FIRST AMENDMENT TO CREDIT AND SECURITY AGREEMENT
This Amendment, dated as of August 31, 2000 is made by and
between LUMINANT WORLDWIDE CORPORATION, a Delaware corporation, LWC OPERATING
CORP., a Delaware corporation, LWC MANAGEMENT CORP., a Delaware corporation,
POTOMAC I HOLDINGS, INC., a Delaware corporation, MULTIMEDIA I HOLDINGS, INC., a
Delaware corporation, RSI GROUP, INC., a Texas corporation, ALIGN SOLUTIONS
CORP., a Delaware corporation, POTOMAC PARTNERS MANAGEMENT CONSULTING, LLC, a
Delaware limited liability company, MULTIMEDIA RESOURCES, LLC, a New York
limited liability company, INTERACTIVE8, INC., a New York corporation, BD
ACQUISITION CORP., a Delaware corporation, RESOURCE SOLUTIONS INTERNATIONAL,
LLC, a Texas limited liability company, INTEGRATED CONSULTING, INC., a Texas
corporation, FREE RANGE MEDIA, INC., a Washington corporation, ALIGN-FIFTH GEAR
ACQUISITION CORPORATION, a Delaware corporation, and ALIGN-SYNAPSE ACQUISITION
CORPORATION, a Texas corporation (collectively, the "Borrowers" and each a
"Borrower"), and XXXXX FARGO BUSINESS CREDIT, INC., a Minnesota corporation,
(the "Lender").
Recitals
The Borrowers and the Lender have entered into a Credit and
Security Agreement dated as of April 5, 2000 (the "Credit Agreement").
Capitalized terms used in these recitals have the meanings given to them in the
Credit Agreement unless otherwise specified.
The Borrowers have requested that the Lender agree to waive
certain Events of Default. The Borrowers have further requested that certain
amendments be made to the Credit Agreement. Lender is willing to grant these
requests pursuant to the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants and agreements herein contained, it is agreed as follows:
1. DEFINED TERMS. Capitalized terms used in this Amendment
which are defined in the Credit Agreement shall have the same meanings as
defined therein, unless otherwise defined herein. In addition, Section 1.1 of
the Credit Agreement is amended by adding or amending, as the case may be, the
following definitions:
"`First Amendment' means that certain First Amendment to
Credit and Security Agreement and Waiver of Defaults, dated as of
August 31, 2000, by and between the Borrowers and the Lender."
"`First Amendment Effective Date' means the date upon which
all of the conditions as identified in paragraph 7 of the First
Amendment have been satisfied."
"`Gross Equity Proceeds' means the total cash proceeds to the
Borrowers generated from a Sale of Equity, before any consideration
given for fees, expenses, and discounts relating to such Sale of
Equity."
"`Sale of Equity' means a secondary public offering or private
placement of additional common or preferred stock or convertible
instruments, or any other single sale, or series of related sales, of
equity in any of the Borrowers (excluding sales pursuant to the
exercise of options and sales pursuant to the acquisition of a
business) on or after the First Amendment Effective Date."
2. AMOUNT AND TERMS OF THE CREDIT FACILITY. Subsection
2.3(a)(i) of the Credit Agreement is hereby amended in its entirety to read as
follows:
"(i) $6,000,000 less the L/C Amount, or"
3. FINANCIAL COVENANTS. Sections 6.13, 6.14, 6.15, and 7.11 of
the Credit Agreement are hereby amended in their entirety to read as follows:
"Section 6.13 MINIMUM EBITDA. The Borrowers will achieve, as
of the end of each month during each period described below, minimum
year-to-date EBITDA of not less than the amount set forth opposite such
period:
Period Minimum Year-to-Date EBITDA
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March 31, 2000 through June 29, 2000 $ 2,000,000
June 30, 2000 through September 29, 2000 $ 4,500,000
September 30, 2000 through December 30, 2000 $ 9,000,000
December 31, 2000 $ 14,000,000
January 1, 2001 through March 30, 2001 $ 0
March 31, 2001 $ 2,000,000"
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"Section 6.14 MINIMUM LIQUIDITY. The Borrowers shall maintain
Liquidity, determined at the end of each month, of not less than
$5,000,000 through September 29, 2000. Upon the earlier of September
30, 2000, or the completion of a Sale of Equity which yields Gross
Equity Proceeds of not less than $20,000,000, and at all times
thereafter, the Borrowers shall maintain Liquidity, determined at the
end of each month, of not less than $15,000,000."
"Section 6.15 MINIMUM UNRESTRICTED CASH. Beginning on the
earlier of September 30, 2000, or upon the completion of a Sale of
Equity which yields Gross Equity Proceeds of not less than $20,000,000,
and at all times thereafter, the Borrowers shall maintain Unrestricted
Cash of not less than $10,000,000."
"Section 7.11 CAPITAL EXPENDITURES. The Borrowers will not
incur or contract to incur Capital Expenditures of more than
$12,000,000 during the fiscal year ending on December 31, 2000,
PROVIDED, HOWEVER, that if the Borrowers complete a Sale of Equity
which yields Gross Equity Proceeds of not less than $20,000,000, the
Borrowers may incur or contract to incur Capital Expenditures of up to
$18,000,000 during such fiscal year, PROVIDED, FURTHER, that the
Borrowers shall not incur or contract to incur Capital Expenditures of
more than $12,000,000 before the later of (i) September 30, 2000, or
(ii) the date the Borrowers receive Gross Equity Proceeds of not less
than $20,000,000."
