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Exhibit 10
AMENDMENT NO. 1 & LIMITED WAIVER
TO AMENDED AND RESTATED CREDIT AGREEMENT
This AMENDMENT NO. 1 AND LIMITED WAIVER TO AMENDED AND RESTATED
CREDIT AGREEMENT (this "AMENDMENT") is dated as of July 31, 2001 and entered
into by and among TeleSpectrum Worldwide, Inc., a Delaware corporation (the
"BORROWER"), the financial institutions listed on the signature pages hereof
(the "LENDERS"), and BNP Paribas, as Agent for the Lenders (the "AGENT").
RECITALS
WHEREAS, the Borrower, the Lenders, and the Agent have entered into
an Amended and Restated Credit Agreement dated as of April 16, 2001 (the "CREDIT
AGREEMENT"). Capitalized terms not otherwise defined in this Amendment have the
same meanings as specified in the Credit Agreement, and
WHEREAS, the Borrower has requested that (i) each Lender that has
any Term Advance Exposure or a Working Capital Commitment amend the Credit
Agreement to permit the Borrower to defer a greater percentage of the interest
otherwise payable on a monthly basis for the time periods specified herein, and
(ii) the Required Lenders (A) waive compliance with certain provisions of the
Credit Agreement and (B) modify certain financial covenants set forth in the
Credit Agreement and make certain other amendments as set forth below.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:
SECTION 1. Amendments to Credit Agreement.
(a) Subsection 2.07(c) of the Credit Agreement (Deferred Interest)
is hereby amended by deleting the first sentence thereof and substituting
the following therefor:
"As long as no Event of Default has occurred and is continuing, each
monthly interest payment due and owing pursuant to Section 2.07(a) shall
consist of (i) from and after the Restatement Date through and including
June 30, 2001, (A) a cash portion of such interest payment equal to 25% of
the total interest for such month pursuant to Section 2.07(a) and (B) a
portion consisting of deferred interest equal to 75% of the total interest
for such month; (ii) for each month during the period commencing on July
1, 2001 through and including September 30, 2001, deferred interest equal
to 100% of the total interest for such month pursuant to Section 2.07(a),
and (iii) for each month during the period commencing on October 1, 2001
through and including December 31, 2001, (X) a cash portion of such
interest payment equal to 50% of the total interest for such month
pursuant to Section 2.07(a) and (Y) a portion consisting of deferred
interest equal to 50% of the total interest for such month; provided,
however, that notwithstanding the Borrower's right to defer payment of
interest pursuant to this Section 2.07(c), the Borrower may elect to pay
all or any portion of the interest which the Borrower is otherwise
entitled to defer on the Advances in cash in any month; and provided
further that in any month from and after July 1, 2001 in which the
Borrower exercises its right to defer interest pursuant to this Section
2.07(c), interest shall be calculated at the default
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rate as set forth in Section 2.07(b). Deferred interest for each month
shall be evidenced by a deferred interest promissory note, substantially
in the form of Exhibit O annexed hereto (each a "DEFERRED INTEREST NOTE";
collectively, the "DEFERRED INTEREST NOTES")."
(b) Section 1.01 of the Credit Agreement (Defined Terms) is hereby
amended by deleting the definition of "Account Payable Reserve"
(c) Subsection 2.02(a) of the Credit Agreement (Working Capital
Advances) is hereby amended by deleting the phrase "unless such request is
made for such Working Capital Advance to be made from the Account Payable
Reserve in accordance with Section 2.2(c)"
(d) Subsection 2.02(c) of the Credit Agreement (Working Capital
Advances) is hereby amended by deleting it in its entirety and
substituting the following therefor:
"(c) [Intentionally Omitted]"
(e) Subsection 2.06(b) of the Credit Agreement (Mandatory
Prepayments) is hereby amended by deleting clause (v) thereof in its
entirety and substituting the following therefor:
"(v) [Intentionally Omitted]"
(f) Section 2.14 of the Credit Agreement (Use of Proceeds) is hereby
amended by deleting the proviso contained therein in its entirety.
(g) Subsection 3.01(b) of the Credit Agreement (Conditions Precedent
to Closing) is hereby amended by deleting the second proviso in clause (i)
thereof in its entirety.
(h) Subsection 5.01(v) of the Credit Agreement (Management
Consultant) is hereby amended by deleting it in its entirety and
substituting the following therefor:
"Management Consultant. By the date not later than September 14,
2001, the Borrower shall have met with at least two consultants of
national reputation identified by the Agent and Majority Lenders,
and shall have discussed with such consultants the operations of the
Borrower and its Subsidiaries. In addition, no later than September
30, 2001 the Borrower shall, at its own cost, engage and retain one
of the consultants or another consultant (the "MANAGEMENT
CONSULTANT") reasonably acceptable to the Borrower and the Majority
Lenders pursuant to an engagement letter in form, substance and
scope acceptable to Majority Lenders in their reasonable discretion.
