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Exhibit 10.4(b)
THIRD AMENDMENT TO LOAN AND PURCHASE AGREEMENT
THIS THIRD AMENDMENT TO LOAN AND PURCHASE AGREEMENT ("Third Amendment") is
entered into as of this 30th day of June, 1997, by and among Xxxxxxx Kodak
Company ("Kodak"), a New Jersey corporation with its principal place of business
at 000 Xxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000, Imaging Financial Services, Inc.
d/b/a EKCC ("EKCC"), a Delaware corporation, formerly known as Xxxxxxx Kodak
Credit Corporation, with its principal place of business at 000 Xxxxx Xxxxxxx
Xxxxx, Xxxxxxxxx, Xxx Xxxx 00000-0000, Applied Printing Technologies, L.P., a
Delaware limited partnership with its principal place of business at 000 Xxxxxx,
Xxxxxxxxx, Xxx Xxxxxx 00000 ("AGT"), Applied Graphics Technologies, Inc., a
Delaware corporation with its principal place of business at 00 Xxxx 00xx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("New AGT"), Xxxxxxxx X. Xxxxxxxxx, an
individual residing at * (Xx. Xxxxxxxxx"), Daily News, L.P., a Delaware limited
partnership with its principal place of business at 000 Xxxx 00xx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, and U.S. News & World Report, L.P., a Delaware limited
partnership with its principal place of business at 0000 X Xxxxxx X.X.,
Xxxxxxxxxx, X.X. 00000 (the Daily News and U.S. News and World Report are
collectively referred to as the "Xxxxxxxxx/Xxxxxxx Properties").
Preliminary Satements
Kodak, EKCC, Xx. Xxxxxxxxx, AGT, New AGT and Xxxxxxxxx/Xxxxxxx Properties
are parties to a Loan and Purchase Agreement dated as of January 8, 1992 (the
"Agreement") as amended by a First Amendment to Loan and Purchase Agreement
dated as of September 18, 1995 and a Second Amendment to Loan and Purchase
Agreement dated as of April 19, 1996 (the "First Amendment and "Second
Amendment" and collectively with the Agreement, the "Purchase Agreement")
pursuant to which EKCC has extended certain Loans to Xx. Xxxxxxxxx, and Kodak
and AGT, New AGT and Xxxxxxxxx/Xxxxxxx Properties have entered into certain
supply/purchase arrangements (capitalized terms not otherwise defined shall have
the meanings attributable to them in the Purchase Agreement).
The parties desire to extend the supply/purchase arrangements in the
Purchase Agreement through December 31, 2000 and to change the Rebate rates, the
value of the Prebate and the terms of Prebate repayments through such date.
* Text deleted pursuant to application for Confidential Treatment under
Rule 24b-2 of the Securities Exchange Act of 1934 and filed separately
with the Securities and Exchange Commission under Rule 24b-2 of the
Securities Exchange Act of 1934 and filed separately with the
Securities and Exchange Commission.
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Xx. Xxxxxxxxx has agreed to further extend the term of his Amended and
Restated Guaranty Agreement until such time as all indebtedness including the
Initial Loan as represented by the First Note, the Additional Loan as
represented by the Second Note, any Term Loan into which such Notes may be
converted has been repaid to EKCC by Xx. Xxxxxxxxx and the Prebate has been
repaid to Kodak by AGT and New AGT, jointly and severally.
There is to be no other change in the obligations to pay the First and
Second Notes or any Term Loan in which they are converted or EKCC's right to
repayment of any such indebtedness as a consequence of the extension of the
supply/purchase arrangement except for additions to Events of Default under the
Notes contemplated by Sections 10, 10A, 10C and 11; nor is there any change in
Rebate rates, the value of the Prebate and the Prebate repayments; and Kodak's
right to repayment of the Prebate except as specifically set forth herein.
AGT, New AGT, Xx. Xxxxxxxxx and Xxxxxxxxx/Xxxxxxx Properties specifically
acknowledge that the rebate levels set forth herein are significant concessions
on Kodak's part and are highly confidential in all respects, and that they will
not receive further increases in such levels or further enhancements to the
program during the term hereof.
NOW THEREFORE, in consideration of the mutual covenants and agreements set
forth herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
Section 1. Amendments to Purchase Agreement. The Purchase Agreement is amended
as of January 1, 1997 as follows:
(a) Section 10 and 10A are restated in their entirety and new Sections
10B and 10C are added as follows:
10. Purchase and Use of Kodak Graphic Arts Products. So long as the Initial
Loan, the Additional Loan, the Term Loan, the Prebate or any other indebtedness
is outstanding by Xx. Xxxxxxxxx or by AGT or New AGT to EKCC and/or Kodak under
the terms of this Purchase Agreement and in any event through December 31, 2000,
AGT and New AGT agree to make Actual Kodak Purchases during each consecutive
twelve-month period commencing on January 1, 1997 in an amount sufficient to
cause the Actual Kodak Purchases during each such twelve-month period to equal
at least * . AGT, New AGT and Xx. Xxxxxxxxx represent and warrant to Kodak and
EKCC that (i) AGT and New AGT currently purchase no graphic arts
* Text deleted pursuant to application for Confidential Treatment under
Rule 24b-2 of the Securities Exchange Act of 1934 and filed separately
with the Securities and Exchange Commission under Rule 24b-2 of the
Securities Exchange Act of 1934 and filed separately with the
Securities and Exchange Commission.
