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FIRST AMENDMENT
TO
REVOLVING CREDIT AGREEMENT (UNGUARANTEED)
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First Amendment dated as of March 10, 1999 to Revolving Credit Agreement
(the "First Amendment"), by and among APPNET SYSTEMS, INC., a Delaware
corporation (the "Borrower"), BANKBOSTON, N.A. and the other lending
institutions listed on Schedule 1 to the Credit Agreement (as hereinafter
defined) (the "Banks"), amending certain provisions of the Revolving Credit
Agreement dated as of January 8, 1999 (as amended and in effect from time to
time, the "Credit Agreement") by and among the Borrower, the Banks, BankBoston,
N.A. as agent for the Banks (the "Agent") and Antares Capital Corporation as
co-agent for the Banks. Terms not otherwise defined herein which are defined in
the Credit Agreement shall have the same respective meanings herein as therein.
WHEREAS, the Borrower and the Banks have agreed to modify certain terms
and conditions of the Credit Agreement as specifically set forth in this First
Amendment;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
ss.1. Amendment to Section 1 of the Credit Agreement. Section 1.1 of the
Credit Agreement is hereby amended by inserting the following definition in the
appropriate alphabetical order:
IPO. The initial underwritten public offering of the common stock of
the Borrower registered under the Securities Act of 1933.
ss.2. Amendment to Section 2 of the Credit Agreement. Section 2.4 of the
Credit Agreement is hereby amended by deleting the first sentence of ss.2.4 in
its entirety and substituting in place thereof the following: "The Revolving
Credit Loans shall be evidenced by separate amended and restated promissory
notes of the Borrower in substantially the form of Exhibit A hereto (each a
"Revolving Credit Note"), dated as of March 5, 1999 and completed with
appropriate insertions."
ss.3. Amendment to Section 9 of the Credit Agreement. Section 9.5.1 of the
Credit Agreement is hereby amended by deleting ss.9.5.1 in its entirety and
restating it as follows:
9.5.1. Mergers and Acquisitions. The Borrower will not, and will not
permit any of its Subsidiaries to, become a party to any merger or
consolidation, or agree to or effect any asset acquisition or stock
acquisition except (a) the merger or consolidation of one or more of the
Subsidiaries of the Borrower with and into the Borrower; (b) or the merger
or consolidation of two or more Subsidiaries of the Borrower; (c) the
acquisition by the Borrower or any of its Subsidiaries of all or
substantially all of the assets or stock of Xxxxxxxxx &
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Company, Inc., Internet Outfitters, Inc., and Dimension Enterprises, Inc.
so long as (i) the financial information provided to the Banks by the
Borrower on or prior to March 3, 1999 as to (1) the Person to be acquired,
and (2) the financial condition of the Borrower and its Subsidiaries after
giving effect to each such acquisition, remains true and correct at the
time of consummating each such acquisition; and (ii) the Borrower has
complied with all the conditions set forth in this ss.9.5.1 (d)(ii)-(ix);
and (d) other asset or stock acquisitions of Persons in the same or a
similar line of business as the Borrower (a "Permitted Acquisition") where
(i) the Borrower has provided the Agent with five (5) Business Days prior
written notice of such Permitted Acquisition, which notice shall include a
reasonably detailed description of such Permitted Acquisition, and the
Majority Banks have consented in writing, in advance, to the Borrower or
the Subsidiary, as the case may be, consummating such acquisition; (ii)
the Borrower has provided the Agent with all documents, instruments and
agreements to be entered into in connection with the Permitted
Acquisition, which documents, instruments and agreements shall be in form
and substance satisfactory to the Agent; (iii) the business to be acquired
would not subject the Agent or any of the Banks to regulatory or third
party approvals in connection with the exercise of its rights and remedies
under this Credit Agreement and the other Loan Documents; (iv) the
business and assets so acquired in such Permitted Acquisition shall be
acquired by the Borrower free and clear of all liens (other than Permitted
Liens) and all Indebtedness (other than Indebtedness expressly permitted
pursuant to ss.9.1 hereof); (v) the Borrower has taken or caused to be
taken all necessary actions to grant to the Agent a first priority
perfected lien in all assets and stock to be acquired in connection with
such Permitted Acquisition; (vi) the Borrower has demonstrated to the
satisfaction of the Agent, based on a pro forma Compliance Certificate,
compliance with ss.10 hereof on a Pro Forma Basis both immediately prior
to and after giving effect to such Permitted Acquisition; (vii) the
Borrower is the survivor of any such Permitted Acquisition; (viii) no more
than seventy five percent (75%) of the total consideration for any
Permitted Acquisition shall be financed with Indebtedness; and (ix) the
Borrower has delivered to the Agent a certificate of the chief financial
officer of the Borrower to the effect that (1) the Borrower will be
solvent on a going concern basis upon the consummation of the Permitted
Acquisition; (2) the pro forma Compliance Certificate fairly presents the
financial condition of the Borrower and its Subsidiaries as of the date
thereof and after giving effect to such Permitted Acquisition and (3) no
Default or Event of Default then exists or would result after giving
effect to the Permitted Acquisition.
