SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
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Date of Report (Date of
earliest event reported): November 19, 1999
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COACTIVE MARKETING GROUP, INC.
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(Exact name of registrant as specified in its charter)
Delaware 06-1340408
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(State or other jurisdic- (I.R.S. Employer
tion of incorporation or Identification No.)
organization)
0-20394
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(Commission File Number)
415 Northern Blvd., Great Neck, New York 11021
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (516) 622-2800
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(Former Name or Former Address, if Changed Since Last Report)
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Item 5. Other Events
On November 19, 1999, the Registrant, Inmark Services, Inc.,
Optimum Group, Inc. and U.S. Concepts, Inc. (collectively, "CoActive Marketing
Group") and PNC Bank, National Association (the "Lender") executed an amendment
to CoActive Marketing Group's existing loan facility with Lender pursuant to
which (i) compliance with certain financial covenants contained in the Loan
Agreement was waived for the quarter ended September 30, 1999, and (ii) the
terms of certain financial covenants contained in the Loan Agreement were
amended.
Item 7. Financial Statements and Exhibits
* * *
(c) Exhibits:
1. Fourth Amendment to Loan Documents dated as of November 19,
1999.
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SIGNATURE
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 thereunto duly authorized.
Date: November 24, 1999
COACTIVE MARKETING GROUP, INC.
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(Registrant)
By: /s/ Donald A. Bernard
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Donald A. Bernard,
Executive Vice President and
Chief Financial Officer
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EXHIBIT INDEX
No. Description Page
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1 Fourth Amendment to Loan Documents dated as of November 19, 1999.
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FOURTH AMENDMENT TO LOAN DOCUMENTS
THIS FOURTH AMENDMENT TO LOAN AGREEMENT; SECURITY AGREEMENT; and PLEDGE
AGREEMENT (this "Amendment") is made as of November 19, 1999 among PNC Bank
National Association ("Lender") having offices at One Garret Mountain Plaza,
West Paterson, New Jersey 07424, CoActive Marketing Group, Inc. (formerly known
as Inmark Enterprises, Inc.), a Delaware corporation ("CoActive"), U.S.
Concepts, Inc., a Delaware corporation, ("USC"), Inmark Services, Inc. a
Delaware corporation ("Services"), and Optimum Group, Inc., an Ohio corporation
(formerly, OG Acquisition Corp.) ("New OGI" and together with Services and USC,
the "Borrower"). CoActive, USC, Services, and New OGI are collectively referred
to herein as the "Inmark Group".
PRELIMINARY STATEMENT:
A. Lender, Enterprises, Services and New OGI entered into a Loan
Agreement dated as of March 31, 1998 ((i) as amended by a First Amendment to
Loan Documents dated as of December 29, 1998, to which USC became a party, (ii)
as amended by a Second Amendment to Loan Documents dated as of January 14, 1999,
(iii) as amended by Third Amendment to Loan Documents dated as of June 30, 1999
("Third Amendment to Loan Documents") and (iv) as amended hereby and as further
amended, supplemented or otherwise modified from time to time, the "Agreement"),
pursuant to which, among other things, Lender agreed to make (i) Revolving Loans
to Borrower in the aggregate principal amount at any one time outstanding not to
exceed $5,000,000 and (ii) a term loan to Borrower in the principal amount of
$5,000,000 (and current principal balance of $3,660,000), all upon the terms and
subject to the conditions set forth therein.
B. The Inmark Group has requested that Lender waive the non-compliance
by Borrower of certain of its covenants under Sections 6.1, 6.2, and 6.3 of the
Agreement (such waivers as expressly described and limited herein shall be
referred to collectively as "Waivers").
C. Lender has agreed to the Waivers upon the condition, among others,
that each member of the Inmark Group agrees to the amendments set forth herein
and executes and delivers this Amendment.
AGREEMENT:
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1. Definitions. Capitalized terms used in this Amendment shall
have the same meanings given them in the Agreement, unless otherwise
defined herein.
2. Section 6.1.
a. Waiver. The Lender hereby grants a waiver of Borrower's
non-compliance with Section 6.1 of the Agreement, solely in respect of the
quarter ended September 30, 1999, and of the Event of Default that would
otherwise result from a violation of that Section, solely by reason of such
non-compliance.
b. Amendment. Section 6.1 of the Loan Agreement is hereby amended to
add the following provision:
"Anything in this Section 6.1 to the contrary notwithstanding, the
Inmark Group shall maintain at all times during each of the quarters ended
December 31, 1999 and March 31, 2000, a Minimum EBITDA (not measured on a
rolling four-quarter basis) no less than $1,000,000 and $2,385,000 respectively;
it being acknowledged and agreed that for each quarter subsequent to March 31,
2000, Minimum EBITDA shall be measured on a rolling four-quarter basis and as
originally set forth in the Agreement prior to any amendments."
3. Section 6.2.
a. Waiver. The Lender hereby grants a waiver of Borrower's
non-compliance with Section 6.2 of the Agreement, solely in respect of the
quarter ended September 30, 1999, and of the Event of Default that would
otherwise result from a violation of that Section, solely by reason of such
non-compliance.
b. Amendment. Section 6.2 of the Loan Agreement is hereby amended to
add the following provision:
"Anything in this Section 6.2 to the contrary notwithstanding, the
Inmark Group shall not be required to comply with the covenants of this Section
6.2 solely in respect of the quarter ended December 31, 1999."
c. Amendment. Section 6.2 of the Loan Agreement is hereby amended to
replace the Maximum Senior Debt Leverage Ratio corresponding to the following
date (and only the following date) with the respective adjusted ratios set forth
below:
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Quarter Ended Maximum Senior Debt Leverage
Ratio
March 31, 2000 2.30:1
4. Section 6.3
a. Waiver. The Lender hereby grants a waiver of Borrower's
non-compliance with Section 6.3 of the Agreement, solely in respect of the
quarter ended September 30, 1999, and of the Event of Default that would
otherwise result from a violation of that Section, solely by reason of such
non-compliance.
b. Amendment. Section 6.3 of the Loan Agreement is hereby amended to
add the following provision:
"Anything in this Section 6.3 to the contrary notwithstanding, the
Inmark Group shall not be required to comply with the covenants of this Section
6.3 solely in respect of the quarter ended December 31, 1999."
5. Term Loan Payment. Anything in the Loan Documents to the contrary
notwithstanding, on March 31, 2000, Borrower shall make a principal payment to
Lender in respect of the Term Loan of $500,000.
6. Lock Box Documents. The Inmark Group hereby acknowledges and agrees that all
of the Documents that set forth the lock box arrangement between the Lender and
the Inmark Group shall constitute "Loan Documents" as defined in the Agreement.
The Inmark Group agrees to immediately notify all of its customers (and all
other Person that owe monies to any member of the Inmark Group) to remit all
payments to the appropriate lock boxes held by the Lender.
7. Borrowing Base. The Inmark Group acknowledges that Lender is entering into
this Amendment in reliance upon the agreement by the Inmark Group to limit its
ability to borrow under the Loan Documents by reference to a borrowing base tied
to among other things eligible receivables as soon as practicable; such
borrowing base to be established at the reasonable discretion of Lender (the
"Borrowing Base"). Accordingly, the Inmark Group agrees to execute and deliver
to Lender any Document (including, any subsequent amendment to the Loan
Documents) to establish such Borrowing Base.
8. Certain Representations and Warranties.
a. In order to induce the Lender to enter into this
Amendment, each member of the Inmark Group hereby represents and
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warrants to the Lender that after giving effect to the Waivers and the
amendments contemplated by this Amendment that:
(1) no Event of Default, or any event which, with the giving
of notice, the lapse of time, or both, or the occurrence of any other condition,
would constitute an Event of Default, has occurred and is continuing;
(2) the Agreement, the Security Agreement, the Pledge
Agreement and each of the other Loan Documents (as amended by this Amendment),
after giving effect to this Amendment, continue to be in full force and effect
and to constitute the legal, valid and binding obligations of each member of the
Inmark Group that is a party thereto, enforceable against each member of the
Inmark Group in accordance with their respective terms;
(3) the representations and warranties made by each member of
the Inmark Group in or pursuant to the Agreement, the Security Agreement, the
Pledge Agreement or any other Loan Document (in each case as amended by this
Amendment), or which are contained in any certificate, document or financial or
other statement furnished at any time under or in connection herewith or
therewith, are each true and correct in on and as of the date hereof, as though
made on and as of such date; and
(4) the "draft" quarterly financial statements for the Inmark
Group for the quarter ended September 30, 1999 and delivered to Lender were
prepared in accordance with GAAP and fairly present the financial condition and
operating results of the Inmark Group as of that date.
9. Conditions to Effectiveness of this Amendment. This Amendment shall become
effective upon the satisfaction of the following conditions:
a. Fees and Expenses. The Inmark Group shall have paid all expenses of
Lender, including, without limitation, (i) an amendment fee in the amount of
$46,650, (ii) accountant and consultant fees and expenses related to the
collateral investigation conducted on behalf of Lender, and (iii) reasonable
fees and expenses of counsel, in connection with the preparation, execution and
delivery of this Amendment and all other documents and instruments to be
executed and delivered pursuant hereto or in connection herewith, and the
transactions contemplated hereby. The Inmark Group hereby authorizes Lender to
charge the operating account of Borrower for the fees described in clauses (i),
and (ii) the fees and expenses described in clause (ii) up to $20,000 and for
the fees and expenses
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described in clause (iii) up to $4,000 so that the Lender can pay for these fees
and expenses on behalf of Borrower. The parties agree that the payment of the
$46,650 set forth above shall also satisfy the payment obligation of the Inmark
Group set forth in paragraph 11 of the Third Amendment to Loan Documents.
