EXHIBIT 10.6
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SCHAWK, INC.
___________________________________
FIRST AMENDMENT
Dated as of January 28, 2005
to
NOTE PURCHASE AGREEMENT
Dated as of December 23, 2003
___________________________________
Re: $15,000,000 Series 2003-A% Senior Notes, Tranche A,
Due December 31, 2013
and
$10,000,000 Series 2003-A% Senior Notes, Tranche B,
Due April 30, 2014
of
Schawk, Inc.
DATED AS OF JANUARY 28, 2005
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FIRST AMENDMENT TO NOTE AGREEMENT
THIS FIRST AMENDMENT dated as of January 28, 2005 (the or this
"First
Amendment") to the Note Agreement each
dated as of December 23, 2003 is between
SCHAWK, INC., a Delaware corporation (the
"Company"), and each of the
institutions which is a signatory to this
First Amendment (collectively, the
"Noteholders").
RECITALS:
A. The Company and each of the Noteholders have heretofore
entered
into the Note Purchase Agreement dated as
of December 23, 2003 (the "Note
Agreement"). The Company has heretofore
issued the $15,000,000 Series 2003-A
Senior Notes, Tranche A, Due December 31,
2013 dated December 23, 2003 and the
$10,000,000 Series 2003-A Senior Notes,
Tranche B, Due April 30, 2014 dated
April 30, 2004 (collectively, the "Notes")
pursuant to the Note Agreement.
B. The Company and the Noteholders now desire to amend the Note
Agreement in the respects, but only in the
respects, hereinafter set forth.
C. Capitalized terms used herein shall have the respective
meanings
ascribed thereto in the Note Agreement
unless herein defined or the context
shall otherwise require.
D. All requirements of law have been fully complied with and all
other
acts and things necessary to make this
First Amendment a valid, legal and
binding instrument according to its terms
for the purposes herein expressed have
been done or performed.
NOW, THEREFORE, upon the full and complete satisfaction of the
conditions precedent to the effectiveness
of this First Amendment set forth in
SS.3.1 hereof, and in consideration of good
and valuable consideration the
receipt and sufficiency of which is hereby
acknowledged, the Company and the
Noteholders do hereby agree as follows:
SECTION 1. AMENDMENTS.
Section 1.1. Section 2.3(b) of the Note Agreement shall be and
is
hereby amended by adding the words "any
other Debt of the Company and" after the
words "in respect of the Bank Credit
Agreement and" in clause (i) of this
section.
Section 1.2. The following shall be added as a new Section 8.7 of
the
Note Agreement:
"SECTION
8.7. OFFER TO PREPAY NOTES IN THE EVENT OF ASSET
SALE.
(a) Notice of Offer to Prepay Notes From Asset Sale Proceeds.
The Company will, within sixty days prior to any application of any
Net
Proceeds to prepay or retire Senior Debt of the Company and/or
its
Restricted Subsidiaries pursuant to Section 10.4(2) hereof,
give
written notice of such application to each holder of the Notes.
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Schawk, Inc.
First
Amendment to Note Agreement
Such notice shall contain and constitute an offer to prepay the
Notes
as described in Section 8.7(c) and shall be accompanied by the
certificate described in Section 8.7(f).
(b)
Notice of Acceptance of Offer under Section 8.7(a). If the
Company shall at any time receive an acceptance to an offer to
prepay
Notes under Section 8.7(a) from some, but not all, of the holders
of
the Notes, then the Company will, within two Business Days after
the
receipt of such acceptance, give written notice of such acceptance
to
each other holder of the Notes which has notified the Company that
it
requests to receive notices under this Section 8.7(b).
(c) Offer to Prepay Notes. The offer to prepay Notes
contemplated by Section 8.7(c) shall be an offer to prepay, in
accordance with and subject to this Section 8.7, on the date
specified
in such offer (the "PROPOSED SALE PROCEEDS PREPAYMENT DATE"), a
principal amount of the Notes of each Series held by each holder
(in
this case only, "holder" in respect of any Note registered in the
name
of a nominee for a disclosed beneficial owner shall mean such
beneficial owner) that is equal to the product of (x) the total
amount
of such Net Proceeds which is to be used to pay Senior Debt of
the
Company and/or its Restricted Subsidiaries pursuant to Section
10.4(2),
and (y) a fraction, the numerator of which is the outstanding
principal
amount of the Notes of such Series held by such holder on the
Proposed
Sale Proceeds Prepayment Date and the denominator of which is
the
outstanding principal amount of all Senior Debt on the Proposed
Sale
Proceeds Prepayment Date. Such Proposed Sale Proceeds Prepayment
Date
shall be not less than 30 days after the date of such offer and
not
later than the date upon which any such Net Proceeds will be used
to
pay any other Senior Debt (if the Proposed Sale Proceeds
Prepayment
Date shall not be specified in such offer, the Proposed Sale
Proceeds
Prepayment Date shall be the 30th day after the date of such
offer).
(d) Rejection; Acceptance. A holder of Notes may accept the
offer to prepay made pursuant to this Section 8.7 by causing a
notice
of such acceptance to be delivered to the Company prior to the
Proposed
Sale Proceeds Prepayment Date. A failure by a holder of Notes to
so
respond to an offer to prepay made pursuant to this Section 8.7
shall
be deemed to constitute a rejection of such offer by such
holder.
(e) Prepayment. Prepayment of the Notes to be prepaid pursuant
to this Section 8.7 shall be at 100% of the principal amount of
such
Notes, together with interest on such Notes accrued to the date
of
prepayment. The prepayment shall be made on the Proposed Sale
Proceeds
Prepayment Date.
