SIXTH AMENDMENT AND LIMITED WAIVER TO CREDIT AGREEMENT
EXHIBIT 10.36(f)
SIXTH AMENDMENT AND LIMITED WAIVER
TO CREDIT AGREEMENT
SIXTH AMENDMENT AND LIMITED WAIVER, dated as of March 31, 2004, to the Credit Agreement referred to below (this "Amendment") among XXXXXX INTERNATIONAL, INC., a Maryland corporation ("Holdings"), XXXXXX SERVICE GROUP, INC., a New Jersey corporation, as Borrower (the "Borrower"); the other Credit Parties signatory hereto; GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation (in its individual capacity, "GE Capital"), for itself, as Lender, and as Agent for Lenders ("Agent") and the other Lenders signatory hereto from time to time.
W I T N E S S E T H:
WHEREAS, Borrower, the other Credit Parties signatory thereto, Agent, and Lenders signatory thereto are parties to that certain Second Amended and Restated Credit Agreement, dated as of September 28, 2001 (including all annexes, exhibits and schedules thereto, and as amended, restated, supplemented or otherwise modified from time to time, the "Credit Agreement"); and
WHEREAS, Agent and Lenders have agreed to amend the Credit Agreement and to waive certain violations of the Credit Agreement in the manner, and on the terms and conditions, provided for herein.
NOW THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt, adequacy and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
1. Definitions. Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Credit Agreement or Annex A thereto.
2. Limited Waiver. Agent and Lenders hereby waive, as of the Amendment Effective Date (as defined below), all Events of Default arising solely from Borrower's failure to comply with the Financial Covenants referenced in Section 6.10 of the Credit Agreement and set forth in Annex G, clauses (b) (Minimum Fixed Charge Coverage Ratio) and (d) (Minimum Interest Coverage Ratio) thereof for the Fiscal Quarter ended December 31, 2003. Nothing herein shall be deemed a waiver of any term or condition of any Loan Document nor shall be deemed to prejudice any right or rights which Agent or Lenders may now have or may have in the future under or in connection with any Loan Document or any of the instruments or agreements referred to therein, as the same may be amended from time to time.
3. Amendment to Section 1.1(b)(i)(2) of Credit Agreement. Section 1.1(b)(i)(2) of the Credit Agreement is hereby amended and restated as of the Amendment Effective Date by inserting the following language immediately following the last word of such Section 1.1(b)(i)(2):
", provided, however, that the requirement to make the regularly scheduled amortization payment on the Term Loan A on the first day of April, 2004, is hereby deferred until the earlier to occur of (a) the first time that the Borrowers' average daily Borrowing Availability for the 30-day period ending immediately prior to the first day of January, April, July and October of each year, commencing October 1, 2004 equals or exceeds $4,000,000 or (b) the Commitment Termination Date."
4.
Amendment to Section 6.5 of Credit Agreement. Section 6.5 of the Credit Agreement
is hereby amended by amending and restating such section in its entirety to
read as follows:
"6.5 Capital
Structure and Business. No Credit
Party shall: (a) Make any changes in any of its business objectives, purposes
or operations that could in any way adversely affect the repayment of the Loans
or any of the other Obligations or could reasonably be expected to have or
result in a Material Adverse Effect; however, this clause (a) will not
be considered operative unless less than 75% of such Credit Party's
consolidated revenue in any year is derived from the combination of staffing
and business services outsourcing; (b) Make any change in its capital structure
as described in Disclosure Schedule 3.8, including
the issuance or sale of any shares of Stock, warrants (other than warrants
issued as of the Closing Date) or other securities convertible into Stock or
any revision of the terms of its outstanding Stock; provided, that Holdings may
issue or sell its Stock (x) for cash so long as (i) the proceeds thereof are
applied in prepayment of the Obligations as required by Section 1.3(b)(iii),
and (ii) no Change of Control occurs after giving effect thereto, and (y) pursuant
to the employee stock option plans described in Disclosure Schedule 6.5;
provided, that the aggregate value of all stock issuance pursuant to such plans
shall not exceed 5% of the authorized Stock of Holdings or any Credit Party in
any year; (c) Amend its charter or bylaws in a manner that would create a
Material Adverse Effect; (d) Engage in any business other than staffing and business services outsourcing or
businesses reasonably related thereto, which in the aggregate exceed 10% of
such Credit Party's consolidated revenue in any year."
