EX-10 12 tor45705.txt EX. 10.2.3 Exhibit 10.2.3 THIS SECOND AMENDMENT AGREEMENT is made as of the 30th day of June, 2002. B E T W E E N: MAXXCOM INC. a corporation incorporated under the laws of the Province of Ontario ("Maxxcom") - and - MAXXCOM INC. a corporation incorporated under the laws of the State of Delaware ("Maxxcom US") AS BORROWERS - AND - MAXXCOM (NOVA SCOTIA) CORP. MAXXCOM (USA) FINANCE COMPANY MAXXCOM (USA) HOLDINGS INC. 1220777 ONTARIO LIMITED 1385544 ONTARIO LIMITED MAXXCOM INTERACTIVE INC. MACKENZIE MARKETING, INC. MF+P ACQUISITION CO. SMI ACQUISITION CO. ACCENT ACQUISITION CO. FMA ACQUISITION CO. TC ACQUISITION INC. ET ACQUISITION INC. BZ ACQUISITION INC. CDI ACQUISITION CO. BRATSKEIR & COMPANY, INC. CPB ACQUISITION INC. CORMARK COMMUNICATIONS INC. CAMPBELL & PARTNERS COMMUNICATIONS LTD. AMBROSE CARR LINTON CARROLL INC. STUDIOTYPE INC. AS GUARANTORS - AND - THE BANK OF NOVA SCOTIA a bank to which the Bank Act (Canada) applies, in its capacity as administrative agent hereunder AS ADMINISTRATIVE AGENT - AND- THE BANK OF NOVA SCOTIA a bank to which the Bank Act (Canada) applies, in its capacity as a lender hereunder - and - CANADIAN IMPERIAL BANK OF COMMERCE a bank to which the Bank Act (Canada) applies, in its capacity as a lender hereunder - and - BANK OF MONTREAL a bank to which the Bank Act (Canada) applies, in its capacity as a lender hereunder - and - THE TORONTO-DOMINION BANK a bank to which the Bank Act (Canada) applies, in its capacity as a lender hereunder - and - ROYAL BANK OF CANADA a bank to which the Bank Act (Canada) applies, in its capacity as a lender hereunder - and - THE BANK OF NOVA SCOTIA by its Atlanta Agency, in its capacity as a lender hereunder - and - CIBC INC. a financial institution incorporated under the laws of the State of Delaware, in its capacity as a lender hereunder - and - BANK OF MONTREAL by its Chicago branch, in its capacity as a lender hereunder - and - TORONTO DOMINION (TEXAS), INC. a corporation incorporated under the laws of Delaware, in its capacity as a lender hereunder - and - ROYAL BANK OF CANADA by its Grand Cayman (North America No. 1) Branch, in its capacity as a lender hereunder AS LENDERS RECITALS: A. The Borrowers, certain of the Guarantors, the Agent and the Lenders are parties to a Second Amended and Restated Credit Agreement dated as of 11 July 2001, as amended by a first amendment agreement (the "First Amendment Agreement") made as of 31 March 2002 (the "Credit Agreement"). B. Effective 7 May 2002, Cormark MacPhee Communication Solutions (Canada) Inc. changed its name to Cormark Communications Inc. C. Effective 30 May 2002, 1220777 Ontario Limited sold all of the outstanding Capital Stock held by it in News Canada Inc. and Maxxcom sold the inter-company balance due by News Canada Inc. to Maxxcom such that News Canada Inc. is no longer a Guarantor under the Credit Agreement. D. The First Amendment Agreement contemplated that the Rights Offering would be completed on or before 30 June 2002. E. Maxxcom completed the Rights Offering as of 22 July 2002 and as a result of such timing, Maxxcom has requested that the Lenders make technical amendments to certain of the financial covenants. F. Maxxcom has also requested that the Lenders agree to amend the definition of "Net Worth Base" to recognize a change in accounting practices in the calculation of goodwill for the purposes of GAAP. G. The Lenders have agreed to such requests on the terms and conditions set forth herein and the parties are entering into this Second Amendment Agreement to give effect thereto and to make the other changes to the Credit Agreement reflected herein. NOW THEREFORE in consideration of these premises and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agree as follows: Section 1 - New Definition Section 1.1 of the Credit Agreement is amended by adding the following definition: 1.1.162.1 "Second Amendment Agreement" means the Second Amendment Agreement to this Agreement made as of 30 June 2002. Section 2 - Amended Definitions Sections 1.1.31, 1.1.79, 1.1.112, 1.1.164 and 1.1.177 of the Credit Agreement are deleted and replaced with the following provisions: 1.1.31 "CanSubCos" means 1220777 Ontario Limited (an Ontario corporation), 656712 Ontario Limited (an Ontario corporation), Accumark Promotions Group Inc. (an Ontario corporation), Ambrose Carr Linton Carroll Inc. (an Ontario corporation), Bryan Mills Group Ltd. (an Ontario corporation), Cormark Communications Inc. (an Ontario corporation), Allard Johnson Communications Inc. (an Ontario corporation), Veritas Communications Inc. (an Ontario corporation), Integrated Healthcare Communications, Inc. (an Ontario corporation), Northstar Research Partners Inc. (an Ontario corporation), 1385544 Ontario Limited (an Ontario corporation), Maxxcom Interactive Inc. (an Ontario corporation), Campbell & Partners Communications Ltd. (an Ontario corporation), Studiotype Inc. (an Ontario corporation), and each future direct or indirect Subsidiary of Maxxcom or of any of the foregoing corporations incorporated under or operating in any Canadian jurisdiction from time to time and "CanSubCo" means any one of them. 1.1.79 "Guarantors" means Maxxcom US, Maxxcom (Nova Scotia) Corp., Maxxcom (USA) Finance Company, Maxxcom (USA) Holdings Inc., 1220777 Ontario Limited, 1385544 Ontario Limited, Maxxcom Interactive Inc., Mackenzie Marketing, Inc., MF + P Acquisition Co., SMI Acquisition Co., Accent Acquisition Co., FMA Acquisition Co., TC Acquisition Inc., ET Acquisition Inc., BZ Acquisition Inc., CDI Acquisition Co., Bratskeir & Company, Inc., CPB Acquisition Inc., Cormark Communications Inc., Campbell & Partners Communications Ltd., Ambrose Carr Linton Carroll Inc., Studiotype Inc. and each other Wholly-Owned Subsidiary of Maxxcom from time to time and "Guarantor" means any one of them. 1.1.112 "Net Worth Base" shall, as at 30 June 2002 be deemed to be Cdn. $85,000,000, and thereafter shall be calculated as the aggregate of Cdn. $85,000,000 plus: (a) any additional capital contributed by the shareholders of Maxxcom if and to the extent only that such additional capital contributed gives rise to net cash proceeds but, for greater certainty, excluding the amount of the MDC Subordinated Debt and the net proceeds of the Rights Offering up to a maximum amount of Cdn. $25,000,000; and (b) 50% of positive net income of Maxxcom on a consolidated basis in each fiscal year of Maxxcom; each calculated on a cumulative basis for the period from 30 June 2002 to the date of calculation. 1.1.164 "Senior Debt" means, at any time, the aggregate (without duplication) of all amounts outstanding under the Credit and all other funded indebtedness for borrowed money of a person, ranking, or capable of ranking, senior to or pari passu with indebtedness under the Credit at such time which, for greater certainty, includes such amounts for Subsidiaries which are reflected in Maxxcom's consolidated financial statements, but shall exclude Permitted Indebtedness of Accent Marketing Services, L.L.C. from time to time; provided however, that for the purposes of calculating Senior Debt as at 31 March 2002 and 30 June 2002, the amount of $25,000,000 shall be deducted from the amount which would otherwise be calculated in accordance with this Section 1.1.164. 1.1.177 "Total Debt" means, at any time, the aggregate (without duplication) of all Debt of a person at such time, but for greater certainty, shall not include the MDC Subordinated Debt; provided however, that for the purposes of calculating Total Debt as at 31 March 2002 and 30 June 2002, the amount of $25,000,000 shall be deducted from the amount which would otherwise be calculated in accordance with this Section 1.1.177. Section 3 - Amendment to the Credit Limit Section 2.1(a) of the Credit Agreement is deleted and replaced with the following provision: 2.1 (a) Upon and subject to the terms and conditions of this Agreement, the Lenders agree to continue to provide a revolving term credit for the use