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EXHIBIT 10.53
FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this "Amendment"), dated as of
August 10, 1998, is entered into by and among:
(1) XXX RESEARCH CORPORATION, a Delaware corporation ("Borrower");
(2) Each of the financial institutions listed in Schedule I to the
Credit Agreement referred to in Recital A below (collectively, the
"Lenders"); and
(3) ABN AMRO BANK, N.V., San Francisco International Branch, as agent
for the Lenders (in such capacity, "Agent").
RECITALS
A. Borrower, the Lenders and Agent are parties to a Credit Agreement dated
as of April 13, 1998 (the "Credit Agreement").
B. Borrower has requested the Lenders and Agent to amend the Credit
Agreement in certain respects.
C. The Lenders and Agent are willing so to amend the Credit Agreement upon
the terms and subject to the conditions set forth below.
AGREEMENT
NOW, THEREFORE, in consideration of the above recitals and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Borrower, the Lenders and Agent hereby agree as follows:
1. DEFINITIONS, INTERPRETATION. All capitalized terms defined above and
elsewhere in this Amendment shall be used herein as so defined. Unless otherwise
defined herein, all other capitalized terms used herein shall have the
respective meanings given to those terms in the Credit Agreement, as amended by
this Amendment. The rules of construction set forth in Section I of the Credit
Agreement shall, to the extent not inconsistent with the terms of this
Amendment, apply to this Amendment and are hereby incorporated by reference.
2. AMENDMENTS TO CREDIT AGREEMENT. Subject to the satisfaction of the
conditions set forth in Paragraph 4 below, the Credit Agreement is hereby
amended as follows:
(a) Paragraph 1.01 is amended by changing the definition of
"Applicable Margin" set forth therein to read in its entirety as follows:
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"Applicable Margin" shall mean, with respect to any Loan at any
time, the per annum margin which is determined pursuant to the Pricing
Grid and added to the Base Rate or LIBO Rate, as the case may be, for
such Loan; provided, however, that (a) each Applicable Margin to be
added to the LIBO Rate determined pursuant to the Pricing Grid shall
be increased by (i) one-tenth of one percent (.10%) at such times
during which Borrower's Unused Commitment exceeds $50,000,000 but is
less than or equal to $75,000,000, (ii) one-fourth of one percent
(.25%) at such times during which Borrower's Unused Commitment exceeds
$25,000,000 but is equal to or less than $50,000,000, and (iii)
one-half of one percent (.50%) at such times during which Borrower's
Unused Commitment is $25,000,000 or less; and (b) each Applicable
Margin determined pursuant to the Pricing Grid shall be increased by
two percent (2.00%) on the date an Event of Default occurs and shall
continue at such increased rate during the continuance of such Event
of Default.
(b) Paragraph 1.01 is amended by adding thereto a new definition of
the term "First Amendment Effective Date" immediately after the definition
of the term "Financial Statements" to read in its entirety as follows:
"First Amendment Effective Date" shall mean August 10, 1998.
(c) Paragraph 1.01 is further amended by deleting the definitions of
the terms "Debt Rating", "Xxxxx'x" and "S&P" set forth therein in their
entirety.
(d) Subparagraph 5.01(a) is hereby amended by deleting clause (iv)
thereof in its entirety and replacing it with the term "RESERVED".
(e) Subparagraph 5.02(l) is amended to read in its entirety as
follows:
(l) Financial Covenants.
(i) Borrower shall not permit its Quick Ratio during any
period set forth below to be less than the ratio set forth
opposite such period below:
March 28, 1998 - June 30, 1999 1.50 to 1.00;
Thereafter 1.35 to 1.00.
(ii) Borrower shall not permit its Debt Service Coverage
Ratio during any period set forth below to be less than the ratio
set forth opposite such period below:
July 1, 1999 - September 26, 1999 1.25 to 1.00;
September 27, 1999 - December 26, 1999 1.50 to 1.00;
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December 27, 1999 - March 26, 2000 1.75 to 1.00;
March 27, 2000 - June 30, 2000 2.00 to 1.00;
July 1, 2000 - September 24, 2000 2.75 to 1.00;
Thereafter 3.00 to 1.00.
(iii) Borrower shall not permit its Senior Indebtedness
Ratio during any period to be greater than 0.25 to 1.00.
(iv) Borrower shall not permit its Tangible Net Worth on any
date of determination (such date to be referred to herein as a
"determination date") which occurs after March 29, 1998 (such
date to be referred to herein as the "base date") to be less than
the sum on such determination date of the following:
(A) $450,000,000;
plus
(B) Seventy-five percent (75%) of the sum of Borrower's
consolidated quarterly net income (ignoring any quarterly
losses) for each quarter ending after the base date through
and including the quarter ending immediately prior to the
determination date;
plus
(C) One hundred percent (100%) of the Net Proceeds of
all Equity Securities issued by Borrower and its
Subsidiaries during the period commencing on the base date
and ending on the determination date;
plus
(D) One hundred percent (100%) of the aggregate
decrease in the total liabilities of Borrower and its
Subsidiaries resulting from conversions of convertible
Subordinated Indebtedness or other liabilities of Borrower
and its Subsidiaries into Equity Securities of Borrower and
its Subsidiaries during the period commencing on the base
date and ending on the determination date.
