Exhibit 10.4(i)
EIGHTH AMENDMENT TO CREDIT AGREEMENT
This Eighth Amendment to Credit Agreement ("Amendment") is made this 13th
day of May, 2002, by and among Phoenix Color Corp. ("Phoenix"), a Delaware
corporation, PCC Express, Inc. ("PCC"), a Delaware corporation, Phoenix (MD.)
Realty, LLC ("Realty"), a Maryland limited liability company, and TechniGraphix,
Inc. ("TechniGraphix"), a Maryland corporation (singly a "Borrower" and
collectively, "Borrowers"), the lending institutions listed from time to time on
Schedule A to the Credit Agreement (as defined below) (singly, a "Lender" and
collectively, "Lenders"), Wachovia Bank, National Association (formerly known as
First Union National Bank), a national banking association, as issuer of letters
of credit (in such capacity, "Issuer") and Wachovia Bank, National Association
(formerly known as First Union National Bank), as administrative agent for
Issuer and Lenders (in such capacity, "Agent").
BACKGROUND
A. Borrowers, Agent, Issuer and Lenders are parties to a Credit Agreement
dated September 15, 1998 (as amended or otherwise modified from time to time,
the "Credit Agreement"), pursuant to which certain financing arrangements were
established for the benefit of Borrowers. All capitalized terms not otherwise
defined herein shall have the respective meanings ascribed thereto in the Credit
Agreement.
B. Borrowers have requested that Agent, Issuer and Lenders modify, in
certain respects, the Credit Agreement and Agent, Issuer and Lenders have agreed
to make such modifications, all as more fully set forth herein and subject to
the terms and conditions hereof.
NOW, THEREFORE, with the foregoing Background incorporated by reference
herein and made part hereof, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. Amendments to Credit Agreement.
a. The definitions of "Consolidated Capital Expenditures" and
"Equipment Availability" set forth in Section 1.1 of the Credit Agreement are
hereby deleted in their entirety and replaced with the following new
definitions:
"Consolidated Capital Expenditures" - For any period, the aggregate of
all capital expenditures (including that portion of Capitalized Lease
Obligations incurred during that period) made by Borrowers and their
Subsidiaries during such period in respect of the purchase,
construction or other acquisition of fixed or capital assets
determined in accordance with GAAP; provided however, that commencing
January 1, 2002, "Consolidated Capital Expenditures" shall also
include the purchase price (determined as of the effective date of the
applicable operating lease) of all equipment of Borrowers and their
Subsidiaries subject to operating leases during such period; provided
further that, Consolidated Capital Expenditures shall not include
capital expenditures made by Borrowers in respect of the purchase of
the Xxxxxx American binding line and Xxxxxx printing press. For the
purposes hereof, any deposits made by any Borrower or its
Subsidiaries for the purposes of acquiring or leasing fixed or capital
assets shall be deemed Consolidated Capital Expenditures.
"Equipment Availability"- the sum of Six Million Dollars ($6,000,000).
The aggregate amount of Equipment Availability shall reduce by (x) One
Hundred Thousand Dollars ($100,000) per month for each month
commencing July 1, 2002 for the first twelve (12) months, and,
commencing July 1, 2003, Two Hundred Thousand Dollars ($200,000) per
month for each month thereafter, (y) if all or any portion of a
security deposit financed by Lenders shall be returned to Borrowers,
an amount equal to the returned portion of such security deposit and
(z) by an amount equal to fifty percent (50%) of the amount of the
Xxxxxx Settlement paid to Agent with such amount under this clause (z)
being applied in the inverse order of reductions.
b. The following new definition shall be added (in alphabetical order)
to Section 1.1 of the Credit Agreement:
"Xxxxxx Settlement " An amount equal to the proceeds received by any
Borrower (or any Subsidiary of Borrower) as a result of any award,
judgment, settlement or any other payment in connection with Phoenix's
litigation against Xxxxxx Biagosch GmbH, Xxxxxx America, Inc. or any
other entity related thereto, as such litigation is described in
Phoenix's 10-k dated March 26, 2002.
c. Section 2.6(ea) of the Credit Agreement is hereby deleted in its
entirety and replaced with the following:
"(e) Borrowers shall unconditionally pay to Agent an amendment fee, in
consideration of the accommodation granted under the Sixth Amendment
of One Hundred Fifty Thousand Dollars ($150,000), which is fully
earned upon execution of the Sixth Amendment, and which is payable in
the amount of Seventy Five Thousand Dollars ($75,000) on December 31,
2002, and Seventy Five Thousand Dollars ($75,000) on December 31,
2003; provided however, that the entire amendment fee (or the
remaining unpaid portion, if applicable) shall be payable on the
termination of the Revolving Credit, if such termination occurs prior
to either such payment date; provided further that the portion of the
fee that is payable on December 31, 2003 shall be reduced by an amount
equal to the product of (i) the actual amount of Xxxxxx Settlement
proceeds paid to Agent times (ii) .03.
d. Section 2 of the Credit Agreement is hereby amended by adding a new
Section 2.13 which shall read as follows:
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"2.13 Xxxxxx Settlement. Borrowers shall, upon receipt of any proceeds
of the Xxxxxx Settlement, immediately pay the entire amount of such
proceeds to Agent for the application to the outstanding Advances.
