EXHIBIT 10.1
CONFIDENTIAL PORTIONS HAVE BEEN OMITTED PURSUANT TO RULE 24B-2 UNDER THE
SECURITIES ACT OF 1934, AS AMENDED. [ * ] INDICATES OMITTED MATERIAL THAT IS
THE SUBJECT OF AN APPLICATION FOR CONFIDENTIAL TREATMENT AND IS FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
FOURTH AMENDMENT TO CREDIT AGREEMENT
THIS FOURTH AMENDMENT TO CREDIT AGREEMENT (this "Fourth
------
Amendment") is entered into as of August 7, 2001 among Mail-Well I
---------
Corporation, a Delaware corporation (the "Company"), as borrower, Mail-Well,
-------
Inc., a Colorado corporation (the "Parent"), and certain other U.S.
------
Subsidiaries of the Parent, as guarantors, the several financial
institutions from time to time party to the Credit Agreement referred to
below (individually, a "Lender" and, collectively, the "Lenders"), ABN AMRO
------ -------
Bank N.V., as syndication agent, The Bank of Nova Scotia, as documentation
agent, SunTrust Bank and Union Bank of California, N.A., as managing agents,
and Bank of America, N.A., as Issuing Bank, Swingline Bank and as
administrative agent for itself and the other Lenders (in such capacity, the
"Agent").
-----
WHEREAS, the Company, the Parent and the other Loan
Parties, the Lenders and the Agent entered into a Credit Agreement dated as
of February 18, 2000, as amended by that certain First Amendment to Credit
Agreement dated as of July 28, 2000, that certain Second Amendment to Credit
Agreement dated as of March 28, 2001, and that certain Third Amendment to
Credit Agreement dated as of June 29, 2001 (as so amended, the "Credit
------
Agreement"); and
---------
WHEREAS, the Company has requested that the Majority
Lenders agree to certain amendments to the Credit Agreement, and the
Majority Lenders have agreed to such request, subject to the terms and
conditions of this Fourth Amendment;
NOW, THEREFORE, the parties hereto agree as follows:
1. Definitions; References; Interpretation.
---------------------------------------
(a) Unless otherwise specifically defined herein, each term used
herein (including in the Recitals hereof) which is defined in the Credit
Agreement shall have the meaning assigned to such term in the Credit Agreement.
(b) Each reference to "this Agreement", "hereof", "hereunder",
"herein" and "hereby" and each other similar reference contained in the Credit
Agreement, and each reference to "the Credit Agreement" and each other similar
reference in the other Loan Documents, shall from and after the Effective
Date (as defined below) refer to the Credit Agreement as amended hereby.
(c) The rules of interpretation set forth in Section 1.02 of
the Credit Agreement shall be applicable to this Fourth Amendment.
2. Amendments to Credit Agreement. Subject to the terms and conditions
------------------------------
hereof, the Credit Agreement is amended as follows, effective as of the date
of satisfaction of the conditions set forth in Section 4 (the "Effective Date"):
--------------
(a) Section 1.01 of the Credit Agreement is hereby amended as
follows:
(i) The defined term "Attributed Principal Amount" set
---------------------------
forth in Section 1.01 of the Credit Agreement is deleted in its entirety.
(ii) A new defined term "Borrowing Base" shall be added to
--------------
Section 1.01 in proper alphabetical order as follows:
""Borrowing Base" means asset-based lending limits
--------------
reasonably satisfactory to the Agent, the Majority Lenders and the
Loan Parties to become effective not later than August 15, 2002 in
accordance with Section 5 of the Fourth Amendment to Credit Agreement
dated as of August 7, 2001 (the "Borrowing Base Agreement Date")."
-----------------------------
(iii) A new defined term "Borrowing Base Agreement Date"
-----------------------------
shall be added to Section 1.01 in proper alphabetical order as follows:
""Borrowing Base Agreement Date" shall have the meaning
-----------------------------
set forth in the definition of Borrowing Base."
(iv) A new defined term "Borrowing Base Certificate" shall
--------------------------
be added to Section 1.01 in proper alphabetical order as follows:
""Borrowing Base Certificate" means a certificate of a
--------------------------
Responsible Officer of the Borrower, in such form as the Agent
reasonably shall specify prior to the Borrowing Base Agreement
Date, with such changes thereto as the Agent or the Majority
Lenders may from time to time reasonably request."
(v) The defined term "Collateral Release Date" set forth
-----------------------
in Section 1.01 of the Credit Agreement is deleted in its entirety.
(vi) A new defined term "Compliance Event" shall be added
----------------
to Section 1.01 in proper alphabetical order as follows:
""Compliance Event" means the date occurring after the
----------------
second fiscal quarter of 2002 on which the Agent receives a completed
Compliance Certificate, executed by a Responsible Officer, pursuant
to Section 7.02 of the Credit Agreement (i) certifying the financial
statements required under Section 7.01(b) and the other information
required under the Compliance Certificate (including, without
limitation, that no Default or Event of Default has occurred and is
continuing) and (ii) demonstrating that the Parent and its
Subsidiaries are in compliance with the financial covenants set forth
in Section 8.21 as of the last day of the second fiscal quarter of
2002."
