THIRD AMENDMENT TO CREDIT AGREEMENT
This Third Amendment to Credit Agreement ("Amendment") is made this
13th day of November, 2000, by and among Phoenix Color Corp. ("Phoenix"), a
Delaware corporation, PCC Express, Inc. ("PCC"), a Delaware corporation, Phoenix
(MD.) Realty, LCC ("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, "Lender"), First Union National Bank, a national
banking association, as issuer of letters of credit (in such capacity, "Issuer")
and 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 supplemented on February 12, 1999, as
amended on March 31, 1999, and as amended on March 23, 2000 (collectively,
"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. Affirmation of Reserve. Borrowers hereby affirm the imposition
of the reserve against the Borrowing Base described in that certain
Letter Agreement dated August 9, 2000, among Borrowers, Agent, Issuer
and Lender.
b. Financial Covenant Amendments - Effective July 1, 2000,
Section 5.8 of the Credit Agreement is hereby amended and restated in
its entirety and shall read as follows:
5.8 Financial Covenants: Borrowers shall maintain and comply with
the following financial covenants:
(a) Total Leverage Ratio: Borrowers shall have and maintain
a Total Leverage Ratio of not more than the following
during the following periods (measured quarterly on a
rolling four quarter basis; provided that the
measurement at (i) March 31, 2001, shall be based on
three months; (ii) June 30 2001, shall be based on six
months; and (iii) September 30, 2001, shall be based on
nine months; and provided further, that for each such
shortened period, Total Funded Debt shall be based on
Total Fund Debt at such date times 25%, 50% and 75%
respectively):
Period Maximum Ratio
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07/01/00 through 09/30/00 5.5:1
01/01/01 through 03/31/01 5.0:1
04/01/01 through 06/30/01 5.0:1
07/01/01 through 09/30/01 5.0:1
(b) Interest Coverage Ratio: Borrowers shall have and
maintain an Interest Coverage Ratio of not less than
the following during the following periods (measured
quarterly on a rolling four quarter basis; provided
that the measurement at (i) March 31, 2001, shall be
based on three months; (ii) June 30 2001, shall be
based on six months; and (iii) September 30, 2001,
shall be based on nine months):
Period Minimum Ratio
------ -------------
07/01/00 through 09/30/00 1.70:1
10/01/00 through 12/31/00 1.50:1
01/01/01 through 03/31/01 1.70:1
04/01/01 through 06/30/01 1.70:1
07/01/01 through 09/30/01 1.70:1
(c) Minimum Consolidated EBITDA: Borrowers shall have and
maintain a Consolidated EBITDA of not less than the
following during the following periods (measured
quarterly on a rolling four quarter basis; provided
that the measurement at (i) March 31, 2001, shall be
based on three months; (ii) June 30 2001, shall be
based on six months; and (iii) September 30, 2001,
shall be based on nine months):
Period Minimum Amount
------ --------------
07/01/00 through 09/30/00 $20,000,000
10/01/00 through 12/31/00 $20,000,000
01/01/01 through 03/31/01 $ 5,750,000
04/01/01 through 06/30/01 $11,750,000
07/01/01 through 09/30/01 $19,000,000
(d) Consolidated Capital Expenditures: Borrowers shall not
expend for Consolidated Capital Expenditures more than
the following amounts during the following periods
(measured quarterly on a rolling four quarter basis;
provided that the measurement at (i) March 31, 2001,
shall be based on three months; (ii) June 30 2001,
shall be based on six months; and (iii) September 30,
2001, shall be based on nine months):
Period Maximum Amount
------ --------------
07/1/00 through 09/30/00 $7,000,000
10/1/00 through 12/31/00 $6,000,000
01/1/01 through 03/31/01 $3,000,000
04/1/01 through 06/30/01 $5,000,000
07/1/01 through 09/30/01 $6,000,000
2. 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 of this Amendment.
b. Certified copies of resolutions of each Borrower authorizing
the execution, delivery and performance of this Amendment.
c. Payment to Agent (for ratable benefit of Lenders) of a
non-refundable amendment fee of $75,000.
3. Consent Re: Use of Proceeds. Agent and Lender hereby consent to the
utilization of proceeds of Advances for the construction of a 50,000 square
foot warehouse at the Maryland facility; provided that the aggregate amount
of Advances utilized for such construction shall not exceed $1,500,000; and
provided further that such construction shall also be subject to the
limitations on Consolidated Capital Expenditures set forth in Section
5.8(d).
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.
d. 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.
e. 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.
IN WITNESS WHEREOF, the parties have executed this Amendment the day
and year first above written.
First Union National Bank, as Agent, Phoenix Color Corp.
Issuer, and Lender
By: /s/ Xxxxxxxx Xxxxx By: /s/ Xxxxxx Xxxxxxxxx
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Name: Xxxxxxxx Xxxxx Name: Xxxxxx Xxxxxxxxx
-------------------------------- ----------------------------
Title: Vice President 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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