AMENDMENT NO. 3 TO CREDIT AGREEMENT
Exhibit
10.30
AMENDMENT
NO. 3
TO
AMENDMENT
NO. 3, dated as of March 26, 2009 (this “Amendment No. 3”),
made by and among COLOR EDGE LLC (f/k/a MCEI, LLC), a Delaware limited liability
company (“MCEI”), COLOR EDGE
VISUAL LLC (f/k/a MCEV, LLC), a Delaware limited liability company (“MCEV”), and CRUSH
CREATIVE LLC (f/k/a MCRU, LLC), a Delaware limited liability company (“MCRU”; each of MCEI, MCEV,
and MCRU, referred to as a “Borrower” and,
collectively, as the “Borrowers”), the
Corporate Guarantors signatory hereto, and AMALGAMATED BANK, a New York banking
corporation (the “Lender”).
This Amendment No. 3 amends that
certain Credit Agreement, dated as of March 1, 2005, as amended by Amendment No.
1 thereto, dated as of August 8, 2005, and Amendment No. 2 thereto, dated as of
February 27, 2008 (as amended, supplemented or otherwise modified
prior to the date hereof, the “Existing Credit
Agreement”) among the Borrowers, MERISEL,
INC., a Delaware corporation (“Merisel”), MERISEL
AMERICAS, INC., a Delaware corporation (“Merisel Americas”)
and certain other affiliates of the Borrowers as guarantors (“Subsidiary
Guarantors”; each of Merisel, Merisel Americas and the Subsidiary
Guarantors, a “Corporate Guarantor”
and, collectively, the “Corporate
Guarantors”) and Lender.
WITNESSETH:
WHEREAS, capitalized terms not
otherwise defined herein shall have the same meanings as specified in the
Existing Credit Agreement;
WHEREAS, the Loan Parties have
requested that Lender agree to amend the Existing Credit Agreement as more
specifically set forth herein; and
WHEREAS, the Lender has
indicated its willingness to agree to such amendment of the Existing Credit
Agreement on the terms and subject to the satisfaction of the conditions set
forth herein.
NOW, THEREFORE, in
consideration of the premises and of the mutual covenants and agreements
contained herein, the parties hereto hereby agree as follows:
ARTICLE
1
AMENDING
PROVISIONS
Section
1.1 Amendment. As of the
Third Amendment Effective Date (as defined in Section 4.1 hereof):
(a) The first
sentence of the definition of “Borrowing Base” in
Section 1.1 of the Existing Credit Agreement is hereby amended by deleting it in
its entirety and inserting, in lieu thereof: ““Borrowing Base”, at
any time, 80% of the then Eligible Accounts”.
(b) The
definition of “Leverage Ratio” in
Section 1.1 of the Existing Credit Agreement is hereby amended by deleting it in
its entirety and inserting, in lieu thereof, the following:
““Leverage
Ratio”: at any time, the ratio of (a) Consolidated
Indebtedness of Merisel and the other Loan Parties as of such time to
(b) Adjusted Consolidated EBITDA of Merisel and the other Loan Parties for
the Test Period ended at or most recently prior to such time.”
(c) The
definition of “Revolving Credit Commitment
Period” in Section 1.1 of the Existing Credit Agreement is hereby
amended, effective as of April 15, 2009, by deleting it in its entirety and
inserting, in lieu thereof, the following:
““Revolving Credit Commitment
Period”: the period from and including April 15, 2009 to the Revolving
Credit Termination Date or such earlier date on which the Revolving Credit
Commitments shall terminate as provided herein.”