(vii) The defined term "EBITDA" set forth in Section 1.01 of
------
the Credit Agreement is amended and restated in its entirety as follows:
2
""EBITDA" means, for any period, for the Parent and its
------
Subsidiaries, the sum of Consolidated Net Income of the Parent and
its Subsidiaries for such period plus (to the extent deducted in
----
determining Consolidated Net Income) (i) Interest Expense for such
period, (ii) income tax expense for such period, (iii) depreciation
expense, amortization expense and other non-cash expenses for such
period, in each case, measured in accordance with GAAP, and
(without duplication) (iv) the following charges incurred in
connection with the Restructuring (collectively, the "Restructuring
Charges"), in each case, measured in accordance with GAAP: (A)
pre-tax net losses of up to $90,000,000 in fiscal year 2001
resulting from book losses on dispositions recorded in fiscal year
2001, (B) pre-tax net losses for fiscal years 2001 and 2002
resulting from restructuring charges in an aggregate amount of up
to $100,000,000 subject to the limitations that (x) no more than
$60,000,000 of such charges (cash and non-cash) may be added back
in the calculation of EBITDA for fiscal year 2001, (y) no more than
$40,000,000 of cash restructuring charges may be added back in the
calculation of EBITDA for fiscal year 2001, and (z) no more than
$55,000,000 of cash restructuring charges in the aggregate may be
added back in the calculation of EBITDA for fiscal years 2001 and
2002.
"For purposes of determining the consolidated EBITDA of
the Parent and its Subsidiaries hereunder for purposes of
calculating the Total Leverage Ratio and the Senior Leverage Ratio
only, EBITDA shall be adjusted for Permitted Acquisitions of
Persons that become Subsidiaries or become part of consolidated
Subsidiaries (each an "Acquired Subsidiary") made by the Parent,
the Company or any Subsidiary during the four fiscal quarter period
(the "Compliance Period") for which the consolidated EBITDA of the
Parent and its Subsidiaries is being calculated. Such adjustment
shall be made as follows:
"(i) actual financial results of each such Acquired
Subsidiary from the date of its Acquisition through the end of the
Compliance Period shall be included in the consolidated measure of
EBITDA in accordance with GAAP;
"(ii) historical financial results of each such Acquired
Subsidiary shall be included in the consolidated measure of EBITDA
if any one of the following conditions is satisfied: (1) either (A)
audited financial statements of such Acquired Subsidiary are
available for its most recent fiscal year-end or (B) if such
audited financial statements are not yet available because such
Acquired Subsidiary was acquired within 90 days of its most recent
fiscal year-end, audited financial statements of such Acquired
Subsidiary are available for its next most recent fiscal year-end;
(2) such Acquired Subsidiary is a Subsidiary or division of a
public company for which either (A) audited financial statements
are available for such company's most recent fiscal year-end or (B)
if such audited financial statements are not yet available because
such Acquired Subsidiary was acquired within 90 days of such public
company's most recent fiscal year-end, audited financial statements
of such public company are available for its next most recent
fiscal year-end; or (3) reviewed financial statements of such
Acquired Subsidiary prepared in accordance with GAAP are available
for its most recent fiscal year-end;
"(iii) if one or more of the conditions set forth in the
preceding paragraph (ii) are satisfied, then such historical
financial results shall be so included as follows: (1) the Parent
shall determine in accordance with GAAP the relevant financial
results of such Acquired
3
Subsidiary for the period of four fiscal quarters of such Acquired
Subsidiary ending on the date of its fiscal quarter most recently
ended prior to the date of its Acquisition, (2) the Parent shall make
adjustments to such financial results to exclude any specific,
identifiable expense items which are eliminated (in accordance with
Regulation S-X promulgated by the SEC) as a result of the Permitted
Acquisition of such Acquired Subsidiary at the closing thereof, and
(3) the Parent shall include in consolidated EBITDA only such portion
of such relevant historical financial results that is obtained by
multiplying such financial results by the quotient obtained by
dividing (x) the number of days elapsed from the first day of the
Compliance Period to the date of the Acquisition of such Acquired
Subsidiary, by (y) 365;
"provided, however, that amounts that would otherwise be included
-------- -------
in EBITDA on account of Permitted Acquisitions made by any of the
Parent or its Subsidiaries shall be excluded unless the Agent and
the Lenders have been provided with reasonably satisfactory
independent verification of such historical financial results. The
parties agree that if at any time (A) the historical financial
results of any Acquired Subsidiary have not been included in the
consolidated measure of EBITDA because none of the requirements set
forth in clauses (1), (2) and (3) of the preceding clause (ii) have
theretofore been satisfied, (B) audited financial statements for
such Acquired Subsidiary shall have since become available for its
most recent fiscal year-end and (C) such Acquired Subsidiary was
acquired during the Compliance Period for which the consolidated
EBITDA of the Parent and its Subsidiaries is then being calculated,
then (subject to the preceding proviso) the Parent shall adjust its
consolidated EBITDA as provided in the preceding clauses (i), (ii)
and (iii); provided, however, that this sentence is intended only
to permit the Parent to make adjustments to its consolidated EBITDA
in respect of the historical financial results of such Acquired
Subsidiary for purposes of any certificate or demonstration of
covenant compliance to be delivered to the Agent and/or the Lenders
after the date on which such audited financial statements become
available, and this sentence is not intended to permit the Parent
to restate or otherwise re-calculate its consolidated EBITDA for
purposes of any certificate or demonstration of covenant compliance
delivered to the Agent and/or the Lenders prior to the date on
which such audited financial statements became available.
"Upon any disposition by the Parent, the Company or the
Subsidiaries of any Subsidiary or of any assets (other than to the
Parent, the Company or any Subsidiary), all financial results of
such Subsidiary or attributable to such assets during the
Compliance Period in which such disposition occurred shall be
excluded from the calculation of EBITDA hereunder for purposes of
calculating the Total Leverage Ratio and the Senior Leverage Ratio
only."
(viii) The defined term "Existing Receivables Purchase
-----------------------------
Facility" set forth in Section 1.01 shall be deleted in its entirety.
