THIRD AMENDMENT TO AMENDED
AND RESTATED CREDIT AGREEMENT
THIS THIRD AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
(this "Amendment") is entered into as of May 14, 2003, by and between
AUTO-GRAPHICS, INC., a California corporation ("Borrower"), and ▇▇▇▇▇
FARGO BANK, NATIONAL ASSOCIATION ("Bank").
RECITALS
A. Borrower is currently indebted to Bank pursuant to the terms
and conditions of that certain Amended and Restated Credit Agreement dated
as of August 1, 2000 between Borrower and Bank as such agreement may have
been amended or modified from time to time (the "Agreement"). Capitalized
terms used herein without definition shall have the meanings ascribed to
them in the Agreement.
B. Pursuant to the Credit Agreement, Borrower remains indebted to
Bank under a line of credit in the maximum principal amount of One Million
Six Hundred Thousand Dollars ($1,600,000.00) (the "Prior Line of Credit"),
which is evidenced by that certain Revolving Line of Credit Note dated
June 4, 2002, as modified from time to time (the "Prior Line of Credit
Note"). The Prior Line of Credit Note shall mature and become due and
payable in full on June 2, 2003, and as of the date hereof, the
outstanding principal balance under the Prior Line of Credit is
$806,072.84, plus accrued but unpaid interest.
C. Bank and Borrower have agreed to certain changes in the terms
and conditions set forth in the Credit Agreement and have agreed to amend
the Credit Agreement to reflect said changes.
NOW, THEREFORE, for valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, subject to the terms and
conditions described herein, the parties hereto agree that the Credit
Agreement shall be amended as follows; provided, however, that nothing
shall terminate any security interests, guaranties, or other documents in
favor of Bank, all of which shall remain in full force and effect unless
expressly amended hereby:
1. Amendment to Section 1.1(a). Section 1.1(a) of the Agreement
is hereby deleted and replaced in its entirety with the following:
"(a) Line of Credit. Subject to the terms and conditions
of this Agreement, Bank hereby agrees to make advances to Borrower from
time to time up to and including June 30, 2004, not to exceed at any time
the aggregate principal amount of One Million Seventy-five Thousand
Dollars ($1,075,000.00) ("Line of Credit"), the proceeds of which shall be
used for working capital requirements. Notwithstanding the principal
amount set forth above, the maximum principal amount available under the
Line of Credit shall be reduced automatically and without further notice
on: (i) October 1, 2003, by the amount of One Hundred Seventy-Five
Thousand Dollars ($175,000.00) and (ii) January 1, 2004 by the amount of
Five Hundred Thousand Dollars ($500,000.00). If the outstanding principal
balance of the Line of Credit on any such date is greater than the Line of
Credit then available hereunder, Borrower shall make a principal payment
on such date in an amount sufficient to reduce the then outstanding
principal balance of the Line of Credit to an amount not greater than said
new Line of Credit. Borrower's obligation to repay advances shall be
evidenced by a promissory note substantially in the form of Exhibit A
attached hereto (the "Note"), all terms of which shall be incorporated by
this reference."
The foregoing change shall become effective upon the execution and
delivery to Bank of a promissory note substantially in the form of Exhibit
A attached hereto (which promissory note shall replace the Prior Note and
be deemed the Note defined in and made pursuant to the Agreement) and all
other contracts, instruments and documents required by Bank to evidence
such change; provided, however, that outstanding advances under the Prior
Line of Credit heretofore provided Borrower by Bank in connection with the
Prior Note shall be deemed outstanding advances under the Note in effect
hereby.
2. Amendment to Section 1.6. Section 1.6 of the Credit
Agreement is hereby deleted in its entirety, and the following substituted
therefor:
" SECTION 1.6. GUARANTIES. All indebtedness of Borrower
to Bank shall be guaranteed jointly and severally by A-G Canada, Ltd., as
evidenced by and subject to the terms of guaranties in form and substance
satisfactory to Bank."
3. Restructuring Fee. In consideration of the changes
set forth herein and as a condition to the effectiveness hereof,
immediately upon signing this Amendment Borrower shall pay to Bank a non-
refundable fee of $11,750.00 (the "Restructuring Fee").
4. Conditions Precedent. Provided that each of the following
conditions is satisfied on or before June 3, 2003, this Amendment shall
become effective on the first business day that each of the following
conditions have been met to Bank's satisfaction (the "Effective Date"):
(a) Documentation. Bank shall have received, in form and
substance satisfactory to Bank, each of the following:
(i) This Amendment executed by Borrower and the attached
Guarantors' Consent and Reaffirmation executed by each Guarantor;
(ii) Reducing Revolving Note executed by Borrower;
(iii) Such other documents as Bank may require under any
other Section of this Amendment.
(b) Restructuring Fee. Bank shall have received the
Restructuring Fee in immediately available funds.
..
(c) Other Fees and Charges. In addition to Borrower's
obligations under the Agreement and the other Loan Documents, Borrower
shall reimburse Bank immediately upon demand for all costs and expenses,
including attorneys' fees (including the allocated costs of bank's in-
house counsel) expended or incurred by Bank in connection with the
negotiation and preparation of this Amendment.
5. General Release. In consideration of the benefits provided to
Borrower under the terms and provisions hereof, Borrower and each
guarantor hereunder hereby agree as follows ("General Release"):
(a) Borrower and each guarantor hereunder, for itself and on
behalf of its respective successors and assigns, do hereby release, acquit
and forever discharge Bank, all of Bank's predecessors in interest, and
all of Bank's past and present officers, directors, attorneys, affiliates,
employees and agents, of and from any and all claims, demands,
obligations, liabilities, indebtedness, breaches of contract, breaches of
duty or of any relationship, acts, omissions, misfeasance, malfeasance,
causes of action, defenses, offsets, debts, sums of money, accounts,
compensation, contracts, controversies, promises, damages, costs, losses
and expenses, of every type, kind, nature, description or character,
whether known or unknown, suspected or unsuspected, liquidated or
unliquidated, each as though fully set forth herein at length (each, a
"Released Claim" and collectively, the "Released Claims"), that Borrower
or any guarantor hereunder now has or may acquire as of the later of: (i)
the date this Amendment becomes effective through the satisfaction (or
waiver by Bank) of all conditions hereto; or (ii) the date that Borrower
and each guarantor hereunder have executed and delivered this Amendment to
Bank (hereafter, the "Release Date"), including without limitation, those
Released Claims in any way arising out of, connected with or related to
any and all prior credit accommodations, if any, provided by Bank, or any
of Bank's predecessors in interest, to Borrower or any guarantor
hereunder, and any agreements, notes or documents of any kind related
thereto or the transactions contemplated thereby or hereby, or any other
agreement or document referred to herein or therein.
(b) Borrower and each guarantor hereunder hereby
acknowledge, represent and warrant to Bank as follows:
(i) Borrower and such guarantor understand the meaning
and effect of Section 1542 of the California Civil Code which provides:
"Section 1542. GENERAL RELEASE; EXTENT. A GENERAL RELEASE DOES NOT
EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN
HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST
HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR."
(ii) With regard to Section 1542 of the California Civil
Code, Borrower and each such guarantor agree to assume the risk of any and
all unknown, unanticipated or misunderstood defenses and Released Claims
which are released by the provisions of this General Release in favor of
Bank, and Borrower and each such guarantor hereby waive and release all
rights and benefits which they might otherwise have under Section 1542 of
the California Civil Code with regard to the release of such unknown,
unanticipated or misunderstood defenses and Released Claims.
(c) Each person signing below on behalf of Borrower or
any guarantor hereunder acknowledges that he or she has read each of the
provisions of this General Release. Each such person fully understands
that this General Release has important legal consequences, and each such
person realizes that they are releasing any and all Released Claims that
Borrower or any such guarantor may have as of the Release Date. Borrower
and each guarantor hereunder hereby acknowledge that each of them has had
an opportunity to obtain a lawyer's advice concerning the legal
consequences of each of the provisions of this General Release.
(d) Borrower and each guarantor hereunder hereby
specifically acknowledge and agree that: (i) none of the provisions of
this General Release shall be construed as or constitute an admission of
any liability on the part of Bank; (ii) the provisions of this General
Release shall constitute an absolute bar to any Released Claim of any
kind, whether any such Released Claim is based on contract, tort,
warranty, mistake or any other theory, whether legal, statutory or
equitable; and (iii) any attempt to assert a Released Claim barred by the
provisions of this General Release shall subject Borrower and each
guarantor hereunder to the provisions of applicable law setting forth the
remedies for the bringing of groundless, frivolous or baseless claims or
causes of action.
6. Interpretation. Except as specifically provided herein, all
terms and conditions of the Agreement remain in full force and effect,
without waiver or modification. This Amendment and the Agreement shall be
read together, as one document.
7. Reaffirmation; Certification. Borrower hereby remakes all
representations and warranties contained in the Agreement and reaffirms
all covenants set forth therein. Borrower represents and warrants that
the execution and delivery of this Amendment and the Note have been duly
authorized by all necessary corporate action of Borrower. Borrower
further certifies that as of the Effective Date of this Amendment there
exists no Event of Default as defined in the Agreement, nor any condition,
act or event which with the giving of notice or the passage of time or
both would constitute any such Event of Default.
8. Counterparts. This Amendment may be executed in any number of
counterparts, each of which when executed and delivered shall be deemed to
be an original, and all of which when taken together shall constitute one
and the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the day and year first written above.
AUTO-GRAPHICS, INC.,
a California corporation
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇
_______________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: President
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_______________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President/Principal
GUARANTOR'S CONSENT AND REAFFIRMATION
Each of the undersigned guarantor(s) of all indebtedness of AUTO-
GRAPHICS, INC., a California corporation, to ▇▇▇▇▇ Fargo Bank, National
Association hereby: (i) consents to the foregoing Third Amendment to
Amended and Restated Credit Agreement (the "Amendment"); (ii) reaffirms
its obligations under its respective Continuing Guaranty; (iii) reaffirms
its waivers of each and every one of the defenses to such obligations as
set forth in its respective Continuing Guaranty; (iv) reaffirms that its
obligations under its respective Continuing Guaranty are separate and
distinct from the obligations of any other party under the Amendment and
the other Loan Documents (as defined therein); and (v) agrees to join in
and be bound by all of the terms and provisions of the General Release
contained in Section 4 of the Amendment.
GUARANTORS: A-G CANADA, LTD.
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇
_____________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: President
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
_____________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: CFO
EXHIBIT A
REDUCING REVOLVING NOTE
$1,075,000.00 Los Angeles, California
May 14, 2003
FOR VALUE RECEIVED, the undersigned AUTO-GRAPHICS, INC., a California
corporation ("Borrower"), promises to pay to the order of ▇▇▇▇▇ FARGO
BANK, NATIONAL ASSOCIATION ("Bank") at its office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, or at such other place as the holder
hereof may designate, in lawful money of the United States of America and
in immediately available funds, the principal sum of One Million Seventy-
five Thousand Dollars ($1,075,000.00), or so much thereof as may be
advanced and be outstanding, with interest thereon, to be computed on each
advance from the date of its disbursement as set forth herein.
Capitalized terms used herein without definition shall have the meanings
assigned to such terms in that certain Amended and Restated Credit
Agreement dated as of August 1, 2000 (as amended, modified, supplemented
or restated from time to time, the "Credit Agreement") between Borrower
and Bank.
INTEREST:
(a) Interest. The outstanding principal balance of this Note shall
bear interest (computed on the basis of a 360-day year, actual days
elapsed) at a rate per annum equal to the Prime Rate in effect from time
to time plus the Applicable Margin as in effect from time to time. The
"Prime Rate" is a base rate that Bank from time to time establishes and
which serves as the basis upon which effective rates of interest are
calculated for those loans making reference thereto. Each change in the
rate of interest hereunder shall become effective on the date each Prime
Rate change is announced within Bank.
The "Applicable Margin" shall mean the per annum rate set forth below for
the applicable period set forth opposite such rate.
Period Applicable Margin
May 14, 2003 through June 2, 2003 4.0%
June 3, 2003 through December 31, 2003 4.5%
January 1, 2004 through June 30, 2004 5.0%
(b) Payment of Interest. Interest accrued on this Note shall be
payable on the last day of each month, commencing June 30, 2003.
(c) Default Interest. From and after the maturity date of this Note,
or such earlier date as all principal owing hereunder becomes due and
payable by acceleration or otherwise, the outstanding principal balance of
this Note shall bear interest until paid in full at an increased rate per
annum (computed on the basis of a 360-day year, actual days elapsed) equal
to four percent (4%) above the rate of interest from time to time
applicable to this Note.
BORROWING AND REPAYMENT:
(a) Borrowing and Repayment. Borrower may from time to time during
the term of this Note borrow, partially or wholly repay its outstanding
borrowings, and reborrow, subject to all of the limitations, terms and
conditions of this Note and of any document executed in connection with or
governing this Note; provided, however, that the total outstanding
borrowings under this Note shall not at any time exceed the principal
amount set forth above or such lesser amount as shall at any time be
available hereunder. The unpaid principal balance of this obligation at
any time shall be the total amounts advanced hereunder by the holder
hereof less the amount of principal payments made hereon by or for
Borrower, which balance may be endorsed hereon from time to time by the
holder. The outstanding principal balance of this Note shall be due and
payable in full on June 30, 2004.
(b) Reductions in Availability. Notwithstanding the principal amount
set forth above, the maximum principal amount available under this Note
shall be reduced automatically and without further notice on: (i) October
1, 2003, by the amount of One Hundred Seventy-Five Thousand Dollars
($175,000.00) and (ii) January 1, 2004, by the amount of Five Hundred
Thousand Dollars ($500,000.00). If the outstanding principal balance of
this Note on any such date is greater than the new maximum principal
amount then available hereunder, Borrower shall make a principal reduction
on this Note on such date in an amount sufficient to reduce the then
outstanding principal balance hereof to an amount not greater than said
new maximum principal amount.
(c) Equity Proceeds. Borrower shall prepay the Line of Credit in an
amount equal to ten percent (10%) of Excess Equity Proceeds not more than
two (2) business days after any Excess Equity Proceeds are received, and
the Line of Credit shall be permanently reduced on such date by the amount
of prepayment required by this sentence. "Equity Proceeds" shall mean the
gross amount of new equity received by the Borrower and its Subsidiaries
from and after April 1, 2000. "Excess Equity Proceeds" shall mean Equity
Proceeds in excess of $5,000,000.00.
(d) Advances. Advances hereunder, to the total amount of the
principal sum stated above, may be made by the holder at the oral or
written request of (i) ▇▇▇▇▇▇ ▇. ▇▇▇▇ or ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, any one acting
alone, who are authorized to request advances and direct the disposition
of any advances until written notice of the revocation of such authority
is received by the holder at the office designated above, or (ii) any
person, with respect to advances deposited to the credit of any deposit
account of Borrower, which advances, when so deposited, shall be
conclusively presumed to have been made to or for the benefit of Borrower
regardless of the fact that persons other than those authorized to request
advances may have authority to draw against such account. The holder
shall have no obligation to determine whether any person requesting an
advance is or has been authorized by Borrower.
(d) Application of Payments. Each payment made on this Note shall be
credited first, to any interest then due and second, to the outstanding
principal balance hereof.
EVENTS OF DEFAULT:
This Note is made pursuant to and is subject to the terms and
conditions of that certain Amended and Restated Credit Agreement between
Borrower and Bank dated as of August 1, 2000, as amended from time to time
(the "Credit Agreement"). Any default in the payment or performance of
any obligation under this Note, or any defined event of default under the
Credit Agreement, shall constitute an "Event of Default" under this Note.
MISCELLANEOUS:
(a) Remedies. Upon the occurrence of any Event of Default, the holder
of this Note, at the holder's option, may declare all sums of principal
and interest outstanding hereunder to be immediately due and payable
without presentment, demand, notice of nonperformance, notice of protest,
protest or notice of dishonor, all of which are expressly waived by
Borrower, and the obligation, if any, of the holder to extend any further
credit hereunder shall immediately cease and terminate. Borrower shall
pay to the holder immediately upon demand the full amount of all payments,
advances, charges, costs and expenses, including reasonable attorneys'
fees (to include outside counsel fees and all allocated costs of the
holder's in-house counsel), expended or incurred by the holder in
connection with the enforcement of the holder's rights and/or the
collection of any amounts which become due to the holder under this Note,
and the prosecution or defense of any action in any way related to this
Note, including without limitation, any action for declaratory relief,
whether incurred at the trial or appellate level, in an arbitration
proceeding or otherwise, and including any of the foregoing incurred in
connection with any bankruptcy proceeding (including without limitation,
any adversary proceeding, contested matter or motion brought by Bank or
any other person) relating to Borrower or any other person or entity.
(b) Governing Law. This Note shall be governed by and construed in
accordance with the laws of the State of California.
(c) Superseded Note. This Note replaces and supersedes in its
entirety that certain Revolving Note executed by Borrower in favor of Bank
dated June 4, 2002, in the original principal amount of $1,600,000.00.
IN WITNESS WHEREOF, the undersigned has executed this Note as of the date
first written above.
AUTO-GRAPHICS, INC., a California corporation
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇
_____________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: President