8-K, 1998-02-13
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                             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):           February 9, 1998

                             MULTI-COLOR CORPORATION
               (Exact Name of Registrant as Specified in Charter)

                 (State or Other Jurisdiction of Incorporation)

        0-16148                                              31-1125853
- -------------------------------                  -------------------------------
(Commission File Number)                                   (IRS Employer
                                                      Identification Number)

                       205 West Fourth Street, Suite 1140
                             Cincinnati, Ohio 45202
               (Address of Principal Executive Offices) (Zip Code)

       Registrant's telephone number, including area code: (513) 381-1480


Item 5. Other Events.

        In its report on Form 10-Q for the quarter ended December 28, 1997 filed
on January 27, 1998, the Registrant reported in its Management's  Discussion and
Analysis of Financial  Condition and Results of Operations  that at December 28,
1997 it was in violation of a required cash flow coverage ratio contained in its
banking arrangements.  The ratio was .77 to 1 versus a requirement of 1 to 1. It
also reported  that it was  negotiating a waiver of default of that covenant and
that it expected to receive a waiver.

        On February 9, 1998, the Registrant received the waiver of that default.
As part of that waiver, the Registrant agreed to a prohibition  against payments
of dividends and purchases of its equity securities. The Registrant has not been
paying  Common  Stock  dividends  but has been paying  dividends  of $69,852 per
quarter on its  outstanding  Series A and Series B  Preferred  Stock and will be
required to cease those payments by this provision.  In addition,  its borrowing
base was  restricted.  That base was the  lesser  of the sum of 80% of  eligible
accounts receivable plus 50% of eligible  inventories less a block of $0, or the
total revolving commitment. This block amount was increased to $500,000.

Item 7.  Financial Statements, Pro Forma Financial Information and Exhibits.

        (c)    Exhibits

               10.42  Fourth Amendment to Credit Agreement and Waiver Agreement


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 hereto duly authorized.

                                            MULTI-COLOR CORPORATION

Dated:   February 13, 1998                  By:  /s/William R. Cochran
                                               William R. Cochran
                                               Vice President,
                                               Chief Financial Officer

                                                                   Exhibit 10.42

                                    WAIVER AGREEMENT

     MULTI-COLOR  CORPORATION,  an Ohio corporation  (the "Company"),  PNC BANK,
NATIONAL   ASSOCIATION   (successor  by  merger  to  PNC  Bank,  Ohio,  National
Association) and STAR BANK,  NATIONAL  ASSOCIATION (each individually a "Lender"
and collectively the "Lenders") and PNC BANK, NATIONAL ASSOCIATION (successor by
merger to PNC Bank, Ohio, National  Association),  as agent for the Lenders (the
"Agent"),  hereby  agree as  follows  effective  as of  February  9,  1998  (the
"Effective Date"):

1.      RECITALS.

        1.1    On  January 9,  1997,  the  Company,  the  Lenders  and the Agent
               entered into a Second Amended and Restated Credit,  Reimbursement
               and  Security  Agreement  (as amended by the First  Amendment  to
               Credit Agreement dated February 25, 1997, the Second Amendment to
               Credit  Agreement  dated April 1, 1997 and the Third Amendment to
               Credit   Agreement   dated   September   1,  1997,   the  "Credit
               Agreement").  Capitalized  terms used  herein  and not  otherwise
               defined  herein  will have the  meanings  given such terms in the
               Credit Agreement.

        1.2    The  Company  has  requested  that the  Lenders  amend the Credit
               Agreement in certain  respects,  and waive certain defaults under
               the  Credit  Agreement,  and the  Lenders  are  willing  to do so
               subject  to and in  accordance  with  the  terms  of this  Fourth
               Amendment  to  Credit   Agreement  and  Waiver   Agreement   (the

2. AMENDMENTS. The Credit Agreement is hereby amended as follows:

        2.1    Section  1.1.20 of the Credit  Agreement is hereby deleted in its
               entirety and replaced with the following:

                      1.1.20  "Borrowing  Base" will equal the lesser of (a) the
               sum of eighty percent (80%) of the Eligible  Accounts  Receivable
               plus fifty percent (50%) of Eligible Inventories,  less the Block
               (as  defined  below),  less  the  aggregate  face  amount  of all
               outstanding Standby Letters of Credit, or (b) the Total Revolving
               Commitment. For purposes hereof, the "Block" will mean $500,000.

        2.2    Section  9.4 of the  Credit  Agreement  is hereby  deleted in its
               entirety and replaced with the following:

                    9.4 BORROWING BASE CERTIFICATES. The Company will furnish to
               the Agent upon the Agent's  request from time to time,  but in no
               event less often than weekly, a Borrowing Base Certificate in the
               form of the attached  Exhibit T. The Borrowing  Base  Certificate
               will  update  accounts  receivable  weekly  and will  update  raw
               materials and finished goods  inventory  monthly.  The Agent will
               promptly send a copy of such certificate to each Lender.


        2.3    Section  10.11 of the Credit  Agreement is hereby  deleted in its
               entirety and replaced with the following:

                      10.11 REDEMPTIONS.  Purchase,  retire, redeem or otherwise
               acquire  for value,  directly  or  indirectly,  any shares of its
               capital stock now or hereafter  outstanding,  or authorize or set
               aside any funds or other property for any such purpose.

        2.4    Section  10.12 of the Credit  Agreement is hereby  deleted in its
               entirety and replaced with the following:

                      10.12  DIVIDENDS.  Declare or pay dividends of any kind on
               any shares of its capital stock now or hereafter  outstanding  or
               make  any  other   distribution   of  cash  or  property  to  its
               shareholders,  or  authorize  or set  aside  any  funds  or other
               property for any such purpose.


        3.1    The Lenders  hereby  waive the  Company's  failure to comply with
               Section 10.4 (Cash Flow Coverage  Ratio) of the Credit  Agreement
               as of the Fiscal Quarter ending December 28, 1997.

        3.2    The  Lenders  hereby  consent  to the  auction  of certain of the
               Company's  assets  pursuant to the Auction Sales  Contract  dated
               December  31, 1997  between the Company and  National  Industrial
               Services,  Incorporated,  a true and  complete  copy of which has
               been  delivered  to each  Lender,  so long  as  such  auction  is
               conducted in a commercially reasonable manner.

        3.3    The waiver set forth in Section 3.1,  above,  will relate only to
               the specific  matter covered by such Section and in no event will
               the Lenders be under any obligation to provide additional waivers
               with regard to such matter or any other  provision  of the Credit
               Agreement, any Note or any Security Document.

        Lenders  and the  Agent  to  enter  into  this  Amendment,  the  Company
        represents, warrants and agrees as follows:


        4.1    Within 10 business  days after the  Effective  Date,  the Company
               will  deliver  to  the  Lenders  a cash  flow  forecast  for  the
               following 2-month period, in form and substance acceptable to the

        4.2    Within 30 days after the Effective Date, the Company, at its sole
               expense,  will  deliver to each Lender an  appraisal  in form and
               substance  acceptable  to the Lenders,  conducted by an appraisal
               firm acceptable to the Lenders,  of the Company's property at its
               Scottsburg, Indiana and Erlanger, Kentucky facilities.

        4.3    Without  limiting  Section 10.15  (Capital  Expenditures)  of the
               Credit  Agreement,  from the date hereof  until 30 days after the
               Effective Date, the Company will not make capital expenditures or
               acquisitions,  including the  capitalized  value of any leases in
               the  aggregate,   which,   when  calculated  in  accordance  with
               generally accepted accounting  principles,  would exceed $100,000
               in the aggregate during such 30-day period.

        4.4    In no event will the Company  incur or pay more than $175,000 for
               asbestos removal,  removal of underground storage tanks and other
               underground  environmental  remediation activities,  or more than
               $250,000 in the  aggregate in connection  with  responding to the
               environmental  issues and  estimated  fix-up  costs raised by the
               potential buyer of the Company's  Eastern Avenue  facility.  Upon
               the sale of its Eastern Avenue  facility,  the Company may retain
               an amount equal to the  expenditures  incurred in connection with
               responding to such  environmental  issues prior to depositing the
               sale  proceeds  into the  Sinking  Fund  Accounts  as required by
               Section 4 of the Credit Agreement.

        4.5    The  representations  and warranties of the Company  contained in
               Section 8 of the  Credit  Agreement  are deemed to have been made
               again on and as of the date of  execution of this  Amendment  and
               are true and  correct  as of the  date of the  execution  of this
               Amendment,  except as such  representations and warranties may be
               affected  by  the  Company's  recent   environmental   compliance
               problems  associated  with the  operation  of two  presses at the
               Company's Scottsburg, Indiana plant.

        4.6    No  Default  or Event of  Default  (as such  term is  defined  in
               Section 11 of the Credit  Agreement)  exists on the date  hereof,
               except for the default  that has been waived in  accordance  with
               Section 3, above.

        4.7    The person  executing this Amendment is a duly elected and acting
               officer of the  Company  and is duly  authorized  by the Board of
               Directors of the Company to execute and deliver this Amendment on
               behalf of the Company.


5.      CONDITIONS.  The Lenders' and the Agent's  obligations  pursuant to this
        Amendment are subject to the following conditions:

        5.1    The Company  will have paid to the Agent,  for the benefit of the
               Lenders, a waiver fee of $50,000.

        5.2    The Agent  will  have been  furnished  copies,  certified  by the
               Secretary or Assistant  Secretary of the Company,  of resolutions
               of  the  Board  of  Directors  of  the  Company  authorizing  the
               execution of this Amendment and all other  documents  executed in
               connection herewith.

        5.3    The  representations  and warranties of the Company in Section 4,
               above, shall be true.

        5.4    The Company will pay all expenses and attorneys  fees incurred by
               the Lenders in  connection  with the  preparation,  execution and
               delivery of this Amendment and related documents.

6.   CLAIMS AND RELEASE OF CLAIMS BY THE  COMPANY.  The Company  represents  and
     warrants that it has no claims,  counterclaims,  setoffs, actions or causes
     of action,  damages or liabilities of any kind or nature whatsoever whether
     at law or in  equity,  in  contract  or in tort,  whether  now  accrued  or
     hereafter maturing (collectively,  "Claims") against any Lender, its direct
     or indirect parent corporation or any direct or indirect affiliates of such
     parent  corporation,  or  any  of  the  foregoing's  respective  directors,
     officers,  employees,  agents, attorneys and legal representatives,  or the
     heirs, administrators,  successors or assigns of any of them (collectively,
     "Lender  Parties") that directly or indirectly arise out of, are based upon
     or are in  any  manner  connected  with  any  Prior  Related  Event.  As an
     inducement  to the Lenders to enter into this  Amendment,  the Company,  on
     behalf of itself and its  successors  and  assigns,  hereby  knowingly  and
     voluntarily  releases and  discharges  all Lender  Parties from any and all
     Claims, whether known or unknown, that directly or indirectly arise out of,
     are based upon or are in any manner connected with any Prior Related Event.
     As used  herein,  the term "Prior  Related  Event"  means any  transaction,
     event,  circumstance,  action,  failure to act,  occurrence  of any sort or
     type,  whether  known or  unknown,  which  occurred,  existed,  was  taken,
     permitted  or begun at any time prior to the  Effective  Date or  occurred,
     existed,  was taken, was permitted or begun in accordance with, pursuant to
     or by virtue of any of the terms of the Credit  Agreement,  any Note or any
     documents  executed in  connection  with the Credit  Agreement or which was
     related to or connected in any manner,  directly or  indirectly,  to any of
     the Obligations.

7.      GENERAL.

        7.1    Except as expressly  modified herein, the Credit Agreement is and
               remains in full force and effect.


        7.2    Except as specifically  provided above,  nothing contained herein
               will be  construed  as  waiving  any  default or Event of Default
               under the Credit  Agreement  or will  affect or impair any right,
               power or remedy of the Lenders or the Agent under or with respect
               to  the  Credit   Agreement  or  any   agreement  or   instrument
               guaranteeing,  securing  or  otherwise  relating  to  the  Credit

        7.3    This  Amendment  will be binding upon and inure to the benefit of
               the  Company,  the  Lenders  and the Agent  and their  respective
               successors and assigns.

        7.4    All representations, warranties and covenants made by the Company
               herein will survive the execution and delivery of this Amendment.

        7.5    This  Amendment will in all respects be governed and construed in
               accordance with the laws of the State of Ohio.

        7.6    This Amendment may be executed in one or more counterparts,  each
               of which  will be deemed an  original  and all of which  together
               will constitute one and the same instrument.

        Executed as of the Effective Date.

                                            MULTI-COLOR CORPORATION, as Company

                                            By:  /s/William R. Cochran
                                               Print Name:  Willian R. Cochran
                                               Title:  Vice President/CFO

                                            PNC BANK, NATIONAL ASSOCIATION,
                                            on its own behalf as Lender, 
                                            and as Agent

                                            By:  /s/Warren F. Weber
                                               Print Name:  Warren F. Weber
                                               Title:  Vice President

                                            STAR BANK, NATIONAL ASSOCIATION,
                                            as Lender

                                            By:  /s/Andrew T. Hawking
                                               Print Name:  Andrew T. Hawking
                                               Title:  Senior Vice President

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