1
Exhibit 10.9(c)
EXECUTION COPY
AMENDMENT NO. 2 TO
CREDIT AGREEMENT
THIS AMENDMENT NO. 2 (this "Amendment"), dated as of September 15,
1998, to the CREDIT AGREEMENT (as defined below), is entered into among APPLIED
GRAPHICS TECHNOLOGIES, INC., a Delaware corporation (the "Borrower"), the banks,
financial institutions and other institutional lenders that are parties to the
Credit Agreement (each called a "Lender" and collectively called the "Lenders"),
FIRST UNION NATIONAL BANK ("First Union"), as Syndication Agent, BANKBOSTON,
N.A.("BankBoston"), as Documentation Agent, FLEET BANK, N.A., as a Lender,
Initial Issuing Bank, Swing Line Bank and Administrative Agent ("Fleet" and, in
its capacity solely as administrative agent, the "Administrative Agent"), and
each of the Guarantors (as defined herein).
W I T N E S S E T H:
WHEREAS, the Borrower, the Lenders, First Union, BankBoston and Fleet
are parties to that certain Credit Agreement dated as of May 27, 1998, as
amended by that certain Amendment No. 1 to Credit Agreement dated as of July 31,
1998, among the Borrower, the Lenders, First Union, BankBoston and Fleet (the
"Credit Agreement");
WHEREAS, (i) Portal Publications, Ltd., The Xxxx Art Group, Inc., Black
Dot Graphics, Inc., Xxxxx GraphicArts, Inc., Typo-Graphics, Inc., Xxxxxxx &
Associates, Inc., West Coast Creative, Inc., ABD Group, Inc., Meridian Retail,
Inc., Taproot Interactive, Inc., Proof Positive/Farrowlyne Associates, Inc., and
One 2 One Inc. (the "Devon Subsidiary Guarantors") executed and delivered in
favor of the Lender Parties, Fleet, as Initial Issuing Bank, Swing Line Bank and
Administrative Agent, and Hedge Banks (collectively, the "Guaranteed Parties") a
guaranty dated as of May 27, 1998 (the "Devon Guaranty") and (ii) Devon Group,
Inc. (formerly known as AGT Acquisition Corp.), AmuseMatte Corp., Miramar
Equipment, Inc., Color Control, Inc., AGT Acquisition Corp. II and Applied
Systems Services, Inc. (collectively, the "AGT Subsidiary Guarantors") executed
and delivered in favor of the Guaranteed Parties a guaranty dated as of May 27,
1998, as supplemented from time to time (the "AGT Guaranty" and, together with
the Devon Guaranty, the "Guaranties"). The AGT Subsidiary Guarantors and the
Devon Subsidiary Guarantors are hereinafter collectively referred to as the
"Guarantors";
WHEREAS, the Borrower and Lenders desire to amend the Credit Agreement
in order to permit the repurchase by the Borrower of up to $20,000,000 of its
common stock and to provide for certain related changes under the Credit
Agreement;
WHEREAS, in connection with the changes to the Credit Agreement
contemplated by this Amendment, the Guarantors desire to confirm and reaffirm
each of the Guaranties; and
WHEREAS, terms not otherwise defined herein shall have the respective
meanings ascribed thereto in the Credit Agreement,
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, and of the loans or other extensions of credit now or hereafter made
to, or for the benefit of, the Borrower by the Lenders, the parties hereto agree
as follows:
SECTION 1 AMENDMENTS TO CREDIT AGREEMENT.
1.01 AMENDMENTS TO SECTION 1.01.
2
A. Section 1.01 of the Credit Agreement is hereby amended by
adding the following definition in alphabetical order in such Section 1.01:
""Repurchased Shares" has the meaning specified in Section
5.02(g)(iv)."
B. The definition of "Equity Issuance" is hereby amended by
adding the following sentence at the end of such definition:
"Any sale or other disposition of the Repurchased Shares,
other than any sale as contemplated in the proviso in the
immediately preceding sentence, shall be deemed to be an
Equity Issuance."