(v) Borrower shall not incur a cumulative net loss
(exclusive of net income) greater than $45,000,000, determined in
accordance with
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GAAP, for the four quarter period commencing on July 1, 1998 and
ending on June 30, 1999.
(f) Schedule 1.01(a) is hereby amended to read in its entirety as set
forth on Attachment 1 hereto.
3. REPRESENTATIONS AND WARRANTIES. Borrower hereby represents and
warrants to Agent and the Lenders that, after giving effect to the amendments
set forth in Paragraph 2 above, the following will be true and correct on the
Effective Date (as defined below):
(a) The representations and warranties of Borrower and its
Subsidiaries set forth in Paragraph 4.01 of the Credit Agreement and in the
other Credit Documents are true and correct in all material respects;
(b) No Default or Event of Default has occurred and is continuing; and
(c) All of the Credit Documents are in full force and effect.
(Without limiting the scope of the term "Credit Documents," Borrower expressly
acknowledges in making the representations and warranties set forth in this
Paragraph 3 that, on and after the date hereof, such term includes this
Amendment.)
4. EFFECTIVE DATE. The amendments effected by Paragraph 2 above shall
become effective on August 10, 1998 (the "Effective Date"), subject to receipt
by Agent and the Lenders of the following, each in form and substance
satisfactory to Agent, the Lenders and their respective counsel:
(a) This Amendment duly executed by Borrower, each Lender and Agent;
(b) A Certificate of the Secretary of Borrower, dated the Effective
Date, certifying that (i) the Certificate of Incorporation and Bylaws of
Borrower, in the form delivered to Agent on the Closing Date, are in full
force and effect and have not been amended, supplemented, revoked or
repealed since such date and (ii) resolutions have been duly adopted by the
Board of Directors of Borrower and are continuing in effect, which
authorize the execution, delivery and performance by Borrower of this
Amendment and the consummation of the transactions contemplated hereby;
(c) A favorable written opinion of counsel to Borrower, addressed to
Agent and dated the Effective Date, as to the matters set forth in
Attachment 2 hereto;
(d) A nonrefundable amendment fee equal to one-tenth of one percent
(0.10%) of the Total Commitment to be shared among the Lenders that execute
this Amendment on or before August 10, 1998 pro rata in accordance with
such Lenders' respective Proportionate Share; and
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(e) Such other evidence as Agent or any Lender may reasonably request
to establish the accuracy and completeness of the representations and
warranties and the compliance with the terms and conditions contained in
this Amendment and the other Credit Documents.
5. EFFECT OF THIS AMENDMENT. On and after the Effective Date, each
reference in the Credit Agreement and the other Credit Documents to the Credit
Agreement shall mean the Credit Agreement as amended hereby. Except as
specifically amended above, (a) the Credit Agreement and the other Credit
Documents shall remain in full force and effect and are hereby ratified and
confirmed and (b) the execution, delivery and effectiveness of this Amendment
shall not, except as expressly provided herein, operate as a waiver of any
right, power, or remedy of the Lenders or Agent, nor constitute a waiver of any
provision of the Credit Agreement or any other Credit Document.
6. MISCELLANEOUS.
(a) Counterparts. This Amendment may be executed in any number of
identical counterparts, any set of which signed by all the parties hereto
shall be deemed to constitute a complete, executed original for all
purposes.
(b) Headings. Headings in this Amendment are for convenience of
reference only and are not part of the substance hereof.
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IN WITNESS WHEREOF, Borrower, Agent and the Lenders have caused this
Amendment to be executed as of the day and year first above written.
