Exhibit 10.4
SEVENTH AMENDMENT AND WAIVER
SEVENTH AMENDMENT AND WAIVER (this "Amendment"), dated as of February 15,
2002, among AMERICAN LAWYER MEDIA HOLDINGS, INC., a Delaware corporation
("Holdings"), AMERICAN LAWYER MEDIA, INC., a Delaware corporation (the
"Borrower"), the several lenders from time to time party to the Credit Agreement
referred to below (the "Banks"), and BANK OF AMERICA, N.A., as Administrative
Agent (the "Administrative Agent"). Unless otherwise defined herein, all
capitalized terms used herein shall have the respective meanings provided such
terms in the Credit Agreement referred to below.
W I T N E S S E T H :
WHEREAS, Holdings, the Borrower, the Banks and the Administrative Agent are
parties to a Credit Agreement, dated as of March 25, 1998 (as amended, modified
or supplemented to, but not including, the date hereof, the "Credit Agreement");
and
WHEREAS, subject to the terms and conditions set forth herein, the parties
hereto agree as follows;
NOW, THEREFORE, it is agreed:
I. Waivers:
1. The Banks hereby waive the Event of Default that has arisen under the
Credit Agreement solely as a result of the failure of Holdings and the Borrower
to comply with Section 8.07 of the Credit Agreement in respect of the
Measurement Periods ended on September 30, 2001 and December 31, 2001 (as such
Section was in effect prior to giving effect to this Amendment).
2. The Banks hereby waive the Event of Default that has arisen under the
Credit Agreement solely as a result of the failure of Holdings and the Borrower
to comply with Section 8.09 of the Credit Agreement for the period from
September 30, 2001 to the Seventh Amendment Effective Date (as hereinafter
defined) (as such Section was in effect prior to giving effect to this
Amendment).
3. The Banks hereby waive the Event of Default that has arisen under the
Credit Agreement solely as a result of Holdings or one or more of its
Subsidiaries receiving equity securities in other Persons in payment for up to
$2,000,000 in advertising services in violation of Section 8.05 of the Credit
Agreement.
II. Amendments:
1. The definition of "Adjusted Consolidated EBITDA" appearing in
Section 1.01 of the Credit Agreement is hereby amended by inserting the
following new text immediately after the words "adjusted by" appearing therein:
(x) subtracting therefrom the amount of all revenues received by
Holdings and its Subsidiaries from advertising services for such
Measurement Period that were paid in the form of equity securities in
other Persons to the extent that such revenues were included in
determining Consolidated Net Income for such Measurement Period and
(y)".
2. The definition of "Consolidated Indebtedness" appearing in Section
1.01 of the Credit Agreement is hereby amended by inserting the text "(excluding
the Holdings Senior Discount Notes and any accreted interest thereon)"
immediately after the words "all Indebtedness of Holdings and its Subsidiaries
at such time" appearing therein.
3. Section 2.09(a)(ii) of the Credit Agreement is hereby amended by
deleting the existing Applicable Margin table set forth therein and inserting
the following new table in lieu thereof:
Applicable Margin
-----------------------
Eurodollar Base
Rate Rate
---- ----
"Consolidated Total Leverage
Ratio is less than 4.00 to 1.00 2.000% 1.000%
("Level I")
Consolidated Total Leverage
Ratio is less than 4.50 to 1.0 but
greater than or equal to 4.00 2.375% 1.375%
to 1.00 ("Level II")
Consolidated Total Leverage
Ratio is less than 5.00 to 1.00 but
greater than or equal to 4.50 2.625% 1.625%
to 1.00 ("Level III")
Consolidated Total Leverage
Ratio is less than 5.50 to 1.00 but
greater than or equal to 5.00 2.875% 1.875%
to 1.00 ("Level IV")
Consolidated Total Leverage
Ratio is less than 6.00 to 1.00 but
greater than or equal to 5.50 3.000% 2.000%
to 1.00 ("Level V")
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Consolidated Total Leverage
Ratio is equal to or less
than 6.50 to 1.00 but greater 3.250% 2.250%
than or equal to 6.00 to 1.00
("Level VI")
Consolidated Total Leverage
Ratio is greater than 6.50 3.500% 2.500%".
to 1.00 ("Level VII")
4. Section 2.10 of the Credit Agreement is hereby amended by inserting
the following new clauses (c) and (d) at the end thereof:
"(c) The Borrower shall pay to the Administrative Agent for the account of
each Bank (and its successors or assigns) which executes and delivers to the
Administrative Agent a counterpart of the Seventh Amendment and Waiver, dated
as of February 15, 2002, to this Agreement on or before 7:00 p.m. (New York
time) on February 22, 2002, an amendment fee in an amount equal to 25 basis
points on the amount of each such Bank's Revolving Commitment on February 22,
2002, which fee shall be payable on the earlier of (i) May 31, 2002 and (ii)
the date on which the Obligations have been declared (or have become) due and
payable as provided in Section 9.02; provided, however, no fee shall be
payable pursuant to this Section 2.10(c) to the extent that the Revolving
Commitment of each Bank has been terminated and all other Obligations have
been paid in full on or before May 31, 2002 except to the extent that such
fee would otherwise be due and payable pursuant to clause (ii) above.
(d) The Borrower shall pay to the Administrative Agent for the account of
each Bank (and its successors or assigns) which executes and delivers to the
Administrative Agent a counterpart of the Seventh Amendment and Waiver, dated as
of February 15, 2002, to this Agreement on or before 7:00 p.m. (New York time)
on February 22, 2002, an additional amendment fee in an amount equal to 25 basis
points on the amount of each such Bank's Revolving Commitment on February 22,
2002, which fee shall be payable on the earlier of (i) August 30, 2002 and (ii)
the date on which the Obligations have been declared (or have become) due and
payable as provided in Section 9.02; provided, however, no fee shall be payable
pursuant to this Section 2.10(d) to the extent that the Revolving Commitment of
each Bank has been terminated and all other Obligations have been paid in full
on or before August 30, 2002 except to the extent that such fee would otherwise
be due and payable pursuant to clause (ii) above."
