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Exhibit 10.2
FIRST AMENDMENT TO AMENDED
AND RESTATED CREDIT AGREEMENT
THIS FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT, dated as
of March 24, 2000 (this "AGREEMENT"), is by and among CENTURY BUSINESS SERVICES,
INC., a Delaware corporation (the "Company"), the Lenders party to the Credit
Agreement referred to below (the "LENDERS"), BANK OF AMERICA, N.A. as agent (the
"AGENT"), and BANKBOSTON, N.A., BANK ONE, MICHIGAN, LASALLE BANK NATIONAL
ASSOCIATION AND PNC BANK, NATIONAL ASSOCIATION, each as Co-Agent (the
"CO-AGENTS").
RECITALS:
WHEREAS, the Company, Agent, Co-Agents and the Lenders are parties to
that certain Amended and Restated Credit Agreement dated as of October 3, 1997,
as amended and restated as of August 10, 1998 and as amended and restated as of
August 24, 1999 (as amended, restated, supplemented or otherwise modified and in
effect from time to time, the "CREDIT AGREEMENT"); and
WHEREAS, the Company, Agent, Co-Agents and the Lenders wish to amend
the Credit Agreement in certain respects as set forth herein, subject to the
terms and conditions set forth herein.
NOW THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the parties hereto agree as follows:
SECTION 1. DEFINED TERMS. Unless otherwise defined herein, all
capitalized terms used herein shall have the meanings given them in the Credit
Agreement.
SECTION 2. AMENDMENTS TO CREDIT AGREEMENT. The Credit Agreement is, as
of the Effective Date (as defined below), hereby amended as follows:
(a) THE DEFINITIONS OF "APPLICABLE MARGIN," "CHANGE OF CONTROL,"
"COLLATERAL DOCUMENTS," "EBIT," "EBITDA" AND "PERMITTED ACQUISITION THRESHOLD"
IN ARTICLE I OF THE CREDIT AGREEMENT ARE EACH HEREBY AMENDED BY DELETING SAID
DEFINITIONS IN THEIR ENTIRETY AND INSERTING THE FOLLOWING IN LIEU THEREOF:
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"APPLICABLE MARGIN" shall mean on any date the applicable
percentage set forth below based upon the Level as shown in the
Compliance Certificate then most recently delivered to the Lenders:
Revolving Loans Letters of Credit
Base Offshore Commitment
Level Rate Rate Non-Financial Financial Fee
----- ---- ----------- ------------- --------- ----
I 1.000% 2.000% 1.125% 2.000% .45%
II .750% 1.750% 1.000% 1.750% .40%
III .500% 1.500% .875% 1.500% .35%
IV .250% 1.250% .750% 1.250% .30%
; PROVIDED HOWEVER that, if the Company shall have failed to deliver to
the Lenders by the date required hereunder any Compliance Certificate
pursuant to SECTION 7.02(b), then from the date such Compliance
Certificate was required to be delivered until the date of such
delivery the Applicable Margin shall be deemed to be Level I. Each
change in the Applicable Margin shall take effect with respect to all
outstanding Loans on the third Business Day immediately succeeding the
day on which such Compliance Certificate is received by the Agent;
PROVIDED, HOWEVER, that with respect to the period from January 1, 2000
until the third Business Day immediately succeeding the day on which
the Compliance Certificate with respect to the fiscal quarter ended
March 31, 2000 is received by the Agent, the Applicable Margin shall be
determined by reference to the Compliance Certificate delivered to the
Agent with respect to the fiscal year ended December 31, 1999.
Notwithstanding the foregoing, no reduction in the Applicable Margin
shall be effected if a Default or an Event of Default shall have
occurred and be continuing on the date when such change would otherwise
occur, it being understood that on the third Business Day immediately
succeeding the day on which such Default or Event of Default is either
waived or cured (assuming no other Default or Event of Default shall be
then pending), the Applicable Margin shall be reduced (on a prospective
basis) in accordance with the then most recently delivered Compliance
Certificate.