of the Borrowers in the amount of up to Cdn. $76,000,000 or the equivalent thereof in U.S. Dollars (as reduced from time to time in accordance with this Agreement, the "Credit Limit"). The principal amount of any Advance under the Credit which is repaid may be reborrowed from time to time, subject to the terms of this Agreement. Section 4 - Amendment to Positive Covenants Effective 22 December 2001, Section 7.1(aa) of the Credit Agreement is deleted. Section 5 - Conditions Precedent to Effectiveness of this Second Amendment Agreement This Second Amendment Agreement shall become binding on the Lenders only upon satisfaction of the following conditions precedent: (a) execution and delivery of this Second Amendment Agreement by each of the Borrowers and the Guarantors; (b) execution and delivery of this Second Amendment Agreement by the Lenders in accordance with Section 9.9 of the Credit Agreement; (c) no Event of Default or Pending Event of Default having occurred and being continuing as at the date of satisfaction of all of the foregoing conditions precedent; (d) the Agent having received evidence, reasonably satisfactory to it, that no consent is required under the Mezz Credit Documents in relation to this Second Amendment Agreement; and (e) such corporate resolutions, incumbency and other certificates of each of the Borrowers, the Guarantors and the other Restricted Parties as the Agent may reasonably request in connection with this Second Amendment Agreement and the transactions contemplated hereby. Section 6 - Continuing Effect of Credit Agreement Except as amended by this Second Amendment Agreement, the Credit Agreement shall remain in full force and effect, without amendment, and is hereby ratified and confirmed. Each of the Borrowers and the Guarantors confirms that the guarantees and Security made or granted by it pursuant to the Credit Agreement remains in full force and effect notwithstanding the amendments and supplements to the Credit Agreement contained herein. Section 7 - Counterparts and Facsimile This Second Amendment Agreement may be executed in any number of counterparts, each of which when executed and delivered shall be deemed to be an original and such counterparts together shall constitute one and the same agreement. For the purposes of this Section, the delivery of a facsimile copy of an executed counterpart of this Second Amendment Agreement shall be deemed to be valid execution and delivery thereof. Section 8 - Governing Law The parties agree that this Second Amendment Agreement shall be conclusively deemed to be a contract made under, and shall for all purposes be governed by and construed in accordance with the laws of the Province of Ontario and the laws of Canada applicable in the Province of Ontario. Section 9 - Interpretation Capitalized terms used herein, unless otherwise defined or indicated herein, have the respective meanings ascribed thereto in the Credit Agreement. This Second Amendment Agreement and the Credit Agreement shall be read together and have effect so far as practicable as though the provisions thereof and the relevant provisions hereof are contained in one document. [Execution Pages Follow] IN WITNESS OF WHICH, the parties have executed this Agreement.
THE LENDERS The Bank of Nova Scotia THE BANK OF NOVA SCOTIA Scotia Capital Corporate Banking-Industrial Products By: 16th Floor -------------------------- 44 King Street West S. J. Meinig Toronto, Ontario Director M5H 1H1 By: -------------------------- Attention: Managing Director R. M. Porter Telecopier No. (416) 866-2009 Associate Director Canadian Imperial Bank of Commerce CANADIAN IMPERIAL BANK OF COMMERCE Canadian Credit Capital Markets BCE Place, 8th Floor 161 Bay Street By: Toronto, Ontario -------------------------- M5J 2S8 Name: Title By: -------------------------- Attention: Managing Director Name: Telecopier No. (416) 956-3816 Title Bank of Montreal BANK OF MONTREAL Media, Telecom & Technology Corporate & Investment Banking By: 1, First Canadian