EXHIBIT 10.10
FOURTH AMENDMENT TO CREDIT AGREEMENT
THIS FOURTH AMENDMENT TO CREDIT AGREEMENT is made and entered as of
September 21, 1999 (this "Amendment") is between AKI, Inc., a Delaware
corporation, formerly known as Arcade, Inc. ("Borrower") and HELLER FINANCIAL,
INC., a Delaware corporation ("Lender").
W I T N E S S E T H:
WHEREAS, Borrower and Lender are parties to that certain Credit
Agreement dated as of April 30, 1996 and all amendments thereto (as amended and
supplemented from time to time, the "Credit Agreement");
WHEREAS, pursuant to that certain Stock Purchase Agreement dated as of
September __, 1999 (the "RetCom Purchase Agreement"), Borrower shall acquire all
of the issued and outstanding capital stock of RetCom Holdings, Ltd., a Delaware
corporation ("Target"); and
WHEREAS, the parties wish to amend the Credit Agreement as provided
herein;
NOW, THEREFORE, the parties agree as follows:
1. Definitions. Capitalized terms used in this Amendment, unless
otherwise defined herein, shall have the meanings ascribed to such terms in the
Credit Agreement.
2. Amendments to the Credit Agreement.
(a) Subsection 4.3(b) is amended by deleting all periods and
amounts beginning with "July 1, 1999 through December 31, 1999 - $25,500,000"
through the end of such subsection and substituting the following in lieu
thereof:
"July 1, 1999 through December 31, 1999 $20,000,000
January 1, 2000 through March 31, 2000 $21,000,000
April 1, 2000 through December 31, 2000 $22,000,000
January 1, 2001 through June 30, 2001 $23,000,000
July 1, 2001 through June 30, 2002 $24,000,000
July 1, 2002 through June 30, 2003 $25,000,000
July 1, 2003 through June 30, 2004 $26,000,000
July 1, 2004 and thereafter $27,000,000"
(b) Subsection 4.4 is amended by deleting such subsection
in its entirety and the following is inserted in lieu
thereof:
"4.4 Fixed Charged Coverage. Borrower shall not permit Fixed Charge
Coverage for the twelve month period ending on any of July 31, 1999,
August 31, 1999 and September 30, 1999 to be less than 1.05. Borrower
shall not permit Fixed Charge Coverage for the twelve month period
ending on the last day of each month thereafter to be less than 1.10.
"Fixed Charge Coverage" will be calculated as illustrated on Exhibit
4.6(C)."
(c) Subsection 4.5 is deleted in its entirety and the
following is inserted in lieu thereof:
"4.5 Total Indebtedness to Operating Cash Flow Ratio
Borrower shall not permit the ratio of Total Indebtedness
calculated as of the last day of any month during the periods set forth
below to Operating Cash Flow for the twelve (12) month period ending on
such day to be greater than the amount set forth below for such period:
Period Ratio
July 1, 1999 through December 31, 1999 7.90
January 1, 2000 through March 31, 2000 7.00
April 1, 2000 through June 30, 2000 6.80
July 1, 2000 through September 30, 2000 6.50
October 1, 2000 through December 31, 2000 6.30
January 1, 2001 through March 31, 2001 6.10
April 1, 2001 through June 30, 2001 5.90
July 1, 2001 and thereafter 5.75
"Total Indebtedness, Operating Cash Flow, will be calculated
as illustrated on Exhibit 4.6(C)."
3. Representations and Warranties. To induce Lender to enter into this
Amendment, Borrower represents and warrants to Lender that:
(a) the execution, delivery and performance by Borrower of
this Amendment are within its corporate power, have been duly authorized by all
necessary corporate action and do not and will not contravene or conflict with
any provision of law applicable to Borrower, the Certificate of Incorporation or
By-laws of Borrower, or any order, judgment or decree of any court or other
agency of government or any contractual obligation binding upon Borrower;
(b) the Credit Agreement as amended as of the date hereof is
the legal, valid and binding obligation of Borrower enforceable against Borrower
in accordance with its terms;
(c) each of the representations and warranties set forth in
Section 5 of the Credit Agreement (other that those which, by their terms,
specifically are made as of a certain date prior to the date hereof) are true
and correct in all material respects as of the date hereof;
(d) no Default or Event of Default has occurred and is
continuing; and
(e) all conditions precedent to the obligations of the parties
to the consummate the purchase and sale of the stock of Target pursuant to the
RetCom Purchase Agreement have been satisfied in all material respects.
4. Covenants. Borrower hereby covenants and agrees to, as soon as
reasonably possible but in no event later than 10 Business Days after the date
draft documentation is delivered to Borrower:
(a) cause Target and each of its Subsidiaries to guarantee the
Obligations and to secure such guarantee by granting a lien on substantially all
of its and their assets, in each instance pursuant to documentation in form and
substance reasonably satisfactory to Lender;
(b) pledge and deliver to Lender all of the capital stock of
Target and each of its Subsidiaries to secure the Obligations pursuant to
documentation in form and substance reasonably satisfactory to Lender;
(c) deliver to Lender a copy of the articles or certificate of
incorporation of Borrower certified as of a recent date by the Secretary of
State of Delaware and such other corporate organizational and authority
documents as Lender may reasonably request; and
(d) deliver to Lender such UCC financing statements and
amendments thereto as Lender may reasonably require.
5. Conditions. The effectiveness of the amendments stated in this
Amendment is subject to each of the following conditions precedent or
concurrent:
(a) No Default or Event of Default under the Credit Agreement,
as amended hereby, shall have occurred and be continuing;
(b) Borrower shall have executed and delivered this Amendment,
and such other documents and instruments as Lender may require shall have been
executed and/or delivered to Lender; and
(c) All proceedings taken in connection with the transactions
contemplated by this Amendment and all documents, instruments and other legal
matters incident thereto, shall be satisfactory to Lender and its legal counsel.
6. Miscellaneous.
(a) Captions. Section captions used in this Amendment are for
convenience only, and shall not affect the construction of this Amendment.
(b) Governing Law. This Amendment shall be a contract made
under and governed by the laws of the State of New York, without regard to
conflict of laws principals. Whenever possible each provision of this Amendment
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Amendment shall be prohibited by or
invalid under such law, such provision shall be ineffective to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Amendment.
(c) Counterparts. This Amendment may be executed in any number
of counterparts, and each such counterpart shall be deemed to be an original,
but all such counterparts shall together constituted but one and the same
Agreement.
(d) Successors and Assigns. This Amendment shall be binding
upon Borrower and Lender and their respective successors and assigns, and shall
inure to the sole benefit of Borrower and Lender and their respective successors
and assigns.
(e) References. Any reference to the Credit Agreement
contained in any notice, request, certificate, or other document executed
concurrently with or after the execution and delivery of this Amendment shall be
deemed to include this Amendment unless the context shall otherwise require.
(f) Continued Effectiveness. The Credit Agreement as amended
hereby and each of the other Loan Documents remains in full force and effect.
(g) Costs, Expenses and Taxes. Borrower affirms and
acknowledges that subsection 1.3(B) of the Credit Agreement applies to this
Amendment and the transactions and Agreements and document contemplated
hereunder.
Delivered at Chicago, Illinois, as of the day and year first above
written.
AKI, INC.
By: /S/ WILLAIM J. FOX
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Name Printed: William J. Fox
Title: President
HELLER FINANCIAL, INC., as Lender
By: /S/ GEORGE F. KURTESON
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Name Printed: George F. Kurteson
Title: Senior Vice President