5. Amendment to Annex A of the Credit Agreement. Annex A of the Credit Agreement is hereby amended as of the Amendment Effective Date by:
(a)
adding the following definition in the appropriate
alphabetical order:
"Sixth
Amendment Effective Date" means the date on which each of the
conditions to effectiveness of the Sixth Amendment to this Agreement have been
satisfied or waived to the satisfaction of the Agent."
(b) Annex A of the Credit Agreement is hereby further amended as of the Amendment Effective Date by deleting the language "January 31, 2005" in clause (a) of the definition of "Commitment Termination Date" and substituting in lieu thereof the language "April 1, 2005".
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6.
Amendment to Annex G of Credit Agreement. Annex G of the Credit Agreement is
hereby amended as of the Amendment Effective Date by amending and restating clauses
(b) (Minimum Fixed Charge Coverage Ratio) and (d) (Minimum Interest
Coverage Ratio) in their entirety to read as follows:
"(b) Minimum
Fixed Charge Coverage Ratio.
Borrower and its subsidiaries shall have on a consolidated basis at the
end of each Fiscal Quarter set forth below, a Fixed Charge Coverage Ratio for
the 12-month period then ended of not less than the following:
0.90 for the Fiscal Quarter ending March 31, 2004;
0.95 for the Fiscal Quarter ending June 30, 2004;
1.00 for the Fiscal Quarter ending September 30, 2004
1.05 for the Fiscal Quarter ending December 31, 2004.
1.10 for each Fiscal Quarter ending thereafter."
"(d) Minimum
Interest Coverage Ratio. Borrower
and its subsidiaries on a consolidated basis shall have at the end of each
Fiscal Quarter set forth below, an Interest Coverage Ratio for the 12-month
period then ended of not less than the following:
1.50 for the Fiscal Quarter ending March 31, 2004;
1.75 for the Fiscal Quarter ending June 30, 2004;
2.00 for the Fiscal Quarter ending September 30, 2004
2.00 for the Fiscal Quarter ending December 31, 2004.
2.00 for each Fiscal Quarter ending thereafter."
7. Representations and Warranties. To induce Agent and Lenders to enter into this Amendment, each of Holdings and Borrower makes the following representations and warranties to Agent and Lenders:
(a) The execution, delivery and performance of this Amendment and the performance of the Credit Agreement, as amended by this Amendment (the "Amended Credit Agreement") by Borrower and Holdings: (a) is within such Person's organizational power; (b) has been duly authorized by all necessary or proper corporate and shareholder action; (c) does not contravene any provision of such Person's charter or bylaws or equivalent organizational documents; (d) does not violate any law or regulation, or any order or decree of any court or Governmental Authority; (e) does not conflict with or result in the breach or termination of, constitute a default under or accelerate or permit the acceleration of any performance required by, any indenture, mortgage, deed of trust, lease, agreement or other instrument to which such Person is a party or by which such Person or any of its property is bound; (f) does not result in the creation or imposition of any Lien upon any of the property of such Person other than those in favor of Agent pursuant to the Loan Documents; and (g) does not require the consent or approval of any Governmental Authority or any other Person.
(b) This Amendment has been duly executed and delivered by or on behalf of each of Holdings, Borrower and the other Credit Parties.
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(c) Each of this Amendment and the Amended Credit Agreement constitutes a legal, valid and binding obligation of Borrower and each of the other Credit Parties party thereto, enforceable against each in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors' rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).
(d) No Default or Event of Default has occurred and is continuing after giving effect to this Amendment.
(e) No action, claim, lawsuit, demand, investigation or proceeding is now pending or, to the knowledge of any Credit Party, threatened against any Credit Party, at law, in equity or otherwise, before any court, board, commission, agency or instrumentality of any Governmental Authority, or before any arbitrator or panel of arbitrators, (i) which challenges Borrower's or, to the extent applicable, any other Credit Party's right, power, or competence to enter into this Amendment or perform any of their respective obligations under this Amendment, the Amended Credit Agreement or any other Loan Document, or the validity or enforceability of this Amendment, the Amended Credit Agreement or any other Loan Document or any action taken under this Amendment, the Amended Credit Agreement or any other Loan Document or (ii) which if determined adversely, is reasonably likely to have or result in a Material Adverse Effect. To the knowledge of Holdings or Borrower, there does not exist a state of facts which is reasonably likely to give rise to such proceedings.
