EXHIBIT 10.1 Exhibit A is omitted, but will be furnished supplementally
to the Commission upon request.
FOURTH AMENDMENT TO
CREDIT AGREEMENT
This Fourth Amendment to Credit Agreement (this "AMENDMENT"), dated as
of April 21, 2006, is by and among EASYLINK SERVICES CORPORATION, a Delaware
corporation (the "PARENT"), the subsidiaries of Parent identified on the
signature pages hereto (collectively, with the Parent, the "BORROWERS" and
individually, a "BORROWER") and XXXXX FARGO FOOTHILL, INC., a California
corporation (together with its successors and assigns, the "LENDER").
R E C I T A L S
A. The Borrowers and the Lender are parties to that certain Credit
Agreement dated as of December 9, 2004 (as amended, the "ORIGINAL CREDIT
AGREEMENT").
B. On or about April 19, 2006, the Parent received investment proceeds
in an amount equal to $5,400,000 in exchange for equity in the Parent. In
accordance with the Original Credit Agreement, on or prior to May 1, 2006, the
Borrowers will pay to the Lender an amount equal to $3,000,000 as a permanent
prepayment of the Term Loan.
C. The parties hereto desire to amend the Original Credit Agreement (as
the Original Credit Agreement is amended by this Amendment, and as the Original
Credit Agreement may be further amended, modified or restated from time,
collectively the "CREDIT AGREEMENT") as provided herein.
NOW, THEREFORE, in consideration of the premises herein contained, and
for other good and valuable consideration (the receipt, sufficiency and adequacy
of which are hereby acknowledged), the parties hereto (intending to be legally
bound) hereby agree as follows:
1. Definitions. Terms capitalized herein and not otherwise defined
herein shall have the meanings ascribed to such terms in the Credit Agreement.
2. Amendment to Credit Agreement. Subject to the terms and conditions
contained herein, the parties hereto hereby amend the Credit Agreement as
follows:
(a) Schedule 1.1 of the Credit Agreement is hereby amended by
deleting the definition of EBITDA in its entirety and replacing it as
follows:
"EBITDA" means, with respect to any fiscal period, Parent's
and its Subsidiaries' consolidated net earnings (or loss), minus
extraordinary gains and interest income, plus the gain on the early
extinguishment of Indebtedness paid to the Existing Lenders with the
proceeds of the Term Loan in an amount not to exceed $1,500,000,
interest expense, income taxes, and depreciation and amortization for
such period, in each case, as determined in accordance with GAAP.
Notwithstanding the foregoing, sales, marketing and product development
costs or expenses of the Borrowers in excess of those amounts
for any such item as reflected on Exhibit A attached hereto in an
amount not to exceed $1,400,000 in the aggregate shall be added back to
EBITDA solely for the fiscal years 2006 and 2007.
3. Conditions Precedent. The amendment contained in Section 2 above is
subject to, and contingent upon, the prior or contemporaneous satisfaction of
each of the following conditions precedent, each in form and substance
satisfactory to the Lender:
(a) The Borrowers and the Lender shall have executed and
delivered to each other this Amendment; and
(b) The Borrowers shall have satisfied any other conditions of
the Lender required in connection with this Amendment.
4. Reference to and Effect on the Credit Agreement. Except as expressly
provided herein, the Credit Agreement and all of the Loan Documents shall remain
unmodified and continue in full force and effect and are hereby ratified and
confirmed. The execution, delivery and effectiveness of this Amendment shall not
operate as a waiver of: (a) any right, power or remedy of the Lender under the
Credit Agreement or any of the Loan Documents, or (b) any Default or Event of
Default under the Credit Agreement or any of the Loan Documents.
5. Representations and Warranties of the Borrowers. Each of the
Borrowers hereby represents and warrants to the Lender, which representations
and warranties shall survive the execution and delivery of this Amendment, that
on and as of the date hereof and after giving effect to this Amendment:
(a) As to each Borrower, the execution, delivery, and
performance by such Borrower of this Amendment have been duly
authorized by all necessary action on the part of such Borrower.
