EXHIBIT 10.3
AMENDMENT AND RESTATEMENT OF CREDIT AGREEMENT
AMENDMENT AND RESTATEMENT OF CREDIT AGREEMENT (this "Amendment and
Restatement"), dated as of December 4, 1998, among WORKFLOW MANAGEMENT, INC., a
Delaware corporation ("Workflow"), DATA BUSINESS FORMS LIMITED, an Ontario
corporation ("DBF" and, together with Workflow, the "Borrowers"), the lenders
party to the Existing Credit Agreement referred to below (the "Lenders"), and
BANKERS TRUST COMPANY, as Agent (in such capacity, the "Agent"). Unless
otherwise defined herein, all capitalized terms used herein and defined in the
Existing Credit Agreement are used herein as so defined.
WITNESSETH:
WHEREAS, the Borrowers, the Lenders and the Agent are parties to a Credit
Agreement, dated as of June 9, 1998 (as amended, modified or supplemented to,
but not including, the date hereof, the "Existing Credit Agreement");
WHEREAS, the Borrowers and the Lenders wish to amend and restate the
Existing Credit Agreement to, inter alia, increase the Total Commitment
thereunder from $150,000,000 to $200,000,000, all as herein provided; and
WHEREAS, subject to the terms and conditions of this Amendment and
Restatement, the parties hereto agree as follows;
NOW, THEREFORE, it is agreed:
1. The Existing Credit Agreement shall be, and hereby is, amended and
restated in its entirety in the form of the Existing Credit Agreement after
giving effect to the changes thereto effected hereby.
2. Section 6 of the Existing Credit Agreement is hereby amended by
inserting the following new Section 6.24 at the end hereof:
"6.24 Permitted Subordinated Indebtedness. From and after the
issuance thereof, the subordination provisions contained in the Permitted
Subordinated Indebtedness will be enforceable against Workflow and the
holders of the Permitted Subordinated Indebtedness, and all Obligations of
Workflow under this Agreement and the Canadian General Guaranty will be
within the definition of "Senior Debt" included in such subordination
provisions."
3. Section 7.01(i) of the Existing Credit Agreement is hereby amended by
deleting the reference to "30 days" each place such reference appears therein
and inserting "90 days" in lieu thereof in each such place.
4. Section 8.04 of the Existing Credit Agreement is hereby amended by (i)
deleting the word "and" appearing at the end of clause (g) thereof, (ii)
deleting clause (h) at the end thereof and (iii) inserting the following the new
clauses (h) and (i) at the end thereof:
"(h) unsecured subordinated *indebtedness of Workflow (the
"Permitted Subordinated Indebtedness") in an aggregate principal amount
not to exceed $10,000,000 (plus the principal amount of any notes issued
in respect of pay-in-kind interest thereon) so long as (i) at the time of
the incurrence thereof and immediately after giving effect thereto, no
Default or Event of Default shall then exist or result therefrom, (ii)
such Indebtedness is incurred on or prior to the last day of Workflow's
fiscal year ending closest to Xxxxx 00, 0000, (xxx) the proceeds from the
incurrence of such Indebtedness are used solely to finance Dividends
permitted under Section 8.07(d), (iv) the maturity of such Indebtedness is
at least ten years from the date of issuance thereof (with no interim
amortizations, redemptions or sinking fund obligations prior to such
time), (v) the interest rate of such Indebtedness is no greater than 12%
per annum (although the holders of such Indebtedness may receive warrants
to purchase shares of Workflow's common stock), (vi) (x) for the first
three years after the issuance thereof, the interest payments thereon
shall consist of no more than 50% cash and at least 50% in-kind, provided
that no cash interest payments shall be required (nor shall any cash
interest payments be made) at any time that a Default or an Event of
Default exists, and (y) after such three year period, such interest
payments may consist of all cash, provided that no cash interest payments
shall be required (nor shall any cash interest payments be made) at any
time that a Default or an Event of Default exists, and (vii) all of the
other terms and conditions thereof are reasonably satisfactory to the
Agent (it being understood and agreed that during each of the first three
years after the issuance of such Indebtedness, Workflow may seek the
consent of the Supermajority Lenders to permit the interest payments on
the Permitted Subordinated Indebtedness to be paid in all cash (provided
that each such request may not be made until Workflow has delivered to the
Lenders its audited financial statements for its immediately preceding
fiscal year)); and
(i) unsecured Indebtedness of Workflow and its Subsidiaries not
otherwise permitted by the foregoing clauses (a) through (h), provided
that the aggregate principal amount of all Indebtedness incurred pursuant
to the clause (i) shall not exceed $7,000,000 at any time outstanding."
