Document:

First Amendment dated as of March 30, 2007 to the Company Credit Agreement

 Exhibit 10.1 
  

					
	

	  		  	 LaSalle Business Credit, LLC
 135 South LaSalle
Street, Suite 425
 Chicago, IL 60603-4177
 (312) 904-8490
 Fax: (312) 904-6109

 March 30, 2007 
 The Coast Distribution System, Inc. 
 350 Woodview Avenue 
 Morgan Hill, California 95037 
  

	 	Re:	First Amendment 

 Gentlemen: 
 The Coast Distribution System, Inc., a Delaware corporation (“Coast Delaware”), United Sales & Warehouse of Texas, Inc.,
a Texas corporation (“United Sales”), C/P Products Corp., an Indiana corporation (“C/P”), Mohawk Trailer Supply, Inc., a New York corporation (“Mohawk”), and Les Systemes De
Distribution Coast (Canada) Inc. The Coast Distribution System (Canada) Inc., a corporation organized under the laws of the Province of Quebec (“Coast Canada”) (Coast Delaware, United Sales, C/P, Mohawk, and Coast Canada
are referred to individually as “Borrower” and collectively as “Borrowers”), and Standard Federal Bank National Association, a national banking association (“US Lender”), acting by and
through LaSalle Business Credit, LLC, a Delaware limited liability company, as Agent for US Lender (“Agent”) and LaSalle Business Credit, a division of ABN AMRO BANK N.V., Canada Branch, a Canadian branch of a
Netherlands bank (“Canadian Lender”), (US Lender, acting through Agent, and Canadian Lender are referred to collectively as “Lender”), have entered into that certain Third Amended and Restated Loan and Security
Agreement dated August 30, 2005 (the “Security Agreement”). From time to time thereafter, Borrowers and Lender may have executed various amendments (each an “Amendment” and collectively the
“Amendments”) to the Security Agreement (the Security Agreement and the Amendments hereinafter are referred to, collectively, as the “Agreement”). Borrowers and Lender now desire to further amend the Agreement as
provided herein, subject to the terms and conditions hereinafter set forth. 
 NOW, THEREFORE, in consideration of the foregoing recitals,
the mutual covenants and agreements set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: 
 1. The Agreement hereby is amended as follows: 
 (a) The definition of “Applicable Margin” set forth in Section 1 of the Agreement is hereby amended and restated as follows: 

 

 
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 March 30, 2007 
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 “Applicable Margin” shall mean, with respect to any LIBOR Rate Loans, Canadian Prime Rate Loans, US Prime Rate Loans and Canadian US Base Rate Loans (each, an “Interest Type”, as hereinafter defined), a
percentage per annum determined by reference to the applicable Funded Debt Ratio, Fixed Charge Coverage Ratio and Pre Tax Loss of the Borrowers, calculated on a consolidated basis, as set forth below for each interest Type for the periods stated:

  

													
	 Period
	  	Level	 	 Funded Debt
Ratio
	  	 Fixed Change
Coverage
 Ratio
	  	Pre Tax Loss	  	 Applicable
Margin
 For
LIBOR Rate
Loans
 (in
basis
points)
	  	Applicable
Margin for
US Prime Rate
Loans, Canadian
Prime Rate Loans
and Canadian
US
Base Rate Loans
(In basis points)
	Within ten (10) days of Lender’s receipt of Coast Delaware’s annual audited consolidated financial statements for any Fiscal Year (beginning with its Fiscal Year
ending December 31, 2006), provided that no Event of Default shall have occurred and be continuing.	  	(1)	 	Less than 0	  	Less than 1.2:1.0	  	Greater than
$3,800,000	  	275 bps	  	75 bps
	  	(2)	 	Less than 0	  	Less than 1.2:1.0	  	Equal to or
less than
$3,800,000	  	225 bps	  	25 bps
	  	(3)	 	 Greater than
 7.0:1.0
	  	Less than 1.2:1.0	  	N/A	  	200 bps	  	25 bps
	  	(4)	 	Less than or equal to 7.0:1.0 but greater than 5.0:1.0	  	Less than 1.2:1.0	  	N/A	  	175 bps	  	0 bps
	  	(5)	 	Less than or equal to 5.0:1.0 but greater than 3.5:1.0	  	Less than 1.2:1.0	  	N/A	  	150 bps	  	0 bps
	  	(6)	 	Less than or equal to 3.5: 1.0 but greater than 2.75:10	  	Equal to or greater than 1.2:1.0	  	N/A	  	125bps	  	-25 bps
	  	(7)	 	Equal to or less than 2.75:1 but greater than or equal to 0	  	Equal to or greater than 1.2:1.0	  	N/A	  	100 bps	  	-50 bps

 ;provided, however, that after the occurrence and during the continuance of an Event of Default the
Applicable Margin shall be the default rate as provided in Section 4(a)(v) of this Agreement. As a point of information, as of the date of this First Amendment, the Applicable Margin is at Level (6) in the above table. 