The Management Consultant shall be charged with the responsibility
of assessing, advising and reporting to the Borrower with respect
to, the business and affairs of the Borrower and its subsidiaries.
The Borrower shall cooperate with the Management Consultant and
instruct the Management Consultant to cooperate, and to communicate
directly, freely and openly, with the Agent and the Lenders and
their consultants and professional advisors. All information and
reports prepared by the Management Consultant shall be shared with
the Agent and the Lenders."
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(i) Section 5.01 of the Credit Agreement (Affirmative Covenants) is
hereby amended by adding a new subsection 5.01(w) at the end thereof as
follows:
"Weekly Reports. Beginning on August 17, 2001 and on the Friday of
each week thereafter, deliver to the Agent and each Lender a sales and
collections report the preceding week in form and substance satisfactory to the
Agent which shall include, but not be limited to, a report of sales, credits
issued, and collections received."
(j) Section 5.01 of the Credit Agreement (Affirmative Covenants) is
hereby amended by adding a new subsection 5.01(x) at the end thereof as
follows:
"Restructuring Proposal. Deliver to the Agent and each Lender on or
before September 30, 2001, a written proposal regarding a restructuring of the
Consolidated balance sheets of the Borrower and its Subsidiaries together with
an independent written analysis prepared by Birch Advisors, LLC regarding (i)
the debt capacity of the Borrower and its Subsidiaries, and (ii) the valuation
of the Borrower and its Subsidiaries, in each case in form satisfactory to the
Agent and Majority Lenders."
(k) Subsection 5.02(b)(ii)(F) of the Credit Agreement (Negative
Covenants) is hereby amended (i) by deleting, in clause 3(a) thereof, the
phrase "120th day after the Restatement Date" and substituting the
following phrase therefor:
"September 30, 2001"
and (ii) by deleting, in clause 3(b) thereof, the phrase "210th day
after the Restatement Date" and substituting the following phrase therefor:
"December 31, 2001"
(l) Subsection 5.03(r) (Reporting Requirements) in hereby amended by
deleting it in its entirety and substituting the following therefor:
"Accounts Payable Schedule. As soon as available and in any event within
15 days after the end of each month, an aging schedule of all Accounts
Payable, as at the end of the immediately preceding month and broken-down
by category of vendors, certified by the chief financial officer of the
Borrower."
(m) Subsection 5.04(c) of the Credit Agreement (Interest Coverage
Ratio) is hereby amended by (i) deleting the phrase "ending on or prior to
June 30, 2002" it in its entirety and substituting the following therefor:
"set forth below"
and (ii) deleting the table set forth therein in its entirety and
substituting the following therefor:
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"FISCAL QUARTER ENDING IN RATIO
------------------------- -------------
December 2001 2.54 to 1.00
March 2002 1.27 to 1.00
June 2002 1.27 to 1.00"
(n) Subsection 5.04(e) of the Credit Agreement (Minimum Cumulative
EBITDA) is hereby amended (i) by deleting the table set forth therein in
its entirety and substituting the following therefor:
MINIMUM CUMULATIVE
"FISCAL MONTH EBITDA
-------------- ------------------
April 2001 $ 4,343,000
May 2001 $ 5,974,000
June 2001 $ 8,110,000
July 2001 $ 9,455,000
August 2001 $10,670,000
September 2001 $11,972,000
October 2001 $13,462,000
November 2001 $14,874,000
December 2001 $16,171,000
January 2002 $ 1,486,000
February 2002 $ 2,779,000
March 2002 $ 4,200,000
April 2002 $ 5,556,000
May 2002 $ 7,042,000
June 2002 $ 8,399,000
and (ii) by deleting the proviso contained therein in its entirety.
(o) Subsection 5.04(f) of the Credit Agreement (Minimum Revenue
Amount) is hereby amended by deleting the table set forth therein in its
entirety and substituting the following therefor:
MINIMUM REVENUE
"FISCAL MONTH AMOUNT
-------------- ---------------
April 2001 $52,326,000
May 2001 $45,567,000
June 2001 $56,109,000
July 2001 $55,680,000
August 2001 $53,039,000
September 2001 $48,962,000
October 2001 $49,035,000
November 2001 $48,467,000
December 2001 $48,294,000
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MINIMUM REVENUE
"FISCAL MONTH AMOUNT
-------------- ---------------
January 2002 $48,733,000
February 2002 $47,501,000
March 2002 $48,294,000
April 2002 $46,808,000
May 2002 $49,037,000
June 2002 $48,294,000
SECTION 2. Waiver. Subject to the agreements, terms and conditions
set forth herein, including, without limitation, the satisfaction of the
conditions to effectiveness set forth in Section 5, and in reliance on the
representation and warranties of the Borrower herein contained, the undersigned
Required Lenders hereby waive the Borrower's obligation to deliver to the Agent
and each Lender on or prior to September 30, 2001 the financial forecasts and
business plan required to be delivered pursuant to Section 5.01(r) of the Credit
Agreement; provided, that Borrower shall deliver to the Agent and each Lender on
or prior to August 31, 2001, a cost reduction plan with a minimum annual cash
expense savings of $5,000,000, to be fully implemented by no later than
September 30, 2001.
SECTION 3. Limitation of Waiver. Without limiting the generality of
the provisions of Section 8.01 of the Credit Agreement, the waiver set forth in
Section 2 above shall be limited precisely as written and relate solely to the
noncompliance by the Borrower with the provisions of Section 5.01(r) of the
Credit Agreement in the manner and to the extent described above, and nothing in
this Amendment shall be deemed to (i) constitute a waiver of compliance with
respect to Section 5.01(r) of the Credit Agreement in any other instance or (ii)
constitute a waiver of compliance by the Borrower with respect to any other
term, provision or condition of the Credit Agreement or any other instrument or
agreement referred to therein.
SECTION 4. Agreement Regarding Board of Directors. The Borrower
hereby agrees that on or before August 31, 2001 (i) J. Xxxxxxx Xxxxxx shall have
been appointed as a member of the board of directors of the Borrower, and (ii)
the board of directors of the Borrower shall have been approved the appointment
of J. Xxxxxxx Xxxxxx as a member of the board of directors of the Borrower.
Notwithstanding anything to the contrary in the Credit Agreement, as
amended by this Amendment, the Borrower further agrees that any failure to
comply with the terms of the immediately preceding paragraph shall be an
immediate Event of Default under the Credit Agreement.
SECTION 5. Conditions of Effectiveness. This Amendment shall become
effective as of the date first above written (the "FIRST AMENDMENT EFFECTIVE
DATE") when, and only when the Agent shall have received, in form and substance
satisfactory to the Agent and in sufficient copies for each Lender Party (i)
counterparts of this Amendment executed by the Borrower and each Lender or, as
to any of the Lenders, advice satisfactory to the Agent that such Lender has
executed this Amendment, (ii) the consent attached hereto executed by each
Guarantor (the "CONSENT"), and (iii) evidence that Borrower has received from
its independent certified public accountants, approval to classify the
Obligations as long term liabilities for purposes of its financial statements
for the period ending June 30, 2001.
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This Amendment is subject to the provisions of Section 8.01 of the
Credit Agreement.
SECTION 6. Representations and Warranties of the Borrower. As of the
First Amendment Effective Date, the Borrower represents and warrants as follows:
(a) The Borrower is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction indicated in the
recital of parties to this Amendment.
(b) The execution, delivery and performance by the Borrower of this
Amendment and the Loan Documents, as amended hereby, to which it is or is
to be a party, and the consummation of the transactions contemplated
hereby, are within the Borrower's corporate powers, have been duly
authorized by all necessary corporate action and do not (i) contravene the
Borrower's charter or by-laws, (ii) violate any law, rule or regulation
(including, without limitation, Regulation X of the Board of Governors of
the Federal Reserve System), or any order, writ, judgment, injunction,
decree, determination or award, (iii) conflict with or result in the
breach of, or constitute a default under, any contract, loan agreement,
indenture, mortgage, deed of trust, lease or other instrument binding on
or affecting any Loan Party, any of its Subsidiaries or any of their
properties or (iv) except for the Liens created under Loan Documents,
result in or require the creation or imposition of any Lien upon or with
respect to any of the properties of any Loan Party or any of its
Subsidiaries.
(c) No authorization or approval or other action by, and no notice
to or filing with, any governmental authority or regulatory body or any
other third party is required for the due execution, delivery or
performance by the Borrower of this Amendment or any of the Loan
Documents, as amended hereby, to which it is or is to be a party.
(d) This Amendment has been duly executed and delivered by the
Borrower. This Amendment and each of the other Loan Documents, as amended
hereby, to which the Borrower is a party are legal, valid and binding
obligations of the Borrower, enforceable against the Borrower in
accordance with their respective terms.