(d) The
definition of “Revolving Credit Termination
Date” in Section 1.1 of the Existing Credit Agreement is hereby amended
by deleting it in its entirety and inserting, in lieu thereof, the
following:
““Revolving Credit Termination
Date”: means April 13, 2010; provided that the
Revolving Credit Termination Date may be extended for one or more 364-day
periods at the sole discretion of the Lender as set forth in this
paragraph. So long as no Default or Event of Default has occurred and is
continuing, if Borrower requests, by written notice to the Lender, given no
earlier than 120 days prior to the then current Revolving Credit
Termination Date, but in any event, no later than 90 days prior to the then
current Revolving Credit Termination Date, that such Revolving Credit
Termination Date be extended for a period of 364 days, the Lender may, in its
sole discretion, agree to such request by providing written notice to that
effect to Borrower no later than 30 days prior to the then current
Revolving Credit Termination Date, in which case, such Revolving Credit
Termination Date shall be deemed so extended from the then current Revolving
Credit Termination Date and the last day of such 364 day period shall become the
Revolving Credit Termination Date. For the avoidance of doubt, if the
Lender has not provided such written notice to Borrower agreeing to any
such extension, no such extension shall occur. The Borrower
shall be deemed to have represented and warranted on and as of the date of any
such extension of the Revolving Credit Termination Date, that no Default or
Event of Default has occurred and is continuing.”
(e) The
following definitions are added to Section 1.1 of the Existing Credit Agreement
in alphabetical order:
““Adjusted Consolidated
EBITDA”: for any period with respect to Merisel and its
Subsidiaries, Consolidated EBITDA; provided, that for
periods beginning on and after January 1, 2008 and ending on or before
December 31, 2008, such Consolidated EBITDA shall be adjusted to add back
certain legal fees as set forth on Schedule 1 attached
to Amendment No. 3.”
““Amendment No. 3”
means that certain Amendment No. 3 to Credit Agreement by and among the
Borrowers, Corporate Guarantors and Lender dated as of March 26,
2009.”
(f) Clause
(a) of Section 5.1 of the Existing Credit Agreement is hereby amended by
deleting it in its entirety and inserting, in lieu thereof, the following: “Each
Term Loan shall bear interest at a rate per annum equal to the Base
Rate.”
(g) Clause
(b) of Section 5.1 of the Existing Credit Agreement is hereby amended by
deleting it in its entirety and inserting, in lieu thereof, the following: “Each
Revolving Credit Loan shall bear interest at a rate per annum equal to the Base
Rate plus 1%.”
(h) Clause
(a) of Section 8.1 of the Existing Credit Agreement is hereby amended by
deleting it in its entirety and inserting, in lieu thereof, the
following:
““as soon
as available, but in any event within 180 days after the end of each fiscal year
of each Borrower, a copy of the consolidated and consolidating balance sheet of
Merisel and its Subsidiaries as at the end of such year and the related
consolidated (and with respect to statement of income, consolidating),
statements of income and retained earnings and of cash flows for such year,
setting forth in each case in comparative form the figures for the previous
year, reported on without a “going concern” or like qualification or exception,
or qualification arising out of the scope of the audit, by BDO Xxxxxxx or other
independent certified public accountants acceptable to the Lender;”
(i) Clause
(b) of Section 8.1 of the Existing Credit Agreement is hereby amended by
deleting it in its entirety and inserting, in lieu thereof, the
following:
““as soon
as available, but in any event not later than 60 days after the end of each of
the first three quarterly periods of each fiscal year of each Borrower, the
unaudited consolidated and consolidating balance sheet of Merisel and its
Subsidiaries as at the end of such quarter and the related unaudited
consolidated (and with respect to statement of income, consolidating) statements
of income and retained earnings and of cash flows of Merisel and its
Subsidiaries for such quarter and the portion of the fiscal year through the end
of such quarter, setting forth in each case in comparative form the figures for
the previous year, certified by a Responsible Officer as being fairly stated in
all material respects (subject to normal year end audit adjustments) and
reviewed pursuant to procedures agreed upon with the Lender by BDO Xxxxxxx or
other independent certified public accountants acceptable to the
Lender;”
(j) Clause
(c) of Section 8.1 of the Existing Credit Agreement is hereby amended by
deleting it in its entirety, together with all references to such clause
throughout the Loan Documents.
(k) Exhibit H
to the Existing Credit Agreement, referred to in the definition of “Borrowing Base
Certificate” in Section 1.1 of the Existing Credit Agreement, is hereby
amended by deleting the percentage “85%” in Section 1 thereof in its entirety
and inserting, in lieu thereof, “80%”.
ARTICLE
2
LIMITED
WAIVER
Section
2.1 Waiver. Subject
to the satisfaction of the conditions in Article 4 below, Lender hereby grants a
one-time waiver of all Defaults and Events of Default with respect to the
non-compliance with Section 9.1(a) of the Existing Credit Agreement resulting
solely from the failure of Merisel and its Subsidiaries to maintain a Leverage
Ratio of no greater than 3.0:1 for the fiscal year ended December 31, 2008;
provided, that
such waiver shall not be construed a permanent waiver of Section 9.1(a) of the
Existing Credit Agreement, as amended by this Amendment No. 3.
ARTICLE
3
COVENANTS
AND LIMITATIONS
Section
3.1 Certain Covenants and
Limitations. In consideration of the execution and delivery of
this Amendment No. 3 by the Lender, Borrowers hereby agree to pay all costs and
expenses of Lender, including the fees associated with the accounts receivable
audit review, and of its counsel, Xxxxx Xxxxxxx LLP, incurred in connection
herewith or otherwise due and owing as of the date hereof pursuant to Section
11.5 of the Credit Agreement.
ARTICLE
4
CONDITIONS
Section
4.1 Conditions Precedent to the
Effectiveness of this Amendment No. 3. This Amendment No. 3
shall become effective as of the date hereof (the “Third Amendment Effective Date”)
provided that each of the following conditions precedent shall have been
satisfied on or before such date:
(a) Amendment. Lender
has received counterparts of this Amendment No. 3 executed and delivered by an
authorized officer of each of the Loan Parties and the Lender.
(b) Borrowing Base
Certificate. The Lender shall have received a Borrowing Base
Certificate showing the Borrowing Base as of December 31, 2008, satisfactory in
form and substance to the Lender, executed by the Chief Financial Officer of
Merisel Americas, Inc., the sole shareholder of each Borrower.
(c) Representations and
Warranties. The representations and warranties contained in
Section 4.1 of this Amendment No. 3 shall be true and correct in all material
respects on and as of the Third Amendment Effective Date, as though made on and
as of such date (except for any such representation and warranty that by its
terms refers to a specific date other than the date first above written, in
which case it shall be true and correct in all material respects as of such
earlier date); and each Loan Party hereby restates each of the representations
and warranties set forth in the Existing Credit Agreement, as amended by this
Amendment No. 3 (including without limitation the Schedules delivered therein),
and represents and warrants to Lender that such representations and warranties
as so amended are true and correct on and as of the date hereof in all material
respects and with the same effect as if made on the date hereof (except for any
such representation and warranty that by its terms refers to a specific date
other than the date first above written, in which case it shall be true and
correct in all material respects as of such earlier date). Each Loan
Party further hereby agrees that all representations and warranties made herein
shall be deemed to be part of the Existing Credit Agreement for all
purposes.
(d) No Default or Event of
Default. No Default or Event of Default that has not been
waived by Lender in writing shall have occurred and be continuing or shall occur
after giving effect to this Amendment No. 3.
ARTICLE
5
MISCELLANEOUS
Section
5.1 Reference to and Effect on
the Loan Documents. As of the Third Amendment Effective Date,
any reference in any Loan Document to the Existing Credit Agreement shall be to
the Existing Credit Agreement, as amended by this Amendment No.
3. The execution, delivery and effectiveness of this Amendment
No. 3 shall not operate as a waiver of any right, power or remedy of the Lender
under any of the Loan Documents, nor, except as specifically set forth in
Section 2.1, constitute a waiver of any provision of any of the Loan
Documents.
Section
5.2 Integration. This
Amendment No. 3 represents the agreement of the Borrowers and the Lender with
respect to the subject matter hereof, and there are no promises, undertakings,
representations or warranties by the Lender relative to subject matter hereof
not expressly set forth or referred to herein.
Section
5.3 No Third Party
Beneficiaries. This Amendment No. 3 shall be binding upon and
inure to the benefit of the Loan Parties and the Lender and their respective
successors and assigns. No Person other than the parties hereto shall
have any rights hereunder or be entitled to rely on this Amendment No. 3, and
all third-party beneficiary rights are hereby expressly disclaimed.
Section
5.4 Execution in
Counterparts. This Amendment No. 3 may be executed by one or more of the
parties to this Amendment No. 3 on any number of separate counterparts
(including by facsimile transmission of signature pages hereto), and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
Section
5.5 Governing
Law. THIS AMENDMENT NO. 3 AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
[signature
pages follow]
12449142.5
IN
WITNESS WHEREOF, the parties hereto have caused this Amendment No. 3 to be duly
executed and delivered by their proper and duly authorized officers as of the
day and year first above written.
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BORROWERS:
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CRUSH
CREATIVE LLC
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f/k/a
MCRU, LLC
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By:
MERISEL AMERICAS, INC., as Sole
Member
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By: /s/ Xxx X.
Xxxxxxxx
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Name:
Xxx X. Xxxxxxxx
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Title: Chief
Financial Officer
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COLOR
EDGE LLC
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f/k/a
MCEI, LLC
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By:
MERISEL AMERICAS, INC., as Sole
Member
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By: /s/ Xxx X.
Xxxxxxxx
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Name:
Xxx X. Xxxxxxxx
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Title: Chief
Financial Officer
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COLOR
EDGE VISUAL LLC
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f/k/a
MCEV, LLC
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By:
MERISEL AMERICAS, INC., as Sole
Member
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By: /s/ Xxx X.
Xxxxxxxx
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Name:
Xxx X. Xxxxxxxx
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Title: Chief
Financial Officer
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CORPORATE
GUARANTORS:
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MERISEL,
INC.
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By: /s/ Xxx X.
Xxxxxxxx
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Name: Xxx
X. Xxxxxxxx
Title: Chief
Financial Officer
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MERISEL
AMERICAS, INC.
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By:
/s/ Xxx X.
Xxxxxxxx
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Name:
Xxx X. Xxxxxxxx
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Title: Chief
Financial Officer
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COMP 24 LLC (f/k/a MC24,
LLC)
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FUEL
DIGITAL, LLC
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XXXXXX
XXXXXX STUDIOS, LLC
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MADP,
LLC
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By:
MERISEL AMERICAS, INC., as Sole Member of each of the above-named
entities
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By: /s/ Xxx X.
Xxxxxxxx
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Name:
Xxx X. Xxxxxxxx
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Title: Chief
Financial Officer
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ADVERTISING
PROPS, INC.
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By:
MADP LLC, as Sole Shareholder
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By:
/s/ Xxx X.
Xxxxxxxx
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Name:
Xxx X. Xxxxxxxx
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Title: Manager
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Signature
page to Amendment No. 3
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LENDER:
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AMALGAMATED
BANK
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By:
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/s/ Xxxxx
XxXxxx
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Name:
Xxxxx XxXxxx
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Title: Executive
Vice President
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Signature
page to Amendment No. 3
Schedule
1
Adjustments
to EBITDA
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1.
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The
March 31, 2008 Consolidated EBITDA figure shall be adjusted upward by
$834,000.
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2.
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The
June 30, 2008 Consolidated EBITDA figure shall be adjusted upward by
$1,106,000.
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3.
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The
September 30, 2008 Consolidated EBITDA figure shall be adjusted upward by
$309,000.
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4.
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The
December 31, 2008 Consolidated EBITDA figure shall be adjusted upward by
$115,000.
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