EXHIBIT 4(i)(b)
FIRST AMENDMENT TO LOAN AGREEMENT
THIS FIRST AMENDMENT TO LOAN AGREEMENT (the "AMENDMENT"), dated as of
the 21st day of October, 1999, by and among GREAT WESTERN DIRECTORIES, INC., a
Texas corporation (the "BORROWER"), and BANK OF AMERICA, N.A. (F/K/A BANK OF
AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION), as a Lender and as
Administrative Agent;
W I T N E S S E T H:
WHEREAS, the Borrower, the Lender and the Administrative Agent are
parties to that certain Loan Agreement dated as of May 14, 1999 (as heretofore
amended, modified, supplemented and restated, the "LOAN AGREEMENT"); and
WHEREAS, the Borrower has requested, and the Lender has agreed, subject
to the conditions and on the terms set forth in this Amendment, to make certain
amendments to the Loan Agreement, as provided in this Amendment;
NOW, THEREFORE, in consideration of the premises set forth above, the
covenants and agreements set forth in this Amendment, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree that all capitalized terms used in
this Amendment shall have the meanings ascribed thereto in the Loan Agreement,
and further hereby agree as follows:
1. AMENDMENT TO ARTICLE 1. Article 1 of the Loan Agreement,
DEFINITIONS, is hereby amended by deleting the existing definitions of "CLEC NET
PROCEEDS" and "EBITDA" in their entirety and substituting in lieu thereof the
following:
"'CLEC NET PROCEEDS' shall mean, with respect to any sale,
lease, transfer or other disposition of all or any part of the CLEC
Business by the Parent or any of its Subsidiaries, the difference
between (1) the difference between (a) the aggregate amount of cash
received by the Parent or any of its Subsidiaries for such assets
(including, without limitation, any payments received for
non-competition covenants, consulting or management fees in connection
with such sale, and any portion of the amount received evidenced by a
promissory note or other evidence of Indebtedness issued by the
purchaser), MINUS (b) the sum of (i) amounts reserved, if any, for
taxes payable with respect to any such sale (after application
(assuming application first to such reserves) of any available losses,
credits or other offsets), (ii) reasonable and customary transaction
costs properly attributable to such transaction and payable by the
Parent or any of its Subsidiaries (other than to an Affiliate) in
connection with such sale, lease, transfer or
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other disposition of assets, including, without limitation,
commissions and severance and other payments to employees due to
termination of employment in an aggregate amount not to exceed
$1,500,000.00, and (iii) until actually received by the Parent or
any of its Subsidiaries, any portion of the amount received held in
escrow or evidenced by a promissory note or other evidence of
Indebtedness issued by a purchaser or non-compete, consulting or
management agreement or covenant or otherwise for which compensation
is paid over time, MINUS (2) amounts permitted to be paid pursuant
to that certain Letter Agreement dated as of October 14, 1999 by the
Lender in favor of Xxxxxxx Systems, Inc., which amounts may not
exceed $2,336,797.00 in the aggregate. Upon receipt by the Parent or
any of its Subsidiaries of (A) amounts referred to in item (b)(iii)
of the preceding sentence, or (B) if there shall occur any reduction
in the tax reserves referred to in item (b)(i) of the preceding
sentence resulting in a payment to the Parent or its Subsidiaries,
such amounts shall then be deemed to be CLEC Net Proceeds.'"
"'EBITDA' shall mean, with respect to the Borrower and its
Subsidiaries, on a consolidated basis, the sum of (a) Net Income for
any period (after eliminating any extraordinary gains and losses),
PLUS, (b) to the extent deducted in determining such Net Income, the
sum of (i) depreciation and amortization, (ii) Interest Expense, (iii)
income taxes paid and (iv) all other non-cash items, in each case, for
such period, PLUS, (c) for each period ending on or prior to the
earlier to occur of (i) June 30, 2000 and (ii) the Maturity Date,
$3,000,000.00."
2. AMENDMENT TO ARTICLE 6. Section 6.4 of the Loan Agreement,
COPIES OF OTHER REPORTS, is hereby amended by adding new subsection (e) as
follows:
"(e) Within fifteen (15) days after the last day of each
calendar month, a report setting forth EBITDA (for the twelve (12)
consecutive calendar month period ending on such date), which report
shall (i) be certified by the chief financial officer of the Borrower
to have been prepared in accordance with GAAP and (ii) include
calculations demonstrating the Borrower's compliance with Sections 7.8,
7.9 and 7.14 hereof."