"CHANGE OF CONTROL" means (a) any Person or any two or more
Persons (in each case other than a Person that is a stockholder of the
Company as of the date of this Agreement) acting in concert acquiring
beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission under the Exchange Act), directly or
indirectly, of capital stock of the Company (or other securities
convertible into such capital stock) representing 25% or more of the
combined voting power of all capital stock of the Company entitled to
vote in the election of directors, other than capital stock having such
power only by reason of the happening of a contingency, or (b) during
any period of twelve consecutive calendar months, individuals who at
the beginning of such period constituted the Company's board of
directors (together with any new directors whose election by the
Company's board of directors or whose nomination for election by the
Company's stockholders was approved by a vote of at least a majority of
the directors then still in office who either were directors at the
beginning of such period or whose election or nomination for election
was previously so approved) cease for any reasons other than death or
disability to constitute a majority of the directors then in office, or
(c) during any period of twelve consecutive calendar months (other than
pursuant to a
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disposition permitted pursuant to SECTION 8.02), the ceasing of more
than 25% of the individuals who hold an office possessing the title
Senior Vice President or Executive Vice President or such title that
ranks senior thereto of the Company or the Company's direct Subsidiaries
(collectively, "SENIOR MANAGEMENT"), on the first day of each such
period to be part of the Senior Management of the Company and its
Subsidiaries taken as a whole.
"COLLATERAL DOCUMENTS" means, collectively, (a) the Guaranty,
the Pledge Agreements, the Security Agreement and other similar
agreements between the Company or its Subsidiaries and the Lenders or
the Collateral Agent for the benefit of the Lenders now or hereafter
delivered to the Lenders or the Collateral Agent pursuant to or in
connection with the transactions contemplated hereby and (b) any
amendments, supplements, modifications, renewals, replacements,
consolidations, substitutions and extensions of any of the foregoing.
"EBIT" means, for any period, for the Company and its
Subsidiaries on a consolidated basis, determined in accordance with
GAAP, the sum of (a) Net Income (or net loss) for such period PLUS (b)
all amounts treated as expenses for interest to the extent included in
the determination of such Net Income (or loss), PLUS (c) all accrued
taxes on or measured by income to the extent included in the
determination of such Net Income (or loss); PROVIDED, HOWEVER, that Net
Income (or loss) shall be computed for these purposes without giving
effect to extraordinary losses or extraordinary gains.
"EBITDA" means, for any period, for the Company and its
Subsidiaries on a consolidated basis, determined in accordance with
GAAP, the sum of (a) the Net Income (or net loss) for such period PLUS
(b) all amounts treated as expenses for depreciation and interest and
the amortization of intangibles of any kind to the extent included in
the determination of such Net Income (or loss), PLUS (c) all accrued
taxes on or measured by income to the extent included in the
determination of such net income (or loss); PROVIDED, HOWEVER, that net
income (or loss) shall be computed for these purposes without giving
effect to extraordinary losses or extraordinary gains.
"PERMITTED ACQUISITION THRESHOLD" means either (a) the total
consideration to be paid by the Company or any of its Subsidiaries in
connection with an Acquisition (as determined by the Company) is equal
to or in excess of $20,000,000 or (b) the total cash consideration to
be paid by the Company or any of its Subsidiaries in connection with an
Acquisition is equal to or in excess of $7,500,000.
(b) ARTICLE I OF THE CREDIT AGREEMENT IS AMENDED BY INSERTING
THE FOLLOWING DEFINITION IN ALPHABETICAL ORDER:
"SECURITY AGREEMENT" means the Security Agreement among the
Company, the Guarantors and the Agent.
(c) ARTICLE II OF THE CREDIT AGREEMENT IS HEREBY AMENDED BY (i)
REDESIGNATING CLAUSE (b) OF SECTION 2.07 AS CLAUSE (c) AND (ii) ADDING THE
FOLLOWING NEW CLAUSE (b) TO SECTION 2.07:
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"(b) On the date of receipt thereof by the Company or
any of its Subsidiaries, an amount equal to 100% of the net
proceeds received by any such Person from the sale or other
disposition of an Insurance Subsidiary (including any sale of
any asset of an Insurance Subsidiary) shall be applied to
repay the then outstanding Revolving Loans.".