BORROWER: XXX RESEARCH CORPORATION
By:
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Name:
Title:
AGENT: ABN AMRO BANK, N.V., SAN FRANCISCO
INTERNATIONAL BRANCH, AS AGENT
By:
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Name:
Title:
By:
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Name:
Title:
LENDERS: ABN AMRO BANK, N.V., SAN FRANCISCO
INTERNATIONAL BRANCH, AS A LENDER
By:
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Name:
Title:
By:
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Name:
Title:
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, AS A LENDER
By:
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Name:
Title:
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DEUTSCHE BANK AG NEW YORK AND/OR CAYMAN ISLANDS
BRANCHES, AS A LENDER
By:
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Name:
Title:
By:
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Name:
Title:
THE INDUSTRIAL BANK OF JAPAN, AS A LENDER
By:
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Name:
Title:
BANKBOSTON, N.A., AS A LENDER
By:
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Name:
Title:
UNION BANK OF CALIFORNIA, N.A., AS A LENDER
By:
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Name:
Title:
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ATTACHMENT 1
SCHEDULE 1.01(a)
PRICING GRID
XXXXX 0 XXXXX 0 XXXXX 0 XXXXX 0 XXXXX 5
------- ------- ------- ------- -------
APPLICABLE MARGINS:
Base Rate Loans 0.00% 0.00% 0.00% 0.00% 0.00%
LIBOR Loans 0.55% 0.75% 0.85% 0.90% 0.95%
COMMITMENT FEE
PERCENTAGE: 0.225% 0.250% 0.275% 0.30% 0.30%
LC USAGE FEE
PERCENTAGE:
Non-Financial Performance
Letters of Credit 0.275%* 0.375%* 0.425%* 0.45%* 0.475%*
Financial Performance Letters
of Credit 0.55%* 0.75%* 0.85%* 0.90%* 0.95%*
* Does not include LC Issuance Fees payable to Issuing Bank
EXPLANATION
1. The Applicable Margin for each Borrowing and Loan, the Commitment Fee
Percentage, and the LC Usage Fee Percentage will be determined as provided
below and will vary depending upon whether Xxxxx 0 xxxxxxx, Xxxxx 0
pricing, Xxxxx 0 xxxxxxx, Xxxxx 0 pricing or Level 5 pricing is applicable.
2. From the Closing Date until the First Amendment Effective Date, Level 1
pricing shall apply.
3. On and after the First Amendment Effective Date until the date that either
Paragraph 4 or Paragraph 5 below is applicable, Level 4 Pricing will apply.
4. Commencing on December 27, 1999 and thereafter on the fifteenth day
following the date Borrower is required to deliver the quarterly Financial
Statements and information under Subparagraphs 5.01(a)(i) of the Credit
Agreement, pricing will vary depending upon Borrower's profitability and
Senior Indebtedness Ratio (as applicable) as set forth in such Financial
Statements and information for the immediately preceding fiscal quarter as
follows:
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(a) If Borrower does not have net profits of greater than $1, determined
in accordance with GAAP, during both the fiscal quarter ending on
September 26, 1999 and the fiscal quarter ending on December 26, 1999,
Level 4 pricing will still apply.
(b) If Borrower has net profits of greater than $1, determined in
accordance with GAAP, during both the fiscal quarter ending on
September 26, 1999 and the fiscal quarter ending on December 26, 1999
and Borrower's Senior Indebtedness Ratio is less than 0.10, Level 2
pricing will apply.
(c) If Borrower has net profits of greater than $1, determined in
accordance with GAAP, during both the fiscal quarter ending on
September 26, 1999 and the fiscal quarter ending on December 26, 1999
and Borrower's Senior Indebtedness Ratio is greater than or equal to
0.10 but less than 0.15, Level 3 pricing will apply.
(d) If Borrower has net profits of greater than $1, determined in
accordance with GAAP, during both the fiscal quarter ending on
September 26, 1999 and the fiscal quarter ending on December 26, 1999
and Borrower's Senior Indebtedness Ratio is greater than or equal to
0.15, Xxxxx 0 pricing will apply.
5. On and after the fifteenth day following the Borrower's failure to deliver
to Agent the Financial Statements and information required under
Subparagraphs 5.01(a)(i) and (iii) of the Credit Agreement within the time
periods set forth therein commencing with the fifteenth day following the
date Borrower is required to deliver such Financial Statements and
information for the fiscal quarter ending on December 26, 1999, and until
the fifteenth day following receipt by Agent of such Financial Statements
and information (at which time Paragraph 4 above will apply), Xxxxx 0
pricing will apply.
6. Examples:
(a) The Senior Indebtedness Ratio for the fiscal quarter ending March 26,
2000 is 0.09. Assuming Borrower had net profits of greater than $1,
determined in accordance with GAAP, during both the fiscal quarter
ending on September 26, 1999 and the fiscal quarter ending on December
26, 1999 and the Financial Statements and information are delivered
within the time periods required under the Credit Agreement,
commencing May 30, 2000, Level 2 pricing will apply.
(b) The Senior Indebtedness Ratio for the fiscal quarter ending June 30,
2000 is 0.14. Assuming Borrower had net profits of greater than $1,
determined in accordance with GAAP, during both the fiscal quarter
ending on September 26, 1999 and the fiscal quarter ending on December
26, 1999 and the Financial Statements and information are delivered
within the time periods set forth in the Credit Agreement, commencing
September 3, 2000, Level 3 pricing will apply.
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ATTACHMENT 2
MATTERS TO BE COVERED BY OPINION OF COUNSEL
(1) The execution, delivery and performance by Borrower of the Amendment
and the consummation of the transactions contemplated thereby (a) are within the
power of Borrower and (b) have been duly authorized by all necessary actions on
the part of Borrower.
(2) The Amendment has been duly executed and delivered by Borrower and
constitutes a legal, valid and binding obligation of Borrower, enforceable
against Borrower in accordance with its terms, except as limited by bankruptcy,
insolvency or other laws of general application relating to or affecting the
enforcement of creditors' rights generally and general principles of equity.
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