EXHIBIT 10.1
SECOND AMENDMENT
SECOND AMENDMENT, dated as of June 2, 2004 (this "SECOND AMENDMENT"), to
the Second Amended and Restated Senior Secured Credit Agreement, dated as of
September 16, 2003 (as amended by the First Amendment, dated as of November 23,
2003, this Second Amendment and as otherwise amended, supplemented or modified
from time to time, the "CREDIT AGREEMENT"), among DAY INTERNATIONAL GROUP, INC.,
a Delaware corporation (the "BORROWER"), the several banks and other financial
institutions or entities from time to time parties thereto (the "LENDERS"),
XXXXXX BROTHERS INC., as sole advisor, sole bookrunner and joint lead arranger,
and BANC ONE CAPITAL MARKETS, INC., as joint lead arranger, BANK ONE, NA, as
syndication agent, NATIONAL CITY BANK, as documentation agent, and XXXXXX
COMMERCIAL PAPER INC., as administrative agent (in such capacity, the
"ADMINISTRATIVE AGENT").
W I T N E S S E T H:
WHEREAS, the Borrower has requested that the Administrative Agent and each
of the Lenders agree to amend certain provisions of the Credit Agreement;
WHEREAS, such amendments include adding a Tranche D Term Loan Facility (as
defined below) and using the proceeds thereof to prepay the existing Tranche B
Term Loans and Tranche C Term Loans; and
WHEREAS, the Administrative Agent and the Lenders are willing to agree to
the requested amendments, but only upon the terms and conditions set forth
herein;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in consideration of the
premises contained herein, the parties hereto agree as follows:
1. Defined Terms. Capitalized terms used herein and not otherwise defined
herein shall have the meanings ascribed to such terms in the Credit Agreement.
2. Amendment to Section 1.1 (Defined Terms). (a) Section 1.1 of the Credit
Agreement is hereby amended by (i) deleting the defined terms "Commitment",
"Facility", "Majority Facility Lenders", "Required Lenders", "Term Loan
Facilities", "Term Loan Lender" and "Term Loans" and (ii) substituting in lieu
thereof the following definitions:
"`COMMITMENT': as to any Lender, the sum of the Tranche A Term Loan
Commitment, Tranche B Term Loan Commitment, Tranche C Term Loan Commitment,
Tranche D Term Loan Commitment and the Revolving Credit Commitment of such
Lender."
"`FACILITY': each of (a) the Tranche A Term Loan Commitments and the
Tranche A Term Loans made thereunder (the "TRANCHE A TERM LOAN FACILITY"), (b)
the Tranche B Term Loan Commitments and the Tranche B Term Loans made thereunder
(the "TRANCHE B TERM LOAN FACILITY"), (c) the Tranche C Term Loan Commitments
and the Tranche C Term Loans made thereunder (the "TRANCHE C TERM LOAN
FACILITY"), (d) the Tranche D Term Loan Commitments and the Tranche D Term Loans
made thereunder
(the "TRANCHE D TERM LOAN FACILITY") and (e) the Revolving Credit Commitments
and the extensions of credit made thereunder (the "REVOLVING CREDIT FACILITY")."
"`MAJORITY FACILITY LENDERS': with respect to any Facility, the holders of
more than 50% of the aggregate unpaid principal amount of the Tranche A Term
Loans, Tranche B Term Loans, Tranche C Term Loans, Tranche D Term Loans or the
Total Revolving Extensions of Credit, as the case may be, outstanding under such
Facility (or, in the case of the Revolving Credit Facility, prior to any
termination of the Revolving Credit Commitments, the holders of more than 50% of
the Total Revolving Credit Commitments)."
"`REQUIRED LENDERS': the holders of more than 50% of (a) until the Closing
Date, the Commitments and (b) thereafter, the sum of (i) the aggregate unpaid
principal amount of the Tranche A Term Loans, (ii) the aggregate unpaid
principal amount of the Tranche B Term Loans, (iii) the aggregate unpaid
principal amount of the Tranche C Term Loans, (iv) the aggregate unpaid
principal amount of the Tranche D Term Loans and (v) the Total Revolving Credit
Commitments or, if the Revolving Credit Commitments have been terminated, the
Total Revolving Extensions of Credit."
"`TERM LOAN FACILITIES': the collective reference to the Tranche A Term
Loan Facility, the Tranche B Term Loan Facility, the Tranche C Term Loan
Facility and the Tranche D Term Loan Facility."
"`TERM LOAN LENDER': each of the Tranche A Term Loan Lenders, the Tranche
B Term Loan Lenders, the Tranche C Term Loan Lenders and the Tranche D Term Loan
Lenders."
"`TERM LOANS': the collective reference to the Tranche A Term Loans, the
Tranche B Term Loans, the Tranche C Term Loans and the Tranche D Term Loans."
(b) The definition of "Applicable Margin" in Section 1.1 of the Credit
Agreement is hereby amended by inserting the following below the last line of
the chart therein (and prior to the proviso contained therein):
Base Rate Eurocurrency
Loans Loans
----- -----
"Tranche D Term Loan Facility 2.50% 3.50%".
(c) The definition of "Interest Period" in Section 1.1 of the Credit
Agreement is hereby amended by deleting paragraph (ii) in the proviso to such
definition in its entirety and substituting in lieu thereof the following:
"(ii) any Interest Period that would otherwise extend beyond the Revolving
Credit Termination Date or beyond the date final payment is due on the Tranche A
Term Loans, the Tranche B Term Loans, the Tranche C Term Loans or the Tranche D
Term Loans, as the case may be, shall end on the Revolving Credit Termination
Date or such due date, as applicable;"
(d) Section 1.1 of the Credit Agreement is hereby amended by adding
alphabetically therein the following definitions:
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"`SECOND AMENDMENT': the Second Amendment to this Agreement dated as of
June 2, 2004."
"`Second Amendment Effective Date': as defined in the Second Amendment."
"`TRANCHE D TERM LOAN': as defined in Section 2.1(d)."
"`TRANCHE D TERM LOAN COMMITMENT': as to any Tranche D Term Loan Lender,
the obligation of such Lender, if any, on the Second Amendment Effective Date to
make a Tranche D Term Loan to the Borrower hereunder in a principal amount not
to exceed the amount set forth opposite the heading "Tranche D Term Loan
Commitment", or convert all or a portion of its Tranche B Term Loans or Tranche
C Term Loans, as the case may be, to Tranche D Term Loans to the Borrower
hereunder in a principal amount not to exceed the amount set forth opposite the
heading "Amount of Tranche B Term Loans and/or Tranche C Term Loans to be
converted to Tranche D Term Loans", in each case on Schedule 1 to the Lender
Consent delivered by such Lender, or, as the case may be, in the Assignment and
Acceptance pursuant to which such Lender became a party hereto, as the same may
be changed from time to time pursuant to the terms hereof. The original
aggregate amount of the Tranche D Term Loan Commitments is $126,473,026.70."
"`TRANCHE D TERM LOAN FACILITY': as defined in the definition of
"Facility" in this Section 1.1."
"`TRANCHE D TERM LOAN LENDER': each Lender which has a Tranche D Term Loan
Commitment or which is the holder of a Tranche D Term Loan."
"`TRANCHE D TERM LOAN MATURITY DATE': September 16, 2009 (or such earlier
date on which the Loans become due and payable pursuant to Section 8); provided,
that notwithstanding the foregoing, the Tranche D Term Loan Maturity Date shall
be September 15, 2007 in the event that the Borrower's Senior Subordinated Notes
are not refinanced in full prior to September 15, 2007 with the proceeds of the
Subordinated Refinancing."
"`TRANCHE D TERM LOAN PERCENTAGE': as to any Tranche D Term Loan Lender at
any time, the percentage which such Lender's Tranche D Term Loan Commitment then
constitutes of the aggregate Tranche D Term Loan Commitments (or, at any time
after the Second Amendment Effective Date, the percentage which the aggregate
principal amount of such Lender's Tranche D Term Loan then outstanding
constitutes of the aggregate principal amount of the Tranche D Term Loans then
outstanding)."
3. Amendment to Section 2.1 (Term Loan Commitments). Section 2.1 of the
Credit Agreement is hereby amended by adding to such section at the end thereof
the following:
"(d) Subject to the terms and conditions hereof, each Tranche D Term Loan
Lender severally agrees to make a term loan (a "TRANCHE D TERM LOAN") to the
Borrower on the Second Amendment Effective Date in an amount not to exceed the
amount of the Tranche D Term Loan Commitment of such Tranche D Term Loan Lender.
The Tranche D Term Loans may from time to time be Eurocurrency Loans or Base
Rate Loans, or a combination thereof, as
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determined by the Borrower and notified to the Administrative Agent in
accordance with Sections 2.2 and 2.13."
4. Amendment to Section 2.2 (Procedure for Term Loan Borrowings). Section
2.2 of the Credit Agreement is hereby amended by adding to such section at the
end thereof the following:
"(c) The Borrower shall deliver to the Administrative Agent a Borrowing
Notice (which Borrowing Notice must be received by the Administrative Agent
prior to 10:00 A.M., New York City time, one Business Day prior to the Second
Amendment Effective Date) requesting that the Tranche D Term Loan Lenders make
the Tranche D Term Loans (or convert Tranche B Term Loans and Tranche C Term
Loans, as applicable, to Tranche D Term Loans) on the Second Amendment Effective
Date. The Tranche D Term Loans shall initially be Base Rate Loans, and no
Tranche D Term Loan may be converted into or continued as a Eurocurrency Loan
having an Interest Period in excess of one month prior to the date which is 30
days after the Second Amendment Effective Date or such shorter period as may be
acceptable to the Administrative Agent. Upon receipt of such Borrowing Notice
the Administrative Agent shall promptly notify each Tranche D Term Loan Lender
thereof. Not later than 12:00 Noon, New York City time, on the Second Amendment
Effective Date, each Tranche D Term Loan Lender shall make available to the
Administrative Agent at the Funding Office an amount in immediately available
funds equal to its Tranche D Term Loan (or notify the Administrative Agent to
convert an equal aggregate principal amount of Tranche B Term Loans or Tranche C
Term Loans, as applicable, held by such Tranche D Term Loan Lender to Tranche D
Term Loans). The Administrative Agent shall apply the aggregate of the amounts
made available to the Administrative Agent by each Tranche D Term Loan Lender in
accordance with Section 2.18 as in effect prior to the Second Amendment
Effective Date to prepay the Tranche B Term Loans and Tranche C Term Loans, as
applicable (or convert Tranche B Term Loans and Tranche C Term Loans, as
applicable, into an equal principal amount of Tranche D Term Loans held by such
Tranche D Term Loan Lender)."
5. Amendment to Section 2.3 (Repayment of Term Loans). Section 2.3 of the
Credit Agreement is hereby amended by adding to such section at the end thereof
the following:
"(d) The Tranche D Term Loan of each Lender shall be repaid in 22
consecutive quarterly installments, commencing on June 30, 2004, each of which
shall be in an amount equal to such Lender's Tranche D Term Loan Percentage
multiplied by the amount set forth below opposite such installment:
Installment Amount
------------------ --------------
June 30, 2004 $ 317,771.43
September 30, 2004 $ 317,771.43
December 31, 2004 $ 317,771.43
March 31, 2005 $ 317,771.43
June 30, 2005 $ 317,771.43
September 30, 2005 $ 317,771.43
December 31, 2005 $ 317,771.43
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Installment Amount
------------------ --------------
March 31, 2006 $ 317,771.43
June 30, 2006 $ 317,771.43
September 30, 2006 $ 317,771.43
December 31, 2006 $ 317,771.43
March 31, 2007 $ 317,771.43
June 30, 2007 $ 317,771.43
September 30, 2007 $ 317,771.43
December 31, 2007 $ 317,771.43
March 31, 2008 $ 317,771.43
June 30, 2008 $ 317,771.43
September 30, 2008 $ 317,771.43
December 31, 2008 $30,188,285.26
March 31, 2009 $30,188,285.26
June 30, 2009 $30,188,285.26
Tranche D Term $30,188,285.23;
Loan Maturity Date
provided, that notwithstanding the foregoing, all outstanding Tranche D
Term Loans, together with accrued interest thereon, shall be due and payable on
the Tranche D Term Loan Maturity Date."
6. Amendment to Section 2.8 (Repayment of Loans; Evidence of Debt). (a)
Section 2.8(a) of the Credit Agreement is hereby amended by adding after the
second sentence thereof the following: "The Borrower hereby unconditionally
promises to pay to the Administrative Agent for the account of the appropriate
Tranche D Term Loan Lender the principal amount of each Tranche D Term Loan of
such Tranche D Term Loan Lender in installments according to the amortization
schedule set forth in Section 2.3(d) and the then unpaid principal amount of
each Tranche D Term Loan of such Tranche D Term Loan Lender on the Tranche D
Term Loan Maturity Date."
(b) Section 2.8(e) of the Credit Agreement is hereby amended by adding to
such section at the end thereof the following: "The Borrower agrees that, upon
the request to the Administrative Agent by any Lender, the Borrower will
promptly execute and deliver to such Lender a promissory note of the Borrower
evidencing any Tranche D Term Loans of such Lender, substantially in the form of
Exhibit E-6, with appropriate insertions as to date and principal amount."
7. Amendment to Section 2.18 (Pro Rata Treatment and Payments). (a)
Section 2.18(a) of the Credit Agreement is hereby amended by inserting the
phrase ", Tranche D Term Loan Percentages" in the fifth line thereof immediately
before the phrase "or Revolving Credit Percentages".
(b) Section 2.18(d) of the Credit Agreement is hereby amended by deleting
such section in its entirety and substituting in lieu thereof the following:
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"(d) Notwithstanding anything to the contrary in Sections 2.12 or 2.18(b),
so long as any Tranche A Term Loans are outstanding, each Tranche D Term Loan
Lender may, at its option, decline up to 100% of the portion of any mandatory
prepayment applicable to the Tranche D Term Loans of such Lender; accordingly,
with respect to the amount of any mandatory prepayment described in Section 2.12
that is allocated to Tranche D Term Loans (such amounts, the "MANDATORY
PREPAYMENT AMOUNT"), at any time when Tranche A Term Loans remain outstanding,
the Borrower will, on the date specified in Section 2.12 for such prepayment,
(i) give the Administrative Agent telephonic notice (promptly confirmed in
writing) requesting that the Administrative Agent prepare and provide to each
Tranche D Term Loan Lender a notice (each, a "PREPAYMENT OPTION NOTICE") as
described below and (ii) deposit with the Administrative Agent the Mandatory
Prepayment Amount. As promptly as practicable after receiving such notice from
the Borrower, the Administrative Agent will send to each Tranche D Term Loan
Lender a Prepayment Option Notice, which shall be substantially in the form of
Exhibit K, and shall include an offer by the Borrower to prepay on the
Prepayment Date (as defined below) the Tranche D Term Loans of such Lender by an
amount equal to the portion of the Mandatory Prepayment Amount indicated in such
Lender's Prepayment Option Notice as being applicable to such Lender's Tranche D
Term Loans. The "Prepayment Date" in respect of any Prepayment Option Notice
shall be the date which is five Business Days after the date of such Prepayment
Option Notice. On the Prepayment Date, the Administrative Agent shall (A) apply
the Mandatory Prepayment Amount toward prepayment of the outstanding Tranche D
Term Loans in respect of which Lenders have accepted mandatory prepayment as
described above and (B) apply the remaining portion of the Mandatory Prepayment
Amount not accepted by the Tranche D Term Loan Lenders toward prepayment of the
Tranche A Term Loans. The procedures described above in this paragraph shall not
be applicable in the case of a prepayment in full of all Term Loans."
8. Amendment to Section 4.16 (Use of Proceeds). Section 4.16 of the Credit
Agreement is hereby amended by adding to such section at the end thereof the
following: "The proceeds of the Tranche D Term Loans shall be used solely to
refinance the Tranche B Term Loans and the Tranche C Term Loans on the Second
Amendment Effective Date."
9. Amendment to Section 7.6 (Limitation on Dividends). Section 7.6 of the
Credit Agreement is hereby amended by (i) deleting the word "and" at the end of
clause (c); (ii) replacing the period at the end of clause (d) with the text ";
and"; and (iii) adding to such section at the end thereof the following clause
(e):
"(e) the Borrower may make Restricted Payments to acquire minority
interests in joint ventures and non-Wholly Owned Subsidiaries from any Person
(other than the Sponsors or any of their respective Affiliates), so long as the
aggregate amount paid by the Borrower in connection with all such Restricted
Payments made pursuant to this clause (e) does not exceed $2,000,000."
10. Amendment to Exhibits to Credit Agreement. (a) Exhibit K (Form of
Prepayment Option Notice) to the Credit Agreement is amended in its entirety to
read as set forth in Annex II hereto.
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(b) The Form of Tranche D Term Note attached hereto as Annex III is hereby
added to the Credit Agreement as Exhibit E-6 thereto.
11. Conditions to Effectiveness of this Second Amendment. This Second
Amendment shall become effective upon the satisfaction of the following
conditions precedent concurrently with or prior to the making of the Tranche D
Term Loans (such date, the "Second Amendment Effective Date"):
(a) The Administrative Agent shall have received (i) counterparts of this
Second Amendment duly executed and delivered by each of the Borrower, each of
the Subsidiary Guarantors and the Administrative Agent, and (ii) a Lender
Consent substantially in the form of Annex I hereto (the "Lender Consent"), duly
executed and delivered by each of the Tranche D Term Loan Lenders.
(b) The Administrative Agent and the Tranche D Term Loan Lenders shall
have received such legal opinions as are customary for transactions of this type
or as they may reasonably request.
(c) Prior to and after giving effect to this Second Amendment, each of the
representations and warranties made by any Loan Party in or pursuant to the Loan
Documents shall be true and correct on and as of the date hereof as if made on
and as of such date; provided that the references to the Credit Agreement in
such representations and warranties shall be deemed to refer to the Credit
Agreement as amended pursuant to this Second Amendment.
(d) No Default or Event of Default shall have occurred and be continuing
on the date hereof prior to or after giving effect to the transactions
contemplated hereby.
(e) The Administrative Agent shall have received such documents and other
instruments as are customary for transactions of this type or as the
Administrative Agent may reasonably request, including with respect to the
Mortgages, such documents, title insurance policies and endorsements as the
Administrative Agent deems necessary or advisable to protect the validity and
priority of any Lien created by such Mortgages.
(f) The Borrower shall have paid to the Administrative Agent all
outstanding fees, costs and expenses invoiced to the Borrower owing on the date
hereof pursuant to the Credit Agreement or this Second Amendment.
(g) The Tranche B Term Loans and Tranche C Term Loans outstanding on the
Second Amendment Effective Date shall be refinanced in full with the proceeds of
Tranche D Term Loans or converted into Tranche D Term Loans at the request of
the applicable Lender.
12. Continuing Effect; No Other Amendments. Except as expressly set forth
in this Second Amendment, all of the terms and provisions of the Credit
Agreement are and shall remain in full force and effect and the Borrower shall
continue to be bound by all of such terms and provisions. The amendments
provided for herein are limited to the specific subsections of the Credit
Agreement specified herein and shall not constitute an amendment of, or an
indication of the Administrative Agent's or the Lenders' willingness to amend or
waive, any other
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provisions of the Credit Agreement or the same subsections for any other date or
purpose. The Second Amendment shall constitute a Loan Document.
