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Exhibit 10.9(d)
AMENDMENT NO. 3 AND CONSENT TO CREDIT AGREEMENT
THIS AMENDMENT NO. 3 AND CONSENT TO CREDIT AGREEMENT (this "THIRD
AMENDMENT") is entered into as of the 21st day of July, 2000, among:
APPLIED GRAPHICS TECHNOLOGIES, INC., a Delaware corporation
(hereinafter referred to as the "BORROWER");
The banks, financial institutions and other institutional lenders from
time to time party to the Credit Agreement (as defined herein) (each a "LENDER"
and, collectively, the "LENDERS"); and
FLEET BANK, N.A., a national banking association, as administrative
agent for the Lenders (in such capacity, together with its successors in such
capacity, the "ADMINISTRATIVE AGENT");
RECITALS
WHEREAS:
(A) The Borrower has entered into a certain Amended and Restated Credit
Agreement dated as of March 10, 1999 (as amended pursuant to a certain Amendment
No. 1 to Credit Agreement dated June 2, 1999, and a certain Amendment No. 2 to
Credit Agreement dated June 28, 1999 and as it may hereafter from time to time
be further amended, modified, supplemented, or restated, the "CREDIT
AGREEMENT"); and
(B) The Borrower and the Lenders have agreed to amend certain
provisions contained in the Credit Agreement and to consent to the sale of
certain assets or stock, all as hereinafter set forth;
NOW, THEREFORE, in consideration of the agreements and provisions
contained herein, the parties hereto hereby agree as follows:
1. DEFINITIONS. Capitalized terms used but not otherwise defined herein
shall have the meanings ascribed to such terms in the Credit Agreement.
2. AMENDMENTS TO CREDIT AGREEMENT. The Credit Agreement is hereby
amended, as follows:
2.1 Section 1 (Definitions) of the Credit Agreement shall, in
the event of the consummation of the DPG Sale, and as of the date thereof, be
amended by deleting in its entirety the definition of "Applicable Margin" set
forth therein and substituting the following definition therefor:
"'APPLICABLE MARGIN' means at any date of determination
thereof:
(i) with respect to Term Loan A Advances and Revolving Credit
Advances, the applicable percentage set forth below opposite the
applicable ratio of Consolidated Total Funded Debt to EBITDA determined
as set forth below:
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APPLICABLE MARGIN FOR TERM LOAN A ADVANCES AND REVOLVING CREDIT ADVANCES
RATIO OF CONSOLIDATED APPLICABLE MARGIN FOR APPLICABLE MARGIN FOR
TOTAL FUNDED DEBT/EBITDA EURODOLLAR RATE ADVANCES PRIME RATE ADVANCES
------------------------ --------------------------------------------
Equal to or greater than 4.00
to 1.00 3.25% 2.00%
Equal to or greater than 3.75
to 1.00, but less than 4.00
to 1.00 3.00% 1.75%
Equal to or greater than 3.00
to 1.00, but less than 3.75
to 1.00 2.75% 1.50%
Equal to or greater than 2.50
to 1.00, but less than 3.00
to 1.00 2.50% 1.25%
Equal to or greater than 2.00
to 1.00, but less than 2.50
to 1.00 2.25% 1.00%
Less than 2.00 to 1.00 2.00% 0.75%
The Applicable Margin for each Eurodollar Rate Advance and Prime Rate
Advance that is a Term Loan A Advance or a Revolving Credit Advance
shall be determined on a quarterly basis by reference to the ratio of
Consolidated Total Funded Debt to EBITDA for the preceding four (4)
full fiscal quarters, as reflected on the financial statements provided
to the Administrative Agent pursuant to Section 5.03(c) or (d), three
(3) Business Days after the date on which the Administrative Agent
receives the foregoing financial statements, together with a
certificate of a Responsible Officer of the Borrower demonstrating the
ratio of Consolidated Total Funded Debt to EBITDA. If the Borrower has
not submitted to the Administrative Agent the information described
above as and when required under Section 5.03(c) or (d), as the case
may be, the Administrative Agent may determine, in its reasonable
judgment, the ratio referred to above that would have been in effect as
at such date, and, consequently, the Applicable Margin in effect for
the period commencing on such date until such time as the Borrower
submits to the Administrative Agent the information so required, and
within three (3) Business Days after receipt thereof the Applicable
Margin shall be adjusted retroactively for the relevant period.