(f) The representations and warranties of Borrower and the other Credit Parties contained in the Credit Agreement and each other Loan Document shall be true and correct on and as of the Amendment Effective Date and the date hereof with the same effect as if such representations and warranties had been made on and as of such date, except that any such representation or warranty which is expressly made only as of a specified date need be true only as of such date.
8. No Other Amendments/Waivers. Except as expressly amended herein, the Credit Agreement and the other Loan Documents shall be unmodified and shall continue to be in full force and effect in accordance with their terms. In addition, this Amendment shall not be deemed a waiver of any term or condition of any Loan Document and shall not be deemed to prejudice any right or rights which Agent, for itself and Lenders, may now have or may have in the future under or in connection with any Loan Document or any of the instruments or agreements referred to therein, as the same may be amended from time to time.
9. Outstanding Indebtedness; Waiver of Claims. Each of Borrower and the other Credit Parties hereby acknowledges and agrees that as of March31,2004 the aggregate outstanding principal amount of (i) the Revolving Loan is $25,430,534.96, (ii) the Term Loan A is $16,000,000 and (iii) the Term Loan B is $18,000,000, and that such principal amounts are payable pursuant to the Credit Agreement without defense, offset, withholding, counterclaim or deduction of any kind. Borrower and each other Credit Party hereby waives, releases, remises and forever discharges Agent, Lenders and each other Indemnified Person from any and all claims, suits, actions, investigations, proceedings or demands arising out of or in connection with the Credit Agreement (collectively, "Claims"), whether based in contract, tort, implied or express warranty, strict liability, criminal or civil statute or common law of any kind or character, known or unknown, which Borrower or any other Credit Party ever had, now has or might hereafter have against Agent or Lenders which relates, directly or indirectly, to any acts or omissions of Agent, Lenders or any other Indemnified Person on or prior to the date hereof, provided, that neither Borrower nor any other Credit Party waives any Claim solely to the extent such Claim relates to the Agent's or any Lender's gross negligence or willful misconduct.
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10. Expenses. Borrower and the other Credit Parties hereby reconfirm their respective obligations pursuant to Sections 1.9 and 11.3 of the Credit Agreement to pay and reimburse Agent, for itself and Lenders, for all reasonable costs and expenses (including, without limitation, reasonable fees of counsel) incurred in connection with the negotiation, preparation, execution and delivery of this Amendment and all other documents and instruments delivered in connection herewith.
11. Effectiveness. This Amendment shall be deemed effective as of the date hereof (the "Amendment Effective Date") only upon satisfaction in full in the judgment of Agent of each of the following conditions:
(a) Amendment. Agent shall have received five (5) original copies of this Amendment duly executed and delivered by Agent, each Lender, Borrower and the other Credit Parties.
(b) Payment of Amendment Fee and Expenses. Borrower shall have paid to Agent (i) a non-refundable cash amendment fee equal to $50,000 for the pro rata account of the Lenders, and (ii) all costs, fees and expenses owing in connection with this Amendment and the other Loan Documents and due to Agent (including, without limitation, reasonable legal fees and expenses).
(c) Representations and Warranties. The representations and warranties of or on behalf of the Credit Parties in this Amendment shall be shall be true and correct on and as of the Amendment Effective Date and the date hereof, except that any such representation or warranty which is expressly made only as of a specified date need be true only as of such date.
12. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
13. Counterparts. This Amendment may be executed by the parties hereto on any number of separate counterparts and all of said counterparts taken together shall be deemed to constitute one and the same instrument.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered as of the day and year first above written.
XXXXXX SERVICE GROUP, INC.
By:
Name:
Title:GENERAL ELECTRIC CAPITAL
CORPORATION, as Agent and LenderBy:
Duly Authorized Signatory
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The following Persons are signatories to this Amendment in their capacity as Credit Parties and not as Borrowers.
XXXXXX INTERNATIONAL, INC.
By: __________________________
Name: ________________________
Title: ________________________XXXXXX SERVICES INTERNATIONAL, INC.
By: __________________________
Name: ________________________
Title: ________________________XXXXXX TELECOM, INC.
By: __________________________
Name: ________________________
Title: ________________________XXXXXX SERVICES, INC.
By: __________________________
Name: ________________________
Title: ________________________XXXXXX UTILITY SERVICE, INC.
By: __________________________
Name: ________________________
Title: ________________________