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EXHIBIT 10.9
THIRD MODIFICATION AGREEMENT
THIS THIRD MODIFICATION AND EXTENSION AGREEMENT (this "Agreement"),
effective as of the 31st day of August 2000, is by and among BANK OF AMERICA,
N.A., a national banking association and successor to NationsBank, N.A. (the
"Bank"); and PROXICOM, INC., a Delaware corporation (the "Borrower").
WITNESSETH THAT:
WHEREAS, the Bank is the owner and holder of that certain Revolving
Commercial Note dated October 30, 1998, made by the Borrower and payable to the
order of the Bank, in the original principal amount of Ten Million and no/100
Dollars ($10,000,000.00) and bearing interest and being payable in accordance
with the terms and conditions therein set forth (as amended pursuant to certain
Note Modification Agreements dated as of May 5, 1999 and November 29, 1999, the
"Note"); and
WHEREAS, the Note was issued pursuant to a certain Secured Credit
Agreement dated October 30, 1998 between the Borrower and the Bank (as amended
pursuant to a certain Modification of Secured Credit Agreement dated June 1,
1999 and by a certain Second Modification of Loan Agreement effective as of
November 29, 1999, the "Credit Agreement"); and
WHEREAS, as of the effective date hereof, the principal balance of the
Note is $0, the outstanding amount of issued Inside Letters of Credit (as
defined below) is $13,316,147.46, the outstanding amount of issued Outside
Letters of Credit (as defined below) is $4,154,929.51 and the parties hereto
desire to modify the terms of the Credit Agreement and the Note.
NOW, THEREFORE, for Ten Dollars ($10.00) and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. The Credit Agreement is hereby modified as follows:
(a) In Section 1.1,
(i) by adding the following definitions:
"ADVANCE" MEANS A LOAN UNDER THE COMMITMENT OTHER THAN AN INSIDE LETTER
OF CREDIT, AND "ADVANCES" MEANS ALL OF SAID LOANS.
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"APPLICATION" MEANS ANY APPLICATION AND AGREEMENT FOR STANDBY LETTER OF
CREDIT EXECUTED AND DELIVERED BY THE BORROWER TO THE BANK ON THE BANK'S FORM
THEREFOR (AS FROM TIME TO TIME IN EFFECT) AND APPROPRIATELY COMPLETED, AND ALL
EXTENSIONS, SUPPLEMENTS AND MODIFICATIONS THERETO, AND RENEWALS AND REPLACEMENTS
THEREOF.
"INSIDE LETTER OF CREDIT" MEANS A LETTER OF CREDIT ISSUED UNDER THE
LETTER OF CREDIT COMMITMENT; AND "INSIDE LETTERS OF CREDIT" MEANS ALL OF SAID
LETTERS OF CREDIT.
"LETTER OF CREDIT" MEANS ANY IRREVOCABLE STANDBY LETTER OF CREDIT ISSUED
BY THE BANK FOR THE ACCOUNT OF THE BORROWER PURSUANT TO THE TERMS OF AN
APPLICATION (AND, IN THE CASE OF AN INSIDE LETTER OF CREDIT, THIS AGREEMENT),
AND ALL EXTENSIONS, SUPPLEMENTS AND MODIFICATIONS THERETO, AND RENEWALS THEREOF;
AND "LETTERS OF CREDIT" MEANS ALL OF SAID LETTERS OF CREDIT.
"LETTER OF CREDIT COMMITMENT" HAS THE MEANING SET FORTH IN SECTION 2.8.
"OBLIGATION" MEANS A LOAN, AN OUTSTANDING LETTER OF CREDIT, OR ANY
AMOUNT DUE UNDER AN APPLICATION, AND "OBLIGATIONS" MEANS ALL OF SAID
OBLIGATIONS.
"OUTSIDE LETTER OF CREDIT" MEANS A LETTER OF CREDIT WHICH IS NOT ISSUED
UNDER THE LETTER OF CREDIT COMMITMENT; AND "OUTSIDE LETTERS OF CREDIT" MEANS ALL
OF SAID LETTERS OF CREDIT.
