AMENDMENT TO
LOAN AGREEMENT AND RELATED LOAN DOCUMENTS
This AMENDMENT dated as of this third day of December, 1998 to Loan
Agreement dated December 18, 1996, as amended by Amendment to Loan Agreement and
Related Loan Documents dated February 6, 1998, (as amended, the "Loan
Agreement") and to the Loan Documents (as defined in the Loan Agreement and as
amended to date), is by and among PRESSTEK, INC., a Delaware corporation with a
principal place of business at 0 Xxxxxxxxxx Xxxxxx, Xxxxxx, Xxx Xxxxxxxxx 00000
(the "Borrower"), DELTA V TECHNOLOGIES, INC., an Arizona corporation with a
principal place of business at 0000 Xxxxx Xxxx Xxxxxx Xxxxxxx, Xxxxxx, Xxxx
Xxxxxx, Xxxxxxx 00000 (the "Guarantor"), and CITIZENS BANK NEW HAMPSHIRE, a bank
organized under the laws of the State of New Hampshire with a place of business
at 000 Xxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxxxxx 00000 (the "Bank").
WITNESSETH:
WHEREAS, the Bank has extended a certain revolving line of credit loan to
the Borrower in the principal amount of up to Ten Million Dollars
($10,000,000.00) (the "Revolving Line of Credit Loan") and a certain mortgage
term loan to the Borrower in the principal amount of Six Million Nine Hundred
Thousand Dollars ($6,900,000.00) ("Term Loan") pursuant to the Loan Agreement
and certain Loan Documents; and
WHEREAS, the Borrower has requested, and the Bank has agreed, to (1) renew
the Revolving Line of Credit Loan, (2) decrease the interest rate applicable to
the outstanding principal under the Revolving Line of Credit Loan, and (3)
modify certain provisions pertaining to the Borrower's financial covenants
contained in the Loan Agreement, all upon and subject to the terms and
conditions of the Loan Agreement and the Loan Documents, as the same are amended
hereby. All capitalized terms not otherwise defined herein shall have the
meanings ascribed to them in the Loan Agreement and/or the Loan Documents, as
the case may be.
NOW, THEREFORE, in consideration of the premises contained herein, the
Borrower, the Guarantor, and the Bank hereby agree as follows:
1. AMENDMENT OF LOAN AGREEMENT.
A. The first sentence in Paragraph I. C. of the Loan Agreement is
amended to read as follows:
"The Revolving Line of Credit Loan shall be subject to review and, at
the sole option and discretion of the BANK, renewal on July 31, 2000,
and, if renewed, thereafter on each subsequent anniversary of such
date (July 31, 2000, and each anniversary thereof to which the
Revolving Line of Credit Loan is renewed, being a "Review Date")."
B. Paragraph I. D. of the Loan Agreement shall be and hereby is
replaced in its entirety with the following:
"D. Interest Rate. The principal balance of each Advance outstanding
from time to time under the Revolving Line of Credit Loan shall, unless
BORROWER otherwise elects the Prime Rate (as defined below) to apply to
such Advance, bear interest during the Advance Term (as defined below)
therefor at a fixed rate equal to the LIBOR Rate (as defined below)
plus one and one-half percent (1.5%) per annum. As used herein, for
each Advance the term "LIBOR Rate" shall mean the rate as determined by
the BANK on the basis of the offered rates for deposits in U.S. dollars
for a thirty (30) day period which appear on the Telerate page 3750 or
Xxxxxx'x LIBOR page as of 11:00 a.m. London time on the date that is
two (2) Banking Days preceding the first day of the Advance Term for
such Advance. If such rate does not appear on the Telerate page 3750 or
Xxxxxx'x LIBOR page, the rate for that date will be determined on the
basis of the offered rates for deposits in U.S. dollars for a thirty
(30) day period which are offered by four major banks in the London
interbank market at approximately 11:00 a.m. London time on the date
that is two (2) Banking Days preceding the first day of the Advance
Term for such Advance. The principal London office of each of the four
major BANKS in the London interbank market will be requested to provide
a quotation of its U.S. dollar deposit offered rate. If at least two
such quotations are provided, the rate for that date will be the
arithmetic mean of all such quotations. If fewer than two quotations
are provided as requested, the rate for that date will be determined on
the basis of the rates quoted for loans in U.S. dollars to leading
European BANKS for a thirty (30) day period offered by major BANKS in
New York City at approximately 11:00 a.m., New York City time, on the
date that is two (2) Banking Days preceding the first day of the
Advance Term for such Advance. In the event that the Board of Governors
of the Federal Reserve System shall impose a Reserve Percentage on the
BANK with respect to LIBOR deposits of the BANK, then for any period
during which such Reserve Percentage shall apply, the LIBOR Rate shall
be equal to the amount determined above divided by an amount equal to 1
minus the Reserve Percentage actually maintained by the BANK. In the
event of any such imposition of a Reserve Percentage, the BORROWER may
elect by written notice to the BANK to have the entire principal amount
of all outstanding Advances bear interest at the Prime Rate (as
hereinafter defined). For purposes hereof, "Reserve Percentage" means
the rate (expressed as a decimal) at which the BANK is required to
maintain reserves under Regulation D of the Board of Governors of the
Federal Reserve System against Eurodollar liabilities outstanding.
