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Exhibit 10.16
AMENDMENT, CONSENT AND WAIVER AGREEMENT
MULTI-COLOR CORPORATION, an Ohio corporation (the "Company"), PNC BANK,
NATIONAL ASSOCIATION and COMERICA BANK (each individually a "Lender" and
collectively the "Lenders") and PNC BANK, NATIONAL ASSOCIATION, as agent for the
Lenders (the "Agent"), hereby agree as follows effective as of April 20, 1999
("Effective Date"):
1. RECITALS.
1.1 On June 22, 1998, the Company, the Lenders and the Agent entered
into a Third Amended and Restated Credit, Reimbursement and Security
Agreement, which amended and fully restated a Credit, Reimbursement
and Security Agreement dated as of July 15, 1994 (as amended and
restated, the "Credit Agreement"). Capitalized terms used herein and
not otherwise defined herein will have the meanings given such terms
in the Credit Agreement.
1.2 The Company has requested that the Lenders (i) amend certain
provisions of the Credit Agreement as provided herein; (ii) waive
the Excess Cash Flow recapture provision of the Credit Agreement for
the Fiscal Year ending March 31, 1999; (iii) consent to the sale and
leaseback of the Company's Scottsburg, Indiana facility; (iv)
consent to certain uses of the funds in the Construction Account, as
provided herein, and (v) consent to the Company's purchase from
Think Laboratory Co., Ltd. of its equity interest in Laser Graphic
Systems, Inc., and the Lenders are willing to do so subject to and
in accordance with the terms of this Amendment, Consent and Waiver
Agreement (this "Agreement").
2. AMENDMENTS.
2.1 The final sentence of Section 1.1.46 of the Credit Agreement
(definition of Eligible Inventory) is hereby deleted in its entirety
and replaced with the following: "Notwithstanding item (d) above, up
to $500,000 of plastic film inventory will be included in Eligible
Inventory if such Inventory otherwise satisfies the definition of
Eligible Inventory contained in this Section."
2.2 Section 10.2 of the Credit Agreement is hereby deleted in its
entirety and replaced with the following:
"10.2 LEASES. Enter into or permit to remain in effect any rental or
lease agreement (whether an operating lease or a capital lease) for
real or personal property whose term, including renewal options,
exceeds five (5) years (except for the term of the Lease dated as of
February 26, 1999 (the "Scottsburg Lease") between the Company and
Indiana Properties, LLC) or if aggregate annual rental payments
under all lease agreements (whether operating leases or capital
leases) for real and personal property on an annual basis would,
when combined with the annual rental payments of Laser Graphic
Systems, Incorporated, exceed $1,200,000."
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2.3 Section 10.12 of the Credit Agreement is hereby deleted in its
entirety and replaced with the following:
"10.12 DIVIDENDS. Declare or pay dividends of any kind on any shares
of capital stock now or hereafter outstanding or make any other
distribution of cash or property to its shareholders, or authorize
or set aside any funds or other property for any such purpose;
PROVIDED, HOWEVER, that if and for so long as the Company's net
income (as determined in accordance with GAAP, but without reducing
net income by any recorded liabilities to the Indiana Department of
Environmental Management) is greater than the amount set forth under
"Cumulative Net Income" below for the four immediately preceding
Fiscal Quarters, then the Company may pay quarterly dividends in an
aggregate amount not to exceed the amount set forth under "Aggregate
Quarterly Dividends" below:
Cumulative Net Income Aggregate Quarterly Dividends
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$2,000,000 $34,000
$2,500,000 $51,000
$3,000,000 $68,000
In addition, if (A) the Company's net income (as determined in
accordance with GAAP, but without reducing net income by any
recorded liabilities to the Indiana Department of Environmental
Management) is greater than $3,500,000 for the four immediately
preceding Fiscal Quarters and (B) the Company's ratio of total
liabilities to Tangible Net Worth (as described in Section 10.6
hereof) is 3.5 or less, then the Company may pay accrued and unpaid
dividends on preferred stock in an aggregate amount not to exceed
$300,000 in any Fiscal Year. No dividend may be paid if at the time
of making or declaring such dividend and after giving effect thereto
any Default or Event of Default exists and no dividend may be paid
if a Default or Event of Default has been waived by the Lenders, but
not cured by the Company."
2.4 The address for Comerica Bank set forth in Section 16.2 (Notices) of
the Credit Agreement is hereby deleted in its entirety and replaced
with the following:
"Comerica Bank
c/o Xxxxxx Xxxxxx, Vice President
000 Xxxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxx 00000
Telecopier No.: (000) 000-0000
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with a copy to:
Xxxxx Xxxxxx, Esq.
Comerica Tower at Detroit Center
33rd Floor
000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Telecopier No. (000) 000-0000"
3. WAIVER.
3.1 The Lenders waive the requirements of Section 9.26 (Excess Cash
Flow) of the Credit Agreement with respect to the Fiscal Year ending
March 31, 1999 only. For the Fiscal Year ending March 31, 2000 and
thereafter, the Company shall comply with the provisions of Section
9.26 of the Credit Agreement.
3.2 The waiver set forth in Section 3.1, above, will relate only to the
specific matter covered by such Section and in no event will the
Lenders be under any obligation to provide additional waivers with
regard to such matter or any other provision of the Credit Agreement
or the other Loan Documents.
4. CONSENTS.
4.1 The Lenders consent to the sale and leaseback of the Company's
Scottsburg, Indiana facility, pursuant to the terms and conditions
of the Purchase Agreement dated as of February 26, 1999 between the
Company and Indiana Properties, LLC and the Lease dated as of
February 26, 1999 between the Company and Indiana Properties, LLC.
The Company acknowledges and agrees that not less than $1,900,000 of
the proceeds from the sale of the Scottsburg, Indiana facility (the
"Minimum Sale Proceeds") will be used to redeem Bonds pursuant to
the optional redemption provisions thereof, and the Lenders hereby
request the Company to so redeem Bonds. At the closing of the sale
of the Scottsburg, Indiana facility, the Company will deposit the
Minimum Sale Proceeds into the Sinking Fund Account and the Lenders
will release of record the Open-End Mortgage dated July 13, 1994
granted by the Company in favor of the Lenders with respect to
certain real property located in Xxxxx County, Indiana.
4.2 The parties acknowledge and agree that the funds in the Construction
Account as of the Effective Date will be disbursed as follows: (i)
$1,000,000 of such funds will be used to redeem Bonds as required by
Section 5.1, below, and (ii) the remainder of such funds will be
made available to the Company for the Company's working capital and
general corporate purposes.
4.3 The Lenders consent to the Company's purchase from Think Laboratory
Co., Ltd., a Japanese corporation ("Think"), of Think's equity
interest in Laser Graphic Systems, Inc. pursuant to an agreement
substantially in the form of the draft
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agreement delivered by the Company's counsel to the Agent's counsel
on March 31, 1999.
5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY. To induce the
Lenders and the Agent to enter into this Agreement, the Company represents,
warrants and covenants as follows:
5.1 By May 1, 1999, the Company will notify the Trustee, in accordance
with the requirements of the Bond Documents, that the Company
desires to redeem not less than $1,500,000 of outstanding Bonds
pursuant to the optional redemption provisions thereof using the
funds in the Sinking Fund Account and $1,000,000 of the funds in the
Construction Account, and the Company will take the necessary steps
to so redeem Bonds by June 1, 1999.
5.2 The representations and warranties of the Company contained in
Section 8 of the Credit Agreement are deemed to have been made again
on and as of the date of execution of this Agreement and are true
and correct as of the date of execution of this Agreement.
5.3 No Event of Default (as such term is defined in Section 11 of the
Credit Agreement) or event or condition which with the lapse of time
or giving of notice or both would constitute an Event of Default
exists on the date hereof.
5.4 The person executing this Agreement is a duly elected and acting
officer of the Company and is duly authorized by the Board of
Directors of the Company to execute and deliver this Agreement on
behalf of the Company.
5.5 The Company and each of its Subsidiaries have reviewed the areas
within each of its businesses and operations that could be adversely
affected by, and have developed or are developing a detailed plan
and timeline to address in a timely manner the risk that certain
computer applications used by the Company or any of its Subsidiaries
(or any of their respective material suppliers, customers or
vendors) may be unable to recognize and perform properly date
sensitive functions involving dates prior to and after December 31,
1999 (the "Year 2000 Problem"). To the Company's knowledge, the Year
2000 Problem will not result in any material adverse change to the
Company or any of its Subsidiaries.
6. CLAIMS AND RELEASE OF CLAIMS BY THE COMPANY. The Company represents and
warrants that the Company does not have any claims, counterclaims, setoffs,
actions or causes of actions, damages or liabilities of any kind or nature
whatsoever whether at law or in equity, in contract or in tort, whether now
accrued or hereafter maturing (collectively, "Claims") against the Lenders
or the Agent, their respective direct or indirect parent corporations or
any direct or indirect affiliates of such parent corporation, or any of the
foregoing's respective directors, officers, employees, agents, attorneys
and legal representatives, or the successors or assigns of any of them
(collectively, "Lender Parties"), that directly or indirectly arise out of,
are based upon or are in any manner connected with any Prior Related Event.
