EXHIBIT 10.1

 

Fourth Amendment to Loan Documents

[logo of PNC Bank]

 

 

THIS FOURTH AMENDMENT TO LOAN DOCUMENTS (this “Amendment”) is made as of
September 28, 2007, by and between MEDIA SCIENCES, INC., a New Jersey
corporation (the “Borrower”), and PNC BANK, NATIONAL ASSOCIATION (the “Bank”).

 

BACKGROUND

 

A.             Borrower has executed and delivered to Bank (or a predecessor
which is now known by Bank’s name as set forth above), one or more promissory
notes, letter agreements, loan agreements, security agreements, mortgages,
pledge agreements, collateral assignments, and other agreements, instruments,
certificates and documents, some or all of which are more fully described on
attached Exhibit A, which is made a part of this Amendment (collectively as
amended from time to time, the “Loan Documents”) which evidence or secure some
or all of Borrower’s obligations to Bank for one or more loans or other
extensions of credit (the “Obligations”).

 

B.

Borrower and Bank desire to amend the Loan Documents as provided for in this
Amendment.

 

NOW, THEREFORE, in consideration of the mutual covenants herein contained and
intending to be legally bound hereby, the parties hereto agree as follows:

 

1.              Certain of the Loan Documents are amended as set forth in
Exhibit A. Any and all references to any Loan Document in any other Loan
Document shall be deemed to refer to such Loan Document as amended by this
Amendment. This Amendment is deemed incorporated into each of the Loan
Documents. Any initially capitalized terms used in this Amendment without
definition shall have the meanings assigned to those terms in the Loan
Documents. To the extent that any term or provision of this Amendment is or may
be inconsistent with any term or provision in any Loan Document, the terms and
provisions of this Amendment shall control.

 

2.              Borrower hereby certifies that: (a) all of its representations
and warranties in the Loan Documents, as amended by this Amendment, are, except
as may otherwise be stated in this Amendment: (i) true and correct as of the
date of this Amendment, (ii) ratified and confirmed without condition as if made
anew, and (iii) incorporated into this Amendment by reference, (b) no Event of
Default or event which, with the passage of time or the giving of notice or
both, would constitute an Event of Default, exists under any Loan Document which
will not be cured by the execution and effectiveness of this Amendment, (c) no
consent, approval, order or authorization of, or registration or filing with,
any third party is required in connection with the execution, delivery and
carrying out of this Amendment or, if required, has been obtained, and (d) this
Amendment has been duly authorized, executed and delivered so that it
constitutes the legal, valid and binding obligation of Borrower, enforceable in
accordance with its terms. Borrower confirms that the Obligations remain
outstanding without defense, set off, counterclaim, discount or charge of any
kind as of the date of this Amendment.

 

3.              Borrower hereby confirms that any collateral for the
Obligations, including liens, security interests, mortgages, and pledges granted
by Borrower or third parties (if applicable), shall continue unimpaired and in
full force and effect, and shall cover and secure all of Borrower’s existing and
future Obligations to Bank, as modified by this Amendment.

 

4.              As a condition precedent to the effectiveness of this Amendment,
Borrower shall comply with the terms and conditions (if any) specified in
Exhibit A.

 

5.              To induce Bank to enter into this Amendment, Borrower waives and
releases and forever discharges Bank and its officers, directors, attorneys,
agents, and employees from any liability, damage, claim, loss or expense of any
kind that it may have against Bank or any of them arising out of or relating to
the Obligations.

 

 

 

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Borrower further agrees to indemnify and hold Bank and its officers, directors,
attorneys, agents and employees harmless from any loss, damage, judgment,
liability or expense (including attorneys’ fees) suffered by or rendered against
Bank or any of them on account of any claims arising out of or relating to the
Obligations. Borrower further states that it has carefully read the foregoing
release and indemnity, knows the contents thereof and grants the same as its own
free act and deed.

