Exhibit 10.31.1
FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
THIS FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this
"Amendment") is made as of the 21st day of June, 2002, by and among CADMUS
COMMUNICATIONS CORPORATION (the "Borrower"), WACHOVIA BANK, NATIONAL ASSOCIATION
(formerly known as First Union National Bank and successor by merger to Wachovia
Bank, N.A.), as Agent and as a Bank, BANK OF AMERICA, N.A., FLEET NATIONAL BANK,
SUNTRUST BANK, NATIONAL CITY BANK, and CREDIT LYONNAIS NEW YORK BRANCH
(collectively referred to herein as the "Banks"), CADMUS JOURNAL SERVICES, INC.,
PORT CITY PRESS, INC., WASHBURN GRAPHICS, INC., and MACK PRINTING COMPANY
(collectively referred to herein as the "Guarantors").
R E C I T A L S:
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The Borrower, the Agent and the Banks have entered into a
certain Amended and Restated Credit Agreement dated June 21, 2001 (the "Credit
Agreement"). Capitalized terms used in this Amendment which are not otherwise
defined in this Amendment shall have the respective meanings assigned to them in
the Credit Agreement.
The Guarantors have executed or otherwise become a party to a
certain Guaranty Agreement dated as of June 21, 2001 (the "Guaranty").
The Borrower and Guarantors have requested the Agent and the
Banks to amend the Credit Agreement upon the terms and conditions hereinafter
set forth.
NOW, THEREFORE, in consideration of the Recitals and the
mutual promises contained herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Borrower, the
Agent and the Banks, intending to be legally bound hereby, agree as follows:
SECTION 1. Recitals. The Recitals are incorporated herein
by reference and shall be deemed to be a part of this Amendment.
SECTION 2. Amendment. The Credit Agreement is hereby amended
as set forth in this Section 2.
SECTION 2.1 Amendments to Definition. The following definition
is hereby amended and restated in its entirety to read as follows:
"Consolidated EBITDA" means, for any period, the sum of (a)
Consolidated Net Income for such period, (b) taxes on income
of the Borrower and its Consolidated Subsidiaries for such
period to the extent
deducted in determining Consolidated Net Income for such
period, (c) Consolidated Interest Expense for such period, (d)
book depreciation expenses of the Borrower and its
Consolidated Subsidiaries for such period, (e) amortization of
intangible assets of the Borrower and its Consolidated
Subsidiaries for such period, (f) non-cash book losses not to
exceed $2,000,000 in the aggregate associated with the
disposal of machinery, equipment and real estate of the
Borrower and its Consolidated Subsidiaries, and (g) non-cash
charges not to exceed $298,000 in the aggregate incurred in
connection with the permanent reduction of the Revolving
Credit Commitment pursuant to Section 2.07, all determined
with respect to the Borrower and its Consolidated Subsidiaries
on a consolidated basis for such period and in accordance with
GAAP. In determining Consolidated EBITDA for any period, (i)
any Consolidated Subsidiary acquired during such period by the
Borrower or any other Consolidated Subsidiary shall be
included on a pro forma, historical basis as if it had been a
Consolidated Subsidiary during such entire period, (ii) any
amounts which would be included in a determination of
Consolidated EBITDA for such period with respect to assets
acquired during such period by the Borrower or any
Consolidated Subsidiary shall be included in the determination
of Consolidated EBITDA for such period and the amount thereof
shall be calculated on a pro forma, historical basis as if
such assets had been acquired by the Borrower or such
Consolidated Subsidiary prior to the first day of such period,
(iii) any Consolidated Subsidiary sold during such period by
the Borrower or any other Consolidated Subsidiary shall be
excluded as if it had not been a Consolidated Subsidiary at
any time during such period, and (iv) any amounts which would
be otherwise included in a determination of Consolidated
EBITDA for such period with respect to assets sold or
otherwise disposed of during such period by the Borrower or
any Consolidated Subsidiary shall be excluded in the
determination of Consolidated EBITDA for such period and the
amount excluded shall be calculated as if such assets had been
sold or otherwise disposed of by the Borrower or such
Consolidated Subsidiary prior to the first day of such period.