--------
(ix) Clause (a) in the definition of "Fixed Charge Coverage
---------------------
Ratio" in Section 1.01 of the Credit Agreement shall be amended and restated as
-----
follows:
"(a) EBITDA for the period of the last four
fiscal quarters ended on or prior to such date minus cash taxes
-----
paid during such period (other than cash taxes paid in respect of
the Restructuring and plans of dispositions with respect thereto) to"
4
(x) Clause (h) in the definition of "Indebtedness" in
------------
Section 1.01 of the Credit Agreement shall be deleted in its entirety and
replaced with "[intentionally omitted]".
(xi) The following language at the end of the definition
of "Lien" in Section 1.01 of the Credit Agreement shall be deleted and replaced
----
with a period: "or the interest of a purchaser of Permitted Receivables under
any Permitted Receivables Purchase Facility."
(xii) The defined term "Permitted Receivables Purchase
------------------------------
Facility" in Section 1.01 of the Credit Agreement shall be deleted in its
--------
entirety.
(xiii) Subsection (vi) of the definition of "Permitted
---------
Acquisition" in Section 1.01 of the Credit Agreement shall be amended and
-----------
restated as follows:
"(vi) in the case of any Acquisition prior to the
Compliance Event, the Majority Lenders shall have consented in
writing to the consummation of such Acquisition."
(xiv) The defined term "Significant Acquisition" in Section
-----------------------
1.01 of the Credit Agreement shall be deleted in its entirety.
(b) Section 2.01 of the Credit Agreement shall be amended as
follows:
(i) Clause (ii) of subsection 2.01(a) of the Credit
Agreement shall be amended and restated as follows:
"(ii) the Effective Amount of all outstanding Revolving
Loans plus the Effective Amount of all Swingline Loans plus the
---- ----
Effective Amount of all L/C Obligations plus the Effective Amount of
----
all outstanding Term Loans shall not exceed the lesser of (A) the
Aggregate Commitment and (B) from and after the Borrowing Base
Agreement Date, the Borrowing Base then in effect."
(ii) Clause (ii) of subsection 2.01(b) of the Credit
Agreement shall be amended and restated as follows:
"(ii) the Effective Amount of all outstanding Revolving
Loans plus the Effective Amount of all Swingline Loans plus the
---- ----
Effective Amount of all L/C Obligations plus the Effective Amount of
----
all outstanding Term Loans shall not exceed the lesser of (A) the
Aggregate Commitment and (B) from and after the Borrowing Base
Agreement Date, the Borrowing Base then in effect."
(iii) Subsection (c) of Section 2.01 of the Credit Agreement
shall be amended and restated in its entirety as follows:
"(c) The Revolving Credit. Each Lender severally
--------------------
agrees, on the terms and conditions set forth herein, to make loans
to the Company (each such loan, a "Revolving Loan") from time to time
--------------
on any Business Day during the period from the Closing Date to the
Revolving Termination Date, in an aggregate amount not to exceed at
any time the amount set forth opposite such Lender's name on
Schedule 2.01 under the heading "Revolving Commitment" (such
-------------
amount, as the same may be reduced under Section 2.05 or Section
2.08 or reduced or increased as a result of one or more assignments
under
5
Section 11.08, such Lender's "Revolving Commitment"); provided,
-------------------- --------
however, that after giving effect to any Borrowing of Revolving Loans,
-------
(i) the Effective Amount of all outstanding Revolving Loans and
Swingline Loans, and the Effective Amount of all L/C Obligations,
shall not at any time exceed the combined Revolving Commitments;
(ii) the Effective Amount of the Revolving Loans of any Lender, plus
----
the participation of such Lender in the Effective Amount of all L/C
Obligations and Swingline Loans, shall not at any time exceed such
Lender's Revolving Commitment; and (iii) the Effective Amount of all
outstanding Revolving Loans plus the Effective Amount of all Swingline
----
Loans plus the Effective Amount of all L/C Obligations plus the
---- ----
Effective Amount of all outstanding Term Loans shall not exceed the
lesser of (A) the Aggregate Commitment and (B) from and after the
Borrowing Base Agreement Date, the Borrowing Base then in effect.
Within the limits of each Lender's Commitment, and subject to the
other terms and conditions hereof, the Company may borrow under this
subsection 2.01(c), prepay under Section 2.07 and reborrow under this
subsection 2.01(c). Notwithstanding anything to the contrary in
this subsection 2.01(c) or this Agreement, the aggregate
outstanding principal amount of the Revolving Loans shall not
exceed $150,000,000 (1) at any time prior to the Compliance Event,
(2) at any time that the outstanding principal amount of the Term
Loans exceeds $50,000,000 or (3) if the Borrowing Base is not then
in effect."
(c) Section 2.07 of the Credit Agreement shall be amended by
deleting from the last sentence the following text: "or from the issuance of
common stock or Permitted Preferred Stock of the Parent".
(d) Subsection (d) of Section 2.08 of the Credit Agreement shall
be redesignated as subsection "(f)" and new subsections "(d)" and "(e)" shall
be added as follows:
"(d) Equity Issuance. If the Parent, the Company or any
---------------
Subsidiary shall issue common or preferred equity (other than to
the Parent, the Company or any Subsidiary, and other than in
connection with compensation of employees, directors or
consultants), the Company shall promptly notify the Agent of the
estimated Net Issuance Proceeds of such issuance to be received by
the Parent, the Company or such Subsidiary in respect thereof.
