EXHIBIT 10.36
AMENDMENT NO. 1
TO
AMENDED AND RESTATED
CREDIT AGREEMENT
This Amendment No. 1 To Amended and Restated Credit Agreement (this
"Amendment"), dated as of September 27, 2002, amends that certain Amended
and Restated Credit Agreement, dated as of June 27, 2002 ("Agreement"),
among Mail-Well, Inc., a Colorado corporation ("Parent"), Mail- Well I
Corporation, a Delaware corporation ("Mail-Well I"), and certain
subsidiaries of Mail-Well I (Mail-Well I and each such subsidiary,
individually, a "Borrower", and, collectively, the "Borrowers"), a syndicate
of financial institutions party thereto (the "Lenders"), and Bank of
America, N.A., with an office at 00 Xxxxx Xxxx Xxxxxx, Xxxxx 000, Xxxxxxxx,
Xxxxxxxxxx 00000, as administrative agent for the Lenders (the "Agent").
Capitalized terms used and not otherwise defined herein shall have the
meanings ascribed to such terms in the Agreement.
R E C I T A L S
WHEREAS, Parent, the Borrowers, the Lenders and the Agent have entered
into the Agreement;
WHEREAS, Parent and the Borrowers desire to amend the Agreement; and
WHEREAS, the Agent and the Lenders are willing to do so, subject to the
terms and conditions stated herein.
NOW, THEREFORE, in consideration of the premises herein contained and
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the Agent, the Lenders, Parent and the Borrowers hereby
agree as follows.
A G R E E M E N T
Section 1. Amendments to the Agreement. The Agent, the Lenders, Parent
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and the Borrowers agree that the Agreement shall be amended as follows:
A. The definition of "Adjusted Net Earnings from Operations"
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in Annex A of the Agreement is hereby amended by adding a new clause (h)
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thereto which shall read as follows:
; and (h) the amount (not to exceed $21,400,000 in the
aggregate) of any write-offs of deferred costs and any rental
expense incurred by Mail-Well I in connection with the
refinancing of the KeyBank Lease in August 2002.
B. The definition of "Fixed Charges" in Annex A of the Agreement
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is hereby amended in its entirety to read as follows:
"Fixed Charges" means, with respect to any fiscal period of
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Parent being measured on a consolidated basis, without
duplication, cash interest expense (excluding deferred financing
fees), Capital Expenditures (excluding
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Capital Expenditures funded with Debt other than Revolving Loans,
but including, without duplication, principal payments with
respect to such Debt), scheduled principal payments of Debt
(excluding scheduled monthly reductions of the Maximum PP&E Loan
Amount, unless paid in cash, and excluding payment, at maturity,
of the Convertible Notes), cash dividends and other dispositions
to the extent permitted to be made hereunder, and the positive
amount, if any, of all Federal, state, local and foreign income
taxes paid in cash (net of tax refunds received in such
measurement period).
C. Clause (vi)(D) of the definition of "Permitted Acquisition"
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in Annex A of this Agreement is hereby amended by deleting the reference
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to "$45,000,000" contained therein and replacing it with "$60,000,000."