SECTION 2.2 Amendment to Section 2.08(b)(2). Section
2.08(b)(2) of the Credit Agreement is hereby amended and restated in its
entirety to read as follows:
(2) In the event and on each occasion of a sale,
lease, transfer or other disposition by the Borrower or any
Subsidiary of any real or personal property (including,
without limitation, the sale or other transfer of
Securitization Assets and the sale, lease, transfer or other
disposition of assets pursuant to a Sale/Leaseback
Transaction) resulting in Net Disposition Proceeds that, when
aggregated with all other Net Disposition Proceeds received by
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the Borrower or any Subsidiary since the Closing Date, are in
excess of $7,000,000 (the "Disposition Threshold"), then
simultaneously with each such sale, lease, transfer or other
disposition, the Borrower shall immediately give the notice
required by Section 2.08(c), and on the date which is three
Euro-Dollar Business Days after the date of receipt of such
Net Disposition Proceeds, the Revolving Credit Commitments
shall be automatically reduced in accordance with Section
2.08(b)(4) in an amount equal to 100% of the Net Disposition
Proceeds to the extent such Net Disposition Proceeds are in
excess of the Disposition Threshold and the Revolving Credit
Availability shall be reduced in an amount equal to 100% of
the Net Disposition Proceeds to the extent such Net
Disposition Proceeds are in excess of the Disposition
Threshold. Notwithstanding anything contained herein to the
contrary, the Revolving Credit Commitments and Revolving
Credit Availability shall not be reduced pursuant to this
Section 2.08(b)(2) by the proceeds from the sale, lease,
transfer or other disposition by the Borrower or any
Subsidiary of (A) any real or personal property resulting in
Net Disposition Proceeds in an amount less than $1,000,000,
(B) the Tapsco manufacturing/composition facility in Akron,
Pennsylvania or (C) the warehouse facility on Manheim Pike in
Lancaster, Pennsylvania, so long as an amount equal to the Net
Disposition Proceeds of any disposition described in clauses
(A), (B) or (C) is invested in manufacturing and production
fixed assets within 90 days of receipt. The Borrower covenants
and agrees that: (1) 100% of the gross proceeds payable to the
Borrower or any Subsidiary in connection with any sale or
other transfer of Securitization Assets shall be in cash or a
Cash Equivalent or an increase in the principal balance of a
Purchase Money Note; and (2) no less than 80% of the gross
proceeds payable to the Borrower or any Subsidiary in
connection with any sale, lease, transfer or other disposition
of any real or personal property which is not permitted under
Section 6.13 (but has been approved by the Required Banks)
shall be in cash or a Cash Equivalent and received at the time
of such disposition.
SECTION 2.3 Amendment to Section 3.02. Section 3.02 of the
Credit Agreement is hereby amended and restated in its entirety to read as
follows:
SECTION 3.02 Types and Amounts. The Letter of Credit
Issuer shall have no obligation to issue any Letter of Credit
at any time:
(a) if the aggregate maximum amount then
available for drawing under Letters of Credit, after
giving effect to the issuance of the requested
Letter of Credit, shall exceed any limit imposed by
law or regulation upon the Letter of Credit Issuer;
(b) if, after giving effect to the
issuance of the requested Letter of Credit, (i) the
aggregate Letter of Credit Obligations would exceed
$5,000,000, or (ii) the conditions set forth in
Section 2.01 would not be satisfied; or
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(c) which has an expiration date (i) more
than one (1) year after the date of issuance or (ii)
after the Revolving Credit Maturity Date.
SECTION 2.4 Amendment to Section 6.03 (Maximum Total Leverage
Ratio). Section 6.03 of the Credit Agreement is hereby amended and restated in
its entirety to read as follows:
SECTION 6.03. Maximum Total Leverage Ratio. The
Borrower shall not suffer or permit the Total Leverage Ratio
at any time during each period set forth in the chart below to
exceed the applicable ratio set forth opposite such period.
Fiscal Quarter Ending
During the Period: Total Leverage Ratio:
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Closing Date through 09/30/01 3.85 to 1.00
10/01/01 through 12/31/01 3.90 to 1.00
01/01/02 through 12/31/02 3.75 to 1.00
01/01/03 and thereafter 3.50 to 1.00
SECTION 2.5 Amendment to Section 6.05 (Minimum Consolidated
Net Worth). Section 6.05 of the Credit Agreement is hereby amended and restated
in its entirety to read as follows:
SECTION 6.05 Minimum Consolidated Net Worth.
Consolidated Net Worth will at no time be less than the amount
determined by the following computation: (1) 90% of
Consolidated Net Worth, determined as of March 31, 2001 (such
90% of Consolidated Net Worth being equal to $100,050,300);
plus (2) the sum of (i) 100% of the cumulative Net Proceeds of
Capital Stock received during any period after the Closing
Date, calculated quarterly, and (ii) 100% of the cumulative
Reported Net Income of the Borrower and its Consolidated
Subsidiaries during any period after March 31, 2001 (taken as
one accounting period), but, for purposes of calculating
cumulative Reported Net Income under this clause (ii),
excluding any quarter in which Reported Net Income is
negative; minus (3) any Restricted Payments made during such
period to the extent permitted by Section 6.31, calculated
quarterly; minus (4) the after-tax charges of the Borrower for
restructuring charges incurred during the Fiscal Quarter
ending June 30, 2001 (not to exceed $1,500,000); and minus (5)
the non-cash charges (not to exceed $50,000,000) incurred by
the Borrower upon the adoption of Financial Accounting
Standards Board Statement No. 142.