1.02 AMENDMENT TO SECTION 2.06(b). Section 2.06(b) of the Credit
Agreement is hereby amended by adding the following sentence at the end of such
Section 2.06(b):
"Notwithstanding anything to the contrary contained in this
Section 2.06(b) and in Section 2.06(c), with respect to any
Equity Issuance involving the Repurchased Shares, the Borrower
shall, within two (2) Business Days after receipt by the
Borrower or any of its Subsidiaries of the Net Cash Proceeds
from such Equity Issuance, prepay or repay, as the case may be
(without premium or penalty), the then outstanding Revolving
Credit Advances in an amount equal to one hundred percent
(100%) of such Net Cash Proceeds."
1.03 AMENDMENT TO SECTION 5.02(g). Section 5.02(g) of the Credit
Agreement is hereby amended by deleting such Section 5.02(g) in its entirety and
replacing it with the following:
"(g) Dividends, Etc. Declare or pay any dividends,
purchase, redeem, retire, defease or otherwise acquire for
value any of its capital stock or any warrants, rights or
options to acquire such capital stock, now or hereafter
outstanding, return any capital to its stockholders as such or
make any distribution to its stockholders, except:
(i) the Borrower may declare and pay
dividends and make distributions payable solely in common
stock or preferred stock of the Borrower;
(ii) a Subsidiary of the Borrower may
declare and pay dividends and make distributions to the
Borrower or to another Loan Party;
(iii) for issuances of stock or other equity
interests expressly permitted by Section 5.02(q); and
(iv) the Borrower may from time to time
repurchase its common stock for purchase price(s) in the
aggregate not to exceed $20,000,000 to the Revolving Credit
Termination Date (the "Repurchased Shares")."
1.04 AMENDMENT TO SECTION 5.02(q). Section 5.02(q) of the Credit
Agreement is hereby amended by deleting such Section 5.02(q) in its entirety and
replacing it with the following:
"(q) Issuance of Stock. Except as otherwise
specifically permitted in this Agreement, the Borrower will
not, and will not permit any of its Subsidiaries to, directly
or indirectly, issue, sell, assign, pledge or otherwise
3
encumber or dispose of any shares of capital stock of the
Borrower or any Subsidiary of the Borrower, except:
(A) to the Borrower or any of its
Subsidiaries;
(B) to qualify any director of the Borrower
or any of its Subsidiaries if required by applicable
law;
(C) for issuances or sales of capital stock
or other equity interests of the Borrower;
(D) in connection with the Borrower's or any
of its Subsidiaries' stock purchase, stock option or
similar incentive plans, or any exercise pursuant
thereto, for the benefit of the Borrower's or any of
its Subsidiaries' directors, management, employees
and other eligible participants;
(E) for issuances of capital stock of the
Borrower to any Person as consideration paid in
connection with any Permitted Acquisition;
(F) as required to be issued in connection
with the acquisition of the business of Digital
Imagination Inc.; or
(G) that the Borrower may sell or otherwise
dispose of any of the Repurchased Shares."
SECTION 2 REPRESENTATIONS AND WARRANTIES.
The Borrower hereby represents and warrants that:
2.01 NO DEFAULT. There exists no Default or Event of Default under the
Credit Agreement as of the date hereof.
2.02 REPRESENTATIONS AND WARRANTIES TRUE AND CORRECT. Each of the
representations and warranties contained in the Credit Agreement is true and
correct in all material respects on, and as though made as of, the date hereof
(except for any representation or warranty which by its terms is made on or as
of a specified date, in which case such representation or warranty shall be
true, correct and complete in all material respects only as of such specified
date).
2.03 CORPORATE POWER, ETC. The Borrower and each of the Guarantors (i)
has all requisite corporate power and authority to execute and deliver this
Amendment and to consummate the transactions contemplated hereby and thereby and
(ii) has taken all action, corporate or otherwise, necessary to authorize the
execution and delivery of this Amendment and the consummation of the
transactions contemplated hereby and thereby.
2.04 NO CONFLICT. Neither the execution and delivery of this Amendment
nor consummation of the transactions contemplated hereby will (i) conflict with
or result in any breach or violation of any provision of the certificate of
incorporation or by-laws of the Borrower, (ii) result in any breach or violation
of, or constitute a default (or an event which, with notice or lapse of time or
both, would constitute a default) under, or result in the termination of, or
accelerate the performance required by, or result in the creation of a Lien upon
any of the properties or assets of the Borrower under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, deed of trust,
license, lease agreement or other instrument or obligation to which the Borrower
is a party or to which any of its properties or assets are subject, (iii)
require any consent, approval, authorization or permit of, or filing with or
4
notification to, any third party or any governmental, judicial, administrative
or regulatory authority of the United States of America or of any state, local
or foreign government or subdivision thereof (a "Governmental Entity") or (iv)
violate any order, writ, injunction, decree, judgment, ruling, law, statute,
rule or regulation of any Governmental Entity.