Place -------------------------- 100 King Street West Name: 4th Floor Title: Toronto, Ontario M5X 1H3 Attention: Managing Director Telecopier No. (416) 359-7796 Royal Bank of Canada ROYAL BANK OF CANADA 13th Floor, South Tower Royal Bank Plaza 200 Bay Street By: Toronto, Ontario -------------------------- M5J 2J5 Name: Title: Attention: Senior Manager Telecopier No. (416) 974-2249 The Toronto-Dominion Bank THE TORONTO-DOMINION BANK 55 King Street West 8th Floor Toronto-Dominion Bank Tower By: Toronto, Ontario -------------------------- M5K 1A2 Name: Title: Attention: Vice President Telecopier No. (416) 944-5164 The Bank of Nova Scotia THE BANK OF NOVA SCOTIA, by its Suite 2200 Atlanta Agency 600 Peachtree Street N.E. Atlanta, Georgia By: 30308 -------------------------- Name: Title: Attention: Senior Manager Telecopier No. (404) 888-8998 CIBC Inc. CIBC INC. 425 Lexington Avenue 8th Floor New York, New York By: 10017 -------------------------- Name: Title: (CIBC World Markets Corp., as agent for CIBC Inc.) Attention: Executive Director Telecopier No. (212) 856-3761 Bank of Montreal, by its Chicago branch BANK OF MONTREAL Media, Telecom & Technology Asset Portfolio Group Investment & Corporate Banking By: 430 Park Avenue -------------------------- 15th Floor Name: New York, New York Title: 10022 Attention: Managing Director Telecopier No. (212) 605-1648 Royal Bank of Canada, by its Grand ROYAL BANK OF CANADA, by its Grand Cayman Cayman (North America No. 1) Branch (North America No. 1) Branch c/o New York Branch One Liberty Plaza 165 Broadway By: New York, New York -------------------------- 10006-1404 Name: Title: Attention: Ms. Linda Joannou Telecopier No. (212) 428-2372 with a copy to: Royal Bank of Canada One Liberty Plaza 4th Floor 165 Broadway New York, New York 10006-1404 Attention: Mr. N.G. Millar Telecopier No. (212) 809-7148 Toronto Dominion (Texas), Inc. TORONTO DOMINION (TEXAS), INC. 909 Fannin Street, 17th Floor Houston, Texas 77010 By: -------------------------- Name: Title: Attention: Vice-President Telecopier No. (713) 951-9921 THE BORROWERS Maxxcom Inc. MAXXCOM INC., an Ontario corporation 45 Hazelton Avenue Toronto, Ontario M5R 2E3 By: -------------------------- G. Gibson Authorized Signing Officer Attention: Chief Financial Officer Telecopier No. (416) 960-6093 By: -------------------------- R. Dickson Authorized Signing Officer Maxxcom Inc. MAXXCOM INC., a Delaware corporation c/o 45 Hazelton Avenue Toronto, Ontario M5R 2E3 By: -------------------------- G. Gibson Authorized Signing Officer Attention: The President Telecopier No. (416) 960-6093 By: -------------------------- R. Dickson Authorized Signing Officer THE GUARANTORS c/o Maxxcom Inc. MAXXCOM (NOVA SCOTIA) CORP 45 Hazelton Avenue MAXXCOM (USA) FINANCE Toronto, Ontario COMPANY M5R 2E3 MAXXCOM (USA) HOLDINGS INC. 1220777 ONTARIO LIMITED Attention: Chief Financial Officer 1385544 ONTARIO LIMITED Telecopier No. (416) 960-6093 MAXXCOM INTERACTIVE INC. MF+P ACQUISITION CO. SMI ACQUISITION CO. ACCENT ACQUISITION CO. FMA ACQUISITION CO. By: -------------------------- G. Gibson Authorized Signing Officer BRATSKEIR & COMPANY, INC. CPB ACQUISITION INC. CORMARK COMMUNICATIONS INC. CAMPBELL & PARTNERS COMMUNICATIONS LTD. AMBROSE CARR LINTON CARROLL INC. STUDIO TYPE INC. By: -------------------------- R. Dickson Authorized Signing Officer MACKENZIE MARKETING, INC. By: -------------------------- G. Gibson Authorized Signing Officer ET ACQUISITION INC. BZ ACQUISITION INC. By: -------------------------- R. Forzley Authorized Signing Officer TC ACQUISITION INC. CDI ACQUISITION CO. By: -------------------------- G. Gibson Authorized Signing Officer THE AGENT --------- The Bank of Nova Scotia THE BANK OF NOVA SCOTIA, Scotia Capital as Administrative Agent Corporate Banking-Loan Syndications 17th Floor 44 King Street West Toronto, Ontario M5H 1H1 By: -------------------------- Name: Title: By: -------------------------- Attention: Managing Director Name: Telecopier No. (416) 866-3329 Title: