EXHIBIT 10.19
AMENDMENT No. 3, dated as of December 31, 1997 ("Amendment"), to the
---------
CREDIT AGREEMENT, dated as of October 30, 1996 (as the same may be further
amended, supplemented or otherwise modified from time to time, the "Agreement")
---------
among DONNELLEY ENTERPRISE SOLUTIONS INCORPORATED, a Delaware corporation, as
borrower (the "Company"), XXXXXX TRUST AND SAVINGS BANK, as Administrative Agent
-------
(in such capacity, the "Administrative Agent"), and the other financial
--------------------
institutions parties thereto (the "Banks").
-----
W I T N E S E T H :
-----------------
WHEREAS, the parties hereto wish to amend Section 5.12 of the
Agreement on the terms set forth herein;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the parties hereto agree as follows:
1. Definitions. Unless otherwise defined herein, terms defined in
-----------
the Agreement shall be used herein as so defined.
2. Amendments. (i) Section 5.05 is amended to read in its entirety
----------
as follows:
"SECTION 5.05. Mergers, Consolidations, Sales of Assets and
--------------------------------------------
Acquisitions. The Company will not, and will not permit its Material
------------
Subsidiaries to, merge into or consolidate with any other Person, or permit
any other Person to merge into or consolidate with it, or sell, transfer,
assign, lease, sublease, or otherwise dispose of (in one transaction or in
a series of transactions) all or any substantial part of any asset (whether
now owned or hereafter acquired) or any capital stock of any Subsidiary,
and the Company will not, and will not permit any Subsidiary to, purchase,
lease or otherwise acquire (in one transaction or a series of transactions)
all or any substantial part (to the extent such assets constitute one or
more distinct business units or operations) of the assets of any other
Person, except that:
(a) the Company or a Material Subsidiary may acquire another
corporation by merger, provided that, if the Company is a party to
such merger, the Company is the surviving corporation, and provided
further that after giving effect to such merger, no Event of Default
or Unmatured Event of Default shall exist;
(b) any Material Subsidiary may merge or consolidate with or
into, or sell or otherwise dispose of any or all of its assets to, the
Company or another Subsidiary, and any Material Subsidiary that is not
a Borrowing Subsidiary may sell all or substantially all of its
assets; provided that (i) after giving effect to such merger,
consolidation, sale or other disposition, no Event of Default or
Unmatured Event of Default shall exist, and (ii) in the case of an
asset sale by such a Material Subsidiary, the assets to be sold do not
constitute a material amount of the assets of the Company and its
Subsidiaries, taken as a whole; and
(c) the Company or any Subsidiary may acquire the assets or
equity securities of any Person (an "Acquisition"), so long as:
(i) such Acquisition has been approved by the board of
directors (or equivalent) or shareholders (or equivalent) of such
Person;
(ii) such assets are used in, or the Person acquired is in,
the same business as the Company or such Subsidiary or a related
line of business; and
(iii) if the purchase price (including all cash paid, notes
issued and indebtedness assumed in connection therewith) of such
Acquisition is over $5,000,000, the Company has delivered to the
Administrative Agent, at least ten (10) Business Days before the
closing of such Acquisition, (A) historical or pro forma
financial statements for such Person for its last two fiscal
years, if available, and (B) financial projections for the
Company and its Consolidated Subsidiaries, giving effect to such
Acquisition, covering the period from the date of such
Acquisition through the Termination Date then in effect;
provided, that neither the Company nor any Subsidiary shall make
--------
any Acquisition if (x) the purchase price (including all cash
paid, notes issued and indebtedness assumed in connection
therewith) of such Acquisition is over $5,000,000 or (y) the sum
of the purchase price (as so determined) of such Acquisition and
the aggregate purchase prices (as so determined) of all other
Acquisitions made by the Company or any Subsidiary after December
31, 1997, would exceed $5,000,000, unless, in the case of clause
(x) or (y), such Acquisition is approved in writing by the
Majority Banks, which approval shall not be unreasonably withheld
or delayed.