"OUTSTANDING INSIDE LETTER OF CREDIT BALANCE" MEANS THE AGGREGATE OF (I)
THE UN-DRAWN AMOUNT OF ALL OUTSTANDING INSIDE LETTERS OF CREDIT, PLUS (II) ALL
AMOUNTS PAID BY THE BANK IN CONNECTION WITH DRAWINGS UNDER INSIDE LETTERS OF
CREDIT FOR WHICH THE BANK HAS NOT BEEN REIMBURSED IN ACCORDANCE WITH THE RELATED
APPLICATION.
"OUTSTANDING OUTSIDE LETTER OF CREDIT BALANCE" MEANS THE AGGREGATE OF
(I) THE UN-DRAWN AMOUNT OF ALL OUTSTANDING OUTSIDE LETTERS OF CREDIT, PLUS (II)
ALL AMOUNTS PAID BY THE BANK IN CONNECTION WITH DRAWINGS UNDER OUTSIDE LETTERS
OF CREDIT FOR WHICH THE BANK HAS NOT BEEN REIMBURSED IN ACCORDANCE WITH THE
RELATED APPLICATION.
(ii) by amending the following definitions:
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(A) The definition of "Bank" is hereby amended in
its entirety to read: " 'BANK' MEANS BANK OF AMERICA, N.A., A NATIONAL BANKING
ASSOCIATION AND SUCCESSOR TO NATIONSBANK, N.A., AND ITS SUCCESSORS".
(B) The definition of "Revolving Credit Period" is
hereby amended in its entirety to read: " 'REVOLVING CREDIT PERIOD' MEANS THE
PERIOD FROM AND INCLUDING THE EFFECTIVE DATE TO BUT EXCLUDING AUGUST 31, 2002".
(C) The definition of "Loan" is hereby amended in
its entirety to read: " 'LOAN' MEANS AN INSIDE LETTER OF CREDIT OR AN ADVANCE;
AND 'LOANS' MEANS ALL OF SUCH EXTENSIONS OF CREDIT"; and
(iii) by deleting the definitions of "Collateral", "Collateral
Documents", Intellectual Property Assignment", Mortgage", "Net Income", "Pledge
Agreement" and "Security Agreement".
(b) In Article II,
(i) by replacing the words "loans ("Loans")" in Section 2.1
with "LOANS";
(ii) by replacing the content of Section 2.3 with
"[INTENTIONALLY DELETED]";
(iii) in Sections 2.4(a) and 2.7, by replacing the word
"Loans" with "ADVANCES";
(iv) in Section 2.5, by changing the title of the section to
"FEES", by designating the current content of that section as subsection (a),
and by adding a new subsection (b), as follows:
(b) UPON THE ISSUANCE, AND UPON THE RENEWAL, OF EACH LETTER OF CREDIT,
THE BORROWER SHALL PAY THE BANK A NON-REFUNDABLE LETTER OF CREDIT FEE IN THE
AMOUNT OF 1.0% OF THE AMOUNT OF THE LETTER OF CREDIT.
and
(v) by adding a new Section 2.8, as follows:
SECTION 2.8. LETTER OF CREDIT SUBFEATURE. AS A SUBFEATURE UNDER THE
COMMITMENT, THE BANK AGREES, ON THE TERMS AND CONDITIONS SET FORTH IN THIS
AGREEMENT AND IN THE APPLICABLE APPLICATIONS (THE FORM AND CONTENT OF WHICH
MUST BE ACCEPTABLE TO BE BANK IN ITS SOLE DISCRETION), TO MAKE
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LOANS TO THE BORROWER BY ISSUING LETTERS OF CREDIT FOR THE ACCOUNT
OF THE BORROWER. AT NO TIME SHALL THE OUTSTANDING INSIDE LETTER OF
CREDIT BALANCE EXCEED THE COMMITMENT MINUS THE OUTSTANDING BALANCE
OF ADVANCES (THE "LETTER OF CREDIT COMMITMENT"). EACH INSIDE
LETTER OF CREDIT SHALL BE ISSUED FOR A TERM NOT TO EXCEED 365
DAYS, UNLESS APPROVED BY THE BANK, AND ANY INSIDE LETTER OF CREDIT
MAY BE AUTOMATICALLY RENEWED IN ACCORDANCE WITH THE TERMS AND
CONDITIONS OF SAID LETTER OF CREDIT AND THE RELATED APPLICATION.
AN INSIDE LETTER OF CREDIT MAY BE DENOMINATED ONLY IN U.S.
