EXHIBIT 00-X
XXXXXX XXXXXXXXX TO
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
THIS FOURTH AMENDMENT TO AMENDED AND RESTATED LOAN AND
SECURITY AGREEMENT (this "Amendment") is entered into as of September
29, 1999, among MULTIGRAPHICS, INC. f/k/a AM INTERNATIONAL, INC., a
Delaware corporation ("Multigraphics"), PUBLISHING SOLUTIONS INC., an
Ohio corporation ("PSI") and FOOTHILL CAPITAL CORPORATION ("Lender").
WHEREAS, Multigraphics, PSI and Lender are parties to that
certain Amended and Restated Loan and Security Agreement dated as of
February 19, 1998, which has previously been amended pursuant to a
certain First Amendment to Amended and Restated Loan and Security
Agreement dated as of July 30, 1998, a certain Second Amendment to
Amended and Restated Loan and Security Agreement dated as of April 21,
1999, and a certain Third Amendment to Amended and Restated Loan and
Security Agreement dated as of June 23, 1999 (as amended, the "Loan
Agreement"); and
WHEREAS, Multigraphics and PSI (collectively, "Borrowers")
have requested that Lender amend various provisions of the Loan
Agreement, and Lender has agreed to do so subject to the terms and
conditions contained herein;
NOW THEREFORE, in consideration of the premises and mutual
agreements herein contained, the parties hereto agree as follows:
1. DEFINED TERMS. Unless otherwise defined herein, capitalized terms used
herein shall have the meanings ascribed to such terms in the Loan
Agreement.
2. AMENDMENTS TO LOAN AGREEMENT.
(a) The definition of the term "Net Worth" contained in Section 1.1 of the
Loan Agreement is hereby amended and restated in its entirety, as
follows:
"'Net Worth' means, as of any date of determination,
Borrowers' consolidated total shareholders' equity as
determined in accordance with GAAP plus (for any date of
determination after September 30, 1999) the outstanding
principal amount of the Subordinated Indebtedness."
(b) The second sentence of the definition of the term "Consolidated Current
Liabilities" contained in Section 1.1 of the Loan Agreement is hereby
amended and restated in its entirety, as follows:
"For purposes of this definition, all Advances outstanding
under this Agreement and the outstanding amount of the
Subordinated Indebtedness shall be deemed to be current
liabilities without regard to whether they would be deemed to
be so under GAAP."
(c) Section 1.1 of the Loan Agreement is hereby amended to add a
definition, "Subordinated Indebtedness," as follows:
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"'Subordinated Indebtedness' means indebtedness of
the Borrowers to a Person which is junior and subordinated to
the Obligations and is subject to standstill provisions in
favor of Foothill, all pursuant to a written agreement between
Foothill and such Person, in form and substance satisfactory
to Foothill."
(d) Clause (a) of Section 6.3 of the Loan Agreement is hereby amended to
delete the following parenthetical phrase:
"(other than the last quarter in any fiscal year)"
(e) Section 6.16 of the Loan Agreement is hereby amended and restated in
its entirety, as follows:
"6.16 ADDITIONAL REPORTS
(a) On or before November 15, 1999, deliver to
Lender projections of Borrower's business performance through
January 31, 2000, which projections shall be in the same
format and in the same detail as that of those projections of
Borrowers' business performance through November 30, 1999
delivered by Borrowers to Lender and dated as of September 10,
1999 (the "Original Projections").
(b) On or before January 15, 2000, deliver to
Lender projections of Borrower's business performance through
July 31, 2000, which projections shall be in the same format
and in the same detail as that of the Original Projections.
(c) Not later than thirty (30) days prior to the
last day of each fiscal year of Borrowers, commencing with the
fiscal year ending July 31, 2000, deliver to Lender
projections of Borrower's business performance through the
last day of the subsequent fiscal year of Borrowers, which
projections shall be in the same format and in the same detail
as that of the Original Projections.
(d) On or before the Thursday of each week,
commencing on September 30, 1999, deliver to Lender a report
on Borrowers' actual business performance for the prior week
and for the month to date as of the Friday of the prior week,
which report shall be in the same format and in the same
detail as that of the Original Projections."
(f) Sections 7.1 and Section 7.2 are hereby amended to permit the Borrowers
to obtain $2,000,000 of Subordinated Indebtedness from Paragon
Corporate Holdings Inc. and to secure such Subordinated Indebtedness
with a junior and subordinated Lien upon the Collateral.
(g) Section 7.20 of the Loan Agreement is hereby amended and restated in
its entirety, as follows:
"7.20 FINANCIAL COVENANTS.
Fail to maintain:
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(a) NET WORTH. Net Worth of at least the
applicable amount set forth below as of each date set forth
below:
DATE NET WORTH
---- ---------
The last day of the fourth quarter of the 1999 (-$11,000,000)
fiscal year
The last day of the first quarter of the 2000 (-$10,500,000)
fiscal year and the last day of each fiscal
quarter thereafter
(b) WORKING CAPITAL. Working Capital of at least
(i) (-$11,200,000), measured the last day of the fourth fiscal
quarter of the 1999 fiscal year, and (ii) (-$14,000,000),
measured on the last day of the first fiscal quarter of the
2000 fiscal year and the last day of each fiscal quarter
thereafter.