5. Section 3.08(a) of the Credit Agreement is hereby amended by
deleting the table appearing therein and inserting the following new table in
lieu thereof:
"Consolidated Total Leverage Ratio
----------------------------------
Level I 2.000%
Level II 2.375%
Level III 2.625%
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Level IV 2.875%
Level V 3.000%
Level VI 3.250%
Level VII 3.500%".
6. Section 7.11 of the Credit Agreement is hereby amended by inserting the
following new clause (d) at the end thereof:
"(d) In the event that any Credit Party holds any Margin Stock that is
required to be pledged pursuant to the Pledge Agreement, such Credit Party
shall promptly execute and deliver to each Bank an appropriately completed
Form U-1 or Form G-3 referred to in Regulation U of the Federal Reserve Board
(although nothing in this clause (d) shall otherwise modify the provisions of
Section 7.13(b))."
7. Section 8.05 of the Credit Agreement is hereby amended by (i) deleting
the word "and" appearing at the end of clause (xii) thereof, (ii) deleting the
period appearing at the end of clause (xiii) thereof and inserting "; and" in
lieu thereof and (iii) inserting the following new clause (xiv) at the end
thereof:
"(xiv) the Borrower and its Subsidiaries may receive equity securities in
other Persons in payment for advertising services provided by the Borrower
and its Subsidiaries, provided that (x) no more than $2,000,000 in the
aggregate of advertising services in any one fiscal year of Holdings may be
provided in exchange for equity securities in other Persons and (y) all such
equity securities shall be duly pledged and delivered to the Collateral Agent
pursuant to (and to the extent required by) the Pledge Agreement."
8. Sections 8.07, 8.08 and 8.09 of the Credit Agreement are each hereby
deleted and the following new Sections 8.07, 8.08 and 8.09 are inserted in lieu
thereof:
"8.07 Consolidated Interest Coverage Ratio. Holdings and the Borrower will
not permit the Consolidated Interest Coverage Ratio for any Measurement Period
ending on the last day of a fiscal quarter set forth below to be less than the
ratio set forth opposite such fiscal quarter below:
Fiscal Quarter Ending Ratio
-------------- ------------
December 31, 2001 1.35:1.00
March 31, 2002 1.25:1.00
June 30, 2002 1.25:1.00
September 30,2002 1.25:1.00
December 31, 2002
and the last day of each
Fiscal quarter thereafter 1.30:1.00
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8.08 Consolidated Fixed Charge Coverage Ratio. Holdings and the Borrower
will not permit the Consolidated Fixed Charge Coverage Ratio for any Measurement
Period ending on the last day of a fiscal quarter ending on or after March 31,
2002 to be less than 1.05:1.00.
8.09 Maximum Consolidated Total Leverage Ratio. Holdings and the Borrower
will not permit the Consolidated Total Leverage Ratio at any time during a
period set forth below to be greater than the ratio set forth opposite such
period below:
Period Ratio
------ -----
December 31, 2001 through
and including March 30, 2002 7.40:1.00
March 31, 2002 through and
including December 30, 2002 8.40:1.00
Thereafter 8.00:1.00".
9. Notwithstanding anything to the contrary contained in Section 8.02(ix)
of the Credit Agreement, no additional Permitted Acquisitions shall be permitted
without the prior written consent of the Required Banks.
III. Miscellaneous:
1. This Amendment is limited as specified and shall not constitute a
modification, acceptance or waiver of any other provision of the Credit
Agreement or any other Loan Document.
2. This Amendment may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, each of which counterparts
when executed and delivered shall be an original, but all of which shall
together constitute one and the same instrument. A complete set of counterparts
shall be lodged with Holdings, the Borrower and the Administrative Agent.
3. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF
NEW YORK.
4. In order to induce the Banks to enter into this Amendment, Holdings and
the Borrower hereby represent and warrant that (i) no Default or Event of
Default exists on the Seventh Amendment Effective Date, after giving effect to
this Amendment, and (ii) on the Seventh Amendment Effective Date, after giving
effect to this Amendment, all representations
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and warranties contained in the Credit Agreement and in the other Loan Documents
are true and correct in all material respects.
5. This Amendment shall become effective on the date (the "Seventh
Amendment Effective Date") when Holdings, the Borrower and the Required Banks
shall have signed a counterpart hereof (whether the same or different
counterparts) and shall have delivered (including by way of telecopier) the same
to the Administrative Agent.
6. From and after the Seventh Amendment Effective Date, all references in
the Credit Agreement and each of the other Loan Documents to the Credit
Agreement shall be deemed to be references to the Credit Agreement after giving
effect to this Amendment.
* * *
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IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of
this Amendment to be duly executed and delivered as of the date first above
written.
AMERICAN LAWYER MEDIA HOLDINGS, INC.
By: ________________________
Name:
Title:
AMERICAN LAWYER MEDIA, INC.
By: ________________________
Name:
Title:
BANK OF AMERICA, N.A., as Administrative Agent
By: ________________________
Name:
Title:
BANK OF AMERICA, N.A., as a Bank
By: ________________________
Name:
Title:
FLEET NATIONAL BANK, as a Bank
By: ___________________________________
Name:
Title:
CREDIT LYONNAIS, NEW YORK BRANCH,
as a Bank
By: __________________________________
Name:
Title:
