Document:

EX-10.20: FIRST AMENDMENT TO CREDIT AGREEMENT

 

EXHIBIT 10.20

FIRST AMENDMENT TO

CREDIT AGREEMENT

     This First Amendment to Credit Agreement, dated as of March 28, 2003 (the
“Amendment”) amends that certain Credit Agreement, dated as of July 2, 2002
(the “Credit Agreement”), by and among BOWNE & CO., INC., a Delaware
corporation (the “Borrower”), FLEET NATIONAL BANK and the other lending
institutions listed on Schedule 1 to the Credit Agreement (each a “Lender”, and
collectively, the “Lenders”), FLEET NATIONAL BANK, as Agent for the Lenders,
JPMORGAN CHASE BANK, as Documentation Agent (the “Documentation Agent”), and
WACHOVIA BANK, NATIONAL ASSOCIATION, as Syndication Agent (the “Syndication
Agent”).

     WHEREAS, Parent Borrower has requested that the Lenders amend certain
terms of the Credit Agreement in order, among other things, to modify certain
financial covenants and to provide for the issuance of up to $10,000,000 of
standby letters of credit; and

     WHEREAS, the Lenders have agreed, subject to the terms and conditions set
forth in this Amendment, to amend the Credit Agreement as set forth herein;

     NOW, THEREFORE, in consideration of these premises, the promises, mutual
covenants and agreements contained in this Amendment and fully intended to be
legally bound hereby, the parties hereby agree as follows:

1.   CAPITALIZED TERMS.

     Terms used in this Amendment which are not defined herein, but which are
defined in the Credit Agreement, shall have the same respective meanings herein
as therein.

2.   AMENDMENT TO CREDIT AGREEMENT.

     Subject to the satisfaction of the conditions set forth in Section 5
below, the Credit Agreement is hereby amended as follows:

	     2.1.	 	Amendment to Section 1.1.
	 
	 	 	Section 1.1 of the Credit Agreement is hereby amended as follows:
	 
	     (a)	 	The definition of “Aggregate Credit Exposure” is hereby
amended and restated in its entirety as follows:

 

 

	 	 	 	“Aggregate Credit Exposure: as of any date of determination,
the sum as of such date of the outstanding principal amount
of the Loans of all Lenders (determined, in the case of each
Alternate Currency Loan, on the basis of the Currency
Equivalent in Dollars thereof) plus the LC Obligations.”

	(b)	 	The definition of “Applicable Fee Percentage” is hereby
amended and restated in its entirety as follows:

	 	 	 	“Applicable Fee Percentage: with respect to the Facility
Fee, at all times during which the applicable Pricing Level
set forth below is in effect, the percentage set forth below
next to such Pricing Level:

	 	 	 	 	 	 
	Pricing Level	 	Applicable Fee Percentage
	
	 	

	I
	 	 	.50	%
	II
	 	 	.50	%
	III
	 	 	.35	%
	IV
	 	 	.25	%
	V
	 	 	.25	%

	 	 	 	Changes in the Applicable Fee Percentage resulting from a
change in a Pricing Level shall be based upon the Compliance
Certificate most recently delivered pursuant to Section
7.1(a) and shall become effective on the date such Compliance
Certificate is delivered to the Agent and the Lenders.
Notwithstanding anything to the contrary contained in this
definition, if, at any time and from time to time, Parent
Borrower shall be in Default of its obligations under Section
7.1(a), (b) or (c), Pricing Level I shall apply until such
Default is cured.”

	(c)	 	The definition of “Applicable Margin” is hereby amended and
restated in its entirety as follows:

	 	 	 	“Applicable Margin: with respect to Eurodollar Advances,
Alternate Currency Advances, and Letter of Credit commissions
in each case at all times during which the applicable Pricing
Level set forth below is in effect, the percentage set forth
below next to such Pricing Level:

	 	 	 	 	 	 
	Pricing Level	 	Applicable Margin
	
	 	

	I
	 	 	2.75	%
	II
	 	 	2.50	%
	III
	 	 	2.00	%
	IV
	 	 	1.50	%
	V
	 	 	1.00	%

2

 

		
	 	              Changes in the Applicable Margin resulting from a change in a
Pricing Level shall be based upon the Compliance Certificate most
recently delivered pursuant to Section 7.1(a) and shall become
effective on the date such Compliance Certificate is delivered to
the Agent and the Lenders. Notwithstanding anything to the
contrary contained in this definition, (a) if, at any time and from
time to time, Parent Borrower shall be in Default of its
obligations under Section 7.1(a), (b) or (c), Pricing Level I shall
apply until such Default is cured.”

	(d)	 	The definition of “Commitment” is hereby amended and restated
in its entirety as follows:

	 	 	 	“Commitment: in respect of any Lender, such Lender’s
undertaking during the Commitment Period to make Revolving
Credit Loans and/or issue or participate in Letters of Credit
issued on behalf of a Borrower hereunder in an aggregate
principal and/or face amount at any one time outstanding not
exceeding the Commitment Amount of such Lender.”

	(e)	 	The definition of “Commitment Amount” is amended by deleting
the reference to Section 2.12.
	 
	(f)	 	The definition of “Consolidated” is hereby amended and
restated in its entirety as follows:

	 	 	 	“Consolidated: Parent Borrower and its Subsidiaries on a
consolidated basis in accordance with GAAP.”

	(g)	 	The definition of “Consolidated EBITDA” is hereby amended by
amending and restating the first sentence in its entirety as
follows:

	 	 	 	“Consolidated EBITDA: for any period, the Consolidated Net
Income from continuing operations and before extraordinary
items (including, but not limited to: restructuring,
integration and asset impairment charges; expenses related to
acquisitions; gains or losses on asset sales; transaction
related expenses; royalty expense borne by the seller within
the trailing 12 months; provisions for doubtful accounts (net
of write-offs); and provision for deferred employee
compensation and retirement benefits) for such period, plus
the sum of, without duplication, each of the following with
respect to Parent Borrower and its Subsidiaries, to the
extent utilized in determining such Consolidated Net Income:
(a) Interest Expense, (b) provision for federal, state and
local income taxes, and (c) depreciation and amortization
(other than amortization of debt discount); provided,
however, all non-cash income, expense, gains and losses to
the extent otherwise included in such Consolidated Net Income
for such period shall be excluded from the foregoing
computation.”

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	(h)	 	The definition of “Credit Party” is hereby amended and restated in
its entirety as follows:

	 	 	 	“Credit Party: each Borrower, Guarantor Subsidiary and each
other party (other than the Agent, the Titled Agents and the
Lenders) to a Loan Document.”

	(i)	 	The definition of “Intercreditor Agreement” is hereby amended
and restated in its entirety as follows:

	 	 	 	“Intercreditor Agreement: the Intercreditor Agreement, dated
as of July 2, 2002, as succeeded and replaced by that certain
Intercreditor and Collateral Agency Agreement, dated as of
March 28, 2003, among the Agent on behalf of the Lenders, the
Agent acting on behalf of itself in connection with its
appointment as Collateral Agent for the holders of the Notes
issued pursuant to the Note Purchase Agreement, and the
parties to the Note Purchase Agreement other than Parent
Borrower, as same may be further amended, modified or
supplemented from time to time.”

	(j)	 	The definition of “Lender” is hereby amended by deleting the
reference to Section 2.12.
	 
	(k)	 	The definition of “Loan Documents” is hereby amended and
restated in its entirety as follows:

	 	 	 	“Loan Documents: collectively, this Agreement and all
agreements, certificates, instruments and other documents
executed or delivered in connection therewith, including any
promissory notes executed and delivered pursuant to Section
2.9(d) and Section 2.11(d) and the Guaranties, the
Intercreditor Agreement, the Security Agreement and all
Applications, in each case as amended, supplemented or
otherwise modified from time to time.”

	(l)	 	The definition of “Note Purchase Agreement” is hereby amended
and restated in its entirety as follows:

	 	 	 	“Note Purchase Agreement: collectively, the, separate and
several, Note Purchase Agreements, each dated January 30,
2002, as amended by a First Amendment, dated as of July 3,
2002, and a Second Amendment dated as of March 28, 2003,
between Parent Borrower, on the one hand, and certain
purchasers, on the other hand, and relating to the sale by
Parent Borrower of: $25,000,000 aggregate principal amount
of its 6.90% Senior Notes, Series A, due January 30, 2007;
$28,000,000 aggregate principal amount of its 7.31% Senior
Notes, Series B, due January 30, 2012; and $22,000,000
aggregate principal amount of its 7.85% Senior Notes, Series
C, due January 30, 2012.”

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	(m)	 	The definition of “Obligations” is hereby amended and
restated in its entirety as follows:

	 	 	 	“Obligations: any and all obligations of Credit Parties to
the Agent or the Lenders under, or in connection with, the
Loan Documents of every kind and description (including
obligations in respect of fees, expenses and commissions and,
including, without limitation, any and all obligations of the
Guarantor Subsidiaries under the Guaranties and the
Reimbursement Obligations) direct or indirect, absolute or
contingent, primary or secondary, due or to become due, now
existing or hereafter arising, regardless of how they arise
or by what agreement or instrument, if any, and including
obligations to perform acts and refrain from taking action as
well as obligations to pay money.

	(n)	 	The definitions of “Pricing Level,” “Pricing Level I,”
“Pricing Level II,” “Pricing Level III,” “Pricing Level IV,”
“Pricing Level V,” and “Pricing Level VI” are hereby amended by
deleting the existing definitions of such terms in their entirety
and replacing them with the following definitions:

	 	 	 	“Pricing Level: Pricing Level I, Pricing Level II, Pricing
Level III, Pricing Level IV, or Pricing Level V, as
applicable.”
	 
	 	 	 	“Pricing Level I: any time when the Leverage Ratio is
greater than or equal to 3.50 to 1.00.”
	 
	 	 	 	“Pricing Level II: any time when the Leverage Ratio is
greater than or equal to 3.00 to 1.00 but less than 3.50 to
1.00.”
	 
	 	 	 	“Pricing Level III: any time when the Leverage Ratio is
greater than or equal to 2.50 to 1.00 but less than 3.00 to
1.00.”
	 
	 	 	 	“Pricing Level IV: any time when the Leverage Ratio is
greater than or equal to 2.00 to 1.00 but less than 2.50 to
1.00.”
	 
	 	 	 	“Pricing Level V: any time when the Leverage Ratio is less
than 2.00 to 1.00.”

	(o)	 	The definition of “Rentals” is hereby amended and restated in
its entirety as follows:

	 	 	 	“Rentals: includes as of the date of any determination
thereof all rental expense from long-term operating leases as
disclosed in the notes to the financial statements of Parent
Borrower contained in the SEC Form 10-K most recently filed
with the Securities and Exchange Commission or any other
material long-term operating lease entered into after the
date of such Form 10-K. For purposes of this definition,
‘material’ means material in relation to the business,
operations, affairs, financial condition, assets,

5

 

	 	 	 	properties, or prospects of Parent Borrower and its
Subsidiaries taken as a whole.”

	(p)	 	The definition of “Restricted Distribution” is hereby amended
by amending and restating clause (b)(ii) as follows:

	 	 	 	“(ii) any such dividend, distribution, payment on or with
respect to, or an acquisition of the publicly-traded common
stock of Parent Borrower, provided the aggregate amount of
payments with respect to the acquisition of such common stock
pursuant to this clause (ii) during any fiscal year of Parent
Borrower shall not exceed $15,000,000.”;
	 	 	 	
 

	 	 	
and by inserting “and” immediately before “(iii)”
and deleting the phrase “, and (iv) a BGS Disposition”
and inserting a period in its place.