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products from any manufacturer or supplier other than Kodak and those
manufacturers and suppliers identified in AGT's and New AGT's most recent
quarterly purchase reports to Kodak, (ii) except for one existing agreement
between AGT and New AGT and another graphic arts manufacturer, which agreement
is terminable by AGT and/or New AGT at will at any time without penalty or
liability of any kind, there is no contract or other agreement between AGT, New
AGT or Xx. Xxxxxxxxx and any person, except for the Purchase Agreement, as
amended, pursuant to which AGT or New AGT is obligated to purchase graphic arts
products or imaging products, and (iii) the obligations to purchase graphic arts
products or imaging products from Kodak pursuant to this Agreement will not
result in a breach of, or create a default under, any existing agreement between
AGT or New AGT and any other graphic arts manufacturer and/or imaging product
manufacturer, or Xx. Xxxxxxxxx and any other graphic arts manufacturer and/or
imaging product manufacturer, or among any combination of AGT, New AGT, Xx.
Xxxxxxxxx and any other graphic arts or imaging manufacturer, or result in a
breach of, or create a default under, or interfere with or otherwise affect any
other existing contract or other agreement to which AGT, New AGT or Xx.
Xxxxxxxxx is a party or by which either of them is bound. AGT, New AGT and Xx.
Xxxxxxxxx acknowledge that the breach of AGT's and/or New AGT's obligations
under Sections 10, 10A, 10C and 11 will constitute an Event of Default under the
Notes and will entitle EKCC to accelerate payment of the Loans and will entitle
Kodak to require immediate repayment of the Prebate as provided for herein and
to enforce Xx. Xxxxxxxxx'x Second Amended and Restated Guaranty.
10A. Purchases and Use of Kodak Imaging Products. So long as the Initial
Loan, the Additional Loan, the Term Loan, the Prebate or any other indebtedness
is outstanding and in any event through December 31, 2000, AGT and New AGT will
make commercially reasonable efforts to purchase Kodak Imaging Products for its
Imaging Products requirements rather than similar products from other suppliers
so long as the Kodak Imaging Products are consistent with AGT's and New AGT's
technical and quality specifications and are price competitive.
So long as Xx. Xxxxxxxxx is indebted to EKCC and/or Xx. Xxxxxxxxx'x
Guaranty Agreement is in effect, he will cause AGT and Xxxxxxxxx/Drasner
Properties to make and Xxxxxxxxx/Xxxxxxx Properties will make commercially
reasonable efforts to purchase Kodak Imaging Products and Kodak Graphic Arts
Products for their respective imaging products and graphic arts product
requirements rather than similar products from other suppliers provided that, in
the case of Xxxxxxxxx/Drasner Properties, it is Xxxxxxxxx/Xxxxxxx Properties'
reasonable
* Text deleted pursuant to application for Confidential Treatment under
Rule 24b-2 of the Securities Exchange Act of 1934 and filed separately
with the Securities and Exchange Commission under Rule 24b-2 of the
Securities Exchange Act of 1934 and filed separately with the
Securities and Exchange Commission.
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judgment, that the Kodak Imaging Products and Kodak Graphic Arts Products are
consistent with the Xxxxxxxxx/Drasner Properties' technical and quality
specifications and are price competitive.
Purchase Tracking. AGT and New AGT at their expense will arrange for AGT
and New AGT or All Star Purchasing, Inc. to track and provide purchase data for
all Kodak Imaging Products and Kodak Graphic Arts Products purchased by AGT, New
AGT and the Xxxxxxxxx/Xxxxxxx Properties and will provide Kodak with these
calculations within 30 days of the end of the relevant quarter.
Section 10B Limited Price Increases on Kodak Graphic Arts Products.
As additional consideration for the extension of the obligation to purchase
Kodak Products by AGT and New AGT, Kodak agrees that during the period May 1,
1997 through December 31, 1997 prices charged to AGT and New AGT for Kodak
Graphic Arts Products will not increase during such period over those charged on
April 30, 1997. Kodak further agrees that prices for Kodak Graphic Arts Products
during each of 1998, 1999 and 2000 will not increase by more than * over those
charged on the last day of the year prior to each of such years, and in no event
shall the increases be greater than any overall price increase implemented by
Kodak on such products for the whole or any portion of each such year.
AGT's and New AGT's only remedy for any breach of this paragraph 10B shall
be to recover any amounts charged by Kodak in prices in excess of those provided
for in this paragraph 10B less applicable rebate paid on account of such excess
amounts, and such breach shall not otherwise operate to cancel, amend or offset
any obligation of AGT, New AGT or Xx. Xxxxxxxxx under the Purchase Agreement
including without limitation the repayment of the Initial Loan, or the
Additional Loan, or any Term Loan, or the Prebate, or interest due on any of the
foregoing, or Xx. Xxxxxxxxx'x Guaranty or the obligations imposed by Sections
10, 10A, 10C and 11.
* Text deleted pursuant to application for Confidential Treatment under
Rule 24b-2 of the Securities Exchange Act of 1934 and filed separately
with the Securities and Exchange Commission under Rule 24b-2 of the
Securities Exchange Act of 1934 and filed separately with the
Securities and Exchange Commission.
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10C Purchase of Kodak PS Approval Units. As additional consideration for the
extension of terms, changes in rebate schedules, and other matters set forth in
this Third Amendment, AGT and New AGT jointly and severally agree on or before
December 31, 1997 to purchase and pay for * Kodak PS Approval Units at a price
of * per unit plus applicable taxes. The other terms and conditions of each such
purchase shall be as set forth on the standard Kodak purchase order form
attached hereto as Exhibit A.