4. NO OTHER CHANGES. Except as explicitly amended by this
Amendment, all of the terms and conditions of the Credit Agreement shall remain
in full force and effect and shall apply to any advance or letter of credit
thereunder.
5. CONDITIONS PRECEDENT. This Amendment shall be effective
when the Lender shall have received an executed original hereof, together with
such other matters as the Lender may reasonably require.
6. REPRESENTATIONS AND WARRANTIES. The Borrowers hereby
represent and warrant to the Lender as follows:
(a) The Borrowers have all requisite power and authority to
execute this Amendment and to perform all of their obligations
hereunder, and this Amendment has been duly executed and delivered by
the Borrowers and constitutes the legal, valid and binding obligation
of the Borrowers, enforceable in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or similar laws
affecting creditor's rights generally and by general equitable
principles.
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(b) The execution, delivery and performance by the Borrowers
of this Amendment have been duly authorized by all necessary corporate
or limited liability company action and do not (i) require any
authorization, consent or approval by any governmental department,
commission, board, bureau, agency or instrumentality, domestic or
foreign, (ii) violate any provision of any law, rule or regulation or
of any order, writ, injunction or decree presently in effect, having
applicability to the Borrowers, or the articles of incorporation or
by-laws of the Borrowers, or (iii) result in a breach of or constitute
a default under any indenture or loan or credit agreement or any other
agreement, lease or instrument to which the Borrowers are a party or by
which they or their properties may be bound or affected.
(c) All of the representations and warranties contained in
Article V of the Credit Agreement are correct in all material respects
on and as of the date hereof as though made on and as of such date,
except to the extent that such representations and warranties relate
solely to an earlier date.
7. REFERENCES. All references in the Credit Agreement to "this
Agreement" shall be deemed to refer to the Credit Agreement as amended hereby;
and any and all references in the Security Documents to the Credit Agreement
shall be deemed to refer to the Credit Agreement as amended hereby.
8. NO OTHER WAIVER. Except as set forth in Paragraph 5 hereof,
the execution of this Amendment and acceptance of any documents related hereto
shall not be deemed to be a waiver of any Default or Event of Default under the
Credit Agreement or breach, default or event of default under any Security
Document or other document held by the Lender, whether or not known to the
Lender and whether or not existing on the date of this Amendment.
9. RELEASE. The Borrowers hereby absolutely and
unconditionally release and forever discharge the Lender, and any and all
participants, parent corporations, subsidiary corporations, affiliated
corporations, insurers, indemnitors, successors and assigns thereof, together
with all of the present and former directors, officers, agents and employees of
any of the foregoing, from any and all claims, demands or causes of action of
any kind, nature or description, whether arising in law or equity or upon
contract or tort or under any state or federal law or otherwise, which the
Borrowers have had, now have or have made claim to have against any such person
for or by reason of any act, omission, matter, cause or thing whatsoever arising
from the beginning of time to and including the date of this Amendment, whether
such claims, demands and causes of action are matured or unmatured or known or
unknown.
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10. COSTS AND EXPENSES. The Borrowers hereby reaffirm their
agreement under the Credit Agreement to pay or reimburse the Lender on demand
for all costs and expenses incurred by the Lender in connection with the Credit
Agreement, the Security Documents and all other documents contemplated thereby,
including without limitation all reasonable fees and disbursements of legal
counsel. Without limiting the generality of the foregoing, the Borrowers
specifically agree to pay all fees and disbursements of counsel to the Lender
for the services performed by such counsel in connection with the preparation of
this Amendment and the documents and instruments incidental hereto. The
Borrowers hereby agree that the Lender may, at any time or from time to time in
its sole discretion and without further authorization by the Borrowers, make a
loan to the Borrowers under the Credit Agreement, or apply the proceeds of any
loan, for the purpose of paying any such fees, disbursements, costs and expenses
and the fee required under paragraph 6 hereof.
11. MISCELLANEOUS. This Amendment may be executed in any
number of counterparts, each of which when so executed and delivered shall be
deemed an original and all of which counterparts, taken together, shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized
as of the date first above written.
XXXXX FARGO BUSINESS CREDIT, INC.
By
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Xxxxxx X. Xxxxxxx
Its Vice President
LUMINANT WORLDWIDE CORPORATION
By
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Its
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LWC OPERATING CORP.
By
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Its
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LWC MANAGEMENT CORP.
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By
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Its
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POTOMAC I HOLDINGS, INC.
By
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Its
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MULTIMEDIA I HOLDINGS, INC.
By
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Its
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RSI GROUP, INC.
By
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Its
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ALIGN SOLUTIONS CORP.
By
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Its
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POTOMAC PARTNERS MANAGEMENT CONSULTING, LLC
By
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Its
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MULTIMEDIA RESOURCES, LLC
By
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Its
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INTERACTIVE8, INC.
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By
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Its
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BD ACQUISITION CORP.
By
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Its
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RESOURCE SOLUTIONS INTERNATIONAL, LLC
By
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Its
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INTEGRATED CONSULTING, INC.
By
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Its
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FREE RANGE MEDIA, INC.
By
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Its
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ALIGN-FIFTH GEAR ACQUISITION CORPORATION
By
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Its
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ALIGN-SYNAPSE ACQUISITION CORPORATION
By
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Its
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