 

 
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 March 30, 2007 
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 (b) The definition of “Other Agreements” set forth in Section 1 of the Agreement is amended and restated as follows: 
 “Other Agreements” shall mean any Hedging Agreements and any other agreements, documents, instruments and writings to evidence, perfect or protect Lender’s lien and security interest in the Collateral required
hereunder or as Lender may request from time to time, as each of the same may be amended, modified or supplemented from time to time. 
 (c) The definition of “Liabilities” set forth in Section 1 of the Agreement is amended and restated as follows: 
 “Liabilities” shall mean any and all obligations, liabilities and indebtedness of Borrowers to Lender, Agent or to LaSalle Bank of any and every kind and nature, howsoever created, arising or evidenced and howsoever owned,
held or acquired, whether now or hereafter existing, whether now due or to become due, whether primary, secondary, direct, indirect, absolute, contingent or otherwise (including, without limitation, obligations of performance and Hedging
Obligations), whether several, joint or joint and several, and whether arising or existing under written or oral agreement or by operation of law. In each case the amount of such obligations and liabilities shall be calculated without duplication.

 (d) Section 1 of the Agreement is hereby amended to add the following definitions in the appropriate alphabetical order:

 “Hedging Agreement” shall mean any interest rate, currency or commodity swap agreement, cap agreement or collar agreement,
and any other agreement or arrangement designed to protect a Person against fluctuations in interest rate, currency exchange rates or commodity prices. 
 “Hedging Obligation” shall mean, with respect to any Person, any liability of such Person under any Hedging Agreement. The amount of any Person’s obligations in respect of any Hedging Obligation
shall be deemed to be the incremental obligations that would be reflected in the financial statements of such Person in accordance with general accepted accounting principles. 
 “Pre Tax Loss” shall mean net loss before taxes. 
 (e) Subsection 2(a) of the Agreement shall be amended and restated in its entirety as follows: 
 (a)
US Revolving Loans. 
 Subject to the terms and conditions of this Agreement, during the Original Term and any Renewal Term, Agent
shall, absent the existence of an Event of Default, 

 

 
 The Coast Distribution System, Inc, 
 March 30, 2007 
 Page 4 
 make
revolving loans and advances (the “US Revolving Loans”) to Coast US on behalf of US Lender, or cause US Lender to make such loans and advances in an amount up to the sum of the following sublimits (the “US Borrowing Base
Availability”): 
 (i) an amount equal to eighty percent (80%) of the face amount of Coast US’s Eligible Accounts,
(provided that Lender may reduce the lending formula with respect to Coast US’s Eligible Accounts to the extent that Lender determines in its Permitted Discretion that: (A) the dilution with respect to those Accounts for any period (based
on the ratio of (1) the aggregate amount of reductions in those Accounts other than as a result of payments in cash to (2) the aggregate amount of total sales has increased in any material respect, or may be reasonably anticipated to
increase in any material respect, above historical levels), or (B) the general creditworthiness of the Account Debtors of Coast US has declined; provided further, that in determining whether to reduce the lending formula(s), Lender may consider
events, conditions, contingencies or risks which are also considered in determining Borrowers’ Eligible Accounts; plus 
 (ii) the US
Inventory Advance Sublimit; minus 
 (iii) (a) a reserve of $1,000,000 to the extent that Borrowers actual consolidated Tangible Net
Worth is at anytime equal to or greater than $27,900,000 but less than or equal to $29,300,000; (b) a reserve of $2,000,000 to the extent Borrowers actual consolidated Tangible Net Worth is less than $27,900,000 and (c) a reserve with
respect to Hedging Obligations in an amount determined by Agent in its Permitted Discretion; 
 provided, that the US Borrowing Base Availability shall in no
event exceed the US Maximum Loan Sublimit, provided further that the aggregate unpaid principal balance of the US Revolving Credit Outstandings plus the aggregate unpaid principal balance of Canadian Revolving Credit Outstandings shall in no event
exceed the Maximum Loan Limit. 
 The aggregate unpaid principal balance of all US Revolving Credit Outstandings shall not at any time exceed the lesser of
the (i) US Borrowing Base Availability and (ii) the US Maximum Loan Sublimit. If at any time (A) the US Revolving Credit Outstandings exceeds either the US Borrowing Base Availability or the US Maximum Loan Sublimit, (B) any
portion of the US Revolving Credit Outstandings exceeds any applicable sublimit within the US Borrowing Base Availability or (C) the aggregate unpaid principal balance of the US Revolving Credit Outstandings and Canadian Revolving Credit
Outstandings exceeds the Maximum Loan Limit, except as otherwise provided in subsection 2(e), Coast US shall pay to US Lender or Agent, for the benefit of US Lender, such amount as may be necessary to eliminate such excess and Agent and US Lender
shall apply such payment to the US Revolving Credit Outstandings to eliminate such excess; provided, that Lender shall permit such excess (the “Excess”) to remain 