It is understood and agreed that the immediate purchase of that certain PS
Approval Unit presently at New AGT's Carlstadt facility shall be counted as one
of the five units required to be purchased and paid for before December 31,
1997, and that full payment for such unit will be due on or before September 30,
1997. It is further understood and agreed that a failure to meet the obligations
under this Section 10C will be an Event of Default under the Notes and will
entitle Kodak to require immediate repayment of the Prebate provided for herein
and to enforce Xx. Xxxxxxxxx'x Second Amended and Restated Guaranty.
(b) Section 11 is restated in its entirety as follows:
11. Payment of Rebates and Prebate
(a) The parties acknowledge and agree that:
(i) Subject only to an audit of the records maintained by Kodak
and AGT/All Star Purchasing, Inc., all rebates due from
inception of the Purchase Agreement through December 31,
1996 have been properly paid to AGT, New AGT and
Xxxxxxxxx/Xxxxxxx Properties.
(ii) Kodak has paid and AGT and New AGT have received the initial
prebate of * which at January 1, 1997 had a present value of
* . In consideration of the extension of payment time
provided hereunder and other changed terms including changes
in the rebate percentage set forth below, the parties agree
now that such sum at January 1, 1997 has a value of *
* Text deleted pursuant to application for Confidential Treatment under
Rule 24b-2 of the Securities Exchange Act of 1934 and filed separately
with the Securities and Exchange Commission under Rule 24b-2 of the
Securities Exchange Act of 1934 and filed separately with the
Securities and Exchange Commission.
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and such latter sum is hereinafter referred to as "the
Prebate" for the purpose of the Agreement, as amended hereby
and for the purposes of the Second Amended and Restated
Personal Guarantee of Xx. Xxxxxxxxx.
(b) Payment of Rebates. At the end of each calendar quarter commencing
during the term of this Purchase Agreement, and provided that (x) no Event
of Default shall have occurred and be continuing under the First or Second
Note or the Term Loan (if in place), or (y) there is no default in the
obligation respecting repayment of the Prebate, or (z) there has been no
* Text deleted pursuant to application for Confidential Treatment under
Rule 24b-2 of the Securities Exchange Act of 1934 and filed separately
with the Securities and Exchange Commission under Rule 24b-2 of the
Securities Exchange Act of 1934 and filed separately with the
Securities and Exchange Commission.
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other breach of the obligation to purchase Graphic Art Products or Imaging
Products under Section 10, 10A, and Section 11 and under Section 10C respecting
PS Approval Units of the Purchase Agreement, then AGT, New AGT and
Xxxxxxxxx/Xxxxxxx Properties will each be entitled to receive a rebate from
Kodak on its Actual Kodak Purchases during such quarter. The rebates will each
be equal to a percentage of AGT's, New AGT's and Xxxxxxxxx Drasner's Actual
Kodak Purchases during the applicable quarter. The percentage used for these
purposes will be determined on the basis of the combined annualized amount of
(i) Xxxxxxxxx/Xxxxxxx Properties' Actual Xxxxxxxxx/Drasner Purchases; (ii) AGT's
and New AGT's Actual Kodak Purchases; and (iii) AGT's and New AGT's and
Xxxxxxxxx/Xxxxxxx Properties' Actual Imaging Purchases (the amounts described in
clauses (i), (ii) and (iii) hereafter called the "Rebate Purchases") during the
quarter in question, as set forth in the following table:
*
*
*
*
*
*
*
*
*
*
*
* Text deleted pursuant to application for Confidential Treatment under
Rule 24b-2 of the Securities Exchange Act of 1934 and filed separately
with the Securities and Exchange Commission under Rule 24b-2 of the
Securities Exchange Act of 1934 and filed separately with the
Securities and Exchange Commission.
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*
*
* Text deleted pursuant to application for Confidential Treatment under
Rule 24b-2 of the Securities Exchange Act of 1934 and filed separately
with the Securities and Exchange Commission under Rule 24b-2 of the
Securities Exchange Act of 1934 and filed separately with the
Securities and Exchange Commission.
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While Actual Imaging Purchases are used in computing total volume, no rebate is
to be paid on such purchases. For the purposes of determining the applicable
rebate percentage rate, the Rebate Purchases will be annualized as of the end of
each of the first three calendar quarters of each calendar year, with each such
calculation being based solely on the volume of the Rebate Purchases during the
quarter in question, not for the period from the beginning of the year through
the end of such quarter. For example, if in the third quarter of 1997 the Rebate
Purchases of film totaled * , then the rebate on such purchases would be equal
to * (i.e., * in purchases equates to an annualized rate of * ; accordingly, the
rebate would be equal to * of * ). If, on the other hand, the Rebate Purchases
of film in such quarter totaled * , then the rebate on such purchases would be
equal to * (i.e., * in purchases equate to an annualized rate of * ;
accordingly, the rebate would be equal to * of * ). At the end of each fourth
quarter, the Rebate Purchases for the year will be totaled, and, in the event of
any discrepancy between the annualized rates used during any of the preceding
three quarters and the actual year-end results, the rebate rates will be
recalculated for such quarters and the fourth quarter rebate adjusted
accordingly. Each rebate on Actual Kodak Purchases to which AGT, New AGT and
Xxxxxxxxx/Drasner Properties are entitled under this Agreement will be paid by
Kodak within thirty days following Kodak's receipt of a properly completed
Claims for Payment executed respectively by (x) the General Partner on behalf of
AGT, (y) the Chief Financial Officer of New AGT, and (z) the Chief Financial
Officer of Xxxxxxxxx/Xxxxxxx Properties, in each case setting forth the volume
of Rebate Purchase.