(d) ARTICLE VI OF THE CREDIT AGREEMENT IS HEREBY AMENDED BY
DELETING SECTION 6.13 IN ITS ENTIRETY AND INSERTING THE FOLLOWING IN LIEU
THEREOF:
"6.13 COLLATERAL DOCUMENTS
(a) The provisions of each Pledge Agreement are
effective to create, in favor of the Collateral Agent for the
benefit of the Lenders, a legal, valid and enforceable first
priority security interest in all of the collateral described
therein; and the Pledged Collateral was delivered to the
Collateral Agent or its nominee in accordance with the terms
thereof. The Lien of each Pledge Agreement constitutes a
perfected, first priority security interest in all right,
title and interest of the Company or such Subsidiary, as the
case may be, in the Collateral described therein, prior and
superior to all other Liens and interests.
(b) The provisions of each of the Collateral
Documents are effective to create in favor of the Collateral
Agent for the benefit of the Lenders, a legal, valid and
enforceable first priority security interest in all right,
title and interest of the Company and its Subsidiaries in the
collateral described therein, subject only to any Permitted
Liens. The chief executive office and the principal books and
records of the Company and each Guarantor will be located at
its address set forth on SCHEDULE A to the Security Agreement,
and when financing statements have been filed in the
appropriate offices in the jurisdictions corresponding to such
locations and when such other actions as are each described in
each of the Collateral Documents, each of the Collateral
Documents shall constitute a perfected security interest in
all right, title and interest of such Person, as the case may
be, in the Collateral described therein, and except for
Permitted Liens existing on the Closing Date and whose
priority cannot be superseded by the provisions hereof or of
any Collateral Document and filings hereunder or thereunder, a
perfected first lien on, and security interest in, all right,
title and interest of such Person, as the case may be, in the
Collateral described in each Collateral Document.
(c) All representations and warranties of the Company
and any of its Subsidiaries party thereto contained in the
Collateral Documents are true and correct.".
(e) ARTICLE VII OF THE CREDIT AGREEMENT IS HEREBY
AMENDED BY (i) REDESIGNATING CLAUSE (f) OF SECTION 7.02 AS CLAUSE (g) AND (ii)
ADDING THE FOLLOWING NEW CLAUSE (f) TO SECTION 7.02:
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"(f) ACCOUNT RECEIVABLE AGING REPORT. Within
forty-five (45) days after the end of each fiscal quarter
(commencing with the fiscal quarter ended March 31, 2000), an
account receivable aging report (the "Account Receivable Aging
Report") of the Company by segment as defined in the Company's
Form 10-K for the fiscal year ended December 31, 1999. Each
Account Receivable Aging Report shall include such detail as
the Agent may reasonably require and shall be signed by the
president or the chief financial officer or treasurer of the
Company; and".
(f) ARTICLE VIII OF THE CREDIT AGREEMENT IS HEREBY AMENDED BY
(x) DELETING SECTION 8.15 IN ITS ENTIRETY AND INSERTING THE FOLLOWING IN LIEU
THEREOF:
"8.15 MINIMUM NET WORTH. The Company shall not permit
its Consolidated Net Worth at any time (a) for the period from
and including the Closing Date to but excluding the last day of
the fiscal quarter ended on December 31, 1999, to be less than
$510,000,000, and (b) for the period from and including the last
day of the fiscal quarter ended on December 31, 1999 and
thereafter, to be less than an amount equal to the sum of (x)
$510,000,000 PLUS (y) 70% of the Company's positive Net Income,
if any, for each such fiscal quarter plus (2) an amount equal to
100% of the net cash and non-cash proceeds of any equity
securities issued by the Company after the date of this
Agreement."; and
(x) DELETING SECTION 8.17 IN ITS ENTIRETY AND INSERTING
THE FOLLOWING IN LIEU THEREOF:
"8.17 INTEREST COVERAGE RATIO. The Company shall not
permit, at any time during a period listed below, its Interest
Coverage Ratio at such time for the twelve month period (taken as one
accounting period) last ended prior to the date of determination, to
be less than the ratio set forth below opposite the respective period
in which the determination is being made:
PERIOD RATIO
From and including 4.00:1.0
the last day of the
fiscal quarter ended
December 31, 1999
to but excluding the
last day of the fiscal
quarter ended on
December 31, 2000
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From and including 4.25:1.0
the last day of the
fiscal quarter ended on
December 31, 2000
to but excluding the
last day of the fiscal
quarter ended on
December 31, 2001
Thereafter 4.50:1.0
(g) SCHEDULE 2.01 OF THE CREDIT AGREEMENT IS AMENDED IN ITS
ENTIRETY TO READ AS SET FORTH ON EXHIBIT A HERETO.