Interest shall be calculated and charged daily on the basis of actual
days elapsed over a three hundred sixty (360) day banking year. The
"Advance Term" for each Advance shall be a thirty (30) day
2
period beginning on the Banking Day elected by the BORROWER for such
Advance to be made. BORROWER shall notify BANK in writing at least two
(2) Banking Days in advance of the date upon which the BORROWER
desires the Advance to be made. BORROWER's notice to BANK as aforesaid
shall specify the amount requested to be advanced under the Revolving
Line of Credit Loan and the date such Advance is to be made (which
must be a Banking Day). The entire principal amount of each
outstanding Advance shall either be repaid in full as of the end of
the Advance Term therefor or, if not repaid in full, shall
automatically (and without requirement of written notification by
BORROWER) be deemed a new Advance as to which (i) the Advance Term
shall commence as of the next day after last day of the Advance Term
then ending and (ii) the interest rate therefor shall be equal to a
fixed rate equal to the LIBOR Rate as of two (2) Banking Days
preceding the first day of such new Advance Term plus one and one-half
percent (1.5%) per annum. As used herein, the term "Prime Rate" shall
mean the rate published by The Wall Street Journal from time to time
under the category "Prime Rate: The Base Rate of Corporate Loans
posted by at least 75% of the Nation's 30 Largest Banks" (the lowest
of the rates so published if more than one rate is published under
this category at any given time) or such other comparable index rate
selected by the BANK in its sole discretion if The Wall Street Journal
ceases to publish such rate. The BORROWER acknowledges that the Prime
Rate is used for reference purposes only as an index and is not
necessarily the lowest interest rate charged by the BANK on commercial
loans. Each time the Prime Rate changes the interest rate under the
Revolving Line of Credit Loan shall change contemporaneously with such
change in the Prime Rate. Interest shall be calculated and charged
daily on the basis of actual days elapsed over a three hundred sixty
(360) day banking year."
C. Paragraph 1. of Section VII. Q. entitled "Additional Financial and
Other Covenants" shall be and hereby is replaced in its entirety with the
following:
"1. Borrower shall have a Tangible Capital Base (as hereinafter
defined) equal to at least Seventy-Two Million Eight Hundred
Forty-Five Thousand Dollars ($72,845,000.00) as at July 4, 1998, which
Tangible Capital Base requirement shall be measured and increased (but
never, in any event decreased) on a cumulative basis as at each fiscal
quarter end thereafter by an amount equal to the sum of (a)
seventy-five percent (75%) of Borrower's net income for each such
fiscal quarter and (b) the amount of equity capital proceeds received
by Borrower during such fiscal quarter as a result of the issuance of
its capital stock. "Tangible Capital Base" means total shareholders'
equity plus Subordinated Debt, less intangible assets, all as
determined in accordance with generally accepted accounting principles
from Borrower's
3
financial statements delivered to the BANK in accordance with the
covenants of the Borrower in the Loan Agreement (the "Financial
Statements"); and
D. Paragraph 2. of Section VII. Q. entitled "Additional Financial and
Other Covenants" shall be and hereby is replaced in its entirety with the
following:
"2. Borrower shall have "Debt Coverage" (as hereinafter defined) of
not less than 2:1 for each fiscal quarter commencing October 4, 1998.
