SCHAWK, INC. SECOND AMENDMENT Dated as of January 12, 2010 to NOTE PURCHASE AND PRIVATE SHELF AGREEMENT Dated as of January 28, 2005 Re: $10,000,000 4.81% Series C Senior Notes Due January 28, 2010 $20,000,000 4.99% Series D Senior Notes Due January...
EXHIBIT
10.2
SCHAWK,
INC.
______________________________
Dated as
of January 12, 2010
to
NOTE
PURCHASE AND PRIVATE SHELF AGREEMENT
Dated as
of January 28, 2005
______________________________
Re:
$10,000,000 4.81% Series C Senior Notes Due January 28, 2010
$20,000,000
4.99% Series D Senior Notes Due January 28, 2011
and
$20,000,000
5.17% Series E Senior Notes Due January 28, 2012
of
Schawk,
Inc.
DATED AS
OF JANUARY 12, 2010
SECOND
AMENDMENT TO NOTE AGREEMENT
THIS
SECOND AMENDMENT dated as of January 12, 2010 (the or this “Second Amendment”) to the
Note Purchase and Private Shelf Agreement dated as of January 28, 2005 is
between SCHAWK, INC., a Delaware corporation (the “Company”), and each of the
institutions which is a signatory to this Second Amendment (collectively, the
“Noteholders”).
RECITALS:
A. The
Company and each of the Noteholders have heretofore entered into the Note
Purchase and Private Shelf Agreement dated as of January 28, 2005 (as amended by
that certain First Amendment to Note Agreement dated as of June 11, 2009 and as
the same may otherwise be amended, modified and supplemented from time to time,
the “Note
Agreement”). The Company has heretofore issued the $10,000,000
4.81% Series C Senior Notes Due January 28, 2010 dated January 28, 2005, the
$20,000,000 4.99% Series D Senior Notes Due January 28, 2011 dated January 28,
2005, and the $20,000,000 5.17% Series E Senior Notes Due January 28, 2012 dated
January 28, 2005 (collectively, the “Notes”) pursuant to the Note
Agreement.
B. The
Company and the Noteholders now desire to amend the Note Agreement in the
respects, but only in the respects, hereinafter set forth.
C. Capitalized
terms used herein shall have the respective meanings ascribed thereto in the
Note Agreement unless herein defined or the context shall otherwise
require.
D. All
requirements of law have been fully complied with and all other acts and things
necessary to make this Second Amendment a valid, legal and binding instrument
according to its terms for the purposes herein expressed have been done or
performed.
NOW,
THEREFORE, upon the full and complete satisfaction of the conditions precedent
to the effectiveness of this Second Amendment set forth in Section 3.1 hereof,
and in consideration of good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, the Company and the Noteholders do
hereby agree as follows:
SECTION
1. AMENDMENTS
TO NOTE AGREEMENT.
Section
1.1. Section
8.8 of the Note Agreement shall be and is hereby amended in its entirety to read
as follows:
“Section 8.8. Reserved.”
Section
1.2. The
introductory phrase of Section 9.6 of the Note Agreement shall be and is hereby
amended in its entirety to read as follows:
The
Company will cause any Subsidiary which is required by the terms of the Bank
Credit Agreement to become, or otherwise becomes, a party to, or otherwise
guarantee, Debt in respect of the Bank Credit Agreement or which becomes a party
to, or otherwise
guaranties,
any other Debt of the Company, to enter into the Subsidiary Guaranty and deliver
to Prudential and each of the holders of the Notes (concurrently with the
incurrence of any such obligation pursuant to the Bank Credit Agreement or with
respect to such other Debt) the following items:
Section
1.3. Each
occurrence of the parenthetical phrase “(as defined in the Bank Credit
Agreement)” set forth in Section 9.6 of the Note Agreement shall be and is
hereby amended in its entirety to read as follows: “(as defined in the Bank
Credit Agreement as in effect on the Amendment No. 2 Effective
Date)”.