Notwithstanding the foregoing, for the purposes of
calculating cumulative Reported Net Income in clause (ii)
above for the quarter in which the Borrower shall have adopted
Financial Accounting Standards Board Statement No. 142, the
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non-cash charges described in clause (5) above shall be
excluded from the calculation of Reported Net Income in clause
(ii) above.
SECTION 2.6 Amendment to Section 6.10. Section 6.10 of the
Credit Agreement is hereby amended and restated in its entirely to read as
follows:
SECTION 6.10 Limitation on Debt. The Borrower shall
not, nor shall it permit any Subsidiary to, incur, create,
issue, assume or permit to exist any Consolidated Senior Debt
other than (a) Consolidated Senior Debt reflected on the
financial statements referred to in Section 5.04(a) for the
Fiscal Quarter ended March 31, 2001 and any and all extensions
and renewals of such Consolidated Senior Debt so long as the
principal amount thereof is not increased, (b) Consolidated
Senior Debt set forth on Schedule 6.10 hereto and any and all
extensions and renewals of such Consolidated Senior Debt so
long as the principal amount thereof is not increased, (c)
Consolidated Senior Debt arising under letters of credit in a
maximum aggregate face amount of $5,000,000, at any time
outstanding, which letters of credit secure the potential
obligations and liabilities of the Borrower and its
Subsidiaries in connection with workers compensation claims;
(d) Consolidated Senior Debt arising under letters of credit
in a maximum aggregate face amount of $5,000,000, at any time
outstanding, which letters of credit secure the potential
obligations and liabilities of the Borrower and its
Subsidiaries in connection with the purchase of production
equipment during the manufacture and delivery of such
equipment; (e) Consolidated Senior Debt in a maximum amount of
$5,000,000, at any time outstanding, arising under capital
leases; and (f) Securitization Facility Attributed Debt
incurred in connection with a Permitted Securitization.
SECTION 3. Amendments to Commitments. The parties hereto agree
that the aggregate Revolving Credit Commitment shall be permanently reduced to
$78,000,000 pursuant to Section 2.07 of the Credit Agreement. Each Bank's
Revolving Credit Commitment, reduced as applicable, is set forth opposite the
name of such Bank on the signature page hereof.
SECTION 4. Conditions to Effectiveness. The effectiveness of
this Amendment and the obligations of the Banks hereunder are subject to the
following conditions:
(a) receipt by the Agent from each of the parties hereto of
a duly executed counterpart of this Amendment signed by the
Borrower, the Guarantors, and the Required Banks;
(b) receipt by the Agent from the Borrower for the ratable
account of the Banks executing this Amendment of fees in an amount
equal to 0.15% times the aggregate amount of the Revolving Credit
Commitments, as hereby amended, on the date of this Amendment;
(c) receipt by the Agent from the Borrower of any and all
fees to be paid by the Borrower to the Agent in connection with this
Amendment; and
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(d) the fact that the representations and warranties of the
Borrower contained in Section 6 of this Amendment shall be true on and
as of the date hereof.
SECTION 5. No Other Amendment. Except for the amendments set
forth above, the text of the Credit Agreement shall remain unchanged and in full
force and effect. This Amendment is not intended to effect, nor shall it be
construed as, a novation. The Credit Agreement and this Amendment shall be
construed together as a single agreement. Nothing herein contained shall waive,
annul, vary or affect any provision, condition, covenant or agreement contained
in the Credit Agreement, except as herein amended, nor affect nor impair any
rights, powers or remedies under the Credit Agreement as hereby amended. The
Banks and the Agent do hereby reserve all of their rights and remedies against
all parties who may be or may hereafter become secondarily liable for the
repayment of the Notes. The Borrower promises and agrees to perform all of the
requirements, conditions, agreements and obligations under the terms of the
Credit Agreement, as heretofore and hereby amended, the Credit Agreement, as
amended, being hereby ratified and affirmed. The Borrower hereby expressly
agrees that the Credit Agreement, as amended, is in full force and effect.
SECTION 6. Representations and Warranties. The Borrower
hereby represents and warrants to each of the Banks as follows:
(a) No Default or Event of Default, nor any act, event,
condition or circumstance which with the passage of time or the giving of
notice, or both, would constitute an Event of Default, under the Credit
Agreement or any other Loan Document has occurred and is continuing unwaived by
the Banks on the date hereof.