For purposes hereof, "Debt Coverage" shall mean the ratio of
Borrower's net income for the applicable fiscal quarter ending on the
date of determination, before reduction for interest, depreciation,
taxes, and amortization expense for such period, but after the payment
of dividends or distributions during such period to the aggregate
amount of interest expense on all indebtedness and current maturities
on long term debt payable by Borrower during such fiscal quarter, all
as determined in accordance with generally accepted accounting
principles from the Financial Statements; and"
E. The following representation and warranty by Borrower is added as
Section VI. P. of the Loan Agreement:
"P. Year 2000 Representation. Borrower represents and warrants to the
BANK (which representation shall survive the making of the Loans) that
the Borrower has taken all necessary action to assess, evaluate and
correct all of the hardware, software, embedded microchips and other
processing capabilities it uses, directly or indirectly, to ensure
that it will be able to function accurately and without interruption
or ambiguity using date information before, during and after January
1, 2000."
2. AMENDMENT OF OTHER LOAN DOCUMENTS.
Each of the other Loan Documents, whether or not specifically
referenced herein, shall be and hereby is amended to reflect the terms and
conditions of this amendment and to include within the scope of such Loan
Documents and the description of Loans and Notes therein, and the
obligations secured thereby, the Revolving Line of Credit Loan and
Revolving Line of Credit Note as modified and renewed this date.
4
3. REAFFIRMATION OF REPRESENTATIONS AND WARRANTIES.
Borrower hereby confirms, reasserts, and restates all of the
representations and warranties under the Loan Agreement and the Loan
Documents, as amended hereby, as of the date hereof, including without
limitation, the representations and warranties set forth in Article VI of
the Loan Agreement.
4. REAFFIRMATION OF AFFIRMATIVE COVENANTS.
Borrower hereby confirms, reasserts, and restates its Affirmative
Covenants as set forth in Article VII of the Loan Agreement and the Loan
Documents, as amended hereby, as of the date hereof.
5. REAFFIRMATION OF NEGATIVE COVENANTS.
Borrower hereby confirms, reasserts, and restates its Negative
Covenants as set forth in Article VIII of the Loan Agreement and the Loan
Documents, as amended hereby, as of the date hereof.
6. FURTHER REPRESENTATION AND WARRANTIES.
The Borrower represents and warrants to the Bank as follows:
(a) The execution, delivery and performance of this Agreement and
the documents relating hereto (the "Amendment Documents") are within
the power of the Borrower and are not in contravention of any law, the
Borrower's Articles of Incorporation, By-laws or the terms of any
other documents, agreements or undertaking to which the Borrower is a
party or by which the Borrower is bound. No approval of any person,
corporation, governmental body or other entity not provided herewith
is required as a prerequisite to the execution, delivery and
performance by Borrower of the Amendment Documents or any of the
documents submitted to the Bank in connection with the Amendment
Documents to ensure the validity or enforceability thereof.
(b) All necessary corporate action has been taken by the Borrower
to authorize the execution, delivery and performance of the Amendment
Documents which, when executed on behalf of the Borrower, will
constitute the legally binding obligations of the Borrower,
enforceable in accordance with their respective terms.
5
7. REAFFIRMATION OF GUARANTY.
The Guarantor hereby confirms, reasserts, and restates its
Guaranty, as amended hereby, as of the date hereof; and the Guarantor
acknowledges and agrees that the term "Guaranteed Obligations" therein
shall include the Revolving Line of Credit Loan and the Revolving Line
of Credit Note as modified and renewed this date.
8. NO FURTHER EFFECT.
Except as amended hereby, the terms and conditions of the Loan
Agreement and each of the Loan Documents as set forth therein shall
remain unchanged and, as hereby amended, are in full force and effect.
[Intentionally left blank.]
6
IN WITNESS WHEREOF, the Borrower, the Guarantor and the Bank have executed
and delivered this Amendment to the Loan Agreement and Related Loan Documents
all as of the day and year first above written.
WITNESS: BANK:
CITIZENS BANK NEW HAMPSHIRE
/s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------- -----------------------------------
Xxxxxx X. Xxxxxxxx, Vice President
BORROWER:
PRESSTEK, INC.
/s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------- -----------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Chief Executive Officer
GUARANTOR:
DELTA V TECHNOLOGIES, INC.
/s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------- -----------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Director
7