SECTION 3. CONDITIONS PRECEDENT TO EFFECTIVENESS OF AGREEMENT. This
Agreement shall become effective upon the date (the "EFFECTIVE DATE") each of
the following conditions have been satisfied:
(a) EXECUTION AND DELIVERY. The Company and the Majority Lenders
shall have executed and delivered this Agreement.
(b) NO DEFAULTS. No Default or Event of Default under the Credit
Agreement (as amended hereby) shall have occurred and be continuing.
(c) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company contained in this Agreement, the Credit Agreement (as
amended hereby) and the other Loan Documents shall be true and correct in all
material respects as of the Effective Date, with the same effect as though made
on such date, except to the extent that any such representation or warranty
expressly refers to an earlier date, in which case such representation or
warranty shall be true and correct in all material respects as of such earlier
date.
(d) REDUCTION OF COMMITMENTS. The receipt by the Agent from the
Company of an irrevocable notice to the Agent to permanently reduce the
Commitments from $250,000,000 to $200,000,000 pursuant to SECTION 2.05 of the
Credit Agreement.
(e) AMENDMENT FEE. The receipt by the Agent from the Company of
an amendment fee in the amount of $5,000 per Lender executing this Amendment, to
be distributed by the Agent to such Lenders.
SECTION 4. REPRESENTATIONS AND WARRANTIES.
(a) The Company represents and warrants (i) that it has full
power and authority to enter into this Agreement and perform its obligations
hereunder in accordance with the provisions hereof, (ii) that this Agreement has
been duly authorized, executed and delivered by such party and (iii) that this
Agreement constitutes the legal, valid and binding obligation of such party,
enforceable against such party in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors' rights generally
and by general principles of equity.
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(b) The Company represents and warrants that the following
statements are true and correct:
(i) The representations and warranties contained in the
Credit Agreement and each of the other Loan Documents are and
will be true and correct in all material respects on and as of
the Effective Date to the same extent as though made on and as
of that date, except to the extent such representations and
warranties expressly refer to an earlier date, in which case
they were true and correct in all material respects on and as of
such earlier date.
(ii) No event has occurred and is continuing or will
result from the consummation of the transactions contemplated by
this Agreement that would constitute an Event of Default.
(iii) The execution, delivery and performance of this
Agreement by the Company do not and will not violate its
respective certificate or articles of incorporation or by-laws,
any law, rule, regulation, order, writ, judgment, decree or
award applicable to it or any contractual provision to which it
is a party or to which it or any of its property is subject.
(iv) No authorization or approval or other action by,
and no notice to or filing or registration with, any
governmental authority or regulatory body is required in
connection with its execution, delivery and performance of this
Agreement and all agreements, documents and instruments executed
and delivered pursuant to this Agreement.
SECTION 5. SECURITY AGREEMENT; FURTHER ASSURANCES.
(a) The Company and each Guarantor shall enter into a security
agreement, substantially in the form attached hereto as Exhibit B, within 30
days (or such other time period as is deemed necessary by the Agent in light of
the surrounding circumstances) of the Effective Date.