D. Clause (b) of the definition of "Permitted Disposition" in
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Annex A of the Agreement is hereby amended in its entirety to read as
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follows:
(b) sales or other dispositions of Equipment in the ordinary
course of its business that is obsolete or no longer useable in
its business with a fair market value not to exceed $10,000,000
in the aggregate in any of the first, second, or third years
after the Initial Funding Date, provided that the applicable
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Person shall deliver the net cash proceeds of any such sale or
disposition to Agent for application to the Revolving Loan and
reduction of the Maximum PP&E Loan Amount in accordance with
Sections 3.3 and 3.8;
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E. A new (c)(iii) is hereby added to clause (c) of the
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definition of "Permitted Dispositions" in Annex A of the Agreement as
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follows:
(iii) sales or dispositions of the Equipment to be disposed
of in the reorganization described on Appendix A, provided that
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the applicable Person shall deliver the net cash proceeds of any
such sale or disposition to Agent for application to the Revolving
Loans and reduction of the Maximum PP&E Loan Amount in accordance
with Sections 3.3 and 3.8, and any non-cash consideration received
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from such sale or disposition shall constitute additional
Collateral, in which Agent shall have a duly perfected Lien;
F. Section 3.3 of the Agreement is hereby amended in its entirety
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to read as follows:
3.3 Mandatory Reductions of Maximum PP&E Loan Amount. The
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Maximum PP&E Loan Amount shall immediately be permanently reduced:
(a) in the event of any disposition of assets described
in clauses (b) or (c) of the definition of Permitted
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Disposition, by an amount equal to the greater of (i) 100%
of the net proceeds of such disposition, less the amount that
any Eligible Accounts or Eligible Inventory included in such
disposition contributed towards the Borrowing Base as of the
date of such disposition as determined by the Agent in its
reasonable determination, or (ii) the amount that any assets
included in such disposition (other than assets
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consisting of Eligible Accounts or Eligible Inventory)
contributed towards the Borrowing Base as of the date of such
disposition, as determined by the Agent in its reasonable
determination; provided, however, that if at the time of a
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disposition of assets described in clauses (b) or (c)(iii) of
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the definition of Permitted Disposition Borrowers have
notified Agent that any Equipment included in such disposition
will be replaced in the next 180 days, then the reduction to
the Maximum PP&E Loan Amount in respect of the Equipment
Borrowers intend to replace shall not be made until after the
180 period has expired, and such reduction shall be net of the
orderly liquidation value of any appraised Eligible Equipment
that is acquired within such time period to replace the
disposed of assets;
(b) in the event of any incurrence of Debt described
in clause (d) of Section 7.13, by an amount equal to 100% of
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the net proceeds of any such Debt;
(c) in the event of any receipt of insurance or
condemnation proceeds in respect of Collateral consisting
of Fixed Assets, unless Borrowers are entitled under
Section 7.6(b) to replace, repair, restore, or rebuild such
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Fixed Assets, by an amount equal to 100% of the net proceeds
of any such insurance or condemnation proceeds; and
(d) in the event any Equipment described in clause
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(c)(iii) of the definition of "Permitted Disposition" is
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rendered inoperable or taken out of service, by an amount
equal to the amount such assets contributed towards the
Borrowing Base, as determined by the Agent in its reasonable
discretion; provided, however, that if at the time such
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Equipment is rendered inoperable or taken out of service
Borrowers have notified Agent that any of such Equipment will
be rendered operable and put back into service in the next
180 days, then the reduction to the Maximum PP&E Loan Amount
for such portion of the Equipment shall not be made until
after the 180 day period has expired, and such reduction
shall be net of the orderly liquidation value of any
appraised Eligible Equipment that is rendered operable and
put back into service within such time period.
G. The first two sentences of Section 5.2 (d) are hereby
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amended in their entirety to read as follows:
With each of the annual audited Financial Statements
delivered pursuant to Section 5.2 (a), and with each of the
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monthly unaudited Financial Statements delivered pursuant to
Section 5.2 (b), a certificate of a Responsible Officer of
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Parent setting forth in reasonable detail the calculations
required to establish that Parent and its Subsidiaries were in
compliance with the covenants set forth in Sections 7.22 through
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7.23 during the period covered (excluding the comparable prior
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period) in such Financial Statements and as at the end thereof.
Within 30 days after the end of each month, a certificate of a
Responsible Officer of Parent (1) stating that, except as
explained in reasonable detail in such certificate, (A) all of
the representations and warranties of the Loan Parties
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contained in this Agreement and the other Loan Documents are
correct and complete in all material respects as at the date of
such certificate as if made at such time, except for those that
speak as of a particular date, (B) the Loan Parties are, at the
date of such certificate, in compliance in all material respects
with all of their respective covenants and agreements in this
Agreement and the other Loan Documents, and (C) no Default or
Event of Default then exists or existed during the period covered
by the Financial Statements for such month, and (2) describing
and analyzing in reasonable detail all material trends, changes,
and developments in each and all Financial Statements, and
explaining the variances of the figures in the corresponding
budgets and prior Fiscal Year financial statements, which
explanations, descriptions, and analysis to be given pursuant to
this Section 5.2(d)(2) shall be satisfied by the availability to
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Agent and the Lenders of the discussion appearing in the
"Management's Discussion and Analysis of Financial Condition
and Results of Operation" sections of either Parent's Annual
Report on Form 10-K or Parent's Quarterly Report on Form 10-Q.
H. Section 5.2(k) of the Agreement is hereby amended to read as
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follows:
As soon as available, but in any event within 20 days after
the end of each fiscal month (for such fiscal month), a Borrowing
Base Certificate, and supporting information in accordance with
Section 9 of the Security Agreement, and, in addition, if
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Availability has dropped below (i) $30,000,000 at any time,
or (ii) $35,000,000 for 5 consecutive Business Days, then a
report of sales and collections and an accounts receivable
roll-forward by Wednesday of each week, respecting the prior week.
I. The following new Section 5.4 is hereby added to Article 5 of
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the Agreement:
5.4 Management Discussions. In addition to any discussions
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provided for in Sections 5.2 (a) or 7.4 (b), Parent and Borrowers
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shall make available their chief financial officer, treasurer or
other relevant members of management for a telephonic meeting
upon the request of Agent or any of the Lenders acting through
the Agent (but not more frequently than one call per month for
all Lenders) to discuss the financial results of Parent and
its Subsidiaries reflected in the monthly Financial Statements
delivered to Agent and the Lenders pursuant to Section 5.2 (a)
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or (b). Such meetings shall take place within 5 Business Days
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of the dissemination of such Financial Statements.
J. Section 7.9 of the Agreement is hereby amended by adding
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the following to the end thereof:
For purposes of this Agreement, "disposition" shall not include
any change in the carrying value of any assets recognized by
Parent or its Subsidiaries under or in connection with FAS 142
or FAS 144.
K. Sections 7.22 and 7.23 of the Agreement are hereby amended
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in their entirety to read as follows:
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7.22 A. Fixed Charge Coverage Ratio. Parent will maintain a
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Fixed Charge Coverage Ratio for each period of four consecutive
fiscal quarters ended on the last day of each fiscal quarter set
forth below (or, with respect to each of the fiscal quarters
ending on or before June 28, 2003, for the period commencing on
July 1, 2002 and ending on the last day of such fiscal quarter)
of at least the ratio set forth below opposite each such fiscal
quarter:
Fiscal Quarter Ending Minimum Fixed Charge Coverage Ratio
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September 2002 0.45:1.00
December 2002 0.70:1.00
March 2003 0.90:1.00
June 2003 0.95:1.00
September 2003 and thereafter 1.15:1.00
provided, however, that following the reduction of the Maximum
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PP&E Loan Amount to $0, the above minimum Fixed Charge Coverage
Ratios will each be reduced by 0.05:1.00.
B. Minimum Availability. Borrowers shall maintain
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Availability of not less than $25,000,000 (with all obligations
of Borrowers and their Subsidiaries current) at all times until
and including the date on which Borrowers demonstrate to Agent's
satisfaction that they can provide weekly reporting of their
sales and collections and weekly accounts receivable rollforwards.