(b) As to each Borrower, the execution, delivery, and
performance by such Borrower of this Amendment does not and will not
(i) violate any provision of federal, state, or local law or regulation
applicable to any Borrower, the Governing Documents of any Borrower, or
any order, judgment, or decree of any court or other Governmental
Authority binding on any Borrower, (ii) conflict with, result in a
breach of, or constitute (with due notice or lapse of time or both) a
default under any material contractual obligation of any Borrower,
(iii) result in or require the creation or imposition of any Lien of
any nature whatsoever upon any properties or assets of Borrower, other
than Permitted Liens, or (iv) require any approval of any Borrower's
interest holders or any approval or consent of any Person under any
material contractual obligation of any Borrower, other than consents or
approvals that have been obtained and that are still in force and
effect.
(c) As to each Borrower, this Amendment and all other
documents contemplated hereby, when executed and delivered by such
Borrower will be the legally valid and binding obligations of such
Borrower, enforceable against such Borrower in accordance with their
respective terms, except as enforcement may be limited by
2
equitable principles or by bankruptcy, insolvency, reorganization,
moratorium, or similar laws relating to or limiting creditors' rights
generally.
(d) The representations and warranties of each of the
Borrowers set forth in the Credit Agreement and in the Loan Documents
to which it is a party are true, correct and complete on and as of the
date hereof; provided that the references to the Credit Agreement
therein shall be deemed to include the Credit Agreement as amended by
this Amendment.
(e) Each of the Borrowers acknowledges that the Lender is
specifically relying upon the representations, warranties and
agreements contained in this Amendment and that such representations,
warranties and agreements constitute a material inducement to the
Lender in entering into this Amendment.
6. Release by the Borrowers. In further consideration of the Lender's
execution of this Amendment, each of the Borrowers hereby waives any defense,
right of set-off or claim against Lender and any of its affiliates, directors,
officers, employees, agents and representatives existing as of the date hereof
with respect to the Credit Agreement and the Loan Documents and each of the
Borrowers hereby forever remises, releases, acquits, satisfies and forever
discharges the Lender and each of its successors, assigns, affiliates, officers,
employees, directors, agents and attorneys (collectively, the "RELEASEES") from
any and all claims, demands, liabilities, disputes, damages, suits,
controversies, penalties, fees, losses, costs, expenses, reasonable attorneys'
fees, actions and causes of action (whether at law or in equity) and obligations
of every nature whatsoever, whether liquidated or unliquidated, known or
unknown, matured or unmatured, fixed or contingent, that any Borrower ever had,
now has, or may have against or seek from any or all of the Releasees that arise
from or relate to any actions that any or all of the Releasees may have taken or
omitted to take prior to the date this Amendment was executed (or otherwise),
including, without limitation, with respect to the Obligations, any Collateral,
the Credit Agreement and any of the Loan Documents, other than for the Lender's
gross negligence or willful misconduct.
7. Reference to Credit Agreement; No Waiver.
7.1 Upon the effectiveness of this Amendment, each reference
in the Credit Agreement to "this Credit Agreement," "hereunder,"
"hereof," "herein" or words of like import shall mean and be a
reference to the Credit Agreement as amended hereby. The term "Loan
Documents" as defined in Schedule 1.1 of the Credit Agreement shall
include (in addition to the Loan Documents described in the Credit
Agreement) this Amendment and any other agreements, instruments or
other documents executed in connection herewith.