 

 
 The Coast Distribution System, Inc. 
 March 30, 2007 
 Page 5 
 outstanding for a period of up to the earlier of (w) the date Coast US becomes aware of such Excess and (x) the earliest date that Coast US is required to deliver it’s next monthly trial balance of its Accounts pursuant to
subsection 9(b) hereof so long as (y) no Event of Default is then in existence and (z) the outstanding amount of such Excess does not exceed $250,000.00; provided further that Lender shall have no obligation to make Loans during
such period of time as such Excess remains outstanding. 
 Coast US hereby authorizes Agent and US Lender, in each of their Permitted
Discretion, to charge any of Coast US’ accounts or advance US Revolving Loans to make any payments of principal, interest, fees, costs or expenses required to be made under this Agreement. 
 A request for a US Revolving Loan shall be made or shall be deemed to be made, each in the following manner: Coast US shall give Agent same day notice,
no later than 1:00 P.M. (Chicago time) for such day, of its request for a US Revolving Loan as a US Prime Rate Loan, and at least three (3) Business Days prior notice of its request for a US Revolving Loan as a LIBOR Rate Loan, in which notice
Coast US shall specify the amount of the proposed borrowing and the proposed borrowing date; provided, however, that no such request may be made at a time when there exists an Event of Default or an event which, with the passage of
time or giving of notice, will become an Event of Default. In the event that Coast US maintains a controlled disbursement account at LaSalle Bank, each check presented for payment against such controlled disbursement account and any other charge or
request for payment against such controlled disbursement account shall constitute a request for a US Revolving Loan as a US Prime Rate Loan. As an accommodation to Coast US, Agent may permit telephone requests for US Revolving Loans and electronic
transmittal of instructions, authorizations, agreements or reports to Agent by Coast US. Unless Coast US specifically directs Agent in writing not to accept or act upon telephonic or electronic communications from Coast US, neither Agent nor US
Lender shall have any liability to Coast US for any loss or damage suffered by Coast US as a result of Agent’s or US Lender’s honoring of any requests, execution of any instructions, authorizations or agreements or reliance on any reports
communicated to it telephonically or electronically and purporting to have been sent to Agent or US Lender by Coast US and neither Agent nor US Lender shall have any duty to verify the origin of any such communication or the authority of the Person
sending it. 
 Coast US hereby irrevocably authorizes Agent and US Lender to disburse the proceeds of each US Revolving Loan requested by
Coast US, or deemed to be requested by Coast US, as follows: the proceeds of each US Revolving Loan requested under subsection 2(a) shall be disbursed by Agent or US Lender in lawful money of the United States of America in immediately
available funds by wire transfer, Automated Clearing House (ACH) transfer or internal bank transfer of funds (if applicable) to a bank account at an Approved Bank or to such other bank account as may be agreed upon by Coast US and Agent (which
agreement by Agent shall not be unreasonably withheld) from time to time, or elsewhere if pursuant to a written direction from Coast US. 

