EXHIBIT 1
December 20, 2002
Xxxxx & Xxxxx Company
0000 Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Re: WAIVER
Ladies/Gentlemen:
Please refer to the Amended and Restated Credit Agreement dated as of
December 31, 2000 (as amended, the "CREDIT AGREEMENT") among Xxxxx & Xxxxx
Company (the "BORROWER"), various financial institutions and Bank of America,
N.A., as Administrative Agent. Capitalized terms used but not otherwise defined
herein have the meanings assigned thereto in the Credit Agreement.
WAIVER
At the request of the Borrower, the Required Lenders hereby waive
through March 31, 2003 any Default or Event of Default arising from the
Borrower's non-compliance with Section 8.1(c) (minimum Adjusted EBITDA) of the
Credit Agreement for the fiscal quarter ended December 31, 2002. The Borrower
acknowledges that the foregoing waiver shall expire on March 31, 2003 and,
absent a further waiver by the Required Lenders or an amendment to the Credit
Agreement, an immediate Event of Default shall exist.
AGREEMENTS OF THE BORROWER
In consideration of the foregoing waiver, the Borrower agrees with the
Administrative Agent and the Lenders as follows:
1. FINANCIAL ADVISOR. Without limiting Section 7.6 of the Credit
Agreement, the Borrower confirms and agrees that it will permit, and cause its
Subsidiaries to permit, FTI Xxxxxxxx & Xxxxx to continue to review the books and
records of, and to engage in discussions with officers and employees of, the
Borrower and its Subsidiaries as reasonably requested by the Administrative
Agent and at the Borrower's expense.
2. 2003 BUSINESS PLAN. Not later than January 31, 2003, the Borrower
will deliver to the Administrative Agent and the Lenders a business plan for the
2003 fiscal year in form and substance reasonably satisfactory to the
Administrative Agent and the Required Lenders.
3. PAYMENT OF BONUSES. The amount of bonuses paid by the Borrower and
its Subsidiaries to their officers and employees for the calendar year ending
December 31, 2002 will not exceed (a) zero at any time prior to March 12, 2003,
(b) $2,000,000 during the period from March 12, 2003 through June 30, 2003, and
(c) an additional $500,000 thereafter.
4. PRICING. From the date hereof until the date on which the
outstanding principal amount of Term Loans is less than or equal to $24,000,000,
(a) the Applicable Margin for Eurodollar Loans shall equal 4.25% and (b) the
Applicable Margin for Base Rate Loans and Swing Line Loans shall equal 3.25%.
5. REPAYMENT OF TERM LOANS.
(a) Notwithstanding any provision of the Credit Agreement to the
contrary, the Borrower will make the principal payment of Term Loans that is
scheduled to occur on March 31, 2003 on February 3, 2003 instead.
(b) The Borrower will request a federal carryback refund related to tax
losses anticipated to be incurred in the tax year ending December 31, 2002
against prior years' tax payments (and not a credit against payment of future
tax liabilities); and within two Business Days after receipt of such refund,
prepay the Term Loans in an amount equal to $700,000. Such prepayment shall be
applied pro rata to the remaining installments of the Term Loans in the inverse
order of maturity.
EFFECTIVENESS
This letter agreement shall become effective when the Administrative
Agent shall have received (a) counterparts of this letter agreement executed by
the Borrower and the Required Lenders, (b) a Confirmation, substantially in the
form of Exhibit A, signed by the Borrower and each Subsidiary Guarantor, (c) a
waiver fee for each Lender which, on or before December 20, 2002, executes and
delivers to the Administrative Agent a counterpart hereof, such fee to be in an
amount equal to 0.125% of such Xxxxxx's Commitment as of the date of this letter
agreement, and (d) evidence that the Borrower has paid all amounts payable to
(i) the Administrative Agent pursuant to Section 11.5 of the Credit Agreement
(including reasonable attorneys' fees) and (ii) FTI Consulting, Inc., in each
case to the extent invoices therefor have been delivered to the Borrower.
MISCELLANEOUS
This letter agreement is limited to the matters specifically set forth
herein and shall not be deemed to constitute a waiver, consent or amendment with
respect to any other matter whatsoever. The Administrative Agent and the Lenders
hereby reserve all of their rights, powers and remedies under the Credit
Agreement and applicable law.
This letter agreement may be executed in counterparts and by the
parties hereto on separate counterparts.
This letter agreement shall be governed by and construed in accordance
with the internal laws of the State of Illinois applicable to contracts made and
to be performed entirely within such State.
BANK OF AMERICA, N.A.
as Administrative Agent and as a Lender
By:
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Name:
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Title:
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LASALLE BANK NATIONAL ASSOCIATION
By:
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Name:
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Title:
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BANK ONE, NA (as successor
by merger with American
National Bank and Trust
Company of Chicago)
By:
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Name:
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Title:
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Xxxxxx to and accepted as of
December 20, 2002:
XXXXX & XXXXX COMPANY
By:
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Name:
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Title:
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Exhibit A
CONFIRMATION
Dated as of December 20, 2002
To: Bank of America, N.A., individually and as Administrative Agent,
and the other financial institutions party to the Credit Agreement referred to
below
Please refer to (a) the Amended and Restated Credit Agreement dated as
of December 31, 2000 (as amended, the "Credit Agreement") among Xxxxx & Xxxxx
Company, various financial institutions (the "Lenders") and Bank of America,
N.A., as administrative agent (the "Administrative Agent"); (b) the other "Loan
Documents" (as defined in the Credit Agreement), including the Guaranty and
Collateral Agreement; and (c) the letter agreement dated as of the date hereof
(the "Waiver") delivered pursuant to the Credit Agreement.
Each of the undersigned hereby confirms to the Administrative Agent and
the Lenders that, after giving effect to the Waiver and the transactions
contemplated thereby, each Loan Document to which such undersigned is a party
continues in full force and effect and is the legal, valid and binding
obligation of such undersigned, enforceable against such undersigned in
accordance with its terms.
XXXXX & XXXXX COMPANY
XXXXX & XXXXX CONSULTING SERVICES COMPANY
XXXXX & XXXXX NEW YORK, INC.
XXXXX & XXXXX OF MICHIGAN, INC.
XXXXX & XXXXX OF NEVADA, INC.
XXXXX & XXXXX OF OREGON, INC.
XXXXX & XXXXX AFFILIATES, INC.
XXXXX & XXXXX MANAGEMENT SERVICES, INC.
XXXXX & XXXXX MANAGEMENT SERVICES OF MICHIGAN, INC.
HSM INC.
XXXXXXXX HOSPITALITY INTERNATIONAL, INC.
By:
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Name: Xxx X. Xxxxx
Title: Chief Financial Officer