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Exhibit 4.4(g)
EXECUTION COPY
AMENDMENT NO. 4
TO
CREDIT AND SECURITY AGREEMENT
This AMENDMENT NO. 4 TO CREDIT AND SECURITY AGREEMENT (this
"Amendment"), made as of this ___ day of March, 2001, among PARAGON CORPORATE
HOLDINGS INC. ("Borrower"), certain financial institutions listed on the
signature pages hereto (the "Banks"), KEY CORPORATE CAPITAL INC., as Letter of
Credit Bank (the "Letter of Credit Bank"), and KEY CORPORATE CAPITAL INC. as
Agent for the Banks and the Letter of Credit Bank (the "Agent").
W I T N E S S E T H :
WHEREAS, the Borrower, the Banks, the Letter of Credit Bank and the
Agent have entered into that certain Credit and Security Agreement, dated as of
April 1, 1998, as amended by that certain Amendment No. 1 to Credit and Security
Agreement, dated as of March 17, 1999, as further amended by that certain
Amendment No. 2 to Credit and Security Agreement, dated as of March 31, 2000, as
further amended by that certain Amendment No. 3 to Credit and Security
Agreement, dated as of May 10, 2000 (as amended, the "Credit Agreement"),
pursuant to which the Agent, the Banks and the Letter of Credit Bank have made
certain loans and other financial accommodations available to Borrower; and
WHEREAS, the Borrower, the Banks, the Letter of Credit Bank and the
Agent desire to amend the Credit Agreement as hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual promises and agreements
contained herein and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Borrower, the Banks, the Letter
of Credit Bank and the Agent do hereby agree as follows:
1. DEFINED TERMS.
Each defined term used herein and not otherwise defined herein shall have the
meaning ascribed to such term in the Credit Agreement.
2. AMENDMENT TO THE CREDIT AGREEMENT.
2.1 AMENDMENT TO INTRODUCTORY PARAGRAPH. The introductory paragraph on
Page 1 of the Credit Agreement is hereby amended by deleting the reference to
"U.S. $32,000,000" and replacing it with "U.S. $37,000,000".
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2.2 AMENDMENT TO SECTION 8.3(c). Section 8.3(c) is amended to read as follows:
(c)INDEBTEDNESS. The Borrower shall not, and shall not permit
any of its Subsidiary Guarantors to, create, assume, incur, suffer to
exist or have outstanding at any time any Indebtedness or other debt of
any kind, EXCEPT that this Section 8.3 (c) shall not prohibit: (i) the
Obligations and the Guaranty by the Subsidiary Guarantors thereof, (ii)
ordinary course trade payables, (iii) the Indebtedness on the
Supplemental Schedule (which Indebtedness shall not be renewed or
increased), (iv) Indebtedness secured by a Lien permitted by Section
8.3(d) of this Agreement, (v) any Indebtedness which results from a
Credit Extension permitted in Section 8.3(b) of this Agreement, (vi)
the Senior Notes and the Guaranty by the Subsidiary Guarantors thereof,
(vii) the incurrence by the Borrower or any of its Subsidiary
Guarantors of Hedging Obligations, (viii) the incurrence by the
Borrower or any of its U.S. Subsidiaries of additional Indebtedness in
an aggregate principal amount (or accreted value, as applicable) at any
time outstanding not to exceed $10,000,000, (ix) the guarantee by the
Borrower or any Subsidiary Guarantor of Indebtedness of the Borrower or
a Subsidiary of the Borrower that was permitted to be incurred by
another provision of this Agreement, (x) the incurrence by the Borrower
or any of its U.S. Subsidiaries of additional Indebtedness in support
of the exchange of the Senior Notes pursuant to that certain Offer to
Exchange and Consent Solicitation Statement regarding the 9 5/8% Series
B Senior Notes of Borrower, Due 2008, as approved by the Agent prior to
commencement (the "Exchange Offer"). Notwithstanding the foregoing, the
Borrower may incur Indebtedness if the Borrower's Consolidated Fixed
Charge Coverage Ratio for the Borrower's most recently ended four full
Fiscal Quarters for which internal financial statements are available
immediately preceding the date on which such additional Indebtedness is
incurred would have been at least 2.0 to 1.0, determined on a pro forma
basis (including a pro forma application of the net proceeds
therefrom), as if the additional Indebtedness had been incurred.
2.3 AMENDMENT TO SECTION 8.3(f). Section 8.3(f) is amended to read as follows:
(f)DIVIDENDS; MANAGEMENT FEE. Other than in a writing made
expressly subject to the Agent's written consent under this Agreement,
neither the Borrower nor any Subsidiary Guarantor shall make or commit
itself to make any Distribution (other than stock dividends) to its
shareholders at any time or pay or commit itself to pay any management
fee to any Affiliate of the Borrower at any time; PROVIDED, HOWEVER,
that so long as no Potential Default has occurred and none would
thereupon occur, (i) the Borrower may pay to NESCO, Inc. a monthly
management fee in an amount not to exceed, together with all other such
payments by the Borrower in any Fiscal Year, in the aggregate five
percent (5%) of the Borrower's Consolidated EBITDA during any Fiscal
Year, (ii) to support the Borrower's payment of any such management
fee, each Subsidiary Guarantor may pay to the Borrower, in accordance
with a management agreement among the Borrower and the Subsidiary
Guarantors, an amount, on a monthly basis, that does not, together with
all other such payments by such Subsidiary Guarantor in any Fiscal
Year, exceed such Subsidiary Guarantor's Consolidated EBITDA for such
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Fiscal Year, (iii) payments required to be made by the Borrower and the
Subsidiary Guarantors pursuant to a certain Tax Payment Agreement,
dated as of the date hereof, among, INTER ALIA the Borrower, the
Subsidiary Guarantors and the Parent Company, (iv) each Subsidiary
Guarantors may, on a weekly basis, pay an amount to the Borrower to
support the Borrower's interest payments under the Senior Notes in an
amount not in excess 1/52 of such Subsidiary Guarantor's ratable
portion (based on projected Consolidated EBITDA for the Fiscal Year in
which such payment occurs) of the interest due under the Senior Notes
for the Fiscal Year in which such payment occurs, and (v) in support of
the exchange of the Senior Notes pursuant to the Exchange Offer, the
Subsidiary Guarantors may pay to the Borrower a sum not to exceed in
the aggregate $51,000,000 cash.
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2.4 AMENDMENT TO SECTION 8.4(a). Section 8.4(a) is amended to read as follows:
(a) MINIMUM CONSOLIDATED EBITDA. The Borrower shall not permit
the Consolidated EBITDA of A. B. Dick as of the end of any of the
following cumulative fiscal periods to be less than the amount set
forth opposite such cumulative fiscal period:
CUMULATIVE FISCAL CONSOLIDATED EBITDA
PERIOD
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January 1, 2001 -- March 31, 2001 $1,250,000
January 1, 2001 -- June 30, 2001 $2,500,000
January 1, 2001 -- September 30, 2001 $3,750,000
January 1, 2001 -- December 31, 2001 $5,250,000
April 1, 2001 -- March 31, 2002 $5,500,000
July 1 2001 -- June 30, 2002 $5,750,000
and each Cumulative Four Quarter Fiscal Period
thereafter $6,000,000
2.5 AMENDMENT TO SECTION 8.4(b). Section 8.4(b) is amended to read as follows:
(b) CONSOLIDATED FIXED CHARGE COVERAGE RATIO. The Borrower
shall not at any time permit:
(i) the Consolidated Fixed Charge Coverage Ratio of
the Borrower as at the end of any of the following cumulative
fiscal periods of the Borrower to be less than the ratio set
forth opposite such cumulative fiscal period:
CUMULATIVE FISCAL CONSOLIDATED FIXED CHARGE COVERAGE
PERIOD RATIO
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January 1, 2001 -- June 30, 2001 0.40 to 1.0
January 1, 2001 -- September 30, 2001 0.45 to 1.0
January 1, 2001 -- December 31, 2001 0.60 to 1.0
April 1, 2001 -- March 31, 2002 0.70 to 1.0
July 1, 2001 -- June 30, 2002 0.75 to 1.0
October 1, 2001 -- September 30, 2002 0.80 to 1.0
January 1, 2002 -- December 31, 2002 0.85 to 1.0
April 1, 2002 -- March 31, 2003 0.90 to 1.0
July 1, 2002 -- June 30, 2003 0.95 to 1.0
and each Cumulative Four Quarter Fiscal Period
thereafter 1.00 to 1.0;
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or
(ii) the Consolidated Fixed Charge Coverage Ratio of
A.B. Dick as at the end of any of the following cumulative
fiscal periods of the Borrower to be less than the ratio set
forth opposite such cumulative fiscal period:
CUMULATIVE FISCAL CONSOLIDATED FIXED CHARGE COVERAGE
PERIOD RATIO
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January 1, 2001 -- March 31, 2001 0.70 to 1.0
January 1, 2001 -- June 30, 2001 0.75 to 1.0
January 1, 2001 -- September 30, 2001 0.80 to 1.0
January 1, 2001 -- December 31, 2001 0.90 to 1.0
April 1, 2001 -- March 31, 2002 0.95 to 1.0
July 1 2001 -- June 30, 2002 1.00 to 1.0
October 1, 2001 -- September 30, 2002 1.05 to 1.0
and each Cumulative Four Quarter Fiscal Period
thereafter 1.10 to 1.0
2.6 AMENDMENT TO ANNEX I. Annex I is hereby amended by deleting all
references to "$32,000,000" and replacing each such reference with
"$37,000,000".
2.7 AMENDMENT TO ANNEX II. Annex II to the Credit Agreement is amended
by deleting the definition of "Borrowing Base" and replacing it with the
following new definition:
"BORROWING BASE" means, at any date of determination, an amount not in
excess of the difference of the following:
(a) the sum of:
(i) eighty-five percent (85%) of the amount due
and owing on the A.B. Dick Eligible
Accounts; PLUS
(iii) the lesser of:
(x) Eighteen Million Five Hundred Thousand
Dollars ($18,500,000) or
(y) sixty percent (60%) of the cost or
market value (whichever is lower) of the
A.B. Dick Eligible Inventory; PLUS
(iv) ten percent (10%) of the cost or market
value (whichever is lower) of the A.B. Dick
Accumulated Depreciation Inventory; MINUS
(b) the Reserve Amount.
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3. WAIVER.
3.1 WAIVER. Subject to and conditioned on the effectiveness of this
Amendment, to the extent that the following actions have resulted in Borrower's
failure to comply with the Credit Agreement, the Agent and each Bank hereby
waives, as of the date of this Amendment:
(a) solely to the extent disclosed to the Agent and the Banks
in writing prior to the date of this Amendment, Borrower's failure to
comply with the requirement set forth in Section 8.4(a)of the Credit
Agreement that Borrower not permit the Consolidated EBITDA of A.B. Dick
to be less than $11,000,000 Cumulative Four Fiscal Quarter Period
ending on December 31, 2000
(b) solely to the extent disclosed to the Agent and the Banks
in writing prior to the date of this Amendment, Borrower's failure to
comply with the requirement set forth in Section 8.4(b)(i) of the
Credit Agreement that Borrower not permit the Consolidated Fixed Charge
Coverage Ratio of the Borrower to be less than 1.20 to 1.0 for the
Cumulative Four Fiscal Quarter Period ending on December 31, 2000;
(c) solely to the extent disclosed to the Agent and the Banks
in writing prior to the date of this Amendment, Borrower's failure to
comply with the requirement set forth in Section 8.4(b)(ii) of the
Credit Agreement that Borrower not permit the Consolidated Fixed Charge
Coverage Ratio of A.B. Dick to be less than 1.20 to 1.0 for the
Cumulative Four Fiscal Quarter Period ending on December 31, 2000; and
(d) solely with respect to defaults waived pursuant to
Sections 3.1(a), 3.1(b) and 3.1(c) of this Amendment, any Event of
Default under Section 9.4 of the Financing Agreement.
4. REPRESENTATIONS AND WARRANTIES.
Borrower hereby represents and warrants as follows:
4.1 THE AMENDMENT. This Amendment has been duly and validly executed by
an authorized executive officer of Borrower and constitutes the legal, valid and
binding obligation of Borrower enforceable against Borrower in accordance with
its terms. The execution delivery, and performance of this Amendment, the Credit
Agreement (as amended hereby), and the other Loan Documents to which Borrower is
a party are within the Borrower's corporate powers, have been duly authorized,
and are not in contravention of Law or the terms of the Borrower's Certificate
of Incorporation or By-Laws or any indenture (including the Senior Note
Indenture) or other document or instrument evidencing borrowed money or any
other agreement or undertaking to which the Borrower is a party or by which it
or its property is bound.
4.2 CLAIMS AND DEFENSES. As of the date of this Amendment, neither the
Borrower nor any of the Subsidiary Guarantors has any defenses, claims,
counterclaims or setoffs with
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respect to the Credit Agreement, the Loan Documents or any Obligations
thereunder or with respect to any actions of the Agent, the Banks, the Letter of
Credit Bank or any of their respective officers, directors, shareholders,
employees, agents or attorneys, and the Borrower irrevocably and absolutely
waives any such defenses, claims, counterclaims and setoffs and releases the
Agent, the Banks and the Letter of Credit Bank, and each of their respective
officers, directors, shareholders, employees, agents and attorneys, from the
same.
4.3 CREDIT AGREEMENT. The Credit Agreement, as previously amended and
as further amended by this Amendment, remains in full force and effect and
remains the valid and binding obligation of Borrower enforceable against
Borrower in accordance with its terms.