2.05 BINDING EFFECT. This Amendment has been duly executed and
delivered by the Borrower and constitutes the valid and legally binding
obligation of the Borrower enforceable in accordance with its terms, except as
such enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws, now or hereafter in effect,
relating to or affecting the enforcement of creditors' rights generally, and
(ii) the application of general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
SECTION 3 CONDITIONS.
The effectiveness of the amendments set forth in Section 1 of this
Amendment shall be subject to the fulfillment by the Borrower, in a manner
satisfactory to the Administrative Agent and the Lenders, of all of the
following conditions precedent set forth in this Section 3:
3.01 REPRESENTATIONS AND WARRANTIES TRUE AND CORRECT. The
representations and warranties contained herein and in each other agreement,
instrument, certificate or other writing delivered to the Administrative Agent
or any Lender pursuant hereto or to the Credit Agreement shall be correct in all
material respects on and as of the date hereof after giving effect to this
Amendment as though made on and as of such date (except for any representation
or warranty which by its terms is made on or as of a specified date, in which
case such representation or warranty shall be true, correct and complete in all
material respects only as of such specified date) except to the extent modified
hereby.
3.02 EXECUTION AND DELIVERY OF THIS AMENDMENT. Each of the parties
hereto shall have executed and delivered an original counterpart of this
Amendment to the Administrative Agent.
3.03 COMPLIANCE WITH TERMS. The Borrower and each Guarantor shall have
complied in all respects with the terms hereof and of any other agreement,
document, instrument or other writing to be delivered by the Borrower or such
Guarantor in connection herewith.
3.04 OTHER PROCEEDINGS. All proceedings in connection with the
transactions contemplated by this Amendment and all documents incidental hereto
shall be satisfactory to the Administrative Agent, the Lenders and their
respective counsel.
SECTION 4 GENERAL CONFIRMATIONS AND AMENDMENTS.
4.01 CONTINUING EFFECT. The Credit Agreement, the other Loan Documents
and the other agreements to which the Borrower or any Guarantor is a party
delivered in connection herewith or with the Credit Agreement are, and shall
continue to be, in full force and effect, and are hereby ratified and confirmed
in all respects except that on and after the date hereof (i) all references in
the Credit Agreement to "this Agreement", "hereto", "hereof", "hereunder" or
words of like import referring to the Credit Agreement shall mean the Credit
Agreement as amended hereby, (ii) all references in the Credit Agreement, the
other Loan Documents or any other agreement, instrument or document executed and
delivered in connection therewith to the "Credit Agreement", "thereto",
"thereof", "thereunder" or words of like import referring to the Credit
Agreement shall mean the Credit Agreement as amended hereby.
4.02 FURTHER AMENDMENTS; INCORPORATION BY REFERENCE. The Credit
Agreement, the other Loan Documents and all agreements, instruments and
documents executed and delivered in connection with any of the
5
foregoing shall each be deemed amended hereby to the extent necessary, if any,
to give effect to the provisions of this Amendment. All of the terms and
provisions of this Amendment are hereby incorporated by reference into the
Credit Agreement as if such terms and provisions were set forth in full therein.
SECTION 5 MISCELLANEOUS.
5.01 GOVERNING LAW. This Amendment shall be governed by and construed
in accordance with the laws of the State of New York (without giving effect to
conflicts of law principles).
5.02 SEVERABILITY. The provisions of this Amendment are severable, and
if any clause or provision shall be held invalid or unenforceable in whole or in
part in any jurisdiction, then such invalidity or unenforceability shall affect
only such clause or provision, or part thereof, in such jurisdiction and shall
not in any manner affect such clause or provision in any other jurisdiction, or
any other clause or provision in this Amendment in any jurisdiction.
5.03 COUNTERPARTS. This Amendment may be signed in any number of
counterparts with the same effect as if the signatures hereto were upon the same
instrument.
5.04 BINDING EFFECT; ASSIGNMENT. This Amendment shall be binding upon
and inure to the benefit of the Borrower, each Guarantor and their respective
successors and to the benefit of the Administrative Agent and the Lenders and
their respective successors and assigns. The rights and obligations of the
Borrower under this Amendment shall not be assigned or delegated without the
prior written consent of the Lenders.