7.23 Adjusted Tangible Net Worth. Parent will maintain
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Adjusted Tangible Net Worth, determined as of the last day of
each of the following fiscal months, of at least the amounts
below opposite such month:
Measurement Date Minimum Amount
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June 2002 - August 2002 $295,000,000
September 2002 - November 2002 $255,000,000
December 2002 - February 2003 $255,000,000
March 2003 - May 2003 $265,000,000
June 2003 - August 2003 $275,000,000
September 2003 - November 2003 $300,000,000
December 2003 and thereafter $325,000,000
provided, however, that the foregoing Minimum Amounts shall be
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adjusted, by: (a) increasing such amounts to reflect 100% of the
net cash proceeds received by Parent from the issuance of Capital
Stock since the Initial Funding Date, and any gains recognized
by Parent or its Subsidiaries resulting from the disposition of
Assets Held For Disposition or Restructuring Assets since the
Initial Funding Date, and (b) decreasing such amounts to reflect:
(i) any losses (not to exceed an aggregate amount of $32,000,000)
recognized by Parent or its Subsidiaries since the Initial
Funding Date resulting from the disposition of Assets Held For
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Disposition or Restructuring Assets, and (ii) any reduction in
Adjusted Tangible Net Worth resulting from a Permitted Acquisition
(but only up to an aggregate amount for all Permitted Acquisitions
equal to 25% of the amount received by Parent from the issuance
of Capital Stock since the Initial Funding Date).
L. Paragraph 11.1(a) of the Agreement is hereby amended by
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deleting therefrom the language before clause (i) that reads:
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"provided, however, that no such waiver, amendment, or
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consent shall, unless in writing and signed by all the Lenders,
Parent and the Borrowers and acknowledged by the Agent, do any
of the following:"
and replacing it with:
"provided, however, that no such waiver, amendment or consent
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with respect to Section 7.22B shall be effective unless in writing
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and signed by Required Lenders, Parent and the Borrowers and
acknowledged by the Agent; and provided further, however, that
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no such waiver, amendment, or consent shall, unless in writing
and signed by all the Lenders, Parent and the Borrowers and
acknowledged by the Agent, do any of the following:"
M. Section 14.21 of the Agreement is hereby amended by deleting
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clauses (iii) and (iv) therefrom and replacing them with "and (iii) if
the Maximum PP&E Loan Limit has been reduced to $0, Agent shall release
the Mortgages."
N. Notwithstanding anything to the contrary contained in the
Agreement, the Applicable Margin shall be set at Level III in the grid
set forth in the definition of "Applicable Margin," commencing
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October 1, 2003 and continuing until the next adjustment is required to
be made pursuant to the existing terms of such definition.
O. Appendix A to this Amendment is hereby added as Appendix A
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to the Agreement.
P. Any references in the Agreement, or in any of the Loan
Documents, to "Wisco III, LLC" are hereby amended to read "Wisco III,
L.L.C."
Section 2. Conditions. The effectiveness of this Amendment is subject
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to the satisfaction of the following conditions precedent:
A. Amendment. Receipt by the Agent of copies of this Amendment
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signed by Parent, the Borrowers and the Majority Lenders.
B. Fee. Agent shall have received an amendment fee, for the
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ratable benefit of the Lenders, in the amount of $750,000, which shall
be fully earned when paid.
C. Other Documents. Parent and the Borrowers shall have executed
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and delivered to the Agent such other documents and instruments as the
Agent may reasonably require in furtherance of this Amendment.
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Section 3. Miscellaneous.
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A. Survival of Representations and Warranties. All
------------------------------------------
representations and warranties made in the Agreement or any other
document or documents relating thereto, including, without limitation,
any Loan Document furnished in connection with this Amendment, shall
survive the execution and delivery of this Amendment and the other Loan
Documents, and no investigation by Agent or Lenders or any closing shall
affect the representations and warranties or the right of Agent or
Lenders to rely thereon.
B. Reference to Agreement. The Agreement, each of the Loan
----------------------
Documents, and any and all other agreements, documents or instruments
now or hereafter executed and delivered pursuant to the terms hereof,
or pursuant to the terms of the Agreement as amended hereby, are hereby
amended so that any reference therein to the Agreement shall mean a
reference to the Agreement as amended hereby.
C. Agreement Remains in Effect. The Agreement and the Loan
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Documents, as amended hereby, remain in full force and effect and the
Borrowers ratify and confirm their agreements and covenants contained
therein. Parent and the Borrowers hereby confirm that, after giving
effect to this Amendment, no Event of Default or Default exists as of
the date hereof.