13. Expenses. The Borrower agrees to pay and reimburse the Administrative
Agent for all its reasonable out-of-pocket costs and expenses incurred in
connection with the development, preparation and execution and delivery of this
Second Amendment, and other documents prepared in connection herewith, and the
transactions contemplated hereby, including, without limitation, reasonable fees
and disbursements and other charges of counsel to the Administrative Agent and
the charges of IntraLinks.
14. Counterparts. This Second Amendment may be executed by one or more of
the parties to this Second Amendment on any number of separate counterparts, and
all of said counterparts taken together shall be deemed to constitute one and
the same instrument. Delivery of an executed signature page of this Second
Amendment by facsimile transmission shall be effective as delivery of a manually
executed counterpart hereof. A set of the copies of this Second Amendment signed
by all the parties shall be lodged with the Borrower and the Administrative
Agent. The execution and delivery of this Second Amendment by the Loan Parties
and the Administrative Agent shall be binding upon the Loan Parties, the
Lenders, the Agents and all future holders of the Loans.
15. Effect of Second Amendment. On the Second Amendment Effective Date,
the Credit Agreement shall be amended as provided herein. The parties hereto
acknowledge and agree that (a) this Second Amendment and the other Loan
Documents executed and delivered in connection herewith do not constitute a
novation, or termination of the "Obligations" (as defined in the Credit
Agreement) under the Credit Agreement as in effect prior to the Second Amendment
Effective Date; (b) such "Obligations" are in all respects continuing (as
amended hereby) with only the terms thereof being modified to the extent
provided in this Second Amendment; and (c) the Liens and security interests as
granted under the Security Documents securing payment of such "Obligations" are
in all respects continuing and in full force and effect and secure the payment
of the "Obligations."
16. GOVERNING LAW. THIS SECOND AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES UNDER THIS SECOND AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
17. Further Assurances. To the extent not delivered to the Administrative
Agent on or before the Second Amendment Effective Date, the Borrower agrees to
promptly deliver to the Administrative Agent such documents, title insurance
policies and endorsements as the Administrative Agent deems necessary or
advisable to protect the validity and priority of any Lien created by the
Mortgages in favor of the Administrative Agent.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment
to be executed and delivered by their respective duly authorized officers as of
the date first above written.
DAY INTERNATIONAL GROUP, INC.
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxx
Title: VP & CFO
XXXXXX COMMERCIAL PAPER INC., as
Administrative Agent
By: /s/ G. Xxxxxx Xxxxx
---------------------------------
Name: G. Xxxxxx Xxxxx
Title: Authorized Signatory
[SIGNATURE PAGE TO FIRST AMENDMENT]
Each Subsidiary Guarantor hereby consents to this Second Amendment and agrees
that the terms hereof shall not affect in any way its obligations and
liabilities under the Loan Documents (as amended and otherwise expressly
modified by this Second Amendment), all of which obligations and liabilities
shall remain in full force and effect and each of which is hereby reaffirmed (as
amended and otherwise expressly modified by this Second Amendment).
Consented to and Agreed as of
the date of this Second Amendment:
DAY INTERNATIONAL, INC.
DAY INTERNATIONAL FINANCE, INC.
XXXX INTERNATIONAL, INC.
NETWORK DISTRIBUTION INTERNATIONAL
NETWORK DISTRIBUTION INTERNATIONAL, INC.
BELLWETHER DISTRIBUTION, L.L.C.
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: VP & CFO
[SIGNATURE PAGE TO FIRST AMENDMENT]
INDEX
ANNEXES:
I Lender Consent
II Form of Prepayment Option Notice
III Form of Tranche D Term Note
A copy of the Annexes will be furnished supplementally to the Commission upon
request.
[SIGNATURE PAGE TO FIRST AMENDMENT]
