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EXHIBIT 4.1
FIRST AMENDMENT AND WAIVER TO LOAN AGREEMENT
THIS FIRST AMENDMENT AND WAIVER AGREEMENT ("Amendment") made this
11th day of May, 1998, among ▇▇▇▇ DIGITAL TECHNOLOGIES, INC., a Delaware
corporation, having its principal place of business at ▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("Borrower"), ADVANCED DIGITAL SERVICES, INC., a New York
corporation, having its principal place of business at ▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ N.Y. ACQUISITION, INC., a Delaware corporation, having its
principal place of business at ▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("KNYA"
or "Guarantor") and THE BANK OF NEW YORK, a New York banking corporation, having
an office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Bank").
W I T N E S S E T H :
WHEREAS, the Borrower, the Guarantors and the Bank entered into a
Loan Agreement dated as of the 8th day of January, 1998 (hereinafter the
"Agreement"); and
WHEREAS, the Bank has made loans to the Borrower as evidenced by
certain promissory notes of the Borrower and specifying interest to be paid
thereon; and
WHEREAS, the Borrower has requested that the Bank agree to certain
waivers of covenants in the Agreement and to certain amendments to the
Agreement.
NOW, THEREFORE, in consideration of Ten ($10.00) Dollars and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Borrower, the Guarantors and the Bank do hereby agree as
follows:
1. Defined Terms. As used in this Amendment, capitalized terms,
unless otherwise defined, shall have the meanings set forth in the Agreement.
2. Representations and Warranties. As an inducement for the bank to
enter into this Amendment, the Borrower and each Guarantor represents and
warrants as follows:
(a) That with respect to the Agreement and the Loan Documents
executed in connection therewith and herewith:
(i) There are no defenses or offsets to the Borrower's or any
Guarantor's obligations under the Agreement, under the Agreement
as amended hereby, the Notes or any of the other Loan Documents
or any other agreements in favor of the Bank referred to in the
Agreement, and if any such defenses or offsets exist without the
knowledge of the Borrower or any Guarantor, the same are hereby
waived;
(ii) All of the representations and warranties made by the
Borrower and any Guarantor in the Agreement or in the Agreement
as amended hereby are true and correct in all material respects
as if made on
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the date hereof, except for those made with respect to a
particular date, which such representations and warranties are
restated as of such date; and
(iii) The outstanding aggregate principal balance of (x) the
Term Loan as evidenced by the Term Loan Note is $5,625,000.00 and
interest has been paid through April 13, 1998 and (y) the
Revolving Credit Loans as evidenced by the Revolving Credit Note
is $4,489,000.00 and interest has been paid through April 13,
1998 on those Revolving Credit Loans that are Eurodollar Loans
and through April 30, 1998 on those Revolving Credit Loans that
are Alternate Base Rate Loans.
3. Waiver. The Bank hereby waives any Default or Event of Default
occurring prior to the date hereof as a result of the failure of the Borrower to
comply with Section 5.01(b)(ix), Section 5.01(n) and Section 5.03(d) of the
Agreement.
4. Amendments. The following amendments are hereby made to the
Agreement:
(a) The definition of "Maturity Date" shall be amended to read as
follows:
"MATURITY DATE" means (i) with respect to the Term Loan and the Term Loan Note,
March 30, 2001, and (ii) with respect to the Revolving Credit Loans and the
Revolving Credit Note, December 31, 2001. If the term "Maturity Date" is used
herein without reference to either the Term Loan or the Revolving Credit Loans,
it shall be deemed to refer to December 31, 2001."
(b) Section 2.03 of the Agreement shall be amended to read in its
entirety as follows:
"SECTION 2.03. REPAYMENT OF TERM LOAN NOTE. The principal balance of the Term
Loan Note shall be payable in thirteen (13) quarterly installments, each due on
the last Business Day of each calendar quarter beginning on the first such day
after the Drawdown and continuing on the last Business Day of each calendar
quarter thereafter. The first such quarterly installment shall be in the
principal amount of $375,000.00, each of the next eleven (11) such quarterly
principal installments shall be in the principal amount of $500,000.00 and the
thirteenth (13th) such quarterly principal installment shall be in an amount
equal to the then outstanding principal balance of the Term Loan Note."
