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EXHIBIT 10.23
FIRST AMENDMENT
TO
AMENDED AND RESTATED CREDIT AGREEMENT
THIS FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
(this "First Amendment") is made and entered into as of the 16th day of March,
1998, by and among STAFFMARK, INC., a Delaware corporation (the "Borrower"),
MERCANTILE BANK NATIONAL ASSOCIATION, DEPOSIT GUARANTY NATIONAL BANK, THE FIRST
NATIONAL BANK OF CHICAGO, FIRST UNION NATIONAL BANK, LASALLE NATIONAL BANK, BANK
OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION and FLEET NATIONAL BANK
(collectively, the "Lenders") and MERCANTILE BANK NATIONAL ASSOCIATION, a
national banking association, as agent on behalf of Lenders (in such capacity,
the "Agent").
WITNESSETH:
WHEREAS, the Borrower, the Agent and the Lenders other than
Fleet National Bank ("Fleet") have previously entered into that certain Amended
and Restated Credit Agreement dated as of March 9, 1998, as partially assigned
to Fleet by Mercantile Bank National Association ("Mercantile") pursuant to an
Assignment Agreement dated the date hereof and made by and among Mercantile,
Fleet and the Agent (as assigned, the "Credit Agreement"); and
WHEREAS, the Borrower has executed and delivered to Lenders,
respectively, its Reducing Revolver Notes in the aggregate original principal
amount of $150,000,000.00 (collectively, the "Original Notes"); and
WHEREAS, the Borrower, Agent and Lenders desire to, among
other things, increase the maximum principal amount of Reducing Revolver Loans
available to Borrower under the Credit Agreement from $150,000,000.00 to
$175,000,000.00 and to amend and restate the Original Notes, all upon the terms
and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto mutually promise and agree as follows:
1. The definition of "Reducing Revolver Commitment" in Section
2 of the Credit Agreement hereby is deleted in its entirety and the following is
substituted in its place:
Reducing Revolver Commitment shall mean, subject to
termination or reduction as set forth in Section 3.11 and
subject to quarterly reductions required by Section 3.1(a),
for each Lender the amount set forth as the Reducing Revolver
Commitment of such Lender next to its name on the signature
pages of the First Amendment to Amended and Restated Credit
Agreement dated as of March 16, 1998, made by and among
Borrower, Lenders and Agent (the "First Amendment")
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or on the signature pages of any subsequent Assignment
Agreement to which such Lender is a party.
2. The definition of "Reducing Revolver Notes" in Section 2 of
the Credit Agreement hereby is deleted in its entirety and the following is
substituted in its place:
Reducing Revolver Notes shall mean each of the Reducing
Revolver Notes of the Borrower to be executed and delivered to
each of the Lenders pursuant to the First Amendment or
thereafter pursuant to Section 3.1 herein, as such Notes may
from time to time be amended, restated, modified, extended or
renewed.
3. Section 3.1(a) of the Credit Agreement hereby is deleted in
its entirety and the following is substituted in its place:
(a) Subject to the terms and conditions hereof,
during the Term of this Agreement, each Lender hereby severally agrees
to make such loans (individually, a "Reducing Revolver Loan," and
collectively, the "Reducing Revolver Loans") to the Borrower as the
Borrower may from time to time request pursuant to Section 3.2(a). The
aggregate principal amount of Reducing Revolver Loans which Lenders,
cumulatively, shall be required to have outstanding hereunder at any
one time, plus the undrawn face amount of Letters of Credit issued by
Agent and then outstanding under Section 3.3, shall not exceed the
lesser of (i) One Hundred Seventy-Five Million Dollars
($175,000,000.00) (subject to reduction as provided below, the "Total
Reducing Revolver Commitment"), or (ii) four hundred percent (400%),
(and at all times after March 31, 1999, three hundred fifty percent
(350%)) of the amount of Borrower's Consolidated Proforma EBITDA Cash
Flow determined as of the most recent fiscal quarter-end. The amount
each Lender shall be required to have outstanding hereunder as Reducing
Revolver Loans plus their undivided Pro Rata Share participation
interest in each Letter of Credit issued by Agent under Section 3.3,
shall not exceed, in the aggregate at any one time outstanding, the
lesser of (x) the amount of such Lender's Reducing Revolver Commitment,
or (y) such Lender's Pro Rata Share multiplied times an amount equal to
four hundred percent (400%) (and at all times after March 31, 1999,
three hundred fifty percent (350%)) of Borrower's Consolidated Proforma
EBITDA Cash Flow determined as of the most recent fiscal quarter-end.
