|
|
o
|
Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
|
|
|
o
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
|
|
o
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
|
|
|
o
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
|
|
Section
2 – Financial Information
|
|
|
|
Item
2.01 Completion of Acquisition or Disposition of
Assets.
|
|
|
On
September 14, 2007, Champion Industries, Inc. (“Champion”) issued a press
release, attached hereto and incorporated herein by reference
as Exhibit
99.1, announcing the completion on September 14, 2007 of the
acquisition
(the “Acquisition”) of the assets of The Herald-Dispatch daily newspaper
published in Huntington, West Virginia for a purchase price
of $77
million, subject to post-closing adjustment as set forth in
the
hereinafter described asset purchase agreement. The Acquisition
was effected pursuant to an asset purchase agreement dated
as of June 28,
2007 by and among Champion Publishing, Inc., a wholly owned
subsidiary of
Champion, as buyer, Champion, as buyer guarantor and GateHouse
Media,
Inc., GateHouse Media West Virginia Holdings, Inc. and GateHouse
Media
Illinois Holdings, Inc., as sellers.
|
|
|
Item
2.03 Creation of a Direct Financial
Obligation or an Obligation Under an Off-Balance Sheet Arrangement
of a
Registrant.
|
|
|
On
September 14, 2007, Champion, as borrower, entered into a credit
agreement
(the “Credit Agreement”) consisting of a (i) $70 million term loan
facility that matures on September 14, 2013, (ii) revolving
loan facility
with up to a $30 million aggregate loan commitment amount pursuant
to the
applicable borrowing base and other restrictions as defined in the
Credit Agreement, including a subfacility of up to $5 million
for letters
of credit and a swingline facility of up to $5 million, which
matures on
September 14, 2012, with the various lenders from time to time
party
thereto and Fifth Third Bank, as Administrative Agent, Letter
of Credit
Issuer and Lead Arranger. All the subsidiaries of Champion
(collectively, the “Guarantors”) executed Guaranties (the “Guaranties”)
guaranteeing the payment and performance of Champion’s obligations under
the Credit Agreement. A press release issued by Champion
announcing this facility is attached hereto and incorporated
herein by
reference as Exhibit 99.1.
In
connection with the Credit Agreement, Champion and all of its
subsidiaries
entered into a security agreement (the “Security Agreement”) and deeds of
trust and mortgages (“Mortgages”) in favor of Fifth Third Bank, as
administrative agent for the various lenders from time to time
parties to
the Credit Agreement, pursuant to which Champion and the Guarantors
encumbered all their assets for the benefit of the secured
parties, as
collateral security for the payment and performance of their
obligations
under the Credit Agreement and the Guaranties. The encumbered
assets include all tangible and intangible assets of Champion
and the
Guarantors and any future subsidiaries of Champion and the
Guarantors,
including, without limitation, all accounts receivable, inventory,
equipment, real estate and stock of the Guarantors.
Borrowings
under the Credit Agreement bear interest, at Champion’s option, equal to
the Base Rate plus the Applicable Margin or the Adjusted LIBOR
Rate plus
the Applicable Margin (all as defined in the Credit
Agreement).
The
Applicable Margins for Base Rate loans are based in part on
a leverage
ratio pricing grid, which grid is subject to applicable "market
flex"
provisions as discussed below. The Leverage Ratio, defined in
the Credit Agreement, is the ratio of Total Funded Debt of
Champion and
Guarantors to EBITDA for the 4 fiscal quarters than ended on
each
determination date. Champion will pay a quarterly commitment
fee under the Credit Agreement on the average daily unused
amount of the
revolving credit facility ranging from 0.450% to 0.275% based
on the
Applicable Margin as determined from time to time. In addition,
the Company is subject to other fees customary in such a transaction
including a one-time arrangement fee and an annual administrative
fee. The $70 million term loan will amortize over 6 years at a
rate of 7% on an annual basis. Additionally, beginning January
31, 2009, within 90 days of Champion’s fiscal year end, it must prepay
outstanding loans by an amount equal to 75% of its Excess Cash
Flow (as
defined in the Credit Agreement), for application first to
the term loan
and then to revolving loans and then to swing loans.
