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Exhibit 10.31
CONSENT, WAIVER AND AMENDMENT NO. 4
TO
SECOND AMENDED AND RESTATED
CREDIT AGREEMENT
This Consent, Waiver and Amendment No. 4 to Second Amended and
Restated Credit Agreement (this "Consent, Waiver and Amendment"),
dated as
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of March 24, 2006, amends that certain Second Amended and Restated
Credit
Agreement, dated as of March 25, 2004, as amended by Amendment No.
1 to
Second Amended and Restated Credit Agreement, dated as of February
8, 2005,
Amendment No. 2 to Second Amended and Restated Credit Agreement,
dated as of
December 23, 2005 and Amendment No. 3 to Second Amended and
Restated Credit
Agreement, dated as of January 20, 2006 (as so amended, the
"Agreement"),
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among the financial institutions from time to time parties hereto
(such
financial institutions, together with their respective successors
and
assigns, are referred to hereinafter each individually as a
"Lender" and
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collectively as the "Lenders"), Bank of America, N.A., with an
office at 55
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South Lake Avenue, Suite 900, Pasadena, California 91101, as
administrative
agent for the Lenders (in its capacity as agent, the "Agent"),
Cenveo, Inc.
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(f/k/a Mail-Well, Inc.), a Colorado corporation ("Parent"),
Cenveo
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Corporation (f/k/a Mail-Well I Corporation), a Delaware
corporation
("Cenveo"), and certain subsidiaries of Cenveo (Cenveo and each
such
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subsidiary, individually, a "Borrower", and, collectively, the
"Borrowers").
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Capitalized terms used and not otherwise defined herein shall have
the
meanings ascribed to such terms in the Agreement.
R E C I T A L S
WHEREAS, Parent, the Borrowers, the Lenders and the Agent have
entered into the Agreement;
WHEREAS, the parties are concurrently herewith entering into
that
certain Amendment No. 2 to Amended and Restated Security Agreement,
dated of
even date herewith (the "Security Agreement Amendment");
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WHEREAS, Parent and the Borrowers desire to amend the Agreement
in
order to amend and waive certain provisions of the Agreement in
connection
with the Lenders' consent to the Supremex Sale (as defined herein)
and
related transactions; and
WHEREAS, the Agent and the Lenders are willing to do so, subject
to
the terms and conditions stated herein.
NOW, THEREFORE, in consideration of the premises herein
contained
and other good and valuable consideration, the receipt and adequacy
of which
are hereby acknowledged, the Agent, the Lenders, Parent and the
Borrowers
hereby agree as follows.
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A G R E E M E N T
Section 1. Amendments to the Agreement. The Agent, the Lenders,
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Parent and the Borrowers agree that the Agreement shall be amended
as
follows:
A. The defined term "Affiliate" contained in Annex A of the
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Agreement is hereby amended by deleting the phrase "5% or more of
the
outstanding equity interest" in its entirety and substituting
therefor the
new phrase "10% or more of the outstanding equity interest".
B. The defined term "Permitted Strategic Investment" contained
in
Annex A of the Agreement is hereby amended and restated in its
entirety to
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read as follows:
"Permitted Strategic Investment" means any investment
(including
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loans and
advances) by Parent or any of its Subsidiaries that conforms
to the
following requirements: (i) the Person in whom such investment
is
made is in
a substantially similar or ancillary line of business as one
or more of
the Borrowers, (ii) all transactions related to such
investment
shall be consummated in accordance with applicable
Requirements of Law, (iii) such investment shall be non-hostile
in
nature,
(iv) such investment does not constitute an Acquisition, (v)
the
aggregate
amount of consideration (other than Capital Stock of Parent)
paid by
Parent or any of its subsidiaries for all such investments
since
the
Closing Date shall not exceed $20,000,000, and (vi) immediately
after
giving effect to such investment: (A) no Default or Event of
Default
exists or would result therefrom, and, for purposes of this
clause,
Parent shall deliver a certificate, signed by a Responsible
Officer of
Parent, demonstrating that Parent will continue to be in
compliance
with its financial covenants hereunder on a pro forma basis,
taking
such investment into account, (B) any investment securities
resulting
from such investment shall be owned directly by the Parent or
a Loan
Party, and such Person shall have taken all actions required by
the Agent
with respect to perfecting the Agent's Liens in any such
investment
securities resulting from such investment, and (C) with
respect to
any investment where some or all of the consideration paid by
Parent or
any of its Subsidiaries is other than Capital Stock of Parent,
Borrowers
would have Availability of not less than $50,000,000 (with all
obligations of Borrowers and their Subsidiaries being current)
after
giving
effect to such investment.
