<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8 - K
________
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 5, 1997
FOUR M CORPORATION
(Exact name of registrant as specified in its charter)
MARYLAND 333-8043 52-0822639
(State or other (Commission file number) (I.R.S. Employer
jurisdiction of Identification No.)
incorporation or
organization)
115 STEVENS AVENUE 10595
VALHALLA, NEW YORK (Zip Code)
(Address of principal
executive offices)
(914) 749-3200
Registrant's telephone number,
including area code
___________
<PAGE>
ITEM 5. OTHER EVENTS.
On May 30, 1996, the Company established a Credit Facility which will
mature on May 30, 2001. The Credit Facility provides borrowing capacity on a
revolving basis, subject to borrowing base limitations, to finance the Company's
working capital needs. On February 28, 1997, the Credit Facility was amended
and Box USA of Florida, L.P. (Florida, L.P.) was made an additional borrower
thereunder. The sole general partner of Florida, L.P. is Four M Manufacturing
Group of Georgia, Inc. one of the guarantors of the Notes. Pursuant to the
Credit Facility, the Company is subject to certain affirmative and negative
covenants customarily found in agreements of this type. Effective December 5,
1997 the Credit Facility was modified, so as to among other things, (i) reduce,
per the Company's request, the borrowing capacity from $80.0 million to $65.0
million; (ii) modify the base borrowing interest rate from the lender's prime
rate plus .5% to a sliding scale rate, based on performance, of the lender's
prime rate plus .5% to 1.0%; and (iii) reduce the minimum unused borrowing base
availability to $1.0 million increasing on December 31, 1998 to $5.0 million.
At December 5, 1997 the Company had unused borrowing base availability of $4.2
million.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits
EXHIBIT NO. DESCRIPTION
10.10 Fourth Amendment to Financing and Security Agreement.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
FOUR M CORPORATION
By: /S/ CHRIS MEHIEL
-------------------------------------
Chris Mehiel
Executive Vice President and Chief
Financial Officer
(Principal Accounting Officer)
Date: December 5, 1997
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
10.10 Fourth Amendment to Financing and Security Agreement.
<PAGE>
FOURTH AMENDMENT TO
FINANCING AND SECURITY AGREEMENT
THIS FOURTH AMENDMENT TO FINANCING AND SECURITY AGREEMENT (this
"Agreement") is made as of the 5th day of December, 1997, by and among
Four M Corporation, a corporation organized under the laws of the
State of Maryland ("FMC"), Box USA Group, Inc., a corporation organized
under the laws of the State of New York ("Box"), Four M Paper Corporation,
a corporation organized under the laws of the State of Delaware ("Paper"),
Four M Manufacturing Group of Georgia, Inc., a corporation organized under
the laws of the State of Pennsylvania ("Georgia"), Page Packaging
Corporation, a corporation organized under the laws of the State of
California ("Page"), and Box USA of Florida, L.P., a limited partnership
organized under the laws of the State of Georgia (the "Florida
Partnership") jointly and severally (FMC, Box, Paper, Georgia, Page and
the Florida Partnership, are sometimes herein collectively referred to as
the "Borrowers;" and individually, as a "Borrower");
NATIONSBANK, N.A., a national banking association ("NationsBank"),
and the other financial institutions listed on the signature pages hereof
(NationsBank and the other financial institutions are herein collectively
referred to as the "Lenders" and individually, as a "Lender"); and
NATIONSBANK, N.A., a national banking association (the "Agent").
RECITALS
A. The Agent, the Lenders and the Borrowers are parties to the Financing
and Security Agreement dated as of May 30, 1996 (as amended by First Amendment
to Financing and Security Agreement dated February 28, 1997 (the "First
Amendment"), Second Amendment to Financing and Security Agreement dated March
27, 1997, Third Amendment to Financing and Security Agreement dated July 31,
1997 and as amended, modified, restated, substituted, extended and renewed at
any time and from time to time, the "Financing Agreement"). Under the terms of
the First Amendment, the Florida Partnership was added as a Borrower.
B. The Agent, the Lenders and the Borrowers wish to enter into this
Agreement to amend certain provisions of the Financing Agreement.
AGREEMENTS
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, receipt of which is hereby acknowledged, the Borrowers,
the Agent and the Lenders agree that the Financing Agreement is hereby amended
as follows:
1. The Borrowers, the Agent and the Lenders agree that the Recitals above
are a part of this Agreement. Unless otherwise expressly defined in this
Agreement, terms defined in the Financing Agreement shall have the same meaning
under this Agreement.
1
<PAGE>
2. Section 1.1 of the Financing Agreement is hereby amended by adding the
following new definitions:
"Current Ratio" means as to the Borrowers for any period of
determination thereof, the ratio of the Borrowers' (i) current assets (as
that term is defined in accordance with GAAP consistently applied to the
Borrowers) to (ii) the sum of (A) current liabilities (as that term is
defined in accordance with GAAP consistently applied to the Borrowers)
plus (B), to the extent not otherwise included in current liabilities,
amounts due on the Revolving Loan.
"Debt Service" means as to the Borrowers for any period of
determination an amount equal to the total of the aggregate amount of all
payments of principal and interest with respect to Funded Debt of each
Borrower scheduled to be due and payable during such period.
"Debt Service Coverage Ratio" means as to the Borrowers for the
period of any determination the ratio of (a) EBITDA to (b) Debt Service.
"EBIT" means as to the Borrowers for any period of determination
thereof, the sum of (a) the net profit (or loss), plus (b) interest
expense and income tax provisions for such period.
"Fixed Charges" means for any period of determination, the scheduled
or required payments (including, without limitation, principal and
interest) on all Funded Debt of each Borrower (excluding, without
duplication, loans by a Borrower to one or more of the Borrowers, but
including, by way of example and not limitation, payments on Capital
Leases), plus dividends paid by each Borrower (excluding, without
duplication, dividends by a Borrower to one or more of the Borrowers),
plus income taxes paid by each Borrower (except to the limited extent such
income taxes arise from the sales of Fixed or Capital Assets and are
covered by cash proceeds from such sales), plus all payments (other than
that portion of payments for paper purchased which does include any
quarterly or other adjustments for purchase price required under the
Output Purchase Agreement), disbursements and advances (after giving
effect to credits which reduce the amounts paid, disbursed or advanced) to
the Joint Venture.
"Fixed Charge Coverage Ratio" means for the period of any
determination thereof the ratio of (a) EBITDA minus Capital Expenditures
which are not financed and which are not funded from the net proceeds of
the Borrowers' sales of Fixed or Capital Assets (after deducting from the
amount of the proceeds, the amount of income taxes arising from such sales
of Fixed or Capital Assets) or are not funded from insurance proceeds, to
(b) Fixed Charges.
"Funded Debt" means at any date, the aggregate for all the Borrowers
of that portion of Indebtedness for Borrowed Money for each of the
Borrowers consisting of (a) indebtedness for borrowed money or for the
deferred purchase price of
2
<PAGE>
property or services, (b) Lease Obligations with respect to Capital
Leases, and (c) third party obligations which are of the type described in
clause (a) or (b) and which are being guarantied or indemnified against by
a Borrower or which are secured by the property of a Borrower, excluding,
however from each of the foregoing clauses loans by a Borrower to one or
more of the Borrowers.
"Success Fee" means for the period of determination an amount equal
to three and one-half percent (3.5%) multiplied by any positive difference
between (A) the Borrowers' EBIT minus (B) $35,000,000, all as shown on the
annual financial statements for such annual period, furnished to the Agent
in accordance with Section 6.1.1 (Financial Statements); or in the event
that the Borrowers fail to deliver such financial statements to the Agent
as and when required, the Agent shall estimate, in its good faith
discretion, the amount of the Success Fee for such period, subject to
appropriate adjustment when such financial statements are received.
3. The first paragraph of Section 2.1.1 of the Financing Agreement is
hereby amended in its entirety to read as follows:
Subject to and upon the provisions of this Agreement, (a) the
Lenders collectively establish a revolving credit facility in favor of the
Borrowers, and (b) each Lender, severally, agrees to lend to the Borrowers
its Pro Rata Share of the Revolving Loan, up to the Lender's Revolving
Credit Committed Amount. The aggregate of all Revolving Credit Committed
Amounts is $65,000,000 (the "Total Revolving Credit Committed Amount").
The aggregate of all advances under the Revolving Credit Facility is
sometimes referred to in this Agreement collectively as the "Revolving
Loan".
4. The first paragraph of Section 2.1.3 of the Financing Agreement is
hereby amended in its entirety to read as follows:
As used in this Agreement, the term "Borrowing Base" means at any
time, an amount equal to the aggregate of (a) eighty-five percent (85%) of
the amount of Eligible Receivables, plus (b) the lesser of sixty percent
(60%) of the amount of Eligible Inventory or $32,500,000.
5. Section 2.1.10 of the Financing Agreement is hereby amended in its
entirety to read as follows:
2.1.10 Revolving Credit Unused Line Fee. The Borrowers shall pay to
the Agent for the ratable benefit of the Lenders a monthly revolving
credit facility fee (collectively, the "Revolving Credit Unused Line Fees"
and individually, a "Revolving Credit Unused Line Fee") in an amount equal
to one-half of one percent (0.5%) per annum of the average daily unused
and undisbursed portion of the Total Revolving Credit Committed Amount in
effect from time to time accruing during each calendar quarter; provided
however, in the event the Borrowers' annual
3
<PAGE>
financial statements furnished in accordance with Section 6.1.1(a) for the
year ended December 31, 1998 show the Borrowers to be in compliance with
all of the provisions of Section 6.1.14 as of that date, commencing with
the fiscal period beginning January 1, 1999, the Revolving Credit Unused
Line Fee shall be an amount equal to three-eighths of one percent (0.375%)
per annum of the average daily unused and undisbursed portion of the Total
Revolving Credit Committed Amount in effect from time to time. The accrued
and unpaid portion of the Revolving Credit Unused Line Fee shall be paid
by the Borrowers to the Agent on the first day of the next calendar
quarter, commencing on the first such date following the date hereof, and
on the Revolving Credit Termination Date.
6. The first paragraph of Section 2.1.11 of the Financing Agreement is
hereby amended in its entirety to read as follows:
In the event of the termination by, or on behalf of, the Borrowers,
of the Revolving Credit Commitment, the Borrowers shall pay a fee (the
"Early Termination Fee") equal to following amount at the following times:
------------------------------------------------------
Period Ending Early Termination Fee
------------- ---------------------
------------------------------------------------------
On or before 2.75% of the Total
December 31, 1998 Revolving Credit
Committed Amount
------------------------------------------------------
After December 31, 1998 0.5% of the Total
Revolving Credit
Committed Amount
------------------------------------------------------
7. Section 2.1.12(b) of the Financing Agreement is hereby amended in its
entirety to read as follows:
(b) The Borrowers shall not at any time permit the aggregate
outstanding principal amount of the Revolving Loan to exceed an amount
equal to (i) Borrowing Base minus (ii) (A) from December 5, 1997, through
and including December 31, 1998, One Million Dollars, and (B) January 1,
1999, and thereafter, Five Million Dollars ($5,000,000).
8. The following is added as new Section 2.2.8:
Section 2.2.8 Success Fee. The Borrowers agree to pay the Lenders,
as part of the Fees and the Obligations, a Success Fee for the Borrowers'
1998 and 1999 fiscal years; provided that the aggregate Success Fee for
both years shall not exceed $750,000. The Success Fee shall be payable on
the date the Borrowers furnish to the Agent the annual financial
statements referred to in Section 6.1.1 (Financial Statements) or in the
event that the Borrowers fail to furnish such financial statements to the
Agent as and when required, ON DEMAND thereafter
4
<PAGE>
by the Agent. In the event, however, the Borrowers repay the Obligations
in full, terminate the Commitments, and pay the Early Termination Fee (x)
in 1998, no Success Fee shall be due, or (y) in 1999, the Success Fee
shall be due only based on fiscal year 1998.
9. Section 2.3.1(c) of the Financing Agreement is hereby amended in its
entirety to read as follows:
(c) The Applicable Margin for (i) LIBOR Loans shall be 300 basis
points per annum, and (ii) Base Rate Loans shall be 100 basis points per
annum; provided, however, the Applicable Margin shall be subject to
change, as set forth in the following table, based on the Borrowers' ratio
of Funded Debt EBITDA as shown on the Borrowers' quarterly financial
statements furnished in accordance with Section 6.1.1(c), which change
shall be effective commencing as of the first day of the first month after
those financial statements are so furnished and shall continue thereafter
until another change is required by this subsection (c), provided,
however, that (i) no decrease in the Applicable Margin shall be made if
there shall exist a Default or an Event of Default and (ii) the Applicable
Margin for the Post-Default Rate shall be 100 basis points:
--------------------------------------------------------------------------
Ratio of Base Rate LIBOR
Funded Debt to Applicable Margin Applicable Margin
EBITDA (basis points) (basis points)
--------------------------------------------------------------------------
Greater than 4.0 to 1.0 100 300
--------------------------------------------------------------------------
Equal to or less than 75 275
4.0 to 1.0 but greater
than or equal to 3.5 to
1.0
--------------------------------------------------------------------------
Less than 3.5 to 1.0 50 250
--------------------------------------------------------------------------
10. Section 6.1.14 of the Financing Agreement is hereby amended in its
entirety as follows:
(a) Net Worth. The Borrowers will at all times (tested
as of the end of each fiscal month) maintain a Net Worth of not less than
(i) commencing December 31, 1997 through and including December 30, 1998,
$2,400,000, and (ii) commencing December 31, 1998 and thereafter, the
greater of (A) $2,400,000 or (B) $2,400,000 plus an amount equal to 100%
of the Borrowers' aggregate net income and losses for each month
commencing January 1, 1998:
(b) Interest Coverage Ratio. The Borrowers will maintain
(tested as of the last day of each fiscal quarter in each fiscal year,
5
<PAGE>
commencing December 31, 1997, for the three (3), six (6), nine (9) or
twelve (12) month period of such fiscal year, as appropriate, ending on
that date) an Interest Coverage Ratio of not less than the following:
---------------------------------------------------
Period Ending Ratio
---------------------------------------------------
December 31, 1997 0.90 to 1.0
---------------------------------------------------
March 31, 1998 1.60 to 1.0
---------------------------------------------------
June 30, 1998 1.70 to 1.0
---------------------------------------------------
September 30, 1998 1.60 to 1.0
---------------------------------------------------
December 31, 1998 1.50 to 1.0
---------------------------------------------------
March 31, 1999 1.60 to 1.0
---------------------------------------------------
June 30, 1999 1.70 to 1.0
---------------------------------------------------
September 30, 1999 1.60 to 1.0
---------------------------------------------------
December 31, 1999 1.50 to 1.0
---------------------------------------------------
March 31, 2000 1.60 to 1.0
---------------------------------------------------
June 30, 2000 1.70 to 1.0
---------------------------------------------------
September 30, 2000 1.80 to 1.0
---------------------------------------------------
December 31, 2000 2.00 to 1.0
---------------------------------------------------
March 31, 2001 1.60 to 1.0
---------------------------------------------------
(c) Fixed Charge Coverage Ratio. The Borrowers will
maintain (tested as of the last day of each fiscal quarter in each fiscal
year, commencing March 31, 1998, for the three (3), six (6), nine (9) or
twelve (12) month period of such fiscal year, as appropriate, ending on
that date) a Fixed Charge Coverage Ratio of not less 1.0 to 1.0.
(d) Funded Debt to EBITDA Ratio. The Borrowers will
maintain (tested as of the last day of each fiscal quarter in each fiscal
year, commencing December 31, 1997, for the four (4) quarter period ending
on the test date) a ratio of Funded Debt to EBITDA of not more than the
following
6
<PAGE>
---------------------------------------------------
Period Ending Ratio
---------------------------------------------------
December 31, 1997 10.00 to 1.0
---------------------------------------------------
March 31, 1998 10.00 to 1.0
---------------------------------------------------
June 30, 1998 10.00 to 1.0
---------------------------------------------------
September 30, 1998 5.50 to 1.0
---------------------------------------------------
December 31, 1998 5.50 to 1.0
---------------------------------------------------
March 31, 1999 5.50 to 1.0
---------------------------------------------------
June 30, 1999 5.50 to 1.0
---------------------------------------------------
September 30, 1999 5.50 to 1.0
---------------------------------------------------
December 31, 1999 5.00 to 1.0
---------------------------------------------------
March 31, 2000 5.00 to 1.0
---------------------------------------------------
June 30, 2000 5.00 to 1.0
---------------------------------------------------
September 30, 2000 5.00 to 1.0
---------------------------------------------------
December 31, 2000 4.50 to 1.0
---------------------------------------------------
March 31, 2001 4.50 to 1.0
---------------------------------------------------
(e) Debt Service Coverage Ratio. The Borrowers will
maintain (tested as of the last day of each fiscal quarter in each fiscal
year, commencing December 31, 1997, (i) for the three (3) month period
ending December 31, 1997, and (ii) thereafter, for the three (3), six (6),
nine (9) or twelve (12) month period of such fiscal year, as appropriate,
ending on that date) a Debt Service Coverage Ratio of not less than 1.0 to
1.0 for the period ending December 31, 1997, and of not less than 1.15
thereafter.
(f) Current Ratio. The Borrowers will maintain at all
times (tested as of the last day of each fiscal quarter in each fiscal
year, commencing December 31, 1997) a Current Ratio of not less than 1.0
to 1.0.
11. The Lenders waive any default under Section 6.1.14 which may have
existed any time prior to the date of this Agreement. This waiver, however, is
not intended to, and shall not, waive any defaults arising out of non-compliance
by the Borrower with the Financing
7
<PAGE>
Agreement, Financing Documents or other Obligations, whether or not the
events, facts or circumstances giving rise to such non-compliance existed
on or prior to the date hereof.
12. Section 6.2.7 of the Financing Agreement is hereby amended in its
entirety as follows:
6.2.7 Operating Lease Obligations. The Borrowers will not
incur or permit to exist any Lease Obligations except Capital Leases
expressly permitted by this Agreement, if the aggregate amount of all such
Lease Obligations of the Borrowers (taken as a whole) would at any time
exceed Seven Million Five Hundred Thousand Dollars ($7,500,000) during any
fiscal year of the Borrowers.
13. Section 6.2.8 of the Financing Agreement is hereby amended in its
entirety as follows:
6.2.8 Capital Expenditures. The Borrowers will not directly or
indirectly (by way of the acquisition of the securities of a Person or
otherwise), make any Capital Expenditures in the aggregate for the
Borrowers (taken as a whole) exceeding (a) for fiscal year 1998, Two
Million Dollars ($2,000,000) plus the amount of Capital Expenditures which
are financed from the net proceeds of the Borrowers' sales of Fixed or
Capital Assets (after deducting from the amount of the proceeds, the
amount of income taxes arising from such sales of Fixed or Capital
Assets) or which are funded from insurance proceeds, and (b) for each
fiscal year thereafter, Twenty-Million Dollars ($20,000,000) plus the
amount of Capital Expenditures which are financed from the net proceeds of
the Borrowers' sales of Fixed or Capital Assets (after deducting from the
amount of the proceeds, the amount of income taxes arising from such sales
of Fixed or Capital Assets) or which are funded from insurance proceeds.
14. In consideration and as a condition of the execution of this Agreement
by the Lenders, at the time this Agreement is executed and delivered by the
parties the Borrowers shall pay to the Lenders an amendment fee in the amount of
$250,000, which fee shall be fully earned when due and non-refundable when paid.
15. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Maryland, without regard to principles
of choice of law.