	(q)	 	The definition of “Required Lenders” is hereby amended and
restated in its entirety as follows:

	 	 	 	“Required Lenders: at any time prior to the Commitment
Termination Date, Lenders having Commitment Amounts greater
than or equal to 51% of the Aggregate Commitment Amount and,
at all other times, Lenders having a total Aggregate
Outstanding Extensions of Credit greater than or equal to 51%
of the Aggregate Credit Exposure.”

	(r)	 	The definition of “Subsidiary Borrower Obligations” is hereby
amended and restated to read in its entirety as follows:

	 	 	 	“Subsidiary Borrower Obligations: at any time with respect
to any Subsidiary Borrower, the principal amount outstanding
at such time of the Loans made to such Subsidiary Borrower
plus the aggregate amount of LC Obligations with respect to
Letters of Credit issued for the account of such Subsidiary
Borrower together with all accrued interest thereon and all
other sums due and owing at such time from such Subsidiary
Borrower under the Loan Documents.”

	(s)	 	The following definitions are hereby inserted in the
appropriate alphabetical order:

	 	 	 	“Aggregate Outstanding Extensions of Credit: as to any
Lender at any time, an amount equal to the sum of (a) such
Lender’s Revolving Credit Exposure, and (b) such Lender’s
Commitment Percentage of the LC Obligations then
outstanding.”
	 
	 	 	 	“Application: an application, in such form as the Issuing
Bank may specify from time to time, requesting the Issuing
Bank to open a Letter of Credit.”

6

 

	 	 	 	“Available Commitment: as to any Lender, at any time, an
amount equal to the excess, if any, of (a) such Lender’s
Commitment over (b) such Lender’s Aggregate Outstanding
Extensions of Credit.”
	 
	 	 	 	“Collateral: as defined in the Security Agreement.”
	 
	 	 	 	“Issuing Bank: Fleet, together with its successor and
assigns, in its capacity as issuer of any Letter of Credit.”
	 
	 	 	 	“LC Commitment: $10,000,000.”
	 
	 	 	 	“LC Obligations: at any time, an amount equal to the sum of
(a) the aggregate then undrawn and unexpired amount of the
then outstanding Letters of Credit and (b) the aggregate
amount of drawings under Letters of Credit which have not
then been reimbursed pursuant to Section 2.14(e).”
	 
	 	 	 	“LC Participants: the collective reference to all the
Lenders other than the Issuing Bank.”
	 
	 	 	 	“Letters of Credit: as defined in Section 2.14(a).”
	 
	 	 	 	“Reimbursement Obligation: the obligation of the Borrowers
to reimburse the Issuing Bank pursuant to Section 2.14(e) for
amounts drawn under Letters of Credit.”
	 
	 	 	 	“Security Agreement: the security agreement, substantially
in the same form as Exhibit R hereto, to be executed by each
Borrower and Subsidiary Guarantor.”
	 
	 	 	 	“Uniform Customs: with respect to a particular Letter of
Credit, the Uniform Customs and Practice for Documentary
Credits as published as of the date of issue of such Letter
of Credit by the International Chamber of Commerce.”

	(t)	 	The definitions of “BGS”, “BGS Disposition” and “BGS
Entities” are hereby deleted.

2.2.   Amendment of Article 2.

Article 2 of the Credit Agreement is hereby amended as follows:

		
	 	     (a) Section 2.1(a) is hereby amended by amending and
restating clause (B) of subsection (i) thereof in its entirety
as follows:

	 	 	 	“(B) with respect to each Lender, such Lender’s Aggregate
Outstanding Extensions of Credit shall not exceed such
Lender’s Commitment Amount.”

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	 	     (b) Section 2.6(a) is hereby amended and restated in
its entirety as follows:

	 	 	 	“(a) Voluntary Reductions. Parent Borrower shall have the
right, upon at least five (5) Business Days’ prior written
notice to the Agent, (i) at any time when there shall be no
Loans or LC Obligations outstanding, to terminate the
Commitments of all Lenders and the Swingline Commitment of
the Swingline Lender, or (ii) at any time and from time to
time when the Aggregate Commitment Amount shall exceed the
aggregate outstanding principal amount of all Loans
(determined, in the case of each Alternate Currency Loan, on
the basis of the Currency Equivalent in Dollars thereof) plus
the LC Obligations, to reduce permanently the Aggregate
Commitment Amount by a sum not greater than the amount of
such excess; provided, however, that each partial reduction
shall be in an amount equal to $5,000,000 or such amount plus
a whole multiple of $1,000,000 in excess thereof.”

		
	 	     (c) Section 2.6(b) is hereby deleted and Section
2.6(c) is hereby re-designated as Section 2.6(b).

		
	 	     (d) Section 2.7(b) is hereby amended by deleting the
last sentence thereof.

		
	 	     (e) Section 2.12 is hereby amended and restated in
its entirety as follows:

	 	 	 	“2.12. Intentionally Omitted.”

		
	 	     (f) Section 2.13(a) is hereby amended by amending and
restating the first sentence thereof in its entirety as
follows:

	 	 	 	“Provided that no Default or Event of Default has occurred
and is then continuing, Parent Borrower may from time to time
direct that any of its Subsidiaries which is not then a
Subsidiary Borrower become a Subsidiary Borrower by
submitting a Borrower Addendum to the Agent with respect to
such Subsidiary, together with (i) a certificate, dated the
date of such Borrower Addendum, of the Secretary or Assistant
Secretary of such Subsidiary and substantially in the form
of, and with substantially the same attachments as, the
certificate which would have been required under Section 5.1
if such Subsidiary had become a party hereto on the Effective
Date, (ii) a Security Agreement executed and delivered to the
Agent by such Subsidiary, and (iii) an opinion of counsel
(including, in the case of a foreign Subsidiary, an opinion
of foreign local counsel) to such Subsidiary in all respects
reasonably satisfactory to the Agent, provided that, to the
extent that any such certificate, agreement, attachment or
opinion is not in English, it shall be accompanied by a
certified English translation thereof.”

		
	 	     (g) Article 2 of the Credit Agreement is hereby
amended by inserting a new Section 2.14 as follows:

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“Section 2.14.   LETTERS OF CREDIT.

	 	 	 
	(a)	 	
LC Commitment. Subject
to the terms and conditions hereof, the Issuing
Bank, in reliance on the agreements of the other
Lenders set forth in Section 2.14(d), agrees to
issue letters of credit (“Letters of Credit”) for
the account of one or more of the Borrowers on any
Business Day during the Commitment Period in such
form as may be approved from time to time by the
Issuing Bank; provided that the Issuing Bank shall
have no obligation to issue any Letter of Credit
if, after giving effect to such issuance, (i) the
LC Obligations would exceed the LC Commitment or
(ii) the aggregate Available Commitments of the
Lenders would be less than zero. Each Letter of
Credit shall (x) be denominated in Dollars and
shall be a standby Letter of Credit issued to
support obligations of one or more of the
Borrowers for whose account it is issued, and (y)
expire no later than the Commitment Termination
Date. Each Letter of Credit shall be subject to
the Uniform Customs and, to the extent not
inconsistent therewith, the laws of the State of
New York. The Issuing Bank shall not at any time
be obligated to issue any Letter of Credit
hereunder if such issuance would conflict with, or
cause the Issuing Bank or any LC Participant to
exceed any limits imposed by, any applicable law,
rule, treaty or regulation or guideline or
directive of a governmental authority.
	 	 	 
	(b)	 	
Procedure for Issuance of
Letter of Credit. Whenever a Borrower desires that
a Letter of Credit be issued for its account
hereunder, such Borrower, or if such Borrower is a
Subsidiary Borrower, Parent Borrower, on behalf of
such Subsidiary Borrower, shall request that the
Issuing Bank issue a Letter of Credit by
delivering to the Issuing Bank at its address for
notices specified herein an Application therefor,
completed to the satisfaction of the Issuing Bank,
and such other certificates, documents and other
papers and information as the Issuing Bank may
request. Upon receipt of any Application, the
Issuing Bank will process such Application and the
certificates, documents and other papers and
information delivered to it in connection
therewith in accordance with its customary
procedures and shall promptly issue the Letter of
Credit requested thereby (but in no event shall
the Issuing Bank be required to issue any Letter
of Credit earlier than three (3) Business Days
after its receipt of the Application therefor and
all such other certificates, documents and other
papers and information relating thereto) by
issuing the original of such Letter of Credit to
the beneficiary thereof or as otherwise may be
agreed by the Issuing Bank and such

9

 

	 	 	 
	 	 	
Borrower, or if such Borrower is a Subsidiary
Borrower, as otherwise agreed to by Parent Borrower
on behalf of such Subsidiary Borrower. The Issuing
Bank shall furnish a copy of such Letter of Credit
to Parent Borrower promptly following the issuance
thereof.
	 	 	 
	(c)	 	
Fees, Commission and
Other Charges. Parent Borrower shall pay to the
Agent, for the account of the Issuing Bank and the
LC Participants, a letter of credit commission
with respect to each Letter of Credit, computed
for the period from the date of issuance of such
Letter of Credit to its expiration date at a per
annum rate equal to the then Applicable Margin in
effect on the date of issuance of such Letter of
Credit; calculated on the basis of a 360-day year,
of the aggregate amount available to be drawn
under such Letter of Credit on the date such fee
is calculated. Such letter of credit commission
shall be shared ratably among the Issuing Bank and
the LC Participants in accordance with their
respective Commitment Percentages. Such
commissions shall be (i) payable quarterly in
arrears on the 15th day of each calendar quarter
for the prior calendar quarter and on the
Commitment Termination Date or such earlier date
upon which the Commitments shall have been
terminated in accordance herewith, and (ii)
non-refundable. In addition to the foregoing
commissions, Parent Borrower shall pay or
reimburse the Issuing Bank for such normal and
customary fees, costs and expenses as are incurred
or charged by the Issuing Bank in issuing,
effecting payment under, amending or otherwise
administering any Letter of Credit. The Agent
shall, promptly following its receipt thereof,
distribute to the Issuing Bank and the LC
Participants all commissions received by the Agent
for their respective accounts pursuant to this
Section.
	 	 	 
	(d)	 	
LC Participations. The
Issuing Bank irrevocably agrees to grant and
hereby grants to each LC Participant, and, to
induce the Issuing Bank to issue Letters of Credit
hereunder, each LC Participant irrevocably agrees
to accept and purchase and hereby accepts and
purchases from the Issuing Bank, on the terms and
conditions hereinafter stated, for such LC
Participant’s own account and risk an undivided
interest equal to such LC Participant’s Commitment
Percentage in the Issuing Bank’s obligations and
rights under each Letter of Credit issued
hereunder and the amount of each draft paid by the
Issuing Bank thereunder. Each LC Participant
unconditionally and irrevocably agrees with the
Issuing Bank, if a draft is paid under any Letter
of Credit for which the Issuing Bank is not
reimbursed in full by the Borrowers in

10

 

	 	 	 
	 	 	
accordance with the terms of this Agreement,
such LC Participant shall pay to the Issuing Bank upon demand at the
Issuing Bank's address for notices specified herein an amount equal to such LC
Participant’s Commitment Percentage of the amount
of such draft, or any part thereof, which is not so
reimbursed. If any amount required to be paid by
any LC Participant to the Issuing Bank pursuant to
this Section 2.14(d) in respect of any unreimbursed
portion of any payment made by the Issuing Bank
under any Letter of Credit is paid to the Issuing
Bank within three (3) Business Days after the date
such payment is due, such LC Participant shall pay
to the Issuing Bank on demand an amount equal to
the product of: (i) such amount; times (ii) the
daily average Federal Funds Rate during the period
from and including the date such payment is
required to the date on which such payment is
immediately available to the Issuing Bank; and
times (iii) a fraction the numerator of which is
the number of days that elapses during such period
and the denominator of which is 360. If any such
amount required to be paid by any LC Participant
pursuant to this Section 2.14(d) is not in fact
made available to the Issuing Bank by such LC
Participant within three (3) Business Days after
the date such payment is due, the Issuing Bank
shall be entitled to recover from such LC
Participant, on demand, such amount with interest
thereon calculated from such due date at the rate
per annum applicable to ABR Advances hereunder. A
certificate of the Issuing Bank submitted to any LC
Participant with respect to any amounts owing under
this Section shall be conclusive in the absence of
manifest error. Whenever, at any time after the
Issuing Bank has made payment under any Letter of
Credit and has received from any LC Participant its
pro rata share of such payment in accordance with
this Section 2.14(d), the Issuing Bank receives any
payment related to such Letter of Credit (whether
directly from the Borrowers or otherwise, including
proceeds of collateral applied thereto by the
Issuing Bank), or any payment of interest on
account thereof, the Issuing Bank will distribute
to such LC Participant its pro rata share thereof;
provided, however, that in the event that any such
payment received by the Issuing Bank shall be
required to be returned by the Issuing Bank, such
LC Participant shall return to the Issuing Bank the
portion thereof previously distributed by the
Issuing Bank to it.
	 	 	 