Each Reducing Revolver Loan under this Section 3.1 shall be made by the
Lenders ratably in proportion to their respective Reducing Revolver
Commitments. The Reducing Revolver Loans shall be evidenced by the
Reducing Revolver Notes of the Borrower payable by the Borrower to the
respective orders of each of the Lenders in the aggregate original
principal amount of One Hundred Seventy-Five Million Dollars
($175,000,000.00) and otherwise in the form attached hereto as Exhibit
A and incorporated herein by reference (as the same may from time to
time be amended, restated, modified, extended or renewed, the "Reducing
Revolver Notes"). The Reducing Revolver Notes shall mature on April 1,
2003, unless earlier terminated by acceleration or otherwise upon the
occurrence of an Event of Default under this Agreement. Subject to any
such earlier maturity by reason of acceleration or otherwise and in
addition to any voluntary reduction requested by Borrower pursuant to
Section 3.11, the Total Reducing
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Revolver Commitment of the Lenders shall be reduced by the amount of
Five Million Dollars ($5,000,000.00) on the first day of each fiscal
quarter commencing with the first such reduction on January 1, 2000 and
continuing on the first day of each fiscal quarter thereafter during
the Term hereof, with such reductions being applied to the respective
Reducing Revolver Commitments of the Lenders in accordance with their
Pro Rata Shares thereof. In the event any such quarterly reduction in
the Total Reducing Revolver Commitment shall cause the amount of the
Total Reducing Revolver Commitment to be decreased below the then
outstanding principal amount of all Reducing Revolver Loans to Borrower
plus the undrawn face amount of all outstanding Letters of Credit, or
in the event any reduction in Borrower's most recent quarter-end
Consolidated Proforma EBITDA Cash Flow shall cause the aggregate
principal amount of the Reducing Revolver Loans plus the undrawn face
amount of all outstanding Letters of Credit to exceed four hundred
percent (400%) (and at all times after March 31, 1999, three hundred
fifty percent (350%)) of such most recent quarter-end Consolidated
Proforma EBITDA Cash Flow, Borrower agrees to pay to Agent for
distribution to the Lenders in accordance with their respective Pro
Rata Shares of the Reducing Revolver Commitments, the amount by which
the aggregate outstanding Reducing Revolver Loans plus the undrawn face
amount of all outstanding Letters of Credit then exceeds the lesser of
the then available Total Reducing Revolver Commitment or four hundred
percent (400%) (and at all times after March 31, 1999, three hundred
fifty percent (350%)) of Borrower's most recent quarter-end
Consolidated Proforma EBITDA Cash Flow. If the undrawn face amount of
all Letters of Credit still exceeds the lesser of the then current
Total Reducing Revolver Commitment or four hundred percent (400%) (and
at all times after March 31, 1999, three hundred fifty percent (350%))
of the most recent quarter-end Consolidated Proforma EBITDA Cash Flow
after repayment in full of all Reducing Revolver Loans under the
preceding sentence, Borrower agrees to provide cash collateral in form
and substance acceptable to Agent in an amount sufficient to cover such
shortfall. Subject to the terms and conditions of this Agreement, the
Borrower may borrow, repay and reborrow the amounts available under
this Section 3.1.
4. Exhibit A to the Credit Agreement hereby is deleted in its
entirety and Exhibit A attached to this First Amendment is substituted in its
place.
5. The agreements of Agent and the Lenders as set forth herein
are expressly conditioned upon the following:
(a) Execution by Borrower of this Agreement and each of the
Amended and Restated Reducing Revolver Notes;
(b) Execution by Guarantors of the Consent of Guarantors in
the form attached to this Agreement; and
(c) Delivery to Agent and Lenders of an opinion of Borrower's
counsel in form and substance satisfactory to Agent and
Lenders relating to the due execution, delivery and
enforceability of this Agreement and the other
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Transaction Documents and such other matters as Agent and
Lenders may reasonably require.
6. Borrower hereby represents and warrants to Agent and to
Lenders that:
a. The execution, delivery and performance by
Borrower of this First Amendment and the amended and restated Reducing Revolver
Notes are within the corporate powers of Borrower, have been duly authorized by
all necessary corporate action and require no action by or in respect of, or
filing with, any governmental or regulatory body, agency or official. The
execution, delivery and performance by Borrower of this First Amendment and the
amended and restated Reducing Revolver Notes do not conflict with, or result in
a breach of the terms, conditions or provisions of, or constitute a default
under or result in any violation of, and Borrower is not now in default under or
in violation of, the terms of the Certificate of Incorporation or Bylaws of
Borrower, any applicable law, any rule, regulation, order, writ, judgment or
decree of any court or governmental or regulatory agency or instrumentality, or
any agreement or instrument to which Borrower is a party or by which it is bound
or to which it is subject;
b. This First Amendment and the amended and restated
Reducing Revolver Notes have been duly executed and delivered and constitute the
legal, valid and binding obligations of Borrower enforceable in accordance with
their respective terms; and
c. As of the date hereof, all of the covenants,
representations and warranties of Borrower set forth in the Credit Agreement are
true and correct and no "Event of Default" (as defined therein) under or within
the meaning of the Credit Agreement, as hereby amended, has occurred and is
continuing.
