<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported) June 2, 1995
SAZTEC INTERNATIONAL, INC.
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(Exact name of registrant as specified in its charter)
California 0-15353 33-0178457
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(State or other jurisdiction (Commission File (IRS Employer
incorporation) Number) Identification No.)
43 Manning Road, Billerica, Massachusetts 01821
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(Address of principal executive offices)
Registrant's telephone number, including area code (508) 262-9800
6700 Corporate Drive, Kansas City, Missouri 64120
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
Saztec International, Inc.'s (the "Company") revolving credit facility was
scheduled to mature on May 22, 1995. By oral statements, confirmed by written
amendment dated June 2, 1995, the lender extended the maturity of the revolving
credit facility to June 15, 1995. An amendment to the revolving credit facility
dated March 22, 1995, set forth various conditions to the loan, including the
conditions that the Company maintain a certain minimum consolidated net worth
and a maximum ratio of consolidated total indebtedness to consolidated net
worth. Since March 31, 1995, the Company has not been in compliance with either
of these financial covenants, but the lender has continued to make advances to
the Company under the revolving credit facility. In the June 2, 1995,
amendment, the lender waived compliance with these financial covenants until
June 15, 1995.
The lender has expressed some willingness to extend further the revolving
credit facility, but the lender is under no obligation to do so.
The liquidity of the Company is severely threatened by the scheduled
maturity of the revolving credit facility unless the Company is able to (i)
negotiate a meaningful extension of that facility, (ii) replace that facility
with a comparable or better credit facility, (iii) obtain additional capital.
The Company is exploring, and will continue to explore, opportunities to
alleviate the liquidity pressures, including replacement of the revolving credit
facility and additional private placements of securities. There can be no
assurances that the Company will be successful in these or related efforts. The
failure of the Company to solve its short-term liquidity pressures could
directly affect the ability of the Company to operate as a going concern.
<PAGE>
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(A) N/A
(B) N/A
(C) Material to be Filed as Exhibits:
Regulations S-K
Item 601 Description of Exhibit Page
-------- ---------------------- ----
10.1 March 22, 1995, Amendment to
Revolving Credit Facility. ___
10.2 June 2, 1995, Amendment to
Revolving Credit Facility. ___
10.3 Master Revolving Note
dated May 22, 1995 ___
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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.
DATE: June 7, 1995
SAZTEC INTERNATIONAL, INC.
By: /s/ Donald J. Campbell
Name: Donald J. Campbell
Title: Vice President and Chief Financial Officer
<PAGE>
Exhibit 10.1
March 22, 1995
[LOGO]
[United Missouri Bank LETTERHEAD]
Mr. Robert P. Dunne, Chairman
Saztec International, Inc.
6700 Corporate Drive
Kansas City, Missouri 64120
Dear Mr. Dunne:
As you know, the Authority to Loan previously extended to Saztec International,
Inc. and all of its subsidiaries ("Saztec") by this bank expired on March 15,
1995. In that connection, you have requested that this bank's discount
committee consider continuing to extend revolving credit to Saztec predicated
off a number of points outlined to the writer in your letter dated March 9,
1995. Your letter to the writer dated March 9, 1995, a copy of which is
attached, will be a part of this agreement.
In consideration of your expressed desire to consummate a credit line with
another financial institution, the discount committee of UMB Bank, n.a. has
favorably considered your request and approved an Authority to Loan (the
"Authority to Loan") on the terms and conditions set forth in this letter.
1. UMB Bank, n.a. hereby extends to Saztec an Authority to Loan in the amount
of $750,000 from March 15, 1995 through April 30, 1995, provided that the
outstanding principal amount of all advances under such Authority to Loan
at no time exceeds an amount equal to 80% of Saztec's qualified accounts
receivable. "Qualified accounts receivable" shall have the meaning set
forth in a Security Agreement to be executed by Saztec not later than the
date of the first advance under the Authority to Loan.
2. All advances under the Authority to Loan will be evidenced by a Master
Revolving Note on this bank's standard form. Such note shall be payable on
demand, but if no demand, not later than April 30, 1995.