It is understood that Purchases of Graphic Arts Products or Imaging
Products outside the United States shall not be taken into account for these
purposes. At AGT's and New AGT's request, Kodak will consider entering into a
separate arrangement with respect to AGT's and New AGT's overseas business, but
Kodak shall have no rebate obligations with respect thereto absent a written
agreement to the contrary signed by both parties.
It is understood and agreed that Rebate Purchases by each of AGT, New AGT
and Xxxxxxxxx/Drasner Properties during 1997 will be consistent with and not
exceed historic, usual and customary order flow so as to prevent and limit any
purchases in 1997 for actual use in 1998 or thereafter and to prevent purchases
by any one of them for resale to or use by any party except the ordering party
and a breach of the foregoing shall also be deemed an Event of Default under the
Notes.
* Text deleted pursuant to application for Confidential Treatment under
Rule 24b-2 of the Securities Exchange Act of 1934 and filed separately
with the Securities and Exchange Commission under Rule 24b-2 of the
Securities Exchange Act of 1934 and filed separately with the
Securities and Exchange Commission.
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From January 1, 1997 through December 31, 1997 Kodak agrees to pay AGT and
New AGT their rebate on their Actual Kodak Purchases and Xxxxxxxxx/Xxxxxxx
Properties on Actual Xxxxxxxxx/Drasner Purchases, on a monthly basis using an
estimate of purchases that equate to an aggregate * month rebate provided,
however, that for each Quarter of 1997 Kodak will retain * of the amount of the
total rebate earned by each of AGT, New AGT and Xxxxxxxxx/Xxxxxxx Properties on
account of Actual Kodak Film Purchases and apply that amount to reduce the
Prebate. Quarterly rebate Claims for Payment filings will be submitted by AGT,
New AGT and Xxxxxxxxx/Drasner Properties or All Star Purchasing as provided
hereinabove and at that time any adjustments based on the actual volumes will be
made, the
* Text deleted pursuant to application for Confidential Treatment under
Rule 24b-2 of the Securities Exchange Act of 1934 and filed separately
with the Securities and Exchange Commission under Rule 24b-2 of the
Securities Exchange Act of 1934 and filed separately with the
Securities and Exchange Commission.
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monthly rebates already paid to AGT, New AGT and Xxxxxxxxx/Xxxxxxx Properties
will be offset against the actual rebate owed, and any additional rebates owed
(which in the case of Actual Kodak Film Purchases by AGT, New AGT and
Xxxxxxxxx/Drasner Properties will be net of the applications to reduce the
Prebate) will be paid to AGT, New AGT and Xxxxxxxxx/Xxxxxxx Properties as
provided above. If Kodak overpaid AGT, New AGT or Xxxxxxxxx/Drasner Properties
for the quarter, the overpaid parties will reimburse Kodak for the amount
overpaid within thirty days of receiving written notice of such overpayment. The
Parties agree that all rebate payments shall be made by Kodak to each of AGT,
New AGT and Xxxxxxxxx/Xxxxxxx Properties on account of its pro rata share
thereof, said payments to be delivered to AGT, New AGT and Xxxxxxxxx/Drasner
Properties, or in the aggregate to All Star Purchasing, Inc. for its
distribution to AGT, New AGT and Xxxxxxxxx/Xxxxxxx Properties and such payment
to All Star shall be deemed to satisfy Kodak's payment obligation. Kodak shall
provide a record of all reductions in the amount of the Prebate owed by AGT and
New AGT through December 31, 1997 and provide a statement of the outstanding
Prebate on January 1, 1998.
Starting the first quarter of 1998 through the fourth quarter of 2000, the
rebates due to AGT, and New AGT under this Section 11 will be reconciled on a
quarterly basis against the value of the outstanding Prebate at January 1, 1998.
This will be done in the following manner. The amount of rebate earned by AGT
and New AGT for the quarter will be determined. If the amount of rebate earned
by AGT and New AGT during the quarter is in excess of * of the outstanding
Prebate, Kodak will pay AGT and New AGT the excess rebate for that quarter
within 30 days of the end of the quarter. If AGT and New AGT earn less than * of
the outstanding Prebate on January 1, 1998, AGT and New AGT, jointly and
severally, must pay Kodak the difference between the earned rebate and such * of
the outstanding Prebate. Kodak will invoice AGT and New AGT for the difference
and AGT and New AGT are jointly and severally obligated to pay the invoice
within 30 days. Kodak and AGT/All Star will keep the appropriate records and
will determine the appropriate rebate. It is the intent and purpose of this
paragraph to reduce the outstanding Prebate on January 1, 1998 by * during each
of the twelve quarters during the period January 1, 1998 through December 31,
2000.
Should AGT or New AGT or Xxxxxxxxx/Drasner Properties at any time breach
its obligation to purchase Kodak Graphic Arts and Imaging Products as provided
in Sections 10,
* Text deleted pursuant to application for Confidential Treatment under
Rule 24b-2 of the Securities Exchange Act of 1934 and filed separately
with the Securities and Exchange Commission under Rule 24b-2 of the
Securities Exchange Act of 1934 and filed separately with the
Securities and Exchange Commission.
