EXHIBIT 10.4.9
NINTH AMENDMENT TO CREDIT AGREEMENT
This NINTH AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is made and
entered into as of April 11, 2003 by and among PRIVATE BUSINESS, INC., a
Tennessee corporation (the "Borrower") and FLEET NATIONAL BANK, as the Initial
Issuing Bank, the Swing Line Bank and as Administrative Agent for the Lenders
under the Credit Agreement dated as of August 7, 1998 (the "Administrative
Agent"), (as amended and modified from time to time, the "Credit Agreement").
All capitalized terms used herein without definition shall have the meanings
assigned to such terms in the Credit Agreement and the related Loan Documents.
WHEREAS, the Borrower has notified the Administrative Agent that
certain Events of Default have occurred and are continuing;
WHEREAS, Borrower has requested that the Administrative Agent and the
Required Lenders each waive such Events of Default which were disclosed to the
Lenders prior to the Amendment Closing Date (as defined below) (including,
without limitation, any Event of Default under the financial covenants set forth
in Article 8 of the Credit Agreement with respect to the fiscal periods ended
December 31, 2002 and March 31, 2003) and amend certain provisions of the Credit
Agreement, and the Administrative Agent and the Required Lenders are willing to
do so on the terms and conditions hereinafter set forth;
WHEREAS, the Borrower has requested the Administrative Agent and the
Required Lenders to further amend the Credit Agreement to incorporate, among
other things, the terms set forth herein. This Amendment shall provide for the
waiver of all existing defaults and/or Events of Default;
WHEREAS, the Borrower, the Administrative Agent and the Required
Lenders agree to amend the Credit Agreement, subject to the terms and conditions
set forth herein;
NOW THEREFORE, in consideration of the mutual agreements contained in
the Credit Agreement and herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
SECTION 1. Amendments to the Credit Agreement. Subject to the
satisfaction of the conditions precedent set forth in Section 2 hereof, the
Credit Agreement is hereby amended as follows:
(a) Section 1.1 is hereby amended by inserting in correct alphabetical
order each of the following new definitions:
"Amendment Closing Date" means April 11, 2003 the date on which
the conditions precedent set forth in Section 2 shall have been
satisfied or waived in accordance therewith.
"Budget" means a budget and Cash Flow Forecast of the Borrower's
anticipated cash receipts and disbursements for such period as
required by the Administrative Agent and the Required Lenders from
time to time, and which shall reflect the anticipated use of
the Revolving Credit Advances, if applicable, and which budget and
Cash Flow Forecast shall be in form and substance acceptable to the
Agent and the Required Lenders.
"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 not less than $20,000,000.
"Cash Flow Forecast" shall have the meaning as set forth in
Section 7.23.
"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 purchase and sale agreement, an executed letter of
intent or other similar agreement) in respect of a Capital Event.
"Eligible Receivables" means, subject to the terms and conditions
of this Agreement and at any date of determination, the portion of
Borrower's invoiced accounts arising in the ordinary course of the
Borrower's business to a Person which is not an Affiliate or
controlled by an Affiliate of Borrower ("Account Obligor") that the
Administrative Agent determines in its sole discretion is eligible. An
account shall not be deemed an Eligible Receivable unless such account
is subject to Administrative Agent's perfected first priority security
interest and no other lien, encumbrance, or security interest,
evidenced by an invoice or other documentary evidence satisfactory to
Agent, payable in U.S. dollars to the Borrower from the Account
Obligor. Without limiting the generality of the foregoing, without the
prior written consent of Administrative Agent, no account shall be an
Eligible Receivable if:
(i) such account has outstanding amounts due and payable to
Borrower more than ninety (90) days after the invoice date relating
thereto;
(ii) the Account Obligor is the United States of America, or any
state, or any department, agency, instrumentality or subdivision
thereof; provided, however, if Borrower executes and delivers to Agent
assignment documents, with respect to the assignment of government
claims to the satisfaction of Administrative Agent, Administrative
Agent will consider such account for eligibility;
(iii) the Account Obligor is subject to bankruptcy, receivership
or similar proceedings or is insolvent;
(iv) the account is subject to any dispute, prior assignment,
claim, lien, subrogation rights, or security interest, or subject to
any levy or setoff;
(v) Administrative Agent has notified the Borrower that the
account or the Account Obligor is unsatisfactory or unacceptable
(which Administrative Agent reserves the right to do in its sole
discretion at any time);
2
(vi) the account is due and owing from an Affiliate, employee,
officer, or director of Borrower;
(vii) the account is a contra account;
(viii) the Account Obligor has a credit history unsatisfactory to
Administrative Agent;
(ix) the account is subject to a retainage amount;
(x) the Account Obligor is a Person located outside the United
States of America; or
(xi) the account when combined with the billed accounts
receivable from a single Account Obligor shall in the aggregate be in
excess of the lesser of (a) five percent (5.0%) of the then aggregate
amount of the outstanding Revolving Credit Advances or (b) $200,000;
provided, however, if such amount in excess thereof shall be approved
by Administrative Agent in its sole discretion, on a case by case
basis, upon written request of Borrower and subject to Administrative
Agent's review of the two most recent years of payment history and
financial condition of such Account Obligor as of the date of
determination, then such limitations in this (xi) shall not apply;
provided, further, that in such event only the excess shall be deemed
not an Eligible Receivable."
"Revolving Credit Borrowing Base" means, at any date of
determination, (i) sixty percent (60%) of the aggregate amount of
Eligible Receivables on such date, less (ii) certain reserves
established by the Administrative Agent in its sole discretion from
time to time.
"Revolving Credit Borrowing Base Certificate" means a certificate
of a Responsible Officer of the Borrower, substantially in the form of
Exhibit A hereto otherwise acceptable to the Administrative Agent in
form and substance.
