Annual Facility
Fee; and
WHEREAS, the Lender did modify the Credit Agreement to include Cadapult
Graphic Systems, Inc., a New Jersey corporation, as a Co-Borrower and reduce the
Annual Facility Fee by that certain Fourth Amendment to Credit and Security
Agreement dated July 18, 2002 (hereinafter the "Fourth Amendment"); and
WHEREAS, the Co-Borrowers have requested that the Lender further modify the
Credit Agreement; and
WHEREAS, the Lender is willing to modify the Credit Agreement, on certain
terms and conditions as hereinafter provided (hereinafter the "Fifth
Amendment").
NOW, THEREFORE, for and in consideration of the premises (which are deemed
herein contained) and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties agree as follows:
1. AMENDMENT
A. Section 2.4., Interest Rate, page 20, line 3: delete "one-half
(1/2%)" and insert in its place and stead "one and one-quarter (1
1/4%)"
B. Section 2.13, Extension of Maturity Date, page 23: delete this
Section 2.13 in its entirety.
C. Page 46: insert "Section 9.24. Unused Facility Fee. The Borrower
agrees that in each calendar month of the Loan, the co-Borrowers
shall pay to the Lender a fee for the previous month in an amount
of one-quarter of one (1/4%) percent per annum of the positive
difference of (x) Loan Maximum ($4,000,000.00) Dollars less (y)
the average principal balance of the Loan for that calendar
month."
D. Page 49: delete existing Section 10.15, Tangible Net Worth, in
its entirety and insert in its place and stead "Section 10.15.
Fixed Charge Coverage. The Borrower, at any time during the term
of the Loan, will not permit nor suffer or cause to permit its
Fixed Charge Coverage Ratio to be less than the following for the
corresponding periods:
3 months ending 9/30/02 1 to 1
6 months ending 12/31/02 1.05 to 1
9 months ending 3/31/03 1.05 to 1
12 months ending 6/30/03
and thereafter measured
each quarter on a rolling
(12) month basis 1.1 to 1
Fixed charge coverage shall mean for any accounting period:
EBDITA less the cash capital expenditures, less any dividends,
distributions or taxes paid during the said accounting period,
divided by interest plus the current portion of long term debt,
all determined in accordance with GAAP.
For the purposes of determining current portion of long term
debt, it shall include, but not be limited to, scheduled
principal payments required to be made during such period in
respect to Indebtedness; however, with respect to the following
obligations, it shall only include actual payments made during
the preceding period: repayments made on officer/stockholder
loans, payments made on accrued product warranties, payments made
on accrued expenses - Supplier (for the Xerox Corporation
obligation) and payments made to Ultrahue, Inc.
E. Page 49: delete Section 10.16, Working Capital, in its entirety.
2. WAIVER OF JURY TRIAL
CO-BORROWERS AND LENDER AGREE THAT ANY SUIT, ACTION OR PROCEEDING, WHETHER
CLAIM OR COUNTERCLAIM, BROUGHT BY LENDER OR CO-BORROWERS ON OR WITH RESPECT TO
THE CREDIT AND SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE DEALINGS OF
THE PARTIES WITH RESPECT HERETO OR THERETO, SHALL BE TRIED ONLY BY A COURT AND
NOT BY A JURY. LENDER AND CO-BORROWERS EACH HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY SUCH SUIT, ACTION OR
PROCEEDING. FURTHER, EACH CO-BORROWER WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR
RECOVER, IN ANY SUCH SUIT, ACTION OR PROCEEDING, ANY SPECIAL, EXEMPLARY,
PUNITIVE, CONSEQUENTIAL OR OTHER DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL
DAMAGES. CO-BORROWERS ACKNOWLEDGE AND AGREE THAT THIS SECTION IS A SPECIFIC AND
MATERIAL ASPECT OF THIS FIFTH AMENDMENT TO CREDIT AND SECURITY AGREEMENT AND
THAT LENDER WOULD NOT MODIFY THE CREDIT TO CO-BORROWERS IF THE WAIVERS SET FORTH
IN THIS SECTION WERE NOT A PART HEREOF.
3. CONTINUED VALIDITY OF ORIGINAL LOAN DOCUMENTATION.
Except as otherwise provided herein, the Credit Agreement, and the other
Loan Documents shall continue in full force and effect, in accordance with their
respective terms, and the parties hereto hereby expressly ratify, confirm and
reaffirm all of their respective liabilities, obligations, duties and
responsibilities under and pursuant to the Loan Documents, as modified by the
First Amendment, the Second Amendment, the Third Amendment, the Fourth Amendment
and this Fifth Amendment to Credit and Security Agreement, and Co-Borrowers
agree that the same shall constitute valid and binding agreements of
Co-Borrowers, enforceable in accordance with their respective terms.
4. MODIFICATION AGREEMENT CONTROLS.
In the event of a conflict between the terms and conditions of the First
Amendment, the Second Amendment, the Third Amendment, the Fourth Amendment and
this Fifth Amendment and the terms and conditions of the Credit Agreement, the
terms and conditions of this Fifth Amendment to Credit Agreement shall control.
5. NO NOVATION.
This Fifth Amendment to Credit Agreement does not represent in any way
satisfaction of the indebtedness evidenced by the Credit Agreement. It is the
intention of the parties hereto that this Fifth Amendment to Credit Agreement
shall not constitute a novation and shall in no way adversely affect or impair
the lien priority of the Credit Agreement, as amended, the UCCs, or any other
instrument securing the Loan.
IN WITNESS WHEREOF, the parties have executed this Fifth Amendment to
Credit Agreement as of the date first above written.
CO-BORROWERS:
ATTEST: MEDIA SCIENCES INTERNATIONAL, INC.,
A Delaware Corporation
_________________________ By:__________________________
Secretary Xxxxxxx Xxxxx, President
ATTEST: CADAPULT GRAPHIC SYSTEMS, INC.,
A New Jersey Corporation
_________________________ By:__________________________
Secretary Xxxxxxx Xxxxx, President
ATTEST: MEDIA SCIENCES, INC.,
A New Jersey Corporation
_________________________ By:__________________________
Secretary Xxxxxxx Xxxxx, President
LENDER:
SUMMIT BUSINESS CAPITAL CORP.
d/b/a Fleet Capital Business
Finance Division
previously SUMMIT COMMERCIAL/
GIBRALTAR CORP.
By:__________________________
Vice President