	(e)	 	
Reimbursement Obligation
of the Borrower. Each Borrower agrees to
reimburse the Issuing Bank on each date on which
the Issuing Bank notifies Parent Borrower of the
date and amount of a draft presented under any
Letter of Credit and

11

 

	 	 	 
	 	 	
paid by the Issuing Bank for the amount of (i) such
draft so paid and (ii) any taxes, fees, charges or
other costs or expenses incurred by the Issuing
Bank in connection with such payment; provided,
however, that if the Issuing Bank so notifies
Parent Borrower after 2:00 p.m. on any date, then
the amount that would otherwise be required to be
reimbursed to the Issuing Bank pursuant to the
foregoing on such date, shall be due and payable on
the next Business Day, together with interest
thereon at the Alternate Base Rate, computed from
the date of such notification until the date
payment is due. Each such payment shall be made to
the Issuing Bank at its address for notices
specified herein in Dollars and in immediately
available funds. Interest shall be payable on any
and all amounts remaining unpaid by the Borrowers
under this Section from the date such amounts
become payable (whether at stated maturity, by
acceleration or otherwise) until payment in full at
the rate which would be payable on any outstanding
ABR Advances which were then overdue. Each drawing
under any Letter of Credit shall constitute a
request by Parent Borrower to the Agent for a
borrowing pursuant to Section 2.3 of ABR Advances
in the amount of such drawing. The limitations of
Section 2.2 shall not apply to any ABR Advances
made pursuant to this Section. The Borrowing Date
with respect to such borrowing shall be the date of
such drawing.
	 	 	 
	(f)	 	
Obligations Absolute.
The Borrowers’ obligations under this Section 2.14
shall be absolute and unconditional under any and
all circumstances and irrespective of any set off,
counterclaim or defense to payment which any
Borrower may have or have had against the Issuing
Bank or any beneficiary of a Letter of Credit.
Each Borrower also agrees with the Issuing Bank
that the Issuing Bank shall not be responsible
for, and such Borrower’s Reimbursement Obligations
under Section 2.14(e) shall not be affected by,
among other things (i) the validity or genuineness
of documents or of any endorsements thereon, even
though such documents shall in fact prove to be
invalid, fraudulent or forged, or (ii) any dispute
between or among such Borrower and any beneficiary
of any Letter of Credit or any other party to
which such Letter of Credit may be transferred or
(iii) any claims whatsoever of such Borrower
against any beneficiary of such Letter of Credit
or any transferee. The Issuing Bank shall not be
liable for any error, omission, interruption or
delay in transmission, dispatch or delivery of any
message or advice, however transmitted, in
connection with any Letter of Credit, except for
errors or omissions caused by the Issuing Bank’s
gross negligence or

12

 

	 	 	 
	 	 	
willful misconduct. Each Borrower agrees that any
action taken or omitted by the Issuing Bank under
or in connection with any Letter of Credit or the
related drafts or documents, if done in the absence
of gross negligence of willful misconduct and in
accordance with the standards of care specified in
the Uniform Commercial Code of the State of New
York, shall be binding on such Borrower and shall
not result in any liability of the Issuing Bank to
such Borrower.
	 	 	 
	(g)	 	
Letter of Credit
Payments. If any draft shall be presented for
payment under any Letter of Credit, the Issuing
Bank shall promptly notify Parent Borrower of the
date and amount thereof. The responsibility of
the Issuing Bank to the Borrowers in connection
with any draft presented for payment under any
Letter of Credit shall, in addition to any payment
obligation expressly provided for in such Letter
of Credit, be limited to determining that the
documents (including each draft) delivered under
such Letter of Credit in connection with such
presentment are in conformity with such Letter of
Credit.
	 	 	 
	(h)	 	
Application. To the
extent that any provision of any Application
related to any Letter of Credit is inconsistent
with the provisions of this Section 2.14, the
provisions of this Section 2.14 shall apply.”

2.3.   Amendment of Article 3.

		
	 	     Article 3 of the Credit Agreement is hereby amended as follows:

		
	 	     (a)    Section 3.5 is hereby amended by amending and
restating subsection (b) in its entirety as follows:

	 	 	 	"(b) the asset value to such Lender or such Control
Person of the Loans, LC Obligations or Commitments made
or maintained by such Lender to a level below that
which such Lender or such Control Person could have
achieved or would thereafter be able to achieve but for
such Regulatory Change (after taking into account such
Lender’s or such Control Person’s policies regarding
capital adequacy) by an amount deemed by such Lender to
be material to such Lender or Control Person, then
Parent Borrower agrees to pay to such Lender or such
Control Person, as the case may be, within ten (10)
days after demand by such Lender, such additional
amount or amounts as shall be sufficient to compensate
such Lender or such Control Person, as the case may be,
for such reduction (which demand shall be accompanied
by a statement setting forth the calculations of such
additional amount or amounts in reasonable detail which
statement shall be conclusive absent manifest error).”

13

 

		
	 	     (b)    Section 3.6 is hereby amended by amending and
restating the first sentence thereof in its entirety as
follows:

	 	 	 	“If any Lender shall determine that a Regulatory Change
shall impose, modify or make applicable any reserve,
special deposit, compulsory loan, assessment, increased
cost or similar requirement against assets held by, or
deposits of, or advances or loans by, or other credit
extended by, or any other acquisition of funds by, any
office of such Lender in respect of its Fixed Rate
Loans which is not otherwise included in the
determination of a Eurodollar Rate or Alternate
Currency Rate, as the case may be, and the result of
any of the foregoing is to increase the cost to such
Lender of making, renewing, converting or maintaining
its Fixed Rate Loans or its commitment to make such
Fixed Rate Loans or issuing or participating in Letters
of Credit, or to reduce any amount receivable under the
Loan Documents in respect of its Fixed Rate Loans,
then, in any such case, Parent Borrower agrees to pay
such Lender, within ten (10) days after demand
therefor, such additional amounts as is sufficient to
compensate such Lender for such additional cost or
reduction in such amount receivable which such Lender
deems to be material as determined by such Lender
(which demand shall be accompanied by a statement
setting forth the calculations of such additional
amounts in reasonable detail which statement shall be
conclusive absent manifest error).”

		
	 	     (c)    Section 3.11 is hereby amended by amending and
restating subsection (c) in its entirety as follows:

	 	 	 	“(c) any Borrower shall be required to pay any
additional amounts pursuant to Section 3.9 in respect
of any Lender, then, in each such case, so long as no
Default or Event of Default then exists, Parent
Borrower may require that such Lender transfer all of
its right, title and interest under the Loan Documents
to any lender identified by Parent Borrower (a
“Proposed Lender”) if such Proposed Lender agrees to
assume all of the obligations of such Lender for
consideration equal to the outstanding principal amount
of such Lender’s Loans, together with interest thereon
to the date of such transfer, all of such Lender’s LC
Obligations, to the extent which the Lender has paid
any amount pursuant to Section 2.14(d) and has not
been reimbursed therefor, together with all accrued and
unpaid commissions on LC Obligations and accrued and
unpaid interest on Reimbursement Obligations to the
date of transfer, and all other amounts payable under
the Loan Documents to such Lender on or prior to the
date of such transfer (including any fees accrued
hereunder and any amounts which would be payable under
Section 3.4 as if all of such Lender’s Loans and
obligations with

14

 

	 	 	 	respect to Letters of Credit were being prepaid in full
on such date).”

2.4.   Amendment of Article 4.

		
	 	     Article 4 of the Credit Agreement is hereby amended as follows:

		
	 	     (a)    The lead-in paragraph is hereby amended and
restated in its entirety as follows:

	 	 	 	“In order to induce the Agent and the Lenders to make
the Loans and issue or participate in the Letters of
Credit, Parent Borrower makes the following
representations and warranties to the Agent and each
Lender.”

		
	 	     (b)    Section 4.21 is hereby deleted.

2.5.   Amendment of Article 6.

		
	 	     Article 6 of the Credit Agreement is hereby amended as follows:

		
	 	     (a)    The title of Article 6 is hereby amended and
restated in its entirety as follows:

	 	 	 	         “6. CONDITIONS TO EACH EXTENSION OF CREDIT”.

		
	 	     (b)    The lead-in paragraph of Article 6 is hereby
amended and restated in its entirety as follows:

		
	 	     “The obligation of each Lender to make any extension of
credit requested to be made by it on any date is subject to
the satisfaction
     of the following conditions precedent as of
the date of such extension of credit.”

		
	 	     (c)    Section 6.1 of the Credit Agreement is hereby
amended and restated in its entirety as follows:

	 	 	“6.1 COMPLIANCE

	 	 	 	On each Borrowing Date or Swingline Loan proposed
funding date or other date that credit is proposed to
be extended, as the case may be, and after giving
effect to the Loans or other extension of credit to be
made thereon (a) there shall exist no Default or Event
of Default, (b) the representations and warranties made
by each Credit Party, or by an officer (or other
authorized Person) on its behalf, contained in the Loan
Documents, or in any certificate, report, opinion or
other document delivered pursuant or incident thereto,
shall be true and correct in all material respects with
the same effect as though such representations and
warranties had

15

 

	 	 	 	been made on such date except to the extent such
representations and warranties specifically relate to
an earlier date, in which case such representations and
warranties shall have been true and correct in all
material respects on and as of such earlier date, and
(c) if any Loan or Loans or other credit being so
extended are being extended to a Subsidiary Borrower,
then Parent Borrower shall deliver to the Agent,
simultaneously with the delivery to the Agent of a
Borrower Request with respect to such Loan or Loans, or
request for extension of credit in connection with a
Letter of Credit or Letters of Credit, a certificate
(in a form reasonably acceptable to Agent) of a
Financial Officer of Parent Borrower demonstrating (to
the reasonable satisfaction of Agent) compliance with
Section 10.4 of the Note Purchase Agreement, or any
successor provision relating to “Priority Indebtedness”
(as defined in the Note Purchase Agreement) or any
concept similar thereto after giving pro forma effect
to the funding of such Loan or Loans, or extension of
credit, and agreeing that the representation included
in such certificate will remain true on the date such
Loan or Loans or other credit are funded or otherwise
extended. Each borrowing or extension of credit
requested by Parent Borrower (including, without
limitation, each borrowing requested by Parent Borrower
on behalf of a Subsidiary Borrower) shall constitute a
certification by Parent Borrower as of such Borrowing
Date, Swingline Loan proposed funding date or issuance
of such Letter of Credit, as the case may be, that each
of the foregoing matters is true and correct in all
respects.”