As an inducement to the Lenders and the Agent
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to enter into this Agreement, the Company on behalf of itself, and all of
its successors and assigns hereby knowingly and voluntarily releases and
discharges all Lender Parties from any and all Claims, whether known or
unknown, that directly or indirectly arise out of, are based upon or are in
any manner connected with any Prior Related Event. As used herein, the term
"Prior Related Event" means any transaction, event, circumstance, action,
failure to act, occurrence of any sort or type, whether known or unknown,
which occurred, existed, was taken, permitted or begun at any time prior to
the Effective Date or occurred, existed, was taken, was permitted or begun
in accordance with, pursuant to or by virtue of any of the terms of the
Credit Agreement or any documents executed in connection with the Credit
Agreement or which was related to or connected in any manner, directly or
indirectly, to any of the Notes or Letters of Credit.
7. CONDITIONS. The Lenders' and Agent's obligations pursuant to this Agreement
are subject to the following conditions:
7.1 The Agent shall have received, for the account of the Lenders, an
amendment fee of $3,000, to be shared by the Lenders based on their
Ratable Portion of the aggregate Commitment.
7.2 The Agent shall have been furnished copies, certified by the
Secretary of the Company, of resolutions of the Company's Board of
Directors authorizing the execution of this Agreement and all other
documents executed in connection herewith.
7.3 The representations and warranties of the Company in Section 5,
above, shall be true.
7.4 The Company shall pay all expenses and attorneys fees reasonably
incurred by the Lenders in connection with the preparation,
execution and delivery of this Agreement and the related documents.
8. GENERAL.
8.1 Except as expressly modified herein, the Credit Agreement is and
remains in full force and effect.
8.2 Except as specifically provided in Section 3, above, nothing
contained herein will be construed as waiving any Default or Event
of Default under the Credit Agreement or will affect or impair any
right, power or remedy of the Lenders or the Agent under or with
respect to the Credit Agreement or any agreement or instrument
guaranteeing, securing or otherwise relating to the Credit
Agreement.
8.3 This Agreement will be binding upon and inure to the benefit of the
Company, the Lenders and the Agent and their respective successors
and assigns.
8.4 All representations, warranties and covenants made by the Company
herein will survive the execution and delivery of this Agreement.
8.5 This Agreement may be executed in one or more counterparts, each of
which will be deemed an original and all of which together will
constitute one and the same instrument.
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8.6 This Agreement will in all respects be governed and construed in
accordance with the laws of the State of Ohio.
Executed as of the Effective Date.
MULTI-COLOR CORPORATION,
as Company
By:
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Print Name:
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Title:
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PNC BANK, NATIONAL ASSOCIATION,
on its own behalf as Lender and as Agent
By:
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Print Name:
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Title:
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COMERICA BANK,
as Lender
By:
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Print Name:
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Title:
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CERTIFICATE OF THE SECRETARY
OF
MULTI-COLOR CORPORATION
The undersigned, Secretary of Multi-Color Corporation (the
"Corporation"), hereby certifies to PNC Bank, National Association, as Agent, as
follows:
1. The following Resolution was duly adopted and is a binding
resolution of the Corporation:
RESOLVED, that the Corporation enter into an Amendment,
Consent and Waiver Agreement with respect to the Third Amended and
Restated Credit, Reimbursement and Security Agreement dated as of June
22, 1998 (the "Credit Agreement") by and between the Corporation and
PNC Bank, National Association, as Agent and Lender, and Comerica Bank,
as Lender, and that the President, any Vice President or the Chief
Financial Officer be, and they each hereby are, authorized to execute
any and all documents to effect the same, which documents shall contain
such terms, conditions, releases and other agreements as any one of
such officers in his or her sole discretion deems appropriate.
FURTHER RESOLVED, that all documents or agreements heretofore
executed and acts or things heretofore done to effectuate the purposes
of these resolutions are hereby ratified, confirmed and approved in all
respects as the act or acts of the Corporation.
2. The following is a complete and accurate list of the officers of the
Corporation as of April _____, 1999:
President....................... Xxxxxx X. Xxxxxxxx
Vice President & CFO............ Xxxxxxx X. Xxxxxxx
Secretary.......................
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Secretary