Promptly upon, and in no event later than one Business Day after,
receipt by the Parent, the Company or such Subsidiary of Net
Issuance Proceeds of such issuance, the Company shall prepay the
Term Loans in an aggregate amount equal to the lesser of (i) the
amount of such Net Issuance Proceeds and (ii) the Effective Amount
of the outstanding Terms Loans. Notwithstanding the foregoing,
after the Compliance Event, the Parent, the Company or any
Subsidiary shall be permitted to use the Net Issuance Proceeds of
any common or preferred equity issuance to repay, purchase, redeem
or repurchase amounts outstanding under the Parent's 5% Convertible
Subordinated Notes due 2002 in accordance with Section 8.14 until
such notes are redeemed or repaid in full, whereupon all Net
Issuance Proceeds from common or preferred equity issuances shall
again be applied to prepay the Terms Loans as provided in the
immediately preceding sentence."
"(e) Borrowing Base. If at any time the Effective Amount
--------------
of all outstanding Revolving Loans plus the Effective Amount of all
----
Swingline Loans plus the Effective Amount of all L/C Obligations
plus the Effective Amount of all outstanding Term Loans shall
----
exceed the Borrowing Base, the Company, upon becoming aware of such
excess,
6
shall immediately prepay the outstanding principal amount of the
Revolving Loans and any L/C Advances, in an amount equal to such
excess and, if necessary, shall also prepay the outstanding
principal amount of the Term Loans in an amount equal to any
remaining excess, and, if necessary, shall also cash collateralize
outstanding Letters of Credit in an amount equal to any remaining
excess."
(e) Subsection (b) of Section 2.16 of the Credit Agreement shall
be deleted in its entirety and replaced with "[intentionally omitted.]."
(f) Subsection (f) of Section 7.02 of the Credit Agreement shall
be redesignated as subsection "(h)" and a new subsection "(f)" and subsection
"(g)" shall be added as follows:
"(f) prior to the Borrowing Base Agreement Date, as soon
as available and in any event not later than twenty (20) days after
the end of each fiscal quarter, a certificate, in form and
substance satisfactory to the Agent, setting forth gross accounts
receivable and gross inventory of the Parent and its Subsidiaries
on a consolidated basis as of such fiscal quarter-end, certified by
a Responsible Officer of the Borrower as being accurate in all
material respects and fairly presenting the information set forth
therein; provided, however, that the failure to timely provide such
-------- -------
certificate pursuant to this subsection 7.02(f) shall not
constitute a Default or an Event of Default;"
"(g) from and after the Borrowing Base Agreement Date, as
soon as available and in any event not later than (i) August 15,
2002 for the fiscal month ending June 29, 2002 and (ii) twenty (20)
days after the end of each fiscal month commencing with the fiscal
month ending July 27, 2002, (A) a completed Borrowing Base
Certificate as of such fiscal month-end, and (B) such reports with
respect to the Collateral included in the Borrowing Base as the
Agent or the Majority Lenders reasonably shall request in
connection therewith, in form and substance satisfactory to the
Agent;"
(g) The second sentence of Section 7.06 of the Credit Agreement
shall be amended and restated as follows:
"All such insurance shall name the Agent as loss payee/
mortgagee and as additional insured, for the benefit of the Lenders,
as their interest may appear."
(h) An additional sentence shall be added to Section 7.10 at the
end as follows:
"Without limiting the generality of the foregoing, the
Parent and the Company shall permit, and shall cause each
Subsidiary to permit, representatives and independent contractors
of the Agent to conduct, upon 10 days prior written notice, at the
expense of the Company such periodic audits of the Collateral at
such frequencies as the Agent or the Majority Lenders shall deem
appropriate; provided, however, that no more than two such audits
-------- -------
shall occur in any fiscal year unless an Event of Default has
occurred and is continuing."
(i) Clause (iv) of Section 7.12 of the Credit Agreement shall
be deleted in its entirety and replaced with "[intentionally omitted]".
7
(j) Subsection (c) of Section 7.14 of the Credit Agreement shall
be amended and restated as follows:
"(c) The parties agree and acknowledge that Mail-Well
Trade Receivables Corporation ("Mail-Well Trade Receivables"), a
special purpose Subsidiary of the Parent, shall not be required to
be a Guarantor hereunder; provided that (1) the Parent and the
--------
Company shall use reasonable efforts to promptly cause
substantially all of the remaining assets, lockboxes and deposit
accounts of Mail-Well Trade Receivables to be transferred to the
Company and (2) thereafter Mail-Well Trade Receivables shall remain
a special purpose Subsidiary of the Parent with only nominal
assets."
(k) The parenthetical in the first paragraph of Section 8.01 of
the Credit Agreement shall be amended and restated as follows:
"(other than this Agreement, any other Loan Document and the Equipment
Lease Facility Documents)"
(l) Subsection (b) of Section 8.01 of the Credit Agreement shall
be amended and restated as follows:
"(b) any Lien created under any Loan Document."
(m) Subsection (d) of Section 8.02 of the Credit Agreement shall
be deleted in its entirety and replaced with "[intentionally omitted]".
(n) Subsection (g) of Section 8.02 of the Credit Agreement shall
be amended and restated in its entirety as follows:
"(g) dispositions not otherwise permitted hereunder which
are made for fair market value; provided that (i) at the time of
--------
any disposition, no Event of Default shall exist or shall result
from such disposition and the Parent shall be in full pro forma
compliance with Section 8.21 after giving effect to such
disposition, measured as of the last day of the fiscal quarter then
most recently ended, (ii) the aggregate sales price from such
disposition shall be paid in cash, (iii) the aggregate fair market
value of the assets disposed of by the Parent, the Company and the
Subsidiaries, together, pursuant to this subsection (g) shall not
exceed in any fiscal year $50,000,000, (iv) prior to the Compliance
Event, no dispositions of accounts or notes receivable shall be
permitted under this subsection (g) unless in connection with the
sale of all or substantially all of a business unit, division or
subsidiary and such sale is otherwise permitted hereunder, and (v)
after the Compliance Event, no dispositions of accounts or notes
receivable shall be permitted under this subsection (g); provided
--------
further, however, that the restrictions set forth in clauses (iii)
------- -------
and (v) of this subsection (g) shall not apply to the disposition
of the following business units, divisions or Subsidiaries: (A) the
Label group, (B) Xxxxxx 1000, Inc., (C) [ * ], (D) [ * ] and (E)
PrintXcel or, in the case of this clause (E), upon the prior
written consent of the Agent, any other Subsidiary or division the
sale of which would generate Net Proceeds similar to the Net
Proceeds that would be generated by the sale of PrintXcel.
