Exhibit 10.1
FIRST AMENDMENT TO
AMENDED AND RESTATED CREDIT AGREEMENT
This First Amendment is dated as of
March 24, 2009 (this “Amendment” ), by and
among DG FastChannel, Inc., a Delaware corporation (the
“Borrower” ), the Guarantors, the banks and
other financial institutions party to this Amendment, as Lenders,
and Bank of Montreal, as Agent for the Lenders (in such capacity,
the “Agent” ).
PRELIMINARY
STATEMENTS
A.
The Borrower, the Guarantors, the
financial institutions listed on the signature pages thereof
as Lenders and the Agent have heretofore entered into that certain
Amended and Restated Credit Agreement, dated as of March 13,
2008 (the “Credit Agreement” ); and
B.
The Borrower has asked the Lenders
to (i) increase the amount by which the Term Loans may be
increased, (ii) revise the Applicable Margin,
(iii) revise certain financial covenants and related
definitions, (iv) revise certain mandatory prepayment
provisions and (v) make certain other amendments to the Credit
Agreement, and the Lenders and Administrative Agent are willing to
do so on the terms and conditions set forth in this
Amendment.
NOW, THEREFORE, in consideration of
the premises set forth above, the terms and conditions contained
herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1
Use of Defined Terms
. Unless otherwise defined
herein or the context otherwise requires, terms for which meanings
are provided in the Credit Agreement shall have such meanings when
used in this Amendment.
ARTICLE II
AMENDMENT
Section 2.1
Section 1.4(a) of the
Credit Agreement is hereby amended by deleting the defined term
“Base Rate” appearing therein and inserting in
its place the following:
“Base
Rate” means, for
any day, a rate per annum equal to the greatest of:
(a) the rate of interest announced or otherwise established by
the Person serving as Administrative Agent from time to time as its
prime commercial rate, or its equivalent, for U.S. Dollar loans to
borrowers located in the United States as in effect on such day,
with any change in the Base Rate resulting from
a change in said prime commercial
rate to be effective as of the date of the relevant change in said
prime commercial rate (it being acknowledged and agreed that such
rate may not be such Person’s best or lowest rate),
(b) the sum of (i) the rate determined by the
Administrative Agent to be the average (rounded upward, if
necessary, to the next higher 1/100 of 1%) of the rates per annum
quoted to the Administrative Agent at approximately 10:00 a.m.
(Chicago time) (or as soon thereafter as is practicable) on such
day (or, if such day is not a Business Day, on the immediately
preceding Business Day) by two or more Federal funds brokers
selected by the Administrative Agent for sale to the Person serving
as Administrative Agent at face value of Federal funds in the
secondary market in an amount equal or comparable to the principal
amount for which such rate is being determined, plus
(ii) 1/2 of 1%, and (c) the LIBOR Quoted Rate for such
day plus 1.00%. As used herein, the term
“LIBOR Quoted Rate” means, for any day, a rate
per annum equal to the quotient of (i) the rate per annum
(rounded upwards, if necessary, to the next higher one
hundred-thousandth of a percentage point) for deposits in U.S.
Dollars for a one-month interest period which appears on the
LIBOR01 Page as of 11:00 a.m. (London, England time) on
such day (or, if such day is not a Business Day, on the immediately
preceding Business Day) divided by (ii) one (1)
minus the Eurodollar Reserve Percentage (calculated for this
purpose as if each Base Rate Loan were a Eurodollar
Loan).
Section 2.2
Section 1.8(a) of the
Credit Agreement is hereby amended by inserting immediately prior
to the “.” at the end thereof the following:
“; provided further that the first principal installment
of any additional Term A Loans advanced on the First Amendment
Effective Date shall be due on June 30, 2009 and the
principal installment due on March 31, 2009 shall be applied
to the payment of Term A Loans outstanding on the date
immediately preceding the First Amendment Effective Date.
”
Section 2.3
Section 1.9(b)(iii) of the
Credit Agreement is hereby amended in its entirety and as so
amended shall read as follows:
(iii) (A) Within two
(2) days after receipt of the Borrower’s year-end
audited financial statements, and in any event within ninety (90)
days after the end of each fiscal year of the Borrower (commencing
with the fiscal year ending December 31, 2009), the Borrower
shall prepay the Obligations by an amount equal to the ECF
Prepayment Percentage of Excess Cash Flow of Borrower and its
Subsidiaries for the most recently completed fiscal year of the
Borrower. The amount of each such prepayment shall be
applied, subject to Section 1.9(b)(v) below, first to the
outstanding Term Loans (to be applied on a ratable basis between
the Term A Loans
2
and Acquisition Loans based on the
outstanding principal amount thereof) until paid in full and then
to the Revolving Credit.