3. AMENDMENTS TO ARTICLE 7.
(a) AMENDMENT TO SECTION 7.6. Section 7.6 of the Loan Agreement,
INVESTMENTS AND ACQUISITIONS, is hereby amended by deleting the existing
subsection (b) thereof in its entirety and substituting in lieu thereof the
following:
"(b) so long as no Default then exists or would be caused
thereby and the Borrower has demonstrated pro forma compliance with
Sections 7.8 and 7.9 hereof, the Borrower may make loans (i) to the
Parent (A) to retire the CIBC Facility and, (B) in an aggregate amount
not to exceed $3,000,000.00, for working capital needs and other
corporate purposes of the Parent, and (ii) to any Affiliate Guarantor
for working capital needs and other corporate purposes of such
Affiliate Guarantor in
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connection with the operation of the CLEC Business in an
aggregate amount not to exceed $2,500,000.00 per calendar month
(which amount shall be exclusive of payments made to satisfy the
obligation of the Parent to Northern Telecom in connection with the
purchase of certain switch equipment which amount shall not exceed
$3,000,000.00) or $15,000,000.00 prior to the Maturity Date, in each
case, so long as (x) each such loan is evidenced by a promissory
note made by such Person in favor of the Borrower in form and
substance satisfactory to the Administrative Agent and (y) each such
promissory note is assigned as Collateral and delivered to the
Administrative Agent."
(b) AMENDMENT TO SECTION 7.8. Section 7.8 of the Loan Agreement,
LEVERAGE RATIO, is hereby amended by deleting such section in its entirety and
substituting in lieu thereof the following:
"Section 7.8 LEVERAGE RATIO. (a) As of the end of any
calendar quarter, and (b) at the time of any Advance hereunder (after
giving effect to such Advance), the Borrower shall not permit its
Leverage Ratio to exceed 5.00 to 1.00."
(c) Article 7 of the Loan Agreement, NEGATIVE COVENANTS, is hereby
further amended by adding new Section 7.14, MINIMUM EDITDA, as follows:
"Section 7.14 MINIMUM EBITDA. (a) As of the end of any
calendar month, and (b) at the time of any Advance hereunder (after
giving effect to such Advance), the Borrower shall not permit its
EBITDA (for the twelve (12) consecutive calendar month period ending on
the month end being tested in the case of Section 7.14(a) hereof, or on
the most recently completed calendar month end in the case of Section
7.14(b) hereof) to be less than $8,000,000.00."
4. AMENDMENTS TO ARTICLE 8. Section 8.1 of the Loan Agreement,
EVENTS OF DEFAULT, is further hereby amended by (i) deleting the word "or" after
the semicolon at the end of the existing subsection (q) thereof, (ii) adding a
semicolon and the word "or", respectively, after the word "assets" at the end of
the existing subsection (r) thereof, and (iii) adding new subsection (s) thereto
as follows:
"(s) The Borrower shall fail to sell, transfer or
otherwise dispose of the CLEC Business on or prior to November 30,
1999."
5. NO OTHER AMENDMENT OR CONSENT. Except for the amendments set
forth above, the text of the Loan Agreement and all other Loan Documents shall
remain unchanged and in full force and effect. No waiver or consent by the
Administrative Agent or the Lenders under the Loan Agreement or any other Loan
Document is granted or intended except as expressly set forth herein, and the
Administrative Agent and the Lenders expressly reserve the right to require
strict compliance in all other respects (whether or not in connection with any
Requests for Advance). Except as set forth herein, the amendments
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agreed to herein shall not constitute a modification of the Loan Agreement or
any of the other Loan Documents, or a course of dealing with the
Administrative Agent and the Lenders at variance with the Loan Agreement or
any of the other Loan Documents, such as to require further notice by the
Administrative Agent or the Lenders to require strict compliance with the
terms of the Loan Agreement and the other Loan Documents in the future.
6. LOAN DOCUMENTS. This Amendment shall be deemed to be a Loan
Document for all purposes under the Loan Agreement and the other Loan Documents.
7. COUNTERPARTS. This Amendment may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
separate counterparts shall together constitute but one and the same instrument.
8. GOVERNING LAW. This Amendment shall be construed in accordance
with and governed by the laws of the State of California.
9. SEVERABILITY. Any provision of this Amendment which is
prohibited or unenforceable shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof in that jurisdiction or affecting the validity or enforceability of such
provision in any other jurisdiction.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment and
Consent or caused it to be executed by their duly authorized officers, all as of
the day and year first above written.
BORROWERS: GREAT WESTERN DIRECTORIES, INC.
By: //XXXXXXX X. X'XXXX//
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Name: Xxxxxxx X. X'Xxxx
Title: President
ADMINISTRATIVE AGENT
AND LENDERS: BANK OF AMERICA, N.A., as Administrative Agent
and as Lender
By: //Xxxxxx X. Xxxxxxx//
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Name: Xxxxxx X. Xxxxxxx
Title: Vice President
GREAT WESTERN DIRECTORIES, INC.
FIRST AMENDMENT TO LOAN AGREEMENT
Signature Page