"Notwithstanding anything to the contrary in this Section
8.02, dispositions by the Loan Parties to any Subsidiaries that are
not Guarantors which are otherwise permitted
[ * ] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF AN APPLICATION FOR
CONFIDENTIAL TREATMENT AND IS FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
8
under this Section 8.02 shall not exceed $15,000,000 in the aggregate
in any fiscal year, exclusive of such dispositions undertaken in the
ordinary course of business pursuant to normal business requirements."
(o) Subsection (d) of Section 8.04 is amended and restated in its
entirety as follows:
"(d) Permitted Acquisitions otherwise permitted herein,
provided that (i) such Acquisitions are undertaken after the
--------
Compliance Event, (ii) the principal amount of the Term Loans then
outstanding is less than $100,000,000, (iii) the consideration
consisting of cash or the assumption of Indebtedness given by the
Parent, the Company and the Subsidiaries for all such Acquisitions
in the aggregate may not exceed $30,000,000 in fiscal year 2002 and
in each fiscal year thereafter, and (iv) the consideration
consisting of the issuance of capital stock of the Parent, the
Company and the Subsidiaries for all such Acquisitions in the
aggregate shall not exceed $50,000,000 in fiscal year 2002 and in
each fiscal year thereafter."
(p) Subsection (f) of Section 8.05 of the Credit Agreement shall
be deleted in its entirety and replaced with "[intentionally omitted]".
(q) Subsection (c) of Section 8.13 of the Credit Agreement shall
be deleted in its entirety and replaced with "[intentionally omitted]".
(r) Section 8.14 of the Credit Agreement shall be amended and
restated as follows:
"8.14 Certain Payments. The Parent and the Company shall
----------------
not, and shall not permit any of its Subsidiaries to, (i) prepay,
redeem, repurchase or otherwise acquire for value any of the
Subordinated Debt; or (ii) make any principal, interest or other
payments on any Subordinated Debt if not permitted by the
respective subordination provisions of the Subordinated Debt
Documents. Notwithstanding the foregoing, the Parent shall be
permitted to (a) repay, purchase, redeem or repurchase in the open
market some or all of the 5% Convertible Subordinated Notes due
2002 using proceeds of Indebtedness permitted under subsection
8.05(j) or, after the Compliance Event, proceeds from the issuance
of common stock or Permitted Preferred Stock of the Parent,
provided that such proceeds are so used within 90 days of their
--------
receipt by the Parent, the Company or any Subsidiary, as the case
may be; or (b) repay, purchase, redeem or repurchase in the open
market some or all of the 5% Convertible Subordinated Notes due
2002 with proceeds from Revolving Loans if all of the following
conditions are satisfied: (i) the Compliance Event shall have
occurred, (ii) the Borrowing Base shall then be in effect, (iii)
after giving effect to such repayment, purchase, redemption or
repurchase there shall be at least $25,000,000 of availability
under the Borrowing Base then in effect, (iv) the then-outstanding
principal amount of the Term Loans is less than $50,000,000 and (v)
if only some (and not all) of the 5% Convertible Subordinated Notes
due 2002 shall be repaid, purchased, redeemed or repurchased using
proceeds of the Revolving Loans, then,
9
concurrently therewith, the Parent shall repay, purchase, redeem or
repurchase the remaining 5% Convertible Subordinated Notes due 2002
in a manner permitted under the immediately preceding clause (a) such
that after giving effect thereto all Indebtedness outstanding under
the 5% Convertible Subordinated Notes due 2002 shall have been paid
in full. Notwithstanding the preceding clauses (a) and (b), no
repayment, purchase, redemption or repurchase of the 5% Convertible
Subordinated Notes due 2002 of the Parent or any other Subordinated
Debt shall be permitted if (i) any Default or Event of Default then
exists or would result therefrom or (ii) after giving effect to
such repayment, purchase, redemption or repurchase, the Parent
would not be in full pro forma compliance with Section 8.21,
measured as of the last day of the fiscal quarter then most
recently ended."
(s) Subsection (a) of Section 8.21 of the Credit Agreement shall
be amended and restated as follows:
"(a) The Parent shall not permit its Consolidated Net
Worth as of the last day of any fiscal quarter to be less than (i)
$300,000,000, plus (ii) 75% of Consolidated Net Income for each
----
fiscal quarter (without giving effect to any net loss for any such
period) ending after September 30, 1999, plus (iii) 100% of all Net
----
Issuance Proceeds for the issuance of equity of the Parent, the
Company or any Subsidiary from and after September 30, 1999, minus
-----
(iv) pre-tax net losses of up to $90,000,000 in fiscal year 2001
resulting from book losses on dispositions recorded in fiscal year
2001, minus (v) pre-tax net losses for fiscal years 2001 and 2002
-----
resulting from restructuring charges in an aggregate amount of up
to $100,000,000 subject to the limitations that (A) no more than
$60,000,000 of such charges (cash and non-cash) may be subtracted
in the calculation of minimum Consolidated Net Worth for fiscal
year 2001, (B) no more than $40,000,000 of cash restructuring
charges may be subtracted in the calculation of minimum
Consolidated Net Worth for fiscal year 2001, and (C) no more than
$55,000,000 of cash restructuring charges in the aggregate may be
subtracted in the calculation of minimum Consolidated Net Worth for
fiscal years 2001 and 2002."