7.2 The Lender's failure, at any time or times hereafter, to
require strict performance by the Borrowers of any provision or term of
the Credit Agreement, this Amendment or the other Loan Documents shall
not waive, affect or diminish any right of the Lender thereafter to
demand strict compliance and performance therewith. Any suspension or
waiver by the Lender of a breach of this Amendment or any Event of
Default under the Credit Agreement shall not,
3
except as expressly set forth herein, suspend, waive or affect any
other breach of this Amendment or any Event of Default under the Credit
Agreement, whether the same is prior or subsequent thereto and whether
of the same or of a different kind or character. None of the
undertakings, agreements, warranties, covenants and representations of
any Borrower contained in this Amendment, shall be deemed to have been
suspended or waived by the Lender unless such suspension or waiver is:
(i) in writing and signed by the Lender and (ii) delivered to the
Borrower. In no event shall the Lender's execution and delivery of this
Amendment establish a course of dealing among the Lender, the
Borrowers, or any other obligor or in any other way obligate the Lender
to hereafter provide any amendments or waivers with respect to the
Credit Agreement. The terms and provisions of this Amendment shall be
limited precisely as written and shall not be deemed: (A) to be a
consent to a modification, amendment or waiver of any other term or
condition of the Credit Agreement or of any other Loan Documents, or
(B) to prejudice any right or remedy that the Lender may now have under
or in connection with the Credit Agreement or any of the other Loan
Documents.
8. Successors and Assigns; Amendment. This Amendment shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, no Borrower may assign this Amendment
or any of its respective rights hereunder without the Lender's prior written
consent. Any prohibited assignment of this Amendment shall be absolutely null
and void. This Amendment may only be amended or modified by a writing signed by
the Lender and the Borrowers.
9. Severability; Construction. Wherever possible, each provision of
this Amendment shall be interpreted in such a manner so as to be effective and
valid under applicable law, but if any provision of this Amendment is held to be
prohibited by or invalid under applicable law, such provision or provisions
shall be ineffective only to the extent of such provision and invalidity,
without invalidating the remainder of this Amendment. Neither this Amendment nor
any uncertainty or ambiguity herein shall be construed or resolved against
Lender, whether under any rule of construction or otherwise. On the contrary,
this Amendment has been reviewed by all parties hereto and shall be construed
and interpreted according to the ordinary meaning of the words used so as to
fairly accomplish the purposes and intentions of the parties hereto.
10. Counterparts; Facsimile. This Amendment may be executed in one or
more counterparts, each of which taken together shall constitute one and the
same instrument. Delivery of an executed counterpart of this Amendment by
telefacsimile shall be equally as effective as delivery of a manually executed
counterpart of this Amendment. Any party delivering an executed counterpart of
this Amendment by telefacsimile shall also deliver a manually executed
counterpart of this Amendment, but the failure to deliver a manually executed
counterpart shall not affect the validity, enforceability or binding effect of
this Amendment.
11. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.
(a) THE VALIDITY OF THIS AMENDMENT, THE CONSTRUCTION,
INTERPRETATION, AND ENFORCEMENT HEREOF, AND
4
THE RIGHTS OF THE PARTIES HERETO WITH RESPECT TO ALL MATTERS ARISING
HEREUNDER OR RELATED HERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(b) THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING
IN CONNECTION WITH THIS AMENDMENT SHALL BE TRIED AND LITIGATED ONLY IN
THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE
OF NEW YORK, PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT
AGAINST ANY BORROWER COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT
LENDER'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE AGENT ELECTS
TO BRING SUCH ACTION OR WHERE SUCH BORROWERS COLLATERAL OR OTHER
PROPERTY MAY BE FOUND. BORROWER AND THE LENDERS WAIVE, TO THE EXTENT
PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE
DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT
ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 11(B).
(c) BORROWERS AND THE LENDER HEREBY WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AMENDMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED
HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS,
AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. BORROWERS AND THE LENDER
REPRESENT THAT IT HAS REVIEWED THIS WAIVER AND IT KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH
LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS AMENDMENT MAY
BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
5
IN WITNESS WHEREOF, the undersigned have caused this Fourth Amendment
to be duly executed and delivered as of the date first above written.
EASYLINK SERVICES CORPORATION,
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------------------
Title: Chairman, President and Chief
Executive Officer
EASYLINK SERVICES USA, INC.,
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------------------
Title: President and Chief Executive
Officer
XXXXX FARGO FOOTHILL, INC.,
a California corporation
By: /s/ Xxxxxx Xxxx
-------------------------------------
Title: V.P.