	(d)	 	A new Section 6.4 is hereby added to read as follows:

		
	 	     “Section 6.4 LETTER OF CREDIT APPLICATIONS.

	 	 	 	With respect to each Letter of Credit to be issued, the
Issuing Bank shall have received an Application
therefor, completed to the satisfaction of the Issuing
Bank, and duly executed by the applicable Borrower (or,
if such Borrower is a Subsidiary Borrower, the Parent
Borrower, on behalf of such Subsidiary Borrower),
together with such other certificates, documents and
other papers and information as the Issuing Bank may
request.”

2.6.    Amendment of Article 7.

		
	 	     Article 7 of the Credit Agreement is hereby amended as follows:

	 	 	   (a)    The lead-in paragraph of Article 7 is hereby
amended and restated in its entirety as follows:

16

 

	 	 	 	“Parent Borrower agrees that, so long as this Agreement
is in effect, any Loan or any Letter of Credit remains
outstanding or unpaid, or any other amount is owing
under any Loan Document to any Lender or Agent, Parent
Borrower shall:”

	 	 	(b)    Section 7.1(b) is hereby amended by deleting the
period at the end of subsection (ii) and inserting a
semi-colon in its place and by amending and restating the
proviso at the end of such section in its entirety as follows:

	 	 	 	“provided that, delivery within the time period
specified above of copies of Parent Borrower’s
Quarterly Report on Form 10-Q for such fiscal quarter
prepared in compliance with the Exchange Act
requirements therefor and filed with the SEC, together
with the certificate from the Financial Officer
described in clause (ii) above, shall be deemed to
satisfy the financial statement delivery requirement
set forth in clause (i) and (ii) above.”

	 	 	(c)    Section 7.1(c) is hereby amended by deleting the
period at the end of subsection (ii) and inserting a
semi-colon in its place and by amending and restating the
proviso at the end of such section in its entirety as follows:

	 	 	 	“provided that, delivery within the time period
specified above of Parent Borrower’s Annual Report on
Form 10-K for such fiscal year prepared in accordance
with the requirements of the Exchange Act therefor and
filed with the SEC, together with the certificate from
such Accountants described in clause (ii)(B) above
shall be deemed to satisfy the requirements of this
Section 7.1(c).”

	 	 	(d)    A new Section 7.1(i) is hereby added to read as
follows:

	 	 	 	“(i) Accounts Receivable Aging Reports. Simultaneously
with the delivery of each set of financial statements
pursuant to Sections 7.1(b) and 7.1(c), a certificate
of a Financial Officer of Parent Borrower setting forth
an accounts receivable aging as of the end of the
fiscal period for which such financial statements are
being provided, in such form and detail and with such
supporting documentation as shall be required by the
Agent in its reasonable discretion.”

	 	 	(e)    Section 7.2(c) is hereby amended and restated in
its entirety as follows:

	 	 	 	“Schedule 4.1. Together with each set of financial
statements delivered pursuant to Section 7.1(b) and
7.1(c), provide to the Agent and each Lender a revised
version of Schedule 4.1 so as to make the
representations set forth in clauses (a), (b) and (c)
of Section 4.1 accurate.”

17

 

	 	 	(f)    The last sentence of Section 7.11 is hereby
deleted and replaced with the following:

	 	 	 	“Each Domestic Subsidiary becoming a Guarantor
Subsidiary, shall, execute and deliver to the Agent a
Guaranty and a Security Agreement which shall be
accompanied by such resolutions, incumbency
certificates and legal opinions as are reasonably
required by the Agent. For purposes of determining
compliance with this Section 7.11 after January 1,
2003, Ohio Franklin Corp., an Illinois corporation,
shall be deemed to have no revenue, income or assets.”

2.7.    Amendment of Article 8.

	 	 	Article 8 of the Credit Agreement is hereby amended as follows:
	 
	 	 	(a)    The lead-in paragraph of Article 8 is hereby
amended and restated in its entirety as follows:

	 	 	 	“Parent Borrower agrees that, so long as this Agreement
is in effect, any Loan or any Letter of Credit remains
outstanding or unpaid, or any other amount is owing
under any Loan Document to any Lender or Agent, Parent
Borrower shall not, directly or indirectly:”

	 	 	(b)    Section 8.2 is hereby amended by amending and
restating the proviso set forth therein in its entirety as
follows:

	 	 	 	“provided, however, that notwithstanding the foregoing,
for each of the respective four fiscal quarter periods
ending on the dates set forth below, such ratio shall
not be less than the ratio set forth below next to such
date:

	 	 	 	 	 
	 	 	Ratio of Consolidated
	Four Fiscal Quarter	 	EBITDAR to Consolidated
	Period Ending Date	 	Fixed Charges
	
	 	

	March 31, 2003
	 	1.75 to 1.00
	June 30, 2003
	 	1.60 to 1.00
	September 30, 2003
	 	1.75 to 1.00
	December 31, 2003
	 	2.00 to 1.00
	March 31, 2004
	 	2.00 to 1.00.”

	 	 	(c)    Section 8.3 is hereby amended and restated in its
entirety as follows:

	 	 	 	“8.3 LEVERAGE RATIO.

18

 

	 	 	 	Permit the Leverage Ratio at any time during a time
period set forth below to be more than the ratio set
forth below next to such time period:

	 	 	 	 	 
	Time Period
(Dates Inclusive)	 	Leverage Ratio
	
	 	

		 	 	 	 
	January 1, 2003 to March 31, 2003
	 	3.10 to 1.0
	April 1, 2003 to June 30, 2003
	 	3.90 to 1.0
	July 1, 2003 to September 30, 2003
	 	3.25 to 1.0
	October 1, 2003 to December 31, 2003
	 	2.75 to 1.0
	January 1, 2004 to March 31, 2004
	 	3.00 to 1.0
	April 1, 2004 and thereafter
	 	  2.75 to
1.0.”

	 	 	(d)    Section 8.5 is hereby amended by amending and
restating clause (iii) of subsection (f) in its entirety as
follows:

	 	 	 	
“(iii) the aggregate amount of Indebtedness permitted under
this Section 8.5(f) shall not exceed $25,000,000 outstanding
at any one time.”

	 	 	(e)    Section 8.6 is hereby amended by deleting the
word “and” immediately after the semi-colon after subsection
8.6(h), deleting the period at the end of Section 8.6(i),
inserting a semi-colon and the word “and” immediately at the
end of Section 8.6(i), and adding a new subsection (j) in its
entirety as follows:

	 	 	 	“(j) Liens created by or expressly permitted under the
Security Agreement.”

	 	 	(f)    Section 8.8 is hereby amended by amending and
restating subsection (b) thereof in its entirety as follows:

	 	 	 	“(b) An Acquisition of one or more Operating Entities
(including, without limitation, Acquisitions of
Capital Stock of an Operating Entity or as a result of
a merger or consolidation with an Operating Entity
which is not Parent Borrower or a Subsidiary of Parent
Borrower), provided that (i) such Operating Entity is
in the same line or lines of business as Parent
Borrower and its Subsidiaries, (ii) Parent Borrower has
provided evidence satisfactory to the Agent that after
giving effect to such Acquisition no Default or Event
of Default would exist, (iii) such Acquisition does not
involve a “hostile” transaction, (iv) the aggregate
consideration paid by Parent Borrower and its
Subsidiaries for such Acquisition, including,
assumption of Indebtedness and the transfer of Property
(other than the Capital Stock of Parent

19

 

	 	 	 	Borrower) does not exceed $3,000,000, and (v) the
aggregate consideration including assumption of
Indebtedness and the transfer of Property (other than
the Capital Stock of Parent Borrower) paid by Parent
Borrower and its Subsidiaries for all Acquisitions
permitted under this Section 8.8(b) consummated during
any calendar year does not exceed $5,000,000.”

	 	 	(g)    Section 8.9 is hereby amended by inserting the
word “and” at the end of Section 8.9(a), by deleting Section
8.9(c) and by amending and restating Section 8.9(b) in its
entirety as follows:

	 	 	 	“Dispositions of Property other than Inter-Company
Dispositions provided that (i) such Disposition will
not have a Material Adverse Effect, (ii) after giving
effect to such Disposition no Default or Event of
Default would exist, (iii) after giving effect to such
Disposition, the aggregate net book value of Property
which is the subject of Dispositions during any fiscal
year, less capital expenditures made during such fiscal
year by Parent Borrower and its Subsidiaries for
tangible operating assets to be used in the business of
Parent Borrower and its Subsidiaries does not exceed
$25,000,000; and (iv) the provisions of Section 8.18
are complied with.”

	 	 	(h)    Section 8.12 is hereby amended by amending and
restating the proviso therein in its entirety as follows:

	 	 	 	“provided, that Parent Borrower or its Subsidiaries may
enter into such an agreement in connection with any
Lien permitted by this Agreement, when such prohibition
or limitation is by, its terms effective only against
the Property subject to such Lien and does not conflict
with the terms and provisions of the Security
Agreement.”

	 	 	(i)    Section 8.15 is hereby amended by amending and
restating clause (a) thereof in its entirety as follows:

	 	 	 	“(a) the Guaranty or Security Agreement;”

	 	 	(j)    A new Section 8.17 is hereby added to read as
follows:

	 	 	 	“8.17 PAYMENT OF CERTAIN FEES. Directly or indirectly
pay or cause to be paid any consideration or
remuneration, whether by way of supplemental or
additional interest, fees or otherwise, to any creditor
of a Credit Party as consideration for or as an
inducement to the entering into by any such creditor of
any release or discharge of any document in which a
security interest is granted, unless such consideration
or remuneration is concurrently paid, on the same
terms, ratably to the Lenders.”

20

 

	 	 	(k)     A new Section 8.18 is hereby added to read as follows:

	 	 	 	“8.18 CERTAIN PREPAYMENTS. Prepay any Senior
Indebtedness (other than (i) the Loans; (ii)
Indebtedness secured by a Lien permitted under Section
8.6(g); and (iii) prepayments not exceeding $1,000,000
in the aggregate) within 12-months of a Disposition
unless the Loans are prepaid, to the extent of the
proceeds from such Disposition, on a pro rata basis
with such other Senior Indebtedness and the Aggregate
Commitment Amount is permanently reduced by an amount
equal to such prepayment of the Loans.”

2.8.   Amendment of Article 9.

	 	 	Article 9 of the Credit Agreement is hereby amended as follows:
	 
	 	 	(a)    Section 9.1 is hereby amended by amending and
restating subsection (a) thereof in its entirety as follows:

	 	 	 	“(a) Failure to Pay Principal. Any payment of
principal with respect to any Loan or Reimbursement
Obligation shall not be made when due and payable
(whether upon demand, at maturity, by reason of
acceleration or otherwise);”

	 	 	(b)    Section 9.1 is hereby amended by amending and
restating subsection (b) thereof in its entirety as follows:

	 	 	 	“(b) Failure to Pay Interest, Fees and Other Amounts.
Any payment of interest, fees, commissions, expenses or
other amounts, payable under any Loan Document or
otherwise to Agent or Issuing Bank with respect to the
loan facility or Letters of Credit established
hereunder shall not be made within three (3) Business
Days of the date when due and payable;”

	 	 	(c)    Section 9.1 is hereby amended by deleting the
period at the end of subsection (1) thereof, replacing same
with “; or” and by adding a new subsection (m) thereto to read
in its entirety as follows:

	 	 	 	“(m) Lien on Collateral. Any Lien created under the
Security Agreement for any reason ceases to be or is
not a valid and perfected Lien on the Collateral
constituting a first priority security interest, other
than the Liens expressly permitted under the Security
Agreement, or there shall have occurred waste or
conversion of a material part of the Collateral.”

