Exhibit 10.31
AMENDMENT NO. 3
TO
AMENDED AND RESTATED ACCOUNTS RECEIVABLE MANAGEMENT
AND SECURITY AGREEMENT
THIS AMENDMENT NO. 3 ("Amendment") is entered into as of May ___, 1997,
by and among TMP Worldwide Inc., f/k/a Telephone Marketing Programs
Incorporated, a Delaware corporation ("Borrower"), BNY Financial Corporation,
as Agent and as Lender (as each term is hereinafter defined) and other
Lenders listed on the signature page hereof.
BACKGROUND
Pursuant to an Amended and Restated Accounts Receivable Management and
Security Agreement dated as of June 27, 1996 (as the same has been or will be
further amended, supplemented or otherwise modified from time to time, the
"Loan Agreement") by and among TMP Worldwide Inc., the
predecessor-in-interest to Borrower, BNY Financial Corporation ("BNY"), each
of the other financial institutions named therein, which are now or which
hereafter become parties thereto (BNY and such other financial institutions,
collectively, "Lenders") and BNY as agent for Lenders (BNY in such capacity,
"Agent"), Agent and Lenders agreed to provide Borrower with certain financial
accommodations.
Borrower has requested that Agent and Lenders amend certain provisions of
the Loan Agreement and Agent and Lenders are willing to do so on the terms
and conditions hereafter set forth.
NOW, THEREFORE, in consideration of any loan or advance or grant of
credit heretofore or hereafter made to or for the account of Borrower by
Agent and Lenders, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto hereby
agree as follows:
1. DEFINITIONS. All capitalized terms not otherwise defined herein
shall have the meanings given to them in the Loan Agreement.
2. AMENDMENT TO LOAN AGREEMENT. Subject to satisfaction of the
conditions precedent set forth in Section 4 below, the Loan Agreement is
hereby amended as follows:
(a) Section 1(A) of the Loan Agreement is hereby amended as follows:
(i) The following defined terms are hereby amended in their
entirety to provide as follows:
"Applicable Margin" means, with respect to Alternate Base Rate Loans and
LIBO Rate Loans the percentages which, when added to or subtracted from the
Alternate
Base Rate or the LIBO Floating Rate, as the case may be, comprise the
Contract Rate.
"Commitment Percentage" of any Lender shall mean the percentage set forth
below such Lender's name on the signature page to the Loan Agreement, as
the same may be adjusted in accordance with Section 15 hereof, PROVIDED,
THAT, immediately prior to the making by Lenders of a Special Advance and
until the payment in full of the then aggregate outstanding principal
balance of Special Advances together with accrued and unpaid interest,
fees, charges and commissions thereon, the Commitment Percentages of the
Lenders shall be deemed to be the percentage set forth below such Lender's
name on the signature page of Amendment No. 3, as the same may be adjusted
in accordance with Section 15 hereof."
"Conforming Equity Event" shall mean the occurrence of an Equity Event
pursuant to which Borrower receives cash proceeds of $60,000,000 or more.
For purposes herein, a Conforming Equity Event shall be deemed to have
occured on or about December 13, 1996 (the "December Equity Event")
pursuant to which Borrower received cash proceeds of approximately
$53,999,252. All references to and provisions concerning "Conforming
Equity Event" herein shall be deemed to include and apply to the December
Equity Event as if it were a "Conforming Equity Event" with proceeds of
$60,000,000.
"Contract Rate" means an interest rate per annum equal to (i) the sum of
the Alternate Base Rate plus the Applicable Margin with respect to
Alternate Base Rate Loans or (ii) the sum of LIBO Floating Rate plus the
Applicable Margin with respect to LIBO Rate Loans, as applicable.
"Maximum Loan Amount" means the sum of (a) $100,000,000 less the
outstanding amount of loans and advances made by BNY/Cafco Financial
Corporation to Borrower's Canadian Subsidiaries PLUS (b) the Special
Advance Limit (if in effect).
(ii) The following defined terms are hereby inserted in their
appropriate alphabetical order:
"Amendment No. 3" shall mean the Amendment No. 3 to Amended and Restated
Accounts Receivable Management and Security Agreement dated as of May ___,
1997.
"Base Amount" shall have the meaning set forth in Section 2(b).
"Special Advances" shall have the meaning set forth in Section 2(b).
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"Special Advance Limit" means $10,000,000; provided that (i) upon ten (10)
days notice ("Special Advance Reduction Notice") to Borrower from Agent or
(ii) immediately upon an Event of Default, Agent may in its sole and
absolute discretion reduce the Special Advance Limit to $0.
(b) Section 2(b) of the Loan Agreement is hereby amended by adding the
following language at the end thereof:
"The lesser of 2(b)(x) and 2(b)(y) shall be referred to as the "Base
Amount".
Notwithstanding anything to the contrary contained herein, upon notice
to Agent, Borrower may from time to time request Lenders to, and Required
Lenders may in their sole and absolute discretion, cause Lenders to make
advances to Borrower in excess of the Formula Amount; provided, however,
that (1) the aggregate amount of such discretionary advances ("Special
Advances") shall not at any time exceed the Special Advance Limit and (2)
after giving effect thereto, the aggregate amount of all Loans made by
Lenders to Borrower does not exceed the Maximum Loan Amount.
The outstanding principal balance of Special Advances shall be due and
payable in full (i) within ten (10) days following the giving of the
Special Advance Reduction Notice or (ii) immediately upon the occurrence of
an Event of Default. Special Advances shall be secured by the Collateral
on an equal basis with all other Obligations of Borrower hereunder. For
purposes of determining the interest, fees or commissions payable thereon,
Special Advances shall be deemed to be Revolving Credit Advances and shall
bear interest at the applicable Contract Rate.
Without limiting the generality of the foregoing, at any time and from
time to time in the event (a) any Special Advances are outstanding and (b)
the Base Amount exceeds the aggregate of all then outstanding Loans
(excluding the Special Advances), Borrower will be deemed to have requested
a Revolving Credit Advance in an amount equal to the lesser of (i) the then
outstanding principal balance of the Special Advances and (ii) the amount
by which the Base Amount exceeds such outstanding Loans."
(c) The second sentence of Section 2(c) of the Loan Agreement is hereby
amended in its entirety to provide as follows:
The term "Permitted Overadvances" means (i) involuntary overadvances that
may result from time to time due to the fact that any borrowing formulas
set forth in this Agreement were unintentionally exceeded (whether at the
time of any Loan or at the time of the issuance of any
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Letter of Credit or otherwise) for any reason (other than the Agent's gross
negligence or willful misconduct), including Collateral believed to be
eligible in fact being or becoming ineligible or the return of uncollected
checks or other items applied to the reduction of the Loans or other
Obligations, as well as overadvances made by the Agent without Lenders'
consent for up to two weeks after discovering the unintentional
overadvance, provided that the Agent does not during that period
voluntarily increase the amount by which the borrowing formulas had been
exceeded as of the start of that period, and (ii) (X) voluntary
overadvances made by the Agent in its sole discretion which shall not cause
the Obligations to exceed the borrowing formulas by the LESSER of: (1) (a)
10% or (b) 20% (during any month in which there are Special Advances
outstanding), of the amount permitted to be borrowed under Section 2(b) or
(2) (a) $8,000,000 or (b) $18,000,000 (during any month in which there any
Special Advances outstanding), at any one time outstanding, and (Y)
voluntary overadvances made by BNY in its sole discretion ("BNY
Overadvances") which shall (1) be designated by BNY as a BNY Overadvance,
(2) be due and payable to BNY on demand (subject to the last sentence of
this Section (c)), (3) not exceed $5,000,000 at any time outstanding, (4)
be secured by the Collateral on a basis junior to all other Obligations of
Borrower hereunder and (5) not result in the then aggregate Revolving
Credit Advances outstanding exceeding the Maximum Amount.
(d) Section 3(a) of the Loan Agreement is hereby amended by inserting the
words "the provisions of the last three paragraphs of Section 2(b) and" in the
first line immediately after the words "Subject to."
(e) Section 3(b) of the Loan Agreement is hereby amended by inserting the
following proviso at the end of the first sentence thereof:
"; provided that, notwithstanding anything to the contrary contained herein
(but subject to Section 19(a) hereof), in the event a Special Advance
Reduction Notice is given by Agent to Borrower, any payments (including any
prepayments) made by Borrower with respect to the outstanding Loans shall
first be applied to the reduction of any outstanding principal balance of
the Special Advances which amounts shall be payable to Agent until such
time as the outstanding principal balance of the Special Advances is
reduced to $0."
(f) A new Section 4(b) is hereby added to the Loan Agreement to provide as
follows:
"(b) Upon and after receipt of a Special Advance Reduction Notice, Borrower
shall not request Agent or any Lender to, and no Lender shall be obligated
to,
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make additional Revolving Credit Advances to the extent after giving effect
thereto, the aggregate amount of all Loans shall exceed the lesser of (a)
the Maximum Loan Amount (excluding the Special Advance Limit) or (b) the
Formula Amount."
(g) Section 5(a)(vi) of the Loan Agreement is hereby amended in its
entirety to provide as follows:
"(vi) The Applicable Margin shall be (a) minus one percent (-1.0%) with
respect to Alternate Base Rate Loans and (b) one and one half percent
(1.5%) with respect to LIBO Rate Loans."
(h) The first sentence of Section 5(b)(i) of the Loan Agreement is hereby
amended in its entirety to provide as follows:
"In the event the average closing daily unpaid balances of all Revolving
Credit Advances (which, for these purposes shall include the aggregate face
amount of all outstanding Letters of Credit) hereunder during any calendar
month is less than (a) $100,000,000 for any month in which there are no
Special Advances outstanding or (b) $110,000,000 during any month in which
there are any Special Advances outstanding, Borrower shall pay to Agent a
fee at a rate per annum equal to one-quarter of one percent (.25%) of the
amount by which $100,000,000 or $110,000,000, as applicable, exceeds such
average daily unpaid balance."
(i) Section 12(s) of the Loan Agreement is hereby amended in its entirety
to read as follows:
"(s) it will not permit the ratio of the earnings of Borrower on a
Consolidated Basis before interest, taxes, depreciation, amortization and
business non-compete expenses to total interest expense (cash and accrued
interest) of Borrower on a Consolidated Basis or such ratio as calculated
solely with respect to Domestic Persons to be less than (i) 2.0 to 1.0 for
each fiscal quarter through and including the fiscal quarter ending
December 31, 1997 and (ii) 2.5 to 1.0 for each fiscal quarter thereafter;"
(j) Section 18(a) of the Loan Agreement is hereby amended in its entirety
to provide as follows:
"(a) failure to make payment of any of the Obligations, when due when
required hereunder, including but not limited to repayment of any Special
Advances upon receipt of the Special Advance Reduction Notice or
immediately upon an Event of Default;"
(k) Section 19(a) of the Loan Agreement is hereby amended by inserting the
following proviso after the term "Obligations" on the third to the last line
thereof:
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"; provided that all payments, other than payments with respect to the
repayment of BNY Overadvances made in accordance with Section 2(c) hereof,
but including payments with respect to the then outstanding Special
Advances, shall be applied pro rata according to the respective Commitment
Percentages of the Lenders".
3. CONDITIONS OF EFFECTIVENESS. This Amendment shall become effective as
of May 1, 1997, provided that Agent shall have received four (4) copies of this
Amendment by May 15, 1997, which Amendment shall be executed by Borrower and
each Lender and consented and agreed to by Scheduled Affiliate and Guarantors
listed on the signature page hereof along with such other certificates,
instruments, documents, agreements and opinions of counsel as may be required by
Agent or its counsel, each of which shall be in form and substance satisfactory
to Agent and its counsel.
4. REPRESENTATIONS AND WARRANTIES. Borrower hereby represents and
warrants as follows:
(a) This Amendment and the Loan Agreement, as amended hereby,
constitute legal, valid and binding obligations of Borrower and are
enforceable against Borrower in accordance with their respective terms.
(b) Upon the effectiveness of this Amendment, Borrower hereby
reaffirms all covenants, representations and warranties made in the Loan
Agreement to the extent the same are not amended hereby and agree that all
such covenants, representations and warranties shall be deemed to have been
remade as of the effective date of this Amendment.
(c) No Event of Default or Default has occurred and is continuing or
would exist after giving effect to this Amendment.
(d) Borrower has no defense, counterclaim or offset with respect to
the Loan Agreement.
5. EFFECT ON THE LOAN AGREEMENT.
(a) Upon the effectiveness of Section 2 hereof, each reference in the Loan
Agreement to "this Agreement," "hereunder," "hereof," "herein" or words of like
import shall mean and be a reference to the Loan Agreement as amended hereby.
(b) Except as specifically amended herein, the Loan Agreement, and all
other documents, instruments and agreements executed and/or delivered in
connection therewith, 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 in SECTION 3, operate as a waiver of any right,
power or remedy of Agent or any Lender, nor constitute a waiver of any provision
of the Loan
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Agreement, or any other documents, instruments or agreements executed and/or
delivered under or in connection therewith.
6. GOVERNING LAW. This Amendment shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns and
shall be governed by and construed in accordance with the laws of the State of
New York.
7. HEADINGS. Section 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.
8. COUNTERPARTS. This Amendment may be executed by the parties hereto in
one or more counterparts, each of which shall be deemed an original and all of
which taken together shall constitute one and the same agreement.
IN WITNESS WHEREOF, this Amendment has been duly executed as of the day and
year first written above.
TMP WORLDWIDE INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
BNY FINANCIAL CORPORATION,
as Agent and as Lender
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Commitment Percentage: _____%
DEUTSCHE FINANCIAL SERVICES HOLDING
CORPORATION, as Lender
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Adjusted Commitment Percentage: ______%
BANK POLSKA KASA OPIEKI, S.A.,
as Lender
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Adjusted Commitment Percentage: ______%
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CONSENTED AND AGREED TO:
TMP Worldwide Ltd. (f/k/a EPI Aviation, Inc.
National Directory Advertising
Programs Inc.) (Canada)
By:______________________ By:______________________
Its:_____________________ Its:_____________________
TMP Worldwide Recruitment Inc. TMP Medical Listings, Inc.
By:______________________ By:______________________
Its:_____________________ Its:_____________________
Deutsch, Xxxx & Xxxxx, Inc. General Directory Advertising Services
Inc.
By:______________________ By:______________________
Its:_____________________ Its:_____________________
MSI-Market Support International, Xxxxxx Advertising, Inc.
Inc.
By:______________________ By:______________________
Its:_____________________ Its:_____________________
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