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[APT LETTERHEAD]
July 27, 2001
Fleet National Bank, as Administrative Agent
000 Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xx. Xxxxx X. Xxxxx, Senior Vice President
Re: Applied Graphics Technologies, Inc. ("AGT")
Ladies and Gentlemen:
Reference is hereby made to the Amended and Restated Credit
Agreement, dated as of March 10, 1999 (as amended, the "Credit Agreement") by
and among AGT, as borrower, the lenders party thereto (the "Lenders") and Fleet
Bank, N.A., as Administrative Agent (the "Administrative Agent"). Capitalized
terms used but not defined herein shall be given the meanings accorded to such
terms in the Credit Agreement.
Applied Printing Technologies, L.P. ("APT") xxxxxx agrees to grant
to the Administrative Agent, on behalf of the Lenders, an irrevocable call
option to purchase from APT, upon the terms and conditions contained herein,
680,067 shares of Common Stock of AGT, which currently equals 7.50% of the
outstanding shares of Common Stock of AGT. The foregoing 680,067 shares of
Common Stock of AGT shall be subject to adjustment to the extent the shares of
Common Stock of AGT held by APT are adjusted on account of a dividend,
distribution, reclassification, exchange, substitution, merger, reorganization
or other similar transaction. The purchase price of the call option shall be an
amount equal to $0.01 per share. The purchase rights represented by this call
option are exercisable at the option of the Administrative Agent, in whole or in
part (but not as to fractional shares of the Common Stock of AGT), at any time
after the earlier of (i) January 15, 2003 and (ii) the occurrence of an Event of
Default (such date, the "Exercise Date"), and from time to time prior to the
close of business on the 180th day after the Exercise Date (the "Expiration
Date").
APT hereby represents and warrants to the Administrative Agent and
the Lenders that (i) APT owns, free and clear, 1,994,000 shares of Common Stock
of AGT representing, as of the date hereof, approximately 22% of the outstanding
shares of Common Stock of AGT, (ii) there are no outstanding rights, options,
warrants or agreements for the purchase from, or sale by, APT of any shares of
Common Stock of AGT, and (iii) APT has the corporate power and authority and has
taken all necessary partnership action to authorize the grant to the
aforementioned call option. Moreover, APT hereby agrees that it shall not
convey, sell, transfer or otherwise dispose of, or grant any right, option,
warrant to acquire, or grant any lien on, any of APT's shares of Common Stock of
AGT subject to the call option contained herein.
This letter shall be effective upon the effectiveness of the Fifth
Amendment to the Amended and Restated Credit Agreement.
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Fleet National Bank, as Administrative Agent
July 27, 2001
Page 2
This letter may be executed by the parties hereto in any number of
separate counterparts, and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
This letter and the rights and obligations of the parties hereunder
shall be governed by, and construed and interpreted in accordance with, the laws
of the State of New York.
Respectfully,
APPLIED PRINTING TECHNOLOGIES, L.P.
By: /s/ Xxxxxx X. Xxxxx
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Title:
AGREED AND ACCEPTED:
FLEET NATIONAL BANK, as Administrative Agent
By: /s/ Xxxxx X. Xxxxx
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Title: Senior Vice President