 

6.              This Amendment may be signed in any number of counterpart copies
and by the parties to this Amendment on separate counterparts, but all such
copies shall constitute one and the same instrument. Delivery of an executed
counterpart of a signature page to this Amendment by facsimile transmission
shall be effective as delivery of a manually executed counterpart. Any party so
executing this Amendment by facsimile transmission shall promptly deliver a
manually executed counterpart, provided that any failure to do so shall not
affect the validity of the counterpart executed by facsimile transmission.

 

7.              This Amendment will be binding upon and inure to the benefit of
Borrower and Bank and their respective heirs, executors, administrators,
successors and assigns.

 

8.              This Amendment has been delivered to and accepted by Bank and
will be deemed to be made in the State where Bank’s office indicated in the Loan
Documents is located. This Amendment will be interpreted and the rights and
liabilities of the parties hereto determined in accordance with the laws of the
State where Bank’s office indicated in the Loan Documents is located, excluding
its conflict of laws rules.

 

9.              Except as amended hereby, the terms and provisions of the Loan
Documents remain unchanged, are and shall remain in full force and effect unless
and until modified or amended in writing in accordance with their terms, and are
hereby ratified and confirmed. Except as expressly provided herein, this
Amendment shall not constitute an amendment, waiver, consent or release with
respect to any provision of any Loan Document, a waiver of any default or Event
of Default under any Loan Document, or a waiver or release of any of Bank’s
rights and remedies (all of which are hereby reserved). Borrower expressly
ratifies and confirms the confession of judgment (if applicable) and waiver of
jury trial provisions contained in the Loan Documents.

 

WITNESS the due execution of this Amendment as a document under seal as of the
date first written above.

 

WITNESS / ATTEST:

 

 

 

/s/ Denise Hawkins                                                     

Name: Denise Hawkins

Title: Secretary

MEDIA SCIENCES, INC.,

a New Jersey corporation

 

 

By: /s/ Kevan Bloomgren                                                     

Name: Kevan Bloomgren

Title: Chief Financial Officer

 

 

 

PNC BANK, NATIONAL ASSOCIATION

 

 

By: /s/ Stephen A. Jarossy                                                    

Name: Stephen A. Jarossy

Title: Vice President

 

 

 

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EXHIBIT A TO

AMENDMENT TO LOAN DOCUMENTS

DATED AS OF SEPTEMBER 28, 2007

 

A.

The “Loan Documents” that are the subject of this Amendment include the
following (as any of the foregoing have previously been amended, modified or
otherwise supplemented):

 

1.

That certain Loan and Security Agreement dated December 16, 2004, as amended by
that certain Amendment to Loan Documents dated as of March 28, 2005, that
certain Second Amendment to Loan Documents dated as of June 28, 2005, and that
certain Amendment to Loan Documents dated as of January 23, 2006 (the “Third
Amendment”), (such Loan and Security Agreement, together with each such
amendment, collectively, the “Loan Agreement”);

 

2.

Security Agreement by Borrower dated December 16, 2004; and

 

3.

Committed Line of Credit Note by Borrower and Cadapult Graphic Systems, Inc.
(“Cadapult”), dated December 16, 2004 in the amount of Three Million Dollars
($3,000,000.00) (the “Note”), from which Cadapult was released as an obligor
pursuant to the Third Amendment.

 

4.

All other documents, instruments, agreements, and certificates executed and
delivered in connection with the Loan Documents listed in this Section A.

 

B.

The Loan Documents are amended as follows:

 

1.

The Loan Agreement and the Note are each hereby amended to change the definition
of the term “Expiration Date” as set forth in the second paragraph of the
preamble of Section 1 of the Loan Agreement and in the preamble of Section 1 of
the Note as follows:

 

The “Expiration Date” means February 29, 2008, or such later date as may be
designated by the Bank by written notice to the Borrower.

 

2.

The definition of the term “EBITDA to Fixed Charge” as set forth in the Third
Amendment is hereby amended and restated as follows:

 

“EBITDA to Fixed Charge” means: (a) for the fiscal quarters ending September 30,
2007, December 31, 2007, and March 31, 2008 (i) EBITDA divided by (ii) cash
taxes paid plus Current Maturities plus interest expense; and (b) for the fiscal
quarter ending June 30, 2008 and thereafter (i) EBITDA minus Unfunded Capital
Expenditures divided by (ii) cash taxes paid plus Current Maturities plus
interest expense.

 

C.

Conditions to Effectiveness of Amendment: Bank’s willingness to agree to the
amendments set forth in this Amendment are subject to the prior satisfaction of
the following conditions:

 

1.

Execution by all parties and delivery to Bank of this Amendment, including the
attached Consent and Borrower’s resolution to amend.

 

2.

Reimbursement of the fees and expenses of Bank's outside counsel in connection
with this Amendment.

 

 

A-3

 

 

 

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3.

Receipt by the Bank of an amendment fee in the amount of $3,000.00 which will be
due and payable in full upon the execution of this Amendment.

 

 

A-4

 

 

 

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CONSENT OF GUARANTOR

 

Each of the undersigned guarantors (jointly and severally if more than one, the
“Guarantor”) consents to the provisions of the foregoing Amendment (the
“Amendment”) and all prior amendments (if any) and confirms and agrees that: (a)
the Guarantor’s obligations under, as to Media Sciences International, Inc., its
Guaranty and Suretyship Agreement dated as of December 16, 2004. and as to
Cadapult Graphic Systems, Inc., its Guaranty and Suretyship Agreement dated as
of January 23, 2006 (collectively if more than one, the “Guaranty”), relating to
the Obligations mentioned in the Amendment, shall be unimpaired by the
Amendment; (b) the Guarantor has no defenses, set offs, counterclaims, discounts
or charges of any kind against Bank, its officers, directors, employees, agents
or attorneys with respect to the Guaranty; and (c) all of the terms, conditions
and covenants in the Guaranty remain unaltered and in full force and effect and
are hereby ratified and confirmed and apply to the Obligations, as modified by
the Amendment. The Guarantor certifies that all representations and warranties
made in the Guaranty are true and correct.

 

The Guarantor hereby confirms that any collateral for the Obligations, including
liens, security interests, mortgages, and pledges granted by the Guarantor or
third parties (if applicable), shall continue unimpaired and in full force and
effect, shall cover and secure all of the Guarantor’s existing and future
Obligations to Bank, as modified by this Amendment.

 

By signing below, each Guarantor who is an individual provides written
authorization to Bank or its designee (and any assignee or potential assignee
hereof) to obtain the guarantor's personal credit profile from one or more
national credit bureaus. Such authorization shall extend to obtaining a credit
profile for the purposes of update, renewal or extension of such credit or
additional credit and for reviewing or collecting the resulting account. A
photocopy or facsimile copy of this authorization shall be valid as the
original. By signature below, each such Guarantor affirms his/her identity as
the respective individual(s) identified in the Guaranty.

 

The Guarantor ratifies and confirms the indemnification, confession of judgment
(if applicable) and waiver of jury trial provisions contained in the Guaranty.

 

WITNESS the due execution of this Consent as a document under seal as of the
date of this Amendment, intending to be legally bound hereby.

 

 

WITNESS / ATTEST:

 

 

 

/s/ Denise Hawkins                                                     

Name: Denise Hawkins

Title: Secretary

MEDIA SCIENCES INTERNATIONAL, INC.,

a Delaware corporation

 

 

By: /s/ Kevan Bloomgren                                                 

Name: Kevan Bloomgren

Title: Chief Financial Officer

 

 

 

 

WITNESS / ATTEST:

 

 

 

/s/ Denise Hawkins                                                     

Name: Denise Hawkins

Title: Secretary

CADAPULT GRAPHIC SYSTEMS, INC.,

a New Jersey corporation

 

 

By: /s/ Kevan Bloomgren                                                 

Name: Kevan Bloomgren

Title: Chief Financial Officer

 

 

 

 

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