DOLLARS. EACH DRAFT PAID BY THE BANK UNDER A LETTER OF CREDIT
SHALL, IF SUCH AMOUNT IS AVAILABLE UNDER THE LETTER OF CREDIT
COMMITMENT, BE DEEMED AN ADVANCE AND SHALL ACCRUE INTEREST AT THE
RATE THEN APPLICABLE UNDER THE NOTE. TO THE EXTENT THE AMOUNT OF A
DRAFT PAID BY THE BANK AS AFORESAID IS UNAVAILABLE UNDER THE
LETTER OF CREDIT COMMITMENT, SAID AMOUNT SHALL BE PAYABLE BY THE
BORROWER ON DEMAND AND UNTIL PAID IN FULL SHALL ACCRUE INTEREST AT
THE RATE THEN APPLICABLE UNDER THE NOTE. THE BANK IS HEREBY
AUTHORIZED AND DIRECTED TO DEBIT ANY DEPOSIT ACCOUNT OR ACCOUNTS
OF THE BORROWER WITH THE BANK, AT ITS OPTION, TO REIMBURSE THE
BANK FOR PAYMENT OF ALL OR ANY PART OF SAID AMOUNT.
UPON THE TERMINATION OF THE LETTER OF CREDIT COMMITMENT FOR
ANY REASON WHATSOEVER, THE BANK MAY, AT ITS OPTION, DEMAND THAT
THE BORROWER, WITHIN TEN (10) DAYS OF SUCH DEMAND, ARRANGE FOR THE
CANCELLATION OF EACH OUTSTANDING LETTER OF CREDIT SUCH THAT THE
BANK HAS NO FURTHER LIABILITY UNDER ANY LETTER OF CREDIT, OR IN
THE EVENT THE BORROWER FAILS TO PROCURE THE CANCELLATION OF ANY
LETTER OF CREDIT WITHIN SUCH TEN (10) DAY PERIOD, DEMAND THAT THE
BORROWER PAY TO THE BANK, AS CASH COLLATERAL, THE REMAINING
AMOUNTS AVAILABLE TO BE DRAWN, IF ANY, UNDER ALL LETTERS OF CREDIT
NOT SO CANCELED AND SUCH AMOUNTS SHALL THEREUPON BECOME
IMMEDIATELY DUE AND PAYABLE. IN THE EVENT THE BORROWER PAYS TO THE
BANK OR THE BANK COLLECTS FROM THE BORROWER SUMS REPRESENTING THE
REMAINING AMOUNTS AVAILABLE TO BE DRAWN UNDER SAID OUTSTANDING
LETTERS OF CREDIT, THE BANK SHALL HOLD SUCH SUMS IN A
NONINTEREST-BEARING ACCOUNT AS SECURITY FOR THE BORROWER'S
OBLIGATION TO REIMBURSE THE BANK FOR AMOUNTS PAID BY THE BANK
UNDER THE LETTERS OF CREDIT OR OTHERWISE DUE HEREUNDER. UPON THE
EXPIRATION OF EACH OF THE LETTERS OF CREDIT AND THE BANK'S
REASONABLE DETERMINATION THAT IT HAS NO FURTHER LIABILITY
THEREUNDER, THE BANK SHALL REPAY SUCH SUMS TO THE BORROWER TO THE
EXTENT THEY EXCEED THE REMAINING AMOUNTS ACTUALLY PAID BY THE BANK
UNDER SAID LETTER OF CREDIT. THE BANK'S RIGHTS UNDER THIS SECTION
2.8 ARE IN ADDITION TO OTHER RIGHTS AND REMEDIES WHICH THE BANK
MAY HAVE.
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SUBJECT TO THE FOREGOING, THE BORROWER MAY BORROW UNDER
THIS SECTION 2.8, PREPAY AND RE-BORROW.
(c) In Article III,
(i) by replacing Section 3.1(iv) with
"[INTENTIONALLY DELETED]"; and
(ii) by adding a new Section 3.4, as
follows:
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SECTION 3.4. LETTER OF CREDIT LOANS. IN THE CASE OF EACH
LETTER OF CREDIT (AND IN ADDITION TO THE REQUIREMENTS OF SECTION
3.1):
(i) RECEIPT BY THE BANK OF A DULY EXECUTED APPLICATION,
TOGETHER WITH ALL AGREEMENTS AND DOCUMENTS REQUIRED TO BE
DELIVERED TO THE BANK AS SET FORTH THEREIN.
THE BANK, UPON RECEIPT OF THE ABOVE INFORMATION, WILL DETERMINE,
IN ITS SOLE AND ABSOLUTE DISCRETION, WHETHER THE LETTER OF CREDIT,
IF THE APPLICATION IS APPROVED, WILL BE AN INSIDE LETTER OF CREDIT
OR AN OUTSIDE LETTER OF CREDIT, AND WILL NOTIFY THE BORROWER
ACCORDINGLY.
(d) By replacing Article V in its entirety with the
following:
ARTICLE V
FINANCIAL COVENANT
THE BORROWER AGREES THAT SO LONG AS THE BANK IS COMMITTED
TO MAKE LOANS HEREUNDER OR ANY OBLIGATION OR AMOUNT PAYABLE
HEREUNDER OR UNDER THE NOTE, OR ANY APPLICATION REMAINS UNPAID:
SECTION 5.1. CERTAIN DEFINITIONS. AS USED IN THIS ARTICLE V
AND HEREAFTER IN THIS AGREEMENT, THE FOLLOWING TERMS HAVE THE
FOLLOWING MEANINGS:
"LIQUID ASSETS" MEANS ALL CASH, UNRESTRICTED BANK DEMAND
DEPOSITS, READILY MARKETABLE SECURITIES (e.g., UNITED STATES
TREASURY BILLS AND MONEY MARKET FUND SHARES), AND OTHER ASSETS
THAT CAN BE CONVERTED INTO CASH IN A SHORT TIME PERIOD (NOT TO
EXCEED ONE YEAR) WITHOUT A MATERIAL CONCESSION IN PRICE. "LIQUID
ASSETS" DOES NOT INCLUDE ACCOUNTS RECEIVABLE OR INVENTORY.
"TOTAL BANK COMMITMENTS" MEANS, AT ANY TIME, THE COMMITMENT
PLUS THE OUTSTANDING OUTSIDE LETTER OF CREDIT BALANCE AT SUCH
TIME.
SECTION 5.2. LIQUIDITY RATIO. AS OF THE END OF EACH FISCAL
QUARTER OF THE BORROWER, THE RATIO OF LIQUID ASSETS OF THE
BORROWER AND ITS CONSOLIDATED SUBSIDIARIES TO TOTAL BANK
COMMITMENTS SHALL BE NO LESS THAN 1.5 TO 1.0.
(e) In Article VI, by:
(i) inserting "OBLIGATION OR" before "amount payable"
and replacing "Notes or any Collateral Document" with "NOTE OR ANY APPLICATION"
in the preamble;
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(ii) replacing the text of Section 6.l(iii) with
"[INTENTIONALLY DELETED]";
(iii) deleting "ANY COLLATERAL DOCUMENT" from Section
6.1(v);
(iv) by replacing Sections 6.3(b) and 6.8(i) with
"[INTENTIONALLY DELETED]";
(v) by deleting the proviso in Section 6.12(v);
(vi) in Section 6.17(a), by:
(A) deleting the words "a pro forma
certificate of the Borrower described in Section 6.l(iii) and supporting" from
the first sentence of paragraph (i);
(B) replacing the second sentence of paragraph
(i) with the following: "SAID DOCUMENTATION SHALL REFLECT THE FACT THAT, AFTER
GIVING EFFECT TO SUCH ACQUISITION, THE BORROWER AND ITS SUBSIDIARIES WILL BE IN
COMPLIANCE WITH THE FINANCIAL COVENANT SET FORTH IN ARTICLE V OF THIS
AGREEMENT."; and
(C) by replacing paragraph (ii) with
"[INTENTIONALLY DELETED]".
(vii) in Section 6.17(b), by:
(A) deleting all of paragraph (i) after the
words "a Guaranty"; and
(B) replacing paragraphs (iv), (vii), (ix),
(x) and (xi) with "[INTENTIONALLY DELETED]".
(viii) in Section 6.17(c), by replacing "$1,000,000"
with "$10,000,000" and "$5,000,000" with "$25,000,000"; by inserting the word
"AND" before clause (ii); and by deleting clause (iii); and
(ix) deleting "President and" in Section 6.18.
(f) In Section 7.4, by inserting "OR ANY OTHER OBLIGATION"
after "Note".
(g) In Section 8.1(v), by inserting "OBLIGATION, OR ANY
OTHER" before the word "Debt".