3. All advances under the Authority to Loan are subject to Saztec being in
full and complete compliance with all terms and conditions stated in this
letter at the time of each such advance and the continuation of extensions
of credit are subject to Saztec being in full compliance with all terms
hereof at all times.
4. All advances under the Authority to Loan will be secured by all accounts
receivable of Saztec, now or hereafter existing, notwithstanding the 80% of
qualified accounts receivable basis for making advances, and by all
inventory, machinery, equipment, furniture and fixtures of Saztec nor owned
or hereafter acquired or created.
<PAGE>
Mr. Robert P. Dunne, Chairman
March 22, 1995
Page 2
5. Saztec will continue to maintain a lock box for the receipt of all accounts
receivable payments over which this bank has sole access and also a cash
collateral account with this bank into which all accounts receivable
payments will be deposited.
6. All advances under the Authority to Loan shall bear interest per annum at
3% over this bank's prime rate of interest, adjusted daily. For purposes
hereof, this bank's prime rate of interest shall be that rate of interest
which it states, from time to time, to be its prime rate of interest.
7. Each extension of credit under the Authority to Loan shall be subject, in
the sole discretion of this bank, to the occurrence of no adverse material
change in (i) the financial condition of Saztec or (ii) the aging or
collectability of its accounts receivable.
8. This bank must at all times have a first priority perfected security
interest in all personal property of Saztec and all proceeds of all of the
foregoing and all common stock of all subsidiaries of Saztec.
9. At all times the consolidated net worth of Saztec must be at least equal to
$2,200,000, the calculation of such to be performed in accordance with
generally accepted accounting principles, consistently applied.
10. At all times the ratio of consolidated total indebtedness to consolidated
net worth shall not exceed 2.5 to 1, the calculation of such to be
performed in accordance with generally accepted accounting principles,
consistently applied.
11. Saztec must provide this bank with monthly financial statements and
accounts receivable listings and agings and a borrowing base certificate in
form and substance acceptable to this bank not later than 20 days following
the end of each month, such financial statements to include, at a minimum,
a balance sheet, an income statement and a statement of cash flow.
12. Should the terms of this letter and any terms of any Promissory note or
Security Agreement executed or continued in connection herewith be in
conflict, then the terms of any such note or Security Agreement shall
prevail.
13. All documentation evidencing the Authority to Loan and any collateral
therefore shall be on this bank's standard forms and must be satisfactory
in all respects to this bank and its attorneys.
14. All costs incurred by this bank in extending credit under the Authority to
Loan must be paid by Saztec.
<PAGE>
Mr. Robert P. Dunne, Chairman
March 22, 1995
Page 3
15. It is further understood that Saztec is completing interrogatories relative
to its litigation against DEC for unrecovered costs related to a
terminated contract. Management of Saztec has anticipated negotiating a
settlement ranging from $200,000 to $400,000 and has committed a minimum of
50% of the proceeds received to further reduce the bank's Authority to Loan
availability during this time period.
16. This letter supersedes any and all prior agreements, whether written or
verbal, between Saztec and this bank relating to the subject matter hereof
except existing Promissory Notes, Security Agreements and financing
statements. By signing below, you and this bank agree that there are no
unwritten oral agreements between us relating to the transactions proposed
hereunder.
17. STATUTORY STATEMENT MADE PURSUANT TO MO. REV. STAT. SECTION 432.045. ORAL
AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM
ENFORCING PAYMENT OF A DEBT INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT
ARE NOT ENFORCEABLE. TO PROTECT SAZTEC INTERNATIONAL, INC. AND TO PROTECT
UMB BANK, N.A. FROM MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS WE
REACH CONCERNING SUCH MATTERS ARE CONTAINED IN THIS LETTER AND THE
DOCUMENTS REFERRED TO HEREIN, WHICH ARE THE COMPLETE AND EXCLUSIVE
STATEMENTS OF THE AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATER AGREE IN
WRITING TO MODIFY IT.
If you agree to the above terms and conditions, kindly acknowledge the same by
signing in the space provided for that purpose below and return the original of
this letter to the undersigned not later than March 29, 1995.
Sincerely,
UMB BANK, n.a.
By /s/ Ned. C. Voth
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Ned C. Voth
Executive Vice President
NCV:am
The undersigned hereby acknowledges and agrees to all of the terms and
conditions stated in the foregoing letter.
SAZTEC INTERNATIONAL, INC.
AND ALL SUBSIDIARIES
By: /s/ Robert P. Dunne
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Robert P. Dunne, Chairman
Dated: March 27 , 1995.
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Exhibit 10.2
[LOGO]
[United Missouri Bank LETTERHEAD]
June 2, 1995
Mr. David Roberts
Senior Vice President
Saztec International, Inc.
6700 Corporate Drive
Kansas City, Missouri 64120
Dear Mr. Roberts:
Please allow this letter to serve as a formal amendment to this bank's
commitment letter to Mr. Robert P. Dunne dated March 22, 1995. Item number
one is being modified to extend the maturity of the $750,000 Authority to
Loan which is made available to Saztec International, Inc. from May 22,
1995, as previously amended in a letter dated May 2, 1995, to a new
maturity date of June 15, 1995. Additionally affected are items numbered
nine and ten. Respectively they call for a total consolidated net worth of
$2,200,000 and a total consolidated indebtedness to total consolidated net
worth ratio not to exceed 2.5:1. Both item nine and ten are being waived
until the expiration date of this commitment which is June 15, 1995.
All other terms and conditions contained in the commitment letter dated
March 2, 1995 will remain in effect.
If you agree to the above terms and conditions, kindly acknowledge the same
by signing in the space provided for that purpose below and return the
original of this amendment to the undersigned not later than June 6, 1995.
Sincerely,
UMB BANK, n.a.
By: /s/ Ned C. Voth
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Ned C. Voth, Community Bank President
NCV:am
<PAGE>
Mr. David Roberts
Senior Vice President
Saztec International, Inc.
Page 2
The undersigned hereby acknowledges and agrees to the above described
amendment to the commitment letter dated March 22, 1995 and agrees this
amendment becomes a part of the above described commitment letter and also
agrees the bank makes no commitment whatsoever beyond June 15, 1995.
SAZTEC INTERNATIONAL, INC.
and all subsidiaries
By: /s/ David Roberts Date: 6/6/95
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David Roberts, Sr. Vice President
<PAGE>
Exhibit 10.3
MASTER REVOLVING NOTE
$ 750,000.00 and Interest May 22, 1995
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PAYMENTS, DISBURSEMENTS AND INTEREST
FOR VALUE RECEIVED,the undersigned (the "undersigned means each maker and
each endorser and, if more than one, each jointly and severally agrees to all
the provisions hereunder) promise(s) to pay to the order of the UMB Bank, n.a.
hereinafter called Bank"), at its main office, on demand, but if no demand on
JUNE 15, 1995 the principal sum of SEVEN HUNDRED FIFTY THOUSAND AND NO/100
DOLLARS or such other lesser amount as shall be noted on the Schedule of
Disbursements and Payments of Principal included herein or attached hereto
pursuant to the authority set forth herein, together with interest on the unpaid
principal balance hereof from time to time outstanding from date(s) of
disbursement(s) until paid, at the rate of 3.00 percent per annum above the
prime interest rate of Bank, adjusted Daily, with all accrued interest payable
Monthly. Interest hereunder shall be computed on the basis of days elapsed and
assuming a 360-day year consisting of twelve 30-day months. Unless Bank, in its
sole discretion, may from time to time otherwise direct, all payments shall be
applied first to payment of accrued interest, and then to reduction of the
principal sum due hereunder. This note shall bear interest after maturity,
whether by reason of acceleration or otherwise, at a rate of interest equal to
two percent (2%) in excess of the rate stated above until paid in full, and such
interest shall be compounded annually if not paid annually. Any part of the
outstanding principal balance hereof may be paid prior to maturity and if less
than the full amount due hereunder is paid, the undersigned, or any of them, may
from time to time until maturity receive, but the Bank has no commitment to
make, further disbursements hereunder; provided, however, the aggregate amount
of all principal amounts outstanding hereunder shall at no time exceed the face
amount of this note; and provided further, that each and every disbursement made
under this MASTER REVOLVING NOTE shall be at the Bank's sole discretion. In the
event the undersigned pays any part of the principal balance hereof prior to
maturity or, in accordance with the terms hereof, receives any additional
disbursements of principal hereunder, the principal amount due hereunder shall
be the last amount stated to be the Unpaid Principal Balance of Note on the
Schedule of Disbursements and Payments of Principal and the undersigned hereby
authorize(s) any officer of the Bank to make notations on the Schedule of
Disbursements and Payments of Principal from time to time to evidence payments
and disbursements hereunder. The Bank is hereby directed by the undersigned to
credit all future advances under this note to account number 987 041 6565
carried on the books of Bank in the name of Saztec International, Inc., Advanced
Automation Associates, Inc. and the undersigned agrees that the Bank or holder
hereof may make advances, at its discretion, upon oral or written instructions
of any of the undersigned, or any other person(s) duly authorized by the
undersigned.
COLLATERAL
The term "Collateral" as used herein includes (but without limitation) all
of the property listed below now owned and hereafter acquired, all proceeds and
products thereof, and all accessions thereto together with (1) all accruals
thereto and dividends, rights, payments, shares and property received in respect
thereof, including those by way of corporate reorganization, liquidation, split
or change in capital structure -- all of which will be promptly delivered to
this holder hereof duly endorsed, if endorsement is required, and in proper form
for transfer, (2) all indebtedness, including (without limitation) any credit
balance, due from or standing on deposit with, the holder which belongs to, is
in the name of, or is subject to withdrawal by, any party liable hereon, whether
now existing or hereafter arising or deposited, and (3) all personal property of
or in the name of any person liable hereon, now or hereafter in the possession
or control of the holder hereof for any purpose and in any capacity. The
undersigned makers each represent that the proceeds of this note are to be used
exclusively for business or agricultural purposes and are not for the personal,
family or household purposes of any of them. If this note is secured by a
mortgage or deed of trust, such mortgage or deed of trust dated N/A, is governed
by Section 443.055 R.S. Mo. such mortgage or deed of trust is recorded in the
State of Missouri.
Description of Collateral:
All Accounts Receivable, Inventory, Machinery, Equipment, Furniture and
Fixtures as described in Security Agreements dated April 7, 1992, September
25, 1992 and February 15, 1993. All stock certificates, bonds, receipts,
confirmation and similar documents as described in Security Agreements dated
September 25, 1992 and December 15, 1994. All commission receivables as
described in Security Agreement dated October 8, 1993.
(Page 1)
<PAGE>
GRANT OF SECURITY INTEREST
The undersigned hereby grants to Bank a security interest in the Collateral
for the payment of all amounts due under this note, and all renewals and
extensions thereof, and for the payment of all other present and future
obligations to the holder, direct or contingent, secured or unsecured, whether
or not due, of any party liable hereon (all of which amounts and obligations are
hereinafter referred to as "Secured Obligations"), and Bank may accordingly
retain the Collateral or any part thereof as security after the payment of all
amounts due under this note. The undersigned agree(s) to give to Bank upon
Bank's request, from time to time, such other and further security as Bank, in
its sole discretion, may deem necessary or appropriate, such additional security
to become "Collateral" under the provisions hereof.