(c) Section 5.01(n) of the Agreement shall be amended to read in
its entirety as follows:
"(n) Landlord Lien Waivers. Deliver to the Bank, not later than June 30, 1998,
the landlord lien waivers required by Section 3.01(1) of this Agreement."
(d) Section 5.02(l) of the Agreement shall be amended to read in
its entirety as follows:
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"(l) Losses. Incur a net loss (i) for either of the fiscal quarters ending June
30, 1998 or September 30, 1998 or (ii) for any fiscal year."
(e) Sections 5.03(b), (c) and (d) of the Agreement shall be
amended to read in their entirety as follows:
"(b) Fixed Charge Coverage Ratio. The Borrower will maintain a Fixed Charge
Coverage Ratio (to be tested quarterly, and except as set forth in (i) and (ii)
below for the four fiscal quarters then ended) of not less than (i) 1.15 to 1.00
for the fiscal quarter ending March 31, 1998; (ii) 1.20 to 1.00 for the two
fiscal quarters ending June 30, 1998, and for the three fiscal quarters ending
September 30, 1998; (iii) 1.20 to 1.00 for the four fiscal quarters ending
December 31, 1998; and (iv) 1.25 to 1.00 thereafter.
"(c) Funded Debt to EBITDA Ratio. The Borrower will maintain a Funded Debt to
EBITDA Ratio (to be tested quarterly for the four fiscal quarters then ended) of
not more than (i) for the fiscal quarter ending March 31, 1998, 2.25 to 1.00;
and (ii) 2.75 to 1.00 for each fiscal quarter thereafter. For purposes of
determining the Funded Debt to EBITDA Ratio, for the first three (3) fiscal
quarters of the Borrower following the closing of the Speed Acquisition, EBITDA
shall be measured only for the number of full or partial fiscal quarters that
have been completed since the date of this Agreement and then annualized,
subject to usual and customary year end adjustments, which adjustments shall be
disclosed and satisfactory to the Bank.
"(d) Adjusted Tangible Net Worth. The Borrower will maintain Adjusted Tangible
Net Worth of not less than (i) beginning on the day of the closing of the Speed
Acquisition and through March 6, 1998, the actual Adjusted Tangible Net Worth as
of the end of the day of such closing and from March 6, 1998 and through
December 30, 1998, ($1,781,000.00); (ii) on December 31, 1998 and through
December 30, 1999, $425,000.00; and (iii) beginning on December 31, 1999 and on
each succeeding December 31 and through the next succeeding December 30,
$1,000,000.00 in excess of the amount of Adjusted Tangible Net Worth on the
preceding December 31."
5. Effectiveness. This Amendment shall become effective upon the
occurrence of the following events and the receipt and satisfactory review by
the Bank and its counsel of the following documents:
(a) The Bank shall have received this Amendment, duly executed by
the Borrower and each Guarantor and an endorsement to the Term Loan Note in the
form of Exhibit A hereto, duly executed by the Borrower.
(b) The Bank's counsel shall have been paid their fees and
disbursements in connection with this Amendment.
6. Governing Law. This Amendment shall be governed by, and construed
in accordance with, the laws of the State of New York.
7. Counterparts. This Amendment may be executed in nay number of
counterparts and by different parties hereto in separate counterparts, each of
which when
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so executed shall be deemed to be an original and all of which taken together
shall constitute one and the same agreement.
8. Reaffirmation. By executing this Amendment, the Guarantors each
reaffirm their obligations under their respective Guaranties.
9. Ratification. Except as hereby amended, the Agreement and all
other Loan Documents executed in connection therewith shall remain in full force
and effect in accordance with their originally stated terms and conditions. The
Agreement and all other Loan Documents executed in connection therewith, as
amended hereby, are in all respects ratified and confirmed.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment
as of the year and date first above written.