Notwithstanding the above schedule, from the date of the DPG Sale until
the delivery to the Administrative Agent of the Borrower's financial
statements for the first full fiscal quarter ending after the date of
the DPG Sale, the Applicable Margin for a Revolving Credit Advance and
a Term Loan A Advance shall be 3.25% for a Eurodollar Advance and 2.00%
for a Prime Rate Advance;
(ii) with respect to Term Loan B Advances, 3.75% for
Eurodollar Rate Advances, and 2.50% for Prime Rate Advances; and
(iii) with respect to Term Loan C Advances, 4.00% for
Eurodollar Rate Advances, and 2.75% for Prime Rate Advances."
2.2 Section 1 (Definitions) of the Credit Agreement is hereby
amended by adding the following definition in its appropriate alphabetic
location:
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"'DPG SALE' means the sale by the Borrower and Devon Group,
Inc. of all of the capital stock or net assets of Portal Publications,
Ltd., a Delaware corporation, and its Subsidiaries to Xxxxxxx Xxxx
Capital or an affiliate thereof."
2.3 Subsection 5.04(e) (Minimum Net Worth) of the Credit
Agreement is hereby deleted in its entirety and the following is substituted
therefor:
"(e) MINIMUM NET WORTH. Maintain as of the last day of each
fiscal quarter of the Borrower an excess of Consolidated total assets
over Consolidated total liabilities of the Borrower and its
Subsidiaries of not less than (i) eighty-five percent (85%) of the
excess of Consolidated total assets over Consolidated total liabilities
of the Borrower and its Subsidiaries at the Initial Funding Date plus
(ii) seventy-five percent (75%) of Consolidated positive net income
(and excluding one hundred percent (100%) of Consolidated net losses)
of the Borrower and its Subsidiaries as at December 31, 1999 and each
June 30 and December 31 thereafter computed on a cumulative basis for
said entire period. Notwithstanding anything to the contrary contained
in this subsection 5.04(e), in the event that the DPG Sale is
consummated and the related "write-down" as a result thereof is
reflected in the Borrower's financial statements for its fiscal quarter
ended June 30, 2000, the Borrower's consolidated net worth as
determined above, as at such date shall not be less than $275,000,000."
2.4 Subsection 5.02(e) (Sales, Etc. of Assets) of the Credit
Agreement is hereby amended by inserting the word "and" at the end of clause
(iv) thereof and by deleting: (a) the word "and" appearing at the end of clause
(v) thereof, (b) clause (vi) thereof in its entirety, and (c) the reference to
"Section 5.02(e)(vi)" appearing in the proviso at the end of such subsection.
3. CONSENT AND RELEASE OF LIENS AND GUARANTORS.
3.1 Consent. Notwithstanding anything to the contrary
contained in subsection 5.02(e) (Sales, Etc. of Assets) of the Credit Agreement,
but subject to the last sentence of this Section 3.1, the Lenders and the
Administrative Agent hereby consent to the following Asset Dispositions:
(a) the DPG Sale for an aggregate net cash consideration of
not less than $45,000,000; and
(b) the sale by the Borrower of all of the outstanding shares
of capital stock of AmuseMatte Corp., a California corporation, to Xxxxxxx X.
Xxxxxxxxx (its general manager) (the "AMUSEMATTE SALE") for an aggregate net
cash consideration of approximately $220,000 plus the termination of Xx.
Xxxxxxxxx'x employment agreement without any severance.
The consent provided in clause (a) of this Section 3.1 is
conditioned upon the net cash proceeds of the DPG Sale being used to repay
Advances under the Credit Agreement in accordance with the provisions of Section
2.06 of the Credit Agreement.
3.2 Release of Liens and Guarantors. With respect to:
(a) the DPG Sale, upon the receipt by the Administrative Agent
of the net cash proceeds of such sale in an amount not less than $45,000,000,
the Administrative Agent shall release (a) all security interests held by it in
the assets and/or stock that are the subject of the DPG Sale, and (b) Portal
Publications, Ltd. and The Xxxx Art Group, Ltd. from their obligations under the
Subsidiary Guaranty; and
(b) the AmuseMatte Sale, concurrently with such sale, the
Administrative Agent shall release (i) all security interests held by it in the
assets and/or stock that are the subject of the AmuseMatte Sale, and (ii)
AmuseMatte Corp. from its obligations under the Subsidiary Guaranty.
4. FEE. In the event that all of the Lenders execute and deliver this
Third Amendment, the Borrower shall pay to the Administrative Agent for the
benefit of each Lender that executes and delivers this Third Amendment no
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later than 5:00 p.m. on Wednesday, July 26, 2000 (the "THIRD AMENDMENT FEE
DATE"), a non-refundable amendment fee equal to the product of (a) 0.125% (i.e.,
12.5 basis points) multiplied by (b) the sum of (i) the Revolving Credit
Commitment of such Lender, (ii) the Term Loan A Commitment of such Lender, (iii)
the Term Loan B Commitment of such Lender, plus (iv) the Term Loan C Commitment
of such Lender, in each case, as of the Third Amendment Fee Date and prior to
giving effect to any reduction in the Commitments as a result of the repayment
of Advances from the proceeds of the DPG Sale. Such fee shall be payable on the
earlier of (i) the consummation of the DPG Sale, and (ii) July 26, 2000.