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10A and Section 11 and under Section 10C respecting PS Approval Units, Kodak
may, at its option, require that AGT and New AGT, jointly and severally,
immediately pay to Kodak the Adjusted Balance (as defined below) of the Prebate,
together with interest on the Adjusted Balance at * computed from the date of
the breach through the actual date of the payment of the Adjusted Balance. For
purposes of this Section (i) the Adjusted Balance shall be calculated by adding
to the balance of the Prebate on the date of breach an amount equal to the
"unearned" portion of any reduction in the Prebate credited during 1997 (such
reduction, the "1997 Reduction"), and (ii) the "unearned" portion of the 1997
Reduction shall be computed by multiplying the 1997 Reduction by a fraction,
which shall be determined in accordance with the following schedule:
*
*
*
*
*
*
*
* Text deleted pursuant to application for Confidential Treatment under
Rule 24b-2 of the Securities Exchange Act of 1934 and filed separately
with the Securities and Exchange Commission under Rule 24b-2 of the
Securities Exchange Act of 1934 and filed separately with the
Securities and Exchange Commission.
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If Kodak exercises its option to require payment of the Adjusted Balance,
then such sum shall become "the Prebate" for the purposes of Xx. Xxxxxxxxx'x
Guaranty Agreement and Xx. Xxxxxxxxx acknowledges he has individually guaranteed
such payment. In such event, AGT and New AGT waive any and all defenses
(including, without limit demands for payment, notice and presentment) to such
payment except those defenses which factually dispute any alleged non-compliance
with Section 10 and 10A.
Section 2. Amendment to Guaranty Agreement. Xx. Xxxxxxxxx shall deliver
concurrently with his execution of this Third Amendment an executed copy of the
Second Amended and Restated Guaranty Agreement attached hereto as Exhibit B
which acknowledges and agrees to the changes in the value of the Prebate and the
terms of the repayment of the Prebate.
Section 3. Confirmation of Agreement. Except as expressly amended herein, the
Purchase Agreement is ratified and confirmed in all respects and shall remain in
full force and effect in accordance with its terms. Xx. Xxxxxxxxx and AGT and
New AGT and each of them represent and confirm each and every representation and
warranty previously made is true and correct and continuing as of the date of
this Third Amendment and that there has been no breach thereof by any of them as
of the date of this Third Amendment. It is expressly understood and agreed that
no term, condition or change set forth in this Third Amendment shall operate to
extend or change the maturity or any other term or condition of the First or
Second Note and Xx. Xxxxxxxxx'x absolute obligation to repay such Notes except
the additions to Events of Default under such Notes contemplated by Sections 10,
10A, 10C and 11; nor shall it effect the absolute obligation to repay the
Prebate except in so far as this Third Amendment changes the amount of such
Prebate and the time for repayment of such Prebate, nor shall it effect the
absolute guarantee of Xx. Xxxxxxxxx for the repayment of the Prebate except as
expressly set forth in the Second Amended and Restated Guaranty Agreement. It is
the intention of the parties that at all times from inception of the Prebate
through its final payment that Xx. Xxxxxxxxx'x guaranty thereof be continuous
and uninterrupted.
Section 4. Execution in Counterparts. This Third Amendment may be executed in
counterparts, each of which shall be deemed an original, and all of which taken
together shall constitute one and the same instrument.
* Text deleted pursuant to application for Confidential Treatment under
Rule 24b-2 of the Securities Exchange Act of 1934 and filed separately
with the Securities and Exchange Commission under Rule 24b-2 of the
Securities Exchange Act of 1934 and filed separately with the
Securities and Exchange Commission.
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Section 5. Governing Law. The interpretation and construction of this Third
Amendment to the Loan and Purchase Agreement, and all matters in connection
herewith, shall be governed by the substantive laws of the State of New York,
without regard to the choice of law principles.
Section 6. Effectiveness. This Third Amendment, together with the amendments to
the Purchase Agreement incorporated in this Third Amendment, and the Second
Amended and Restated Guaranty Agreement (the form of which is attached hereto as
Exhibit B) shall be effective as of January 1, 1997 upon receipt by EKCC and
Kodak of the last signed counterpart and the signed Second Amended and Restated
Guaranty Agreement.
(THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK)
WITNESS the following signatures:
XXXXXXX KODAK COMPANY IMAGING FINANCIAL SERVICES, INC. D/B/A EKCC
* Text deleted pursuant to application for Confidential Treatment under
Rule 24b-2 of the Securities Exchange Act of 1934 and filed separately
with the Securities and Exchange Commission under Rule 24b-2 of the
Securities Exchange Act of 1934 and filed separately with the
Securities and Exchange Commission.
15
By: /s/ Xxxxx X. XxXxxxxxxx By: /s/ Xxxx Xxxxx
(signature) (signature)
V.P. & COO, Kodak Professional ___________________________________
(title) (title)
Date: July 24, 1997 Date: : July 24, 1997
XXXXXXXX X. XXXXXXXXX DAILY NEWS, L.P.
By: /s/ Xxxxxxxx X. Xxxxxxxxx By: /s/ Xxxx Xxxxxxx
(signature) (signature)
Chief Executive Officer
(title)
Date: : July 22, 1997 Date: July 22, 1997
U.S. NEWS & WORLD REPORT, L.P. APPLIED PRINTING TECHNOLOGIES, L.P.
* Text deleted pursuant to application for Confidential Treatment under
Rule 24b-2 of the Securities Exchange Act of 1934 and filed separately
with the Securities and Exchange Commission under Rule 24b-2 of the
Securities Exchange Act of 1934 and filed separately with the
Securities and Exchange Commission.
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By: /s/ Xxxx By: /s/ Xxxx
Xxxxxxx Drasner
(signature) (signature)
Chief Executive Officer Chairman and Chief Executive Officer
(title) (title)
Date: July 22, 1997 Date: July 22, 1997
APPLIED GRAPHICS TECHNOLOGIES, INC.
