Exhibit 10.2.3
THIS SECOND AMENDMENT AGREEMENT is made as of the 30th day of June, 2002.
B E T W E E N:
MAXXCOM INC.
a corporation incorporated under the
laws of the Province of Ontario
("Maxxcom")
- and -
MAXXCOM INC.
a corporation incorporated under the
laws of the State of Delaware
("Maxxcom US")
AS BORROWERS
- AND -
MAXXCOM (NOVA SCOTIA) CORP.
MAXXCOM (USA) FINANCE COMPANY
MAXXCOM (USA) HOLDINGS INC.
1220777 ONTARIO LIMITED
1385544 ONTARIO LIMITED
MAXXCOM INTERACTIVE INC.
MACKENZIE MARKETING, INC.
MF+P ACQUISITION CO.
SMI ACQUISITION CO.
ACCENT ACQUISITION CO.
FMA ACQUISITION CO.
TC ACQUISITION INC.
ET ACQUISITION INC.
BZ ACQUISITION INC.
CDI ACQUISITION CO.
BRATSKEIR & COMPANY, INC.
CPB ACQUISITION INC.
CORMARK COMMUNICATIONS INC.
XXXXXXXX & PARTNERS COMMUNICATIONS LTD.
XXXXXXX XXXX XXXXXX XXXXXXX INC.
STUDIOTYPE INC.
AS GUARANTORS
- AND -
THE BANK OF NOVA SCOTIA
a bank to which the Bank Act (Canada) applies,
in its capacity as administrative agent hereunder
AS ADMINISTRATIVE AGENT
- AND-
THE BANK OF NOVA SCOTIA
a bank to which the Bank Act (Canada) applies,
in its capacity as a lender hereunder
- and -
CANADIAN IMPERIAL BANK OF COMMERCE
a bank to which the Bank Act (Canada) applies,
in its capacity as a lender hereunder
- and -
BANK OF MONTREAL
a bank to which the Bank Act (Canada) applies,
in its capacity as a lender hereunder
- and -
THE TORONTO-DOMINION BANK
a bank to which the Bank Act (Canada) applies,
in its capacity as a lender hereunder
- and -
ROYAL BANK OF CANADA
a bank to which the Bank Act (Canada) applies,
in its capacity as a lender hereunder
- and -
THE BANK OF NOVA SCOTIA
by its Atlanta Agency,
in its capacity as a lender hereunder
- and -
CIBC INC.
a financial institution incorporated under the laws of the State of Delaware,
in its capacity as a lender hereunder
- and -
BANK OF MONTREAL
by its Chicago branch,
in its capacity as a lender hereunder
- and -
TORONTO DOMINION (TEXAS), INC.
a corporation incorporated under the laws of Delaware,
in its capacity as a lender hereunder
- and -
ROYAL BANK OF CANADA
by its Grand Cayman (North America No. 1) Branch,
in its capacity as a lender hereunder
AS LENDERS
RECITALS:
A. The Borrowers, certain of the Guarantors, the Agent and the Lenders
are parties to a Second Amended and Restated Credit Agreement dated
as of 11 July 2001, as amended by a first amendment agreement (the
"First Amendment Agreement") made as of 31 March 2002 (the "Credit
Agreement").
B. Effective 7 May 2002, Cormark XxxXxxx Communication Solutions
(Canada) Inc. changed its name to Cormark Communications Inc.
C. Effective 30 May 2002, 1220777 Ontario Limited sold all of the
outstanding Capital Stock held by it in News Canada Inc. and Maxxcom
sold the inter-company balance due by News Canada Inc. to Maxxcom
such that News Canada Inc. is no longer a Guarantor under the Credit
Agreement.
D. The First Amendment Agreement contemplated that the Rights Offering
would be completed on or before 30 June 2002.
E. Maxxcom completed the Rights Offering as of 22 July 2002 and as a
result of such timing, Maxxcom has requested that the Lenders make
technical amendments to certain of the financial covenants.
F. Maxxcom has also requested that the Lenders agree to amend the
definition of "Net Worth Base" to recognize a change in accounting
practices in the calculation of goodwill for the purposes of GAAP.
G. The Lenders have agreed to such requests on the terms and conditions
set forth herein and the parties are entering into this Second
Amendment Agreement to give effect thereto and to make the other
changes to the Credit Agreement reflected herein.
NOW THEREFORE in consideration of these premises and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties agree as follows:
Section 1 - New Definition
Section 1.1 of the Credit Agreement is amended by adding the
following definition:
1.1.162.1 "Second Amendment Agreement" means the Second
Amendment Agreement to this Agreement made as of 30
June 2002.
Section 2 - Amended Definitions
Sections 1.1.31, 1.1.79, 1.1.112, 1.1.164 and 1.1.177 of the Credit
Agreement are deleted and replaced with the following provisions:
1.1.31 "CanSubCos" means 1220777 Ontario Limited (an
Ontario corporation), 656712 Ontario Limited (an
Ontario corporation), Accumark Promotions Group
Inc. (an Ontario corporation), Xxxxxxx Xxxx Xxxxxx
Xxxxxxx Inc. (an Ontario corporation), Xxxxx Xxxxx
Group Ltd. (an Ontario corporation), Cormark
Communications Inc. (an Ontario corporation),
Xxxxxx Xxxxxxx Communications Inc. (an Ontario
corporation), Veritas Communications Inc. (an
Ontario corporation), Integrated Healthcare
Communications, Inc. (an Ontario corporation),
Northstar Research Partners Inc. (an Ontario
corporation), 1385544 Ontario Limited (an Ontario
corporation), Maxxcom Interactive Inc. (an Ontario
corporation), Xxxxxxxx & Partners Communications
Ltd. (an Ontario corporation), Studiotype Inc. (an
Ontario corporation), and each future direct or
indirect Subsidiary of Maxxcom or of any of the
foregoing corporations incorporated under or
operating in any Canadian jurisdiction from time to
time and "CanSubCo" means any one of them.
1.1.79 "Guarantors" means Maxxcom US, Maxxcom (Nova
Scotia) Corp., Maxxcom (USA) Finance Company,
Maxxcom (USA) Holdings Inc., 1220777 Ontario
Limited, 1385544 Ontario Limited, Maxxcom
Interactive Inc., Mackenzie Marketing, Inc., MF + P
Acquisition Co., SMI Acquisition Co., Accent
Acquisition Co., FMA Acquisition Co., TC
Acquisition Inc., ET Acquisition Inc., BZ
Acquisition Inc., CDI Acquisition Co., Bratskeir &
Company, Inc., CPB Acquisition Inc., Cormark
Communications Inc., Xxxxxxxx & Partners
Communications Ltd., Xxxxxxx Xxxx Xxxxxx Xxxxxxx
Inc., Studiotype Inc. and each other Wholly-Owned
Subsidiary of Maxxcom from time to time and
"Guarantor" means any one of them.
1.1.112 "Net Worth Base" shall, as at 30 June 2002 be
deemed to be Cdn. $85,000,000, and thereafter shall
be calculated as the aggregate of Cdn. $85,000,000
plus:
(a) any additional capital contributed by the
shareholders of Maxxcom if and to the
extent only that such additional capital
contributed gives rise to net cash
proceeds but, for greater certainty,
excluding the amount of the MDC
Subordinated Debt and the net proceeds of
the Rights Offering up to a maximum amount
of Cdn. $25,000,000; and
(b) 50% of positive net income of Maxxcom on a
consolidated basis in each fiscal year of
Maxxcom;
each calculated on a cumulative basis for the
period from 30 June 2002 to the date of
calculation.
1.1.164 "Senior Debt" means, at any time, the aggregate
(without duplication) of all amounts outstanding
under the Credit and all other funded indebtedness
for borrowed money of a person, ranking, or capable
of ranking, senior to or pari passu with
indebtedness under the Credit at such time which,
for greater certainty, includes such amounts for
Subsidiaries which are reflected in Maxxcom's
consolidated financial statements, but shall
exclude Permitted Indebtedness of Accent Marketing
Services, L.L.C. from time to time; provided
however, that for the purposes of calculating
Senior Debt as at 31 March 2002 and 30 June 2002,
the amount of $25,000,000 shall be deducted from
the amount which would otherwise be calculated in
accordance with this Section 1.1.164.
1.1.177 "Total Debt" means, at any time, the aggregate
(without duplication) of all Debt of a person at such time, but for greater
certainty, shall not include the MDC Subordinated Debt; provided however, that
for the purposes of calculating Total Debt as at 31 March 2002 and 30 June
2002, the amount of $25,000,000 shall be deducted from the amount which would
otherwise be calculated in accordance with this Section 1.1.177.
Section 3 - Amendment to the Credit Limit
Section 2.1(a) of the Credit Agreement is deleted and replaced with
the following provision:
2.1 (a) Upon and subject to the terms and conditions of
this Agreement, the Lenders agree to continue to
provide a revolving term credit for the use of the
Borrowers in the amount of up to Cdn. $76,000,000
or the equivalent thereof in U.S. Dollars (as
reduced from time to time in accordance with this
Agreement, the "Credit Limit"). The principal
amount of any Advance under the Credit which is
repaid may be reborrowed from time to time, subject
to the terms of this Agreement.