Section
1.4. Section
10.6 of the Note Agreement shall be and is hereby amended in its entirety to
read as follows:
“Section
10.6. Restricted
Payments. The Company shall not declare or make any Restricted
Payment, except Restricted Payments in an amount not to exceed $5,000,000 in the
aggregate during any fiscal year of the Company and except Restricted Payments
by a Subsidiary to the Company or another Subsidiary; provided, however, that in no
event shall any Restricted Payments (other than Restricted Payments to the
Company) be declared or made if either a Default or an Event of Default shall
have occurred and be continuing at the date of declaration or payment thereof or
would result therefrom.”
Section
1.5. Section
10.7 of the Note Agreement shall be and is hereby amended in its entirety to
read as follows:
“Section 10.7. Conduct of Business; Subsidiaries;
Acquisitions. Neither the Company nor any of its Subsidiaries
shall engage in any business other than the businesses engaged in by the Company
on the date hereof and any business or activities which are substantially
similar, related or incidental thereto or logical extensions
thereof. The Company shall not create, acquire or capitalize any
Subsidiary after the date hereof unless (i) no Event of Default or Default which
is not being cured shall have occurred and be continuing or would result
therefor; (ii) after such creation, acquisition or capitalization, all of the
representations and warranties contained herein shall be true and correct in all
material respects (unless such representation and warranty is made as of a
specific date, in which case, such representation or warranty shall be true in
all material respects as of such date); and (iii) after such creation,
acquisition or capitalization the Company shall be in compliance with the terms
of Sections 9.6 and 9.9 hereof. The Company shall not make any
Acquisitions, other than Acquisitions meeting the following requirements or
otherwise approved by the Required Holders (each such Acquisition constituting a
“Permitted
Acquisition”):
(a) no
Default or Event of Default shall have occurred and be continuing or would
result from such Acquisition or the incurrence of any Debt in connection
therewith;
2
(b) after
giving effect to such transaction, the aggregate of all Foreign Subsidiary
Investments would not exceed the Permitted Foreign Subsidiary Investment
Amount;
(c) in the
case of an Acquisition of Capital Stock of an entity, the Acquisition shall be
of at least fifty-one percent (51%) of the Capital Stock of such entity, and
such acquired entity shall be (i) merged with and into the Company immediately
following such Acquisition, with the Company being the surviving corporation
following such merger or (ii) the results of operations of such entity shall be
reported on a consolidated basis with the Company and its consolidated
Subsidiaries;
(d) the
purchase is consummated pursuant to a negotiated acquisition agreement on a
non-hostile basis;
(e) the
Company shall deliver to the holders of the Notes a certificate from one of the
Authorized Officers, demonstrating to the satisfaction of the Required Holders
that after giving effect to such Acquisition and the incurrence of any Debt
permitted by Section 10.1 in connection therewith, on a pro forma basis using
historical audited or reviewed unaudited financial statements obtained from the
seller(s) in respect of each such Acquisition as if the Acquisition and such
incurrence of Debt had occurred on the first day of the twelve-month period
ending on the last day of the Company’s most recently completed fiscal quarter,
the Company would have been in compliance with the financial covenants in
Section 10.19 and that an Event of Default has not otherwise
occurred;
(f) the
purchase price for the Acquisition (including the incurrence or assumption of
any Debt in connection therewith) shall not, when aggregated with the purchase
price and such Debt for all other Acquisitions during any rolling period of
twelve consecutive months, exceed without the prior written consent of the
Required Holders the Maximum Acquisition Amount; and
(g) the
businesses being acquired shall be substantially similar, related or incidental
to, or a logical extension of, the businesses or activities engaged in by the
Company on the date hereof.”
Section
1.6. Section
10.15 of the Note Agreement shall be and is hereby amended in its entirety to
read as follows:
“Section 10.15. Hedging
Obligations. The Company shall not and shall not permit any of
its Subsidiaries to enter into any interest rate, commodity or foreign currency
exchange, swap, collar, cap or similar agreements evidencing Hedging
Obligations, other than interest rate, foreign currency or commodity exchange,
swap, collar, cap or similar, agreements entered into by the Company or any
Subsidiary pursuant to which the Company or any Subsidiary has hedged its actual
interest rate, foreign currency or commodity exposure.”
