EXHIBIT 10.16
SECOND AMENDMENT AND AGREEMENT
SECOND AMENDMENT AND AGREEMENT, dated as of March __, 1999 (this
"Amendment"), to the Credit Agreement, dated as of January 28, 1998 (the Credit
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Agreement"), among NCI ACQUISITION CORPORATION, a Delaware corporation
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("Holdings"), NATIONWIDE CREDIT, INC., a Georgia corporation (the "Borrower"),
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the several banks and other financial institutions or entities from time to time
parties to thereto (the "Lenders"), XXXXXX BROTHERS INC., as advisor and
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arranger (in such capacity, the "Arranger"), XXXXXX COMMERCIAL PAPER INC., as
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syndication agent (in such capacity, the "Syndication Agent"), FLEET CAPITAL
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CORPORATION, as administrative agent (in such capacity, the "Administrative
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Agent"), and BHF - BANK AKTIENGESELLSCHAFT, GRAND CAYMAN BRANCH, as
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Documentation Agent (in such capacity, the "Documentation Agent").
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W I T N E S S E T H:
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WHEREAS, pursuant to the Credit Agreement, the Lenders have agreed to
make, and have made, certain loans and other extensions of credit to the
Borrower; and
WHEREAS, the Borrower has requested, and, upon this Amendment becoming
effective, the Required Lenders have agreed, to amend certain provisions of the
Credit Agreement as provided for in this Amendment;
NOW, THEREFORE, the parties hereto hereby agree as follows:
I. Defined Terms. Terms defined in the Credit Agreement and used
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herein shall have the meanings given to them in the Credit Agreement.
II. Amendments to Credit Agreement. Section 7.1 of the Credit
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Agreement is hereby amended by replacing the portion of such Section provided
for below in its entirety and substituting in lieu thereof the following (and
the remaining portion of such Section shall not be amended and shall remain in
full force and effect):
"(a) Minimum Consolidated EBITDA. Permit the Consolidated
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EBITDA for any period of four consecutive fiscal quarters of the
Borrower (or, if less, the number of full fiscal quarters in
1998) ending with any fiscal quarter set forth below to be less
than the amount set forth below opposite such fiscal quarter:
2
Fiscal Quarter Minimum Consolidated EBITDA
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December 31, 1998 $14,500,000
March 31, 1999 $11,360,000
June 30, 1999 $13,110,000
September 30, 1999 $14,780,000
December 31, 1999 $19,000,000
(b) Consolidated Total Debt Ratio. Permit the Consolidated Total
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Debt Ratio as at the last day of any period of four consecutive fiscal
quarters of the Borrower (or, if less, the number of full fiscal
quarters in 1998) ending with any fiscal quarter set forth below to
exceed the ratio set forth below opposite such fiscal quarter:
Consolidated
Fiscal Quarter Total Debt Ratio
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December 31, 1998 8.20 to 1.00
March 31, 1999 10.40 to 1.00
June 30, 1999 9.00 to 1.00
September 30, 1999 8.00 to 1.00
December 31, 1999 6.25 to 1.00
(c) Consolidated Interest Coverage Ratio. Permit the Consolidated
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Interest Coverage Ratio for any period of four consecutive fiscal quarters of
the Borrower (or, if less, the number of full fiscal quarters in 1998) ending
with any fiscal quarter set forth below to be less than the ratio set forth
below opposite such fiscal quarter:
Consolidated Interest
Fiscal Quarter Coverage Ratio
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December 31, 1998 1.30 to 1.00
March 31, 1999 .90 to 1.00
June 30, 1999 1.00 to 1.00
September 30, 1999 1.20 to 1.00
December 31, 1999 1.50 to 1.00
4. Amendment to Annex A. Annex A to the Credit Agreement is hereby
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amended by deleting such Annex A in its entirety and substituting in lieu
thereof Annex A hereto.
III. Agreement. The Revolving Credit Commitments shall be
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permanently reduced to $5,000,000 on the Amendment Effective Date (as defined
below).
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IV. Conditions to Effectiveness. This Amendment shall become
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effective on the date (the "Amendment Effective Date") on which (i) the
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Borrower, the Agents and the Required Lenders shall have executed and delivered
this Amendment and (ii) the Borrower shall have paid to Administrative Agent for
distribution to each Lender that executes this Amendment prior to March__, 1999
an amendment fee equal to the product of .25% times such Lender's Aggregate
Exposure as of the Amendment Effective Date.
