Exhibit 10-26
THIRD AMENDMENT TO CREDIT AGREEMENT
THIS THIRD AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is entered
into
as of June 1, 1998, by and between AUTO-GRAPHICS, INC., a California
corporation ("Borrower"), and XXXXX FARGO BANK, NATIONAL ASSOCIATION
("Bank").
RECITALS
WHEREAS, Borrower is currently indebted to Bank pursuant to the terms
and conditions of that certain Credit Agreement between Borrower and
Bank dated as of May 12, 1997, as amended from time to time ("Credit
Agreement").
WHEREAS, Bank and Borrower have agreed to certain changes in the terms
and conditions set forth in the Credit Agreement and have agreed to
amend the Credit Agreement to reflect said changes.
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree that the
Credit Agreement shall be amended as follows:
1. Exhibit C as referenced in Section 1.3(a) is hereby substituted with
a new Exhibit C as attached hereto, to reflect the new principal payment
schedule of the Term Loan.
2. Section 4.8(a),(b),(c) and (d) are hereby deleted in their entirety,
and the following substituted therefor:
"(a) Current Ratio not at any time less than 1.05 to 1.0, with
"Current Ratio" defined as total current assets divided by total
current liabilities (to include borrowings under Line of Credit).
(b) Tangible Net Worth not at any time less than $2,400,000.00,
with "Tangible Net Worth" defined as the aggregate of total
stockholders' equity plus subordinated debt less any intangible
assets.
(c) Total Liabilities divided by Tangible Net Worth not at any time
greater than 2.50 to 1.0 from the date of this Amendment up to
December 31, 1998 and not at anytime greater than 2.25 to 1.0 at
December 31, 1998 and at all times thereafter, with "Total
Liabilities" defined as the aggregate of current liabilities and
non-current liabilities less subordinated debt, and with "Tangible
Net Worth" defined as the aggregate of total stockholders' equity
plus subordinated debt less any intangible assets.
(d) EBITDA Coverage Ratio not less than 1.75 to 1.0 as of each
fiscal year end and not less than 1.75 to 1.0 as of the end of
each fiscal quarter excluding quarter ending December 31, on a
rolling four-quarter basis, with "EBITDA" defined as net profit
before tax plus interest expenses (net of capitalized interest
expense), depreciation expense and amortization expense, and with
"EBITDA Coverage Ratio" defined as EBITDA divided by the aggregate
of total interest expense plus the prior period current maturity
of long-term debt (to be adjusted for the Amendment to the Term
Loan repayment period, of interest only, from the date of this
Amendment up to July 1, 1999) and the prior period current
maturity of subordinated debt."
3. The following is hereby added to the Credit Agreement as Section
4.10:
"SECTION 4.10. YEAR 2000 COMPLIANCE.
Perform all acts reasonably necessary to ensure that (a) Borrower and
any business in which Borrower holds a substantial interest,
and (b) all customers, suppliers and vendors that are material to
Borrower's business, become Year 2000 Compliant in a timely manner.
Such acts shall include, without limitation, performing a
comprehensive review and assessment of all of Borrower's systems
and adopting a detailed plan, with itemized budget, for the
remediation, monitoring and testing of such systems. As used herein,
"Year 2000 Compliant" shall mean, in regard to any entity, that all
software, hardware, firmware, equipment, goods or systems utilized by
or material to the business operations or financial condition of such
entity, will properly perform date sensitive functions before, during
and after the year 2000. Borrower shall, immediately upon request,
provide to Bank such certifications or other evidence of Borrower's
compliance with the terms hereof as Bank may from time to time
require."
4. Except as specifically provided herein, all terms and conditions of
the Credit Agreement remain in full force and effect, without waiver or
modification. All terms defined in the Credit Agreement shall have the
same meaning when used in this Amendment. This Amendment and the Credit
Agreement shall be read together, as one document.
5. Borrower hereby remakes all representations and warranties contained
in the Credit Agreement and reaffirms all covenants set forth therein.
Borrower further certifies that as of the date of this Amendment there
exists no Event of Default as defined in the Credit Agreement, nor any
condition, act or event which with the giving of notice or the passage
of time or both would constitute any such Event of Default.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the day and year first written above.
XXXXX FARGO BANK,
AUTO-GRAPHICS, INC. NATIONAL ASSOCIATION
By: ss/Xxxxxx X. Xxxx By: ss/Xxxx X. Xxxxx
Xxxxxx X. Xxxx Xxxx X. Xxxxx
President Vice President