5. Section 8.07 of the Existing Credit Agreement is hereby amended by
Inserting the following new clause (d) at the end thereof:
"(d) In addition to the Dividends permitted by clauses (a) and (c)
of this Section 8.07, on or prior to the last day of Workflow's fiscal
year ending closest to April 30, 1999, Workflow may repurchase additional
shares of its capital stock so long as (i) no Default or Event of Default
then exists or would result therefrom and (ii) all such repurchases are
effected with proceeds received by Workflow from the issuance of the
Permitted Subordinated Indebtedness."
6. Section 8 of the Existing Credit Agreement is hereby further amended by
inserting the following new Section 8.13 at the end thereof:
"8.13 Limitation on Payments and Modification of Permitted
Subordinated Indebtedness. From and after the issuance of the Permitted
Subordinated Indebtedness, Workflow will not, and will not permit any of
its Subsidiaries to:
(i) make (or give any notice in respect of) any payment,
prepayment, redemption or acquisition for value of (including, without
limitation, by way of depositing with any Person money or securities
before due for the purpose of payment when due) any Permitted
Subordinated Indebtedness (whether in respect of principal, interest or
otherwise), provided that so long as no Default or Event of Default then
exists or would result therefrom, Workflow may make cash and in-kind
interest payments on the Permitted Subordinated Indebtedness to the
extent permitted by Section 8.04(h); and
(ii) amend or modify, or permit the amendment or modifications
of, any provision of the Permitted Subordinated Indebtedness."
7. Section 9 of the Existing Credit Agreement is hereby amended by (i)
inserting the word "or" at the end of Section 9.10 thereof and (ii) inserting
the following new Section 9.11 immediately after such Section 9.10:
"9.11 Permitted Subordinated Indebtedness. At any time after the
issuance of the Permitted Subordinated Indebtedness, the original holders
thereof satisfactory to the Agent shall cease to hold at least 50% of the
aggregate outstanding principal amount of the Permitted Subordinated
Indebtedness;".
8. The definition of "Acquisition Sub-Limit" appearing in Section 10 of
the Existing Credit Agreement is hereby amended by deleting the reference to the
amount "$125,000,000" appearing therein and inserting the amount "$165,000,000"
in lieu thereof.
9. The definition of "Applicable Base Rate/Canadian Prime Rate Margin"
appearing in Section 10 of the Existing Credit Agreement is hereby amended by
deleting the table set forth therein and inserting the following new table in
lieu thereof:
Applicable Base Rate/
"Leverage Ratio Canadian Prime Rate Margin
-------------- --------------------------
Greater than or equal to 3.0:1 .750%
Less than 3.0:1 but greater than or equal .500%
to 2.5:1
Less than 2.5:1 but greater than or equal .250%
to 2.0:1
Less than 2.0:1 0%
10. The definition of "Applicable Commitment Fee Percentage" appearing in
Section 10 of the Existing Credit Agreement is hereby amended by deleting the
table set forth therein and inserting the following new table in lieu thereof:
Applicable Commitment
"Leverage Ratio Fee Percentage
-------------- --------------
Greater than or equal to 3.0:1 .500%
Less than 3.0:1 but greater than or equal .400%
to 2.5:1
Less than 2.5:1 but greater than or equal .300%
to 2.0:1
Less than 2.0:1 .250%."
11. The definition of "Applicable Eurodollar Margin" appearing in Section
10 of the Existing Credit Agreement is hereby amended by deleting the table set
forth therein and inserting the following new table in lieu thereof:
"Leverage Ratio Applicable Eurodollar Margin
-------------- ----------------------------
Greater than or equal to 3.0:1 1.750%
Less than 3.0:1 but greater than or equal 1.500%
to 2.5:1
Less than 2.5:1 but greater than or equal 1.250%
to 2.0:1
Less than 2.0:1 but greater than or equal 1.000%
to 1.5:1
Less than 1.5:1 but greater than or equal .875%
to 1.0:1
Less than 1.0:1 .750%."
12. Section 10 of the Existing Credit Agreement is hereby further amended
by inserting the following new definitions in the appropriate alphabetical
order:
"Permitted Subordinated Indebtedness" shall have the meaning
provided on Section 8.04(h).
"Supermajority Lenders" shall mean those. Non-Defaulting Lenders
which would constitute the Required Lenders under, and as defined in, this
Agreement if the percentage "50'/o" contained therein were changed to
"66-2/3%".
13. The Lenders hereby approve an increase in the Total Commitment from
$150,000,000 to $200,000,000. In that connection, Annex I-A to the Existing
Credit Agreement is hereby amended by deleting such Annex in its entirety and
replacing it with the new Annex I-A attached hereto. In connection with the
increase in the Total Commitment as set forth on the new Annex I-A attached
hereto, the Lenders hereby agree that Workflow and the Agent may take all such
actions as may be necessary to ensure that all Lenders continue to participate
in each Borrowing of Dollar Revolving Loans on a pro rata basis (based on the
Commitment of each Lender after giving effect to this Amendment), and it is
hereby further agreed that to the extent any Lender incurs any funding or other
costs (including those of the type described in Section 1.11 of the Existing
Credit Agreement) in connection therewith, such costs shall be for the account
of Workflow. In addition, it is hereby further agreed that at the time of such
increase in the Total Commitment with respect to all outstanding Letters of
Credit there shall be an automatic adjustment to the participations by the
Lenders in such Letters of Credit to reflect the new Percentages of the Lenders
after giving effect to this Amendment and Restatement.
14. Each Credit Party hereby agrees that, on or promptly after the
Restatement Effective Date (as defined below) and upon the request of the Agent,
such Credit Party will execute such amendments to the Mortgages as the Agent
shall reasonably require in connection with this Amendment and Restatement.
15. This Amendment and Restatement shall become effective on the date (the
"Restatement Effective Date") when each of the following conditions have been
met:
(a) each Credit Party, the Required Lenders (as determined before
giving effect to this Amendment and Restatement) and each Lender whose
Commitment shall be increased pursuant to this Amendment and Restatement
shall have signed a counterpart hereof (whether the same or different
counterparts) and shall have delivered (including by way of facsimile
transmission) the same to the Agent at the Notice Office;
(b) the Agent shall have received from Xxxxxxx & Xxxxxxx, counsel to
the Credit Parties, an opinion addressed to the Agent, the Collateral
Agent and each of the Lenders and dated the Restatement Effective Date, in
form and substance reasonably satisfactory to the Agent, and covering such
matters incident to this Amendment arid Restatement and the transactions
contemplated herein as the Agent may reasonably request;
(c) the Agent shall have received resolutions of the Board of
Directors of each U.S. Credit Party, which resolutions shall be certified
by the Secretary or any Assistant Secretary of such U.S. Credit Party and
shall authorize the execution, delivery and performance by such U.S.
