EXHIBIT 4
SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT
This Second Amendment to Amended and Restated Loan Agreement ("Amendment") is
dated as of the 31st day of January, 1997, by and between PMT SERVICES, INC.
("Borrower"), a Tennessee corporation, and FIRST UNION NATIONAL BANK OF
TENNESSEE ("Lender"), a national banking association.
WITNESSETH:
WHEREAS, Borrower and Lender have previously executed that certain Amended
and Restated Loan Agreement dated as of May 31, 1995, as amended by that First
Amendment to Amended and Restated Loan Agreement dated as of July 18, 1996 (as
amended, the "Loan Agreement") (capitalized terms not otherwise defined herein
have the meaning assigned in the Loan Agreement); and
WHEREAS, Borrower and Lender wish to further amend the Loan Agreement in
certain respects;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. The Loan Agreement is hereby amended by revising the reference to "three
months" in the first line of Section 1.29 to read "three, six or nine months, as
elected by Borrower in its notice of borrowing".
2. The Loan Agreement is hereby amended by revising it to read in full as
follows:
"Note" means that Fourth Amended and Restated Promissory Note made by
Borrower dated as of January 31, 1997, in the principal amount of $20,000,000
payable to the order of Lender and all modifications, extensions, renewals,
amendments and restatements thereof.
3. The Loan Agreement is hereby amended by adding a Section 1.40(a) thereto,
reading in full as follows:
"Permitted Acquisition" means any acquisition by Borrower of a Permitted
Subsidiary or all or substantially all of the operating assets of any Person,
or assets which constitute all or substantially all of the
assets of a division or a separate or separable line of business or operating
unit, provided that:
(i) Borrower or a Permitted Subsidiary, as the case may be, is the
surviving entity in any acquisition involving a merger, reorganization or
recapitalization;
(ii) the Person or line of business acquired is in the same line of
business as that of Borrower;
(iii) no Event of Default or Unmatured Default shall exist at the time of
such acquisition or would result on a pro forma basis after completion of such
acquisition;
(iv) the acquisition must have been approved by the Board of Directors or
other similar governing authority of the seller or acquiree;
(v) Lender must have issued its prior written consent in the case of any
acquisition which (x) singly or in the aggregate with other acquisitions from
the same seller or affiliated sellers has a purchase price (including all
consideration, however denominated, in connection with the acquisition, and
valuing contingent consideration on a basis acceptable to Lender) in excess of
$15,000,000.00, or which (y) taken together with all other acquisitions for
the same fiscal year, brings the total consideration paid for all such
acquisitions, determined in the manner set forth in the preceding sentence, to
any amount in excess of $50,000,000.00; provided, however, that for the
purpose of this section (y), as long as there are no amounts outstanding under
the Revolving Credit Loan, consideration paid for acquisitions by the issuance
of Borrower's own stock shall not be counted in calculating the total
consideration paid for acquisitions.
4. The Loan Agreement is hereby amended by changing the value "$25,000" in the
third line of Section 1.42.9 thereof to read "$500,000".
5. The Loan Agreement is hereby amended by adding a Section 1.42(a) thereto
reading in full as follows:
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"Permitted Subsidiary" means any Person (i) of which Borrower directly owns
at least a majority of the voting equity interests, determined on a fully
diluted basis, (ii) that is a Borrower under this Agreement or a guarantor of
the Obligations, as Lender may specify, (iii) that is owned by Borrower in a
proportion sufficient to allow Borrower to Control the Person, including the
right to cause the Person to make lawful distributions of income, and the
financial interest of Borrower therein is freely alienable by Borrower through
a security interest granted therein or otherwise, (iv) as to which Borrower
has granted to Lender as additional security for the Obligations, a first
priority perfected security interest in its stock or other equity interest in
the Person pursuant to documentation in form and substance acceptable to
Lender and its counsel, with the validity and perfection of the security
interest and other matters as Lender may reasonably require confirmed to
Lender by an opinion of Borrower's outside counsel satisfactory to Lender in
all respects, and with all expenses related to such documentation (including,
but not limited to, filing fees and taxes and the reasonable fees and expenses
of Lender and its attorneys) to be paid by Borrower, and (v) only if so
requested by Lender, which has granted to Lender a first priority perfected
security interest in its assets pursuant to documentation in form and
substance acceptable to Lender and its counsel, with the validity and
perfection of the security interest and other matters as Lender may reasonably
require confirmed to Lender by an opinion of Borrower's outside counsel
satisfactory to Lender in all respects, and with all expenses related to such
documentation (including, but not limited to, filing fees and taxes and the
reasonable fees and expenses of Lender and its attorneys) to be paid by
Borrower.
6. Section 2.1 of the Loan Agreement is amended by replacing the words and
figures "Seventeen Million Five Hundred Thousand and No/100 Dollars
($17,500,000.00)" with the words and figures "Twenty Million and No/100 Dollars
($20,000,000.00)."
7. The Loan Agreement is hereby amended by revising Sections 2.2.1 and 2.2.2
thereof to read in full as follows:
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2.2.1 LIBOR Loans shall bear interest at the rate of one hundred
twenty-five (125) basis points above the Adjusted LIBOR Rate, which
shall remain fixed for each LIBOR Interest Period.
2.2.2 Prime Rate Loans shall bear interest at the rate of one-
half of one percent (0.50%) below the Prime Rate, as it may change from
time to time.
8. Sections 2.4 and 2.5.3 are amended by replacing the date "November 1,
1996" with "January 31, 1998".
9. The Loan Agreement is hereby amended by deleting the period at the
end of the third sentence thereof and replacing it with the phrase ", and the
requested LIBOR Interest Period, if applicable."