16. The Borrowers shall pay at the time this Agreement is executed and
delivered all fees, commissions, costs, charges, taxes and other expenses
incurred by the Agent and its counsel in connection with this Agreement,
including, but not limited to, reasonable fees and expenses of the Agent's
counsel and all recording fees, taxes and charges.
17. This Agreement may be executed in any number of duplicate originals or
counterparts, each of such duplicate originals or counterparts shall be deemed
to be an original and all taken together shall constitute but one and the same
instrument. The Borrowers agree that the Agent and the Lenders may rely on a
telecopy of any signature of any Borrower. The
8
<PAGE>
Agent and the Lenders agree that the Borrowers may rely on a telecopy of this
Agreement executed by the Agent and the Lenders, respectively.
IN WITNESS WHEREOF, each of the parties hereto has executed and delivered
this Agreement under their respective seals as of the day and year first written
above.
WITNESS OR ATTEST: FOUR M CORPORATION
/s/ Harvey L. Friedman By: /s/ Chris Mehiel (Seal)
- --------------------------- -------------------------------
Harvey L. Friedman Chris Mehiel
Secretary Chief Financial Officer
WITNESS OR ATTEST: BOX USA GROUP, INC.
/s/ Harvey L. Friedman By: /s/ Chris Mehiel (Seal)
- --------------------------- -------------------------------
Harvey L. Friedman Chris Mehiel
Secretary Chief Financial Officer
9
<PAGE>
WITNESS OR ATTEST: FOUR M PAPER CORPORATION
/s/ Harvey L. Friedman By: /s/ Chris Mehiel (Seal)
- --------------------------- -------------------------------
Harvey L. Friedman Chris Mehiel
Secretary Chief Financial Officer
WITNESS OR ATTEST: FOUR M MANUFACTURING GROUP
OF GEORGIA, INC.
/s/ Harvey L. Friedman By: /s/ Chris Mehiel (Seal)
- --------------------------- -------------------------------
Harvey L. Friedman Chris Mehiel
Secretary Chief Financial Officer
WITNESS OR ATTEST: PAGE PACKAGING CORPORATION
/s/ Harvey L. Friedman By: /s/ Chris Mehiel (Seal)
- --------------------------- -------------------------------
Harvey L. Friedman Chris Mehiel
Secretary Chief Financial Officer
WITNESS OR ATTEST: BOX USA OF FLORIDA, L.P.
BY: FOUR M MANUFACTURING
GROUP OF GEORGIA, INC., General
Partner
/s/ Harvey L. Friedman By: /s/ Chris Mehiel (Seal)
- --------------------------- -------------------------------
Harvey L. Friedman Chris Mehiel
Secretary Chief Financial Officer
WITNESS: NATIONSBANK, N.A.,
in its capacity as Agent
/s/ Mary J. Kleinsmith By: /s/ Vickie L. Tillman (Seal)
- --------------------------- -------------------------------
Vickie L. Tillman
Vice President
10
<PAGE>
WITNESS: NATIONSBANK, N.A.,
in its capacity as a Lender
/s/ Mary J. Kleinsmith By: /s/ Vickie L. Tillman (Seal)
- --------------------------- -------------------------------
Vickie L. Tillman
Vice President
WITNESS: IBJ SCHRODER BUSINESS CREDIT
CORPORATION
By: /s/ Robert Wallace (Seal)
- --------------------------- -------------------------------
Name: Robert Wallace
Title: Vice President
WITNESS: SANWA BUSINESS CREDIT
CORPORATION
/s/ Donald A. Mastrau By: /s/ Lawrence J. Placek (Seal)
- --------------------------- -------------------------------
Name: Lawrence J. Placek
Title: Vice Pres
WITNESS: BNY FINANCIAL CORPORATION
/s/ Robert Nuytkens By: /s/ Frank Imperato (Seal)
- --------------------------- -------------------------------
Name: Frank Imperato
Title: VP
WITNESS: FLEET CAPITAL CORPORATION
By: /s/ Robert M. Dailey (Seal)
-------------------------------
Name: Robert M. Dailey
Title: VP
Kim B. Bushey
- ---------------------------
11