(f) Officer's Certificate. Each offer to prepay the Notes
pursuant to this Section 8.7 shall be accompanied by a
certificate,
executed by a Responsible Officer of the Company and dated the date
of
such offer, specifying (i) the Proposed Sale Proceeds Prepayment
Date,
(ii) that such offer is made pursuant to this Section 8.7, (iii)
the
principal amount of each Note offered to be prepaid, (iv) the
interest
that would be due on each Note offered to be prepaid, accrued to
the
Proposed Sale Proceeds Prepayment Date, (v) that the conditions of
this
Section 8.7 have been fulfilled, and
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Schawk, Inc.
First Amendment to Note Agreement
(vi) in reasonable detail, a description of the property sold,
leased
or otherwise disposed of, the Net Proceeds from such sale, lease
or
other disposition, and the details of the determination of the
amount
of such Net Proceeds to be applied to each Note."
Section 1.3. Section 9.6 of the Note Agreement shall be and is
hereby
amended by adding the words "or which
becomes a party to or otherwise
guaranties, any other Debt of the Company"
after the words "or otherwise
guarantee, Debt in respect of the Bank
Credit Agreement" in Section 9.6 of the
Note Agreement.
Section 1.4. Section 9.6 of the Note Agreement shall be and is
hereby
amended by adding the words "or with
respect to such other Debt" after the words
"pursuant to the Bank Credit Agreement" in
Section 9.6 of the Note Agreement.
Section 1.5. Section 9.6 of the Note Agreement shall be and is
hereby
amended by adding the following paragraph
at the end of Section 9.6 to read as
follows:
"Notwithstanding the foregoing, so long as the Intercreditor
Agreement shall be in effect and applicable thereto, any
Subsidiary that becomes a party to the Bank Credit Agreement
solely to borrow loans in Canadian Dollars thereunder shall
not be required to enter into the Subsidiary Guaranty and make
the foregoing
deliveries so long as the outstanding amount of
all Debt of such Subsidiary, and any other Subsidiary which is
a party to the Bank Credit Agreement as a borrower of loans in
Canadian Dollars, does not exceed 105% of the Maximum Canadian
Amount (as defined in the Bank Credit Agreement) and any
Subsidiary that becomes a party to the Bank Credit Agreement
solely to borrow loans in Alternate Currencies (as defined in
the Bank Credit Agreement) other than Canadian Dollars
thereunder shall not be required to enter into the Subsidiary
Guaranty and make the foregoing deliveries so long as the
outstanding United States Dollar equivalent amount of all Debt
of such Subsidiary, and any other Subsidiary which is a party
to the Bank Credit Agreement as a borrower of loans in such
Alternate
Currencies, does not exceed 105% of the Maximum
Eurocurrency Amount (as defined in the Bank Credit Agreement).
If at any time there are loans outstanding under the Bank
Credit Agreement in Canadian Dollars or Alternate Currencies
to Subsidiaries that are not Subsidiary Guarantors and are not
excepted under the preceding sentence, an Event of Default
shall exist without any notice or the expiration of the 30 day
period provided for in Section 11(d)."
Section 1.6. Section 10.1 of the Note Agreement shall be and is
hereby
amended in its entirety to read as
follows:
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Schawk, Inc.
First Amendment to Note Agreement
"SECTION 10.1. CONSOLIDATED NET WORTH. The Company will not,
at any time, permit Consolidated Net Worth to be less than the sum
of
(a) $187,200,000, plus (b) 25% of Consolidated Net Income (but only
if
a positive number) for each fiscal quarter, beginning with the
fiscal
quarter ending March 31, 2005, ended on or before the date of
determination of compliance with this covenant, plus (c) the
aggregate
amount of Net Proceeds received by the Company subsequent to
January
28, 2005 from the sale or other issuance of any capital stock of
the
Company."
Section 1.7. Section 10.2(a) of the Note Agreement shall be and
is
hereby amended by adding the phrase
"Consolidated EBITDA to be" at the beginning
of the parenthetical in Section
10.2(a).
Section 1.8. Section 10.2(b) of the Note Agreement shall be and
is
hereby amended in its entirety to read as
follows:
"(b) Priority Debt. The Company will not, at any time, permit
the aggregate amount of all Priority Debt to exceed 15% of
Consolidated
Total Capitalization (Consolidated Total Capitalization to be
determined as of the end of the then most recently ended fiscal
quarter
of the Company) other than Priority Debt consisting of (i)
unsecured
guaranties by Subsidiary Guarantors of Debt of Company, which Debt
when
incurred by Company did not result in a violation of Section
10.2(a)
and the Subsidiary Guaranty shall be in effect or (ii) Debt of
the
Company under the Bank Agreement, evidenced by the 2005 Notes or
the
1995 Notes, or constituting Hedging Obligations (as defined in the
Bank
Credit Agreement) owed to a Bank Lender or an Affiliate thereof,
and
guaranties by Subsidiary Guarantors of such Debt, but only if
the
Subsidiary Guaranty shall be in effect, secured by security
interests
in Capital Stock of Foreign Incorporated Subsidiaries granted to
the
Collateral Agent, but only if the Intercreditor Agreement shall be
in
effect and applicable thereto."
Section 1.9. Section 10.3 of the Note Agreement shall be and is
hereby
amended by adding the words "and subject to
an intercreditor agreement
reasonably satisfactory to the Required
Holder(s) among the holders of the Notes
and the holders of such other obligations,"
after the words "an agreement
reasonably satisfactory to the Required
Holders" of the first paragraph of
Section 10.3 of the Note Agreement.
Section 1.10. Section 10.3(j) of the Note Agreement shall be and
is
hereby amended by adding the words " and
(2) except as otherwise provided in
Section 10.2, no su