(c) EBITDA. EBITDA of (i) at least $1,300,000 on
the last day of the fourth quarter of the 1999 fiscal year,
for the 12 month period ending on such day, (ii) at least $1
on the last day of the first fiscal quarter of the 2000 fiscal
year, for the 3 month period ending on such day, (iii) at
least $1 on the last day of the second fiscal quarter of the
2000 fiscal year, for the 3 month period ending on such day,
and (iv) at least $1,300,000 on the last day of each fiscal
quarter commencing with the third fiscal quarter of the 2000
fiscal year, for the 12 month period ending on such day."
3. TESTING OF FINANCIAL COVENANTS AT END OF FISCAL YEAR. The financial
covenants set forth in Section 7.20 of the Loan Agreement shall be
tested for the last quarter of any fiscal year based upon the financial
statements delivered to Lender within 45 days after the end of such
fiscal quarter pursuant to the provisions of Section 6.3 of the Loan
Agreement, as amended by this Amendment, as well as based upon the
audited financial statements delivered to Lender within 90 days after
the end of such fiscal quarter pursuant to the provisions of Section
6.3 of the Loan Agreement.
4. CONDITIONS PRECEDENT TO AMENDMENT. This Amendment shall not become
effective if any of the following conditions is not satisfied within
the time specified therefore:
(i) By September 30, 1999, each Borrower shall have executed and
delivered to Lender an original of this Amendment and
Borrowers shall have delivered the Amendment Fee (as hereafter
defined) to Lender in good funds;
(ii) By September 30, 1999, Paragon Corporate Holdings Inc. (the
"Subordinated Creditor") shall have entered into a binding
agreement, in form and substance satisfactory to Lender, to
loan Borrowers not less than $2,000,000 of Subordinated
Indebtedness and shall have entered into a Subordination
Agreement with Lender in form and substance
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satisfactory to Lender; and
(iii) By September 30, 1999, Borrowers, Subordinated Creditor and
Multi Acquisition Corp., a Delaware corporation, shall have
entered into a definitive written agreement for the
recapitalization and merger of Borrowers in form and substance
satisfactory to Lender; provided, however, that nothing in
this Amendment shall constitute (A) Lender's consent to the
consummation of any such recapitalization or merger, (B) a
waiver of any Event of Default hereafter occurring as a result
of the consummation of any such recapitalization or merger,
(C) a commitment by Lender to finance such merger or to
provide financing to Borrowers subsequent to such merger, or
(D) Lender's consent to Borrowers payment of, or Lender's
agreement to pay, any fees, expenses or other amounts to
Subordinated Creditor coming due upon any termination of any
agreement with respect to such merger or recapitalization.
5. AMENDMENT FEE. In consideration of Lender's agreements hereunder,
Borrowers, jointly and severally, agree to pay to Lender an amendment
fee of $25,000 (the "Amendment Fee"). The entire Amendment Fee will be
fully earned and payable on the effective date of this Amendment as
provided in Section 6 below.
6. FUNDING OF ADVANCES. Notwithstanding anything to the contrary contained
in the Loan Agreement, Lender shall have no obligation (but shall have
the right in its sole discretion) to make any Advances to Borrowers
prior to the time that (i) Subordinated Creditor has actually advanced
not less than $2,000,000 of Subordinated Indebtedness to Borrowers, and
(ii) Borrowers and Subordinated Creditor have demonstrated to Lender's
satisfaction that the entire $2,000,000 of such Subordinated
Indebtedness has actually been advanced to Borrowers.
7. Each Borrower acknowledges and agrees that any default of its
obligations under any agreement among Borrowers and Subordinated
Creditor relating to Subordinated Indebtedness or to a recapitalization
or merger of Borrowers shall constitute an Event of Default under the
Loan Agreement
8. RELEASE OF DEFENSES; REAFFIRMATION. Each Borrower hereby ratifies and
confirms the Loan Agreement and the Loan Documents (as modified by this
Amendment) in all respects. Each Borrower hereby further fully and
forever waives, releases, withdraws and discharges any and all
defenses, rights of setoff, claims, rights, demands, damages,
judgments, liabilities and causes of action that it may have against
Lender or Lender's affiliates, directors, officers, employees, agents
and representatives, existing as of the date hereof respect to, or
arising out of or related to, the Loan Agreement, the Loan Documents,
the Obligations or any transactions related thereto, and each Borrower
hereby releases Lender and Lender's affiliates, directors, officers,
employees, agents and representatives from any and all liabilities
thereunder or relating thereto. Each Borrower agrees that there are no
oral agreements or understandings among Borrowers and Lender that are
not expressly set forth in this Amendment.