In the event any new Subsidiary is formed or acquired as a result of
or in connection with any acquisition, the Loan Documents shall be amended
and/or supplemented as necessary to make the terms and conditions of the
Loan Documents applicable to such Subsidiary.
ss.4. Amendment to Section 10 of the Credit Agreement. Section 10.1 of the
Credit Agreement is hereby amended by deleting ss.10.1 in its entirety and
restating it as follows:
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10.1. Leverage Ratio. The Borrower will not permit the Leverage
Ratio at any time from the Closing Date until the date which is the
earlier to occur of (a) the consummation of the IPO and (b) December 31,
1999 to exceed 3.00:1.00 and then after such date the Borrower will not
permit the Leverage Ratio (1) at any time when the Borrower's EBITDA
(calculated on a Pro Forma Basis) for the immediately preceding twelve
month period from the date of determination is less than $10,000,000 to
exceed 2.50:1.00; (2) at any time when the Borrower's EBITDA (calculated
on a Pro Forma Basis) for the immediately preceding twelve month period
from the date of determination is greater than or equal to $10,000,000 but
less than $15,000,000 to exceed 2.75:1.00; and (3) at any time when the
Borrower's EBITDA (calculated on a Pro Forma Basis) for the immediately
preceding twelve month period from the date of determination is equal to
or greater than $15,000,000 to exceed 3.00:1.00.
ss.5. Amendment to Schedule 1 to the Credit Agreement. Schedule 1 to the
Credit Agreement is hereby amended by deleting Schedule 1 in its entirety and
replacing it with the Schedule 1 attached hereto.
ss.6. Conditions to Effectiveness. This First Amendment shall not become
effective until the Agent receives the following:
(a) a counterpart of this First Amendment, executed by the Borrower,
each Subsidiary and the Banks;
(b) the replacement Revolving Credit Notes, duly executed and
delivered by the Borrower;
(c) corporate resolutions of the Borrower authorizing the
transactions contemplated by this First Amendment; and
(d) an amendment fee of $220,000 in cash from the Borrower, which
amendment fee shall be for the pro rata accounts of the Banks.
ss.7. Representations and Warranties. The Borrower hereby represents that,
on and as of the date hereof, each of the representations and warranties made by
it in ss.7 of the Credit Agreement remain true as of the date hereof (except to
the extent of changes resulting from transactions contemplated or permitted by
the Credit Agreement and the other Loan Documents and changes occurring in the
ordinary course of business that singly or in the aggregate are not materially
adverse, and to the extent that such representations and warranties relate
expressly to an earlier date), provided, that all references therein to the
Credit Agreement shall refer to such Credit Agreement as amended hereby. In
addition, the Borrower hereby represents and warrants that the execution and
delivery by the Borrower and its Subsidiaries of this First Amendment and the
performance by the Borrower and its Subsidiaries of all of its agreements and
obligations under the Credit Agreement and the other Loan Documents as amended
hereby are within the corporate authority of each of the Borrower and its
Subsidiaries and has been duly authorized by all necessary corporate action on
the part of the Borrower and its Subsidiaries.
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ss.8. Ratification, Etc. Except as expressly amended hereby, the Credit
Agreement and all documents, instruments and agreements related thereto,
including, but not limited to the Security Documents, are hereby ratified and
confirmed in all respects and shall continue in full force and effect. The
Credit Agreement and this First Amendment shall be read and construed as a
single agreement. All references in the Credit Agreement or any related
agreement or instrument to the Credit Agreement shall hereafter refer to the
Credit Agreement as amended hereby.
ss.9. No Waiver. Nothing contained herein shall constitute a waiver of,
impair or otherwise affect any Obligations, any other obligation of the Borrower
or any rights of the Agent or the Banks consequent thereon.
ss.10. Counterparts. This First Amendment may be executed in one or more
counterparts, each of which shall be deemed an original but which together shall
constitute one and the same instrument.
ss.11. Governing Law. THIS FIRST AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
(WITHOUT REFERENCE TO CONFLICT OF LAWS).
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IN WITNESS WHEREOF, the parties hereto have executed this First Amendment
as a document under seal as of the date first above written.
APPNET SYSTEMS, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
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Title:
BANKBOSTON, N.A.
By: /s/ Xxx X. Massimo
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Xxx X. Massimo, Director
ANTARES CAPITAL CORPORATION
By: /s/
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Title:
RATIFICATION OF GUARANTY
Each of the undersigned guarantors hereby acknowledges and consents to the
foregoing First Amendment as of March __, 1999, and agrees that each of the
Guaranty dated as of January 8, 1999 and March 4, 1999 from each of the
undersigned guarantors remains in full force and effect, and each of the
guarantors confirms and ratifies all of its obligations thereunder.
APPNET OF MICHIGAN, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
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Title: Sr. VP-CFO
APPNET OF MARYLAND, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
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Title: Sr. VP-CFO
SOFTWARE SERVICES CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxxx
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Title: Sr. VP-CFO
NEW MEDIA PUBLISHING, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
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Title: Sr. VP-CFO
RESEARCH & PLANNING, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
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Title: Sr. VP-CFO
CENTURY COMPUTING, INCORPORATED
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By: /s/ Xxxxxx X. Xxxxxxxxx
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Title: Sr. VP-CFO
THE KODIAK GROUP, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
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Title: Sr. VP-CFO
133 COMMUNICATION CORP.
By: /s/ Xxxxxx X. Xxxxxxxxx
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Title: Sr. VP-CFO
SIGMA6, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
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Title: Sr. VP-CFO
Schedule 1
Banks; Commitments
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Bank Commitment Amount Commitment Percentage
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BankBoston, N.A.
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
LIBOR Lending Office: Same $13,000,000 50%
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Antares Capital
Corporation
000 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
LIBOR Lending Office: Same $13,000,000 50%
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Total Commitment $26,000,000 100%
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