D. Severability. Any provision of this Amendment held by a court
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of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this Amendment and the effect thereof
shall be confined to the provision so held to be invalid or unenforceable.
E. APPLICABLE LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND
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CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA.
F. Successors and Assigns. This Amendment is binding upon and
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shall inure to the benefit of Agent, the Lenders, Parent and the
Borrowers and their respective successors and assigns; provided, however,
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that Parent and the Borrowers may not assign or transfer any of their
rights or obligations hereunder without the prior written consent of the
Lenders.
G. Counterparts. This Amendment may be executed in one or more
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counterparts, each of which when so executed shall be deemed to be an
original, but all of which when taken together shall constitute one and
the same instrument.
H. Headings. The headings, captions and arrangements used in
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this Amendment are for convenience only and shall not affect the
interpretation of this Amendment.
I. NO ORAL AGREEMENTS. THIS AMENDMENT, TOGETHER WITH THE OTHER
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LOAN DOCUMENTS AS WRITTEN, REPRESENTS THE FINAL AGREEMENT AMONG THE AGENT,
THE LENDERS, PARENT AND THE BORROWERS AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE AGENT, THE
LENDERS, PARENT AND THE BORROWERS.
* * * * *
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IN WITNESS WHEREOF, the parties have executed this Amendment on the date
first above written.
"PARENT"
MAIL-WELL, INC.,
a Colorado corporation
By:
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Name:
------------------------------------
Title:
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"BORROWERS"
MAIL-WELL I CORPORATION,
a Delaware corporation
By:
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Name:
------------------------------------
Title:
-----------------------------------
MAIL-WELL COMMERCIAL PRINTING, INC.,
a Delaware corporation
By:
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Name:
------------------------------------
Title:
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POSER BUSINESS FORMS, INC.,
a Delaware corporation
By:
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Name:
------------------------------------
Title:
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DISCOUNT LABELS, INC.,
an Indiana corporation
By:
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Name:
------------------------------------
Title:
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NATIONAL GRAPHICS COMPANY,
a Colorado corporation
By:
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Name:
------------------------------------
Title:
-----------------------------------
MAIL-WELL WEST, INC.,
a Delaware corporation
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
WISCO III, L.L.C.,
a Delaware limited liability company
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
MAIL-WELL GOVERNMENT PRINTING, INC.,
a Colorado corporation
By:
--------------------------------------
Name:
------------------------------------
Title:
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HILL GRAPHICS, INC.,
a Texas corporation
By:
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Name:
------------------------------------
Title:
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MAIL-WELL SERVICES, INC.,
a Colorado corporation
By:
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Name:
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Title:
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"AGENT"
BANK OF AMERICA, N.A.,
as the Agent
By:
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Name:
------------------------------------
Title:
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ACKNOWLEDGED AND AGREED TO ON
THIS DAY OF SEPTEMBER, 2002:
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"MAJORITY LENDERS"
BANK OF AMERICA, N.A.,
as a Lender
By:
--------------------------------------
Name:
------------------------------------
Title:
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10
FLEET CAPITAL CORPORATION,
as a Lender
By:
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Name:
------------------------------------
Title:
-----------------------------------
GENERAL ELECTRIC CAPITAL
CORPORATION,
as a Lender
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
WACHOVIA BANK, NATIONAL
ASSOCIATION,
as a Lender
By:
--------------------------------------
Name:
------------------------------------
Title:
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JPMORGAN CHASE BANK,
as a Lender
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
FOOTHILL CAPITAL CORPORATION,
as a Lender
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
11
WASHINGTON MUTUAL BANK,
as a Lender
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
PNC BANK, NATIONAL ASSOCIATION,
as a Lender
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
THE CIT GROUP/BUSINESS CREDIT, INC.,
as a Lender
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
U.S. BANK, NATIONAL ASSOCIATION,
as a Lender
By:
--------------------------------------
Name:
------------------------------------
Title:
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XXXXXXX XXXXX BUSINESS FINANCIAL
SERVICES,
as a Lender
By:
--------------------------------------
Name:
------------------------------------
Title:
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