(e) There is no action, suit, investigation, litigation or
proceeding affecting any Loan Party or any of its Subsidiaries, including
any Environmental Action, pending or threatened before any court,
governmental agency or arbitrator that (i) could be reasonably likely to
have a Material Adverse Effect (other than as set forth on Schedule
4.01(j) to the Credit Agreement) or (ii) purports to affect the legality,
validity or enforceability of this Amendment or any of the other Loan
Documents, as amended hereby, or the consummation of any of the
transactions contemplated hereby.
(f) The representations and warranties contained in each Loan
Document are true and correct on and as of the First Amendment Effective
Date, other than any such representations or warranties that, by their
terms, refer to a specific date other than the First Amendment Effective
Date, in which case as of such specific date.
(g) No Defaults exist under the Credit Agreement.
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(h) The Borrower has not made, and shall not make, any payment or
transfer to the Agent or any Lender except in accordance with the terms of
the Credit Agreement; provided however, that the Borrower may pay standard
fees to the Agent or any Lender in the ordinary course of business in
connection with the maintenance of the Borrower's cash management system.
(i) No fee shall be payable to Birch Advisors or any other
investment banker or financial advisor in connection with the execution
and delivery by the Agent and the Lenders of this Amendment.
SECTION 7. Reference to and Effect on the Credit Agreement and the
Loan Documents. (a) On and after the First Amendment Effective Date, each
reference in the Credit Agreement to "this Agreement", "hereunder", "hereof" or
words of like import referring to the Credit Agreement, and each reference in
the Notes and each of the other Loan Documents to "the Credit Agreement",
"thereunder", "thereof" or words of like import referring to the Credit
Agreement, shall mean and be a reference to the Credit Agreement as amended by
this Amendment.
(b) The Credit Agreement, the Notes and each of the other Loan
Documents, as specifically amended by this Amendment, are and shall
continue to be in full force and effect and are hereby in all respects
ratified and confirmed. Without limiting the generality of the foregoing,
the Collateral Documents and all of the Collateral described therein do
and shall continue to secure the payment of all Obligations of the Loan
Parties under the Loan Documents, in each case as amended by this
Amendment.
(c) Except as specifically amended by this Amendment, the Credit
Agreement and the other Loan Documents shall remain in full force and
effect and are hereby ratified and confirmed.
(d) The execution, delivery and effectiveness of this Amendment
shall not, except as expressly provided herein, operate as a waiver of any
right, power or remedy of any Lender or the Agent under any of the Loan
Documents, nor constitute a waiver of any provision of any of the Loan
Documents.
SECTION 8. Costs and Expenses. The Borrower agrees to pay on demand
all costs and expenses of the Agent and each Lender in connection with the
preparation, execution, delivery and administration, modification and amendment
of this Amendment and the other instruments and documents to be delivered
hereunder (including, without limitation, the reasonable fees and expenses of
counsel for the Agent and each Lender) in accordance with the terms of Section
8.04 of the Credit Agreement.
SECTION 9. Waiver Fee. The Borrower agrees to pay to the Agent for
the account of each Lender that executes this Amendment a waiver fee (a "WAIVER
FEE") equal to 0.25% on the sum of the Commitments of each such Lender. Such
Waiver Fee shall be payable on the earlier of (i) the Final Maturity Date and
(ii) the Termination Date.
SECTION 10. Execution in Counterparts. This Amendment may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of
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which when so executed shall be deemed to be an original and all of which taken
together shall constitute but one and the same agreement. Delivery of an
executed counterpart of a signature page to this Amendment by telecopier shall
be effective as delivery of a manually executed counterpart of this Amendment.
SECTION 11. Headings. Section and subsection headings in this
Amendment are included herein for convenience of reference only and shall not
constitute a part of this Amendment for any other purpose or be given any
substantive effect
SECTION 12. Governing Law. This Amendment shall be governed by, and
construed in accordance with, the laws of the State of New York.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their respective officers thereunto, duly authorized, as of the
date first above written.
TELESPECTRUM WORLDWIDE, INC.
By: /s/ Xxxx X. Xxxxxxxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxxxxxxx
Title: Chief Financial Officer
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BNP PARIBAS,
as Agent and as Lender
By: /s/ Xxx Xxxxxxxxx
-------------------------------------
Name: Xxx Xxxxxxxxx
Title: Vice President
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Managing Director
BANK OF AMERICA, N.A.,
as a Lender
By: /s/ Xxxxxxx Xxxx
-------------------------------------
Name: Xxxxxxx Xxxx
Title: Vice President
FLEET NATIONAL BANK (f/k/a
BankBoston, N.A.), as a Lender
By: /s/ G. Xxxxxxxxxxx Xxxxxx
-------------------------------------
Name: G. Xxxxxxxxxxx Xxxxxx
Title: Vice President
IBJ WHITEHALL BANK & TRUST
COMPANY, as a Lender
By: /s/ Xxxxxxxx X. XxXxxxxxx
-------------------------------------
Name: Xxxxxxxx X. XxXxxxxxx
Title: Managing Director
XXX XXXXXX PRIME RATE
INCOME TRUST, as a Lender
By: Xxx Xxxxxx Investment Advisory
Corp.