RIGHTS RESPECTING COLLATERAL
Before or after maturity, the holder may (1) transfer all or any part of
the Collateral into the name of the holder hereof or its nominee, with or
without disclosing that such Collateral is subject to the lien and security
interest hereunder; (2) notify the parties obligated on any of the Collateral to
make payment to the holder hereof of any amounts due or to become due
thereunder; (3) enforce collection of any of the Collateral by suit or otherwise
and surrender, release or exchange all or any part thereof, or compromise,
extend or renew for any period (whether or not longer than the original period)
any indebtedness secured thereby; (4) take control of any proceeds of the
Collateral; (5) endorse any Collateral in the name of any person liable hereon,
whenever, in the opinion of the holder, such endorsement may facilitate the
handling of, or realization upon, the Collateral, and an irrevocable power of
attorney therefor is hereby granted to the holder hereof; (6) in addition to its
security interest therein, apply balances, credits, deposits, accounts, or
monies of any person liable hereon held by the holder in any capacity, whether
or not the same are due, applying them toward the payment of such of the Secured
Obligations, and in such order of application, as the holder elects; (7) vote,
use, transfer or repledge any or all of the Collateral; (8) exercise such
additional rights, powers or remedies, if any, with respect to any security for
or guaranty of any of the Secured Obligations as may be provided in any written
instrument other than this note. No liability shall arise against the holder
from any act, or the omission of any act, pertaining to the collection or
failure to collect any Collateral securing this or any other obligation of any
party liable hereon. The undersigned hereby agree(s) to take any and all steps
necessary to preserve any rights in the Collateral against prior parties and the
holder hereof shall not be bound to take any such steps. Notwithstanding any
other provision herein, the undersigned shall not give, transfer, sell, encumber
or otherwise dispose of any Collateral, or any interest therein, without Bank's
advance written consent.
ACCELERATION AND EVENTS OF DEFAULT
Without limitation on the demand maturity of this note, the holder may,
without demand or notice of any kind, declare this note and any other of the
Secured Obligations immediately due and payable in full at any time that the
holder deems itself insecure for any reason whatsoever in respect of any Secured
Obligation. Upon the occurrence of any of the following events of default: (1)
failure of the undersigned to pay or perform any other obligation of any of the
undersigned to the holder hereof; (2) the death or dissolution of, or
termination of existence of, any of the undersigned; (3) the failure of any of
the undersigned to pay debts as they mature; (4) appointment of a receiver of
or for any part of the property of any of the undersigned, an assignment for the
benefit of creditors by any of the undersigned; or the commencement of any
proceedings under bankruptcy or insolvency laws by or against any of the
undersigned, then this note and all other obligations of each of the undersigned
to the holder hereof shall immediately become due and payable in full without
notice or demand.
MISSOURI LAW
The interpretation of this instrument and the rights and remedies of the
parties hereto shall be governed by the laws of the State of Missouri.
COLLECTION EXPENSES
To the extent permitted by applicable law, the undersigned agrees to pay
all expenses of the holder in collecting this note and enforcing rights
respecting and realizing upon any of the Collateral, including reasonable
attorneys' fees.
(Page 2)
<PAGE>
DEMAND, NOTICE, ENDORSERS, GUARANTORS AND SURETIES
Demand for payment, notice of nonpayment, protest, dishonor, diligence and
suit are hereby waived by all parties liable hereon. All endorsers, guarantors
and sureties, by endorsing or guaranteeing this note (1) agree to all of the
terms and conditions herein contained, and (2) without limitation of the
foregoing, and without affecting their liabilities hereunder, agree and consent
to all renewals, extensions, and modifications hereof including (a) the
impairment, substitution, exchange or release at any time or times of all or any
part of any property securing payment of this note and all other obligations of
each of the undersigned to the holder hereof, without notice; (b) the release
of, or impairment of right of recourse against, any other endorser, guarantor or
surety, without notice; and (c) the substitution of renewal or extension notes
for this note, without notice or demand.
NO WAIVERS
Any failure of the holder hereof to exercise any right hereunder shall not
be construed as a waiver of the right to exercise the same or any other right at
any other time and from time to time thereafter.
HEADINGS
All headings or titles appearing in this note are used as a matter of
convenience only and shall not affect the interpretation of the provisions
hereof.
Saztec International, Inc.
Mailing Address: By: /s/ David W. Roberts
6700 Corporate Drive -------------------------------------
Kansas City, MO 64120
Senior Vice President
Customer ID: 3904321 -------------------------------------
New Loan: # Advanced Automation Associates, Inc.
By: /s/ David W. Roberts
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Secretary
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By:
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Title:
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(Page 3)