Section
1.7. Section
10.17 of the Note Agreement shall be and is hereby amended in its entirety to
read as follows:
3
“Section 10.17. Most
Favored Lender. If the Company, or any of its Subsidiaries,
enters into (i) any amendment, restatement, supplement, waiver or modification
to the Bank Credit Agreement (or the documents related to any extension,
refinancing, refunding or renewal thereof) or the 2003 Note Agreement that
amends, restates, supplements or modifies any of the covenants, events of
default or related definitions used in the Bank Credit Agreement (or the
documents related to any extension, refinancing, refunding or renewal thereof)
or in the 2003 Note Agreement or (ii) any document related to any extension,
refinancing, refunding or renewal thereof that includes covenants, events of
default or related definitions, such that , in any case, any of such covenants,
events of default or related definitions are more restrictive than, or in
addition to (the “More Restrictive Provisions”), the covenants, events of
default or related definitions contained in this Agreement, then (a) the Company
will give the holders of the Notes prior written notice thereof, (b) this
Agreement shall be deemed to be automatically amended to add the More
Restrictive Provisions hereto and otherwise afford the holders of the Notes with
the benefit thereof without any action by the Company or any holder of any Note,
provided that the Required Holders may elect in writing not to have any one or
more More Restrictive Provisions added to this Agreement, and (c) the Company
shall, upon the request of the holders of the Notes (i) enter into an amendment
to this Agreement, in form and substance satisfactory to the holders of the
Notes, to evidence the addition of such More Restrictive Provisions (other than
any More Restrictive Provisions that the Required Holders elect in writing to
exclude) to this Agreement for the benefit of holders of the Notes, and (ii)
agree to satisfy any conditions precedent to the effectiveness of such
amendment.”
Section
1.8. Section
10.19 of the Note Agreement shall be and is hereby amended in its entirety to
read as follows:
“Section 10.19. Financial
Covenants.
(a) Minimum Fixed Charge
Coverage Ratio. The Company and its consolidated Subsidiaries
shall maintain a ratio (“Fixed
Charge Coverage Ratio”) of:
(i) EBITDA
during such period, to
(ii) the sum
of the amounts, without duplication, of (a) Interest Expense during such period
(net of interest income) plus (b) scheduled
principal payments of Debt not incurred under a revolving credit facility
excluding, however, principal payments of the PIK Notes and the 2003 PIK Notes
and principal payments of Withdrawal Liability plus (or minus with
respect to tax benefits) (c) Company’s income tax provision calculated in
accordance with GAAP for such period plus (d) scheduled
principal payments of Capital Lease Obligations during such period,
which
shall not be less than the applicable ratio set forth below for each
corresponding four (4) fiscal quarter period beginning with the four (4) fiscal
quarter period ending with the end of the applicable fiscal quarter of the
Company set forth below. As used herein, “Withdrawal Liability” means
any amounts owing by the Company to the Graphic
4
Communications
Union (“GCU”) or a trust
or fund or Plan administered by GCU as a result of the Company terminating its
participation in a Supplemental Retirement and Disability Fund for the Company’s
employees at its facility in Minneapolis, Minnesota, as described in Note 16 to
the financial statements contained in the Company’s Form 10-K for the fiscal
year ending December 31, 2008. In each case, the Fixed Charge
Coverage Ratio shall be determined as of the last day of each fiscal quarter for
the four (4) fiscal quarter period ending on such day (the “Last Twelve-Month Period”),
provided, that
the Fixed Charge Coverage Ratio shall be calculated, with respect to Permitted
Acquisitions, on a pro forma basis using
historical audited and reviewed unaudited financial statements obtained from the
seller(s) in such Permitted Acquisition, broken down by fiscal quarter as if
such Permitted Acquisition (including the uses and applications of proceeds in
respect thereof and the Debt incurred in conjunction therewith) had occurred on
the first day of the Last Twelve-Month Period (the “Measurement Period”)
(excluding cost savings), provided such pro forma statements
shall be substantiated by supporting information reasonably acceptable to the
Required Holders. Interest Expense shall be calculated for the
purpose of clause
(ii) by excluding the effect of amortization of deferred financing fees,
to the extent it is an Interest Expense.
|
Last
Twelve-Month Period Ending
|
Minimum
Fixed Charge Coverage Ratio
|
|
March
31, 2010
|
1.20
to 1.00
|
|
June
30, 2010
|
1.20
to 1.00
|
|
September
30, 2010
|
1.20
to 1.00
|
|
December
31, 2010
|
1.20
to 1.00
|
|
March
31, 2011
|
1.20
to 1.00
|
|
June
30, 2011
|
1.20
to 1.00
|
|
September
30, 2011
|
1.20
to 1.00
|
|
December
31, 2011 and the last
day
of each fiscal quarter thereafter
ending
|
1.25
to 1.00
|
(b) Maximum Cash Flow Leverage
Ratio. The Company and its consolidated Subsidiaries shall not
permit the ratio (the “Cash
Flow Leverage Ratio”) of (i) Total Funded Debt to (ii) EBITDA to be
greater than the applicable ratio set forth below for each corresponding four
(4) fiscal quarter period ending with the end of the applicable fiscal quarter
of the Company set forth below. The Cash Flow Leverage Ratio shall be
calculated, in each case, determined as of the last day of each fiscal quarter
based upon (a) for Debt, Debt as of the last day of each such fiscal quarter;
and (b) for EBITDA, the actual amount for Last Twelve-Month Period, provided, that the
Cash Flow Leverage Ratio shall be calculated, with respect to Permitted
Acquisitions, on a pro forma basis using
historical audited and reviewed unaudited financial statements obtained from the
seller(s) in such Permitted Acquisition, broken down by fiscal quarter in the
Company’s reasonable judgment as if such Permitted Acquisition (including the
uses and applications
5
of
proceeds in respect thereof and the Debt incurred in conjunction therewith) had
occurred on the first day of the Measurement Period (excluding cost savings),
provided such pro forma statements
shall be substantiated by supporting information reasonably acceptable to the
Required Holders.
|
Last
Twelve-Month Period Ending
|
Maximum
Cash Flow Leverage Ratio
|
|
March
31, 2010
|
2.75
to 1.00
|
|
June
30, 2010
|
2.75
to 1.00
|
|
September
30, 2010
|
2.75
to 1.00
|
|
December
31, 2010
|
2.75
to 1.00
|
|
March
31, 2011
|
2.75
to 1.00
|
|
June
30, 2011
|
2.75
to 1.00
|
|
September
30, 2011
|
2.75
to 1.00
|
|
December
31, 2011 and the last
day
of each fiscal quarter thereafter
ending
|
2.50
to 1.00
|
(c) Minimum Consolidated Net
Worth. The Company shall not permit its Consolidated Net Worth at any
time to be less than the sum of (a) $181,504,000 plus (b) fifty
percent (50%) of Net Income (if positive) calculated separately for each fiscal
quarter commencing with the fiscal quarter ending on December 31, 2009, plus (c) one hundred
percent (100%) of the net cash proceeds resulting from the issuance by the
Company of any Capital Stock other than shares of Capital Stock issued pursuant
to employee stock option or ownership plans commencing with the fiscal quarter
ending on December 31, 2009; provided, that, to
the extent that the Company takes a write-down of goodwill or other assets, if
recognized in connection with the sale of the Schawk LA or Cactus divisions of
the Company and related losses, in any fiscal year of the Company, an aggregate
amount of up to $25,000,000 of such write-down and losses shall be deducted from
the Consolidated Net Worth that would otherwise be required to be maintained
pursuant to the terms of this Section
10.19(c).
(d) Maximum Capital
Expenditures. The Company will not, nor will it permit any
Subsidiary to, expend, or be committed to expend, in excess of (i) an aggregate
of $18,500,000 for Capital Expenditures of the Company and its Subsidiaries
during any fiscal year of the Company, and (ii) an aggregate of $40,000,000 for
Capital Expenditures of the Company and its Subsidiaries during the period from
the Amendment No. 2 Effective Date to the Revolving Loan Termination Date (as
defined in the Bank Credit Agreement).”
Section
1.9. The
following Defined Terms in Schedule B to the Note Agreement shall be and are
hereby amended as follows:
6
“Bank Credit Agreement” means
the Amended and Restated Credit Agreement dated as of January 12, 2010 by and
among the Company, certain Subsidiaries of the Company named therein, JPMorgan
Chase Bank, N.A., as agent and collateral agent, and the other financial
institutions party thereto, as amended, restated, joined, supplemented or
otherwise modified from time to time, and any renewals, extensions or
replacements thereof, in each case (x) in accordance with the terms of Section
10.17 of this Agreement and (y) which constitute the primary bank credit
facility of the Company and its Subsidiaries.
“Debt” of a Person means,
without duplication, such Person’s (a) obligations for borrowed money,
including, without limitation, subordinated indebtedness, (b) obligations
representing the deferred purchase price of property or services (other than
accounts payable arising in the ordinary course of such Person’s business
payable on terms customary in the trade and other than earn-outs or other
similar forms of contingent purchase prices), (c) obligations, whether or not
assumed, secured by liens on or payable out of the proceeds or production from
property now or hereafter owned or acquired by such Person, (d) obligations
which are evidenced by notes, acceptances, or other instruments, (e) Capital
Lease Obligations, (f) outstanding principal balances (representing securitized
but unliquidated assets) under asset securitization agreements (including,
without limitation, the outstanding principal balance of accounts receivable
under receivables transactions) and (g) the implied debt component of synthetic
leases of which such Person is lessee or any other off-balance sheet financing
arrangements (including, without limitation, any such arrangements giving rise
to any Off-Balance Sheet Liabilities).
“EBITDA” means, for any
period, on a consolidated basis for the Company and its Subsidiaries, the sum of
the amounts for such period, without duplication, of (a) Net Income, plus (b) Interest
Expense to the extent deducted in computing Net Income, plus (c) charges
against income for foreign, federal, state and local taxes to the extent
deducted in computing Net Income, plus (d) depreciation
expense to the extent deducted in computing Net Income, plus (e) amortization
expense, including, without limitation, amortization of goodwill and other
intangible assets to the extent deducted in computing Net Income, plus (f) acquisition,
integration, transformation and restructuring charges incurred in the first
three fiscal quarters of the Company’s 2009 fiscal year and in an aggregate
amount not to exceed $3,000,000, all in accordance with Agreement Accounting
Principles to the extent deducted in computing Net Income, plus (g) other
extraordinary non-cash charges to the extent deducted in computing Net Income,
minus (h) other
extraordinary non-cash credits to the extent added in computing Net Income,
plus (i)
non-cash expenses related to stock based compensation to the extent deducted in
computing Net Income, plus (j) charges
incurred as a result of impairment of fixed assets, intangible assets and
goodwill, all to the extent deducted in computing Net Income. EBITDA
shall be calculated on a pro forma basis giving
effect to Acquisitions and Asset Sales on a last twelve (12) months’
basis.
“Intercreditor Agreement”
means the Second Amended and Restated Intercreditor Agreement dated as of
January 12, 2010 among the Administrative Agent, the Collateral Agent and the
holders of the Notes and the holders of the 2003 Notes, as
7
the same
may be amended, restated, supplemented or otherwise modified from time to
time.
“Interest Expense” means, for
any period, the total interest expense of the Company and its consolidated
Subsidiaries, whether paid or accrued (including the interest component of
Capital Leases, commitment fees and fees for stand-by letters of credit, the
discount with respect to asset securitization agreements and the implied
interest component of synthetic leases), all as determined in conformity with
Agreement Accounting Principles. Interest Expense shall not include
any interest which in accordance with Agreement Accounting Principles has been
capitalized under the PIK Notes and the 2003 PIK Notes.
“Permitted Refinancing Debt”
means any replacement, renewal, refinancing or extension of any Debt permitted
by this Agreement that (a) does not exceed the aggregate principal amount (plus
accrued interest and any applicable premium and associated fees and expenses) of
the Debt being replaced, renewed, refinanced or extended, (b) does not have a
Weighted Average Life to Maturity at the time of such replacement, renewal,
refinancing or extension that is less than the Weighted Average Life to Maturity
of the Debt being replaced, renewed, refinanced or extended, (c) does not rank
at the time of such replacement, renewal, refinancing or extension senior to the
Debt being replaced, renewed, refinanced or extended, and (d) does not contain
terms (including, without limitation, terms relating to security, amortization,
interest rate, premiums, fees, covenants, event of default and remedies)
materially less favorable to the Company or to the holders of the Notes than
those applicable to the Debt being replaced, renewed, refinanced or
extended.
“Pledge and Security
Agreement” means that certain Amended and Restated Pledge and Security
Agreement (including any and all supplements thereto) dated as of January 12,
2010 by and among the Domestic Note Parties and the Collateral Agent, for the
benefit of the Collateral Agent and the other holders of the Secured
Obligations.
“2003 Note Agreement” means
the Note Purchase Agreement, dated December 23, 2003, between the Company and
the Purchasers named in the Purchaser Schedule attached thereto, as amended
through the Amendment No. 2 Effective Date and as further amended from time to
time.
Section
1.10. The
following shall be added as new definitions in alphabetical order to the Defined
Terms in Schedule B to the Note Agreement:
“Amendment No. 2” means that
certain Second Amendment to Note Purchase and Private Shelf Agreement dated as
of January 12, 2010 by and among the Company, each of the holders of the Notes
and the other parties a signatory thereto.
“Amendment No. 2 Effective Date”
shall have the meaning set forth in Section 3 of Amendment No.
2.
“Maximum Acquisition Amount”
means, for any rolling period of twelve consecutive months,
$50,000,000.
8
Section
1.11. The
following Defined Terms in Schedule B to the Note Agreement shall be and are
hereby deleted in their entirety: “Acceptable Bank Credit Agreement” and
“Normalization Date”.
SECTION
2. REPRESENTATIONS
AND WARRANTIES OF THE COMPANY.
Section
2.1. To induce
the Noteholders to execute and deliver this Second Amendment (which
representations shall survive the execution and delivery of this Second
Amendment), the Company represents and warrants to the Noteholders
that:
(a) this
Second Amendment has been duly authorized, executed and delivered by it and this
Second Amendment constitutes the legal, valid and binding obligation, contract
and agreement of the Company enforceable against the Company in accordance with
its terms, except as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws or equitable principles relating to
or limiting creditors’ rights generally;
(b) the Note
Agreement, as amended by this Second Amendment, constitutes the legal, valid and
binding obligation, contract and agreement of the Company enforceable against it
in accordance with its terms, except as enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable
principles relating to or limiting creditors’ rights generally;
(c) the
execution, delivery and performance by the Company of this Second Amendment (i)
has been duly authorized by all requisite corporate action and, if required,
shareholder action, (ii) does not require the consent or approval of any
governmental or regulatory body or agency, and (iii) will not (A) violate (1)
any provision of law, statute, rule or regulation or its certificate of
incorporation or bylaws, (2) any order of any court or any rule, regulation or
order of any other agency or government binding upon it, or (3) any provision of
any material indenture, agreement or other instrument to which it is a party or
by which its properties or assets are or may be bound, or (B) result in a breach
or constitute (alone or with due notice or lapse of time or both) a default
under any indenture, agreement or other instrument referred to in clause
(iii)(A)(3) of this Section 2.1(c);
(d) as of the
date hereof and after giving effect to this Second Amendment, no Default or
Event of Default has occurred which is continuing and no condition exists which
has resulted in, or could reasonably be expected to have, a Material Adverse
Effect;
(e) all the
representations and warranties contained in Section 5 of the Note Agreement and
in Section 5 of the Guaranty Agreement are true and correct in all material
respects with the same force and effect as if made by the Company and the
Subsidiary Guarantors, respectively, on and as of the date hereof;
(f) all
Subsidiaries that are required to enter into the Subsidiary Guaranty or enter
into a joinder agreement in respect of the Subsidiary Guaranty pursuant to
Section 9.6 of the Note Agreement have so entered into the Subsidiary Guaranty
or a joinder
9
agreement
in respect of the Subsidiary Guaranty and are listed on the signature pages to
this Second Amendment as Subsidiary Guarantors; and
(g) other
than as expressly set forth in the Bank Credit Agreement or as otherwise
disclosed by the Company to the Noteholders on or prior to the Amendment No. 2
Effective Date, neither the Company nor any of its Subsidiaries on or prior to
the Amendment No. 2 Effective Date has paid or agreed to pay, nor will the
Company or any of its Subsidiaries pay or agree to pay on or prior to the
Amendment No. 2 Effective Date, any fees or other compensation to the
Administrative Agent, any Bank Lender or any holder of the 2003 Notes for or
with respect to the Bank Credit Agreement or the 2003 Note Agreement Third
Amendment (other than for the reimbursement of out of pocket expenses in
connection therewith).