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
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XXX XXXXXX SENIOR FLOATING
RATE FUND, as a Lender
By: Xxx Xxxxxx Investment Advisory
Corp.
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
XXX XXXXXX SENIOR INCOME
TRUST, as a Lender
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
XXXXX FARGO BANK, N.A.,
as a Lender
By: /s/ Xxxxx Xxxxx
-------------------------------------
Name: Xxxxx Xxxxx
Title: Vice President/Principal
FIRST SOURCE LOAN
OBLIGATIONS TRUST, LLP, as
a Lender
By: First Source Financial, Inc.,
its Servicer and Administrator
By: /s/ Xxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President
KZH ING-1 LLC,
as a Lender
By: /s/ Xxxxx Xxx
-------------------------------------
Name: Xxxxx Xxx
Title: Authorized Agent
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KZH ING-2 LLC,
as a Lender
By: /s/ Xxxxx Xxx
-------------------------------------
Name: Xxxxx Xxx
Title: Authorized Agent
KZH ING-3 LLC,
as a Lender
By: /s/ Xxxxx Xxx
-------------------------------------
Name: Xxxxx Xxx
Title: Authorized Agent
ARCHIMEDES FUNDING, L.L.C.,
as a Lender
By: ING Capital Advisors LLC,
as Collateral Manager
By: /s/ Xxxx Xxxxxxxx
-------------------------------------
Name: Xxxx Xxxxxxxx
Title: Vice President
ARCHIMEDES FUNDING, LLC,
as a Lender
By: ING Capital Advisors LLC,
as Collateral Manager
By: /s/ Xxxx Xxxxxxxx
-------------------------------------
Name: Xxxx Xxxxxxxx
Title: Vice President
ARCHIMEDES FUNDING II, L.L.C.,
as a Lender
By: ING Capital Advisors LLC,
as Collateral Manager
By: /s/ Xxxx Xxxxxxxx
-------------------------------------
Name: Xxxx Xxxxxxxx
Title: Vice President
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FIRST DOMINION FUNDING III,
as a Lender
By: /s/ Xxxxx Xxxxxx
-------------------------------------
Name: Xxxxx Xxxxxx
Title: Authorized Signatory
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CONSENT
Dated as of July 31, 2001
The undersigned, each Guarantor under either (x) the Guaranty dated
as of June 30, 1999 (the "U.S. Guaranty") in favor of the Secured Parties (as
defined in the Credit Agreement referred to in the foregoing Amendment) or (y)
the Guaranty dated as of June 30, 1999 (the "Canadian Guaranty" and collectively
with the U.S. Guaranty, the "Guaranties") in favor of the Secured Parties (as
defined in the Credit Agreement referred to in the foregoing Amendment), hereby
consents to such Amendment and hereby confirms and agrees that (a)
notwithstanding the effectiveness of such Amendment, the Guaranty to which each
of the undersigned is a party and each of the Collateral Documents is, and shall
continue to be, in full force and effect and is hereby ratified and confirmed in
all respects, except that on and after the effectiveness of such Amendment, each
reference in each Guaranty and each of the Collateral Documents to the "Credit
Agreement", "thereunder", "thereof" or words of like import shall mean and be a
reference to the Credit Agreement, as amended by such Amendment, and (b) the
Collateral Documents to which Guarantor is a party and all of the Collateral
described therein do, and shall continue to, secure the payment of all of the
Secured Obligations (in each case, as defined therein).
TLSP TRADEMARKS, INC.
By: /s/ Xxxx X. Xxxxxxxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxxxxxxx
Title: Chief Financial Officer
TELESPECTRUM GOVERNMENT SERVICES, INC.
By: /s/ Xxxx X. Xxxxxxxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxxxxxxx
Title: Chief Financial Officer
CRW FINANCIAL INC.
By: /s/ Xxxx X. Xxxxxxxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxxxxxxx
Title: Chief Financial Officer
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TELESPECTRUM WORLDWIDE (CANADA) INC.
By: /s/ Xxxx X. Xxxxxxxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxxxxxxx
Title: Chief Financial Officer
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