▇▇▇▇ DIGITAL TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇
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▇▇▇▇ ▇▇▇▇
Chief Executive Officer
ADVANCED DIGITAL SERVICES, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇
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▇▇▇▇ ▇▇▇▇
Chief Executive Officer
▇▇▇▇ N.Y. ACQUISITION, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇
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▇▇▇▇ ▇▇▇▇
Chief Executive Officer
THE BANK OF NEW YORK
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Vice President
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EXHIBIT A
Endorsement No. 1
The undersigned, ▇▇▇▇ Digital Technologies, Inc. (the "Borrower")
and The Bank of New York (the "Bank") hereby amend the Term Loan Note of the
Borrower dated January 8, 1998 to which this Endorsement No. 1 is attached (the
"Note") as hereinafter set forth. The Note has been issued pursuant to the Loan
Agreement described therein. The Loan Agreement has been amended by an Amendment
of even date herewith and this Endorsement No. 1 is to amend the Note to conform
to the Amendment. Accordingly, the Note is hereby amended to the extent that the
amount, the situs of execution and delivery, the date and the first paragraph
are deleted and the following is substituted therefor:
$6,000,000.00 New York, New York
January 8, 1998
FOR VALUE RECEIVED, ▇▇▇▇ DIGITAL TECHNOLOGIES, INC., a Delaware
corporation, having its principal place of business at ▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("Borrower") promises to pay to the
order of THE BANK OF NEW YORK ("Bank") at its office located at ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, the principal sum of Six
Million ($6,000,000.00) Dollars in thirteen (13) quarterly principal
installments, each due on the last Business Day of each calendar
quarter beginning on the last Business Day of March 1998 and
continuing on the last Business Day of each calendar quarter
thereafter. The first such quarterly installment shall be in the
principal amount of $375,000.00, each of the next eleven (11) such
quarterly principal installments shall be in the principal amount of
$500,000.00 and the thirteenth (13th) such quarterly principal
installment shall be in an amount equal to the then outstanding
principal balance of this Note.
Except as expressly amended by this Endorsement No. 1, all the terms
and conditions of the Note shall continue in full force and effect.
This Endorsement No. 1 shall be effective as of May __, 1998.
▇▇▇▇ DIGITAL TECHNOLOGIES, INC.
By: __________________________________
▇▇▇▇ ▇▇▇▇
Chief Executive Officer
THE BANK OF NEW YORK
By: __________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Vice President
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Endorsement No. 1
The undersigned, ▇▇▇▇ Digital Technologies, Inc. (the "Borrower")
and The Bank of New York (the "Bank") hereby amend the Term Loan Note of the
Borrower dated January 8, 1998 to which this Endorsement No. 1 is attached (the
"Note") as hereinafter set forth. The Note has been issued pursuant to the Loan
Agreement described therein. The Loan Agreement has been amended by an Amendment
of even date herewith and this Endorsement No. 1 is to amend the Note to conform
to the Amendment. Accordingly, the Note is hereby amended to the extent that the
amount, the situs of execution and delivery, the date and the first paragraph
are deleted and the following is substituted therefor:
$6,000,000.00 New York, New York
January 8, 1998
FOR VALUE RECEIVED, ▇▇▇▇ DIGITAL TECHNOLOGIES, INC., a Delaware
corporation, having its principal place of business at ▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("Borrower") promises to pay to the
order of THE BANK OF NEW YORK ("Bank") at its office located at ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, the principal sum of Six
Million ($6,000,000.00) Dollars in thirteen (13) quarterly principal
installments, each due on the last Business Day of each calendar
quarter beginning on the last Business Day of March 1998 and
continuing on the last Business Day of each calendar quarter
thereafter. The first such quarterly installment shall be in the
principal amount of $375,000.00, each of the next eleven (11) such
quarterly principal installments shall be in the principal amount of
$500,000.00 and the thirteenth (13th) such quarterly principal
installment shall be in an amount equal to the then outstanding
principal balance of this Note.
Except as expressly amended by this Endorsement No. 1, all the terms
and conditions of the Note shall continue in full force and effect.
This Endorsement No. 1 shall be effective as of May 11, 1998.
▇▇▇▇ DIGITAL TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇
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▇▇▇▇ ▇▇▇▇
Chief Executive Officer
THE BANK OF NEW YORK
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Vice President