C. Annex A of the Agreement is hereby amended by adding a new
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definition thereto which shall read as follows:
"Supremex Income Fund" means Supremex Income Fund, an
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unincorporated open-ended trust established under the laws of
the
Province
of Quebec.
D. Sections 5.3(j) and (k) of the Agreement and hereby amended
and
restated in their entirety to read as follows:
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(j) (1) At least 10 Business Days prior written notice of
any change
in any Loan Party's name as it appears in the state of
its
incorporation or other organization, state of incorporation or
organization, type of entity, organizational identification
number,
or form of
organization, trade names under which it will sell
Inventory
or create Accounts, or to which instruments in payment of
Accounts
may be made payable, and (2) concurrent written notice of
the disposition (including
any Permitted Disposition) of any
Eligible
Equipment with an orderly liquidation value of $1,000,000
or more,
in the aggregate, and (3) written notice within one month
after (y)
any disposition (including any Permitted Disposition) of
Eligible
Equipment with an orderly liquidation value of less than
$1,000,000, in the aggregate, or other Equipment with a Fair
Market
Value of
$1,000,000 or more, in the aggregate, or (z) the change in
location
of any Collateral with a Fair Market Value of $1,000,000
or more,
in the aggregate;
(k) Within 10 Business Days after Parent or any of its
ERISA
Affiliates knows or has reason to know, that an ERISA Event
or a
prohibited transaction (as defined in Sections 406 of ERISA
and 4975
of the Code), which could reasonably be expected to result
in
liability of one or more Loan Parties in excess of $500,000,
has
occurred,
and, when known, any action taken or threatened by the
IRS, the
DOL or the PBGC with respect thereto;
E. Section 6.19(c) of the Agreement is hereby amended and
restated
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in its entirety to read as follows:
(i) No ERISA Event has occurred or is reasonably expected
to occur
which would reasonably be expected to have a Material
Adverse
Effect; (ii) no Pension Plan has any Unfunded Pension
Liability
in an amount in excess of $10,000,000; (iii) neither
Parent,
nor any of its Subsidiaries, nor any of their ERISA
Affiliates has incurred, or
reasonably expects to incur, any
liability
(A) under Title IV of ERISA with respect to any Pension
Plan
(other than premiums due and not delinquent under Section 4007
of ERISA),
(B) under Section 4201or 4243 of ERISA with respect to a
Multi-employer Plan (and no event has occurred which, with the
giving of
notice under Section 4219 of ERISA, would result in such
liability), or (C) as a result of a transaction that could be
subject to
Section 4069 or 4212(c) of ERISA, which liability
described
in the foregoing clauses (A) through (C), individually or
in the
aggregate, could reasonably be expected to exceed
$10,000,000.
F. Section 7.15 of the Agreement is hereby amended and restated
in
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its entirety to read as follows:
7.15 Transactions with Affiliates. Except as set forth
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below in
this Section 7.15, or as explicitly permitted in another
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Section of
this Credit Agreement, neither Parent nor any Loan Party
shall,
sell, transfer, distribute, or pay any money or property,
including,
but not limited to, any fees or expenses of
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any nature
(including, but not limited to, any fees or expenses for
management
services), to any Affiliate, or lend or advance money or
property
to any Affiliate, or invest in (by capital contribution or
otherwise)
or purchase or repurchase any stock or indebtedness, or
any
property, of any Affiliate, or become liable on any Guaranty of
the
indebtedness, dividends, or other obligations of any Affiliate.