By: /s/ Xxxx Xxxxxxx
(signature)
Chairman and Chief Executive Officer
(title)
Date: July 22, 1997
* Text deleted pursuant to application for Confidential Treatment under
Rule 24b-2 of the Securities Exchange Act of 1934 and filed separately
with the Securities and Exchange Commission under Rule 24b-2 of the
Securities Exchange Act of 1934 and filed separately with the
Securities and Exchange Commission.
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EXHIBIT B OF THIRD AMENDMENT TO LOAN & PURCHASE AGREEMENT
SECOND AMENDED AND RESTATED GUARANTY AGREEMENT
June 30, 0000
Xxxxxxx Xxxxx Company
000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Gentlemen:
For value received and in order to induce Xxxxxxx Kodak Company, with its
principal place of business at 000 Xxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000
("Kodak"), to have originally provided a prebate ("Prebate") to Applied Graphics
Technologies, L.P., a/k/a/ Applied Printing Technologies, L.P. with its
principal place of business at 000 Xxxxxx, Xxxxxxxxx, Xxx Xxxxxx 00000 ("AGT")
and Applied Graphic Technologies, Inc. a Delaware corporation with its principal
place of business at 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("New AGT"),
and to extend the time for repayment of the Prebate and an increase in the
rebate percentages, to change certain terms, including the value of the Prebate
and the amount of Prebate to be paid during 1997 and thereafter and relating to
purchases to be made by AGT, New AGT and Xxxxxxxxx/Drasner Properties from
Kodak, and to execute the Third Amendment of Loan and Purchase Agreement of even
date herewith among Kodak, Imaging Financial Services, Inc. d/b/a EKCC ("EKCC"),
AGT, New AGT Xxxxxxxx X. Xxxxxxxxx ("Guarantor"), Daily News, L.P, and U.S. News
& World Report, L.P., known collectively as Xxxxxxxxx/Drasner Properties (the
"Third Amendment"), Guarantor, an individual residing at *
* Text deleted pursuant to application for Confidential Treatment under
Rule 24b-2 of the Securities Exchange Act of 1934 and filed separately
with the Securities and Exchange Commission under Rule 24b-2 of the
Securities Exchange Act of 1934 and filed separately with the
Securities and Exchange Commission.
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hereby, absolutely, irrevocably and unconditionally, guarantees unto Kodak, its
successors and assigns, the payment of the Prebate in the aggregate amount of *
with applicable interest, to Kodak pursuant to and under the First Amendment of
Loan and Purchase Agreement dated September l8, 1995 between Kodak, AGT and
Guarantor, and the Second Amendment thereto between Kodak and AGT, New AGT and
Xxxxxxxxx Properties dated April 19, 1996 and the Third Amendment thereto and as
amended from time to time (including but not limited to as amended by the Third
Amendment), and including any extensions and renewals thereof or part thereof,
together with interest, fees, charges, expenses and costs of collection or
enforcement, including attorneys fees (collectively, the "Liabilities").
Guarantor acknowledges and agrees that the Liabilities shall not be reduced
by any "unearned" portion of any reduction in the Prebate credited during 1997
as such "unearned" portion is calculated under the terms of Section 11 of the
Loan and Purchase Agreement respecting the "Adjusted Balance." Thus in the event
that there is any breach by AGT or New AGT or Xxxxxxxxx/Drasner Properties of
any obligation set forth in Section 10, 10A, 10C or 11 of the Loan and Purchase
Agreement as amended, then the Liabilities shall include the Adjusted Balance of
the Prebate together with interest, fees, charges, expenses and costs of
collections and enforcement.
Kodak may without notice or demand of any kind grant any extensions of time
to or make any compromise with or release and discharge AGT or New AGT, or any
other party or parties liable with AGT or New AGT upon any instrument,
indebtedness or obligation, or any other guarantor thereof, and Kodak may
release or omit to collect or enforce or may compromise any collateral security
held by it without regard to any demands or requests by Guarantor and without
thereby releasing Guarantor hereunder or incurring any liability to Guarantor.
Kodak may without notice or demand of any kind realize on and apply any
collateral held by Kodak, whether or not deposited by Guarantor, to such
obligation or obligations as Kodak may elect, whether guaranteed hereby or not,
without regard to any rights of Guarantor in respect to the application thereof.
All sums at any time to the credit of the Guarantor and any property of the
Guarantor in Kodak's possession shall be deemed held by Kodak as security for
any and all of Guarantor's obligations hereunder.
* Text deleted pursuant to application for Confidential Treatment under
Rule 24b-2 of the Securities Exchange Act of 1934 and filed separately
with the Securities and Exchange Commission under Rule 24b-2 of the
Securities Exchange Act of 1934 and filed separately with the
Securities and Exchange Commission.
19
If AGT or New AGT fail to pay all or any part of the Liabilities when due,
whether by acceleration or otherwise, Guarantor, immediately upon written demand
of Kodak, will pay to Kodak all Liabilities then due and unpaid by AGT or New
AGT as if such Liabilities constituted direct and primary obligations of
Guarantor.