V. General
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1. Representation and Warranties. To induce the Agents and the
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Lenders parties hereto to enter into this Amendment, the Borrower hereby
represents and warrants to the Agent and all of the Lenders as of the Amendment
Effective Date that (a) the representations and warranties made by the Loan
Parties in the Loan Documents are true and correct in all material respects on
and as of the Amendment Effective Date, after giving effect to the effectiveness
of this Amendment, as if made on and as of the Amendment Effective Date and (b)
no Default or Event of Default shall have occurred and be continuing.
2. Payment of Expenses. The Borrower agrees to pay or reimburse the
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Agents for all of their out-of-pocket costs and reasonable expenses incurred in
connection with this Amendment, any other documents prepared in connection
herewith and the transactions contemplated hereby, including, without
limitation, the reasonable fees and disbursements of counsel.
3. No Other Amendments; Confirmation. Except as expressly amended,
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modified and supplemented hereby, the provisions of the Credit Agreement and the
other Loan Documents are and shall remain in full force and effect. This
Amendment shall be a Loan Document.
4. Governing Law; Counterparts. (a) This Amendment and the rights
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and obligations of the parties hereto shall be governed by, and construed and
interpreted in accordance with, the laws of the State of New York.
(b) This Amendment may be executed by one or more of the parties to
this Agreement on any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. A set of the copies of this Amendment signed by all the parties
shall be lodged with the Borrower and the Administrative Agent. This Amendment
may be delivered by facsimile transmission of the relevant signature pages
hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered by their respective proper and duly authorized
officers as of the day and year first above written.
NCI ACQUISITION CORPORATION
By:_____________________________________
Name:
Title:
NATIONWIDE CREDIT, INC.
By:_____________________________________
Name:
Title:
XXXXXX COMMERCIAL PAPER INC., as
Syndication Agent and as a Lender
By:______________________________________
Name:
Title:
BHF - BANK AKTIENGESELLSCHAFT, GRAND CAYMAN
BRANCH,
By:______________________________________
Name:
Title:
By:______________________________________
Name:
Title:
5
FLEET CAPITAL CORPORATION, as
Administrative Agent and as a Lender
By:______________________________________
Name:
Title:
BALANCED HIGH-YIELD FUND I LTD.
By: BHF - Bank Aktiengesellschaft
acting through its New York Branch
as attorney-in-fact
By:______________________________________
Name:
Title:
Annex A
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Pricing Grid
Consolidated Applicable Margin Applicable Margin
Total Debt for Eurodollar Loans for Base Rate Loans
Ratio
Revolving Tranche B Revolving Tranche B Commitment
Credit Term Credit Term Fee
Loans Loans Loans Loans Rate
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greater than or equal to:
6.00 to 1.00 3.500% 3.750% 2.500% 2.750% 0.625
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less than:
6.00 to 1.00 3.250% 3.500% 2.250% 2.500% 0.500
but greater than or equal to:
5.50 to 1.00
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less than:
5.50 to 1.00 3.000% 3.250% 2.000% 2.250% 0.375
but greater than or equal to:
5.00 to 1.00
less than:
5.00 to 1.00 2.875% 3.125% 1.875% 2.125% 0.375
but greater than or equal to:
4.50 to 1.00
less than:
4.50 to 1.00 2.625% 3.000% 1.625% 2.000% 0.375
but greater than or equal to:
4.00 to 1.00
less than:
4.00 to 1.00 2.500% 2.875% 1.500% 1.875% 0.375
but greater than or equal to:
3.50 to 1.00
less than:
3.50 to 1.00 2.375% 2.750% 1.375% 1.750% 0.250
Changes in the Applicable Margin with respect to the Revolving Credit Loan and
the Tranche B Term Loans resulting from changes in the Consolidated Total Debt
Ratio shall become effective on the date (the "Adjustment Date") on which
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financial statements are delivered to the Lenders pursuant to Section 6.1 (but
in any event not later than the 45th day after the end of each of the first
three quarterly periods of each fiscal year or the 90th day after the end of
each fiscal year, as the case may be) and shall remain in effect until the next
change to be effected pursuant to this paragraph. If any financial statements
referred to above are not delivered within the time periods specified above,
then, until such financial statements are delivered, the Consolidated Total Debt
Ratio as at the end of the fiscal period that would have been covered thereby
shall for the purposes of this definition be deemed to be greater than 6.00 to
1. In addition, at all times while an Event of Default shall have occurred and
be continuing, the Consolidated Total Debt Ratio shall for the purposes of this
definition be deemed to be greater than 6.00 to 1. Each determination of the
Consolidated Total Debt Ratio pursuant to this definition shall be made with
respect to the period of four consecutive fiscal quarters of the Borrower ending
at the end of the period covered by the relevant financial statements.
