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Exhibit 10.9(f)
FIFTH AMENDMENT TO THE
AMENDED AND RESTATED CREDIT AGREEMENT
FIFTH AMENDMENT dated as of July 27, 2001 (this "Amendment") with
respect to the Amended and Restated Credit Agreement dated as of March 10, 1999
(as amended, the "Credit Agreement") by and among Applied Graphics Technologies,
Inc. (the "Borrower"), the lenders party thereto (the "Lenders") and Fleet
National Bank (formerly known as BankBoston, N.A.), as agent (the
"Administrative Agent").
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, the Lenders have made
Advances and other financial accommodations to the Borrower which remain
outstanding; and
WHEREAS, the Borrower has requested that the Administrative Agent
and the Lenders amend the Credit Agreement, and the Administrative Agent and the
Lenders are willing to do so, but only on the terms and conditions set forth
herein;
NOW, THEREFORE, in consideration of the premises and for other
good and valuable consideration the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Defined Terms. Unless otherwise defined herein,
capitalized terms used herein have the meanings assigned in the Credit Agreement
and the following terms shall have the following meanings:
"Amendment Fee" has the meaning specified in Section 6.2(b).
"Business Plan" has the meaning specified in Section 3.1(j).
"Cash on Hand" means, at any date of determination, the aggregate
collected cash balances on deposit in the Included Accounts.
"Documentation Benchmark" means the execution and delivery by the
Borrower and a bona fide third party of one or more definitive
agreements (e.g., a merger agreement, a purchase and sale agreement or
other similar agreement) in respect of the Type A Capital Event or the
Type B Capital Event, as applicable.
"Effective Date" means the first date on which the conditions
precedent specified in Article IV of this Amendment shall have been
satisfied or the satisfaction thereof shall have been waived in
accordance with the terms hereof.
"Employee and Tax-Related Accounts" means the Borrower's and each
of its Subsidiaries' payroll accounts, medical accounts, insurance
accounts, payroll tax accounts, and income tax accounts.
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"Excluded Accounts" means (a) Employee and Tax-Related Accounts,
but only to the extent that (i) funds held in such accounts do not
exceed the amount of the next required payroll, medical, insurance or
tax payment for the Borrower or any of its Subsidiaries, as appropriate,
(ii) funds are not held in payroll accounts more than three days in
advance of the relevant payroll date and (iii) funds are not held in
Employee and Tax-Related Accounts (other than payroll accounts) more
than one week in advance of the date that payment is required by the
relevant payee, (b) the Ispot Partnership Account, but only to the
extent that activity in such account complies with the provisions of
Section 3.1(b), and (c) the accounts of Applied Graphics Technologies
(UK) Limited, Wace Group Limited and any of their Subsidiaries organized
under the laws of the United Kingdom or Australia, but only to the
extent that funds held in such accounts do not exceed a collected cash
balance on any calculation day of more than GBP 1,500,000 in the United
Kingdom and AUD 250,000 in Australia.
"Financial Advisor" has the meaning specified in Section 3.1(f).
"Foreign Collateral Documents" has the meaning specified in
Section 3.1(g).
"Included Account" means any account included in "cash
equivalents" on the balance sheets of the Borrower or any of its
Subsidiaries maintained at any bank or other financial institution that
is a depository account within the Borrower's cash management system,
except for Excluded Accounts.
"Investment Bankers" has the meaning specified in Section 3.1(f).
"Ispot Partnership Account" means Account No. 9399234220
maintained at Fleet.
"Ispot Partnership" means the alliance among the Borrower, Xxxxxx
& Xxxxxx Xxxx, Inc. and Showcase-Online LLC, originally created pursuant
to that certain Agreement for Internet Services, dated July 19, 1996, as
subsequently modified.
"Mortgage Instruments" has the meaning specified in Section
3.1(g).
"2001 Forecast" means the forecast of the Borrower dated June 25,
2001, and delivered to the Administrative Agent pursuant to Section
4.1(d).
"Warrants" means warrants to purchase the common stock of the
Borrower, as more fully described in Section 6.3, and substantially in
the form of Exhibit E hereto.
ARTICLE II
AMENDMENTS
Section 2.1. Amendments to Section 1.1 (Definitions).
(a) Section 1.1 of the Credit Agreement is hereby
amended by (i) deleting the definitions of "Applicable Margin", "DPG Sale",
"EBITDA", "Excess Cash Flow", "Revolving Credit Advance", "Revolving Credit
Lender", "Revolving Credit Commitments", "Revolving Credit Termination Date",
and (ii) inserting the following definitions in their proper alphabetical order:
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"APPLICABLE MARGIN" means, at any date of determination thereof:
(i) With respect to Revolving Credit Advances and
Term Loan A Advances, 3.75% for Eurodollar Rate Advances and 2.50% for
Prime Rate Advances;
(ii) With respect to Term Loan B Advances, 4.25% for
Eurodollar Rate Advances and 3.00% for Prime Rate Advances; and
(iii) With respect to Term Loan C Advances, 4.50% for
Eurodollar Rate Advances and 3.25% for Prime Rate Advances.
Notwithstanding the foregoing, in the event that (a) the Borrower fails
to consummate the Type A Capital Event on or before December 31, 2001,
the Applicable Margin with respect to each Facility shall be increased
by 1% over the margin for each such Facility set forth above for the
period beginning January 1, 2002 through the date of the consummation of
the Type A Capital Event, and (b) the Borrower fails to consummate the
Type B Capital Event on or before April 30, 2002, the Applicable Margin
with respect to each Facility shall be increased by 1% over the margin
then in effect for each such Facility for the period beginning May 1,
2002 through the date of the consummation of the Type B Capital Event.
"AMENDMENT PERIOD REVOLVING CREDIT ADVANCE" has the meaning
specified in Section 2.01(a)(ii).
"AMENDMENT PERIOD REVOLVING CREDIT COMMITMENT" means, with
respect to any Revolving Credit Lender at any time, the amount set forth
opposite such Lender's name on Schedule I as such Lender's Amendment
Period Revolving Credit Commitment, or, if such Lender has entered into
one or more Assignments and Acceptances, the amount set forth for such
Lender in the Register maintained by the Administrative Agent pursuant
to Section 8.07(d) as such Lender's "Amendment Period Revolving Credit
Commitment", as such amount may be reduced at or prior to such time
pursuant to Section 2.05. The aggregate amount of the Lenders' Amendment
Period Revolving Credit Commitment is $30,000,000.
"BORROWING BASE" means, at any date of determination, (i) 80% of
the aggregate amount of Eligible Receivables on such date, less (ii) 80%
of the then-current Offset Amount, less (iii) reasonable reserves
established by the Administrative Agent from time to time.
"BORROWING BASE CERTIFICATE" means a certificate of a Responsible
Officer of the Borrower, substantially in the form of Exhibit B to the
Fifth Amendment.
"CAPPED REVOLVER PERIOD" has the meaning specified in Section
2.01(a)(iii).
"DEFERRED AMOUNTS" has the meaning specified in Section
2.04(b)(iv).
"DPG SALE" means the sale by the Borrower and Devon Group, Inc.
of all the capital stock or substantially all of the assets of Portal
Publications, Ltd. and its Subsidiaries to a bona fide third party.
"EBITDA" means, for any period, the sum, determined on a
Consolidated basis without duplication, of (A) net income (or net loss)
from continued and discontinued operations, plus, (B) to the extent
deducted (or added) in determining net income for such period: (i)
preferred dividends or charges for minority interest, (ii) provision for
taxes (or minus tax benefit), (iii) net interest expense,
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(iv) losses on the disposal of assets (or minus gains on the disposal of
assets), (v) restructuring charges including the cost of implementing
"Phase III" (including any severance or other costs incurred for such
plans that are not included as part of "restructuring charges" in
accordance with GAAP) (add-backs under this clause (v) or other
add-backs made to calculate EBITDA shall not include any allocation of
departmental expenses or charges from the Borrower or its Subsidiaries),
(vi) fees and expenses associated with the Fifth Amendment, (vii) fees
and expenses of non-employee professionals engaged by the Borrower, in
connection with the Borrower's restructuring, and the Administrative
Agent on an ongoing basis, including, without limitation, fees and
expenses associated with clauses (v) and (vi) above, (viii)
non-operating expense (or minus non-operating income) properly excluded
from "operating income" in accordance with GAAP, and separately reported
in filings under the U.S. Securities Exchange Act of 1934 as "Other
income (expense) - net", (ix) depreciation expense, (x) amortization
expense, (xi) non-cash expenses related to the granting of stock
options, asset impairments and other permanent non-cash charges, (xii)
extraordinary items, including extinguishment of debt, and (xiii)
cumulative effect of change in accounting principles.
"EFFECTIVE DATE" has the meaning specified in the Fifth
Amendment.
"ELIGIBLE RECEIVABLES" means, at any date of determination, the
aggregate amount of all Receivables payable to the Borrower or any of
its Domestic Subsidiaries, other than the following (in each case
without duplication):
(a) accounts owing from account debtors located outside of
the United States;
(b) accounts that are not assignable or for which a first
priority security interest in such account in favor of the
Administrative Agent for the benefit of the Lenders has not been
obtained and fully perfected;
(c) accounts subject to any Lien, other than (i) Liens in
favor of the Administrative Agent for benefit of the Lenders and (ii)
such other Liens described in clause (i) of the definition of Permitted
Liens;
(d) accounts that do not constitute a legal, valid and
binding irrevocable payment obligation of the account debtor to pay the
balance thereof in accordance with its terms or is subject to any
asserted or contractual defense, setoff, recoupment or counterclaim;
(e) accounts of the Borrower's Publishing Division (e.g.,
Portal Publications Ltd. and its Subsidiaries);
(f) accounts of the Borrower's Broadcast Division;
(g) accounts for which the account debtor has not been sent
an invoice;
(h) accounts more than 90 days from invoice date;
(i) [Intentionally Omitted];
(j) accounts from any account debtor which has filed a
petition for relief under the United States Bankruptcy Code (or similar
action under any successor law or under any comparable law), made a
general assignment for the benefit of creditors, had filed against it
any petition or other application for relief under the United States
Bankruptcy Code (or similar action under any
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successor law or under any comparable law), called a meeting of its
creditors for the purpose of obtaining any financial concession or
accommodation, or had or suffered a receiver or a trustee to be
appointed for all or a significant portion of its assets or affairs, or,
to the knowledge of the Borrower or any of its Subsidiaries, is
otherwise winding up its affairs or has become insolvent; provided,
however, that Eligible Accounts shall include accounts from any account
debtor that either (A) relate to periods following the filing of a
petition for relief under the United States Bankruptcy Code with respect
to such account debtor (except accounts from any account debtor whose
case is converted post-petition to a case under Chapter 7 of the United
States Bankruptcy Code pursuant to Section 706 thereof) or (B) the
payment of which has been approved by final order of a United States
Bankruptcy Court;
(k) accounts that have been placed with an attorney or other
third party for collection;
(l) accounts from affiliates or Subsidiaries of the Borrower
or any of its Subsidiaries (except, for purposes of this clause (l)
only, accounts from U.S. News & World Report, L.P., Daily News, L.P. and
Applied Printing Technologies, L.P.; provided, however, accounts from
such affiliates shall be reduced to the extent that the Borrower or any
of its Domestic Subsidiaries are liable for goods sold or services
rendered by such affiliates);
(m) accounts from employees or directors of the Borrower or
any of its Subsidiaries;
(n) accounts from any account debtor from whom 30% or more
of the account balance is past 90 days from invoice date before giving
effect to credit-related charge-offs (i.e., excluding normal documented
credit memos or discounts issued in the ordinary course of business)
made during the period 60 days ending on the date of determination; and
(o) accounts with respect to which the Borrower or any of
its Subsidiaries have not complied with all material requirements of law
applicable to such account or affecting the collectability of such
account.
"EXISTING REVOLVING CREDIT ADVANCE" has the meaning specified in
Section 2.01(a)(i).
"EXISTING REVOLVING CREDIT COMMITMENT" means, with respect to any
Revolving Credit Lender at any time, the amount set forth opposite such
Lender's name on Schedule I as such Lender's Existing Credit Commitment,
or, if such Lender has entered into one or more Assignments and
Acceptances, the amount set forth for such Lender in the Register
maintained by the Administrative Agent pursuant to Section 8.07(d) as
such Lender's "Existing Revolving Credit Commitment", as such amount may
be reduced at or prior to such time pursuant to Section 2.05. The
aggregate amount of the Lenders' Existing Revolving Credit Commitment is
$51,000,000.