(t) Subsection (b) of Section 8.21 of the Credit Agreement shall
be amended and restated as follows:
"(b) The Parent shall not permit the Total Leverage Ratio
as of the last day of any fiscal quarter to be greater than (i)
5.00 to 1.00 for the fiscal quarter ending on September 30, 2001,
(ii) 5.25 to 1.00 for the fiscal quarters ending on December 31,
2001, and Xxxxx 00, 0000, (xxx) 4.50 to 1.00 for the fiscal
quarters ending on June 30, 2002, September 30, 2002, December 31,
2002 and March 31, 2003, (iv) 4.25 to 1.00 for the fiscal quarters
ending on June 30, 2003 and September 30, 2003 and (v) 4.00 to 1.00
for the fiscal quarter ending on December 31, 2003, and each fiscal
quarter ending thereafter."
(u) Subsection (c) of Section 8.21 of the Credit Agreement shall
be amended and restated as follows:
"(c) The Parent shall not permit the Senior Leverage Ratio
as of the last day of any fiscal quarter to be greater than (i)
3.00 to 1.00 for the fiscal quarters ending
10
September 30, 2001, December 31, 2001, and March 31, 2002, and (ii)
2.50 to 1.00 for the fiscal quarter ending June 30, 2002, and each
fiscal quarter ending thereafter."
(v) Section 8.22 of the Credit Agreement shall be deleted in its
entirety and replaced with "[intentionally omitted]".
(w) Clause (iii) in subsection 9.01(e) of the Credit Agreement
shall be deleted in its entirety and replaced with "[intentionally omitted]".
(x) Subsection (a) of Section 11.08 of the Credit Agreement shall
be amended and restated as follows:
"(a) Any Lender may, with the written consent of the
Company and the Agent, the Issuing Bank and the Swingline Bank
(which in each case shall not be unreasonably withheld), at any
time assign and delegate to one or more Eligible Assignees (each an
"Assignee") all, or any ratable part of all, of the Loans, the
--------
Commitment, the L/C Obligations and the other rights and
obligations of such Lender hereunder; provided, however, that (i)
-------- -------
no written consent of the Company shall be required during the
existence of a Default or an Event of Default; (ii) no written
consent of the Company or the Agent, the Issuing Bank or the
Swingline Bank shall be required in connection with any assignment
and delegation by a Lender to an Eligible Assignee that is (A)
another Lender or an Affiliate of such Lender or (B) a fund that is
administered or managed by (1) a Lender, (2) an Affiliate of a
Lender or (3) an entity or an Affiliate of an entity that
administers or manages a Lender; (iii) no written consent of the
Issuing Bank or the Swingline Bank shall be required in connection
with any assignment and delegation of Term Loans by a Lender; and
(iv) except in connection with an assignment of all of a Lender's
rights and obligations with respect to its Commitment, Loans and
L/C Obligations, any such assignment to an Eligible Assignee shall
be equal to or greater than $1,000,000; and provided further,
-------- -------
however, that the Company and the Agent may continue to deal solely
-------
and directly with such Lender in connection with the interest so
assigned to an Assignee until (A) such Lender and its Assignee
shall have delivered to the Company and the Agent an Assignment and
Acceptance Agreement substantially in the form of Exhibit E
---------
("Assignment and Acceptance"), together with any Note or Notes
-------------------------
subject to such assignment; (B) a written notice of such
assignment, together with payment instructions, addresses and
related information with respect to the Assignee, in substantially
the form of the Notice of Assignment and Acceptance attached as
Schedule 1 to the Assignment and Acceptance, shall have been given
----------
to the Company and the Agent by such Lender and the Assignee; (C)
the assignor Lender or Assignee shall have paid to the Agent a
processing fee in the amount of $4,000 and (D) the Agent, the
Company, the Issuing Bank and the Swingline Bank each shall have
provided any required consent to such assignment in accordance with
this Section. In connection with any assignment by BofA, its
Swingline Commitment may be assigned in whole (and not part) and
only in connection with an assignment transaction involving an
assignment of all of its Commitments and Loans, and the Assignment
and Acceptance may be appropriately modified to include an
assignment and delegation of its Swingline Commitment and any
outstanding Swingline Loans. It is understood that any Lender may
(1) assign its Tranche A Term Loans separately from its Revolving
Loans, Revolving Commitment and Tranche B Term Loans, (2) assign
its Tranche B Term Loans separately from its Revolving Loans,
Revolving Commitment and Tranche A Term Loans; and (3)
11
assign its Revolving Loans and Revolving Commitment separately from
its Tranche A Term Loans and Tranche B Term Loans."
(y) The pricing grid attached as Annex I to the Credit Agreement
-------
is amended and restated in its entirety in the form of Annex I hereto.
-------
(z) Schedule 1.01(A) to the Credit Agreement is amended and
----------------
restated in its entirety in the form of Schedule 1.01(A) hereto.
----------------
3. Representations and Warranties. The Parent and the Company hereby
------------------------------
represent and warrant to the Agent and the Lenders as follows:
(a) No Default or Event of Default has occurred and is continuing
(or would result from the amendment of the Credit Agreement contemplated
hereby).
(b) The execution, delivery and performance by the Parent, the
Company and the other Loan Parties of this Fourth Amendment and the Credit
Agreement (as amended by this Fourth Amendment) have been duly authorized by
all necessary corporate and other action and do not and will not require any
registration with, consent or approval of, or notice to or action by, any
Person (including any Governmental Authority) in order to be effective and
enforceable.