Champion
will use the $70 million term loan and a portion of the revolving
loan
facility to finance the acquisition of the assets of The Herald-Dispatch
daily newspaper published in Huntington, West Virginia, to
refinance
existing indebtedness, for working capital, to finance capital
expenditures and to finance acquisitions permitted under the
Credit
Agreement.
The
Credit Agreement contains typical representations and covenants
for loans
of this type including restriction on the ability to incur
indebtedness,
create liens on assets, engage in certain lines of business;
engage in
mergers or consolidations, dispose of assets, make investments
or
acquisitions; engage in transactions with affiliates, enter
into sale
leaseback transactions, enter into negative pledges or pay
dividends or
make other restricted payments (except that Champion is permitted
to (i)
make restricted payments (including quarterly dividends) so
long as, after
giving effect to any such restricted payment, Champion and
its
subsidiaries would not be in default under the terms of the
Credit
Agreement. Financial
covenants include leverage ratio requirements, first fixed
charge coverage
ratio, second fixed charge coverage ratio, minimum EBITDA, maximum
capital expenditures and minimum revolving loan
availability.
|
| The
aforementioned credit facilities described above and related
Credit
Agreement may be subject to "market flex" provisions customary
for
syndicated loans of this type. The market flex provides the
Administrative Agent and the Arranger, after consulting with
the Company,
with the ability to modify the structure and pricing provisions
(subject
to specified caps) if such changes are advisable to appropriately
syndicate the facility and achieve Fifth Third Bank’s target hold level.
The Credit Agreements may be revised pursuant to any post closing
amendment to the loan documentation as may be reasonably requested
by the
Administrative Agent or the Arranger to document any changes
to the
facilities made pursuant to such market flex provisions.
The
foregoing summary of certain provisions of the Credit Agreement
is
qualified in its entirety by reference to the complete Credit
Agreement
filed as Exhibit 10.1 hereto, which is incorporated herein
by
reference.
|
|
Section 9
- Financial Statements and Exhibits
|
|
|
|
Item
9.01 Financial Statements and
Exhibits
|
|
|
|
(d)
|
Financial
Statements of Business Acquired
|
|
|
|
|
To
the extent required by this item, the financial statements will
be filed
by an amendment to this Current Report on Form 8-K within the time
period
permitted under Item 9.01(a)(4) of Form 8-K (but in any event not
later
than November 30, 2007).
|
|
(b)
|
Pro
Forma Financial Information
|
||
|
To
the extent required by this item, the pro forma financial information
will
be filed by an amendment to this Current Report on Form 8-K within
the
time period permitted by Item 9.01(b)(2) of Form 8-K (but in any
event not
later than November 30, 2007).
|
|||
|
(d)
|
Exhibits
|
||
|
10.1 Credit
Agreement among Champion Industries, Inc., as borrower, Fifth Third
Bank
as administrative agent and L/C issuer, and various lenders from
time to
time parties, dated as of September 14, 2007. *
99.1 Press
Release dated September 14, 2007.
|
|
|
|
CHAMPION
INDUSTRIES, INC.
(Registrant)
|
|
Date: September
19, 2007
|
|
|
|
|
|
/s/
Todd R. Fry
Todd
R. Fry, Senior Vice President
and
Chief Financial Officer
|
|
|
|
|
|
Exhibit
Number
|
|
Exhibit
|
|
10.1
|
Credit
Agreement among Champion Industries, Inc., as borrower, Fifth
Third Bank
as administrative agent and L/C issuer, and various lenders from
time to
time parties, dated as of September 14, 2007. *
|
|
|
99.1
|
Press
Release dated September 14, 2007 captioned "CHAMPION COMPLETES
ACQUISITION OF THE HERALD-DISPATCH".
|
|
|
|
|
|
|
|
|
|