(b) Promptly upon request by the Agent or the Majority Lenders,
the Company and each Guarantor shall (and shall cause any of its Subsidiaries
to) do, execute, acknowledge, deliver, record, re-record, file, re-file,
register and re-register, any and all such further acts, deeds, conveyances,
security agreements, mortgages, assignments, estoppel certificates, financing
statements and continuations thereof, termination statements, notices of
assignment, transfers, certificates, assurances and other instruments the Agent
or such Lenders, as the case may be, may reasonably require from time to time in
order (i) to carry out more effectively the purposes of this Agreement or any
other Loan Document, (ii) to subject to the Liens created by any of the
Collateral Documents any of the properties, rights or interests covered by any
of the Collateral Documents, (iii) to perfect and maintain the validity,
effectiveness and priority of any of the Collateral Documents and the Liens
intended to be created thereby, and (iv) to better assure, convey, grant,
assign, transfer, preserve, protect and confirm to the Agent and Lenders the
rights granted or now or hereafter intended to be granted to
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the Lenders under any Loan Document or under any other document executed in
connection therewith.
SECTION 6. REFERENCES TO AND EFFECT ON THE CREDIT AGREEMENT.
(a) On and after the Effective Date each reference in the Credit
Agreement to "this Agreement," "hereunder," "hereof," "herein," or words of like
import, and each reference to the Credit Agreement in the Loan Documents and all
other documents (the "ANCILLARY DOCUMENTS") delivered in connection with the
Credit Agreement shall mean and be a reference to the Credit Agreement as
amended hereby.
(b) Except as specifically amended above, the Credit Agreement,
the Loan Documents and all other Ancillary Documents shall remain in full force
and effect and are hereby ratified and confirmed.
(c) The execution, delivery and effectiveness of this Amendment
shall not, except as expressly provided herein, operate as a waiver (except as
specifically waived above) of any right, power or remedy of the Lenders, the
Co-Agents or the Agents under the Credit Agreement, the Loan Documents or the
Ancillary Documents.
SECTION 7. EXECUTION IN COUNTERPARTS. This Agreement may be executed in
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute but one and the
same instrument. Delivery of an executed counterpart of a signature page of this
Agreement by facsimile transmission shall be effective as delivery of a manually
executed counterpart of this Agreement.
SECTION 8. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND BE
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS,
WITHOUT REGARD TO THE INTERNAL CONFLICTS OF LAWS PROVISIONS THEREOF.
SECTION 9. HEADINGS. Section headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purposes.
[signature pages to follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers thereunto duly authorized as of the
date above first written.
/s/CENTURY BUSINESS SERVICES, INC.
/s/BANK OF AMERICA, N.A., as Agent
/s/BANK OF AMERICA, N.A., Individually as
a Lender and as the Issuing Bank
/s/BANKBOSTON, NA, as a Co-Agent and
individually as a Lender
/s/BANK ONE, MICHIGAN, as a Co-Agent and
individually as a Lender
/s/LASALLE BANK NATIONAL ASSOCIATION, as a
Co-Agent and individually as a Lender
/s/PNC BANK, NATIONAL ASSOCIATION, as a
Co-Agent and individually as a Lender
/s/COMERICA BANK
/s/FIFTH THIRD BANK, NORTHEASTERN OHIO
/s/HUNTINGTON NATIONAL BANK
/s/FIRSTAR BANK, N.A.
/s/FIRSTMERIT BANK, N.A.
/s/FIRST UNION NATIONAL BANK
/s/U.S. BANK, N.A.
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EXHIBIT A
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SCHEDULE 2.01
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REVOLVING LOAN COMMITMENTS
--------------------------
AND PRO RATA SHARES
-------------------
Revolving Loan Pro Rata
Lender Commitment Share
------ ---------- -----
Bank of America, N.A. $ 26,400,000 13.20%
BankBoston, NA 19,200,000 9.60%
Bank One, Michigan 19,200,000 9.60%
LaSalle Bank National Association 19,200,000 9.60%
PNC Bank, National Association 19,200,000 9.60%
Comerica Bank 15,200,000 7.60%
Fifth Third Bank, Northeastern Ohio 15,200,000 7.60%
Huntington National Bank 15,200,000 7.60%
Firstar Bank 15,200,000 7.60%
FirstMerit Bank, N.A. 12,000,000 6.00%
First Union National Bank 12,000,000 6.00%
U.S. Bank, N.A. 12,000,000 6.00%
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TOTAL: $200,000,000 100%
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