4.4 NONWAIVER. Except as expressly provided in Section 3 hereto, the
execution, delivery, performance and effectiveness of this Amendment shall not
operate nor be deemed to be nor construed as a waiver (i) of any right, power or
remedy of the Agent, any Bank or the Letter of Credit Bank under the Credit
Agreement, nor (ii) of any term, provision, representation, warranty or covenant
contained in the Credit Agreement or any other documentation executed in
connection therewith and Bank expressly retains all of its rights and remedies
with regard to any conversion of the Additional Promissory Notes (as defined in
the Exchange Offer). Further, except as set forth in Section 3 of this
Agreement, none of the provisions of this Amendment shall constitute, be deemed
to be or construed as, a waiver of any Event of Default under the Credit
Agreement as previously amended and as further amended by this Amendment.
4.5 REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT. Upon the
effectiveness of this Amendment, each reference in the Credit Agreement to "this
Agreement", "hereunder", "hereof", "herein", or words of like import shall mean
and be a reference to the Credit Agreement, as previously amended and as further
amended hereby, and each reference to the Credit Agreement in any other
document, instrument or agreement executed and/or delivered in connection with
the Credit Agreement shall mean and be a reference to the Credit Agreement, as
previously amended and as further amended hereby.
5. CONDITIONS PRECEDENT TO EFFECTIVENESS OF THIS AMENDMENT NO. 4.
In addition to all of the other conditions and agreements set forth herein, the
effectiveness of this Amendment is subject to the fulfillment of each of the
following conditions precedent:
5.1 AMENDMENT NO. 4 TO CREDIT AND SECURITY AGREEMENT. The Agent and
each Bank shall have received an original counterpart of this Amendment No. 4 to
Credit and Security Agreement, executed and delivered by a duly authorized
officer of Borrower, the Agent, and each of the Banks.
5.2 AMENDMENT TO SECURITY AGREEMENT OF A.B. DICK. The Security
Agreement of A.B. Dick shall have been amended in form and substance acceptable
to the Agent, in its sole discretion, to provide the grant of a security
interest in the property, plant and equipment of A.B. Dick to the Agent for the
benefit of the Banks and the Agent shall have received such executed amendment
and financing statements evidencing such grant.
5.3 MORTGAGE OF REAL PROPERTY OF A.B. DICK. The Agent shall have
received original mortgages and fixture financing statements, in form and
substance acceptable to the
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Agent, in its sole discretion, for the real property of A.B. Dick, executed and
delivered by a duly authorized officer of A.B. Dick.
5.4 ACKNOWLEDGMENT OF GUARANTOR. The Agent shall have received the
Acknowledgment of Guarantor, attached hereto, executed and delivered by a duly
authorized officer of A.B. Dick.
5.5 AMENDMENT FEE. Bank shall have received from the Borrower, an
Amendment Fee in the amount of Twenty-Five Thousand Dollars ($25,000).
6. MISCELLANEOUS.
6.1 GOVERNING LAW. This Amendment has been delivered and accepted at
and shall be deemed to have been made at Cleveland, Ohio. This Amendment shall
be interpreted and the rights and liabilities of the parties hereto determined
in accordance with the laws of the State of Ohio, without regard to principles
of conflict of law, and all other laws of mandatory application.
6.2 SEVERABILITY. Each provision of this Amendment shall be interpreted
in such manner as to be valid under applicable law, but if any provision hereof
shall be invalid under applicable law, such provision shall be ineffective to
the extent of such invalidity, without invalidating the remainder of such
provision or the remaining provisions hereof.
6.3 COUNTERPARTS. This Amendment may be executed in one or more
counterparts, each of which, when taken together, shall constitute but one and
the same agreement.
[Signature Page to Follow]
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IN WITNESS WHEREOF, Borrower has caused this Amendment No. 4 to Credit
and Security Agreement to be duly executed and delivered by its duly authorized
officer as of the date first above written.
KEY CORPORATE CAPITAL INC., as Agent PARAGON CORPORATE HOLDINGS INC.
----------------------------------- -----------------------------------
By:________________________________ By:________________________________
Its:_______________________________ Its:_______________________________
KEY CORPORATE CAPITAL INC., as a Bank KEY CORPORATE CAPITAL INC., as a
Letter of Credit Bank
----------------------------------- -----------------------------------
By:________________________________ By:________________________________
Its:_______________________________ Its:_______________________________
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ACKNOWLEDGMENT OF A. B. DICK COMPANY.
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The undersigned, A. B. DICK COMPANY, a Delaware corporation,
having guaranteed the obligations of Paragon Corporate Holdings Inc. to Key
Corporate Capital Inc. ("KCCI"), hereby acknowledges and agrees to the terms of
the foregoing Amendment No. 4 to Credit and Security Agreement. The undersigned
represents and warrants to KCCI that the Subsidiary Guaranty Agreement, executed
and delivered by the undersigned to KCCI, dated as of April 1, 1998, remains the
valid and binding obligation of the undersigned, enforceable against it in
accordance with its respective terms.
A. B. DICK COMPANY
By:___________________________
Its:__________________________
Dated: March __, 2001
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