Credit Party of this Amendment and Restatement and the consummation of the
transactions contemplated hereby, and the foregoing shall be reasonably
satisfactory to the Agent;
(d) the Agent and the Lenders shall have received the financial
statements and related officer's certificate required to be delivered
pursuant to Sections 7.01(b) and (e) of the Existing Credit Agreement in
respect of Workflow's fiscal quarter ended closest to October 31, 1998;
(e) Workflow shall have paid in cash to the Agent for distribution
to each Lender that has signed a counterpart of this Amendment and
Restatement and delivered the same to the Agent at the Notice Office by
no later than 5:30 p.m. (New York time) on December 2, 1998 a consent fee
equal to .05% of each such Lender's Commitment on the Restatement
Effective date (before giving effect to this Amendment and Restatement);
and
(f) Workflow shall have paid to the Agent and each of the Lenders
all other fees and expenses to the extent due and payable.
16. In order to induce the Lenders to enter into this Amendment and
Restatement, the Borrowers hereby represent and warrant that (i) the
representations, warranties and agreements contained in Section 6 of the
Existing Credit Agreement are true and correct in all material respects on and
as of the Restatement Effective Date, both before and after giving effect to
this Amendment and Restatement and (ii) there exists no Default or Event of
Default on the Restatement Effective Date, both before and after giving effect
to this Amendment and Restatement.
17. By executing and delivering a counterpart hereof, each Subsidiary
Guarantor hereby agrees that all Loans (including, without limitation, the
additional Revolving Loans which may be incurred pursuant to the Total
Commitment after giving effect to this Amendment and Restatement) shall be fully
guaranteed pursuant to the U.S. Subsidiaries Guaranty *in accordance with the
terms and provisions thereof and shall be fully secured pursuant to the
applicable Security Documents.
18. This Amendment and Restatement is limited as specified and shall not
constitute a modification, acceptance or waiver of any other provision of the
Credit Agreement or any other Credit Document.
19. This Amendment and Restatement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which counterparts when executed and delivered shall be an original, but all
of which shall together constitute one and the same instrument. A complete set
of counterparts shall be lodged with the Borrowers and the Agent.
20. THIS AMENDMENT AND RESTATEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW
OF THE STATE OF NEW YORK.
21. From and after the Restatement Effective Date, all references in the
Existing Credit Agreement and in the other Credit Documents to the Existing
Credit Agreement shall be deemed to be references to the Existing Credit
Agreement as amended and restated hereby.
IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers to execute and deliver this Amendment and Restatement as of the date
first above written.
WORKFLOW MANAGEMENT, INC.
By: /s/ Xxxxx X. Xxxxxx
------------------------------
Name: Xxxxx X. Xxxxxx
----------------------------
Title: Vice President and CFO
--------------------------
DATA BUSINESS FORMS LIMITED
By: /s/ Xxxxxxx Xxxxx
-----------------------------
Name: Xxxxxxx Xxxxx
--------------------------
Title: Vice President
------------------------
SFI OF DELAWARE, LLC
By: /s/ Xxxxxxx Xxxxx
-----------------------------
Name: Xxxxxxx Xxxxx
-------------------------
Title: Vice President
------------------------
SFI OF PUERTO RICO, INC.
By: /s/ Xxxxxxx Xxxxx
-------------------------------
Name: Xxxxxxx Xxxxx
--------------------------
Title: Vice President
-------------------------
ASTRID OFFSET CORP.
By: /s/ Xxxxxxx Xxxxx
-------------------------------
Name: Xxxxxxx Xxxxx
-------------------------
Title: Vice President
---------------------------
XXX ENVELOPE CO., INC.
By: /s/ Xxxxxxx Xxxxx
--------------------------
Name: Xxxxxxx Xxxxx
-----------------------
Title: Vice President
----------------------
HANO DOCUMENT PRINTERS, INC.
By: /s/ Xxxxxxx Xxxxx
-------------------------------
Name: Xxxxxxx Xxxxx
-----------------------------
Title: Vice President
---------------------------
UNITED ENVELOPE, LLC
By: /s/ Xxxxxxx Xxxxx
-------------------------------
Name: Xxxxxxx Xxxxx
----------------------------
Title: Vice President
---------------------------
HUXLEY ENVELOPE CORP.
By: /s/ Xxxxxxx Xxxxx
------------------------------
Name: Xxxxxxx Xxxxx
-----------------------------
Title: Vice President
----------------------------
POCONO ENVELOPE, CORP.