b. Recordings and Filings; Other Actions. Any documents (including,
without limitation, financing statements and an assignment of registered
intellectual property) required to be filed, registered or recorded (and that
have not already been so filed, registered or recorded) in order to create, in
favor of Lender a perfected Lien against the Collateral thereunder with respect
to which a Lien may be perfected by a filing under the Uniform Commercial Code
or any other applicable law shall have been delivered to Lender duly executed by
the appropriate member of the Inmark Group and shall be in proper form to be
filed, registered or recorded in each office in each jurisdiction required in
order to create in favor of Lender a perfected Lien on the respective Collateral
described therein having the priority purported to be granted thereby. Lender
shall have also received evidence that all necessary filing fees and all taxes
or other expenses related to such filings, registrations or recordings will be
paid in full. Lender shall have received evidence that all other actions
necessary or, in the opinion of Lender, desirable to perfect the Liens created
by the Loan Documents have been taken.
c. No Legal Restraints. There shall be no (i) litigation, investigation
or other proceeding of or before any Governmental Authority pending or, to the
best of knowledge of each member of the Inmark Group, threatened against any
member of the Inmark Group or any of its properties or revenues that could have
a Material Adverse Effect or (ii) injunction, writ, restraining order or any
order of any nature issued by any Governmental Authority directing that the
transactions provided for in this Amendment not be consummated as therein
provided.
d. Additional Matters. Lender shall have received such other
certificates, opinions, documents and instruments relating to the transactions
contemplated by this Amendment as it may have reasonably requested, and all
corporate and other proceedings and all other documents (including, all
documents referred to herein and not appearing as exhibits hereto) and legal
matters in connection with the transactions contemplated by this Amendment shall
be satisfactory in form and substance to Lender and its counsel.
10. Condition Subsequent. This Amendment shall become
automatically void and of no force and effect if on or prior to
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November 22, 1999 Lender shall not have received a certificate from the
Secretary or an Assistant Secretary of each member of the Inmark Group, dated
the Closing Date, certifying (as applicable) that or as to (i) attached to each
such certificate is a true, complete and correct copy of the resolutions of the
Board of Directors of such member of the Inmark Group authorizing among other
things the execution, delivery and performance of this Amendment and (ii) such
resolutions have not been amended, modified, revoked or rescinded since the
dates on which they were adopted and (iii) the incumbency and signature of each
officer signing this Amendment and any other certificate or other document to be
delivered pursuant hereto (and another officer of such member of the Inmark
Group shall certify as to the incumbency of such Secretary or Assistant
Secretary).
11. Counterparts. This Amendment may be executed in several counterparts, each
of which, when executed and delivered, shall be deemed an original, and all of
which together shall constitute one agreement.
12. Governing Law. This Amendment shall be governed by and construed and
interpreted in accordance with the laws of the State of New York, without giving
effect to principles of conflicts of law.
13. Effect of Amendment. From and after the effectiveness hereof, all references
to the Agreement, the Security Agreement, the Pledge Agreement in the other Loan
Documents shall mean the Agreement, the Security Agreement, the Pledge
Agreement, respectively, as amended and modified by this Amendment.
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14. Ratification; Effect of Waivers; Etc. Except as amended and otherwise
modified by this Amendment, the Agreement, the Security Agreement, the Pledge
Agreement and the other Loan Documents shall remain in full force and effect in
accordance with their respective terms. Except as expressly described above, the
Waivers shall not constitute (i) a modification or an alteration of the terms,
conditions or covenants of the Agreement, the Security Agreement, the Pledge
Agreement or any other Loan Document or (ii) a waiver, release or limitation
upon the Lender's exercise of any of its rights and remedies thereunder, which
are hereby expressly reserved. The Waivers shall not relieve or release any
member of the Inmark Group or any guarantor in any way from any of its
respective duties, obligations, covenants or agreements under the Agreement, the
Security Agreement, the Pledge Agreement or the other Loan Documents or from the
consequence of any Event of Default thereunder, except as expressly described
above. The Waivers shall not obligate the Lender, or be construed to require the
Lender, to waive any other Events of Default or defaults, whether now existing
or which may occur after the date of this Amendment.
[signature page follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
PNC BANK NATIONAL ASSOCIATION
By: /s/ Charles W. Jones
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Name/Title: Charles W. Jones, Vice President
COACTIVE MARKETING GROUP, INC.
(f/k/a Inmark Enterprises, Inc.)
By: /s/ Donald Bernard
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Name/Title: Donald Bernard, Executive Vice
President and CFO
U.S. CONCEPTS, INC.
(a Delaware corporation)
By: /s/ Donald Bernard
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Name/Title: Donald Bernard, Executive Vice
President and CFO
INMARK SERVICES, INC.
By: /s/ Donald Bernard
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Name/Title: Donald Bernard, Executive Vice
President and CFO
OPTIMUM GROUP, INC.
By: /s/ Donald Bernard
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Name/Title: Donald Bernard, Executive Vice
President and CFO
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