"EXCESS CASH FLOW" means, for any period, the difference (if
positive) between (a) EBITDA and (b) Fixed Charges.
"FIFTH AMENDMENT" means the Fifth Amendment to the Amended and
Restated Credit Agreement, dated as of July 27, 2001.
"FIXED CHARGES" means, for any period, the sum, determined on a
Consolidated basis without duplication, of (i) cash interest paid or due
but unpaid by the Borrower and its Subsidiaries on all Debt, (ii)
scheduled payments of principal amounts paid by the Borrower and its
Subsidiaries on all Debt, including Capitalized Leases, (iii) cash
Capital Expenditures made by the Borrower and
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its Subsidiaries, and (iv) the aggregate amount of federal, state, local
and foreign income taxes paid by the Borrower and its Subsidiaries.
"INTELLECTUAL PROPERTY" has the meaning specified in Section
4.01(v).
"MONTHLY COVENANT" has the meaning specified in Section
2.01(a)(iii).
"OFFSET AMOUNT" means the greater of (i) $250,000 or (ii) the
then-current Reset Amount.
"PHASE III REPORT" has the meaning specified in Section 3.1(i) of
the Fifth Amendment.
"REAL PROPERTY" has the meaning specified in Section 4.01(z).
"RESET AMOUNT" means, at any date of determination, an amount
equal to (i) 1.5 multiplied by (ii) an amount equal to the lesser of,
with respect to each account debtor, (x) the aggregate amount of
Receivables payable to the Borrower or any of its Domestic Subsidiaries
from account debtors (other than U.S. News & World Report, L.P., Daily
News, L.P. and Applied Printing Technologies, L.P.) to which the
Borrower or any of its Domestic Subsidiaries are liable for goods sold
or services rendered by such account debtors or (y) the aggregate amount
for which the Borrower or any of its Domestic Subsidiaries are liable to
such account debtors.
"REVOLVING CREDIT ADVANCES" means each Existing Revolving Credit
Advance and each Amendment Period Revolving Credit Advance.
"REVOLVING CREDIT LENDER" means any Lender that has an Existing
Revolving Credit Commitment and an Amendment Period Revolving Credit
Commitment.
"REVOLVING CREDIT COMMITMENTS" means, with respect to any
Revolving Credit Lender, at any time, such Lender's Existing Revolving
Credit Commitment and Amendment Period Revolving Credit Commitment.
"REVOLVING CREDIT TERMINATION DATE" means the earlier of (i)
January 15, 2003 and (ii) the Termination Date.
"TYPE A CAPITAL EVENT" means (i) any issuance or sale of equity
securities or junior debt securities or instruments, (ii) any Asset
Disposition or (iii) any combination of events identified in clauses (i)
and (ii) above, in any case, on terms and conditions satisfactory to the
Administrative Agent and the Required Lenders, that shall result in a
payment in cash to the Lenders in an amount not less than $35,000,000.
"TYPE B CAPITAL EVENT" means (i) any issuance or sale of equity
securities or junior debt securities or instruments, (ii) any Asset
Disposition, or (iii) any combination of events identified in clauses
(i) and (ii) above, in any case, on terms and conditions satisfactory to
the Administrative Agent and the Required Lenders, that shall result in
a payment in cash to the Lenders in an amount not less than $15,000,000,
provided, that if a Type A Capital Event results in a payment in cash to
the Lenders in excess of $45,000,000, then such amount in excess of
$45,000,000 shall be deemed to arise from a Type B Capital Event.
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(b) The definition of "Capital Expenditures"
contained in Section 1.1 of the Credit Agreement is hereby amended by inserting
immediately after the word "improvements" therein the following:
"and including, without limitation, purchased software".
(c) The definition of "Interest Expense" contained
in Section 1.1 of the Credit Agreement is hereby amended by deleting clause (iv)
of said definition in its entirety and inserting in lieu thereof the following:
"(iv) the net payment, if any, payable in connection with Hedge
Agreements less the net credit, if any, receivable in connection with
Hedge Agreements (but excluding, for the purposes of calculating the
financial covenants contained in Sections 5.04(b) and (c) only,
permanent non-cash charges and non-cash credits associated in each case
with changes, during, and as of the end of, such period, in the fair
value of such Hedge Agreements) and".
(d) The definition of "Interest Period" contained in
Section 1.1 of the Credit Agreement is hereby amended by replacing the reference
to "one, two, three or six months" in the second sentence thereof with "one or
two months".
Section 2.2. Amendment to Section 2.01 (The Advances). Section
2.01 of the Credit Agreement is hereby amended by deleting Section 2.01(a) in
its entirety and inserting in lieu thereof the following:
" (a) THE REVOLVING CREDIT ADVANCES.
(i) Each Revolving Credit Lender severally agrees,
on the terms and conditions hereinafter set forth, to make advances
(each an "EXISTING REVOLVING CREDIT ADVANCE") to the Borrower from time
to time on any Business Day during the period from the Initial Funding
Date until the Revolving Credit Termination Date; provided, however,
that no Lender shall make any Existing Revolving Credit Advance if,
after giving effect thereto, such Lender's then outstanding Existing
Revolving Credit Advances would exceed such Lender's Existing Revolving
Credit Commitment; provided, further, that no Lender shall make any
Existing Revolving Credit Advance until such time as the aggregate
amount of outstanding Amendment Period Revolving Credit Advances has
been reduced to $0. The aggregate amount of Existing Revolving Credit
Advances on the Effective Date shall be no greater than $51,000,000.
(ii) Each Revolving Credit Lender severally agrees, on
the terms and conditions hereinafter set forth, to make advances (each
an "AMENDMENT PERIOD REVOLVING CREDIT ADVANCE") to the Borrower from
time to time on any Business Day during the period from the Initial
Funding Date until the Revolving Credit Termination Date; provided,
however, that no Lender shall make any Amendment Period Revolving Credit
Advance if, after giving effect thereto, (A) the aggregate total of all
outstanding Amendment Period Revolving Credit Advances would exceed the
Borrowing Base then in effect, (B) such Lender's then outstanding
Amendment Period Revolving Credit Advances would exceed such Lender's
Amendment Period Revolving Credit Commitment or (C) the aggregate amount
of outstanding Existing Revolving Credit Advances shall be less than the
aggregate Existing Revolving Credit Commitment.
(iii) Each Revolving Credit Borrowing shall be in an
aggregate amount of $1,000,000 or an integral multiple of $100,000 in
excess thereof (other than a Borrowing the proceeds of which shall be
used solely to repay or prepay in full outstanding Swing Line Advances
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or outstanding Letter of Credit Advances) and shall consist of Revolving
Credit Advances made simultaneously by the Revolving Credit Lenders
ratably according to their Revolving Credit Commitments. Subject to
clauses (i) and (ii) above, the Borrower may borrow, repay and reborrow
Revolving Credit Advances; provided, however, that, notwithstanding
anything to the contrary contained in this Agreement, in the event that
the Borrower fails to comply with the Minimum Consolidated EBITDA
covenant set forth in Section 5.04(e) as at the last day of any month
other than March, June, September or December (a "MONTHLY COVENANT"), no
Lender shall be required to make, and the Borrower shall not be
permitted to borrow, any Revolving Credit Advance until such time as (A)
the Borrower shall be in compliance with all financial covenants
(including the most recent Monthly Covenant) set forth in Sections 5.04
(a) through (e) and (B) all other conditions to borrowing set forth in
Section 3.03 shall have been satisfied; provided, however, that,
notwithstanding the foregoing, during any period for which the Borrower
is in breach of a Monthly Covenant but no Default or Event of Default
shall then exist (the "CAPPED REVOLVER PERIOD"), the Borrower shall be
permitted to repay and reborrow Revolving Credit Advances so long as the
aggregate amount of Revolving Credit Advances outstanding at any time
during such Capped Revolver Period shall not exceed the lesser of (x)
the aggregate amount of Revolving Credit Advances outstanding as at the
time of the reporting of the breach of such Monthly Covenant and (y) the
average daily Revolving Credit Advances outstanding during the month
immediately preceding the month during which the breach of such Monthly
Covenant is reported."
Section 2.3. Amendment to Section 2.02 (Making the Advances).
Section 2.02(a) of the Credit Agreement is hereby amended by inserting the
following proviso immediately before the period at the end of the second
sentence thereof:
"; provided, however, that no such Notice of Borrowing will be deemed
effective until receipt by the Administrative Agent of the most recent
Borrowing Base Certificate required to be delivered pursuant to Section
5.03(q)."
Section 2.4. Amendment to Section 2.04 (Repayment of Advances).
Section 2.04(b) of the Credit Agreement is hereby amended by inserting at the
end thereof the following new Section 2.04(b)(iv):
" (iv) Notwithstanding anything to the contrary
contained in clauses (i) through (iii) of this Section 2.04(b), the
principal payments on the Term Loan Advances due on July 1, 2001,
October 1, 2001, January 1, 2002 and April 1, 2002 shall be deferred and
shall be payable as provided in this clause (iv) (as such principal
payments become due and are actually deferred, the "Deferred Amounts").
The Deferred Amounts (except to the extent otherwise paid or deemed paid
from the Type A Capital Event, the Type B Capital Event or Excess Cash
Flow) in an aggregate amount up to $10,000,000 shall be amortized on a
monthly basis, commencing July 1, 2002, and payable in monthly amounts
equal to the lesser of (i) $277,778 or (ii) 1/36 of the aggregate amount
of such Deferred Amounts. Any Deferred Amounts in excess of $10,000,000
shall be due and payable on January 15, 2003."
Section 2.5. Amendment to Section 2.06 (Prepayments and
Repayments). Section 2.06 of the Credit Agreement is hereby amended by inserting
at the end thereof the following new Section 2.06(f):
" (f) BORROWING BASE. The Borrower shall from time to time
prepay the Amendment Period Revolving Credit Advances in such amounts as
shall be necessary so that at all times the aggregate outstanding amount
of the Amendment Period Revolving Credit Advances shall not exceed the
Borrowing Base then in effect."
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Section 2.6. Amendment to Section 2.07 (Interest). Section 2.07
of the Credit Agreement is hereby amended by deleting Section 2.07(a)(ii) in its
entirety and inserting in lieu thereof the following:
" (ii) EURODOLLAR RATE ADVANCES. During such periods as
such Advance is a Eurodollar Rate Advance, a rate per annum equal at all
times during each Interest Period for such Advance to the sum of (x) the
Eurodollar Rate for such Interest Period for such Advance plus (y) the
Applicable Margin for such Advance in effect on the first day of such
Interest Period, payable in arrears on the last day of such Interest
Period."
Section 2.7. Amendment to Section 4.01(f). Section 4.01(f) of
the Credit Agreement is hereby amended by deleting the last reference to
"September 30, 1998" therein and inserting in lieu thereof a reference to "June
30, 2001".
Section 2.8. Amendment to Section 4.01(s). Section 4.01(s) is hereby
amended by deleting said Section 4.01(s) in its entirety and inserting in lieu
thereof the following:
"[Intentionally Omitted]".
Section 2.9. Amendment to Section 4.01(v). Section 4.01(v) of the
Credit Agreement is hereby amended by deleting said Section 4.01(v) in its
entirety and inserting in lieu thereof the following:
" (v) Neither the Borrower nor any of its Subsidiaries owns any
intellectual property material to its business other than as set forth
in Schedule 2 to the Fifth Amendment (the "INTELLECTUAL PROPERTY"). With
respect to any Intellectual Property, the loss, impairment or
infringement of which might have a Material Adverse Effect:
(i) such Intellectual Property is subsisting and has
not been adjudged invalid or unenforceable, in whole or in part;
(ii) to the best of the Borrower's knowledge, such
Intellectual Property is valid and enforceable;
(iii) the Borrower and its Subsidiaries have made all
necessary filings and recordations with the appropriate
recordation office to protect their respective interests in such
Intellectual Property, including without limitation, recordations
of all such interests in the intellectual property in the United
States Patent and Trademark Office; and
(iv) to the best of the Borrower's knowledge, the
Borrower and its Subsidiaries are the exclusive owners of the
entire and unencumbered right, title and interest in and to such
Intellectual Property (except for Liens created under the Loan
Documents) and, to the best of the Borrower's knowledge, no
claim has been made that the use of such intellectual property
does or may violate the asserted rights of any third party,
except as set forth on Schedule 2."
Section 2.10. Amendment to Section 4.01 (Representations and
Warranties). Section 4.01 is hereby amended by inserting at the end thereof the
following new Sections 4.01(z) and (aa):
" (z) Neither the Borrower nor any of its Subsidiaries owns any
real property in fee other than as set forth in Schedule 1 to the Fifth
Amendment (the "REAL PROPERTY"). The Borrower and each of its
Subsidiaries own all of the Real Property, free and clear of all Liens
other than the Liens permitted pursuant to Section 5.02(b).
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(aa) Except as heretofore disclosed to the Administrative Agent,
none of Gallions Estates Ltd., Wace UK Holdings Limited, Wace Corporate
Packaging Limited, Wace (Wiltshire) Ltd. or Wace Group Services Limited
own, directly or indirectly, any assets or other property or conduct any
business, and shall not after the Effective Date of the Fifth Amendment,
own, directly or indirectly, any assets or other property or conduct any
business.".
Section 2.11. Amendment to Section 5.02(b) (Debt). Section
5.02(b) is hereby amended by:
(a) inserting immediately before the first semi-colon in
Section 5.02(b)(iii)(E), and immediately after the word "Businesses" in Section
5.02(b)(iii)(G) the following:
"outstanding on the Effective Date of the Fifth Amendment";
(b) deleting Section 5.02(b)(iii)(H) in its entirety and
inserting in lieu thereof the following:
"[Intentionally Omitted]"; and
(c) inserting immediately at the end of Sections 5.02(b) the
following:
"Notwithstanding anything to the contrary set forth in this Section
5.02(b), in the event that Debt incurred pursuant to Sections
5.02(b)(iii)(A) and (B) following the Effective Date of the Fifth
Amendment exceeds $2,500,000, then the Amendment Period Revolving Credit
Commitment shall be deemed to be permanently reduced by an amount equal
to 50% of the amount of such excess.".
Section 2.12. Amendment to Section 5.02(d) (Fundamental
Changes). Section 5.02(d) is hereby amended by inserting immediately before the
period in Section 5.02(d)(iii) the following:
"prior to the Effective Date of the Fifth Amendment".
Section 2.13. Amendment to Section 5.02(e) (Sales, Etc., of
Assets). Section 5.02(e) is hereby amended by:
(a) deleting Section 5.02(e)(iv) in its entirety and
inserting in lieu thereof the following:
" (iv) (x) prior to the Effective Date of the Fifth Amendment,
any sales, leases, licenses, transfers or other dispositions of
intellectual property in the ordinary course of business, (y) on or
after the Effective Date of the Fifth Amendment, leases or licenses of
intellectual property in the ordinary course of business; provided, that
such leases or licenses could not be reasonably expected to have a
Material Adverse Effect and (z) notwithstanding anything to the contrary
set forth in clause (y) above, sales of intellectual property in
connection with the DPG Sale;" and
(b) deleting Section 5.02(e)(v) in its entirety and inserting
in lieu thereof the following:
" (v) (x) prior to the Effective Date of the Fifth Amendment,
any sales of properties resulting from the Transaction or any sale of
real property, (y) on or after the Effective Date of the Fifth
Amendment, any individual sale or series of related sales of real
property to a bona fide third party in an amount up to $2,000,000;
provided, however, (A) each such sale shall be for not less than fair
market value as evidenced by a broker's letter as to value and (B) the
aggregate amount of
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such sales shall not exceed $10,000,000 and (z) notwithstanding anything
to the contrary set forth in clause (y) above, sales of real property in
connection with the DPG Sale;".
Section 2.14. Amendment to Section 5.02(f) (Investments in Other
Persons). Section 5.02(f) is hereby amended by deleting Sections 5.02(f)(ix) and
(xi) in their entirety.
Section 2.15. Amendment to Section 5.02(g) (Dividends). Section
5.02(g) is hereby amended by inserting immediately before the period in Section
5.02(g)(iv) the following:
"prior to the Effective Date of the Fifth Amendment".
Section 2.16. Amendment to Section 5.02(q) (Issuance of Stock).
Section 5.02(q) is hereby amended by deleting the word "and" at the end of
Section 5.02(q)(F), replacing the period at the end of Section 5.02(q)(G) with
"; and" and inserting at the end of Section 5.02(q) the following new Section
5.02(q)(H):
" (H) subject to the provisions of the Fifth
Amendment, the Warrants (as defined therein) and any stock issued
pursuant to the Warrants.".
Section 2.17. Amendment to Section 5.02(p) (Capital
Expenditures). Section 5.02(p) of the Credit Agreement is hereby amended by
deleting said Section 5.02(p) in its entirety and inserting in lieu thereof the
following:
" (p) CAPITAL EXPENDITURES. Make or commit to make, or permit
any of its Subsidiaries to make or commit to make, any Capital
Expenditures except that the Borrower and its Subsidiaries shall be
permitted to make or commit to make Capital Expenditures (i) during the
period beginning July 1, 2001 through December 31, 2001 in an aggregate
amount up to $8,500,000 and (ii) during fiscal year 2002 in an aggregate
amount up to $14,600,000; provided, however, amounts in an aggregate
amount up to $2,500,000 permitted to be expended in the period
identified in clause (i) that are not expended in such period shall be
permitted to be expended during fiscal year 2002."
Section 2.18. Amendment to Section 5.03(b) (Monthly Financials).
Section 5.03(b) of the Credit Agreement is hereby amended by deleting said
Section 5.03(b) in its entirety and inserting in lieu thereof the following:
" (b) PERIODIC REPORTING. On or before:
(i) the first and third Tuesday of each month, a
sixteen week rolling cash flow forecast which shall detail all sources
and uses of cash on a weekly basis and shall report any variances from
the prior report, and which, to the extent necessary, shall be
reforecast in its entirety as of the end of each month (including a
variance analysis with respect to such reforecast);
(ii) the tenth Business Day of each month (or, in the
case of July 2001 and August 2001, the fifteenth Business Day), a
"Financial Statement Highlights" indicating revenue, gross profit and
operating income for each operating division and on a consolidated basis
for the preceding month, and year to date, in each case compared to (A)
the 2001 Forecast (as defined in the Fifth Amendment), for each month
ending during the period from the Effective Date through December 31,
2001, and (B) the Business Plan (as defined in the Fifth Amendment) for
each month ending after December 31, 2001; and
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(iii) the last Business Day of each month, (A)
consolidating and consolidated financial statements of the Borrower for
the preceding month and year to date, (B) an accounts receivable aging
summary of the Borrower and its major Subsidiaries reconciled to the
consolidated balance sheet, and (C) an accounts payable summary of the
Borrower and its major Subsidiaries reconciled to the consolidated
balance sheet, in each case, in form and substance satisfactory to the
Administrative Agent and the Lenders;
all of the foregoing to be in reasonable detail and, with respect to
clause (iii) above, duly certified by a Responsible Officer of the
Borrower as having been prepared in accordance with GAAP (subject to
normal year-end audit adjustments and quarter-end review adjustments and
the absence of footnotes).".
Section 2.19. Amendment to Section 5.03 (Reporting Requirements).
Section 5.03 is hereby amended by inserting at the end thereof the following new
Sections 5.03(q) and (r):
" (q) BORROWING BASE CERTIFICATE. On or before Wednesday of
each week, a Borrowing Base Certificate detailing the Borrowing Base as
of Friday of the preceding week.
(r) RESET AMOUNT CERTIFICATE. On or before the 10th Business
Day following the end of each fiscal quarter, a certificate of a
Responsible Officer of the Borrower, in form and substance satisfactory
to the Administrative Agent, detailing the Reset Amount as of the last
day of the preceding fiscal quarter.".
Section 2.20. Amendment to Section 5.04(a) (Consolidated Total
Funded Debt to EBITDA Ratio). Section 5.04(a) of the Credit Agreement is hereby
amended by deleting said Section 5.04(a) in its entirety and inserting in lieu
thereof the following:
" (a) CONSOLIDATED TOTAL FUNDED DEBT TO EBITDA RATIO. Maintain
a ratio of (i) Total Funded Debt to (ii) EBITDA as at the last day of
each fiscal quarter of the Borrower of not more than the ratios set
forth below (calculated on the basis of (x) annualized amounts,
cumulatively from and including the fiscal quarter beginning April 1,
2001, in the case of any fiscal quarter ending on or before December 31,
2001, and (y) the cumulative aggregate amounts for the immediately
preceding four full fiscal quarters, in the case of any fiscal quarter
ending after December 2001):
Period Ending In: Ratio:
---------------- -----
September 2001 9.14:1.00
December 2001 7.82:1.00
March 2002 7.88:1.00
June 2002 8.33:1.00
September 2002 9.05:1.00
December 2002 8.62:1.00".
Section 2.21. Amendment to Section 5.04(b) (Consolidated Senior
Debt to EBITDA Ratio). Section 5.04(b) of the Credit Agreement is hereby amended
by deleting said Section 5.04(b) in its entirety and inserting in lieu thereof
the following:
" (b) ADJUSTED INTEREST COVERAGE RATIO. Maintain a ratio of (i)
EBITDA to (ii) Interest Expense plus Capital Expenditures as at the last
day of each fiscal quarter of the Borrower of not less than the ratios
set forth below (calculated on the basis of cumulative aggregate amounts
(x) for the period from April 1, 2001 to the last day of such fiscal
quarter, in the case of any fiscal quarter
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ending on or before December 31, 2001, and (y) for the immediately
preceding four full fiscal quarters, in the case of any fiscal quarter
ending after December 2001):
Period Ending In: Ratio:
---------------- -----
September 2001 0.69:1.00
December 2001 0.67:1.00
March 2002 0.65:1.00
June 2002 0.68:1.00
September 2002 0.66:1.00
December 2002 0.70:1.00".
Section 2.22. Amendment to Section 5.04(c) (Interest Coverage
Ratio). Section 5.04(c) of the Credit Agreement is hereby amended by deleting
said Section 5.04(c) in its entirety and inserting in lieu thereof the
following:
" (c) INTEREST COVERAGE RATIO. Maintain a ratio of (i) EBITDA
to (ii) Interest Expense as at the last day of each fiscal quarter of
the Borrower of not less than the ratios set forth below (calculated on
the basis of cumulative aggregate amounts (x) for the period from April
1, 2001 to the last day of such fiscal quarter, in the case of any
fiscal quarter ending on or before December 31, 2001, and (y) for the
immediately preceding four full fiscal quarters, in the case of any
fiscal quarter ending after December 2001):
Period Ending In: Ratio:
---------------- -----
September 2001 1.14:1.00
December 2001 1.10:1.00
March 2002 1.07:1.00
June 2002 1.09:1.00
September 2002 1.06:1.00
December 2002 1.13:1.00".
Section 2.23. Amendment to Section 5.04(d) (Fixed Charge Coverage
Ratio). Section 5.04(d) of the Credit Agreement is hereby amended by deleting
said Section 5.04(d) in its entirety and inserting in lieu thereof the
following:
" (d) FIXED CHARGE COVERAGE RATIO. Maintain a ratio of (i)
EBITDA to (ii) Fixed Charges, as at the last day of each fiscal quarter
of the Borrower of not less than the ratios set forth below (calculated
on the basis of cumulative aggregate amounts (x) for the period from
April 1, 2001 to the last day of such fiscal quarter, in the case of any
fiscal quarter ending on or before December 31, 2001, and (y) for the
immediately preceding four full fiscal quarters, in the case of any
fiscal quarter ending after December 2001):
Period Ending In: Ratio:
---------------- -----
September 2001 0.48:1.00
December 2001 0.47:1.00
March 2002 0.49:1.00
June 2002 0.56:1.00
September 2002 0.49:1.00
December 2002 0.48:1.00".
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Section 2.24. Amendment to Section 5.04(e) (Minimum Net Worth).
Section 5.04(e) of the Credit Agreement is hereby amended by deleting said
Section 5.04(e) in its entirety and inserting in lieu thereof the following:
" (e) MINIMUM CONSOLIDATED EBITDA . Maintain cumulative EBITDA
as at the last day of each month of not less than the amounts set forth
below for each such period (calculated on the basis of cumulative
aggregate amounts (x) for the period from April 1, 2001 to the last day
of such month, in the case of any month through February 2002 and (y)
for the immediately preceding twelve full months, in the case of any
month occurring after February 2002):
Period Ending In: Minimum Consolidated EBITDA:
---------------- ---------------------------
July 2001 $9,400,000
August 2001 $12,200,000
September 2001 $15,200,000
October 2001 $18,400,000
November 2001 $21,100,000
December 2001 $22,300,000
January 2002 $22,500,000
February 2002 $24,000,000
March 2002 $28,000,000
April 2002 $28,200,000
May 2002 $28,400,000
June 2002 $28,000,000
July 2002 $27,500,000
August 2002 $26,800,000
September 2002 $26,100,000
October 2002 $25,700,000
November 2002 $26,000,000
December 2002 $26,700,000;
provided, however, that for the purposes of this Section 5.04(e) only,
(i) for all periods from the date that the Borrower shall consummate the
DPG Sale and prior to December 31, 2001, EBITDA shall be deemed to
include the projected positive EBITDA of Portal Publications, Ltd. and
its Subsidiaries for such periods as heretofore provided to the
Administrative Agent which amounts shall be prorated for partial months
(provided, however, that EBITDA of Portal Publications, Ltd. and its
Subsidiaries for any month shall in no event exceed the projected amount
for such month as heretofore provided to the Administrative Agent) and
(ii) for all monthly periods beginning January 1, 2002 and thereafter,
EBITDA shall not include the EBITDA, if any, of Portal Publications,
Ltd. and its Subsidiaries.".
Section 2.25. Amendment to Section 6.01 (Events of Default).
Sections 6.01(c) and (d) are hereby amended by inserting immediately after the
word "agreement" in each of said subsections the following:
"(but excluding any Monthly Covenant)"
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Section 2.26. Amendment to Section 8.01 (Amendments, Etc.).
Section 8.01(a)(ii) is hereby amended by inserting immediately before the
semi-colon at the end thereof the following:
"(except, in each case, as may be required in order to effectuate the
Type A Capital Event or the Type B Capital Event)".
Section 2.27. Amendment to Section 8.02 (Notices). Sections
8.02(i) and (ii) are hereby amended in their entirety by deleting said Sections
8.02(i) and (ii) and inserting in lieu thereof the following:
"(i) if to the Borrower:
Applied Graphics Technologies, Inc.
000 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chief Financial Officer
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
with a copy to:
Applied Graphics Technologies, Inc.
000 Xxxx 00xx Xxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chief Legal Officer
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
(ii) if to the Administrative Agent:
Fleet National Bank
000 Xxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxx Xxxxx & Xxxxx
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Trust, Esq.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000"
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Section 2.28. Amendment to the Credit Agreement. The Credit
Agreement is hereby amended by replacing Schedule I with the Schedule I attached
hereto as Exhibit A.
ARTICLE III
AGREEMENTS
Section 3.1. Agreements.
(a) Excess Cash Flow. Notwithstanding anything to the
contrary set forth in Section 2.06(b) or (c) of the Credit Agreement, (i) (A)
the Borrower shall provide the Administrative Agent, within 45 days after June
30 of each year and within 90 days after December 31 of each year, a certificate
of a Responsible Officer, certifying in reasonable detail as to Excess Cash Flow
measured as of the end of such fiscal half year and (B) within one Business Day
of the delivery of such certificate, prepay the Deferred Amounts and Advances in
an amount equal to such Excess Cash Flow, and (ii) any prepayments of Excess
Cash Flow pursuant to clause (i) above shall be applied, first, to the
prepayment of the Deferred Amounts and second, to the prepayment of the Advances
(in accordance with the provisions of Section 2.06(c)(ii) of the Credit
Agreement).
(b) Cash on Hand Limitation. The Borrower shall furnish to
the Administrative Agent, no later than 12:00 p.m. (New York time) on each
Tuesday, a certificate of a Responsible Officer of the Borrower certifying in
reasonable detail as to Cash on Hand measured as of the preceding Friday. The
Borrower shall, by the close of business each Wednesday, prepay the Advances in
an amount equal to the amount of Cash on Hand in excess of $5,000,000 as of the
preceding Friday. Notwithstanding anything to the contrary set forth in Section
2.06(b) or (c) of the Credit Agreement, prepayments pursuant to this Section
3.1(b) shall be applied, first, to prepay Amendment Period Revolving Credit
Advances then outstanding until such Amendment Period Revolving Credit Advances
are paid in full and, second, to prepay Existing Revolving Credit Advances then
outstanding until such Existing Revolving Credit Advances are paid in full. Each
of the Borrower and its Subsidiaries represents and covenants that it owns or
will own no depository accounts other than the Included Accounts and the
Excluded Accounts. Each of the Borrower and its Subsidiaries further represents
and covenants that, as of the Effective Date, the balance in the Ispot
Partnership Account is not greater than $500,000 and, as of such date, no
advances shall be made to the Ispot Partnership, no repayments of indebtedness
or intercompany payables shall be made to the Ispot Partnership and no purchases
shall be made from the Ispot Partnership except normal trade transactions on an
arms-length basis.
(c) Capital Events. The Borrower shall use its best efforts
to consummate the Type A Capital Event on or before October 31, 2001. The
Borrower shall use its best efforts to consummate the Type B Capital Event on or
before February 28, 2002. It is understood that the failure to consummate the
Type A Capital Event or the Type B Capital Event by such dates shall not
constitute a Default or Event of Default.
(d) Application of Proceeds of Certain Events.
(i) Notwithstanding anything to the contrary set
forth in Sections 2.06(b) or (c) of the Credit Agreement, (A) the
proceeds of the Type A Capital Event and the Type B Capital Event, in
aggregate amount up to $50,000,000, shall be applied, first, to the
prepayment of the Deferred Amounts (and to amounts to be deferred within
30 days of the consummation of a Capital Event) and, second, to the
prepayment of the Advances in accordance with Section 2.06(c)(i) of the
Credit Agreement, and (B) the proceeds of (1) the Type A Capital Event
and the Type B Capital Event, in an aggregate amount in excess of
$50,000,000 and (2) any issuance or sale of equity
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securities or junior debt securities or instruments or of any Asset
Disposition (in each case, other than in connection with the Type A
Capital Event or the Type B Capital Event), in each case, shall be
applied, first, on a pro rata basis to the prepayment in full of the
Term Loan Advances and the Existing Revolving Credit Advances then
outstanding (which prepayments shall permanently reduce the Existing
Revolving Credit Commitment) until such Advances are paid in full,
second, to the prepayment of the Letter of Credit Advances then
outstanding under the Existing Revolving Credit Commitments, until all
such Letter of Credit Advances are paid in full, third, to the
prepayment of the Amendment Period Revolving Credit Advances then
outstanding (which prepayments shall permanently reduce the Amendment
Period Revolving Credit Commitment) until all such Advances are paid in
full, fourth, to the prepayment of the Letter of Credit Advances then
outstanding under the Amendment Period Revolving Credit Commitments,
until all such Letter of Credit Advances are paid in full, and fifth, by
depositing such amount in the L/C Cash Collateral Account, to cash
collateralize 100% of the Available Amount of the Letters of Credit then
outstanding.
(ii) Notwithstanding anything to the contrary set
forth in Section 20(b) of the Security Agreement, all cash proceeds
received in respect of any realization upon the Collateral, after an
Event of Default and upon an acceleration of the indebtedness as a
result therefrom, shall be applied, first, to the payment in full of all
Amendment Period Revolving Credit Advances then outstanding (which
prepayments shall permanently reduce the Amendment Period Revolving
Credit Commitment), second, to the prepayment of the Letter of Credit
Advances then outstanding under the Amendment Period Revolving Credit
Commitments, until all such Letter of Credit Advances are paid in full,
third, on a pro rata basis to the prepayment in full of the Term Loan
Advances and the Existing Revolving Credit Advances then outstanding
(which prepayments shall permanently reduce the Existing Revolving
Credit Commitment) until such Advances are paid in full, fourth, to the
prepayment of the Letter of Credit Advances then outstanding under the
Existing Period Revolving Credit Commitments, until all such Letter of
Credit Advances are paid in full, and fifth, by depositing such amount
in the L/C Cash Collateral Account, to cash collateralize 100% of the
Available Amount of the Letters of Credit then outstanding.
(e) Cash Management System; Certain Debits. The Borrower
shall maintain its cash management system at the Administrative Agent or
otherwise pursuant to depositary agreements in form and substance
satisfactory to the Administrative Agent. The Administrative Agent shall
be entitled, upon one Business Day's notice, to debit any operating
account of the Borrower to collect costs and expenses to which the
Administrative Agent is entitled pursuant to Section 8.04 of the Credit
Agreement or Sections 3.1(h) and 6.2 of this Amendment.
(f) Financial Advisor; Investment Bankers. The Borrower shall
(i) at all times continue the retention of The Recovery Group, or
another financial advisor reasonably acceptable to the Administrative
Agent and the Required Lenders (the "Financial Advisor"), (ii) until the
consummation of the Type A Capital Event, continue the retention of
Xxxxxxx Xxxxxx, or another investment banker reasonably acceptable to
the Administrative Agent and the Required Lenders with respect to the
scope of engagement set forth in that certain engagement letter between
the Borrower and Xxxxxxx Xxxxxx dated April 11, 2001 and (iii) retain on
or before August 1, 2001 and thereafter continue the retention of an
investment banker reasonably acceptable to the Administrative Agent and
the Required Lenders (the investment bankers retained pursuant to
clauses (ii) and (iii), the "Investment Bankers"). Upon request, the
Administrative Agent, the Lenders and their advisors shall be provided
reasonable access to the Financial Advisor and the Investment Bankers
and shall receive copies of all information provided to or from any of
them.
(g) Mortgage Instruments; Foreign Collateral Documents;
Intellectual Property Documents. (i) As soon as possible after the
Effective Date, and in no event later than August 31, 2001, the Borrower
and its Subsidiaries shall deliver to the Administrative Agent for the
ratable benefit of the Lenders
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(A) one or more security agreements and guarantees duly executed by each
Foreign Subsidiary identified in Schedule 3 hereto, together with all
documents and instruments necessary to perfect the security interests
granted in such security agreements and such legal opinions as the
Administrative Agent may reasonably request (the "Foreign Collateral
Documents") and (B) one or more security agreements duly executed by the
Borrower and its Subsidiaries as may be necessary to grant the
Administrative Agent for the ratable benefit of the Lenders security
interests in the Intellectual Property, together with all documents and
instruments necessary to perfect the security interests (the "IP
Collateral Documents"); and (ii) as soon as possible after the Effective
Date, and in no event later than September 28, 2001, the Borrower and
its Subsidiaries shall deliver to the Administrative Agent for the
ratable benefit of the Lenders fully executed and notarized mortgages,
deeds of trust or deeds to secure debt, as applicable (the "Mortgage
Instruments"), with respect to the Real Property. The Mortgage
Instruments, the Foreign Collateral Documents and the IP Collateral
Documents shall be in form and substance satisfactory to the
Administrative Agent and the Required Lenders.
(h) Administrative Agent's Advisors. The Borrower shall
cooperate in all respects with any financial advisor retained by the
Administrative Agent and shall pay or reimburse the Administrative Agent
for all reasonable fees and out-of-pocket expenses incurred in
connection therewith.
(i) Phase III Report. The Borrower shall deliver to the
Administrative Agent and the Lenders, as soon as available, but in any
event not later than August 31, 2001, a written report describing in
detail the initiatives to be considered in "Phase III" as described in
the Borrower's presentation to the Lenders dated May 22, 2001 (the
"Phase III Report"). The Phase III Report shall be in form and substance
satisfactory to the Administrative Agent and the Required Lenders.
Promptly following the delivery of the Phase III Report, the Borrower
and the Financial Advisor shall, from time to time at the request of the
Administrative Agent, consult with the Administrative Agent, the Lenders
and their advisors with regard to all aspects of the implementation of
the Phase III initiatives. The Borrower shall use best efforts to
implement the Phase III initiatives as soon as practicable. The Borrower
and the Financial Advisor shall participate on bi-weekly (or more
frequently as the Administrative Agent shall request) conference calls
with the Administrative Agent and its advisors regarding the analysis
and implementation of the Phase III initiatives.
(j) Business Plan. The Borrower shall deliver to the
Administrative Agent and the Lenders on or before October 31, 2001 a
detailed business plan which plan shall be prepared on a "bottom-up"
basis for each of the operating divisions of the Borrower (and
reflecting, in particular, the operations of each business unit of each
such operating division) (the "Business Plan"). The Business Plan shall
identify and reflect the timing of the implementation of the "Phase III"
action items and shall include, on a monthly basis, for the fifteen
month period beginning October 1, 2001, (i) profit and loss statements,
(ii) balance sheets, (iii) consolidated forecasts detailing cash flow
and collateral levels. The Business Plan shall identify, among other
things, (x) all sources of revenue and expenses, including without
limitation, intended executive compensation and (y) the nature of all
proposed Capital Expenditures. The Business Plan shall be in form and
substance satisfactory to the Administrative Agent.
Section 3.2. Agreements Deemed Agreements under the Credit
Agreement. For purposes of the Credit Agreement, the agreements of the Borrower
contained in this Article III shall be deemed to be, and shall be, agreements
under the Credit Agreement. Any breach on the part of the Borrower in respect of
any agreement contained in Sections 3.1(a), (b), (g), (i) or (j) shall
constitute an Event of Default.
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ARTICLE IV
EFFECTIVE DATE
Section 4.1. Effective Date. This Amendment shall become
effective as of the date hereof upon receipt by the Administrative Agent of the
following:
(a) counterparts of this Amendment, duly executed and
delivered by the Borrower, each of the Subsidiaries listed on the signature
pages hereto, the Administrative Agent and the Lenders;
(b) that portion of the Amendment Fee due on the Effective
Date, along with the reasonable fees and disbursements of the Administrative
Agent's professionals that have been invoiced as of July 27, 2001;
(c) evidence that outstanding Revolving Credit Advances
shall not be greater than $51,000,000;
(d) a copy of the 2001 Forecast;
(e) such legal opinions (including opinions from counsel to
the Borrower and its Subsidiaries and from such local counsel as may be required
by the Administrative Agent), documents, and instruments as are customary for
transactions of this type or as the Administrative Agent or any Lender may
reasonably request;
(f) a guaranty supplement duly executed by each Domestic
Subsidiary identified in Schedule 3 hereto, in form and substance substantially
similar to that set forth in Exhibit C to this Amendment;
(g) a security agreement supplement duly executed by each
Domestic Subsidiary identified in Schedule 3 hereto, in form and substance
substantially similar to that set forth in Exhibit D to this Amendment, together
with all documents and instruments necessary to perfect the security interests
granted in such security agreements; and
(h) as may be requested by the Administrative Agent,
certified copies of the charter and by-laws (or equivalent documents), of each
Subsidiary identified in Schedule 3 hereto and of all corporate authority for
each such Subsidiary (including, without limitation, board of director
resolutions and evidence of the incumbency of officers) with respect to the
execution, delivery and performance of each Loan Document to which such
Subsidiary is intended to be a party and each other document to be delivered by
such Subsidiary from to time in connection herewith and with the extensions of
credit under the Credit Agreement (and the Administrative Agent and each Lender
may conclusively rely on such certificate until it receives notice in writing
from such Subsidiary to the contrary).
ARTICLE V
INTERPRETATION
Section 5.1. Continuing Effect of the Credit Agreement. The
Borrower, the Administrative Agent and each Lender hereby acknowledges and
agrees that the Credit Agreement shall continue to be and shall remain unchanged
and in full force and effect in accordance with its terms, except as expressly
modified hereby. Any terms or conditions contained in this Amendment shall
control over any inconsistent terms or conditions in the Credit Agreement or the
other Loan Documents.
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Section 5.2. No Waiver. Nothing contained in this Amendment shall
be construed or interpreted or is intended as a waiver of any Default or Event
of Default or of any rights, powers, privileges or remedies that the
Administrative Agent or the Lenders have or may have under the Credit Agreement,
any other related document or applicable law on account of such Default or Event
of Default.
ARTICLE VI
MISCELLANEOUS
Section 6.1. Representations and Warranties. The Borrower hereby
represents and warrants as of the date hereof that, after giving effect to this
Amendment, (a) no Default or Event of Default has occurred and is continuing,
and (b) all representations and warranties of the Borrower contained in the
Credit Agreement are true and correct in all material respects on and as of the
date hereof (or if any such representation or warranty is expressly stated to
have been made as of a specific date, as of such specific date).
Section 6.2. Fees and Expenses.
(a) The Borrower agrees to pay to the Administrative Agent
on demand all reasonable expenses including reasonable attorney's fees and
expenses of the Administrative Agent, incurred by the Administrative Agent, in
connection with the preparation, negotiation and execution of this Fifth
Amendment.
(b) The Borrower shall pay to the Administrative Agent, for
the account of each Lender on a pro rata basis, an amendment fee (the "Amendment
Fee") payable as follows: (i) $2,000,000 in cash on the Effective Date, (ii)
$500,000 in cash on November 1, 2001 only in the event the Borrower shall have
failed to achieve the Documentation Benchmark with respect to the Type A Capital
Event on or before October 31, 2001, (iii) $1,000,000 in cash on January 15,
2003 in the event that (A) the Borrower shall have failed to consummate the Type
A Capital Event on or before December 31, 2001 and (B) the Borrower shall not
have paid in full, in cash, all Obligations owing to the Administrative Agent
and the Lenders under the Credit Agreement on or before January 15, 2003, (iv)
$500,000 in cash on March 1, 2002 in the event the Borrower shall have failed to
achieve the Documentation Benchmark with respect to the Type B Capital Event on
or before February 28, 2002 and (v) in addition to any fee owing pursuant to
clause (iii) above, $1,000,000 in cash on January 15, 2003 in the event that (A)
the Borrower shall have failed to consummate the Type B Capital Event on or
before April 30, 2002 and (B) the Borrower shall not have paid, in full, in
cash, all Obligations owing to the Administrative Agent and the Lenders under
the Credit Agreement on or before January 15, 2003. The Amendment Fee shall be
deemed earned in full on the Effective Date.
Section 6.3. Warrants. In the event the Borrower shall have
failed to achieve the Documentation Benchmark with respect to the Type A Capital
Event on or before December 31, 2001, the Borrower shall issue to the Lenders,
on January 1, 2002, detachable and freely transferable five year Warrants for
the purchase of common stock of the Borrower representing in the aggregate 5% of
the fully diluted common stock upon the Effective Date; provided, however, that
in the event the Borrower shall have consummated the Type A Capital Event on or
before February 28, 2002, such Warrants shall be cancelled. In addition to any
Warrants issued pursuant to the preceding sentence, in the event the Borrower
shall have failed to achieve the Documentation Benchmark with respect to the
Type B Capital Event on or before April 30, 2002, the Borrower shall issue to
the Lenders, on May 1, 2002, Warrants representing in the aggregate 5% of the
fully diluted common stock upon the Effective Date; provided, however, that in
the event the Borrower shall have consummated the Type B Capital Event on or
before June 30, 2002, such Warrants shall be cancelled. All such Warrants would
be exercisable on the earlier of (i) the fifth anniversary of the issuance
thereof or (ii) upon the occurrence of an Event of Default at a nominal strike
price.
-20-
21
Section 6.4. Confirmation of Indebtedness. The Borrower and the
Subsidiary Guarantors hereby confirm and acknowledge that, as of the Effective
Date, (i) the Borrower is truly and justly indebted to the Lenders, without
defense, counterclaim or offset of any kind, (ii) the Borrower is liable to the
Lenders in respect of Advances made under the Credit Agreement, as of July 24,
2001, in the aggregate principal amount of $250,635,275.34 (exclusive of Letters
of Credit) and (iii) each Subsidiary Guarantor is contingently liable to the
Lenders in respect of such amount.
Section 6.5. Counterparts. 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.
Section 6.6. GOVERNING LAW. THIS AMENDMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
(WITHOUT GIVING EFFECT TO ITS CONFLICTS OF LAW PRINCIPLES).
Section 6.7. Reservation of Rights. Notwithstanding anything
contained in this Amendment, the Borrower acknowledges that the Administrative
Agent and the Lenders do not waive, and expressly reserve, the right to
exercise, at any time, any and all of their rights and remedies under the Credit
Agreement, any other related document and applicable law on account of any
Default or Event of Default.
Section 6.8. Waiver. The Loan Parties hereby release, waive, and
forever relinquish all claims, demands, obligations, liabilities and causes of
action of whatever kind or nature, whether known or unknown, which any of them
has, may have, or might assert at the time of execution of this Amendment or in
the future against the Administrative Agent, the Lenders and/or their respective
parents, affiliates, participants, officers, directors, employees, agents,
attorneys, accountants, consultants, successors and assigns (collectively, the
"Lender Group"), directly or indirectly, which occurred, existed, was taken,
permitted or begun prior to the execution of this Amendment, arising out of,
based upon, or in any manner connected with (i) any transaction, event,
circumstance, action, failure to act or occurrence of any sort or type, whether
known or unknown, with respect to the Credit Agreement, any other Loan Document
and/or the administration thereof or the obligations created thereby, (ii) any
discussions, commitments, negotiations, conversations or communications with
respect to the refinancing, restructuring or collection of any obligations
related to the Credit Agreement, any other Loan Document and/or the
administration thereof or the obligations created thereby, or (iii) any matter
related to the foregoing.
Section 6.9. Consents. Each of the Administrative Agent and each
Lender hereby consents to (a) the DPG Sale for aggregate net cash consideration
in an amount not less than fair market value, and (b) the release by the
Administrative Agent of (i) all security interests held by it for the benefit of
the Lenders in the assets and/or stock that are the subject of the DPG Sale and
(ii) Portal Publications, Ltd. and its Subsidiaries from their obligations under
the Subsidiary Guaranty.
Section 6.10. Fuji Letter. The Borrower and each Lender hereby
agree that, as of the Effective Date, that certain letter agreement, dated
December 8, 2000, from Fleet National Bank, as Administrative Agent and Lender,
to Applied Graphics Technologies, Inc., shall be of no further force or effect.
-21-
22
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be duly executed and delivered by their proper and duly authorized officers
as of the date first above written.
APPLIED GRAPHICS TECHNOLOGIES, INC.
By:
-----------------------------------
Title:
MIRAMAR EQUIPMENT, INC.
DEVON GROUP, INC.
BLACK DOT GRAPHICS, INC.
XXXXX GRAPHICARTS, INC.
TYPO-GRAPHICS, INC.
XXXXXXX & ASSOCIATES, INC.
WEST COAST CREATIVE, INC.
ABD GROUP, INC.
MERIDIAN RETAIL, INC.
TAPROOT INTERACTIVE, INC.
PROOF POSITIVE/FARROWLYNE
ASSOCIATES, INC.
ONE 2 ONE, INC.
PORTAL PUBLICATIONS, LTD.
THE XXXX ART GROUP, LTD.
COLOR CONTROL, INC.
AGILE ENTERPRISE, INC.
AGT SYSTEM SERVICES, INC.
RETAIL PROFIT SOLUTIONS, INC.
By:
-----------------------------------
Title:
-22-
23
FLEET NATIONAL BANK, as Administrative Agent
By:
-----------------------------------
Title:
FLEET NATIONAL BANK, as a Lender, Issuing Bank
and Swing Line Bank
By:
-----------------------------------
Title:
BANK OF AMERICA, N.A., as a Lender
By:
-----------------------------------
Title:
FIRST UNION NATIONAL BANK, N.A., as a Lender
By:
-----------------------------------
Title:
THE CHASE MANHATTAN BANK, as a Lender
By:
-----------------------------------
Title:
-23-
24
THE BANK OF NEW YORK, as a Lender
By:
-----------------------------------
Title:
SOVEREIGN BANK, as a Lender
By:
-----------------------------------
Title:
MELLON BANK, N.A., as a Lender
By:
-----------------------------------
Title:
SUNTRUST BANK, N.A., as a Lender
By:
-----------------------------------
Title:
CITIZENS BANK OF MASSACHUSETTS, as a Lender
By:
-----------------------------------
Title:
THE BANK OF NOVA SCOTIA, as a Lender
By:
-----------------------------------
Title:
-24-
25
BHF (USA) CAPITAL CORPORATION, as a Lender
By:
-----------------------------------
Title:
By:
-----------------------------------
Title:
-25-
26
Schedule 1
REAL PROPERTY
1. Property located at 000 Xxxx Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000
owned by WUSA RE, Inc.
2. Property located at 000 X. Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000 owned
by Xxxxxxx & Associates, Inc.
3. Property located at 000 X. Xxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000 owned by
Xxxxxxx & Associates, Inc.
4. Property located at 0000 Xxxxxxx Xxxx, Xxxxxxx Xxxx, Xxxxxxxx 00000
owned by Black Dot Graphics, Inc.
5. Property located at 0000 Xxxxxxx Xxxx, Xxxxxxx Xxxx, Xxxxxxxx 00000
owned by Black Dot Graphics, Inc.
6. Property located at 0000 Xxxxxxxx Xxxx, Xxxxxxx Xxxx, Xxxxxxxx 00000
owned by Black Dot Graphics, Inc.
7. Property located at 0000 Xxxxxxxx Xxxx, Xxxxxxx Xxxx, Xxxxxxxx 00000
owned by Black Dot Graphics, Inc.
8. Property located at 0000 X. Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000 owned
by AGT.
9. Property located at 0000 Xxxxxx, Xxxxxxx, Xxxxxxxx 00000 owned by Xxxxx
Graphic Arts, Inc.
10. Property located at 0000 X Xxxxxx, Xxxxx, Xxxxxxxx 00000 owned by Xxxxx
Graphic Arts, Inc.
11. Property located at 0000 Xxxx Xxxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx 00000
owned by Typo-Graphics, Inc.
12. Property located at 3820 000 Xxxxxx XX, Xxxxxxx, Xxxxxxxxxx 00000 owned
by Color Control, Inc.
13. Property located at 0000 Xxxx Xxxxxx 00, Xxx Xxxxxxx, Xxxxxxxxxx 00000
owned by AGT.
14. Property located at 000 Xxxxxxx xxx Xxxxx, Xxxxxx, Xxxxxxxxxx owned by
Portal Publications, Inc.
27
Schedule 2
INTELLECTUAL PROPERTY
Patents and Patent Applications
1. Appartatus and Method for Processing Images Using a Reciprocating Easel,
US Patent Serial Number 08/708,751.
2. Appartatus and Method for Processing Images Using a Reciprocating Easel,
Patent Cooperation Treaty Application No. PCT/US97114999.
Trademarks and Trademark Applications
1. AGT
2. Applied Graphics Technologies
3. APT
4. APT (stylized)
5. Applied Printing Technologies
6. ArtOnCall
7. ArtOnCall and design
8. Digital Link
9. Digital Originals
10. Xxxx Graphics
11. Xxxx Graphics and design
12. Spotlink
13. Black Dot (stylized)
14. Black Dot Group
15. Customizing Your Cultural Experience
16. Digizine and design
17. Digizine (stylized)
28
18. Seven and Penguin design (pending)(1)
19. Seven and Lightbulb design
20. Seven and Zebra design
21. Seven and Strawberry design
22. Seven
23. Seven and Fish design
24. Seven and Knife design
25. Seven and Marble design
26. Wace USA
27. The Image Network
28. G.S. Imaging Services
29. GS (stylized)
30. Hexagon design
31. Xxxx & Ollier
32. Pleasing Colour
33. Techtron and design
34. Techtron Imaging Network
35. Digizine (Australia)
36. Digital Link (Canada)
37. Digizine (Canada)
38. ArtOnCall and design (EC)
39. Digizine (EC)
40. Digital Link (Germany)
41. Digital Link (Israel)
-----------------------
(1) Penguin Books has filed a challenge with the PTO with respect to the use
of this xxxx.
29
42. Digizine (Japan)
43. Digital Link (Mexico)
44. Digitizine (Mexico)
45. Digizine (New Zealand)
46. Digital Link (Norway)
47. Digizine (Singapore)
48. Digital Link (Sweden)
49. 8 marks of Seven (listed as items 18-25 of this schedule) filed with the
EC trademark office (pending)(2)
-----------------------
(2) ProsibenSAT Gmbh is challenging these marks.
30
Schedule 3
JOINING SUBSIDIARIES
1. Seven Worldwide, Inc.
2. WUSA Re, Inc.
3. R.E. Graphics, Inc.
4. Applied Graphics Technologies (UK) Limited
5. Devon Publishing Limited
6. Portal Xxxx Publications Pty., Ltd.
7. Seven Australia Pty. Limited
8. Canadian Art Prints, Inc.
9. Seven Sydney Pty., Ltd.
31
EXHIBIT A TO THE
FIFTH AMENDMENT
Schedule I
COMMITMENTS
Existing Additional Total
Tranche A Tranche B Tranche C Letter of Revolving Revolving Revolving
Term Loan Term Loan Term Loan Swing Line Credit Credit Credit Credit
Lender Commitment Commitment Commitment Commitment Commitment Commitments Commitments Commitments
------ ---------- ---------- ---------- ---------- ---------- ----------- ----------- -----------
Fleet National Bank $10,256,183 $56,864,066 $40,983,619 $5,000,000 $10,000,000 $10,189,800 $6,010,200 $16,200,000
Bank of America $10,939,928 $6,793,200 $4,006,800 $10,800,000
First Union Nat'l Bank $9,116,607 $5,661,000 $3,339,000 $9,000,000
The Chase Manhattan Bank $9,116,607 $5,611,000 $3,339,000 $9,000,000
The Bank of New York $9,116,607 $5,611,000 $3,339,000 $9,000,000
Sovereign Bank $7,293,286 $4,528,800 $2,671,200 $7,200,000
Mellon Bank $5,469,964 $3,396,600 $2,003,400 $5,400,000
Suntrust Bank $5,469,964 $3,396,600 $2,003,400 $5,400,000
Citizens Bank $5,469,964 $3,396,600 $2,003,400 $5,400,000
The Bank of Nova Scotia $3,3646,643 $2,264,400 $1,335,600 $3,600,000
BHF (USA) Capital $6,153,710 $4,610,600
00
XXXXXXX X
XXXXXXX X TO THE
FIFTH AMENDMENT
FORM OF BORROWING BASE CERTIFICATE
,
-------- ---
Fleet National Bank,
as Administrative Agent
000 Xxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx
This Certificate is delivered pursuant to the provisions of the Amended
and Restated Credit Agreement, dated as of March 10, 1999 (as amended,
supplemented or otherwise modified, the "Credit Agreement") among Applied
Graphics Technologies, Inc. (the "Borrower"), the several banks and other
financial institutions from time to time party to the Credit Agreement (the
"Lenders") and Fleet National Bank (the "Administrative Agent"). Capitalized
terms used herein and not otherwise defined herein shall have the meanings
assigned to such terms in the Credit Agreement.
The undersigned hereby certifies that [s]he is an officer of the
Borrower and that, as such, is authorized to execute this Certificate on behalf
of the Borrower and further certifies that:
(a) for purposes of this Certificate, the date of
determination of the Borrowing Base is ______, _____ and
(b) the amounts set forth below are a true and correct
statement of the calculation of the Borrowing Base in
accordance with the provisions of the Credit Agreement.
Gross Receivables
----------
Accounts excluded from Eligible Receivables:
1. accounts owing from account debtors
located outside of the United States ----------
2. accounts that are not assignable or for
which a first priority security interest in such account ----------
in favor of the Administrative Agent for the benefit of
the Lenders has not been obtained and fully perfected
3. accounts subject to any Lien, other than
(i) Liens in favor of the Administrative Agent for ----------
benefit of the Lenders and (ii) such other Liens
described in clause (i)
33
of the definition of Permitted Liens
4. accounts that do not constitute a legal,
valid and binding irrevocable payment obligation of the ----------
account debtor to pay the balance thereof in accordance
with its terms or is subject to any asserted or
contractual defense, setoff, recoupment or counterclaim
5. accounts of the Borrower's Publishing
Division (e.g., Portal Publications Ltd. and its ----------
Subsidiaries)
6. accounts of the Borrower's Broadcast
Division ----------
7. accounts for which the account debtor has
not been sent an invoice ----------
8. accounts more than 90 days from invoice
date ----------
9. accounts from any account debtor which
has filed a petition for relief under the United States ----------
Bankruptcy Code (or similar action under any successor
law or under any comparable law), made a general
assignment for the benefit of creditors, had filed
against it any petition or other application for relief
under the United States Bankruptcy Code (or similar
action under any successor law or under any comparable
law), called a meeting of its creditors for the purpose
of obtaining any financial concession or accommodation,
or had or suffered a receiver or a trustee to be
appointed for all or a significant portion of its assets
or affairs, or, to the knowledge of the Borrower or any
of its Subsidiaries, is otherwise winding up its affairs
or has become insolvent; provided, however, that Eligible
Accounts shall include accounts from any account debtor
that either (A) relate to periods following the filing of
a petition for relief under the United States Bankruptcy
Code with respect to such account debtor (except accounts
from any account debtor whose case is converted
post-petition to a case under Chapter 7 of the United
States Bankruptcy Code pursuant to Section 706 thereof)
or (B) the payment of which has been approved by final
order of a United States Bankruptcy Court
10. accounts that have been placed with an
attorney or other third party for collection ----------
11. accounts from affiliates or Subsidiaries
of the Borrower or any of its Subsidiaries (except, for ----------
purposes of this item 11 only, accounts from U.S. News &
World Report, L.P., Daily News, L.P. and Applied Printing
Technologies, L.P.; provided, however, accounts from such
affiliates shall be reduced to the extent that the
Borrower or
-2-
34
any of its Domestic Subsidiaries are liable for goods
sold or services rendered by such affiliates)
12. accounts from employees or directors of
the Borrower or any of its Subsidiaries ----------
13. accounts from any account debtor from
whom 30% or more of the account balance is past 90 days ----------
from invoice date before giving effect to credit-related
charge-offs (i.e., excluding normal documented credit
memos or discounts issued in the ordinary course of
business) made during the period 60 days ending on the
date of determination
14. accounts with respect to which the
Borrower or any of its Subsidiaries have not complied ----------
with all material requirements of law applicable to such
account or affecting the collectability of such account
Eligible Receivables:
----------
Offset Amount for such date: the greater of (i) $250,000
and (ii) an amount equal to (A) 1.5 multiplied by (B) an ----------
amount equal to the lesser of, with respect to each
account debtor (x) the aggregate amount of Receivables
payable to the Borrower or any of its Domestic
Subsidiaries from account debtors (other than U.S. News &
World Report, L.P., Daily News, L.P. and Applied Printing
Technologies, L.P.) to which the Borrower or any of its
Domestic Subsidiaries are liable for goods sold or
services rendered by such account debtors and (y) the
aggregate amount for which the Borrower or any of its
Domestic Subsidiaries are liable to such account debtors.
Less any reasonable reserves established by the
Administrative Agent from time to time: ----------
Borrowing Base for such date: 80% of Eligible
Receivables, less 80% of the Offset Amount for such date, ----------
less any reasonable reserves established by the
Administrative Agent from time to time:
Aggregate Outstanding Amount of Amendment Period
Revolving Credit Advances: ----------
Excess (Deficit):
----------
-3-
35
IN WITNESS WHEREOF, I have hereto executed this certificate on behalf of
the Borrower:
-------------------------------------
Name:
Title:
-4-
36
EXHIBIT C TO THE
FIFTH AMENDMENT
FORM OF GUARANTY SUPPLEMENT
,
-------------- ----
Fleet National Bank, as Administrative Agent
000 Xxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx
Amended and Restated Credit Agreement, dated as of March 10, 1999, among
Applied Graphics Technologies, Inc., a Delaware corporation (the
"Borrower"), the Lenders party thereto, and Fleet National Bank
(formerly known as BankBoston, N.A.)., as Initial Issuing Bank, as Swing
Line Bank and as Administrative Agent (as amended, the "Credit
Agreement")
Ladies and Gentlemen:
Reference is made to the above-defined Credit Agreement and to the
Guaranty referred to therein (such Guaranty, as in effect on the date hereof and
as it may hereafter be amended, modified, restated or supplemented from time to
time, the "Guaranty"). Capitalized terms used and not otherwise defined herein
have the meanings ascribed to them in the Guaranty.
The undersigned hereby jointly and severally, unconditionally and
irrevocably guarantees the punctual payment when due, whether at stated
maturity, by acceleration or otherwise, of all of the Guaranteed Obligations and
agrees to pay any and all reasonable expenses (including reasonable counsel fees
and expenses) incurred by the Administrative Agent or any other Secured Party on
the terms set forth in the Guaranty as if it were an original party thereto. On
and after the date hereof, each reference in the Guaranty to "Guarantor" shall
also mean and be a reference to the undersigned.
The undersigned hereby agrees to be bound as a Guarantor by all of the
terms and provisions of the Guaranty to the same extent as each other Guarantor.
THIS GUARANTY SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO ITS
CONFLICT OF LAWS PRINCIPLES).
THE UNDERSIGNED HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE, IN EQUITY OR AT LAW) ARISING OUT OF THE LOAN DOCUMENTS, THE
TRANSACTIONS CONTEMPLATED THEREBY OR THE ACTIONS OF ANY
-5-
37
SECURED PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR
ENFORCEMENT THEREOF.
Very truly yours,
[ADDITIONAL GRANTOR]
By:
-----------------------------------
Title:
--------------------------------
Address:
------------------------------
------------------------------
-6-
38
EXHIBIT D TO THE
FIFTH AMENDMENT
FORM OF SECURITY AGREEMENT SUPPLEMENT
,
-------------- ----
Fleet National Bank, as Administrative Agent
000 Xxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx
Security Agreement, dated as of June 3, 1999, made by Applied Graphics
Technologies, Inc. and the other Grantors party thereto, to Fleet
National Bank (formerly known as BankBoston, N.A.), as Administrative
Agent for the Secured Parties
Ladies and Gentlemen:
Reference is made to the above-captioned Security Agreement (such
Security Agreement, as in effect on the date hereof and as it may hereafter be
amended, supplemented, restated, or otherwise modified from time to time, the
"Security Agreement"). Capitalized terms used and not otherwise defined herein
have the meanings ascribed to them in the Security Agreement.
The undersigned hereby agrees, as of the date first above written, to
become a Grantor under the Security Agreement as if it were an original party
thereto and agrees that each reference in the Security Agreement to "Grantor"
shall also mean and be a reference to the undersigned.
The undersigned hereby assigns and pledges to the Administrative Agent,
for the benefit of the Administrative Agent and the ratable benefit of the
Lenders, the Swing Line Bank and the Issuing Bank, and hereby grants to the
Administrative Agent, for the benefit of the Administrative Agent and the
ratable benefit of the Secured Parties, as security for the Secured Obligations,
a lien on, and security interest in, all of the right, title and interest of the
undersigned, whether now owned or hereafter acquired, in and to the Collateral
owned by the undersigned, including, but not limited to, the property listed on
the attached supplements to Schedules I through III to the Security Agreement.
The undersigned hereby certifies that such supplements have been prepared by the
undersigned in substantially the form of such Schedules and are true, accurate
and complete as of the date hereof.
The undersigned hereby makes each representation and warranty set forth
in Section 8 of the Security Agreement (as modified by the attached supplements
to the Schedules to the Security Agreement) to the same extent as each other
Grantor and hereby agrees to be bound as a Grantor by all of the terms and
provisions of the Security Agreement to the same extent as each other Grantor.
-7-
39
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO ITS CONFLICTS OF LAWS
PROVISIONS).
THE UNDERSIGNED HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF THE LOAN DOCUMENTS (AS DEFINED IN THE CREDIT
AGREEMENT), THE TRANSACTIONS CONTEMPLATED THEREBY OR THE ACTIONS OF THE
ADMINISTRATIVE AGENT, ANY LENDER OR THE ISSUING BANK IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
Very truly yours,
[ADDITIONAL GRANTOR]
By:
-----------------------------------
Title:
--------------------------------
Address:
------------------------------
------------------------------
-8-
40
EXHIBIT E
EXHIBIT E TO THE
FIFTH AMENDMENT
FORM OF WARRANT
THIS WARRANT AND THE SHARES OF COMPANY COMMON STOCK ISSUABLE UPON THE EXERCISE
OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR QUALIFIED UNDER ANY STATE
SECURITIES LAW, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS
THEY HAVE BEEN REGISTERED UNDER SUCH LAWS OR AN EXEMPTION FROM REGISTRATION IS
AVAILABLE AND IF AN EXEMPTION SHALL BE APPLICABLE, THE WARRANT HOLDER SHALL HAVE
DELIVERED AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY THAT SUCH
REGISTRATION IS NOT NECESSARY.
Date of Issuance: [January 1] [May 1], 2002 Number of Shares: _____
(subject to adjustment)
WARRANT CERTIFICATE TO PURCHASE
COMMON STOCK OF
APPLIED GRAPHICS TECHNOLOGIES, INC.
This Warrant Certificate (the "Warrant Certificate") is to certify that
[NAME OF LENDER] or its registered assigns (the "Warrantholder") is entitled, at
any time during the period beginning on the Exercise Date (as defined in Section
1.2) and ending on the date that is 180 days after the Exercise Date (the
"Expiration Date"), to purchase, at the Exercise Price (as hereinafter defined),
shares (as may be modified pursuant to Section 5, the "Initial Exercise Amount")
of common stock ("Company Common Stock") of Applied Graphics Technologies, Inc.,
a Delaware corporation (the "Company"). Unless earlier exercised in full and
subject to the conditions set forth herein, this Warrant Certificate shall
expire on the Expiration Date. Capitalized terms used but not otherwise defined
herein shall have the meanings given to them in the Amended and Restated Credit
Agreement dated as of March 10, 1999 among the Company, the lenders party
thereto, and Fleet National Bank, as Administrative Agent (as amended, the
"Credit Agreement").
1. Exercise of Warrant.
1.1 This Warrant Certificate is exercisable by the
Warrantholder at the Exercise Price per share of Company Common Stock issuable
hereunder, payable in cash, by certified or official bank check. Upon surrender
of this Warrant Certificate with the attached Subscription Form duly completed
and executed, together with any required payment of the Exercise Price for the
shares of Company Common Stock being purchased, at the Company's principal
executive offices presently located at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, the Warrantholder shall be entitled to receive a certificate or
certificates for the shares of Company Common Stock so purchased.
41
1.2 The purchase rights represented by this Warrant
Certificate are exercisable at the option of the Warrantholder, in whole or in
part (but not as to fractional shares of Company Common Stock), during the
period beginning on the earlier of (i) January 15, 2003 or (ii) the occurrence
of an Event of Default (but in no event earlier than [March 1, 2002] [July 1,
2002]) (the "Exercise Date") and ending on the Expiration Date.
1.3 In the case of the purchase of less than all the shares
of Company Common Stock purchasable under this Warrant Certificate, the Company
shall cancel this Warrant Certificate upon the surrender hereof and shall
execute and deliver a new Warrant Certificate as soon as practicable to the
Warrantholder of like tenor for the balance of the shares of Company Common
Stock purchasable hereunder.
1.4 In the event that the Company shall have consummated the
[Type A Capital Event] [Type B Capital Event] on or before [February 28, 2002]
[June 30, 2002], this Warrant Certificate, and the rights hereunder, shall
terminate and be of no further force and effect as of the date of such
consummation.
2. Issuance of Stock Certificates.
2.1 The issuance of certificates for shares of Company
Common Stock upon the exercise of this Warrant Certificate shall be made as soon
as practicable thereafter or in any event within twenty (20) days of such
exercise without charge to the Warrantholder, including, without limitation, any
tax that may be payable in respect thereof, and such certificates shall (subject
to the provisions of this Section 2) be issued in the name of, or in such names
as may be directed by, the Warrantholder; provided, however, that the Company
shall not be required to pay any income tax to which the Warrantholder may be
subject in connection with the issuance of this Warrant Certificate or of shares
of Company Common Stock upon the exercise of this Warrant Certificate; provided,
further, that the Company shall not be required to pay any tax that may be
payable in respect of any transfer involved in the issuance and delivery of any
such certificate in a name other than that of the Warrantholder and the Company
shall not be required to issue or deliver such certificates unless or until the
person or persons requesting the issuance thereof shall have paid to the Company
the amount of such tax or shall have established to the satisfaction of the
Company that such tax has been paid.
2.2 All shares of Company Common Stock issued upon the
exercise of this Warrant Certificate shall be validly issued, fully paid and
nonassessable.
2.3 Each person in whose name any such certificate for
shares of Company Common Stock is issued shall for all purposes be deemed to
have become the holder of record of such shares on the date on which the Warrant
Certificate was surrendered and payment of the Exercise Price and any applicable
taxes was made, irrespective of the date of delivery of such certificate, except
that, if the date of such surrender and payment is a date when the stock
transfer books of the Company are closed, such person shall be deemed to have
become the holder of such shares at the close of business on the next succeeding
date on which the stock transfer books are open.
3. Restrictions on Transfer.
3.1 Investment Representation and Transfer Restriction
Legend. The Warrantholder, by acceptance of this Warrant Certificate, represents
and warrants to the Company that it is acquiring this Warrant Certificate and
the shares of Company Common Stock issued or issuable upon exercise hereof (the
"Warrant Shares") for investment purposes only and not with a view towards the
resale or other
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distribution thereof. Each certificate representing Warrant Shares, unless at
the same time of exercise such Warrant Shares are registered under the Act,
shall bear a legend in substantially the following form on the face thereof:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR QUALIFIED UNDER ANY STATE SECURITIES
LAW, AND MAY NOT BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED
UNLESS THEY HAVE BEEN REGISTERED UNDER SUCH LAWS OR AN EXEMPTION
FROM REGISTRATION IS AVAILABLE AND IF AN EXEMPTION SHALL BE
APPLICABLE, THE WARRANT HOLDER SHALL HAVE DELIVERED AN OPINION OF
COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY THAT SUCH
REGISTRATION IS NOT NECESSARY.
Any certificate issued at any time in exchange or substitution for any
certificate bearing such legend (except a new certificate issued upon completion
of a distribution under a registration statement covering the securities
represented thereby) shall also bear such legend unless, in the opinion of
counsel to the Company, the securities represented thereby may be transferred as
contemplated by such Warrantholder without violation of the registration
requirements of the Securities Act.
4. Exercise Price and Exercise Amount.
4.1 Exercise Price. The exercise price of this Warrant
Certificate shall be $0.01 per share of Company Common Stock (the "Exercise
Price").
4.2 Exercise Amount. The term "Exercise Amount" shall mean
the Initial Exercise Amount or the adjusted Exercise Amount determined pursuant
to Section 5 depending upon the context.
5. Adjustment of Exercise Amount and Number of Shares.
5.1 The Exercise Amount specified in Section 4.2 shall be
subject to adjustment from time to time as follows:
(a) Adjustment for Stock Splits and Combinations. If the
Company shall at any time or from time to time after the date this
Warrant Certificate was granted (the "Original Issue Date") effect a
subdivision of the outstanding Company Common Stock, the Exercise Amount
then in effect immediately before the subdivision shall be
proportionately increased and the Exercise Price then in effect
immediately before the subdivision shall be proportionately reduced. If
the Company shall at any time or from time to time after the Original
Issue Date combine the outstanding shares of Company Common Stock, the
Exercise Amount then in effect immediately before the combination shall
be proportionately decreased and the Exercise Price then in effect
immediately before the combination shall be proportionately increased.
Any adjustment under this paragraph shall become effective at the close
of business on the date the subdivision or combination becomes
effective.
(b) Adjustment for Certain Dividends and Distributions. In
the event the Company at any time, or from time to time, after the
Original Issue Date shall make or issue, or fix a record date for the
determination of holders of Company Common Stock entitled to receive, a
dividend or other distribution payable in additional shares of Company
Common Stock, then in each such event the Exercise Amount then in effect
shall be increased as of the time of such issuance or, in
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the event such a record date shall have been fixed, as of the close of
business on such record date, to an amount equal to the amount
determined by multiplying the Exercise Amount then in effect by a
fraction:
(i) the numerator of which shall be the total number
of shares of Company Common Stock issued and outstanding
immediately prior to the time of such issuance or the close of
business on such record date plus the number of shares of
Company Common Stock issuable in payment of such dividend or
distribution; and
(ii) the denominator of which shall be the total
number of shares of Company Common Stock issued and outstanding
immediately prior to the time of such issuance or the close of
business on such record date;
provided, however, if such record date shall have been fixed and such
dividend is not fully paid or if such distribution is not fully made on
the date fixed therefor, the Exercise Amount shall be recomputed
accordingly as of the close of business on such record date and
thereafter the Exercise Amount shall be adjusted pursuant to this
paragraph as of the time of actual payment of such dividends or
distributions.
(c) Adjustments for Other Dividends and Distributions. In
the event the Company at any time or from time to time after the
Original Issue Date shall make or issue, or fix a record date for the
determination of holders of Company Common Stock entitled to receive, a
dividend or other distribution payable in securities of the Company or
any Subsidiary or Affiliate thereof other than shares of Company Common
Stock, then and in each such event provision shall be made so that the
Warrantholder shall receive upon exercise thereof, in addition to the
number of shares of Company Common Stock receivable thereupon, the
amount and type of securities that it would have received had its
Warrant Certificate been exercised for shares of Company Common Stock on
the date of such event and had it thereafter, during the period from the
date of such event to and including the actual exercise date, retained
such securities receivable by it as aforesaid during such period giving
application to all adjustments called for during such period. In the
event of the spinoff or other creation of a subsidiary or affiliate of
the Company whose assets consist in whole or in part of a significant
component of the Company's business (a "Spinoff Transaction"), the
Warrantholder shall be entitled to receive, without any requirement that
this Warrant be exercised, Warrants (the "New Warrants") with terms
substantially equivalent to the terms of this Warrant Certificate, to
purchase the amount and type of securities (the "Spinoff Securities")
that it would have received in such Spinoff Transaction had this Warrant
been exercised immediately prior to such Spinoff Transaction. The
exercise price of the New Warrants (the "New Warrant Exercise Price")
shall be equal to the Exercise Price in effect immediately prior to the
Spinoff Transaction multiplied by the product of (A) the relative value
per share of the business or assets subject to the Spinoff Transaction
as compared to the total value per share of the Company at the time of
the Spinoff Transaction (as determined in good faith by the Board) times
(B) one (1) minus the percentage of such business or assets retained by
the Company, if any. The Exercise Price shall thereafter be reduced by
the amount of the New Warrant Exercise Price such that the sum of the
New Warrant Exercise Price plus the Exercise Price shall not exceed the
Exercise Price as in effect immediately prior to the Spinoff
Transaction. In the event a Spinoff Transaction involves a third party
whose contribution to the entity or business subject to the Spinoff
Transaction is other than cash or other consideration to the Company,
the Board, in good faith, shall determine the appropriate adjustment in
the application of the provisions in this Section 5 with respect to the
rights and interest thereafter of the Warrantholder.
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(d) Adjustment for Reclassification, Exchange, or
Substitution. If the Company Common Stock issuable upon exercise of this
Warrant Certificate shall be changed into the same or a different number
of shares of any class or classes of stock, whether by capital
reorganization, reclassification, or otherwise (other than a subdivision
or combination of shares or stock dividend provided for above, or a
reorganization, merger, consolidation, or sale of assets provided for
below), then and in each such event the Warrantholder shall have the
right thereafter to exercise this Warrant Certificate for the kind and
amount of shares of stock and other securities and property receivable
upon such reorganization, reclassification, or other change, by holders
of the number of shares of Company Common Stock into which this Warrant
Certificate was exercisable immediately prior to such reorganization,
reclassification, or change, all subject to further adjustment as
provided herein.
(e) Adjustment for Merger or Reorganization, etc. In case of
any consolidation or merger of the Company with or into another Person
or the sale of all or substantially all of the assets of the Company to
another Person, this Warrant Certificate shall thereafter be exercisable
for the kind and amount of shares of stock or other securities or
property to which a holder of the number of shares of Company Common
Stock of the Company deliverable upon exercise of this Warrant
Certificate would have been entitled upon such consolidation, merger or
sale; and, in such case, appropriate adjustment (as determined in good
faith by the Board) shall be made in the application of the provisions
in this Section 5 with respect to the rights and interest thereafter of
the Warrantholder, to the end that the provisions set forth in this
Section 5 (including provisions with respect to changes in and other
adjustments of the Exercise Amount) shall thereafter be applicable, as
nearly as reasonably may be, in relation to any shares of stock or other
property thereafter deliverable upon exercise of this Warrant
Certificate.
(f) No Impairment. The Company will not, by amendment of its
Certificate of Incorporation or through any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities
or any other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms to be observed or performed hereunder by
the Company but will at all times in good faith assist in the carrying
out of all the provisions of this Section 5 and in the taking of all
such action as may be necessary or appropriate in order to protect the
exercise rights of the Warrantholder against impairment.
(g) Certificate as to Amendments. Upon the occurrence of
each adjustment or readjustment of the Exercise Price pursuant to this
Section 5, the Company at its expense shall promptly compute such
adjustment or readjustment in accordance with the terms thereof and
furnish to each Warrantholder a certificate setting forth such
adjustment or readjustment and showing in detail the facts upon which
such adjustment or readjustment is based. The Company shall, upon the
written request at any time of any Warrantholder, furnish or cause to be
furnished to such holder a similar certificate setting forth (i) such
adjustments and readjustments, (ii) the Exercise Amount then in effect,
and (iii) the number of shares of Company Common Stock and the amount,
if any, of other property which then would be received upon exercise of
this Warrant Certificate.
(h) Notice of Record Date. In the event:
(i) that the Company declares a dividend (or any
other distribution) on its Company Common Stock payable in
Company Common Stock or other securities of the Company;
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(ii) that the Company subdivides or combines its
outstanding shares of Company Common Stock;
(iii) of any reclassification of the Company Common
Stock (other than a subdivision or combination of its
outstanding shares of Company Common Stock or a stock dividend
or stock distribution thereon), or of any consolidation or
merger of the Company into or with another corporation, or of
the sale of all or substantially all of the assets of the
Company; or
(iv) of the involuntary or voluntary dissolution,
liquidation or winding up of the Company;
then the Company shall cause to be filed at its principal office or at
the office of the transfer agent of the Company Common Stock, and shall
cause to be mailed to the Warrantholders at their last addresses as
shown on the records of the Company or such transfer agent, at least 15
days prior to the record date specified in (A) below or 30 days before
the date specified in (B) below, a notice stating
(A) the date as of which the holders of Company
Common Stock of record to be entitled to such
dividend, distribution, subdivision or
combination are to be determined, or
(B) the date on which such reclassification,
consolidation, merger, sale, dissolution,
liquidation or winding up is expected to become
effective, and the date as of which it is
expected that holders of Company Common Stock of
record shall be entitled to exchange their
shares of Company Common Stock for securities or
other property deliverable upon such
reclassification, consolidation, merger, sale,
dissolution or winding up.
6. Exchange and Replacement of Warrant Certificate.
6.1 On surrender for exchange of this Warrant Certificate,
or any Warrant Certificate or Warrant Certificates issued upon subdivision,
exercise, or transfer in whole or in part of this Warrant Certificate, properly
endorsed, to the Company, the Company at its expense will issue and deliver to
or on the order of the holder thereof a new Warrant Certificate or Warrant
Certificates of like tenor, in the name of such holder or as such holder (on
payment by such holder of any applicable transfer taxes) may direct, calling in
the aggregate on the face or faces thereof for the number of shares of Company
Common Stock called for on the face or faces of the Warrant Certificate or
Warrant Certificates so surrendered.
6.2 In the event this or any subsequently issued Warrant
Certificate is lost, stolen, mutilated or destroyed, the Company may, upon
receipt of a proper affidavit (and surrender of any mutilated Warrant
Certificate) and an indemnity agreement or security reasonably satisfactory in
form and amount to the Company, in each instance protecting the Company, issue a
new Warrant Certificate of like denomination, tenor and date as the Warrant
Certificate so lost, stolen, mutilated or destroyed. Any such new Warrant
Certificate shall constitute an original contractual obligation of the Company,
whether or not the allegedly lost, stolen, mutilated or destroyed Warrant
Certificate shall be at any time enforceable by anyone.
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7. Elimination of Fractional Interests.
7.1 The Company shall not issue any fraction of a share in
connection with the exercise of this Warrant Certificate, but in any case where
the Warrantholder would, except for the provisions of this Section 7, be
entitled under the terms of this Warrant Certificate to receive a fraction of a
share upon the exercise of this Warrant Certificate, the Company shall, upon the
exercise of the Warrant Certificate for the largest number of full shares then
called for thereby and receipt of the Exercise Price thereof, pay a sum in cash
equal to the Fair Market Value of such fraction of a share on the day preceding
such exercise. The Warrantholder expressly waives its rights to receive any
fraction of a share or a Warrant Certificate representing a fractional share
upon exercise thereof.
7.2 If the taking of any action would cause an adjustment in
the Exercise Price so that the exercise of this Warrant Certificate while such
Exercise Price is in effect would cause shares to be issued at a price below
their then par value, the Company will take such action as may, in the opinion
of its counsel, be necessary in order that it may validly and legally issue
fully paid and nonassessable shares of Company Common Stock upon the exercise of
this Warrant Certificate.
8. Reservation of Shares.
The Company will cause to be reserved and kept available out of its
authorized and unissued shares of Company Common Stock the number of whole
shares of Company Common Stock sufficient to permit the exercise in full of this
Warrant Certificate.
9. Rights of Warrantholder.
The Company may deem and treat the person in whose name this Warrant
Certificate is registered with it as the absolute owner for all purposes
whatever (notwithstanding any notation of ownership or other writing thereon
made by anyone other than the Company) and the Company shall not be affected by
any notice to the contrary. The terms "Warrantholder" and "holder of the Warrant
Certificate" and all other similar terms used herein shall mean only such
person(s) in whose name(s) this Warrant Certificate if properly registered on
the Company's books. However, notwithstanding the foregoing, no person, entity
or group may become a Warrantholder other than the Warrantholder unless and
until (a) the provisions of Section 3.1 hereof have been complied with, (b) the
Company has received an assignment transferring all right, title and interest in
and to this Warrant Certificate, and (c) such person, entity or group represents
and warrants in writing that it will be the sole legal and beneficial owner
thereof.
10. Notices.
Any notice or demand authorized by this Warrant Certificate to be given
or made by the Warrantholder to or on the Company or to be given or made by the
Company to or on the Warrantholder shall be sufficiently given or made if sent
in writing by first-class mail, postage prepaid, addressed as follows:
(a) If to the Warrantholder, to the address for such holder
as shown on the books of the Company; or
(b) If to the Company, at the address set forth in Section
8.02 of the Credit Agreement or at such other address as the registered
holder or the Company may hereafter have advised the other.
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11. Successors.
All the covenants, agreements, representations and warranties
contained in this Warrant Certificate shall bind the parties hereto and their
respective heirs, executors, administrators, distributees, successors and
assigns.
12. Headings.
The Section headings in this Warrant Certificate have been
inserted for purposes of convenience only and shall have no substantive effect.
13. Law Governing.
This Warrant Certificate is delivered in the State of New York
and shall be construed and enforced in accordance with, and governed by, the
laws of the State of New York (without giving effect to the choice of law
principle of such state), regardless of the jurisdiction of creation or domicile
of the Company or its successors or of the holder at any time hereof.
14. Remedies.
The Company stipulates that the remedies at law of the holder of
this Warrant Certificate in the event of any default or threatened default by
the Company in the performance of or compliance with any of the terms of this
Warrant Certificate are not and will not be adequate, and that such terms may be
specifically enforced by a decree for the specific performance of any agreement
contained herein or by an injunction against a violation of any of the terms
hereof or otherwise.
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IN WITNESS WHEREOF, the Company has executed this Warrant
Certificate by its duly authorized officer as of the day and year first above
written.
APPLIED GRAPHICS TECHNOLOGIES, INC.
By:
-------------------------
Name:
Title:
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SUBSCRIPTION FORM
(To Be Executed By The Warrantholder
In Order to Exercise The Warrant Certificate)
The undersigned, pursuant to the provisions set forth in the enclosed
Warrant Certificate, hereby irrevocably elects to exercise the right to purchase
________ shares of Company Common Stock of APPLIED GRAPHICS TECHNOLOGIES, INC.
covered by such Warrant Certificate, and herewith tenders _________ having a
fair market value of $________ in full payment of the Exercise Price for such
shares (which may include foregoing receipt of ___ shares of Company Common
Stock as per Section 1.1 of the Warrant Certificate).
By:
-------------------------------
Signature
------------------------
Name
------------------------
Address
------------------------