By: /s/ Xxxxxxx Xxxxx
-----------------------------
Name: Xxxxxxx Xxxxx
---------------------------
Title: Vice President
--------------------------
DIRECTPRO LLC
By: /s/ Xxxxxxx Xxxxx
-------------------------------
Name: Xxxxxxx Xxxxx
----------------------------
Title: Vice President
--------------------------
DIRECTPRO WEST LLC
By: /s/ Xxxxxxx Xxxxx
-----------------------------
Name: Xxxxxxx Xxxxx
--------------------------
Title: Vice President
-------------------------
XXXX-XXXXXX ENVELOPE CORP.
By: /s/ Xxxxxxx Xxxxx
-----------------------------
Name: Xxxxxxx Xxxxx
---------------------------
Title: Vice President
--------------------------
BANKERS TRUST COMPANY,
Individually and as Agent
By: /s/ Xxxxx X. Xxxx
----------------------------
Name: Xxxxx X. Xxxx
---------------------------
Title: Vice President
--------------------------
BANKBOSTON, N.A.
By: /s/ Xxxxx Xxxxxxx
-------------------------------
Name: Xxxxx Xxxxxxx
----------------------------
Title: Director
---------------------------
PNC BANK, N.A.
By: /s/ Xxxx X. Xxxxx
--------------------------------
Name: Xxxx X. Xxxxx
-----------------------------
Title: Vice President
----------------------------
WACHOVIA BANK, N.A.
By: /s/ Xxxxxxx Xxxxxxxxxx
-------------------------------
Name: Xxxxxxx Xxxxxxxxxx
-----------------------------
Title: Vice President
----------------------------
NATIONSBANK N.A.
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxxx
----------------------------
Title: Commercial Banking Officer
---------------------------
BANK OF MONTREAL
By: /s/ Bank of Montreal
----------------------------
Name:
Title: Sr. Mgr. Corp. Finance
----------------------------
By: /s/ X.X. Xxxxxx
---------------------------------
Name: X.X. Xxxxxx
------------------------------
Title: VP & Head of Corp. Finance
-----------------------------
COMERICA BANK
By: /s/ Xxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxx X. Xxxxx
-----------------------------
Title: Vice President
----------------------------
THE FUJI BANK AND TRUST
COMPANY
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
FLEET NATIONAL BANK
By: /s/ Xxxxx X. Xxxx
-------------------------------
Name: Xxxxx X. Xxxx
-----------------------------
Title: Assistant Vice President
--------------------------
THE FIRST NATIONAL BANK OF
CHICAGO
By: /s/ Xxxx X. Xxxxxxxx
------------------------------
Name: Xxxx X. Xxxxxxxx
----------------------------
Title: Vice President
---------------------------
NATIONAL BANK OF CANADA
By: /s/ X. Xxxxx
------------------------------
Name: X. Xxxxx
----------------------------
Title: Senior Manager
---------------------------
Workflow Allocations
Existing
Exposure New Commitment Allocation Total Exposure
BT $16,250,000 $5,000,000 $4,750,000 $21,000,000
Bk One $16,250,000 $5,000,000 $4,750,000 $21,000,000
Wachovia $16,250,000 $10,000,000 $7,125,000 $23,375,000
Comerica $16,250,000 $10,000,000 $7,125,000 $23,375,000
Fleet $12,500,000 $10,000,000 $7,125,000 $19,625,000
NBC $12,500,000 $2,500,000 $2,500,000 $15,000,000
Bk Boston $12,500,000 $5,000,000 $4,750,000 $17,250,000
Nations $12,500,000 $10,000,000 $7,125,000 $19,625,000
BMo $12,500,000 $5,000,000 $4,750,000 $17,250,000
PNC $12,500,000 $0 $0 $12,500,000
Fuji $10,000,000 $0 $0 $10,000,000
------------ ------------ ------------ ------------
$150,000,000 $62,500,000 $50,000,000 $200,000,000