10. The Loan Agreement is hereby amended by revising Section 2.8.1
thereof to read in full as follows:
2.8.1 Amounts converted to a term loan shall bear interest, at
Borrower's election, at either the Prime Rate or Adjusted LIBOR Rate
option described in Section 2.2 hereof, or at a fixed rate equal to 200
basis points in excess of the bond equivalent bid side yield of the U.S.
Treasury Note with a maturity closest to January 31, 2002.
11. The Loan Agreement is hereby amended by revising Section 2.8.3 to
read in full as follows:
2.8.3 All remaining principal and interest shall be due and
payable on January 31, 2002.
12. The Loan Agreement is hereby amended by deleting the text of Section
3.1.9 and replacing it with the phrase "[intentionally left blank]," it being
the intention by this deletion that the life insurance requirement set forth
therein shall no longer apply. Accordingly, the life insurance presently held by
Lender to secure the Obligations shall be released.
13. The Loan Agreement is hereby amended by adding the following as a
new final sentence in Section 5.2.5 thereof:
Without limiting the foregoing, Borrower shall deliver its 10K prepared
pursuant to applicable securities laws within ninety (90) days after the
end of each fiscal year
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and shall deliver its 10Q, similarly prepared, within forty-five (45)
days after the end of each fiscal quarter.
14. The Loan Agreement is hereby amended by revising Section 6.1 thereof
to include the words "shall not" before the word "exceed" in the first line
thereof.
15. The Loan Agreement is hereby amended by revising the ratio required
in Section 6.2 thereof from 2.00:1.00 to 1.75:1.00.
16. The Loan Agreement is hereby amended by deleting the text of Section
6.4 thereof and substituting the phrase "[intentionally left blank]", it being
the intention that the net income requirement no longer apply.
17. The Loan Agreement is hereby amended by revising the text of Section
7.1 to include additional Sections 7.1.7 and 7.1.8 providing in full as follows:
7.1.7 CERTAIN GUARANTIES. Guaranty obligations (i) in existence as of
March , 1997, as disclosed to Lender in a written schedule dated as of that
date, (ii) with respect to Bankcard America in an amount of up to $1,000,000,
(iii) with respect to Money Transfer Systems in an amount of up to $250,000,
and (iv) other guaranty obligations incurred in the ordinary course of business
in favor of processing banks with regard to processing operations or in favor of
Sirrom Capital Corporation or its Affiliates with regard to other payment
servicing companies, subject to the limitations that no guaranty obligation
shall be permitted under this Subsection 7.1.7(iv) in excess of the amount of
$1,000,000 as to any individual primary obligor and the aggregate guaranty
obligations permitted under this Subsection 7.1.7(iv) shall not exceed
$25,000,000.
7.1.7 ADDITIONAL GUARANTIES. Additional guaranty obligations incurred in
the ordinary course of business in an amount not exceeding $5,000,000 in the
aggregate.
18. The Loan Agreement is hereby amended by revising the text of Section
7.2 thereof to provide that only Xxxxxxxxxx X. Xxxxxxx and Xxxxxxx X. Daily are
covered by the restriction on change in management.
19. The Loan Agreement is hereby amended by deleting the text of Section
7.3 thereof and substituting the phrase "[intentionally left blank]", it being
the intention that the capital expenditure limit no longer apply.
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20. The Loan Agreement is hereby amended by revising each of Sections
7.5 and 7.8 by deleting the final periods thereof and adding the phrase
", except for Permitted Acquisitions."
21. Concurrently with the execution hereof, Borrower shall pay Lender a
$25,000 commitment fee, which fee is neither refundable nor proratable. Borrower
shall also pay all recording costs, attorneys' fees and other fees and expenses
incurred in connection with this Amendment.
22. Borrower warrants to Lender that, after giving effect to this
Amendment, no Event of Default or Unmatured Event of Default exists under the
Loan Agreement, except as follows. Borrower is a party to certain litigation
that needs to be reported to Lender and has guaranteed certain obligations for
which Lender's consent is required. On or before March 31, 1997, Borrower shall
provide Lender with information sufficient to enable Lender to assess these
matters and to issue any necessary consents, should Lender so elect.
Additionally, as of the execution of this Amendment, Borrower has several
Subsidiaries that are not "Permitted Subsidiaries" under the definition provided
above in this Amendment. Lender hereby waives noncompliance with the above
requirements as to Subsidiaries until the funding of any advance under the
Revolving Credit Loan.
23. Prior to and as a condition to the funding of any advance under the
Revolving Credit Loan, Borrower shall cause Lender to receive (i) the disclosure
items referred to in Section 22 above, (ii) stock pledges, guaranties, corporate
charters, resolutions and such other documents as Lender may require in
connection with the qualification of Subsidiaries as "Permitted Subsidiaries,"
and (iii) such other amendments, resolutions of Borrower's Board of Directors,
opinions of Borrower's counsel and other documents as Lender or its counsel may
reasonably require to evidence and secure the Obligations consistent with the
requirements of the Loan Agreement as amended hereby. In order to allow time for
the preparation and execution of such documentation, Borrower agrees to submit
its initial borrowing request under the Loan Agreement at least thirty (30) days
prior to the requested disbursement date.
24. The provisions hereof shall control provisions of the Loan Agreement
to the extent the two documents may conflict. The validity and construction
hereof shall be determined in accordance with the substantive laws of the State
of Tennessee.
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Executed as of the date first written above.
PMT SERVICES, INC.
By: /s/ Xxxx Xxxxxxx
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Title: Chief Financial Officer
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FIRST UNION NATIONAL BANK OF
TENNESSEE
By: /s/ Xxxxxxx X. Xxxxx
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Title: Vice President
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