21

 

	 	 	(d)    Section 9.2 is hereby amended and restated to read in its entirety as follows:

		
	 	     “9.2 CONTRACT REMEDIES.

		
	 	(a) Termination of Commitment;
Acceleration. Upon the occurrence of an Event of
Default or at any time thereafter during the continuance
thereof:

	 	 	 
	(i)	 	
if such event is an Event
of Default specified in Sections 9.1(g) or 9.1(h)
above with respect to any Domestic Borrower, the
Commitments of all of the Lenders and the
Swingline Commitment of the Swingline Lender,
shall immediately and automatically terminate and
the Loans, all accrued and unpaid interest thereon
and all other amounts owing under the Loan
Documents (including, without limitation, all
amounts of LC Obligations, whether or not the
beneficiaries of the then outstanding Letter of
Credit shall have presented the documents required
thereunder) shall immediately become due and
payable, and the Agent may, and, upon the
direction of the Required Lenders shall, exercise
any and all remedies and other rights provided in
the Loan Documents;

	 	 	 
	(ii)	 	
if such event is an Event
of Default specified in Sections 9.1(g) or 9.1(h)
above with respect to any other Borrower, the
Commitments of all of the Lenders with respect to
Loans to be made to such Borrower shall
immediately and automatically terminate and the
Subsidiary Borrower Obligations (including,
without limitation, all amounts of LC Obligations,
whether or not the beneficiaries of the then
outstanding Letter of Credit shall have presented
the documents required thereunder) of such
Borrower shall immediately become due and payable,
and, in each case, the Agent may, and, upon the
direction of the Required Lenders shall, exercise
any and all remedies and other rights provided in
the Loan Documents; and

	 	 	 
	(iii)	 	
if such event is any
other Event of Default (or an Event of Default
specified in Sections 9.1(g) or 9.1(h) with
respect to a Borrower other than a Domestic
Borrower), any or all of the following actions may
be taken: (A) with the consent of the Required
Lenders, the Agent may, and upon the direction of
the Required Lenders shall, by notice to Parent
Borrower, declare the Commitments and the
Swingline Commitment terminated forthwith,
whereupon such

22

 

	 	 	 
	 	 	
Commitments shall immediately terminate; and (B)
with the consent of the Required Lenders, the
Agent may, and upon the direction of the Required
Lenders shall, by notice of default to Parent
Borrower, declare the Loans, all accrued and
unpaid interest thereon and all other amounts
owing under the Loan Documents (including,
without limitation, all amounts of LC
Obligations, whether or not the beneficiaries of
the then outstanding Letter of Credit shall have
presented the documents required thereunder) to
be due and payable forthwith, whereupon the same
shall immediately become due and payable, and the
Agent may, and upon the direction of the Required
Lenders shall, exercise any and all remedies and
other rights provided in the Loan Documents

		
	 	With respect to all Letters of Credit with respect to which
presentment for honor shall not have occurred at the time of
an acceleration pursuant to the preceding paragraph, the
Borrowers shall at such time deposit in a cash collateral
account opened by the Agent an amount equal to the aggregate
then undrawn and unexpired amount of such Letters of Credit.
Each Borrower hereby grants to the Agent, for the benefit of
the Issuing Bank and the LC Participants, a security interest
in such cash collateral to secure all obligations of such
Borrower under this Agreement and the other Loan Documents.
Amounts held in such cash collateral account shall be applied
by the Agent to the payment of drafts drawn under such
Letters of Credit, and the unused portion thereof after all
such Letters of Credit shall have expired or been fully drawn
upon, if any, shall be applied to repay other obligations of
the Borrowers hereunder and under the Notes. After all such
Letters of Credit shall have expired or been fully drawn
upon, all Reimbursement Obligations shall have been satisfied
and all other obligations of the Borrowers hereunder and
under the Notes shall have been paid in full, the balance, if
any, in such cash collateral account shall be returned to
Parent Borrower. Each Borrower shall execute and deliver to
the Agent, for the account of the Issuing Bank and the LC
Participants, such further documents and instruments the
Agent may request to evidence the creation and perfection of
the within security interest in such cash collateral account.

		
	 	Except as otherwise provided in this Section, presentment,
demand, protest and all other notices of any kind are hereby
expressly waived. Each Borrower hereby further expressly
waives and covenants not to assert any appraisement,
valuation, stay, extension, redemption or similar laws, now
or at any time hereafter in force which might delay, prevent
or otherwise impede the performance or enforcement of any
Loan Document.

		
	 	     (b)    Application of Proceeds. In the
event that any Commitments shall have been terminated,
or any Loans, any accrued and unpaid

23

 

	 	 	 	interest thereon or any other amounts owing under the
Loan Documents (including, without limitation, all
amounts of LC Obligations, whether or not the
beneficiaries of the then outstanding Letter of Credit
shall have presented the documents required thereunder)
shall have been declared due and payable, in each case
pursuant to the provisions of this Section any funds
received by the Agent and the Lenders from or on behalf
of Parent Borrower (including, without limitation, from
any Credit Party, other than a Subsidiary Borrower that
is not also a Guarantor Subsidiary) shall be applied by
the Agent and the Lenders in liquidation of the Loans,
Reimbursement Obligations and the other Obligations in
the following manner and order: (i) to the payment of
interest on, and then the principal portion of, any
Loans which the Agent, in its capacity as Agent, may
have advanced on behalf of any Lender for which the
Agent has not then been reimbursed by such Lender or
Parent Borrower; (ii) to the payment of any fees or
expenses due Agent from Parent Borrower; (iii) to
reimburse the Agent, the Lenders and the Swingline
Lender for any expenses (to the extent not paid
pursuant to clause (ii) above) due from Parent Borrower
pursuant to the provisions of Section 12.5; (iv) to the
payment of accrued Facility Fees and all other fees,
expenses and amounts due under the Loan Documents
(other than principal and interest on the Loans and
Reimbursement Obligations); (v) to the payment of
interest on Swingline Loans; (vi) to the payment, pro
rata according to the outstanding principal amount of
the Loans and Reimbursement Obligations (other than
Swingline Loans), of interest due on such Loans and
Reimbursement Obligations of each Lender; (vii) to the
payment of principal of Swingline Loans; (viii) to the
payment, pro rata according to the outstanding
principal amount of the Loans (other than Swingline
Loans) and Reimbursement Obligations, of principal
outstanding on such Loans and Reimbursement
Obligations; and (ix) to the payment of any other
amounts owing to the Agent and the Lenders under any
Loan Document. Any funds received by the Agent and the
Lenders from a Credit Party that is a Subsidiary
Borrower but not a Guarantor Subsidiary shall be
applied by the Agent and the Lenders in liquidation of
the Obligations of such Subsidiary Borrower in the same
order as the immediately preceding clauses (i) through
(ix), to the extent applicable.”

2.9.   Amendment of Article 10.

	 	 	Article 10 of the Credit Agreement is hereby amended as follows:
	 
	 	 	(a)    Section 10.4 is hereby amended by amending and
restating the second sentence thereof in its entirety as
follows:

24

 

	 	 	 	“Agent may treat each Lender or the Person designated in the
last notice filed with the Agent under this Section, as the
holder of all of the interests of such Lender in its
Aggregate Outstanding Extensions of Credit, until written
notice of transfer, signed by such Lender (or the Person
designated in the last notice filed with the Agent) and by
the Person designated in such written notice of transfer, in
form and substance satisfactory to the Agent and otherwise in
accordance herewith, shall have been filed with the Agent.”

	 	 	(b)    Section 10.4 is hereby amended by amending and
restating the last sentence thereof in its entirety as
follows:

	 	 	 	“Agent shall in all cases be fully protected in acting, or in
refraining from acting, under the Loan Documents in
accordance with a request or direction of the Required
Lenders, and such request or direction and any action taken
or failure to act pursuant thereto shall be binding upon all
the Lenders and all future holders of the Loans and other
extensions of credit under the Loan Documents.”

	 	 	(c)    Section 10.7 is hereby amended by amending and
restating the first sentence in its entirety as follows:

	 	 	 	“ Each Lender agrees to indemnify and hold harmless Agent in
its capacity as such (to the extent not promptly reimbursed
by Parent Borrower and without limiting the obligation of
Parent Borrower to do so), pro rata according to (a) at any
time prior to the Commitment Termination Date, its Commitment
Percentage, and (b) at all other times, (i) if no Loan or LC
Obligation is outstanding, its Commitment Percentage, and
(ii) if any Loan or LC Obligation is outstanding, the
percentage equal to the fraction, the numerator of which is
the Aggregate Outstanding Extensions of Credit of such Lender
(determined, in the case of each Alternate Currency Loan, on
the basis of the Currency Equivalent in Dollars thereof), and
the denominator of which is the Aggregate Credit Exposure,
from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever, including
any amounts paid to the Lenders (through Agent) by any
Credit Party pursuant to the terms of the Loan Documents,
that are subsequently rescinded or avoided, or must otherwise
be restored or returned) which may at any time (including at
any time following the payment of the Loans) be imposed on,
incurred by or asserted against Agent in any way relating to
or arising out of the Loan Documents or any other documents
contemplated by or referred to therein or the transactions
contemplated thereby or any action taken or omitted to be
taken by Agent under or in connection with any of the
foregoing; provided, however, that no Lender shall be liable
to Agent for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements to the extent
resulting primarily

25

 

	 	 	 	from the finally adjudicated gross negligence or willful
misconduct of the Agent.”

	 	 	(d)    Section 10.8 is hereby amended and restated in
its entirety as follows:

	 	 	 	“10.8 LENDERS IN THEIR RESPECTIVE INDIVIDUAL CAPACITIES.
Fleet and each Lender and the respective affiliates thereof
may make secured or unsecured loans to, accept deposits from,
issue letters of credit for the account of, act as trustee
under indentures of, and generally engage in any kind of
business with, Parent Borrower and its Subsidiaries as though
Fleet was not the Agent hereunder, and each Lender was not a
Lender hereunder. With respect to the Commitments made or
renewed by Fleet and the Loans made and with respect to any
Letter of Credit issued or participated in by it, in addition
to any rights and powers it may have as the Swingline Lender
or the Issuing Bank, it shall have the same rights and powers
under the Loan Documents as any Lender and may exercise the
same as though it were not the Agent, and the terms “Lender”
and “Lenders” shall in each case include Fleet. Further,
the Agent and any of its affiliates may accept fees and other
consideration from Parent Borrower and its Subsidiaries for
services in connection with this Agreement or otherwise
without having to account for the same to the other Lenders.”

2.10.   Amendment to Article 11.

	 	 	Article 11 of the Credit Agreement is hereby amended by amending
and restating the first sentence of Section 11.2 in its entirety as
follows:

	 	 	 	“Subject to Section 11.4, Parent Borrower shall not be
released from liability hereunder unless and until the
Commitment Termination Date shall have occurred and either
(a) each Subsidiary Borrower shall have paid in full the
outstanding principal amount of the Loans made to it,
together with all accrued interest thereon and all other sums
then due and owing by it under the Loan Documents and there
are no LC Obligations outstanding with respect to any
Subsidiary Borrower, or (b) the Parent Guarantor Obligations
shall have been paid in full.”

2.11.   Amendment of Article 12.

	 	 	Article 12 of the Credit Agreement is hereby amended as follows:
	 
	 	 	(a)    Section 12.4 is hereby amended by amending and
restating Section 12.4(b) in its entirety as follows:

	 	 	 	“(b) Obligations. The obligations of Borrowers under
Sections 3.4, 3.5, 3.6, 3.7, 3.8, 3.9, 3.10, 12.5, 12.7 and
12.13(b) shall survive the termination of the Commitments,
the expiration or termination of the

26

 

	 	 	 	Letters of Credit and the payment of the Loans, Reimbursement
Obligations and all other amounts payable under the Loan
Documents.”

	 	 	(b)    Section 12.6 is hereby amended by amending and
restating subsection (a) in its entirety as follows:

	 	 	 	“(a) Binding Effect. The Loan Documents shall be binding
upon and inure to the benefit of Parent Borrower, the other
Borrowers, the Lenders, the Agent, all future holders of the
Loans and other extensions of credit under the Loan
Documents, and their respective successors and assigns,
except that neither Parent Borrower nor any other Borrower
may assign, delegate or transfer any of its rights or
obligations under the Loan Documents without the prior
written consent of the Agent and each Lender.”

	 	 	(c)    Section 12.7 is hereby amended and restated in
its entirety as follows:

	 	 	 	“Parent Borrower agrees to defend, protect, indemnify, and
hold harmless Agent, and each and all of the Lenders, each of
their respective affiliates and each of the respective
officers, directors, employees and agents of each of the
foregoing (each an “Indemnified Person”) from and against any
and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs, expenses and
disbursements of any kind or nature whatsoever (including the
reasonable fees and disbursements of counsel to such
Indemnified Persons in connection with any investigative,
administrative or judicial proceeding, whether direct,
indirect or consequential and whether based on any federal or
state laws or other statutory regulations of any
jurisdiction, including securities and commercial laws and
regulations, under common law or at equitable cause, or on
contract or otherwise, including any liabilities and costs
under environmental laws, federal, state or local health or
safety laws, regulations, or common law principles, arising
from or in connection with the past, present or future
operations of Parent Borrower or any of its Subsidiaries or
their respective predecessors in interest, or the past,
present or future environmental condition of the Property of
Parent Borrower or any of its Subsidiaries, the presence of
asbestos-containing materials at any such Property, or the
release or threatened release of any hazardous substance into
the environment from any such Property) in any manner
relating to or arising out of the Loan Documents (including,
without limitation, with respect to the Agent’s acting as
Collateral Agent, pursuant to the Intercreditor Agreement,
for the benefit of the holders of the notes issued pursuant
to the Note Purchase Agreement) any commitment letter or fee
letter executed and delivered by Parent Borrower or any of
its Subsidiaries and/or the Agent, the capitalization of
Parent Borrower or any of its Subsidiaries, the Commitments,
the making of, management of and participation in the Loans,
or the use or intended use of the proceeds of the Loans
hereunder, provided that Parent Borrower shall have no
obligation

27

 

	 	 	 	under this Section to an Indemnified Person with respect to
any of the foregoing to the extent resulting primarily out of
the gross negligence or willful misconduct of such
Indemnified Person or arising solely from claims between one
such Indemnified Person and another such Indemnified Person.
The indemnity set forth herein shall be in addition to any
other obligations or liabilities of Parent Borrower to each
Indemnified Person under the Loan Documents or at common law
or otherwise, and shall survive any termination of the Loan
Documents, the expiration of the Commitments and the payment
of all Indebtedness under the Loan Documents.”

	 	 	(d)    Section 12.10 (a) is hereby amended by amending
and restating the first sentence in its entirety as follows:

	 	 	 	“(a) If a Lender shall obtain payment of any principal of, or
interest on, any Loan made by it to a Borrower under this
Agreement, or shall obtain payment on any other Obligation
owing by a Credit Party (including, without limitation, any
Reimbursement Obligation) through the exercise of any right
of set-off, banker’s lien or counterclaim or similar right or
otherwise or through voluntary prepayments directly to a
Lender or other payments made by a Credit Party to a Lender
not in accordance with the terms of this Agreement or other
Loan Documents and such payment should be distributed to the
Lenders pro rata or on the basis of their Commitment
Percentages in accordance with Section 2.5(a) or Section
9.2(b), as applicable, such Lender shall promptly purchase
from the other Lenders participations in the Loans made by
the other Lenders or other Obligations owed to such other
Lenders (including, without limitation, Reimbursement
Obligations) in such amounts, and make such other adjustments
from time to time as shall be equitable, to the end that all
the Lenders shall share the benefit of such payment (net of
any reasonable expenses which may be incurred by such Lender
in obtaining or preserving such benefit) pro rata or in
accordance with their Commitment Percentages, as applicable,
in accordance with Section 2.5(a) or Section 9.2(b).”

	 	 	(e)    Section 12.10(b) is hereby amended and restated
in its entirety as follows:

	 	 	 	“(b) Set-Off. In addition to any rights and remedies provided
by law, upon and during the continuance of an Event of
Default, the Agent, each Lender, any participant with such
Lender in the Loans or other extensions of credit under the
Loan Documents and each Affiliate of each Lender and the
Agent shall have the right, without prior notice to any
Credit Party, any such notice being expressly waived by
Borrowers to the extent not prohibited by applicable law, to
set-off and to appropriate and to apply any and all deposits
(general or special, including, but not limited to,
indebtedness evidenced by certificates of deposit, whether
matured or unmatured) and any other indebtedness at any time
held or owing by the

28

 

	 	 	 	Agent, such Lender, any Affiliate of the Agent or such Lender
or any participant to or for the credit or the account of any
Borrower against and on account of the Obligations,
irrespective of whether or not the Agent or any Lender, shall
have made demand under this Agreement or any of the other
Loan Documents or the Agent or any Lender shall have declared
any or all of the Obligations to be due and payable as
permitted by Section 9.2 of this Agreement and although such
Obligations shall be contingent or unmatured. To the extent
not prohibited by applicable law, the aforesaid right of
set-off may be exercised by the Agent and each Lender and
participant in the Loans or other extensions of credit under
the Loan Documents and by each Affiliate of a Lender or the
Agent against any Borrower or against any trustee in
bankruptcy, custodian, debtor in possession, assignee for the
benefit of creditors, receiver, or execution, judgment or
attachment creditor of any Borrower or against anyone else
claiming through or against any Borrower or such trustee in
bankruptcy, custodian, debtor in possession, assignee for the
benefit of creditors, receiver, or execution, judgment or
attachment creditor, notwithstanding the fact that such right
of set-off shall not have been exercised by any such Person
prior to the making, filing or issuance, or service upon such
Person of, or of notice of, any such petition, assignment for
the benefit of creditors, appointment or application for the
appointment of a receiver, or issuance of execution,
subpoena, order or warrant. Each Lender agrees promptly to
notify Parent Borrower and the Agent after any such set-off
and application made by such Lender, any of its Affiliates or
any of its participants in the Loans or other extensions of
credit under the Loan Documents or any exercise of similar
set-off rights that any of them exercises against deposits or
other indebtedness to or for the credit of any Borrower which
is applied against the Obligations (and the Agent shall
promptly notify all of the other Lenders thereof), provided
that the failure to give such notice to Parent Borrower or
Agent shall not affect the validity of such set-off and
application. Agent shall also promptly notify the Parent
Borrower after any such set-off and application made by it or
any of its Affiliates, provided that the failure to give such
notice shall not affect the validity of such set-off and
application. Each Borrower hereby grants to Agent, each
Lender and Affiliate of each Lender and Agent and each
participant in the Loans or other extensions of credit under
the Loan Documents a continuing lien, security interest and
right of setoff as security for all Obligations upon and
against all deposits, credits, collateral and property, now
or hereafter in the possession, custody, safekeeping or
control of such Persons and each of their respective
successors and assigns or in transit to any of them. ANY AND
ALL RIGHTS TO REQUIRE ANY OF THE LENDERS OR AGENT, ANY OF
THEIR AFFILIATES OR ANY PARTICIPANT IN THE LOANS OR OTHER
EXTENSIONS OF CREDIT UNDER THE LOAN DOCUMENTS TO EXERCISE
THEIR RESPECTIVE RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER
COLLATERAL WHICH SECURES THE

29

 

	 	 	 
	 	 	OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF SET-OFF WITH
RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF
BORROWERS ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY
WAIVED.”

	 	 	(f)    Section 12.21 is hereby amended and restated in
its entirety as follows:

	 	 	 
	 	 	"THE AGENT AND EACH OF THE LENDERS AND BORROWERS HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY AND ALL
RIGHTS THAT THEY MAY NOW OR HEREAFTER HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY CLAIM BASED HEREON, ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS AGREEMENT, ANY OF THE OTHER LOAN
DOCUMENTS CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH
OR THE TRANSACTIONS CONTEMPLATED HEREBY OR ANY COURSE OF
CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR
WRITTEN) OR ACTIONS OF ANY PARTY, INCLUDING, WITHOUT
LIMITATION, ANY COURSE OF CONDUCT, COURSE OF DEALINGS,
STATEMENTS OR ACTIONS RELATING TO THE ADMINISTRATION OF THE
CREDIT FACILITY UNDER THIS AGREEMENT OR ENFORCEMENT OF THIS
AGREEMENT OR THE OTHER LOAN DOCUMENTS, AND (ii) AGREE THAT
NONE OF THE BORROWERS, ANY LENDER OR THE AGENT WILL SEEK TO
CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A
JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. EXCEPT AS
PROHIBITED BY APPLICABLE LAW, EACH BORROWER HEREBY WAIVES ANY
RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION ANY
SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY
DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. EACH
BORROWER HEREBY CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF THE AGENT OR ANY LENDER HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT THE AGENT OR THE LENDERS WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVERS. THIS WAIVER CONSTITUTES A MATERIAL
INDUCEMENT FOR THE AGENT AND THE LENDERS TO ENTER INTO THIS
AGREEMENT AND FOR THE LENDERS TO MAKE LOANS AND OTHER CREDIT
AVAILABLE TO THE BORROWERS. IT IS INTENDED THAT SAID WAIVERS
SHALL APPLY TO ANY AND ALL DEFENSES, RIGHTS, AND/OR
COUNTERCLAIMS IN ANY ACTION OR PROCEEDING

	 	 	(g)    Section 12.25 is hereby amended and restated in
its entirety as follows:

30

 

	 
	“12.25. OPINION OF LOCAL COUNSEL WITH RESPECT TO GUARANTOR
SUBSIDIARIES. No later than May 15, 2003, Parent Borrower
shall deliver opinions of local counsel in the jurisdictions
of the states of incorporation or organization of the
Guarantor Subsidiaries with respect to which an opinion of
counsel was not delivered on or about March 28, 2003 with
respect to the first amendment to the Credit Agreement. Each
such opinion shall be reasonably satisfactory to the Agent in
all respects, and shall be substantially in the form of the
opinions regarding the Credit Parties delivered in connection
with such first amendment to the Credit Agreement.”

	 	2.12.	 	Amendment of Exhibit E.

Exhibit E to the Credit Agreement, Form of Compliance Certificate,
is hereby amended and restated to read in its entirety the same as
Exhibit E annexed hereto.

	 	2.13.	 	Schedule 4.21.

Schedule 4.21 to the Credit Agreement is hereby deleted.

3.   REAFFIRMATION OF GUARANTY.

     Each of the Guarantors hereby reaffirms each of its continuing obligations
to the Agent and the Lenders under the Guaranty and agrees that neither this
Amendment, the transactions contemplated by this Amendment nor any further
agreements or arrangements whatsoever relating to the Credit Agreement shall in
any way affect the validity and enforceability of the Guaranty or reduce,
impair, or discharge the obligations of any of the Guarantors thereunder.

4.   REPRESENTATIONS AND WARRANTIES.

	 	Parent Borrower represents and warrants that:

	 	4.1	 	Representations in Credit Agreement. Each of the
representations and warranties made by Parent Borrower in the Credit
Agreement is true, correct and complete on and as of the date hereof
with the same full force and effect as if each of such
representations and warranties had been made by the Parent Borrower
on the date hereof and in this Amendment (except to the extent such
representations and warranties expressly relate to an earlier date).
	 
	 	4.2	 	No Default or Event of Default. No Default or Event of
Default exists on the date of this Amendment (after giving effect to
all of the arrangements and transactions contemplated by this
Amendment).
	 
	 	4.3	 	Binding Effect of Documents. This Amendment, the Security
Agreement and all other Loan Documents being executed by the Credit
Parties in connection herewith have been duly authorized, executed
and delivered by each Credit Party and are in full force and effect
as of the date hereof and the agreements and obligations of each
such Credit Party contained herein and therein constitute the legal,
valid, and

31

 

	 	 	 	binding obligations of each Credit Party enforceable against such
Credit Party in accordance with their respective terms, except as
such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization or other similar laws affecting the
enforcement of creditors’ rights generally.
	 
	 	4.4	 	Ohio Franklin Corp. Ohio Franklin Corp., a Subsidiary of
Parent Borrower, has no operating assets, conducts no operations and
sold its only remaining material asset (certain improved real
estate) in 2002.

5.   CONDITIONS TO EFFECTIVENESS.

     This Amendment shall become effective on the first date when the following
conditions are met (the “Amendment Effective Date”):

	 	5.1	 	Counterparts to Amendment. The Agent shall have received
counterparts hereof signed by the Required Lenders and all of the
Credit Parties (or, in the case of any Required Lender as to which
an executed counterpart shall not have been received, the Agent
shall have received in form satisfactory to it a telecopy or other
written confirmation from such party of execution of a counterpart
hereof by such party);
	 
	 	5.2	 	Amendment Fee. The Agent shall have received payment of an
amendment fee for each Lender which shall have executed and
delivered a counterpart hereof as contemplated by Section 5.1 hereof
on or before 5:00 p.m. New York time on March 28, 2003 in an amount
equal to .375% of such Lender’s Commitment;
	 
	 	5.3	 	Other Fees and Expenses. The Agent shall have received
payment of all amendment fees, other costs, fees and expenses
(including, without limitation, reasonable legal fees and expenses
for which invoices shall have been submitted to the Borrower) and
other compensation payable to it on or prior to the Amendment
Effective Date in connection with the Loan Documents;
	 
	 	5.4	 	Counterparts to Security Agreement. The Agent shall have
received the Security Agreement, dated the Amendment Effective Date,
duly executed and delivered, by each Credit Party;
	 
	 	5.5	 	Opinions of Counsel to Credit Parties. The Agent shall have
received an opinion of (a) Simpson Thacher & Bartlett, counsel to
the Credit Parties, and (b) Philip E. Kucera, Esq., General Counsel
of Parent Borrowers, in each case addressed to the Agent and the
Lenders, in form and substance satisfactory to Agent;
	 
	 	5.6	 	Note Purchase Agreement. The Agent shall have received
evidence satisfactory to it that the Note Purchase Agreement has
been amended in form and substance satisfactory to the Agent (as
determined in its sole and absolute discretion) including provisions
necessary to (a) acknowledge and consent to the Security Agreement;
and (b) provide for a security interest in the Collateral on a
parity basis with the security interest granted pursuant to the
Security Agreement.

32

 

	 	5.7	 	Counterparts to Intercreditor Agreement. The Agent shall
have received Amendment No. 1 to the Intercreditor Agreement, duly
executed and delivered by each of the parties to the Note Purchase
Agreement, other than Parent Borrower;
	 
	 	5.8	 	Financing Statements. The Agent shall have received all such
UCC-1 financing statements, UCC-3 and other instruments and
agreements as the Agent may request in order to confirm that the
Security Agreement is effective to create in favor of the Agent a
valid, enforceable first priority security interest upon the
Collateral. The Agent shall have received payment of all recording
fees, taxes and other charges in connection with all such
instruments and agreements; and
	 
	 	5.9	 	Additional Documents. The Agent shall have received all
documents it may reasonably request relating to the existence of
each Credit Party, the corporate or other authority for this
Amendment and the other documents related thereto, and any other
matters relevant hereto, all in form and substance to the Agent,

     Provided that this Amendment shall not become effective or be binding upon
any party hereto unless all of the foregoing conditions are satisfied not later
than April 1, 2003. Promptly after the Amendment Effective Date occurs, the
Agent shall notify the Parent Borrower and the Lenders thereof, and such notice
shall be conclusive and binding on all parties hereto.

6.   RATIFICATION; MISCELLANEOUS.

     Except as expressly amended hereby, the Credit Agreement and all
documents, instruments and agreements related thereto are hereby ratified and
confirmed in all respects. All references in the Credit Agreement or any Loan
Document or related agreement or instrument shall hereafter refer to the Credit
Agreement as amended hereby.

7.   NO IMPLIED WAIVER.

     Except as expressly provided herein, nothing contained herein shall
constitute a waiver of, impair or otherwise affect any Obligations, any other
obligations of any of the Credit Parties or any right of the Agent or any
Lender consequent thereon.

8.   EXPENSES.

     Regardless of whether the Amendment Effective Date ever occurs, Parent
Borrower agrees to pay all reasonable fees and expenses incurred by Agent in
connection with the preparation and negotiation of this Amendment, including,
without limitation, the reasonable fees and expenses of Agent’s counsel.

9.   COUNTERPARTS.

     This Amendment may be executed in one or more counterparts, each of which
shall be deemed an original but which together shall constitute one and the
same instrument.

33

 

10.   GOVERNING LAW.

     THIS AMENDMENT SHALL FOR ALL PURPOSES BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO
PRINCIPLES OF CONFLICTS OF LAW).

34

 

     IN WITNESS WHEREOF, the parties have executed this First Amendment to
Credit Agreement as of this 28th day of March, 2003.

	 	 
	 	BOWNE & CO., INC., Borrower
	 	 
	 	By: /s/ C. Cody Colquitt

Name: C. Cody Colquitt

Title: Senior Vice President and Chief Financial Officer
	 	 
	 	FLEET NATIONAL BANK, as a Lender and as Agent
	 	 
	 	By: /s/ Peter A. Dontas

Name: Peter A. Dontas

Title: Senior Vice President
	 	 
	 	JPMORGAN CHASE BANK, as a Lender

and as Documentation Agent
	 	 
	 	By: /s/ Louis Mastrianni

Name: Louis Mastrianni

Title: Vice President
	 	 
	 	WACHOVIA BANK, NATIONAL ASSOCIATION,

as a Lender
	 	 
	 	By: /s/ Anne L. Sayles

Name: Anne L. Sayles

Title: Director
	 	 
	 	HSBC BANK USA, as a Lender
	 	 
	 	By: /s/ Bruce Wicks
	 	Name: Bruce Wicks

Title: Vice President

35

 

	 	 
	 	THE ROYAL BANK OF SCOTLAND, PLC, as a Lender
	 	 
	 	By: /s/ Julian Dakin

	 	Name: Julian Dakin

Title: Senior Vice President
	 	 
	 	U.S. BANK, as a Lender
	 	 
	 	By: /s/ Richard W. Neltner
	 	Name: Richard W. Neltner

Title: Senior Vice President
	 	 
	 	THE BANK OF NEW YORK, as a Lender
	 	 
	 	By: /s/ James Ducey
	 	Name: James Ducey

Title: Vice President
	 	 
	 	GUARANTORS:
	 	 
	 	BOWNE BUSINESS COMMUNICATIONS, INC.,
	 	a New York corporation
	 	 
	 	By: /s/ Philip E. Kucera
	 	Name: Philip E. Kucera

Title: Vice President and Assistant Secretary
	 	 
	 	BOWNE BUSINESS SOLUTIONS, INC.,

a Delaware corporation
	 	 
	 	By: /s/ Philip E. Kucera
	 	Name: Philip E. Kucera

Title: Vice President and Assistant Secretary
	 	 
	 	BOWNE ENTERPRISE SOLUTIONS, L.L.C.,

a New York limited liability company
	 	 
	 	By: /s/ Philip E. Kucera
	 	Name: Philip E. Kucera 

Title: Vice President and Assistant Secretary

36

 

	 	 
	 	BOWNE OF ATLANTA, INC.,

a Georgia corporation
	 	 
	 	By: /s/ Philip E. Kucera
	 	Name: Philip E. Kucera

Title: Vice President and Assistant Secretary
	 	 
	 	BOWNE OF BOSTON, INC.,

a Massachusetts corporation
	 	 
	 	By: /s/ Philip E. Kucera
	 	Name: Philip E. Kucera

Title: Vice President and Assistant Secretary
	 	 
	 	BOWNE OF CHICAGO, INC.,

a Delaware corporation
	 	 
	 	By: /s/ Philip E. Kucera
	 	Name: Philip E. Kucera

Title: Vice President and Assistant Secretary
	 	 
	 	BOWNE OF CLEVELAND, INC.,

a Ohio corporation
	 	 
	 	By: /s/ Philip E. Kucera
	 	Name: Philip E. Kucera

Title: Vice President and Assistant Secretary
	 	 
	 	BOWNE OF DALLAS LIMITED PARTNERSHIP,

a Delaware limited partnership
	 	 
	 	By: BOWNE OF DALLAS, INC.,

      a Delaware corporation, as General Partner
	 	 
	 	By: /s/ Philip E. Kucera
	 	Name: Philip E. Kucera

Title: Vice President and Assistant Secretary
	 	 
	 	BOWNE OF LOS ANGELES, INC.,

a California corporation
	 	 
	 	By: /s/ Philip E. Kucera
	 	Name: Philip E. Kucera

Title: Vice President and Assistant Secretary
	 	 
	 	BOWNE OF NEW YORK CITY, L.L.C.,

a New York limited liability company
	 	 
	 	By: /s/ Philip E. Kucera
	 	Name: Philip E. Kucera

Title: Vice President and Assistant Secretary

37

 

	 	 
	 	BOWNE OF PHOENIX, INC.,

an Arizona corporation
	 	 
	 	By: /s/ Philip E. Kucera
	 	Name: Philip E. Kucera

Title: Vice President and Assistant Secretary
	 	 
	 	BOWNE OF SOUTH BEND, INC.,

a Delaware corporation
	 	 
	 	By: /s/ Philip E. Kucera
	 	Name: Philip E. Kucera

Title: Vice President and Assistant Secretary
	 	 
	 	BGS COMPANIES, INC.,

a Delaware corporation, (also as successor by merger
with Bowne Localization, Inc., a Delaware corporation)
	 	 
	 	By: /s/ Philip E. Kucera

Name: Philip E. Kucera

Title: Vice President and Assistant Secretary
	 	 
	 	BOWNE TRANSLATION SERVICES, LLC,

a New York limited liability company
	 	 
	 	By: /s/ Philip E. Kucera
	 	Name: Philip E. Kucera

Title: Vice President and Assistant Secretary
	 	 
	 	DOCUMENT MANAGEMENT SERVICES, INC.,

a Massachusetts corporation
	 	 
	 	By: /s/ Philip E. Kucera
	 	Name: Philip E. Kucera

Title: Vice President and Assistant Secretary

38

 

EXHIBIT E

FORM OF COMPLIANCE CERTIFICATE

     I,            
, do hereby certify that I am the           of
BOWNE & CO., INC. (the “Parent
Borrower”), and that, as such, I am duly authorized to execute and deliver this
Compliance Certificate on the Parent Borrower’s behalf pursuant to Section
7.1(a) of the Credit Agreement, dated as of July 2, 2002, by and among the
Parent Borrower, the Subsidiary Borrowers party thereto, the Lenders party
thereto, FLEET NATIONAL BANK, as Agent for the Lenders, JPMORGAN CHASE BANK, as
Documentation Agent, WACHOVIA BANK, NATIONAL ASSOCIATION, as Syndication Agent,
with FLEET SECURITIES, INC., having acted as the Arranger (as the same may be
amended, supplemented or otherwise modified from time to time, the
“Agreement”). Capitalized terms used herein that are defined in the Agreement
shall have the meanings therein defined.

I hereby certify that:

          1.     The Leverage Ratio as of
             (the
“Determination Date”) is      .     :1.00,
calculated as set forth on Schedule 1.

          2.     The ratio of Consolidated
EBITDAR to Consolidated Fixed Charges for the
four fiscal quarters ended            (which date is the Determination
Date, or if the Determination Date is not the end of a fiscal quarter, such
date is the last day of the fiscal quarter immediately preceding the
Determination Date) is      .     :1.00, calculated as set forth on Schedule 2.

          3.     The ratio of Consolidated
Indebtedness to Consolidated Total
Capitalization as of the Determination Date is      .     :1.00., calculated set
forth on Schedule 3.

          4.     The Consolidated
Shareholders’ Equity as of the Determination Date is
     , calculated as set forth on Schedule 4.

          5.     Attached as Schedule 5
is a calculation of the Parent Borrower’s
compliance with the financial covenants included within the Note Purchase
Agreement for and as of the Determination Date.

          6.     There exists no violation of
any covenant or agreement contained in any
Loan Document, and no condition or event has occurred which would constitute a
Default or Event of Default under the Agreement [, except as follows:

SPECIFY ALL SUCH VIOLATIONS, CONDITIONS AND EVENTS AND THE NATURE AND STATUS
THEREOF.]

 

 

     IN WITNESS WHEREOF, I have executed this Compliance Certificate on this
     day of                ,      .

	 	 
	 	

Name:

Title:

2

 

Schedule 1 to Compliance Certificate

dated     /    /

CALCULATION OF THE LEVERAGE RATIO

	 	 	 	 	 	 	 
	1.	 	
Funded Debt as of the Determination Date.
	 	$
	 	

	 	 	 	 	 	 	 
	2.	 	
Consolidated Net Income from continuing
operations, for the period comprised of the
four fiscal quarters ended on the
Determination Date (or if the Determination
Date is not the last day of a fiscal quarter,
for the period of the four fiscal quarters
immediately preceding the Determination Date)
	 	$
	 	

	 	 	 	 	 	 	 
	3.	 	
All Interest Expense of Parent Borrower and
its Subsidiaries to the extent utilized in
determining Item 2
	 	$
	 	

	 	 	 	 	 	 	 
	4.	 	
Provision for federal, state and local
income taxes of the Parent Borrower and its
Subsidiaries, to the extent utilized
in determining Item 2
	 	$
	 	

	 	 	 	 	 	 	 
	5.	 	
Depreciation and amortization (other than
amortization of debt discount) to the extent
utilized in determining Item 2
	 	$
	 	

	 	 	 	 	 	 	 
	6.	 	
Extraordinary items of the Parent Borrower
and its Subsidiaries (including, but not
limited to: restructuring integration and
asset impairment charges; expenses related to
acquisitions; gains or losses on asset sales;
transaction related expenses; royalty expense
borne by Seller within the trailing 12 months;
provisions for doubtful accounts (net of
write-offs); and provision for deferred
employee compensation and retirement benefits)
in each case to the extent utilized in
determining Item 2
	 	$
	 	

	 	 	 	 	 	 	 
	7.	 	
All other non-cash income, expense, gains
and losses to the extent utilized in
determining Item 2 and not otherwise added or
subtracted, as	 	 	 	 

3

 

	 	 	 	 	 	 	 
	 	 	
applicable, by the foregoing
items 3 through 6.	 	 	 	 
	 	 	 	 	 	 	 
	8.	 	
Consolidated EBITDA (Item 2 plus the sum of
Items 3 through 5 minus or plus, as
applicable, Items 6 and 7)
	$  
	

	 	 	 	 	 	 	 
	9.	 	
Leverage Ratio

(Item 1 : Item 8)
	 	   .   :1.00
	 	 	 	 	 	 	 
	10.	 	
Maximum permitted Leverage Ratio pursuant to

Section 8.3 of the Credit Agreement:	 	 	 	 
	 	 	 	 	 	 	 
	 	 	
(a) January 1, 2003 to March 31, 2003
	 	3.10 to 1.0
	 	 	
(b) April 1, 2003 to June 30, 2003
	 	3.90 to 1.0
	 	 	
(c) July 1, 2003 to September 30, 2003
	 	3.25 to 1.0
	 	 	
(d) October 1, 2003 to December 31,
2003
	 	2.75 to 1.0
	 	 	
(e) January 1, 2004 to March 31, 2004
	 	3.00 to 1.0
	 	 	
(f) April 1, 2004 and thereafter
	 	2.75 to 1.0

4

 

Schedule 2 to Compliance Certificate

dated     /    /

CALCULATION OF THE FIXED CHARGE COVERAGE RATIO

	 	 	 	 	 	 	 
	1.	 	
Consolidated EBITDA from Schedule 1, Item
8, plus all Rentals to the extent utilized in
determining Consolidated Net Income set forth
on Schedule 1, Item 2
	$ 
	

	 	 	 	 	 	 	 
	2.	 	
The aggregate amount of all Rentals and
Interest Expense on Consolidated Indebtedness
for the period comprised of the four fiscal
quarters ended on the Determination Date (or
if the Determination Date is not the last day
of a fiscal quarter, for the period of the
four fiscal quarters immediately preceding the
Determination Date)
	$ 
	

	 	 	 	 	 	 	 
	3.	 	
Fixed charge coverage ratio (Item 1: Item 2)
	 	   .   :1.00	 
	 	 	 	 	 	 	 
	4.	 	
Minimum permitted fixed charge coverage
ratio pursuant to Section 8.2 of the Credit
Agreement:	 	 	 
	 	 	 	 	 	 	 
	 	 	(a)
	
For the four fiscal quarter
period ended March 31, 2003
	 	1.75 to 1.0	 
	 	 	 	 	 	 	 
	 	 	(b)
	
For the four fiscal quarter
period ended June 30, 2003
	 	1.60 to 1.0	 
	 	 	 	 	 	 	 
	 	 	(c)
	
For the four fiscal quarter
period ended September 30, 2003
	 	1.75 to 1.0	 
	 	 	 	 	 	 	 
	 	 	(d)
	
For the four fiscal quarter
period ended December 31, 2003
	 	2.00 to 1.0	 
	 	 	 	 	 	 	 
	 	 	(e)
	
For the four fiscal quarter
period ended March 31, 2004 and
thereafter
	 	2.00 to 1.0	 
	 	 	 	 	 	
	 

5

 

Schedule 3 to Compliance Certificate

dated    /    /

CALCULATION OF THE RATIO OF

CONSOLIDATED INDEBTEDNESS TO CONSOLIDATED TOTAL CAPITALIZATION

	 	 	 	 	 	 	 
	1.	 	
Consolidated
Indebtedness, as of
the Determination
Date
	$ 
	

	 	 	 	 	 	 	 
	2.	 	
Consolidated
Shareholders’
Equity, as of the
Determination Date
	$ 
	

	 	 	 	 	 	 	 
	3.	 	
Ratio of
Consolidated
Indebtedness to
Consolidated Total
Capitalization
(Item 1: Items 1
plus Item 2)
	 	 	   .   :1.00	 
	 	 	 	 	 	 	 
	4.	 	
Maximum ratio of
Consolidated
Indebtedness to
Consolidated Total
Capitalization
permitted pursuant
to Section 8.4 of
the Credit
Agreement
	 	 	0.55:1.00	 
	 	 	 	 	 	
	 

6

 

Schedule 4 to Compliance Certificate

dated    /   /   

CALCULATION OF CONSOLIDATED SHAREHOLDERS’ EQUITY

	 	 	 	 	 	 
	1.	 	
Consolidated
Shareholders’ Equity from
Schedule 3, Item 2.
	 	$ 	

	 	 	 	 	 	 
	2.	 	
$250,000,000 plus an
aggregate amount equal to
25% of Consolidated Net
Income (but, in each
case, only if a positive
number) for each
completed fiscal quarter
commencing with the
fiscal quarter ending
March 31, 2002.
	 	$ 	

	 	 	 	 	 	 
	3.	 	
Minimum Shareholders’
Equity permitted pursuant
to Section 8.1 of the
Credit Agreement.
	 	Item 1 must be greater than Item 2

7

 

Schedule 5 to Compliance Certificate

dated    /    /

CALCULATIONS AND OTHER EVIDENCE OF COMPLIANCE

WITH NOTE PURCHASE AGREEMENT FINANCIAL COVENANTS

8<PAGE>
                                                                   EXHIBIT 10.60

May 12, 2003

Mr. Karl S. Puehringer
Zedernweg 6
80939 Munich
Germany

Dear Karl:

Pursuant to Paragraph 16 of the agreement dated September 19, 2001 between
Baldwin Technology Company, Inc. (the "Company") and you (the "Agreement"), and
the Amendment dated February 14, 2003 between the Company and you (the
"Amendment"), the Agreement and Amendment are hereby changed, effective May 12,
2003, as follows:

The Amendment is cancelled effective May 12, 2003. Paragraph 8G of the Agreement
is changed by deleting that Paragraph in its entirety and inserting in its place
the following new Paragraph 8G:

G.    Events. If any of the following described events occurs during the term of
      your employment hereunder, you may terminate your employment hereunder by
      written notice to the Company either prior to, or not more than six (6)
      months after the happening of such event. In such event, your employment
      hereunder will be terminated effective as of the later of ten (10) days
      after the notice or ten (10) days after the event, and the Company shall
      make to you the same payments that the Company would have been obligated
      to make to you under Paragraph 8A hereof if the Company had terminated
      your employment hereunder effective on such date, except that if either of
      the events described under 8G(i) or 8G(iii) occurs and you terminate your
      employment as provided above in the Paragraph 8G, you will receive all
      payments as outlined in 8A(i), (ii), (iii) and (iv) and a severance
      payment (in place of compensation that would have been paid during the
      notice period in Paragraph 8A) in an amount equal to and totaling your
      then annual base rate of compensation.

      (i)   Any merger or consolidation by the Company with or into any other
            entity or any sale by the Company of substantially all of its
            assets; provided, however, that such event shall not be deemed to
            have occurred under this clause if consummation of the transaction
            would result in at least fifty (50%) percent of the total voting
            power represented by the voting securities of the Company
            outstanding immediately after such transaction being beneficially
            owned by holders of outstanding voting securities of the Company
            immediately prior to the transaction.

      (ii)  Any change of the majority of the directors of the Company occurring
            within any thirteen (13) month period.

      (iii) The adoption by the Company of any plan of liquidation providing for
            the distribution of all or substantially all of its assets.
<PAGE>
      (iv)  A material diminution in your duties, or assignment to you of duties
            that are materially inconsistent with your duties or that materially
            impair your ability to function as the Vice President of Operations
            of the Company if such diminution or assignment has not been cured
            within thirty (30) days after written notice thereof has been given
            by you to the Company.

All other sections of the Agreement shall remain in full force and effect as
originally agreed to.

BALDWIN TECHNOLOGY COMPANY, INC.

By:

        Gerald A. Nathe
        Its Chairman, President and CEO

AGREED TO AND ACCEPTED:

         Karl S. Puehringer

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