(c) This Fourth Amendment and the Credit Agreement (as amended
by this Fourth Amendment) constitute the legal, valid and binding obligations
of the Parent, the Company and each other Loan Party, enforceable against it
in accordance with their respective terms.
(d) All representations and warranties of the Parent, the Company
and the other Loan Parties contained in the Credit Agreement are true and
correct (except to the extent such representations and warranties expressly
refer to an earlier date, in which case they shall be true and correct as of
such earlier date, and except that this subsection (d) shall be deemed instead
to refer to the last day of the most recent quarter and year for which
financial statements have then been delivered in respect of the
representation and warranty made in subsection 6.11(a) of the Credit
Agreement and to take into account any amendments to the Schedules to the
Credit Agreement and other disclosures made in writing by the Parent or the
Company to the Agent and the Lenders after the Closing Date and approved by
the Agent and the Majority Lenders).
(e) The Parent, the Company and each other Loan Party are
entering into this Fourth Amendment on the basis of its own investigation and
for its own reasons, without reliance upon the Agent and the Lenders or any
other Person.
(f) The Parent's, the Company's and each other Loan Party's
obligations under the Credit Agreement and under the other Loan Documents are
not subject to any defense, counterclaim, set-off, right of recoupment,
abatement or other claim.
4. Conditions of Effectiveness.
---------------------------
(a) The effectiveness of Section 2 of this Fourth Amendment
shall be subject to the satisfaction of each of the following conditions
precedent:
12
(i) The Agent or Banc of America Securities LLC ("BAS")
shall have received from the Company all amounts payable under that certain fee
letter dated as of July 11, 2001, delivered by the Company to BAS in connection
herewith.
(ii) The Agent shall have received from the Parent, the
Company and each other Loan Party and the Majority Lenders a duly executed
original (or, if elected by the Agent, an executed facsimile copy) of this
Fourth Amendment.
(iii) The Agent shall have received all other documents it
or the Majority Lenders may reasonably request relating to any matters relevant
hereto, all in form and substance satisfactory to the Agent and the Majority
Lenders.
(iv) The representations and warranties in Section 3 of
this Fourth Amendment shall be true and correct on and as of the Effective Date
with the same effect as if made on and as of the Effective Date.
(v) The Agent shall have received a completed Update
Certificate in the form of Exhibit K attached to the Credit Agreement for the
---------
period commencing on February 18, 2000, through the Effective Date.
(b) For purposes of determining compliance with the conditions
specified in Section 4(a), each Lender that has executed this Fourth Amendment
shall be deemed to have consented to, approved or accepted, or to be satisfied
with, each document or other matter either sent, or made available for
inspection, by the Agent to such Lender for consent, approval, acceptance or
satisfaction, or required hereunder to be consented to or approved by or
acceptable or satisfactory to such Lender.
(c) From and after the Effective Date, the Credit Agreement is
amended as set forth herein. Except as expressly amended pursuant hereto, the
Credit Agreement shall remain unchanged and in full force and effect and is
hereby ratified and confirmed in all respects.
(d) The Agent will notify the Parent, the Company and the Lenders
of the occurrence of the Effective Date.
5. Borrowing Base. Not later than August 15, 2002, the Loan Parties and
--------------
the Agent shall have agreed to a Borrowing Base and a form of Borrowing Base
Certificate, in each case, in form and substance satisfactory to the Agent
and the Majority Lenders (such date on which the parties agree on such
items, the "Borrowing Base Agreement Date"). The Agent, the Lenders and the
Loan Parties hereby agree that the failure of the Borrowing Base Agreement
Date to occur on or prior to August 15, 2002 shall constitute an immediate
Event of Default under Section 9.01(c) of the Credit Agreement and for all
purposes of the Credit Agreement and the other Loan Documents, unless the
reason that the Borrowing Base Agreement Date does not occur on or prior to
August 15, 2002 is the failure of the Agent and/or the Lenders to act in
good faith.
6. Consent of Guarantors. Each of the Parent and the other Guarantors,
---------------------
in its capacity as a Guarantor, acknowledges that its consent to this Fourth
Amendment and the amendments to the Credit Agreement contemplated hereby is
not required, but each of such Persons nevertheless does hereby consent to
this Fourth Amendment and the amendments to the Credit Agreement
13
contemplated hereby and to the documents and agreements referred to herein.
Nothing herein shall in any way limit any of the terms or provisions of the
Guaranty of the Parent or any of the other Guarantors or the Collateral
Documents executed by the Parent or any of the other Guarantors in the
Agent's and the Lenders' favor, or any other Loan Document executed by the
Parent or any of the other Guarantors (as the same may be amended from time
to time), all of which are hereby ratified and affirmed in all respects.
7. Miscellaneous.
-------------
(a) The Parent, the Company and each other Loan Party
acknowledges and agrees that the execution and delivery by the Agent and the
Majority Lenders of this Fourth Amendment shall not be deemed to create a
course of dealing or an obligation to execute similar waivers or amendments
under the same or similar circumstances in the future.
(b) This Fourth Amendment and the Credit Agreement as amended by
this Fourth Amendment shall be binding upon and inure to the benefit of the
parties hereto and thereto and their respective successors and assigns.
(c) This Fourth Amendment shall be governed by and construed in
accordance with the law of the State of California, provided that the Agent
--------
and the Lenders shall retain all rights arising under Federal law.