(h) By replacing Section 8.1(xi) with
"[INTENTIONALLY DELETED]".
(i) By adding the following to the end of Section 8.1:
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UPON THE OCCURRENCE OF ANY EVENT OF DEFAULT, THEN, OR AT ANY TIME
AFTER THE HAPPENING OF THE SAME, THE BANK MAY, AT ITS OPTION, DEMAND THAT
THE BORROWER, WITHIN TEN (10) DAYS OF SUCH DEMAND, ARRANGE FOR THE
CANCELLATION OF EACH OUTSTANDING LETTER OF CREDIT SUCH THAT THE BANK HAS
NO FURTHER LIABILITY UNDER ANY LETTER OF CREDIT, OR IN THE EVENT THE
BORROWER FAILS TO PROCURE THE CANCELLATION OF ANY LETTER OF CREDIT WITHIN
SUCH TEN (10) DAY PERIOD, DEMAND THAT THE BORROWER PAY TO THE BANK, AS
CASH COLLATERAL, THE REMAINING AMOUNTS AVAILABLE TO BE DRAWN, IF ANY,
UNDER ALL LETTERS OF CREDIT NOT SO CANCELED AND SUCH AMOUNTS SHALL
THEREUPON BECOME IMMEDIATELY DUE AND PAYABLE. IN THE EVENT THE BORROWER
PAYS TO THE BANK OR THE BANK COLLECTS FROM THE BORROWER SUMS REPRESENTING
THE REMAINING AMOUNTS AVAILABLE TO BE DRAWN UNDER SAID OUTSTANDING
LETTERS OF CREDIT, THE BANK SHALL HOLD SUCH SUMS IN A
NON-INTEREST-BEARING ACCOUNT AS SECURITY FOR THE BORROWER'S OBLIGATION TO
REIMBURSE THE BANK FOR AMOUNTS PAID BY THE BANK UNDER THE LETTERS OF
CREDIT OR OTHERWISE DUE HEREUNDER. UPON THE EXPIRATION OF EACH OF THE
LETTERS OF CREDIT AND THE BANK'S REASONABLE DETERMINATION THAT IT HAS NO
FURTHER LIABILITY THEREUNDER, THE BANK SHALL REPAY SUCH SUMS TO THE
BORROWER TO THE EXTENT THEY EXCEED THE REMAINING AMOUNTS ACTUALLY PAID BY
THE BANK UNDER SAID LETTER OF CREDIT. THE BANK'S RIGHTS UNDER THIS
SECTION 8.1 ARE IN ADDITION TO OTHER RIGHTS AND REMEDIES WHICH THE BANK
MAY HAVE.
2. The Note is hereby amended by changing the definition of "Date of
Maturity" from "August 31, 2000" to "AUGUST 31, 2002".
3. The Borrower hereby acknowledges and agrees that, as of the
effective date hereof, the unpaid principal balance of the Note, the outstanding
amount of issued Inside Letters of Credit, and the outstanding amount of issued
Outside Letters of Credit, are as set forth in the third Recital to this
Agreement, and that there are no set-offs or defenses against the Note, the
Credit Agreement, or any Application.
4. The Borrower represents and warrants to the Bank that the
"Guarantors" of the Loans, IBIS CONSULTING, INC., SQUARE EARTH, INC. and AD HOC
INTERACT, INC., are no longer in existence.
5. The parties to this Agreement do not intend that this Agreement be
construed as a novation of the Note, the Credit Agreement or any Application.
6. Except as hereby expressly modified, the Credit Agreement and the
Note shall otherwise be unchanged, shall remain in full force and effect, and is
hereby expressly approved, ratified and confirmed. A legend shall be placed on
the face of the Note indicating
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that its terms have been modified hereby, and the original of this Agreement
shall be affixed to the original of the Note.
7. This Agreement shall be governed in all respects by the laws of
the Commonwealth of Virginia and shall be binding upon and shall inure to the
benefit of the parties hereto and their respective heirs, executors,
administrators, personal representatives, successors and assigns.
WITNESS the following signatures and seals.
PROXICOM, INC. [SEAL]
By /s/ XXXXXXX X. XXXXXX
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Name: Xxxxxxx X. Xxxxxx
Title: EVP & CFO
BANK OF AMERICA, N.A. [SEAL]
By: /s/ XXXX XXXXX
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Xxxx Xxxxxx Cross, Vice President
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