Exhibit 10.42
FOURTH AMENDMENT TO CREDIT AGREEMENT AND
WAIVER AGREEMENT
MULTI-COLOR CORPORATION, an Ohio corporation (the "Company"), PNC BANK,
NATIONAL ASSOCIATION (successor by merger to PNC Bank, Ohio, National
Association) and STAR BANK, NATIONAL ASSOCIATION (each individually a "Lender"
and collectively the "Lenders") and PNC BANK, NATIONAL ASSOCIATION (successor by
merger to PNC Bank, Ohio, National Association), as agent for the Lenders (the
"Agent"), hereby agree as follows effective as of February 9, 1998 (the
"Effective Date"):
1. RECITALS.
1.1 On January 9, 1997, the Company, the Lenders and the Agent
entered into a Second Amended and Restated Credit, Reimbursement
and Security Agreement (as amended by the First Amendment to
Credit Agreement dated February 25, 1997, the Second Amendment to
Credit Agreement dated April 1, 1997 and the Third Amendment to
Credit Agreement dated September 1, 1997, the "Credit
Agreement"). Capitalized terms used herein and not otherwise
defined herein will have the meanings given such terms in the
Credit Agreement.
1.2 The Company has requested that the Lenders amend the Credit
Agreement in certain respects, and waive certain defaults under
the Credit Agreement, and the Lenders are willing to do so
subject to and in accordance with the terms of this Fourth
Amendment to Credit Agreement and Waiver Agreement (the
"Amendment").
2. AMENDMENTS. The Credit Agreement is hereby amended as follows:
2.1 Section 1.1.20 of the Credit Agreement is hereby deleted in its
entirety and replaced with the following:
1.1.20 "Borrowing Base" will equal the lesser of (a) the
sum of eighty percent (80%) of the Eligible Accounts Receivable
plus fifty percent (50%) of Eligible Inventories, less the Block
(as defined below), less the aggregate face amount of all
outstanding Standby Letters of Credit, or (b) the Total Revolving
Commitment. For purposes hereof, the "Block" will mean $500,000.
2.2 Section 9.4 of the Credit Agreement is hereby deleted in its
entirety and replaced with the following:
9.4 BORROWING BASE CERTIFICATES. The Company will furnish to
the Agent upon the Agent's request from time to time, but in no
event less often than weekly, a Borrowing Base Certificate in the
form of the attached Exhibit T. The Borrowing Base Certificate
will update accounts receivable weekly and will update raw
materials and finished goods inventory monthly. The Agent will
promptly send a copy of such certificate to each Lender.
2.3 Section 10.11 of the Credit Agreement is hereby deleted in its
entirety and replaced with the following:
10.11 REDEMPTIONS. Purchase, retire, redeem or otherwise
acquire for value, directly or indirectly, any shares of its
capital stock now or hereafter outstanding, or authorize or set
aside any funds or other property for any such purpose.
2.4 Section 10.12 of the Credit Agreement is hereby deleted in its
entirety and replaced with the following:
10.12 DIVIDENDS. Declare or pay dividends of any kind on
any shares of its capital stock now or hereafter outstanding or
make any other distribution of cash or property to its
shareholders, or authorize or set aside any funds or other
property for any such purpose.
3. WAIVERS AND CONSENTS.
3.1 The Lenders hereby waive the Company's failure to comply with
Section 10.4 (Cash Flow Coverage Ratio) of the Credit Agreement
as of the Fiscal Quarter ending December 28, 1997.
3.2 The Lenders hereby consent to the auction of certain of the
Company's assets pursuant to the Auction Sales Contract dated
December 31, 1997 between the Company and National Industrial
Services, Incorporated, a true and complete copy of which has
been delivered to each Lender, so long as such auction is
conducted in a commercially reasonable manner.
3.3 The waiver set forth in Section 3.1, above, will relate only to
the specific matter covered by such Section and in no event will
the Lenders be under any obligation to provide additional waivers
with regard to such matter or any other provision of the Credit
Agreement, any Note or any Security Document.
4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF COMPANY. To induce the
Lenders and the Agent to enter into this Amendment, the Company
represents, warrants and agrees as follows:
4.1 Within 10 business days after the Effective Date, the Company
will deliver to the Lenders a cash flow forecast for the
following 2-month period, in form and substance acceptable to the
Lenders.
4.2 Within 30 days after the Effective Date, the Company, at its sole
expense, will deliver to each Lender an appraisal in form and
substance acceptable to the Lenders, conducted by an appraisal
firm acceptable to the Lenders, of the Company's property at its
Scottsburg, Indiana and Erlanger, Kentucky facilities.
4.3 Without limiting Section 10.15 (Capital Expenditures) of the
Credit Agreement, from the date hereof until 30 days after the
Effective Date, the Company will not make capital expenditures or
acquisitions, including the capitalized value of any leases in
the aggregate, which, when calculated in accordance with
generally accepted accounting principles, would exceed $100,000
in the aggregate during such 30-day period.
4.4 In no event will the Company incur or pay more than $175,000 for
asbestos removal, removal of underground storage tanks and other
underground environmental remediation activities, or more than
$250,000 in the aggregate in connection with responding to the
environmental issues and estimated fix-up costs raised by the
potential buyer of the Company's Eastern Avenue facility. Upon
the sale of its Eastern Avenue facility, the Company may retain
an amount equal to the expenditures incurred in connection with
responding to such environmental issues prior to depositing the
sale proceeds into the Sinking Fund Accounts as required by
Section 4 of the Credit Agreement.
4.5 The representations and warranties of the Company contained in
Section 8 of the Credit Agreement are deemed to have been made
again on and as of the date of execution of this Amendment and
are true and correct as of the date of the execution of this
Amendment, except as such representations and warranties may be
affected by the Company's recent environmental compliance
problems associated with the operation of two presses at the
Company's Scottsburg, Indiana plant.
4.6 No Default or Event of Default (as such term is defined in
Section 11 of the Credit Agreement) exists on the date hereof,
except for the default that has been waived in accordance with
Section 3, above.
4.7 The person executing this Amendment is a duly elected and acting
officer of the Company and is duly authorized by the Board of
Directors of the Company to execute and deliver this Amendment on
behalf of the Company.
5. CONDITIONS. The Lenders' and the Agent's obligations pursuant to this
Amendment are subject to the following conditions:
5.1 The Company will have paid to the Agent, for the benefit of the
Lenders, a waiver fee of $50,000.
5.2 The Agent will have been furnished copies, certified by the
Secretary or Assistant Secretary of the Company, of resolutions
of the Board of Directors of the Company authorizing the
execution of this Amendment and all other documents executed in
connection herewith.
5.3 The representations and warranties of the Company in Section 4,
above, shall be true.
5.4 The Company will pay all expenses and attorneys fees incurred by
the Lenders in connection with the preparation, execution and
delivery of this Amendment and related documents.
6. CLAIMS AND RELEASE OF CLAIMS BY THE COMPANY. The Company represents and
warrants that it has no claims, counterclaims, setoffs, actions or causes
of action, damages or liabilities of any kind or nature whatsoever whether
at law or in equity, in contract or in tort, whether now accrued or
hereafter maturing (collectively, "Claims") against any Lender, its direct
or indirect parent corporation or any direct or indirect affiliates of such
parent corporation, or any of the foregoing's respective directors,
officers, employees, agents, attorneys and legal representatives, or the
heirs, administrators, successors or assigns of any of them (collectively,
"Lender Parties") that directly or indirectly arise out of, are based upon
or are in any manner connected with any Prior Related Event. As an
inducement to the Lenders to enter into this Amendment, the Company, on
behalf of itself and its successors and assigns, hereby knowingly and
voluntarily releases and discharges all Lender Parties from any and all
Claims, whether known or unknown, that directly or indirectly arise out of,
are based upon or are in any manner connected with any Prior Related Event.
As used herein, the term "Prior Related Event" means any transaction,
event, circumstance, action, failure to act, occurrence of any sort or
type, whether known or unknown, which occurred, existed, was taken,
permitted or begun at any time prior to the Effective Date or occurred,
existed, was taken, was permitted or begun in accordance with, pursuant to
or by virtue of any of the terms of the Credit Agreement, any Note or any
documents executed in connection with the Credit Agreement or which was
related to or connected in any manner, directly or indirectly, to any of
the Obligations.
7. GENERAL.
7.1 Except as expressly modified herein, the Credit Agreement is and
remains in full force and effect.
7.2 Except as specifically provided above, nothing contained herein
will be construed as waiving any default or Event of Default
under the Credit Agreement or will affect or impair any right,
power or remedy of the Lenders or the Agent under or with respect
to the Credit Agreement or any agreement or instrument
guaranteeing, securing or otherwise relating to the Credit
Agreement.
7.3 This Amendment will be binding upon and inure to the benefit of
the Company, the Lenders and the Agent and their respective
successors and assigns.
7.4 All representations, warranties and covenants made by the Company
herein will survive the execution and delivery of this Amendment.
7.5 This Amendment will in all respects be governed and construed in
accordance with the laws of the State of Ohio.
7.6 This Amendment may be executed in one or more counterparts, each
of which will be deemed an original and all of which together
will constitute one and the same instrument.
Executed as of the Effective Date.
MULTI-COLOR CORPORATION, as Company
By: /s/William R. Cochran
---------------------------------
Print Name: Willian R. Cochran
Title: Vice President/CFO
PNC BANK, NATIONAL ASSOCIATION,
on its own behalf as Lender,
and as Agent
By: /s/Warren F. Weber
---------------------------------
Print Name: Warren F. Weber
Title: Vice President
STAR BANK, NATIONAL ASSOCIATION,
as Lender
By: /s/Andrew T. Hawking
---------------------------------
Print Name: Andrew T. Hawking
Title: Senior Vice President