(B) If after the First
Amendment Effective Date the Borrower or any Subsidiary shall issue
new equity securities (whether common or preferred stock or
otherwise), other than (i) equity securities issued in
connection with the exercise of employee stock options or stock
appreciation rights plans, any management and/or director ownership
or incentive plans, any employment termination agreement or
employment agreement, (ii) equity securities of the Borrower
issued to the seller of an Acquired Business in connection with any
Permitted Acquisition, (iii) equity securities issued by the
Borrower the proceeds of which are used within 45 days of receipt
by the Borrower to fund all or any portion of the purchase price of
any Permitted Acquisition, (iv) equity securities of a
Subsidiary issued to the Borrower or another Subsidiary, or
(v) equity securities of the Borrower the proceeds of which
are used to repay the Bridge Loan, the Borrower shall promptly
notify the Administrative Agent of the estimated Net Cash Proceeds
of such issuance to be received by or for the account of the
Borrower or such Subsidiary in respect thereof. Promptly upon
receipt (or, in the case of clause (iii) above, promptly after
the 45th day after receipt) by the Borrower or such Subsidiary of
Net Cash Proceeds of such issuance, the Borrower shall prepay the
Obligations in an aggregate amount equal to the lesser of
(I) 50% of the amount of such Net Cash Proceeds and
(II) such percentage of such Net Cash Proceeds necessary to
cause the Borrower’s Total Leverage Ratio calculated as of
the end of the Borrower’s most recently completed fiscal
quarter to be less than or equal to 2.00 to 1.00 calculated as if
such prepayment were made on the last day of such fiscal
quarter. The amount of each such prepayment shall be applied,
subject to Section 1.9(b)(v) below, first to the
outstanding Term Loans (to be applied on a ratable basis between
the Term A Loans and Acquisition Loans based on the outstanding
principal amount thereof) until paid in full and then to the
Revolving Credit. The Borrower acknowledges that its
performance hereunder shall not limit the rights and remedies of
the Lenders for any breach of Section 8.7 hereof or any other
terms of the Loan Documents.
Section 2.4
Section 2.1 of the Credit
Agreement is hereby amended by deleting the phrase “equal
to 0.25%” appearing therein and inserting in its place
the phrase “equal to the Applicable
Margin”.
Section 2.5
Section 5.1 of the Credit
Agreement is hereby amended by (i) deleting the defined term
“Senior Leverage Ratio,” (ii) amending the
defined terms “Applicable Margin,”
3
“ECF Prepayment Percentage,”
“Fixed Charges,” “Permitted Acquisition,” and
“Term Loan Increase Availability” in their
entirety and as so amended to read as set forth below and
(iii) inserting new defined terms “Bridge Loan
Repayment,” “Cash on Hand,” “First
Amendment,” and “First Amendment Effective
Date” as set forth below in their proper alphabetical
order:
“Applicable
Margin” means, with
respect to Loans, Reimbursement Obligations, and the commitment
fees and letter of credit fees payable under Section 2.1
hereof, until the first Pricing Date, the rates per annum shown
opposite Level IV in Grid A below or Level IV in
Grid B below, and thereafter from one Pricing Date to the next
the Applicable Margin means the rates per annum determined in
accordance with the following schedule:
GRID A
|
LEVEL
|
|
TOTAL LEVERAGE RATIO
FOR SUCH PRICING DATE
|
|
APPLICABLE MARGIN
FOR BASE RATE LOANS
UNDER REVOLVING
CREDIT, TERM A CREDIT
AND REIMBURSEMENT
OBLIGATIONS SHALL BE:
|
|
APPLICABLE MARGIN FOR
EURODOLLAR LOANS UNDER
REVOLVING CREDIT, TERM A
CREDIT AND LETTER OF
CREDIT FEE SHALL BE:
|
|
APPLICABLE MARGIN FOR
COMMITMENT FEE SHALL BE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IV
|
|
Greater than 2.5 to 1.0
|
|
3.50
|
%
|
4.50
|
%
|
0.500
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
III
|
|
Less than or equal to 2.5 to 1.0, but greater
than 2.0 to 1.0
|
|
3.00
|
%
|
4.00
|
%
|
0.450
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
II
|
|
Less than or equal to 2.0 to 1.0,
but greater than 1.5 to 1.0
|
|
2.50
|
%
|
3.50
|
%
|
0.375
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
I
|
|
Less than or equal to 1.5 to
1.0
|
|
2.00
|
%
|
3.00
|
%
|
0.250
|
%
|
GRID B
|
LEVEL
|
|
TOTAL LEVERAGE RATIO FOR SUCH