(d) This Fourth Amendment may be executed in any number of
counterparts, each of which shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument. Each
of the parties hereto understands and agrees that this document (and any other
document required herein) may be delivered by any party thereto either in
the form of an executed original or an executed original sent by facsimile
transmission to be followed promptly by mailing of a hard copy original, and
that receipt by the Agent of a facsimile transmitted document purportedly
bearing the signature of a Lender or any Loan Party shall bind such Lender
or such Loan Party, respectively, with the same force and effect as the
delivery of a hard copy original. Any failure by the Agent to receive the
hard copy executed original of such document shall not diminish the binding
effect of receipt of the facsimile transmitted executed original of such
document of the party whose hard copy page was not received by the Agent.
(e) This Fourth Amendment contains the entire and exclusive
agreement of the parties hereto with reference to the matters discussed herein.
This Fourth Amendment supersedes all prior drafts and communications with
respect hereto. This Fourth Amendment may not be amended except in accordance
with the provisions of Section 11.01 of the Credit Agreement.
(f) If any term or provision of this Fourth Amendment shall be
deemed prohibited by or invalid under any applicable law, such provision shall
be invalidated without affecting the remaining provisions of this Fourth
Amendment, the Credit Agreement or the other Loan Documents.
(g) The Company agrees to pay or reimburse BofA (including in
its capacity as Agent), upon demand, for all reasonable costs and expenses
(including reasonable Attorney Costs) incurred by BofA (including in its
capacity as Agent) in connection with the development, preparation,
negotiation, execution and delivery of this Fourth Amendment.
[Signature pages follow.]
14
IN WITNESS WHEREOF, the parties hereto have caused this
Fourth Amendment to be duly executed and delivered in San Francisco,
California, by their proper and duly authorized officers as of the day and
year first above written.
MAIL-WELL, INC.
By: ___________________________________
Title: _________________________________
MAIL-WELL I CORPORATION
By: ___________________________________
Title: _________________________________
EACH SUBSIDIARY GUARANTOR LISTED ON
ANNEX II
By: ___________________________________
Title: _________________________________
BANK OF AMERICA, N.A., as Agent, Issuing
Bank, Swingline Bank and as a Lender
By: __________________________________
Title: ________________________________
[Other Lenders.]
15
ANNEX I
To Fourth Amendment to Credit Agreement
---------------------------------------
ANNEX I
-------
PRICING GRID
------------
From the Effective Date (as such term is defined in the
Fourth Amendment to the Credit Agreement dated as of August 7, 2001) until
the date on which the Parent delivers a Compliance Certificate pursuant to
Section 7.02(b) of the Credit Agreement for the fiscal quarter ending June
30, 2001 (the "Initial Period"), the Applicable Margin and the Applicable
--------------
Fee Amount shall be fixed at Level 5. From and after the last day of the
Initial Period, the Applicable Margin and the Applicable Fee Amount for any
day shall be the amount per annum set forth below based on the Total
Leverage Ratio set forth in the most recently delivered Compliance
Certificate delivered by the Parent pursuant to Section 7.02(b) of the
Credit Agreement. Changes in the Applicable Margin and the Applicable Fee
Amount resulting from a change in the Total Leverage Ratio shall become
effective on the date of delivery by the Parent to the Agent of a new
Compliance Certificate pursuant to Section 7.02(b), except that no such
change shall take effect until the end of the Initial Period. If the Parent
shall fail to deliver a Compliance Certificate and accompanying financial
statements within the number of days after the end of any fiscal quarter or
fiscal year as required pursuant to Section 7.02(b), the parties agree that
the Applicable Margin and the Applicable Fee Amount shall be fixed at Level
6 until such time as the Parent delivers such new Compliance Certificate and
accompanying financial statements pursuant to Section 7.02(b).
Notwithstanding the foregoing, the Applicable Margin for Tranche B Term
Loans shall be, at Levels 1 through 5, 3.50% for Offshore Rate Loans and
2.25% for Base Rate Loans and, at Xxxxx 0, 3.75% for Offshore Rate Loans and
2.50% for Base Rate Loans.
================================================================================================================
OFFSHORE RATE BASE RATE LETTER OF COMMITMENT
LEVEL TOTAL LEVERAGE RATIO SPREAD SPREAD CREDIT FEE FEE
================================================================================================================
Level 6 greater than or equal 3.50% 2.25% 3.50% 0.50%
to 4.75 to 1.00
----------------------------------------------------------------------------------------------------------------
Level 5 greater than or equal 3.25% 2.00% 3.25% 0.50%
to 4.25 to 1.00 and
less than 4.75 to 1.00
----------------------------------------------------------------------------------------------------------------
Level 4 greater than or equal 3.00% 1.75% 3.00% 0.50%
to 3.50 to 1.00 and
less than 4.25 to 1.00
----------------------------------------------------------------------------------------------------------------
Level 3 greater than or equal 2.75% 1.50% 2.75% 0.50%
to 3.00 to 1.00 and
less than 3.50 to 1.00
----------------------------------------------------------------------------------------------------------------
Level 2 greater than or equal 2.50% 1.25% 2.50% 0.50%
to 2.50 to 1.00 and
less than 3.00 to 1.00
----------------------------------------------------------------------------------------------------------------
Level 1 less than 2.50 to 1.00 2.25% 1.00% 2.25% 0.50%
----------------------------------------------------------------------------------------------------------------
16
ANNEX II
To Fourth Amendment to Credit Agreement
---------------------------------------
ABP Books, Inc.
Xxxxxx 1000, Inc.
Discount Labels, Inc.
Hill Graphics, Inc.
Mail-Well Canada Holdings, Inc.
Mail-Well Commercial Printing, Inc.
Mail-Well Europe Holdings, LLC
Mail-Well Label USA, Inc.
Mail-Well Mexico Holdings, Inc.
Mail-Well Services, Inc.
Mail-Well West, Inc.
National Graphics Company
Poser Business Forms, Inc.
Vanier Graphics Corporation
Wisco III, LLC
17