 

 
 The Coast Distribution System, Inc. 
 March 30, 2007 
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 (f) The date of the Original Term of May 31, 2009 set forth in Section 10 of the Agreement is hereby amended and restated to read May 31, 2010. 
 (g) Subsection 12(j) of the Agreement is hereby amended and restated in its entirety as follows: 
 (j) Checking Accounts. 
 Borrowers shall maintain their general checking/controlled disbursement accounts with an Approved Bank in order to effectuate the provisions herein, in particular, the terms and conditions established in Section 8 above. In addition,
Borrowers shall enter into Agreements with LaSalle Bank for standard cash management services, including without limitation, “remote deposit” cash management services. Borrowers shall be responsible for all normal charges assessed thereon.

 (h) Section 12 of the Agreement is amended to add the following subsection (1) “Interest Rate Protection”:

 (l) Interest Rate Protection. 
 Within sixty (60) days of the date hereof, Coast US shall enter into Hedging Agreements satisfactory to Agent for interest rate protection with respect to not less than $10,000,000 of the Loans for a period of
not less than three (3) years and shall keep such Hedging Agreements in full force and effect at all times during such period. 
 (i) Subsection 13(e) of the Agreement is hereby amended and restated in its entirety as follows: 
 (e) Dividends,
Distributions and Redemptions. 
 Except for stock dividends, Borrowers shall not declare or pay any dividend or other distribution
(whether in cash or in kind) on any class of their stock (if a Borrower is a corporation) or on account of any equity interest in Borrowers (if a Borrower is a partnership, limited liability company or other type of entity) or redeem or repurchase
shares of their respective stock, except that any Borrower may pay any dividend to its Parent provided such Parent is another of the Borrowers, and except that Coast Delaware may pay cash dividends or repurchase or redeem its outstanding capital
stock in each case, so long as (i) no Event of Default has occurred and is continuing, (ii) no Event of Default would occur as a result of such dividend payment or stock redemption or repurchase, and (iii) such dividend payment, stock
redemption or repurchase is permitted under all applicable laws. 

 

 
 The Coast Distribution System, Inc. 
 March 30, 2007 
 Page 7 
 (j) Subsection 13(f) of the Agreement is hereby amended and restated in its entirety as follows: 
 (f) Investments;
Loans. 
 Except as otherwise permitted by subsection 13(d) above, Borrowers shall not (i) purchase or otherwise acquire, or
contract to purchase or otherwise acquire, the obligations or stock of any Person, other than direct obligations of the United States and Hedging Agreements for interest rate protection in accordance with subsection 12(I) hereof, obligations insured
by the Federal Deposit Insurance Corporation and obligations unconditionally guaranteed by the United States and (ii) lend or otherwise advance funds to any Person, except for (A) advances made to employees, officers, directors and
managers for travel and other expenses arising in the ordinary course of business and (B) loans to employees not exceeding $100,000.00 in the aggregate outstanding for all employees at any one time; provided, however, that the grant or issuance
by any of the Borrowers of stock options or stock purchase rights to employees on terms that permit the employees to pay for the shares subject to such grants or issuances on an installment or deferred basis, whether or not the obligations to make
such payments are evidenced by a promissory note or other similar instrument, shall not constitute the making of loans by Borrowers that is prohibited by this subsection 13(f). 
 (k) Subsections 14(a), 14(b), 14(c) and 14(d) of the Agreement are hereby amended and restated in their entirety as follows: 
  

	 	 (a)
	 Tangible Net Worth. 

 Borrowers
shall, on a consolidated basis, measured quarterly on a cumulative basis, maintain Tangible Net Worth as follows: (i) for the fiscal quarter ending on December 31, 2006, Twenty-Six Million Eight Hundred Thousand and No/100 Dollars ($26,800,000.00); and (ii) for each fiscal quarter ending during the Fiscal Year 2007 and
thereafter (in each case, a “Measurement Quarter”), the minimum Tangible Net Worth for such Measurement Quarter shall be (A) the minimum Tangible Net Worth for the immediately preceding fiscal quarter (as may be further increased
hereby) plus 50% of Borrowers’ actual Net Income (but without reduction for any net loss) for such Measurement Quarter;). 
  

	 	(b)	“INTENTIONALLY OMITTED” 

 

 
 The Coast Distribution System, Inc. 
 March 30, 2007 
 Page 8 
  

	 	(c)	“INTENTIONALLY OMITTED” 

 (l)
Subsection 14(d) of the Agreement is hereby amended and restated in its entirety as follows: 
  

	 	(d)	Capital Expenditures. 