This instrument shall be deemed to be a continuing guaranty of payment and
not of collectability and shall remain in full force and effect until full
performance and payment of all of the Liabilities, whether absolute or
contingent, and any renewals or extensions thereof. Kodak and AGT and/or New AGT
may agree to subsequent changes on the applicable interest rate without
impairing any of Kodak's right under this Guaranty. Kodak may release Guarantor
without in way affecting or terminating the obligations of any other guarantors
as to then existing or future Liabilities and notice by Guarantor shall in no
way offer or terminate the obligation of Guarantor or any of the Guarantors as
to then existing or future Liabilities. Guarantor's liability hereunder is in no
way conditional or contingent upon any attempt to collect from AGT or New AGT or
realize upon any collateral security for the Liabilities. Guarantor shall have
no right of subrogation, reimbursement or indemnity whatsoever and no right of
recourse to or with respect to any assets or property of AGT or New AGT or to
any collateral for the Liabilities, unless and until all the Liabilities have
been paid and performed in full.
Guarantor agrees to pay its obligations hereunder without deduction by
reason of any set-off, defense or counterclaim of AGT or New AGT, and without
requiring protest,
* Text deleted pursuant to application for Confidential Treatment under
Rule 24b-2 of the Securities Exchange Act of 1934 and filed separately
with the Securities and Exchange Commission under Rule 24b-2 of the
Securities Exchange Act of 1934 and filed separately with the
Securities and Exchange Commission.
20
presentment or notice of dishonor or notice of default or non-payment.
Guarantor's obligation shall not be affected by any invalidity or
unenforceability of the Liabilities against AGT and/or New AGT or any other
person or entity, all of which are hereby waived.
Guarantor represents and warrants that the execution, delivery and
performance hereof and of any term, covenant or condition herein provided for
are within his power and are not in conflict with any indenture, contract or
agreement to which Guarantor is a party or by which Guarantor is bound, or with
any statute, rule regulation, decree, judgment or order binding upon Guarantor.
Guarantor covenants that from the date hereof until all obligations owing
to Kodak hereunder have been paid fully, Guarantor shall furnish to Kodak
annually, promptly and as soon as available, but in no event more than 90 days
after the end of each calendar year, financial statements at the end of and for
such calendar year and, promptly after Kodak's request, such other financial
information as Kodak may from time to time reasonably request.
Books and records showing the account and amounts outstanding between Kodak
on the one hand and AGT and New AGT on the other shall be admissible in evidence
in any action or proceedings and shall constitute prima facie proof thereof.
Guarantor expressly waives any rights to notice of acceptance from Kodak or to
any other notice or demand upon Guarantor or to any other actions or conditions
prior to Kodak's reliance upon or enforcement of this Guaranty. Kodak may take
or refrain from taking any of the actions authorized under this Guaranty without
notice of any kind to Guarantor. Arrangements by and between AGT, New AGT and
Xxxxxxxxx/Xxxxxxx Properties respecting the Liabilities shall not operate to
waive, cancel or amend Guarantor's absolute and unconditional obligations under
this Guaranty.
This Guaranty shall be enforceable as to all of the Liabilities despite any
discharge of AGT or New AGT in bankruptcy and despite adjustment of all or any
part of the Liabilities in insolvency proceedings or pursuant to some other
compromise with creditors. If claim is ever made upon Kodak for repayment or
recovery of any amount or amounts received by Kodak in payment or on account of
any of the Liabilities, and Kodak repays all or part of said amount by reason of
(a) any judgment, decree or order of any court or administrative body, or (b)
any settlement or compromise of any such claim effected by Kodak with any such
claimant (including AGT or New AGT), then and in such event Guarantor agrees
that any such judgment,
* Text deleted pursuant to application for Confidential Treatment under
Rule 24b-2 of the Securities Exchange Act of 1934 and filed separately
with the Securities and Exchange Commission under Rule 24b-2 of the
Securities Exchange Act of 1934 and filed separately with the
Securities and Exchange Commission.
21
decree, order, settlement, or compromise shall be binding upon Guarantor,
notwithstanding any termination hereof or the cancellation of any such
Liabilities, and Guarantor shall be and remain liable hereunder for the amounts
so repaid or recovered to the same extent as if such amount had never originally
been received by Kodak.
Guarantor's liability hereunder is in addition to and independent of any
other liabilities such Guarantor has incurred or assumed, or may hereafter incur
or assume, by way of endorsement, separate guaranty agreement, or in any other
manner, with respect to all or any part of the Liabilities guaranteed hereby.
This Guaranty does not supersede or limit any such other
* Text deleted pursuant to application for Confidential Treatment under
Rule 24b-2 of the Securities Exchange Act of 1934 and filed separately
with the Securities and Exchange Commission under Rule 24b-2 of the
Securities Exchange Act of 1934 and filed separately with the
Securities and Exchange Commission.
22
liabilities of Guarantor, and Kodak's rights and remedies under and pursuant to
this Guaranty and any such other liabilities are cumulative and may be exercised
singly or concurrently.
This instrument shall be binding upon Guarantor, and any heirs, personal
representatives or successors and assigns, and shall inure to Kodak's benefit.
This instrument contains the entire agreement between parties hereto and cannot
be changed orally. No failure by Kodak to exercise any right hereunder shall be
deemed a waiver thereof, nor shall any single or partial exercise by Kodak of
any right hereunder preclude any other or further exercise thereof, and no
waiver by Kodak of any right hereunder shall operate as a waiver of any other
right.
This Guaranty shall be governed by the laws of the State of New York
without regard to choice of law principles. Any provision of this Guaranty which
found to be prohibited by law will be ineffective to the extent to such
prohibition without invalidating the remaining provisions.
IN WITNESS WHEREOF, Guarantor has executed this instrument as of the date
first set forth above.
Date: June 30, 1997 /s/ Xxxxxxxx X. Xxxxxxxxx
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Xxxxxxxx X. Xxxxxxxxx
On this 30th day of June, 1997, before me personally appeared Xxxxxxxx X.