9. RATIFICATION AND EFFECTIVENESS. This Amendment shall constitute an
amendment to the Loan Agreement and all of the Loan Documents as
appropriate to express the agreements contained herein. Upon the timely
satisfaction of all of the conditions precedent set forth in Section 3
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above, this Amendment shall be deemed to be effective. Any Event of
Default under Section 7.20 of the Loan Agreement existing prior to the
effective date of this Amendment will be cured if Borrowers have
provided Lender, on or before October 8, 1999, with a Compliance
Certificate for the month ending on July 31, 1999 and if Borrowers are
otherwise in full compliance with the provisions of Section 7.20 of the
Loan Agreement, as amended by this Amendment, on the effective date of
this Amendment. In all other respects, the Loan Agreement and the Loan
Documents shall remain unchanged and in full force and effect in
accordance with their original terms.
10. MISCELLANEOUS.
(a) BORROWERS' WARRANTIES AND ABSENCE OF DEFAULTS. In order to induce
Lender to enter into this Amendment, each Borrower hereby warrants to
Lender, as of the effective date of this Amendment, that:
(i) The warranties of each Borrower contained in the Loan
Agreement, as herein amended, are true and correct as of the
date hereof as if made on the date hereof.
(ii) All information, reports and other papers and data heretofore
furnished to Lender by either Borrower in connection with this
Amendment, the Loan Agreement and the other Loan Documents are
accurate and correct in all material respects and complete
insofar as may be necessary to give Lender true and accurate
knowledge of the subject matter thereof. Each Borrower has
disclosed to Lender every fact of which it is aware which
would reasonably be expected to materially and adversely
affect the business, operations or financial condition of
either Borrower or the ability of either Borrower to perform
its obligations under this Amendment, the Loan Agreement or
under any of the other Loan Documents. None of the information
furnished to Lender by or on behalf of either Borrower
contained any material misstatement of fact or omitted to
state a material fact or any fact necessary to make the
statements contained herein or therein not materially
misleading.
(iii) No Event of Default or event which, with giving of notice or
the passage of time, or both would become an Event of Default,
exists as of the date hereof.
(b) LENDER'S WARRANTIES. Lender hereby warrants to Borrowers, as of the
date hereof, that assuming that this Amendment has become effective in
accordance with the provisions of Section 6 hereof, Lender (i) has no
knowledge of the existence of any Event of Default on the date hereof
and (ii) has no present intention to create new reserves or to reduce
its advance rates under Section 2.1(b) of the Loan Agreement as a
result of any matters of which Lender has actual knowledge as of the
date hereof.
(c) EXPENSES. Borrowers jointly and severally agree to pay on demand all
costs and expenses of Lender (including the reasonable fees and
expenses of outside counsel for Lender) in connection with the
preparation, negotiation, execution, delivery and administration of
this Amendment and all other instruments or documents provided for
herein or delivered or to be delivered hereunder or in connection
herewith. In addition, Borrowers jointly and severally agree to pay,
and save Lender harmless from all liability for, any stamp or other
taxes which may be payable in
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connection with the execution or delivery of this Amendment or the
Loan Agreement, as amended hereby, and the execution and delivery of
any instruments or documents provided for herein or delivered or to be
delivered hereunder or in connection herewith. All obligations
provided in this SECTION 10(C) shall survive any termination of this
Amendment and the Loan Agreement as amended hereby.
(d) GOVERNING LAW. This Amendment shall be a contract made under and
governed by the internal laws of the State of California.
(e) COUNTERPARTS. This Amendment may be executed in any number of
counterparts, and by the parties hereto on the same or separate
counterparts, and each such counterpart, when executed and delivered,
shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same Amendment.
(f) REFERENCE TO LOAN AGREEMENT. On and after the effectiveness of the
amendment to the Loan Agreement accomplished hereby, each reference in
the Loan Agreement to "this Agreement," "hereunder," "hereof," "herein"
or words of like import, and each reference to the Loan Agreement in
any Loan Documents, or other agreements, documents or other instruments
executed and delivered pursuant to the Loan Agreement, shall mean and
be a reference to the Loan Agreement, as amended by this Amendment.
(g) SUCCESSORS. This Amendment shall be binding upon each Borrower, Lender
and their respective successors and assigns, and shall inure to the
benefit of each Borrower, Lender and their respective successors and
assigns.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their respective officers thereunto duly
authorized and delivered as of the date first above written.
MULTIGRAPHICS, INC. f/k/a
AM INTERNATIONAL, INC.
By /s/ Xxxx X. Xxxxxxxx
-----------------------------
Its President & CEO
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PUBLISHING SOLUTIONS INC.
By /s/ Xxxxxxx X. Xxxxx
-----------------------------
Its Vice President & CFO
----------------------------
FOOTHILL CAPITAL CORPORATION
By /s/ Xxxxx X. Xxxxxx
-----------------------------
Its Vice President
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