 Except for Capital
Expenditures funded by Indebtedness as permitted under subsection 13(b), Borrowers, on a consolidated basis, shall not make any Capital Expenditures if, after giving effect to such Capital Expenditures, the aggregate cost of all Capital
Expenditures would exceed (i) $2,700,000.00 for Fiscal year 2007 and (ii) One Million Two Hundred Thousand and No/100 Dollars ($1,200,000.00) during any Fiscal Year thereafter. 
 2. This Amendment shall not become effective until (i) fully executed by all parties hereto. 
 3. Except as amended hereby, the Agreement and each of the Other Agreements shall remain in full force and effect in accordance with its respective
terms. Borrowers hereby ratify and confirm their liabilities, obligations and agreements under the Agreement and the Other Agreements, all as amended by this First Amendment, and acknowledge that (i) Borrowers have no defenses, claims or
set-offs to the enforcement by Lender of such liabilities, obligations and agreements, (ii) Lender has fully performed all obligations to Borrowers which it may have had or has on and as of the date hereof, and (iii) Lender does not waive,
diminish or limit any term or condition contained in the Agreement or the Other Agreements. The agreement of Lender to the terms of this First Amendment or any other amendment of the Agreement shall not be deemed to establish or create a custom or
course of dealing among Lender and Borrowers. The Agreement and the Other Agreements, as amended by this First Amendment, contain the entire agreement among Lender and Borrowers with respect to the transactions contemplated by the Agreement and the
Other Agreements. 
 (Remainder of page intentionally left blank, signatures to follow) 

 

 
 The Coast Distribution System, Inc. 
 March 30, 2007 
 Page 9 
  

			
	LASALLE BUSINESS CREDIT, LLC, as Agent
		
	By	 	/s/ [ILLEGIBLE]
	Title	 	[ILLEGIBLE] Vice President
	
	 LASALLE BANK MIDWEST NATIONAL
 ASSOCIATION,

	formerly known as,
	 STANDARD FEDERAL BANK NATIONAL
 ASSOCIATION, as US Lender

		
	 By
	 	 /s/ [ILLEGIBLE]

	 Title
	 	AUTHORIZED SIGNATORY
	
	 LASALLE BUSINESS CREDIT, A DIVISION OF
 ABN AMRO BANK N.V., Canada Branch, as
 Canadian
Lender

		
	 By
	 	 /s/ Nick Dounas

		 	Nick Dounas
	 Title
	 	Vice President
		
		 	 /s/ Darcy Mack

		 	Darcy Mack
		 	First Vice President

 

 
 The Coast Distribution System, Inc. 
 March 30, 2007 
 Page 10 
  

			
	 ACKNOWLEDGED AND AGREED TO
 this
30th day of March, 2007:
  
 THE COAST DISTRIBUTION SYSTEM, INC.

		
	By	 	/s/ Sandra Knell
	Title	 	CFO
	
	 UNITED SALES & WAREHOUSE OF
 TEXAS, INC.

		
	By	 	/s/ Sandra Knell
	Title	 	EVP
	
	C/P PRODUCTS, CORP.
		
	By	 	/s/ Sandra Knell
	Title	 	EVP
	
	MOHAWK TRAILER SUPPLY, INC.
		
	By	 	/s/ Sandra Knell
	Title	 	EVP
	
	 LES SYSTEMES DE DISTRIBUTION COAST (CANADA) INC. THE COAST DISTRIBUTION SYSTEM (CANADA) INC.

		
	By	 	/s/ Sandra Knell
	Title	 	EVP

 

 
 The Coast Distribution System, Inc. 
 March 30, 2007 
 Page 11 
 Acknowledged and Consented to by the following Guarantor of the obligations of: 
 The Coast Distribution System, Inc., United Sales &
Warehouse of Texas, Inc., C/P Products Corp., Mohawk Trailer Supply, Inc., and Les Systemes De Distribution Coast (Canada) Inc. The Coast Distribution System (Canada) Inc. 
 to 
 LaSalle Bank Midwest National Association, formerly known as, Standard Federal Bank National Association, acting by and
through LaSalle Business Credit, LLC, as Agent, and LaSalle Business Credit, a division of ABN AMRO BANK N.V., Canada Branch 
  

			
	9002-1288 QUEBEC INC.
		