Notwithstanding the foregoing, but subject to the limitations
set
forth in Sections 7.9, 7.10,
7.12, 7.13, or 7.18, while no Default
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or Event
of Default has occurred and is continuing Parent and the
Loan
Parties may engage in (i) ordinary course cash management
transactions among themselves and with other Affiliates
notwithstanding the failure to charge interest in connection
with
such
transactions, (ii) Permitted Intercompany Transfers, and (iii)
transactions with Affiliates in the ordinary course of
business,
consistent
with past practices (if any), and to the extent the
aggregate
consideration for such transaction(s), individually or in
the
aggregate with respect to a series of related transactions,
exceeds
$1,000,000, then in amounts and upon terms fully disclosed
to the
Agent, and no less favorable to Parent and such Loan Parties
than would
be obtained in a comparable arm's-length transaction
with a
third party who is not an Affiliate.
G. Section 7.21 of the Agreement is hereby amended and restated
in
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its entirety to read as follows:
7.21 Fiscal Year. Parent shall not (i) except upon 30 days
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prior
written notice to the Agent, change its Fiscal Year, and (ii)
permit any
of its Subsidiaries to have a fiscal year different from
Parent's.
H. The second sentence of Section 12.11(a) of the Agreement is
hereby amended and restated in its entirety to read as follows:
Except as
provided above, the Agent will not release any of the
Agent's
Liens without the prior written authorization of all of
the
Lenders; provided that the Agent may, in its discretion,
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release
the Agent's Liens on Collateral valued in the aggregate
not in
excess of $2,000,000 during each Fiscal Year without the
prior
written authorization of the Lenders and the Agent may
release
the Agent's Liens on Collateral valued in the aggregate
not in
excess of $3,000,000 during each Fiscal Year with the
prior
written authorization of Required Lenders.
Section 2. Waiver and Consent to Prepayment of Fleet Lease.
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Pursuant to Section 7.14 of the Agreement, neither Parent nor any
of its
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Subsidiaries shall voluntarily prepay any Debt. Parent and
Borrowers have
informed the Agent that they desire to prepay in full and terminate
the Debt
under the Fleet Lease (the "Fleet Lease Prepayment"), and have
requested the
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consent of Agent and the Lenders to such prepayment. Agent and the
Lenders
hereby consent to the Fleet Lease Prepayment and waive any Defaults
in
connection with the Fleet Lease Prepayment, so long as the amount
of the
Fleet Lease Prepayment does not exceed US$12,000,000 and so long as
the
prepayment is made from proceeds of the Supremex Inc. sale and
related
transactions referred to in Section 3 below. The foregoing waiver
shall be
limited
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precisely as written and shall not be deemed to be a waiver or
modification
of any other term or condition of the Agreement, or prejudice any
right or
remedy which Agent and the Lenders may now or in the future have
under or in
connection with the Agreement.
Section 3. Consent to Sale of Supremex Inc. and Related
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Transactions. Subject to the conditions precedent contained in this
Consent,
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Waiver and Amendment and notwithstanding Sections 7.2, 7.9,
7.13(i), 7.15 or
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7.26 of the Agreement or any other provision contained therein or
in any
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other Loan Document, the Lenders hereby consent to each of the
transactions
set forth in Schedule 1 attached hereto. In order to facilitate
the
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consummation of the transactions enumerated in Schedule 1 hereto,
the
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Lenders hereby irrevocably authorize the Agent to release any
Agent's Liens
upon (i) Cenveo Canada's and Supremex's (as such terms are defined
in
Schedule 1 hereto) right, title and interest in the Portland
Facility, the
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Omemee Facility and the St. Louis Facility (it being understood and
agreed
that the Agent shall, upon the sale of the Portland Facility and
the St.
Louis Facility to Cenveo, have a Lien upon Cenveo's right, title
and
interest therein pursuant to the Security Agreement), (ii) the
Buffalo
Assets (as defined in Schedule 1 hereto), and (iii) the outstanding
capital
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stock of Amalco (as defined in the Acquisition Agreement referenced
below),
PNG, Innova, Supremex, Cenveo Canada, Cenveo International, Texas
LP and
Cenveo West (as such terms are defined in Schedule 1 hereto) that
has been
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pledged to Agent for the ratable benefit of the Lenders pursuant to
the
Pledge Agreement and/or the Security Agreement, which release shall
be
effective immediately and automatically upon the closing of the
sale and
purchase of the Shares (as defined in the Acquisition Agreement
referenced
below) pursuant to the Acquisition Agreement. The Lenders also
hereby
consent to the release of (i) PNG, Innova, Supremex and Cenveo
Canada as
Canadian Guaran