5.05 EXPENSES. The Borrower agrees to pay the Administrative Agent upon
demand for all reasonable expenses, including reasonable fees of attorneys and
paralegals for the Administrative Agent (who may be employees of the
Administrative Agent), incurred by the Administrative Agent in connection with
the preparation, negotiation and execution of this Amendment and any document
required to be furnished herewith.
5.06 CONTINUING EFFECT. Except as specifically provided herein, the
Credit Agreement and the other Loan Documents shall remain in full force and
effect in accordance with their respective terms.
SECTION 6 CONFIRMATION AND REAFFIRMATION OF GUARANTIES.
6.01 REAFFIRMATION AND CONFIRMATION. Each Guarantor hereby agrees that
its respective Guaranty shall remain in full force and effect and that such
Guaranty is hereby ratified and confirmed in all respects.
[Signature pages follow]
6
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 2
to be executed by their respective officers thereunto duly authorized, on the
date first above written.
APPLIED GRAPHICS TECHNOLOGIES, INC.
By: ___________________________________
Name:
Title:
PORTAL PUBLICATIONS, LTD.
THE XXXX ART GROUP, INC.
BLACK DOT GRAPHICS, INC.
XXXXX GRAPHICARTS, INC.
TYPO-GRAPHICS, INC.
XXXXXXX & ASSOCIATES, INC.
WEST COAST CREATIVE, INC.
ABD GROUP, INC.
MERIDIAN RETAIL, INC.
TAPROOT INTERACTIVE, INC.
PROOF POSITIVE/FARROWLYNE
ASSOCIATES, INC.
ONE 2 ONE INC.
For each of the foregoing entities:
By:____________________________________
Name:
Title:
[Signature page to Amendment No. 2]
7
DEVON GROUP, INC. (FORMERLY KNOWN AS AGT
ACQUISITION CORP.),
By:____________________________________
Name:
Title:
AMUSEMATTE CORP.
By:____________________________________
Name:
Title:
MIRAMAR EQUIPMENT, INC.
By:____________________________________
Name:
Title:
COLOR CONTROL, INC.
By:____________________________________
Name:
Title:
AGT ACQUISITION CORP. II
By:____________________________________
Name:
Title:
APPLIED SYSTEMS SERVICES, INC.
By:____________________________________
Name:
Title:
Signature page to Amendment No. 2]
8
FLEET BANK, N.A. AS INITIAL ISSUING
BANK, SWING LINE BANK AND ADMINISTRATIVE
AGENT AND AS A LENDER
By:____________________________________
Name:
Title:
THE BANK OF NEW YORK, AS A LENDER
By:____________________________________
Name:
Title:
MELLON BANK, N.A., AS A LENDER
By:____________________________________
Name:
Title:
THE CHASE MANHATTAN BANK,
AS A LENDER
By:____________________________________
Name:
Title:
FIRST UNION NATIONAL BANK,
AS SYNDICATION AGENT AND AS A LENDER
By:____________________________________
Name:
Title:
STATE STREET BANK AND TRUST COMPANY,
AS A LENDER
By:____________________________________
Name:
Title:
9
KEYBANK NATIONAL ASSOCIATION,
AS A LENDER
By:____________________________________
Name:
Title:
BANKBOSTON, N.A.,
AS DOCUMENTATION AGENT AND AS A LENDER
By:____________________________________
Name:
Title:
DEUTSCHE BANK AG NEW YORK AND/OR
CAYMAN ISLANDS BRANCH, AS A LENDER
By:____________________________________
Name:
Title:
By:____________________________________
Name:
Title:
BANK OF AMERICA NATIONAL TRUST &
SAVINGS ASSOCIATION,
AS A LENDER
By:____________________________________
Name:
Title:
SUNTRUST BANK, ATLANTA,
AS A LENDER
By:____________________________________
Name:
Title:
10
COMERICA BANK,
AS A LENDER
By:____________________________________
Name:
Title:
EUROPEAN AMERICAN BANK,
AS A LENDER
By:____________________________________
Name:
Title:
BANK OF TOKYO-MITSUBISHI TRUST COMPANY
AS A LENDER
By:____________________________________
Name:
Title:
[Signature page to Amendment No. 2]