	By	 	/s/ Sandra Knell
	Name	 	Sandra Knell
	 Title
	 	EVPLIMITED WAIVER AND CONSENT TO CREDIT AGREEMENT

 Exhibit 4.13 
 LIMITED WAIVER AND CONSENT TO CREDIT AGREEMENT 
 This LIMITED WAIVER AND CONSENT TO CREDIT
AGREEMENT (this “Agreement”) is entered into as of April 11, 2007 by and among SGS INTERNATIONAL, INC., a Delaware corporation (“US Borrower”), SOUTHERN GRAPHIC SYSTEMS - CANADA, CO./SYSTEMES GRAPHIQUES
SOUTHERN – CANADA, CO., an unlimited liability company organized under the laws of Nova Scotia (“Canadian Borrower”, and together with US Borrower, the “Borrowers” and each individually, a
“Borrower”), the Guarantors (such term and each other capitalized term used but not defined herein having the meaning given to it in the Credit Agreement hereinafter defined), the Required Lenders signatory hereto, UBS AG, STAMFORD
BRANCH, as US administrative agent (in such capacity, “US Administrative Agent”), as US collateral agent (in such capacity, “US Collateral Agent”) and as Canadian collateral agent (in such capacity,
“Canadian Collateral Agent” and, together with US Collateral Agent, the “Collateral Agents”), and NATIONAL CITY BANK, as Canadian administrative agent (in such capacity, “Canadian Administrative
Agent” and, together with US Administrative Agent, the “Administrative Agents”). 
 RECITALS 
 WHEREAS, the Borrowers, Guarantors, Collateral Agents, Administrative Agents and Lenders entered into that certain Credit Agreement dated as of
December 30, 2005 (as amended, supplemented, restated or otherwise modified from time to time, the “Credit Agreement”); 
 WHEREAS, the US Borrower has determined to restate its earnings for the first three quarters of fiscal year 2006 and the December 31, 2005 balance sheet (the “Restatements”). The US Borrower filed a report on Form 8K
on March 30, 2007 describing the Restatements in greater detail, which is attached hereto as Exhibit A and incorporated by reference; 
 WHEREAS, the Loan Parties are unable to timely deliver the financial statements for the fiscal year ended December 31, 2006 as required by Section 5.01(a) and the Compliance Certificate and Financial Officer certificate
(“Officer’s Certificate”) accompanying the delivery of such annual financial statements required by Sections 5.01(d) and (e), respectively; and 
 WHEREAS, the Loan Parties have requested that the Required Lenders (i) waive any Defaults or Events of Default under Section 8.01(c) that result from the Restatements and (ii) waive the applicable
provisions of Sections 5.01(a), (d) and (e) solely to the extent necessary to relieve the Loan Parties of their obligations to deliver the financial statements required by Section 5.01(a) for the fiscal year ending
December 31, 2006 by April 2, 2007 and consent to the Loan Parties delivering such financial statements and related Compliance Certificate and Officer’s Certificate no later than April 17, 2007. 
 NOW THEREFORE, in consideration of the foregoing recitals, mutual agreements contained herein and for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Agents, the Required Lenders and the Loan Parties agree as follows: 

 1 Limited Waiver and Consent. Subject to the satisfaction of each of the conditions to
effectiveness set forth in Section 2 hereof, the Loan Parties and the Required Lenders hereby agree as follows: 
 1.1 Immediately
upon the effectiveness of this Agreement, the Required Lenders hereby waive any Defaults or Events of Default that result under Section 8.01(c) that result from the Restatements; provided, however, that the waiver set forth in
this Section 1.1 shall be of no force and effect if the Restatements result in a reduction in EBITDA of 5% or more from the amounts set forth in the Form 8K attached hereto as Exhibit A for any of the periods covered by the Restatements.

 1.2 Immediately upon the effectiveness of this Agreement, the Required Lenders hereby waive compliance with the applicable provisions of
Section 5.01(a), (d) and (e) to the extent, and solely to the extent, necessary to relieve the Loan Parties of their obligation to deliver the financial statements required by Section 5.01(a) for the fiscal year ended
December 31, 2006 and the accompanying Compliance Certificate and Officer’s Certificate by April 2, 2007. 
 1.3 Immediately
upon the effectiveness of this Agreement, the Required Lenders hereby consent to extending the time by which the Loan Parties are required to deliver the financial statements required by Section 5.01(a) for the fiscal year ended
December 31, 2006 and the accompanying Compliance Certificate and Officer’s Certificate until April 17, 2007; provided, however, that the failure to deliver such financial statements, Compliance Certificate and
Officer’s Certificate by April 17, 2007 shall be an immediate Event of Default under the Credit Agreement. 
 1.4 The limited
waiver and consent set forth in this Section 1 is effective solely for the purposes set forth herein and shall be limited precisely as written and shall not be deemed to be a consent to any amendment, waiver or modification of any term
or condition of the Credit Agreement, Security Agreements or of any other Loan Document, except as expressly provided in this Agreement, or prejudice any right or rights that Agents or Lenders have or may have in the future under or in connection
with the Credit Agreement, the Security Agreements or any other Loan Document. 
 2 Conditions to Effectiveness. This Agreement
shall be effective on the date on which all of the following conditions precedent are satisfied: 
 2.1 This Agreement shall have been
executed and delivered by the Required Lenders and the Loan Parties. 
 2.2 The representations and warranties contained herein shall be true
and correct in all respects, and, after giving effect to this Agreement, no Event of Default or Default shall exist on the date hereof. 
 3 Representations and Warranties. 
 3.1 The execution, delivery and performance by the Loan Parties of this Agreement
has been duly authorized by all necessary corporate action and this 

  

 2 

 
Agreement is a legal, valid and binding obligation of the Loan Parties enforceable against the Loan Parties in accordance with its terms, except as the
enforcement thereof may be subject to (i) the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar law affecting creditors’ rights generally and (ii) general principles of equity (regardless of
whether such enforcement is sought in a proceeding in equity or at law); 
 3.2 Each of the representations and warranties contained in the
Credit Agreement is true and correct in all material respects on and as of the date hereof as if made on the date hereof, except to the extent that such representations and warranties expressly relate to an earlier date; and 
 3.3 Neither the execution, delivery and performance of this Agreement by the Loan Parties nor the consummation of the transactions contemplated hereby
does or shall result in a breach of, or violate (i) any provision of any Loan Party’s articles of incorporation or bylaws, (ii) any law or regulation, or any order or decree of any court or government instrumentality, applicable to
the Loan Parties or binding upon any of their properties, or (iii) any indenture, mortgage, deed of trust, lease, agreement or other instrument to which any Loan Party is a party or by which any Loan Party or any of their property is bound,
except in any such case to the extent such conflict or breach has been waived by a written waiver document, a copy of which has been delivered to the Agents on or before the date hereof. 
 4 Reference to and Effect upon the Credit Agreement. 
 4.1 Except as specifically set forth above, the Credit Agreement and the other Loan Documents shall remain in full force and effect and are hereby ratified and confirmed. 
 4.2 The execution, delivery and effectiveness of this Agreement shall not operate as a waiver of any right, power or remedy of any Agent or any Lender
under the Credit Agreement or any other Loan Document, nor constitute amendment of any provision of the Credit Agreement or any other Loan Document, except as specifically set forth herein. Upon the effectiveness of this Agreement, each reference in
the Credit Agreement to “this Agreement”, “hereunder”, “hereof”, “herein” or words of similar import shall mean and be a reference to the Credit Agreement as amended hereby. 
 4.3 The Loan Parties acknowledge and agree that the execution and delivery by the Required Lenders of this Agreement shall not be deemed (i) to
create a course of dealing or otherwise obligate Lenders to forbear, waive, consent or execute similar amendments under the same or similar circumstances in the future, or (ii) to amend, relinquish or impair any right of Agents or Lenders to
receive any indemnity or similar payment from any Person or entity as a result of any matter arising from or relating to this Agreement. 
 4.4 The Loan Parties affirm and acknowledge that this Agreement constitutes a Loan Document under the Credit Agreement and any reference to the Loan 

  

 3 

 
Documents under the Credit Agreement contained in any notice, request, certificate or other document executed concurrently with or after the execution and
delivery of this Agreement shall be deemed to include this Agreement unless the context shall otherwise specify. 
 5 Costs and
Expenses. As provided in Section 10.03 of the Credit Agreement, Borrowers agree to reimburse Agents for all reasonable out-of-pocket expenses incurred by the Administrative Agents and the Collateral Agents in connection with the
preparation, execution and delivery of this Agreement, including the fees, charges and disbursements of Latham & Watkins, LLP, counsel for the Agents. 
 6 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO CONFLICTS OF LAWS PROVISIONS) OF THE STATE OF NEW YORK. 
 7 Headings. Section headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of
this Agreement for any other purposes. 
 8 Counterparts. This Agreement may be executed in any number of counterparts, each of
which when so executed shall be deemed an original, but all such counterparts shall constitute one and the same instrument. In the event that any signature is delivered by facsimile transmission, such signature shall create a valid and binding
obligation of the party executing (or on whose behalf the signature is executed) the same with the same force and effect as if such facsimile signature page were an original thereof, and such party shall promptly follow its facsimile signature page
by mailing of a hard copy original. 
 [Signature Pages Follow] 
  