Section 4 - Amendment to Positive Covenants
Effective 22 December 2001, Section 7.1(aa) of the Credit Agreement
is deleted.
Section 5 - Conditions Precedent to Effectiveness of this Second Amendment
Agreement
This Second Amendment Agreement shall become binding on the Lenders
only upon satisfaction of the following conditions precedent:
(a) execution and delivery of this Second Amendment Agreement by
each of the Borrowers and the Guarantors;
(b) execution and delivery of this Second Amendment Agreement by
the Lenders in accordance with Section 9.9 of the Credit
Agreement;
(c) no Event of Default or Pending Event of Default having
occurred and being continuing as at the date of satisfaction
of all of the foregoing conditions precedent;
(d) the Agent having received evidence, reasonably satisfactory
to it, that no consent is required under the Mezz Credit
Documents in relation to this Second Amendment Agreement;
and
(e) such corporate resolutions, incumbency and other
certificates of each of the Borrowers, the Guarantors and
the other Restricted Parties as the Agent may reasonably
request in connection with this Second Amendment Agreement
and the transactions contemplated hereby.
Section 6 - Continuing Effect of Credit Agreement
Except as amended by this Second Amendment Agreement, the Credit
Agreement shall remain in full force and effect, without amendment, and is
hereby ratified and confirmed. Each of the Borrowers and the Guarantors
confirms that the guarantees and Security made or granted by it pursuant to
the Credit Agreement remains in full force and effect notwithstanding the
amendments and supplements to the Credit Agreement contained herein.
Section 7 - Counterparts and Facsimile
This Second Amendment Agreement may be executed in any number of
counterparts, each of which when executed and delivered shall be deemed to be
an original and such counterparts together shall constitute one and the same
agreement. For the purposes of this Section, the delivery of a facsimile copy
of an executed counterpart of this Second Amendment Agreement shall be deemed
to be valid execution and delivery thereof.
Section 8 - Governing Law
The parties agree that this Second Amendment Agreement shall be
conclusively deemed to be a contract made under, and shall for all purposes be
governed by and construed in accordance with the laws of the Province of
Ontario and the laws of Canada applicable in the Province of Ontario.
Section 9 - Interpretation
Capitalized terms used herein, unless otherwise defined or indicated
herein, have the respective meanings ascribed thereto in the Credit Agreement.
This Second Amendment Agreement and the Credit Agreement shall be read
together and have effect so far as practicable as though the provisions
thereof and the relevant provisions hereof are contained in one document.
[Execution Pages Follow]
IN WITNESS OF WHICH, the parties have executed this Agreement.
THE LENDERS
The Bank of Nova Scotia THE BANK OF NOVA SCOTIA
Scotia Capital
Corporate Banking-Industrial Products By:
16th Floor --------------------------
00 Xxxx Xxxxxx Xxxx X. X. Xxxxxx
Toronto, Ontario Director
M5H 1H1
By:
--------------------------
Attention: Managing Director X. X. Xxxxxx
Telecopier No. (000) 000-0000 Associate Director
Canadian Imperial Bank of Commerce CANADIAN IMPERIAL BANK OF COMMERCE
Canadian Credit Capital Markets
BCE Place, 0xx Xxxxx
000 Xxx Xxxxxx By:
Xxxxxxx, Xxxxxxx --------------------------
X0X 0X0 Name:
Title
By:
--------------------------
Attention: Managing Director Name:
Telecopier No. (000) 000-0000 Title
Bank of Montreal BANK OF MONTREAL
Media, Telecom & Technology
Corporate & Investment Banking By:
0, Xxxxx Xxxxxxxx Xxxxx --------------------------
000 Xxxx Xxxxxx Xxxx Name:
4th Floor Title:
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Managing Director
Telecopier No. (000) 000-0000
Royal Bank of Canada ROYAL BANK OF CANADA
00xx Xxxxx, Xxxxx Xxxxx
Xxxxx Xxxx Xxxxx
000 Xxx Xxxxxx By:
Xxxxxxx, Xxxxxxx --------------------------
X0X 0X0 Name:
Title:
Attention: Senior Manager
Telecopier No. (000) 000-0000
The Toronto-Dominion Bank THE TORONTO-DOMINION BANK
00 Xxxx Xxxxxx Xxxx
0xx Xxxxx
Xxxxxxx-Xxxxxxxx Bank Tower By:
Xxxxxxx, Xxxxxxx --------------------------
X0X 0X0 Name:
Title:
Attention: Vice President
Telecopier No. (000) 000-0000
The Bank of Nova Scotia THE BANK OF NOVA SCOTIA, by its
Suite 2200 Atlanta Agency
000 Xxxxxxxxx Xxxxxx X.X.
Xxxxxxx, Xxxxxxx By:
30308 --------------------------
Name:
Title:
Attention: Senior Manager
Telecopier No. (000) 000-0000
CIBC Inc. CIBC INC.