(b) The Borrower and Guarantors have the power and authority
to enter into this Amendment and to do all acts and things as are required or
contemplated hereunder to be done, observed and performed by them.
(c) This Amendment has been duly authorized, validly executed
and delivered by one or more authorized officers of the Borrower and Guarantors
and constitutes a legal, valid and binding obligation of the Borrower, and each
Guarantor enforceable against it in accordance with its terms, provided that
such enforceability is subject to general principles of equity.
(d) The execution and delivery of this Amendment and the
performance of the Borrower and Guarantors hereunder do not and will not require
the consent or approval of any regulatory authority or governmental authority or
agency having jurisdiction over the Borrower or any Guarantor, nor be in
contravention of or in conflict with the articles of incorporation or bylaws of
the Borrower, or any Guarantor, or the provision of any statute, or any
judgment, order or indenture, instrument, agreement or undertaking, to which the
Borrower, or any Guarantor is party or by which the assets or properties of the
Borrower and Guarantors are or may become bound.
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SECTION 7. Counterparts. This Amendment may be executed in
multiple counterparts, each of which shall be deemed to be an original and all
of which, taken together, shall constitute one and the same agreement.
SECTION 8. Governing Law. This Amendment shall be construed
in accordance with and governed by the laws of the State of Georgia.
SECTION 9. Consent by Guarantors. The Guarantors consent to
the foregoing amendments. The Guarantors promise and agree to perform all of the
requirements, conditions, agreements and obligations under the terms of the
Guaranty and Indemnity, Subrogation and Contribution Agreement, said Guaranty
and Indemnity, Subrogation and Contribution Agreement being hereby ratified and
affirmed. The Guarantors hereby expressly agree that the Guaranty and Indemnity,
Subrogation and Contribution Agreement are in full force and effect.
SECTION 10. Effective Date. This Amendment shall be effective
as of June 21, 2002.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered, or
have caused their respective duly authorized officers or representatives to
execute and deliver, this Amendment as of the day and year first above written.
BORROWER:
CADMUS COMMUNICATIONS CORPORATION
By: /s/ Stephen E. Hare
-----------------------------------------
Name: Stephen E. Hare
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Title: Executive VP and CFO
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Revolving Credit Commitment: WACHOVIA BANK, NATIONAL ASSOCIATION
(formerly known as First Union National Bank
$32,175,000 and successor by merger to Wachovia Bank,
N.A.), as Agent and as a Bank
By: /s/ Anne L. Sayles
------------------------------------------
Name: Anne L. Sayles
----------------------------------------
Title: Director
---------------------------------------
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Revolving Credit Commitment: BANK OF AMERICA, N.A.
$14,625,000
By: /s/ Robert Mauriello
------------------------------------
Name: Robert Mauriello
-----------------------------------
Title: Principal
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Revolving Credit Commitment: FLEET NATIONAL BANK
$9,750,000
By: /s/ C. A. Gaysunas, Jr.
-------------------------------------
Name: C. A. Gaysunas, Jr.
------------------------------------
Title: Vice President
-----------------------------------
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Revolving Credit Commitment: SUNTRUST BANK
$5,850,000
By: /s/ Mark A. Flatin
-------------------------------------
Name: Mark A. Flatin
-----------------------------------
Title: Director
----------------------------------
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Revolving Credit Commitment: NATIONAL CITY BANK
$5,850,000
By: /s/ Kelly L. Moyer
------------------------------------
Name: Kelly L. Moyer
----------------------------------
Title: Vice President
---------------------------------
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Revolving Credit Commitment: CREDIT LYONNAIS NEW YORK BRANCH
$9,750,000
By: /s/ Scott R. Chappelka
-----------------------------------
Name: Scott R. Chappelka
---------------------------------
Title: Vice President
--------------------------------
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GUARANTORS:
CADMUS JOURNAL SERVICES, INC.
By:/s/ Stephen E. Hare
-----------------------------------
Name: Stephen E. Hare
--------------------------------
Title: Vice President and CFO
-------------------------------
MACK PRINTING COMPANY
By:/s/ Stephen E. Hare
-----------------------------------
Name: Stephen E. Hare
--------------------------------
Title: Vice President and CFO
-------------------------------
PORT CITY PRESS, INC.
By:/s/ Stephen E. Hare
-----------------------------------
Name: Stephen E. Hare
--------------------------------
Title: Vice President and CFO
-------------------------------
WASHBURN GRAPHICS, INC.
By:/s/ Stephen E. Hare
-----------------------------------
Name: Stephen E. Hare
--------------------------------
Title: Vice President and CFO
-------------------------------