7. The Credit Agreement, as hereby amended, the Reducing
Revolver Notes, as hereby amended and restated, and the other Transaction
Documents are and shall remain the binding obligations of Borrower, and except
to the extent amended by this First Amendment, all of the terms, provisions,
conditions, agreements, covenants, representations, warranties and powers
contained in the Credit Agreement, the Reducing Revolver Notes and the other
Transaction Documents shall be and remain in full force and effect and the same
are hereby ratified and confirmed. This First Amendment amends the Credit
Agreement and is not a novation thereof.
8. All references in the Credit Agreement or the other
Transaction Documents to "this Agreement" and any other references of similar
import shall henceforth mean the Credit Agreement as amended by this First
Amendment.
9. This First Amendment shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns,
except that Borrower may not assign, transfer or delegate any of its rights or
obligations hereunder.
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10. This First Amendment is made solely for the benefit of
Borrower, Agent and Lenders as set forth herein, and is not intended to be
relied upon or enforced by any other person or entity.
11. ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND
CREDIT OR TO FOREBEAR FROM ENFORCING REPAYMENT OF A DEBT, INCLUDING PROMISES TO
EXTEND OR RENEW SUCH DEBT, ARE NOT ENFORCEABLE. TO PROTECT BORROWER, AGENT AND
LENDERS FROM ANY MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS REACHED BY
BORROWER, AGENT AND LENDERS COVERING SUCH MATTERS ARE CONTAINED IN THIS FIRST
AMENDMENT, THE CREDIT AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS, WHICH
CONSTITUTE A COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENTS BETWEEN
BORROWER, AGENT AND LENDERS EXCEPT AS BORROWER, AGENT AND LENDERS MAY LATER
AGREE IN WRITING TO MODIFY. THIS FIRST AMENDMENT, THE CREDIT AGREEMENT AND THE
OTHER TRANSACTION DOCUMENTS EMBODY THE ENTIRE AGREEMENT AND UNDERSTANDING
BETWEEN THE PARTIES HERETO AND SUPERSEDE ALL PRIOR AGREEMENTS AND UNDERSTANDINGS
(ORAL OR WRITTEN) RELATING TO THE SUBJECT MATTER HEREOF.
12. This First Amendment shall be governed by and construed in
accordance with the internal laws of the State of Missouri.
13. In the event of any inconsistency or conflict between this
First Amendment and the Credit Agreement or the other Transaction Documents, the
terms, provisions and conditions of this First Amendment shall govern and
control.
[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties have caused this First
Amendment to Amended and Restated Credit Agreement to be executed and delivered
by their duly authorized officers as of the date first above written.
STAFFMARK, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Reducing Revolver Commitment: MERCANTILE BANK
$35,000,000.00 NATIONAL ASSOCIATION
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Address: 000 Xxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Mid America
Group
Telecopy No: (000)000-0000
Reducing Revolver Commitment: DEPOSIT GUARANTY NATIONAL BANK
$15,000,000.00
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Address: 000 X. Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx,
SVP
Telecopy No. (000)000-0000
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Reducing Revolver Commitment: THE FIRST NATIONAL BANK OF CHICAGO
$32,500,000.00
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Address: One First National Plaza
00xx Xxxxx
Xxxx Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxx,
VP
Telecopy No. (000)000-0000
Reducing Revolver Commitment: FIRST UNION NATIONAL BANK
$30,000,000.00
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Address: One First Union Center
000 Xxxxx Xxxxxxx Xxxxxx, XX0
Xxxxxxxxx, Xxxxx Xxxxxxxx
00000-0000
Attention:
Xxxxx X. Xxxxxxxxxx, VP
Telecopy No. (000)000-0000
Reducing Revolver Commitment: LASALLE NATIONAL BANK
$20,000,000.00
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Address: One Metropolitan Square
000 Xxxxx Xxxxxxxx
Xxxxx 0000
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Xxx Xxxxxx, AVP
Telecopy No. (000)000-0000
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Reducing Revolver Commitment: BANK OF AMERICA NATIONAL TRUST
$20,000,000.00 AND SAVINGS ASSOCIATION
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Address: 000 X. XxXxxxx Xxxxxx
0xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxxxxxxxx,
VP
Telecopy No. (000)000-0000
Reducing Revolver Commitment: FLEET NATIONAL BANK
$22,500,000.00
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Address: Xxx Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxxx
Telecopy No. (000)000-0000
MERCANTILE BANK
NATIONAL ASSOCIATION, as Agent
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Address: 000 Xxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Mid America Group
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