e. Section 5.8(d) of the Credit Agreement is hereby amended and
restated in its entirety as follows:
"(d) Borrowers shall not expend for Consolidated Capital Expenditures
during any rolling four quarter period measured on the last day of
each fiscal quarter, an amount greater than the amount set forth below
during the following periods, less during any period, the net cash
proceeds received by Borrowers from any equipment sale during the
applicable period:
Four Quarter Periods Ending Maximum Amount
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June 30, 2002 thru December 31, 2002 $2,500,000
March 31, 2003 and thereafter $5,000,000
f. Section 5.8(e) of the Credit Agreement is hereby amended and
restated in its entirety and shall read as follows:
"(e) Fixed Charge Coverage Ratio: Borrowers shall have and maintain a
Fixed Charge Coverage Ratio of not less than the following during the
following periods (measured quarterly on a rolling four quarter
basis):
Period Ending: Maximum Ratio:
------------- -------------
6/30/02 1.0 to 1.0
9/30/02 1.1 to 1.0
12/31/02
and thereafter 1.2 to 1.0
2. Waiver. Borrowers have failed to comply with the requirements of the
Credit Agreement and the following Event of Default has occurred (such Event of
Default for the period so referenced is referred to as the "Existing Default"):
Borrowers' noncompliance with the financial covenant set forth in Sections
5.8(e) (Fixed Charge Coverage Ratio) of the Credit Agreement, for the fiscal
quarter ending March 31, 2002. Borrowers have requested that Agent and Lenders
waive the Existing Default. Upon the effectiveness of this Amendment, Agent and
Lenders hereby waive the Existing Default. The waiver of the Existing Default
shall not constitute a waiver of any other Default or Event of Default. Nothing
contained herein shall obligate Agent or Lenders to grant any future waiver of
any other Default or Event of Default or be deemed to constitute a course of
conduct.
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3. Effectiveness Conditions. This Amendment shall become effective upon the
satisfactory completion, as determined by Agent in its discretion, of the
following conditions ("Effectiveness Conditions") (all documents to be in form
and substance satisfactory to Agent):
a. Execution and delivery by all parties of this Amendment;
b. Delivery of all consents and approvals of the boards of directors,
shareholders and other applicable third parties necessary in connection with
this transaction shall have been obtained;
c. After giving effect to Section 2 of this Agreement, no Default or
Event of Default exists;
d. Payment to Agent (for ratable benefit of Lenders) of a
non-refundable amendment and waiver fee equal to Twenty-Five Thousand Dollars
($25,000); and
e. Payment of Expenses.
4. Representations and Warranties. Each Borrower warrants and represents to
Agent, Issuer and Lenders that:
a. Prior Representations. As of the date of this Amendment, all
warranties and representations set forth in the Credit Agreement and Loan
Documents are true and correct in all material respects, both before and after
giving effect to this Amendment.
b. No Default. After giving effect to this Amendment, no Default or
Event of Default is outstanding or would exist after giving effect to this
Amendment.
5. Incorporation into Existing Loan Documents. The parties acknowledge and
agree that this Amendment is incorporated into and made part of the Credit
Agreement and Loan Documents, the terms and provisions of which, unless
expressly modified herein, are hereby ratified and confirmed and continue
unchanged and in full force and effect. Any future reference to the Credit
Agreement or Loan Documents shall mean the Credit Agreement or Loan Documents as
amended hereby. To the extent that any term or provision of this Amendment is or
may be deemed expressly inconsistent with any term or provision in the Loan
Documents, the terms and provisions hereof shall control.
6. Miscellaneous.
a. Headings. The headings of any paragraph of this Amendment are for
convenience only and shall not be used to interpret any provision hereof.
b. Other Instruments. Each Borrower shall execute any other documents,
instruments and writings, in form and substance satisfactory to Agent, as Agent
may reasonably request, to carry out the intentions of the parties hereunder.
c. Modifications. No modification hereof or any agreement referred to
herein shall be binding or enforceable unless in writing and signed on behalf of
the party against whom enforcement is sought.
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d. Third Party Rights. No rights are intended to be created hereunder
for the benefit of any third party donee, creditor, or incidental beneficiary.
e. Governing Law. The terms and conditions of this Amendment shall be
governed by and construed in accordance with the substantive laws of the
Commonwealth of Pennsylvania without regard to its otherwise applicable
principles of conflicts and laws.
f. Counterparts. This Amendment may be executed in counterpart all, of
which counterparts taken together shall constitute one completed fully executed
document. A photocopied or facsimile signature shall be deemed to be the
functional equivalent of a manually executed original for all purposes.
g. WAIVER OF JURY TRIAL. BORROWERS, AGENT, ISSUER AND LENDERS, BY
THEIR EXECUTION OF THIS AMENDMENT, EACH REAFFIRM THEIR WAIVER OF THE RIGHT TO
TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING OR COUNTERCLAIM OF ANY KIND
ARISING OUT OF OR RELATED TO ANY OF THE LOAN DOCUMENTS, THE OBLIGATIONS OR THE
COLLATERAL.
IN WITNESS WHEREOF, the parties have executed this Amendment the day and
year first above written.
Wachovia Bank, National Association,
as Agent, Issuer and Lender
By: /s/ Xxxxxxxx Xxxxx
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Name: Xxxxxxxx Xxxxx
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Title: Vice President
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Phoenix Color Corp.
By: /s/ Xxxxxx Xxxxxxxxx
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Name: Xxxxxx Xxxxxxxxx
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Title: Chief Financial Officer
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PCC Express, Inc.
By: /s/ Xxxxxx Xxxxxxxxx
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Name: Xxxxxx Xxxxxxxxx
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Title: Chief Financial Officer
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Phoenix (MD.) Realty, LLC
By: /s/ Xxxxxx Xxxxxxxxx
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Name: Xxxxxx Xxxxxxxxx
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Title: Chief Financial Officer
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TechniGraphix, Inc.
By: /s/ Xxxxxx Xxxxxxxxx
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Name: Xxxxxx Xxxxxxxxx
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Title: Chief Financial Officer
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