SECTION
3. CONDITIONS
TO EFFECTIVENESS OF THIS SECOND AMENDMENT.
Section
3.1. This
Second Amendment shall not become effective until, and shall become effective
when, each and every one of the following conditions shall have been
satisfied:
(a) executed
counterparts of this Second Amendment, duly executed by the Company and the
holders of the Notes, shall have been delivered to the Noteholders;
(b) the
Company shall have delivered to the Noteholders executed copies of (i) the
Pledge and Security Agreement, (ii) the Bank Credit Agreement, (iii) the Third
Amendment to Note Purchase Agreement dated as of the date hereof among the
Company and the holders of the 2003 Notes (the “2003 Note Agreement Third
Amendment”), and (iv) the Intercreditor Agreement, and all related
agreements, documents and instruments, in each case, in connection therewith,
all of which shall be in form and substance satisfactory to the
Noteholders;
(c) the
Company shall have prepaid the entire aggregate outstanding principal amount of
all PIK Notes, together with accrued interest thereon to the prepayment date
which has not previously been paid by adding such interest to the principal
balance of the PIK Notes;
(d) the
representations and warranties of the Company set forth in Section 2 hereof are
true and correct on and with respect to the date hereof;
(e) the
Noteholders shall have received the favorable opinion of counsel to the Company
as to the matters set forth in Sections 2.1(a), 2.1(b) and 2.1(c) hereof, which
opinion shall be in form and substance satisfactory to the Noteholders;
and
(f) the
Company agrees to pay upon demand, the reasonable fees and expenses of Xxxxxx
Xxxxxx LLP, special counsel to the Noteholders, in connection with the
negotiation, preparation, approval, execution and delivery of this Second
Amendment.
Upon
receipt of all of the foregoing, this Second Amendment shall become effective
(the “Amendment No. 2 Effective
Date”).
10
SECTION
4. MISCELLANEOUS.
Section
4.1. This
Second Amendment shall be construed in connection with and as part of the Note
Agreement and, except as modified and expressly amended by this Second
Amendment, all terms, conditions and covenants contained in the Note Agreement,
the Guaranty Agreement and the Notes are hereby ratified and shall be and remain
in full force and effect.
Section
4.2. Except as
modified and expressly amended by this Second Amendment, the execution, delivery
and effectiveness of this Second Amendment shall not (a) amend the Note
Agreement, the Guaranty Agreement or any Note, (b) operate as a waiver of any
right, power or remedy of any Noteholder, or (c) constitute a waiver of, or
consent to any departure from, any provision of the Note Agreement, the Guaranty
Agreement or any Note at any time.
Section
4.3. Any and
all notices, requests, certificates and other instruments executed and delivered
after the execution and delivery of this Second Amendment may refer to the Note
Agreement without making specific reference to this Second Amendment but
nevertheless all such references shall include this Second Amendment unless the
context otherwise requires. At all times on and after the Amendment
No. 2 Effective Date, each reference to the Note Agreement in any other
document, instrument or agreement shall mean and be a reference to the Note
Agreement as modified by this Second Amendment.
Section
4.4. The
descriptive headings of the various Sections or parts of this Second Amendment
are for convenience only and shall not affect the meaning or construction of any
of the provisions hereof.
Section
4.5. This
Second Amendment shall be governed by and construed in accordance with the laws
of the State of New York excluding choice-of-law principles of the law of such
State that would require the application of the laws of a jurisdiction other
than such State.
[Signatures
on Following Page]
11
The
execution hereof by you shall constitute a contract between us for the uses and
purposes hereinabove set forth, and this Second Amendment may be executed in any
number of counterparts, each executed counterpart constituting an original, but
all together only one agreement.
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Very
truly yours,
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SCHAWK,
INC.
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By:
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/s/Xxxxxxx
X. Cunningham________
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Xxxxxxx
X. Xxxxxxxxxx
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Chief
Financial Officer
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Each of
the Subsidiary Guarantors hereby (i) consents to the foregoing Second Amendment
and ratifies the amendments contained therein, (ii) ratifies and reaffirms all
of its obligations and liabilities under each Subsidiary Guaranty (as defined in
the Note Agreement referred to in the Second Amendment) notwithstanding the
Second Amendment or otherwise, (iii) confirms that each Subsidiary Guaranty
remains in full force and effect after giving effect to the Second Amendment,
(iv) represents and warrants that there is no defense, counterclaim or offset of
any type or nature under any Subsidiary Guaranty, (v) agrees that nothing in any
Subsidiary Guaranty, the Note Agreement, the Second Amendment or any other
agreement or instrument relating thereto requires the consent of any Subsidiary
Guarantor or shall be deemed to require the consent of any Subsidiary Guarantor
to any future amendment or other modification to the Note Agreement, and (vi)
waives acceptance and notice of acceptance hereof.
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SCHAWK
USA, INC.
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By:
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/s/Xxxxxxx
X.
Cunningham________
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Xxxxxxx
X. Xxxxxxxxxx
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Chief
Financial Officer
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SCHAWK
WORLDWIDE HOLDINGS INC.
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By:
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/s/Xxxxxxx
X.
Cunningham________
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Xxxxxxx
X. Xxxxxxxxxx
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Chief
Financial Officer
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SCHAWK
HOLDINGS INC.
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By:
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/s/Xxxxxxx
X.
Cunningham________
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Xxxxxxx
X. Xxxxxxxxxx
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Chief
Financial Officer
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SEVEN
SEATTLE, INC.
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By:
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/s/Xxxxxxx
X.
Cunningham________
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Xxxxxxx
X. Xxxxxxxxxx
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Chief
Financial Officer
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SCHAWK
LLC
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By:
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/s/Xxxxxxx
X.
Cunningham________
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Xxxxxxx
X. Xxxxxxxxxx
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Chief
Financial Officer
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MIRAMAR
EQUIPMENT, INC.
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By:
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/s/Xxxxxxx
X.
Cunningham________
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Xxxxxxx
X. Xxxxxxxxxx
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Chief
Financial Officer
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SCHAWK
DIGITAL SOLUTIONS INC.
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By:
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/s/Xxxxxxx
X.
Cunningham________
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Xxxxxxx
X. Xxxxxxxxxx
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Chief
Financial Officer
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KEDZIE
AIRCRAFT LLC
By: SCHAWK USA Inc., its sole
member
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By:
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/s/Xxxxxxx
X.
Cunningham________
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Xxxxxxx
X. Xxxxxxxxxx
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Chief
Financial Officer
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Accepted
as of the date first written above.
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PRUDENTIAL
INVESTMENT MANAGEMENT, INC.
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By:
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/s/Xxxxxx X.
Carr___________________________
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Name:
Xxxxxx X. Xxxx
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Title:
Vice President
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THE
PRUDENTIAL INSURANCE CMOPANY OF
AMERICA
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By:
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/s/Xxxxxx X.
Carr___________________________
Vice President
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RGA REINSURANCE COMPANY
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By:
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Prudential
Private Placement Investors, L.P.
(as Investment Advisor) |
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By:
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Prudential
Private Placement Investors, Inc.
(as its General Partner) |
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By:
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/s/Xxxxxx X.
Carr___________________________
Vice President
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