Xxxxxxxxx who, being by me duly sworn did depose and say that he resides at *
and that he is the individual who executed the foregoing agreement.
Notary Public
My Commission Expires:
* Text deleted pursuant to application for Confidential Treatment under
Rule 24b-2 of the Securities Exchange Act of 1934 and filed separately
with the Securities and Exchange Commission under Rule 24b-2 of the
Securities Exchange Act of 1934 and filed separately with the
Securities and Exchange Commission.
23
* Text deleted pursuant to application for Confidential Treatment under
Rule 24b-2 of the Securities Exchange Act of 1934 and filed separately
with the Securities and Exchange Commission under Rule 24b-2 of the
Securities Exchange Act of 1934 and filed separately with the
Securities and Exchange Commission.
24
SECOND AMENDMENT TO PROMISSORY NOTE
This Second Amendment to Promissory Note ("Second Amendment") is made as of
the 30th day of June, 1997 by and between Imaging Financial Services, Inc. d/b/a
EKCC ("Lender") and Xxxxxxxx X. Xxxxxxxxx ("Borrower") and amends the Promissory
Note of Borrower to Lender, dated June 23, 1993, in the original principal
amount of Three Million Dollars ($3,000,000) as amended by the First Amendment
to Promissory Note between Lender and Borrower, dated April 19, 1996 (the
"Promissory Note"). Capitalized terms used herein and not otherwise defined
shall have the meaning ascribed thereto in the Promissory Note.
The Promissory Note was issued in connection with the Loan and Purchase
Agreement, dated as of January 8, 1992, among Xxxxxxx Kodak Company ("Kodak"),
Lender, Applied Printing Technologies, L.P. ("AGT"), Borrower and Daily News,
L.P. and was amended by a First Amendment of Loan and Purchase Agreement among
such parties, dated as of September 18, 1995, and further amended by a Second
Amendment to Loan and Purchase Agreement to, among other things, add Applied
Graphics Technology, Inc. ("New AGT") and U.S. News & World Report, L.P. as
parties (the Loan and Purchase Agreement, as amended by the First and Second
Amendments, the "Purchase Agreement"). (Daily News, L.P. and U.S. News & World
Report, L.P. are referred to herein as the "Xxxxxxxxx/Xxxxxxx Properties"). The
parties have agreed to further amend the Purchase Agreement and have entered
into a Third Amendment to Loan and Purchase Agreement (the "Third Amendment"),
dated as of June 30, 1997.
NOW, THEREFORE, in consideration of the mutual promises and agreements set
forth in the Purchase Agreement and the Third Amendment and the documents and
instruments issued by the parties in connection therewith and intending to be
legally bound, Lender and Borrower agree as follows:
The Events of Default set forth in the Promissory Note are hereby amended
and a new paragraph (e) is hereby added to replace the existing paragraph (e) in
its entirety as follows:
(e) Breach of Purchase Requirements; Termination of Purchase Agreement
or Guaranty.
* Text deleted pursuant to application for Confidential Treatment under
Rule 24b-2 of the Securities Exchange Act of 1934 and filed separately
with the Securities and Exchange Commission under Rule 24b-2 of the
Securities Exchange Act of 1934 and filed separately with the
Securities and Exchange Commission.
25
AGT and/or New AGT fail to make, at the times and in the amounts specified,
Actual Kodak Purchases, purchases of Kodak Imaging Products, purchases of Kodak
PS Approval Units and such other purchases of Kodak products or otherwise fail
to comply with AGT's and/or New AGT's covenants as set forth in Section 10, 10A,
10C and 11 of the Purchase Agreement, as amended by the Third Amendment; or
Borrower fails to cause any of AGT, New AGT or the Xxxxxxxxx/Drasner Properties
to make the purchases required under Sections 10, 10A or 10C of the Purchase
Agreement, as amended by the Third Amendment; or The Purchase Agreement, as
amended by the Third Amendment, or the Second Amended and Restated Guaranty
Agreement of Borrower to Kodak, dated as of June 30, 1997 (the "Guaranty
Agreement"), shall cease to be in full force and effect or shall be terminated
or the validity or enforceability thereof shall be contested by Borrower or by
any other person other than Kodak or EKCC.
All references to the Promissory Note in the Purchase Agreement or in the
Third Amendment to shall be the Promissory Note as amended by this Second
Amendment to Promissory Note. An executed copy of this Second Amendment shall be
affixed to the Promissory Note.
This Second Amendment may be executed in one or more counterparts, each of
which shall be deemed an original and all of which, when taken together, shall
constitute one instrument.
Except as expressly amended hereby, all of the terms, covenants and
conditions of the Promissory Note shall continue in full force as effect in
accordance with its terms.
IN WITNESS WHEREOF, this Second Amendment has been executed as of the date
first above written.
BORROWER:
-------------------------------
Xxxxxxxx X. Xxxxxxxxx
* Text deleted pursuant to application for Confidential Treatment under
Rule 24b-2 of the Securities Exchange Act of 1934 and filed separately
with the Securities and Exchange Commission under Rule 24b-2 of the
Securities Exchange Act of 1934 and filed separately with the
Securities and Exchange Commission.
26
LENDER:
IMAGING FINANCIAL SERVICES, INC.
By:________________________________
Title:_____________________________
* Text deleted pursuant to application for Confidential Treatment under
Rule 24b-2 of the Securities Exchange Act of 1934 and filed separately
with the Securities and Exchange Commission under Rule 24b-2 of the
Securities Exchange Act of 1934 and filed separately with the
Securities and Exchange Commission.