"Revolving Credit Facility Availability" means, at any time of
determination, the (i) lesser of the Revolving Credit Facility or the
Revolving Credit Borrowing Base minus (ii) the aggregate amount of the
Revolving Credit Advances.
(b) Section 1.1 of the Credit Agreement is amended by restating each
of the following definitions appearing in Section 1.1 in its entirety as
follows:
"Total Revolving Commitment" The sum of the Commitments of the
Lenders labeled "Revolving Commitments" as set forth on Schedule 1 of
the Credit Agreement and in effect from time to time. Effective as of
the Amendment Closing Date, attached hereto is a revised Schedule 1 to
the Credit Agreement. As of the Amendment Closing Date, the Total
Revolving Commitment is reduced to $3,000,000."
(c) Section 1.1 of the Credit Agreement is amended by amending the
definition of "Applicable Margin" to read in its entirety:
3
"Applicable Margin" means at any time and from time to time a
percentage per annum determined pursuant to the applicable Fiscal
Year, as set forth in the table below:
APPLICABLE MARGIN
REVOLVING CREDIT ADVANCES AND TERM B ADVANCES
TERM A ADVANCES
------------------------------------ ------------------------------------
Eurodollar Rate Prime Rate Eurodollar Rate Prime Rate
Fiscal Year Advances Advances Advances Advances
---------- --------------- ---------- --------------- ----------
2003 4.00% 2.75% 4.50% 3.50%
2004 5.00% 3.75% 5.50% 4.50%
2005 n/a n/a 5.50% 4.50%
2006 n/a n/a 5.50% 4.50%
(d) Section 2.1(c) of the Credit Agreement is amended to read in its
entirety:
"(c) The Revolving Credit Advances. Each Revolving Credit Lender
severally agrees, on the terms and conditions hereinafter set forth,
to make advances (each a "Revolving Credit Advance") to the Borrower
from time to time on any Business Day during the period from the date
hereof until the Revolving Credit Termination Date in an amount for
each such Advance not to exceed such Lender's Unused Revolving Credit
Commitment at such time; provided, however, that no Revolving Credit
Lender shall have any obligation to make a Revolving Credit Advance
under this Section 2.1(c) to the extent such Revolving Credit Advance
would cause the aggregate amount of Revolving Credit Advances
outstanding (after giving effect to any immediate application of the
proceeds thereof) plus (ii) Swing Line Advances outstanding, plus
(iii) Letter of Credit Advances outstanding, plus (iv) the aggregate
Available Amount of all Letters of Credit then outstanding to exceed
the lesser of (a) the Revolving Credit Facility or (b) the Revolving
Credit Borrowing Base, subject to reserves established in the sole
discretion of the Administrative Agent from time to time hereunder.
Each Revolving Credit Borrowing shall be in an aggregate amount of
$400,000 or an integral multiple of $100,000 (other than, in each
case, a Borrowing, the proceeds of which shall be used solely to repay
or prepay in full outstanding Swing Line Advances 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. Within the limits of
each Revolving Credit Lender's Unused Revolving Credit Commitment in
effect from time to time, the Borrower may borrow, repay and reborrow
Revolving Credit Advances.
4
(e) Section 2.6(b) of the Credit Agreement is amended to read in its
entirety:
"(b) Mandatory.
(i) Within ninety (90) days following the end of each Fiscal
Year, the Borrower shall execute and deliver to the Administrative
Agent a certificate of the Borrower's Chief Executive Officer or Chief
Financial Officer demonstrating its calculation of Excess Cash Flow
for such Fiscal Year along with a prepayment of the then outstanding
Advances equal to one hundred percent (100%) of the annual Excess Cash
Flow.
(ii) Within fifteen (15) days after receipt by any Loan
Party or any of its Subsidiaries of Net Cash Proceeds from Asset
Dispositions, the Borrower shall prepay the then outstanding Advances
in an amount equal to one-hundred percent (100%) of such Net Cash
Proceeds in any Fiscal Year.
(iii) Within fifteen (15) days after receipt by any Loan
Party or any of its Subsidiaries of Net Cash Proceeds from any Debt
Issuance or Equity Issuance, the Borrower shall prepay the then
outstanding Advances in an amount equal to, with respect to any (x)
Debt Issuance and (y) Equity Issuance, one hundred percent (100%) of
such Net Cash Proceeds.
(iv) Within fifteen (15) days after receipt of Net Cash
Proceeds by any Loan Party or any of its Subsidiaries from any
Extraordinary Receipt received by or paid to or for the account of any
Loan Party or any of its Subsidiaries and not otherwise included in
clause (i), (ii) or (iii) above, the Borrower shall prepay the then
outstanding Advances in an amount equal to one hundred percent (100%)
of such Net Cash Proceeds in the aggregate.
(v) Each prepayment made pursuant to clause (i), (ii), (iii)
or (iv) shall be applied to prepay the Facilities in the following
manner: first, ratably to the Term A Facility and the Term B Facility,
and ratably to each unpaid installment of principal of each of the
Term Facilities until such installments are paid in full; second, to
prepay Swing Line Advances then outstanding until such Advances are
paid in full; third, to prepay Letter of Credit Advances then
outstanding until such Advances are paid in full; fourth, to prepay
Revolving Credit Advances then outstanding (whereupon the Revolving
Credit Facility shall be permanently reduced as set forth in Section
2.5(b)(iii)) until such Revolving Credit Advances are paid in full;
and fifth, deposited in the L/C Cash Collateral Account to cash
collateralize 100% of the Available Amount of the Letters of Credit
then outstanding. The portion of each such application allocable to
Eurodollar Rate Advances may, at the option of the Borrower (A) be
applied to prepay such Advances immediately, even if such application
shall occur on other than the last day of an applicable Interest
Period (in which case the Borrower shall pay the amounts provided for
in Section 11.4(c)) or (B) be deposited in the Prepayment Account and
applied on the last day of the applicable Interest Periods to prepay
the Eurodollar Rate Advances that would otherwise have been prepaid by
the amounts deposited in the Prepayment Account. Upon the drawing of
any Letter of Credit for which funds are on deposit in the L/C Cash.
5
Collateral Account, such funds shall be applied to reimburse the
Issuing Bank or the Revolving Credit Lenders, as applicable. The
amount remaining (if any) after the required prepayment of the
Advances then outstanding and the 100% cash collateralization of the
aggregate Available Amount of Letters of Credit then outstanding (the
sum of such prepayment amounts, cash collateralization amounts and
remaining amount being referred to herein as the "Reduction Amount")
may be retained by the Borrower. Upon the drawing of any Letter of
Credit for which funds are on deposit in the L/C Cash Collateral
Account, such funds shall be applied to reimburse the Issuing Bank or
the Revolving Credit Lenders, as applicable. Upon the termination of
all of the Commitments and the indefeasible payment in full of all
Obligations, including, without limitation, termination or expiration
of all Letters of Credit and the indefeasible payment in full of all
Obligations in respect of all Letters of Credit, then all amounts
remaining on deposit in the L/C Cash Collateral Account shall be
returned to the Borrower.
(vi) The Borrower shall, within fifteen (15) days following
the end of each month in each Fiscal Year, pay to the Administrative
Agent for deposit in the L/C Cash Collateral Account an amount
sufficient to cause the aggregate amount on deposit in such Account to
equal the amount by which the aggregate Available Amount of all
Letters of Credit then outstanding exceeds the Letter of Credit
Facility on such Business Day.
(vii) At any time that the aggregate amount of Revolving
Credit Advances plus Swing Line Advances, plus Letter of Credit
Advances, plus the aggregate Available Amount of all Letters of Credit
then outstanding exceeds the Revolving Credit Facility, the Borrower
shall immediately repay Revolving Credit Advances to the extent
necessary to reduce the principal balance of Revolving Credit
Borrowings to an amount equal to or less than the Revolving Credit
Availability.
(viii) The foregoing notwithstanding, the provisions of this
Section 2.6(b) shall not be construed to permit any Equity Issuance,
Debt Issuance or Asset Disposition otherwise prohibited under the
terms of this Agreement."
(f) Section 2.7(a) of the Credit Agreement is amended to read in its
entirety:
"(a) Scheduled Interest. The Borrower shall pay to the
Administrative Agent, for the benefit of the Lenders, interest on the
unpaid principal amount of each Advance owing to each Lender from the
date of such Advance until such principal amount shall be paid in
full, at the following rates per annum:
(i) Prime Rate Advances. During such periods as such Advance
is a Prime Rate Advance, a rate per annum equal at all times to the
sum of (x) the Prime Rate in effect from time to time plus (y) the
Applicable Margin for such Advance in effect from time to time,
payable in arrears monthly on the last day of each month during such
periods and on the date such Prime Rate Advance shall be Converted or
paid in full. Notwithstanding the foregoing, if, at any time
hereunder, the sum of (x) and (y) shall equal a rate per annum less
than 5.50%, then the rate per annum for such Prime Rate.
6
Advance shall be the rate of 5.50% until such time as the sum of (x)
and (y) shall exceed 5.50%.
(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 and, if such Interest Period has a duration of more
than three months, on each day that occurs during such Interest Period
every three months from the first day of such Interest Period and on
the date such Eurodollar Rate Advance shall be Converted or paid in
full. Notwithstanding the foregoing, if, the sum of (x) and (y) for
such Interest Period shall equal a rate per annum less than 5.50%,
then the rate per annum for such Eurodollar Rate Advance for such
Interest Period shall be the rate of 5.50%."
(g) Section 2.8(a) of the Credit Agreement is hereby amended to read
it is entirety:
"(a) Commitment Fees. The Borrower shall pay to the
Administrative Agent, for the account of the Lenders, commitment fees,
from the Amendment Closing Date in the case of each Lender until the
Revolving Credit Termination Date payable in arrears quarterly on the
last Business Day of each March, June, September and December,
commencing on June 30, 2003, and on the Revolving Credit Termination
Date at a rate per annum equal to 0.50% per annum on the average daily
Unused Revolving Credit Commitment of such Lender. For purposes of
this clause (a), Swing Line Advances shall not constitute utilization
of the Revolving Credit Commitments of the Revolving Credit Lenders."
(h) Section 3.2 of the Credit Agreement is amended to include a new
subsection 3.2(c) as follows:
"(c) A Revolving Credit Borrowing Base Certificate shall have
been submitted to the Administrative Agent, in form and substance
otherwise acceptable to the Administrative Agent."
(i) Section 6.2 of the Credit Agreement is amended by deleting the
section appearing therein and replacing it in its entirety with the following:
"SECTION 6.2 Debt. Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume or suffer to
exist, any Debt, other than:
(a) In the case of the Borrower, Debt incurred pursuant to the
Loan Documents;
(b) In the case of any of the Subsidiaries of the Borrower, Debt
owed to the Borrower or to a wholly-owned Subsidiary of the Borrower;
provided, that such Debt shall be evidenced by a promissory note, such
promissory note shall be pledged to the
7
Administrative Agent pursuant to the terms of the Security Agreement
and there shall be no restrictions whatsoever on the ability of such
Subsidiary to repay such Debt;
(c) In the case of the Borrower and any of its Subsidiaries:
(i) Debt (A) secured by Liens permitted by Section 6.1(d)
and (B) Capitalized Leases, collectively not to exceed in the
amount set forth on Schedule 6.2(c);
(ii) endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of
business;
(iii) Unsecured Debt not to exceed $1,000,000 at any time
outstanding;
(iv) the Surviving Debt not exceed the amount set forth on
Schedule 6.2(c)(iv);
(v) any unsecured insurance premium financing; and
(vi) Debt incurred pursuant to a Capital Event; provided,
however, such Debt shall have been approved by the Required
Lenders."