5. REPRESENTATIONS AND WARRANTIES. The Borrower represents and warrants
to the Lender Parties and the Administrative Agent that: (i) the execution,
delivery and performance by the Borrower of this Third Amendment are within its
organizational powers and have been duly authorized by all necessary corporate
action, (ii) this Third Amendment is the legal, valid and binding obligation of
the Borrower, enforceable against the Borrower in accordance with its terms and
(iii) this Third Amendment and the execution, delivery and performance by the
Borrower thereof does not: (A) contravene the terms of the Borrower's
organizational documents; (B) conflict with or result in any breach or
contravention of, or the creation of any Lien (other than Liens under the Loan
Documents) under, any document evidencing any contractual obligation to which
the Borrower is a party or any order, injunction, writ or decree to which it or
its property is subject; or (C) violate any requirement of law.
6. REFERENCE TO AND EFFECT UPON THE CREDIT AGREEMENT.
6.1 Effect. Except as specifically amended hereby, the Credit
Agreement and the other Loan Documents shall remain in full force and effect in
accordance with their terms and are hereby ratified and confirmed.
6.2 No Waiver; References. The execution, delivery and
effectiveness of this Third Amendment shall not operate as a waiver of any
right, power or remedy of the Administrative Agent or any Lender under the
Credit Agreement, or constitute a waiver of any provision of the Credit
Agreement, except as specifically set forth herein. Upon the effectiveness of
this Third Amendment, each reference in:
(i) the Credit Agreement to "this Agreement", "hereunder",
"hereof", "herein" or words of similar import shall mean and be a reference to
the Credit Agreement as amended hereby;
(ii) the other Loan Documents to the Credit Agreement
shall mean and be a reference to the Credit Agreement as amended hereby; and
(iii) the Loan Documents to the Loan Documents shall
be deemed to include this Third Amendment.
7. MISCELLANEOUS.
7.1 Headings. Section headings in this Third Amendment are
included herein for convenience of reference only and shall not constitute a
part of this Third Amendment for any other purposes.
7.2 Law. THIS THIRD AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK.
7.3 Successors. This Third Amendment shall be binding upon the
Borrower, the Lender Parties and the Administrative Agent and their respective
successors and assigns, and shall inure to the benefit of the Borrower, the
Lender Parties and the Administrative Agent and the successors and assigns of
the Lender Parties and the Administrative Agent.
7.4 Execution in Counterparts. This Third Amendment may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed to be an original and all of which taken together shall constitute one
and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment
to be executed and delivered by an officer thereunto duly authorized on the date
first written above.
APPLIED GRAPHICS TECHNOLOGIES, INC.
By:_________________________________________________
Name:_______________________________________________
Title:______________________________________________
FLEET BANK, N.A., AS A BANK, AS
ADMINISTRATIVE AGENT, INITIAL ISSUING
BANK AND SWING LINE BANK
By:_________________________________________________
Name:_______________________________________________
Title:______________________________________________
BANK OF AMERICA, N.A.
By:_________________________________________________
Name:_______________________________________________
Title:______________________________________________
FIRST UNION NATIONAL BANK, N.A.
By:_________________________________________________
Name:_______________________________________________
Title:______________________________________________
THE CHASE MANHATTAN BANK
By:_________________________________________________
Name:_______________________________________________
Title:______________________________________________
[Signature Page to Amendment No. 3 and Consent to Credit Agreement]
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XXX XXXX XX XXX XXXX
By:_________________________________________________
Name:_______________________________________________
Title:______________________________________________
SOVEREIGN BANK
By:_________________________________________________
Name:_______________________________________________
Title:______________________________________________
MELLON BANK, N.A.
By:_________________________________________________
Name:_______________________________________________
Title:______________________________________________
SUNTRUST BANK
By:_________________________________________________
Name:_______________________________________________
Title:______________________________________________
CITIZENS BANK OF MASSACHUSSETTS
By:_________________________________________________
Name:_______________________________________________
Title:______________________________________________
THE BANK OF NOVA SCOTIA
By:_________________________________________________
Name:_______________________________________________
Title:______________________________________________
BHF (USA) CAPITAL CORPORATION
By:_________________________________________________
Name:_______________________________________________
Title:______________________________________________
[Signature Page to Amendment No. 3 and Consent to Credit Agreement]