For purposes of this Section 5.05, "a material amount" of assets shall
------------
mean assets (A) constituting 10% or more of the consolidated assets of the
Company and its Consolidated Subsidiaries, or (B) generating 10% or more of
the consolidated revenue of the Company and its Consolidated Subsidiaries
in any fiscal year."
(ii) Section 5.12 is amended in its entirety to read as follows:
"The Company will, as of the end of a fiscal quarter, maintain a Fixed
Charge Coverage Ratio of not less than, in the case of each fiscal quarter
ending on or before September 30, 1997, 2 to 1; in the case of the fiscal
quarter ending December 31, 1997, 1.75 to 1; in the case of the fiscal
quarter ending March 31, 1998, 1.65 to 1; in the case of the fiscal quarter
ending June 30, 1998, 1.5 to 1; in the case of the fiscal quarter ending
September 30, 1998, 1.75 to 1; and in the case of each fiscal quarter
ending on or after December 31, 1998, 2 to 1."
3. Conditions Precedent. This Amendment shall become effective and
--------------------
be deemed effective as of December 31, 1997 subject to the Administrative
Agent's receipt of this Amendment, duly executed by the Company and Xxxxxx Trust
and Savings Bank, as Administrative Agent and sole Bank.
4. Covenants, Representations and Warranties.
-----------------------------------------
(i) Upon the effectiveness of this Amendment, the Company reaffirms
all covenants, representations and warranties made by it in the
Credit Agreement and agrees that all such covenants,
representations and warranties shall be deemed to have been
remade as of December 31, 1997.
(ii) The Company represents and warrants that, after giving effect to
this Amendment, no event has occurred and is continuing or would
result from the execution, delivery or performance of this
Amendment which constitutes or would constitute an Event of
Default or which would constitute an Event of Default but for
the requirement that notice be given or time elapse or both.
(iii) The Company represents and warrants that the execution, delivery
and performance of this Amendment by it (i) are within its
corporate powers and (ii) have been duly authorized by all
necessary corporate action on its part. The Company further
represents and warrants that this Amendment, as of the date it
becomes effective, will constitute a valid and binding agreement
of the Company, enforceable against the Company in accordance
with its terms, subject to the effect of any applicable
bankruptcy, insolvency, reorganization or other laws relating to
or affecting the enforcement of creditors' rights generally or
by equitable principles.
5. Reference to and Effect on Agreement. Upon the effectiveness of
------------------------------------
this Amendment, each reference in the Agreement to "this Agreement,"
"hereunder," "hereof," "herein," "hereby" or words of like import shall mean and
be a reference to the Agreement as amended hereby, and each reference to the
Agreement in any instrument, document or agreement executed or delivered in
connection with the Agreement (including without limitation this Amendment)
shall mean and be a reference to the Agreement as amended hereby.
6. Continuing Effect. Except as expressly amended hereby, the
-----------------
Agreement shall continue to be and shall remain in full force and effect in
accordance with its terms.
7. Governing Law. This Amendment shall be governed by, and
-------------
construed and interpreted in accordance with, the internal laws (as opposed to
conflict of laws principles) of the State of Illinois.
8. Counterparts; Delivery of Facsimiles. This Amendment may be
------------------------------------
executed by the parties hereto in any number of separate counterparts and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument. Delivery of an executed signature page hereof by facsimile
transmission shall be effective as delivery of a manually-signed counterpart
hereof.
3
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered by their properly and duly authorized officers as
of the day and year first above written.
DONNELLEY ENTERPRISE SOLUTIONS
INCORPORATED
By: /s/ Xxxxxx. X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Vice President and Chief Financial
Officer
XXXXXX TRUST AND SAVINGS BANK,
as Administrative Agent and as a Bank
By: /s/ M. Xxxxx Xxxxx
Name: M. Xxxxx Xxxxx
Title: Vice President
4