PRICING DATE
|
|
APPLICABLE MARGIN FOR
BASE RATE LOANS UNDER
ACQUISITION CREDIT SHALL
BE:
|
|
APPLICABLE MARGIN FOR
EURODOLLAR LOANS UNDER
ACQUISITION CREDIT SHALL
BE:
|
|
|
|
|
|
|
|
|
|
|
|
IV
|
|
Greater than 2.5 to 1.0
|
|
4.00
|
%
|
5.00
|
%
|
|
|
|
|
|
|
|
|
|
|
III
|
|
Less than or equal to 2.5 to 1.0, but greater
than 2.0 to 1.0
|
|
3.50
|
%
|
4.50
|
%
|
|
|
|
|
|
|
|
|
|
|
II
|
|
Less than or equal to 2.0 to 1.0,
but greater than 1.5 to 1.0
|
|
3.00
|
%
|
4.00
|
%
|
|
|
|
|
|
|
|
|
|
|
I
|
|
Less than or equal to 1.5 to
1.0
|
|
2.50
|
%
|
3.50
|
%
|
4
For purposes hereof, the term
“Pricing Date” means, (i) for any fiscal
quarter of the Borrower ending on or after June 30, 2009, the
date on which the Administrative Agent is in receipt of the
Borrower’s most recent financial statements (and, in the case
of the year-end financial statements, audit report) for the fiscal
quarter then ended, pursuant to Section 8.5 hereof and
(ii) on any date after the First Amendment Effective Date, on
each such date on which the Borrower or any Guarantor consummates a
Permitted Acquisition that is financed (in whole or in part) by an
Acquisition Loan. The Applicable Margin shall be established
based on the Total Leverage Ratio for the most recently completed
fiscal quarter (calculated, in the case of clause (ii) above,
as if the Permitted Acquisition was consummated on the last day of
the immediately preceding fiscal quarter) and the Applicable Margin
established on a Pricing Date shall remain in effect until the next
Pricing Date. If the Borrower has not delivered its financial
statements by the date such financial statements (and, in the case
of the year-end financial statements, audit report) are required to
be delivered under Section 8.5 hereof, until such financial
statements and audit report are delivered, the Applicable Margin
shall be the highest Applicable Margin ( i.e., Level IV
with respect to Grid A and Level IV with respect to
Grid B shall apply). If the Borrower subsequently
delivers such financial statements before the next Pricing Date,
the Applicable Margin established by such late delivered financial
statements shall take effect from the date of delivery until the
next Pricing Date. In all other circumstances, the Applicable
Margin established by such financial statements shall be in effect
from the Pricing Date that occurs immediately after the end of the
fiscal quarter covered by such financial statements until the next
Pricing Date. Each determination of the Applicable Margin
made by the Administrative Agent in accordance with the foregoing
shall be conclusive and binding on the Borrower and the Lenders if
reasonably determined.
“ Bridge Loan Repayment
” means the repayment of the Bridge Loan by the Borrower with
the proceeds from all or any combination of any of the following:
(a) the issuance of any equity, (b) the issuance of any
subordinated debt, (c) any cash or cash equivalents on the
Borrower’s balance sheet, (d) borrowings of Revolving
Loans, and/or (e) the proceeds of any Term Loan
Increase.
“Cash on
Hand” means the
aggregate amount of cash of the Borrower and its Subsidiaries held
in accounts subject to a demand deposit account control agreement
in favor of the Administrative Agent minus (i) the
amount of accounts payable of the Borrower and its Subsidiaries in
excess of historically normal levels as determined by the Borrower
in good faith minus (ii) the aggregate amount of
payroll and other significant expenditures of the Borrower and its
Subsidiaries to be paid within 14 days of the date of such
calculation as determined by the Borrower in good faith
5
plus (iii) the lesser of (a) the aggregate
amount of accounts receivable of the Borrower and its Subsidiaries
that the Borrower reasonably expects to collect within 14 days of
the date of such calculation as determined by the Borrower in good
faith and (b) the amount calculated in clause
(ii) above.
“ECF Prepayment
Percentage” means
50% for the fiscal year ending December 31, 2009; provided
that so long as no Event of Default shall have occurred and be
continuing such percentage shall be permanently reduced to
(a) 25% at such time as the Total Leverage Ratio as
demonstrated by the financial statements of the Borrower submitted
pursuant to Section 8.5 hereof has been less than 2.50 to 1.00
for two (2) consecutive fiscal qua