 4 

 IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the date first
written above. 
  

			
	 SGS INTERNATIONAL, INC.

		
	 By:
	 	 /s/ Henry R. Baughman

	 Name:
	 	Henry R. Baughman
	 Title:
	 	President and Chief Executive Officer
	
	SOUTHERN GRAPHIC SYSTEMS - CANADA, CO./SYSTEMES GRAPHIQUES SOUTHERN-CANADA, CO.
		
	 By:
	 	 /s/ Henry R. Baughman

	 Name:
	 	Henry R. Baughman
	 Title:
	 	Chairman and Vice President
	
	SOUTHERN GRAPHICS INC.
		
	 By:
	 	 /s/ Henry R. Baughman

	 Name:
	 	Henry R. Baughman
	 Title:
	 	President
	
	SGS PACKAGING EUROPE HOLDINGS LIMITED
		
	 By:
	 	 /s/ Henry R. Baughman

	 Name:
	 	Henry R. Baughman
	 Title:
	 	Director
	
	SOUTHERN GRAPHIC SYSTEMS, MEXICO, S. DE R.L. DE C.V.
		
	 By:
	 	 /s/ Henry R. Baughman

	 Name:
	 	Henry R. Baughman
	 Title:
	 	Vice President

			
	 SOUTHERN GRAPHIC SYSTEMS, INC.

		
	 By:
	 	 /s/ Henry R. Baughman

	 Name:
	 	Henry R. Baughman
	 Title:
	 	President and Chief Executive Officer
	
	 PROJECT DOVE HOLDCO, INC.

		
	 By:
	 	 /s/ Henry R. Baughman

	 Name:
	 	Henry R. Baughman
	 Title:
	 	Chairman, Vice President
	
	 PROJECT DOVE MANITOBA LP

		
	 By:
	 	PROJECT DOVE HOLDCO, INC.
	 Its:
	 	General Partner
		
	 By:
	 	 /s/ Henry R. Baughman

	 Name:
	 	Henry R. Baughman
	 Title:
	 	Chairman, Vice President
	
	 MCG GRAPHICS LIMITED

		
	 By:
	 	 /s/ Henry R. Baughman

	 Name:
	 	Henry R. Baughman
	 Title:
	 	Director
	
	 SOS PACKAGING EUROPE LIMITED

		
	 By:
	 	 /s/ Henry R. Baughman

	 Name:
	 	Henry R. Baughman
	 Title:
	 	Director

			
	 SYNNOFLEX INC.

		
	 By:
	 	 /s/ Henry R. Baughman

	 Name:
	 	Henry R. Baughman
	 Title:
	 	Senior Vice President
	
	 THE BOX ROOM LIMITED

		
	 By:
	 	 /s/ Henry R. Baughman

	 Name:
	 	Henry R. Baughman
	 Title:
	 	Director
	
	 SGS PACKAGING NETHERLANDS B.V.

		
	 By:
	 	 /s/ Henry R. Baughman

	 Name:
	 	Henry R. Baughman
	 Title:
	 	Managing Director

			
	UBS AG, STAMFORD BRANCH, as US Administrative Agent, US Collateral Agent and Canadian Collateral Agent
		
	 By:
	 	 /s/ David B. Julie

	 Name:
	 	David B. Julie
	 Title:
	 	Associate Director
		
	 By:
	 	 /s/ Mary E. Evans

	 Name:
	 	Mary E. Evans
	 Title:
	 	Associate Director

			
	NATIONAL CITY BANK, as Canadian Administrative Agent
		
	 By:
	 	 /s/ James C. Ritchie

	 Name:
	 	James C. Ritchie
	 Title:
	 	SVP

  
 ADDITIONAL SIGNATURE PAGES

 AND EXHIBIT A OMITTED

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