(j) Section 6.4(c) of the Credit Agreement is hereby amended by
deleting the section appearing therein and replacing in its entirety the
following"
"(c) Acquire or permit any Subsidiary to acquire all or
substantially all of the assets of any other Person (including capital
stock)."
(k) Section 6.6 of the Credit Agreement is hereby amended by deleting
the section appearing therein and replacing in its entirety the following:
"SECTION 6.6 Investments in Other Persons. Make or hold, or
permit any of its Subsidiaries to make or hold, any Investment in any
Person other than:
(a) Investments by the Borrower and its Subsidiaries in their
Subsidiaries outstanding on the date hereof and described on Schedule
6.6(a);
(b) Loans and advances to officers and other employees in the
ordinary course of the business (including, without limitation, to
permit such officers and employees to purchase restricted stock of the
Borrower) of the Borrower and its Subsidiaries in an aggregate
principal amount not to exceed $236,484.47 as set forth on Schedule
6.6(b) (the "Officer Loan Limitation"), which amount shall be reduced
by all payments of principal thereunder, and, further, which amounts
repaid thereunder shall reduce the Officer Loan Limitation by such
amount;
(c) Investments by the Borrower and its Subsidiaries in Cash
Equivalents in an aggregate amount not to exceed $1,200,000 and which
Investments shall be
8
maintained in accounts each subject to the execution of an account
control agreement in favor of the Administrative Agent for the benefit
of the Lenders;
(d) Investments consisting of intercompany Debt permitted under
Section 6.2(b);
(e) Investments existing on the Closing Date and described on
Schedule 6.6(f) hereto;
(f) Investments by the Borrower and its Subsidiaries in deposit
accounts opened in the ordinary course of business, provided however,
such deposit accounts are opened and exist subject to the terms of an
account control agreement otherwise acceptable to the Administrative
Agent in form and substance;
(g) Investments by the Borrower and its Subsidiaries in joint
ventures existing as of the Amendment Closing Date as set forth on
Schedule 6.6(g); and
(h) Investments consisting of accounts receivable in the ordinary
course of business."
(l) Section 6.7 of the Credit Agreement is hereby amended by deleting
the section appearing therein and replacing in its entirety the following:
"SECTION 6.7 Dividends, Etc. Declare or pay any dividends,
purchase, redeem, retire, defease or otherwise acquire for value any
of its capital stock or any warrants, rights or options to acquire
such capital stock, now or hereafter outstanding, return any capital
to its stockholders as such, make any distribution of assets, rights,
obligations or securities to its stockholders as such or issue or sell
any rights to acquire such capital stock, or permit any of its
Subsidiaries to do any of the foregoing or permit any of its
Subsidiaries to purchase, redeem, retire, defease or otherwise acquire
for value any capital stock of the Borrower or any warrants, rights or
options to acquire such capital stock or to issue or sell any such
capital stock or any warrants, rights or options to acquire such
capital stock; provided, however, that nothing contained in this
Section shall prohibit an issuance of Company stock in exchange for
interests in any Subsidiary owned by an employee as a result of any
employee benefit program."
(m) Section 6.11 of the Credit Agreement is hereby amended by
deleting the section appearing therein and replacing it in its entirety with the
following:
SECTION 6.11 Prepayments, Etc. of Debt. Prepay, redeem, purchase,
defease or otherwise satisfy prior to the scheduled maturity thereof
(a) in any manner, or make any payment in violation of any
subordination terms of, any Debt, other than the prepayment of the
Advances in accordance with the terms of this Agreement, or (b) permit
any of its Subsidiaries to do any of the foregoing other than to repay
any Debt payable to the Borrower.
(n) Section 6 of the Credit is hereby amended by adding the following
new section:
9
"SECTION 6.20 Management Compensation. Pay, or permit any of its
Subsidiaries to pay a bonus or other incentive compensation to any
member of senior management of the Borrower or any of its
Subsidiaries.
(o) Section 7.2 of the Credit Agreement is hereby amended to replace
the words "within thirty (30) days after the end of each month which is not a
fiscal quarter end, "within twenty two (22) days after the end of each month".
(p) Section 7 of the Credit Agreement is hereby amended by: (a)
adding the following new sections:
"SECTION 7.21 Revolving Credit Borrowing Base Certificate. On or
before the first Wednesday of each month, a Revolving Credit Borrowing
Base Certificate detailing the Revolving Credit Borrowing Base as of
the last Business Day of the preceding month, and, further, at such
times and for such periods as the Administrative Agent shall request.
SECTION 7.22 Cash Flow Forecast. As soon as available and in any
event within twenty two (22) days after the end of each month, in a
form otherwise acceptable to the Administrative Agent in its sole
discretion, a copy of a Budget and a rolling thirteen (13) week cash
flow forecast (the "Cash Flow Forecast") which Cash Flow Forecast
shall include the following:
(a) the actual beginning cash balance and ending cash balance for
the immediately preceding month (reflecting the closing available
balance on the last Business Day of the immediately preceding
month) of all commercial bank deposit accounts of Borrower;
(b) the actual cash collections and cash disbursements for the
immediately preceding month, on a weekly basis, as of the close
of business as of the last Business Day and on a cumulative
basis;
(c) a comparison of the actual cash collections and cash
disbursements for the immediately preceding month, on a weekly
basis, with the amounts reflected on the Cash Flow Forecast for
such month, on a weekly basis, with a variance to the related
Budget; and
(d) a forecast of all cash collections and cash disbursements for
each week on a rolling forward thirteen-week basis.
and (b) renumbering Section 7.21 as follows:
SECTION 7.23 Other Information. Such other information respecting
the business, condition (financial or otherwise), operations,
performance or properties of any Loan Party or any of its Subsidiaries
or the Collateral as the Administrative Agent or any Lender Party
(through the Administrative Agent) may from time to time reasonably
request."
10
(q) Section 8.1 of the Credit Agreement is hereby amended by deleting
such Section in its entirety and replacing it with the following:
"SECTION 8.1. Minimum EBITDA. Maintain for each period set forth below
EBITDA at not less than the respective amounts set forth below:
YEAR TO DATE PERIOD ENDING MINIMUM EBITDA
-------------------------- --------------
March 31, 2003 $ 1,161,000
June 30, 2003 $ 3,517,000
September 30, 2003 $ 6,169,000
December 31, 2003 $ 9,211,000
FOUR FISCAL QUARTERS ENDING
March 31, 2004 $17,000,000
June 30, 2004 $17,500,000
September 30, 2004 $17,500,000
December 31, 2004 $18,000,000
March 31, 2005 $18,000,000
June 30, 2005 $18,000,000
September 30, 2005 $18,500,000
December 31, 2005 $18,500,000
March 31, 2006 $18,500,000
June 30, 2006 and thereafter $20,000,000"
(r) Section 8.2 of the Credit Agreement is hereby amended by deleting
such Section in its entirety and replacing it with the following:
"SECTION 8.2. Ratio of Consolidated Debt to EBITDA. Maintain as of the
end of each fiscal quarter of the Borrower a Ratio of Consolidated Debt to
EBITDA for the most recently completed four fiscal quarters of the Borrower of
not more than the ratio set forth below:
FOUR FISCAL QUARTERS ENDING RATIO
--------------------------- -----
March 31, 2003 2.88:1
June 30, 2003 3.49:1
11
September 30, 2003 3.34:1
December 31, 2003 2.62:1
March 31, 2004 and thereafter 1.50:1"
(s) Section 8.3 is hereby amended by deleting such Section in its
entirety and replacing it with the following:
"SECTION 8.3 Interest Coverage Ratio. Maintain as of each date set
forth below, a ratio of (i) EBITDA for the periods set forth below of the
Borrower to (ii) Consolidated cash Interest Expense for such period of not less
than the ratio set forth below for such period:
YEAR TO DATE PERIOD ENDING RATIO
-------------------------- -----
March 31, 2003 3.23:1
June 30, 2003 4.50:1
September 30, 2003 4.50:1
December 31, 2003 4.50:1
FOUR FISCAL QUARTERS ENDING
March 31, 2004 and thereafter 4.50:1"
(t) Section 8.4 of the Credit Agreement is hereby amended by deleting
such Section in its entirety and replacing it with the following:
"SECTION 8.4 Fixed Charge Coverage Ratio. Maintain as of the end of
each fiscal quarter of the Borrower a ratio of (I) during 2003, EBITDA for the
year to date as of the most recently completed fiscal quarter of the Borrower,
less Capital Expenditures made by the Borrower and its Subsidiaries during such
period, less the aggregate amount of federal, state, local and foreign taxes
paid by the Borrower and its Subsidiaries in cash during such period, less cash
dividends paid by the Borrower to the holders of its common stock during such
period, to the (ii) sum of (x) cash interest payable by the Borrower and its
Subsidiaries on all Debt during such period, plus (y) principal amounts of all
Debt payable by the Borrower and its Subsidiaries during such period, of not
less than the ratio set forth below for such period; and (II) as of March 31,
2004 and thereafter, EBITDA for the most recently completed four fiscal quarters
of the Borrower, less Capital Expenditures made by the Borrower and its
Subsidiaries during such period, less the aggregate amount of federal, state,
local and foreign taxes paid by the Borrower and its Subsidiaries in cash during
such period, less cash dividends paid by the Borrower to the holders of its
common stock during such period, to the (ii) sum of (x) cash interest payable by
the Borrower and its Subsidiaries on all Debt during such period, plus (y)
principal amounts of
12
all Debt payable by the Borrower and its Subsidiaries during such period, of not
less than the ratio set forth below for such period:
YEAR TO DATE PERIOD ENDING RATIO
------------------------- -----
March 31, 2003 .53:1
June 30, 2003 .84:1
September 30, 2003 1.00:1
December 31, 2003 1.25:1
FOUR FISCAL QUARTERS ENDING
March 31, 2004 1.25:1
June 30, 2004 1.25:1
September 30, 2004 1.25:1
December 31, 2004 1.25:1
March 31, 2005 1.00:1
June 30, 2005 1.00:1
September 30, 2005 1.00:1
December 31, 2005 1.00:1
March 31, 2006 and thereafter 1.25:1"
SECTION 2. Conditions Precedent. This Amendment shall become effective
on the date on which the following conditions have been satisfied:
(a) Schedules; Delivery. The Borrower shall have provided to the
Administrative Agent, a schedule of each: (i) all existing Events of
Default, with a description of each, acceptable to the Administrative
Agent in its sole discretion and which schedule shall be annexed as
Schedule 9 hereto; (ii) Disclosed Litigation which schedule shall be
annexed as Schedule 3.1(e) hereto; and (iii) non-competition
agreement(s) in effect and the dates and amounts of all required
payments thereunder, which schedule shall be annexed as Schedule II
hereto.
(b) Officer Loan Documentation; Delivery. The Borrower shall
have delivered to the Administrative Agent, in respect of each officer
loan set forth on Schedule __, the original note evidencing such loan
together with an allonge executed by the payee to the Administrative
Agent, for the benefit of the Lenders
13
(c) Amendment Fee. The Borrower shall pay a fee to the
Administrative Agent, for the benefit of the Lenders which shall be
the amount of 2.0% of the aggregate amount of (A) the Revolving Credit
Facility plus (B) the Advances outstanding under the Term Facilities,
as of the Amendment Closing Date which shall amount to $601,048.41
(the "Amendment Fee"). The Amendment Fee shall be deemed fully earned
as of the Amendment Closing Date and due and payable in three
installments as described below. The first installment (as described
below) of the Amendment Fee shall be distributed to each approving
Lender as follows: (i) if unanimous approval, then to each Lender in
accordance with its Commitment percentage or (ii) if not unanimous
approval, then to each approving Lender in an amount equal to the
product of (A) .25% multiplied by (B) the aggregate amount of the
Commitments multiplied by a fraction (x/y) of which (x) is that
Lender's Commitment percentage over (y) the total Commitment
percentage of all approving Lenders. The second and third installments
of the Amendment Fee will be distributed to each Lender on a pro rata
basis.
The Amendment Fee shall be payable in installments, in
immediately available funds, by the Borrower as follows: (i)
$150,262.10 on the Amendment Closing Date, (ii) (A) no further
installment shall be due and the balance of the Amendment Fee shall be
waived if the Borrower shall have paid in full all Obligations on or
before September 30, 2003 or (B) $75,131.05 on September 30, 2003, in
the event that the Borrower shall have achieved the Documentation
Benchmark (with a corresponding waiver of $75,131.05), or (C) in the
event the conditions in (A) or (B) are not met, $150,262.10 on
September 30, 2003, and (iii) (A) no further installment shall be due
and the balance of the Amendment Fee shall be waived if the Borrower
shall have paid in full all Obligations on or before December 31, 2003
or (B) otherwise, $300,524.20 on December 31, 2003.
(d) Legal and Professional Fees. The Borrower shall have paid to
the Administrative Agent and the Lenders all legal and professional
fees and expenses incurred by the Administrative Agent and the Lenders
in connection with the preparation, negotiation and execution of the
Amendment and any documents required to be furnished herewith,
including but not limited to all current and previously outstanding
legal and professional fees, as set forth in the fees and expenses
letter delivered to the Administrative Agent on the Amendment Closing
Date.
(e) Waivers. The Administrative Agent and the Required Lenders
hereby waive each and every default and existing Events of Default,
which defaults and Events of Default are listed in the exhibit
attached hereto as Exhibit "A." This waiver shall be effective
exclusively for the defaults and Events of Default set forth in
Exhibit "A."
(f) Corporate Authority. All corporate action necessary for the
valid execution, delivery and performance by the Borrower and the
Parent shall have been duly and effectively taken, and evidence
thereof satisfactory to the Administrative Agent shall have been
provided to the Administrative Agent.
(g) Executed Documentation. This Amendment shall have been duly
executed and delivered by the Borrower, each other Loan Party, the
Administrative
14
Agent, the Required Lenders and Revolving Credit Lenders holding
greater than 50% of the aggregate Revolving Credit Commitments and
shall be in full force and effect.
SECTION 3. Agreements
(a) Capital Event; Application of Prepayments. The Borrower
shall use its best efforts to consummate the Capital Event on or
before December 31, 2003. The Administrative Agent shall apply the Net
Cash Proceeds of the Capital Event pursuant to Section 2.6(b).
(b) Professional Financial Consultant.
Notwithstanding any provision to the contrary in the Credit
Agreement, the Borrower acknowledges that NachmanHaysBrownstein, Inc.
(the "Professional Financial Consultant") has been retained by counsel
to the Administrative Agent as their sole choice to assist the
Administrative Agent in the review of the Borrower's business plan,
projections results of operations and such other matters as the
Administrative Agent may require, including but not limited to the
preparation of a comprehensive business and financial analysis of the
Borrower, which shall be acceptable in form and substance to the
Administrative Agent. The Borrower shall, cooperate with the
Professional Financial Consultant, including but not limited to the
full disclosure of all pertinent financial information and full access
to (x) all books and records of the Borrower and (y) the Borrower's
premises locations and related facilities and equipment. The failure
of the Borrower to (i) provide the Professional Financial Consultant
with such cooperation and access, or (ii) pay in full the invoiced
professional fees and disbursements of the Professional Financial
Consultant, shall constitute an Event of Default under the Credit
Agreement.
(c) Additional Business Advisors.
Notwithstanding any provision to the contrary in the Credit
Agreement, within seven (7) days after due notice of a request by the
Administrative Agent, the Borrower shall retain the following:
(i) a professional financial and operations consulting firm (the
"Professional Business Consultant") which Professional Business
Consultant shall be chosen by the Borrower from a list of such firms
to be provided by the Administrative Agent, acceptable to the Agent
and the Required Lenders, and which shall specialize in (i) the prompt
identification of emergent material financial and operational matters
affecting the viability of Borrower's business which require immediate
rectification ("Emergent Matters"), (ii) the formulation of a plan
setting forth the analysis and proposed resolution of the Emergent
Matters (the "Emergent Matters Business Plan"), and (iii) the
implementation of the Emergent Matters Business Plan prepared thereby.
The Borrower shall authorize the Professional Business Consultant to
communicate directly with the Administrative Agent and the Lenders and
to furnish the Administrative Agent and the Lenders with such
information as they may reasonably request. The Professional Business
Consultant shall report directly to the board of directors of the
Borrower.
15
The Borrower shall provide the Administrative Agent and the
Lenders with full access to the personnel and work papers of the
Professional Business Consultant. The Borrower shall cooperate with
the Professional Business Consultant, including but not limited to the
full disclosure of all pertinent financial information and full access
to (x) all books and records of the Borrower and (y) the Borrower's
premises locations and related facilities and equipment. The failure
of the Borrower to (i) retain the Professional Business Consultant as
requested by the Administrative Agent, (ii) provide the Professional
Business Consultant with such cooperation and access, or (ii) pay in
full the invoiced professional fees and disbursements of the
Professional Business Consultant, shall constitute an Event of Default
under the Credit Agreement.
The Borrower agrees to continue to retain the Professional
Business Consultant until the Obligations are paid in full or until
the Administrative Agent shall determine in its sole discretion that
the retention of the Professional Business Consultant shall no longer
be required hereunder and shall notify the Borrower in writing of such
determination. The termination of the Professional Business Consultant
by the Borrower without cause and the failure to replace same with a
substitute firm acceptable to the Administrative Agent within fifteen
(15) days shall constitute an Event of Default under the Credit
Agreement; and/or
(ii) a strategic advisory firm (the "Strategic Advisor") which
shall be selected from a list of such firms to be provided by the
Administrative Agent, and retained on such terms as are reasonably
acceptable to the Administrative Agent and the Required Lenders for
the purpose of the development and presentation of strategic
alternatives for the Borrower's business sufficient to consummate a
Capital Event no later than December 31, 2003. The Borrower shall,
cooperate with the Strategic Advisor, including but not limited to the
full disclosure of all pertinent financial information and full access
to all books and records of the Borrower. The failure of the Borrower
to (a) retain the Strategic Advisor as requested by the Administrative
Agent or (b) provide the Strategic Advisor with such cooperation and
access shall constitute an Event of Default under the Credit
Agreement.
Upon request, the Administrative Agent, the Lenders and their
attorneys and advisors, including but not limited to the Professional
Financial Consultant shall be provided reasonable access to the
Strategic Advisor and shall receive copies of all information provided
to or from the Strategic Advisor.
(d) Monthly Status Conferences.
No later than five (5) days after the required date of submission
of the monthly financial statements pursuant to Section 7.2 and Cash
Flow Forecast pursuant to Section 7.23, the Borrower shall schedule
monthly informational teleconferences ("Teleconference(s)") with the
Strategic Advisor, the Administrative Agent and the Lenders (during
business hours to be announced) to permit the Administrative Agent and
the Lenders, and their Professional Financial Consultant to review and
discuss with the Strategic Advisor, the Professional Business
Consultant (if applicable) and the Borrower (i) the monthly financial
statements and Cash Flow Forecast, (ii) the status of the
16
development and presentation of strategic alternatives for the
Borrower's business sufficient to consummate a Capital Event no later
than December 31, 2003, and (iii) all other material business issues.
The failure of the Borrower to comply with the terms of this section
shall constitute an Event of Default.
(e) Account Control Agreement. No later than sixty (60) days
after the Amendment Closing Date, the Borrower shall have executed and
delivered to the Administrative Agent an account control agreement and
related documents in form and substance acceptable to the
Administrative Agent in its sole discretion, in respect of all deposit
accounts. The failure of the Borrower to deliver such account control
agreement and related documents in accordance with the terms of this
section shall constitute an Event of Default.
SECTION 4. Loan Documentation. The Borrower shall cooperate with the
Administrative Agent to cure any documentation deficiency and shall provide the
Administrative Agent with all documentation reasonably required by the
Administrative Agent.
The Borrower agrees to execute any and all documentation reasonably
required by the Administrative Agent to reaffirm the effectiveness,
enforceability and accuracy of the terms and conditions of each Facility
Document.
SECTION 5. Representations and Warranties. The Borrower hereby
represents and warrants to the Administrative Agents and the Lenders as follows:
(a) Representations and Warranties in the Credit Agreement. The
representations and warranties of the Borrower contained in the Credit
Agreement were true and correct in all material respects as of the
date when made and continue to be true and correct in all material
respects on the date hereof except to the extent of changes resulting
from transactions contemplated or permitted by the Credit Agreement
and the other Loan Documents and changes occurring in the ordinary
course of business that singly or in the aggregate have not or are not
reasonably expected to have a Material Adverse Effect, and to the
extent that such representations and warranties relate expressly to an
earlier date.
(b) Authority, Etc. The execution, delivery and performance of
this Amendment and the consummation of the transactions contemplated
hereby (i) are within the corporate powers of the Borrower and the
Parent and have been duly authorized by all necessary corporate action
on the part of such Persons, (ii) do not require any approval or
consent of or filing with, any governmental agency or authority other
than those already obtained or where failure to do so would not
reasonably be expected to have a Material Adverse Effect on any of the
Borrower, the Parent or any of their respective Subsidiaries, or on
the enforceability of any of the Loan Documents, including, without
limitation, this Amendment, (iii) do not conflict with or result in
any breach or contravention of any provision of law, statute, rule or
regulation to which the Parent the Borrower or any of their respective
Subsidiaries is subject or any judgment, order, writ, injunction,
license or permit applicable to the Parent the Borrower or any of
their respective Subsidiaries, except such conflicts, breaches or
contraventions that would not have a Material Adverse
17
Effect on the enforceability of the Loan Documents, including, without
limitation, this Amendment, (iv) do not conflict with any provision of
the corporate charter or bylaws of the Parent, the Borrower or any of
their respective Subsidiaries, (v) do not conflict with, or result in
a breach of any material term, covenant or provision of, or constitute
a default under any agreement, trust deed, indenture, mortgage, or
other instrument to which the Parent, the Borrower or any of their
respective Subsidiaries is a party or by which the Parent, the
Borrower or any of their respective Subsidiaries or any of their
properties is bound or affected or result in the creation of any
mortgage, lien, pledge, charge, security interest or other encumbrance
upon any property of the Parent, the Borrower or any of their
respective Subsidiaries.
(c) Enforceability of Obligations. This Amendment and the Credit
Agreement as amended hereby constitute the legal, valid and binding
obligations of the Parent and the Borrower enforceable against the
Parent and the Borrower in accordance with their terms, except as
enforceability is limited by bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting generally the
enforcement of, creditors' rights and except to the extent that
availability of the remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any
proceeding therefor may be brought.
(d) No Default. No Default or Event of Default has occurred and
is continuing, and no Default or Event of Default will exist, in each
case upon the effectiveness of this Amendment.
SECTION 6. Ratification, No Other Amendments, Etc.
(a) Ratification Etc. Except as expressly amended hereby, the
Credit Agreement, and all documents, instruments and agreements
related thereto, are hereby ratified and confirmed in all respects and
shall continue in full force and effect. The Credit Agreement and this
Amendment, shall be read and construed as a single agreement.
(b) No Other Amendment. Except as expressly provided in this
Amendment, all of the terms and conditions of the Credit Agreement and
the other Loan Documents remain in full force and effect. Nothing
contained in this Amendment (i) shall be construed to imply a
willingness on the part of the Administrative Agents or the Required
Lenders to grant any similar or other future amendment of any of the
terms and conditions of the Credit Agreement or the other Loan
Documents and (ii) shall in any way prejudice, impair or effect any
rights or remedies of the Administrative Agents or the Lenders (other
than as expressly amended herein) under the Credit Agreement or the
other Loan Documents.
SECTION 7. Execution in Counterparts; Delivery by Facsimile. This
Amendment may be executed in any number of counterparts, each of which shall be
deemed an original, but which together shall constitute one instrument. This
Amendment, to the extent signed and delivered by means of a facsimile machine,
shall be treated in all manner and respects as an original agreement or
instrument and shall be considered to have the same binding legal effect as if
it
18
were the original signed version thereof delivered in person. At the request of
any party hereto or to any such agreement or instrument, each other party hereto
or thereto shall re-execute original forms thereof and deliver them to all other
parties. No party hereto or to any such agreement or instrument shall raise the
use of a facsimile machine to deliver a signature or the fact that any signature
or agreement or instrument was transmitted or communicated through the use of a
facsimile machine as a defense to the formation of a contract and each party
forever waives such defense. In proving this Amendment, it shall not be
necessary to produce or account for more than one such counterpart signed by the
party against whom enforcement is sought.
SECTION 8. Release of the Administrative Agent and the Lenders. By
execution of this Amendment, Borrower acknowledges and confirms that, as of the
date hereof, they do not have any offsets, defenses or claims against the
Administrative Agent, Lenders, or any of their officers, agents,
representatives, directors or employees whether asserted or unasserted in
connection with the Loan Documents or the transactions contemplated by this
Amendment. To the extent that they may have such offsets, defenses or claims in
connection with the Loan Documents, the Borrower and each of their respective
successors, assigns, parents, subsidiaries, affiliates, predecessors, employees,
agents, representatives, heirs, executors, as applicable, jointly and severally,
release and forever discharge the Administrative Agent, Lenders, their
subsidiaries, affiliates, officers, directors, employees, representatives,
agents, attorneys, successors and assigns, both present and former (collectively
the "Lenders' Affiliates") of and from any and all manner of action and actions,
cause and causes of action, suits, debts, controversies, damages, judgments,
executions, claims and demands whatsoever, asserted or unasserted, in law or in
equity which arise under, in connection with, or are related to such offsets,
defenses or claims in connection with the Loan Documents against the
Administrative Agent, Lenders and/or Lenders' Affiliates they ever had or now
have upon or by reason of any manner, cause, causes or thing whatsoever,
including, without limitation, any such offset, defense or claim presently
existing.
SECTION 9. Miscellaneous. THIS AMENDMENT IS A CONTRACT UNDER THE LAWS
OF THE STATE OF NEW YORK AND SHALL, PURSUANT TO NEW YORK GENERAL OBLIGATIONS
LAWss.5-1401, FOR ALL PURPOSES BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF SAID STATE OF NEW YORK, EXCLUSIVE OF LAWS APPLICABLE TO CONFLICTS OF
LAW THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION.
The captions in this Amendment are for convenience of reference only and shall
not define or limit the provisions hereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
19
IN WITNESS WHEREOF, the undersigned have
duly executed this Amendment as of the date first
set forth above.
PRIVATE BUSINESS, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
--------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Chief Financial Officer
PRIVATE BUSINESS INSURANCE, INC.
PRIVATE BUSINESS CAPITAL, INC.
PRIVATE PROCESSING, INC.
TOWNE SERVICES, INC.
BANKING SOLUTIONS, INC.
BSI ACQUISITION CORP.
IMAGING INSTITUTION, INC.
FORSEON CORPORATION
By: /s/ Xxxxxx X. Xxxxxx, Xx.
--------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Chief Financial Officer
FLEET NATIONAL BANK,
as Issuing Bank,
as Swing Line Bank,
as Administrative Agent and
as a Lender
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
[SIGNATURES CONTINUE ON NEXT PAGE]
20
CITIZENS BANK OF MASSACHUSETTS,
as a Lender
By: /s/ Xxxxxxxx X. Xxxxxx
----------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Vice President
ING PRIME RATE TRUST,
as a Lender
By: ING Investments, LLC
as its investment manager
By: /s/ Xxxxxx X. Xxx
----------------------------
Name: Xxxxxx X. Xxx
Title: Senior Vice President
LASALLE BANK NATIONAL ASSOCIATION,
as a Lender
By: /s/ Xxxx Xxxxxxxxxxx
----------------------------
Name: Xxxx Xxxxxxxxxxx
Title: Group Senior Vice President
CREDIT LYONNAIS NEW YORK BRANCH,
as a Lender
By: /s/ A. Averbulch
----------------------------
Name: A. Averbulch
Title: Vice President
[SIGNATURES CONTINUE ON NEXT PAGE]
21
Each of the undersigned Guarantors hereby acknowledges and consents to the
foregoing Amendment dated as of April 11, 2003, and agrees that the Subsidiary
Guaranty dated as of the date of its execution from each of the undersigned
Guarantors remains in full force and effect, and each of the Guarantors confirms
and ratifies all of its obligations thereunder. PRIVATE BUSINESS INSURANCE, INC.
PRIVATE BUSINESS CAPITAL, INC.
PRIVATE PROCESSING, INC.
TOWNE SERVICES, INC.
BANKING SOLUTIONS, INC.
BSI ACQUISITION CORP.
IMAGING INSTITUTION, INC.
FORSEON CORPORATION
By: /s/ Xxxxxx X. Xxxxxx, Xx.
---------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Chief Financial Officer
22