000 Xxxxxxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx By:
10017 --------------------------
Name:
Title:
(CIBC World Markets Corp., as agent for
CIBC Inc.)
Attention: Executive Director
Telecopier No. (000) 000-0000
Bank of Montreal, by its Chicago branch BANK OF MONTREAL
Media, Telecom & Technology
Asset Portfolio Group
Investment & Corporate Banking By:
000 Xxxx Xxxxxx --------------------------
15th Floor Name:
New York, New York Title:
10022
Attention: Managing Director
Telecopier No. (000) 000-0000
Royal Bank of Canada, by its Grand ROYAL BANK OF CANADA, by its Grand Cayman
Cayman (North America No. 1) Branch (North America No. 1) Branch
x/x Xxx Xxxx Xxxxxx
Xxx Xxxxxxx Xxxxx
165 Broadway By:
New York, New York --------------------------
10006-1404 Name:
Title:
Attention: Xx. Xxxxx Xxxxxxx
Telecopier No. (000) 000-0000
with a copy to:
Royal Bank of Canada
One Liberty Plaza
4th Floor
000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx
00000-0000
Attention: Xx. X.X. Xxxxxx
Telecopier No. (000) 000-0000
Toronto Dominion (Texas), Inc. TORONTO DOMINION (TEXAS), INC.
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx
00000 By:
--------------------------
Name:
Title:
Attention: Vice-President
Telecopier No. (000) 000-0000
THE BORROWERS
Maxxcom Inc. MAXXCOM INC., an Ontario corporation
00 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
By:
--------------------------
X. Xxxxxx
Authorized Signing Officer
Attention: Chief Financial Officer
Telecopier No. (000) 000-0000
By:
--------------------------
X. Xxxxxxx
Authorized Signing Officer
Maxxcom Inc. MAXXCOM INC., a Delaware corporation
c/o 00 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
By:
--------------------------
X. Xxxxxx
Authorized Signing Officer
Attention: The President
Telecopier No. (000) 000-0000 By:
--------------------------
X. Xxxxxxx
Authorized Signing Officer
THE GUARANTORS
c/o Maxxcom Inc. MAXXCOM (NOVA SCOTIA) CORP
00 Xxxxxxxx Xxxxxx XXXXXXX (XXX) FINANCE
Toronto, Ontario COMPANY
M5R 2E3 MAXXCOM (USA) HOLDINGS INC.
1220777 ONTARIO LIMITED
Attention: Chief Financial Officer 1385544 ONTARIO LIMITED
Telecopier No. (000) 000-0000 MAXXCOM INTERACTIVE INC.
MF+P ACQUISITION CO.
SMI ACQUISITION CO.
ACCENT ACQUISITION CO.
FMA ACQUISITION CO.
By:
--------------------------
X. Xxxxxx
Authorized Signing Officer
BRATSKEIR & COMPANY, INC.
CPB ACQUISITION INC.
CORMARK COMMUNICATIONS INC.
XXXXXXXX & PARTNERS
COMMUNICATIONS LTD.
XXXXXXX XXXX XXXXXX XXXXXXX INC.
STUDIO TYPE INC.
By:
--------------------------
X. Xxxxxxx
Authorized Signing Officer
MACKENZIE MARKETING, INC.
By:
--------------------------
X. Xxxxxx
Authorized Signing Officer
ET ACQUISITION INC.
BZ ACQUISITION INC.
By:
--------------------------
X. Xxxxxxx
Authorized Signing Officer
TC ACQUISITION INC.
CDI ACQUISITION CO.
By:
--------------------------
X. Xxxxxx
Authorized Signing Officer
THE AGENT
---------
The Bank of Nova Scotia THE BANK OF NOVA SCOTIA,
Scotia Capital as Administrative Agent
Corporate Banking-Loan Syndications
00xx Xxxxx
00 Xxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
By:
--------------------------
Name:
Title:
By:
--------------------------
Attention: Managing Director Name:
Telecopier No. (000) 000-0000 Title:
