EXHIBIT (r)
FIRST AMENDMENT TO CREDIT AGREEEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT effective as of December 26,
1998 (this "Amendment"), by and among The Xxxxx Group, Inc., a Tennessee
corporation (the "Borrower"), SunTrust Bank, Atlanta, a Georgia banking
corporation ("SunTrust"), the other banks and lending institutions listed
on the signature pages hereof, and any assignees of SunTrust or such other
banks and lending institutions which become "Lenders" as provided herein
(SunTrust, and such other banks, lending institutions, and assignees
referred to collectively as "Lenders"), SUNTRUST BANK, ATLANTA, as
administrative agent for the Lenders (in such capacity, the
"Administrative Agent") and NATIONSBANK, N.A., as documentation agent for
the Lenders (in such capacity, the "Documentation Agent").
WITNESSETH:
Whereas, Borrower, the Lenders, the Administrative Agent and the
Documentation Agent are parties to that certain Credit Agreement, dated as
of March 31, 1998 (as amended or modified, the "Agreement");
Whereas, Borrower, the Lenders, the Administrative Agent and the
Documentation Agent have agreed to make certain modifications to the
Agreement subject to the terms, conditions and requirements set forth in
this Amendment.
Now, Therefore, in consideration of the terms and conditions contained
herein, the parties hereto, intending to be legally bound, hereby amend the
Agreement as follows:
A. DEFINITIONS
Capitalized terms used but not otherwise defined herein shall have the
meanings given to such terms in the Agreement, as amended by this
Amendment.
B. AMENDMENTS TO THE AGREEMENT
1. Section 1.01, of the Agreement is hereby amended by replacing the
definitions of "Interest Expense" and "Net Income" in their entirety
with the following definitions:
"Interest Expense" shall mean, for any period, interest expense
as determined according to GAAP, calculated on a consolidated basis
for the Consolidated Companies, and shall include, without
duplication, all Interest Expense of any Person accrued prior to the
date such Person becomes a Subsidiary of Borrower or is merged into or
consolidated with Borrower or any of its Subsidiaries, or such
Person's assets are acquired by any Consolidated Company.
"Net Income" shall have the meaning afforded such term by GAAP,
calculated on a consolidated basis for the Consolidated Companies, and
shall include, without duplication, all Net Income of any Person
accrued prior to the date such Person becomes a Subsidiary of Borrower
or is merged into or consolidated with Borrower or any of its
Subsidiaries, or such Person's assets are acquired by any Consolidated
Company.
2. Section 8.11 of the Agreement is hereby amended as follows:
(a) Subsection (b) is hereby amended by replacing such
subsection in its entirety with the following:
(b) LEVERAGE RATIO. Its Leverage Ratio (i) to be greater
than 0.675 to 1.00 as of the last day of Borrower's fiscal quarters
ending on December 26, 1998 and March 27, 1999; and (ii) to be greater
than 0.65 to 1.00 as of the last day of each fiscal quarter of the
Borrower thereafter.
(b) Subsection (d) is hereby amended by replacing such
subsection in its entirety with the following:
(d) CONSOLIDATED NET WORTH. Fail to maintain as of the
last day of each fiscal quarter of Borrower, Consolidated Net Worth
equal to or greater than the Minimum Compliance Level plus, for each
of the first three fiscal quarters of each fiscal year of Borrower,
50% of the Consolidated Net Income of the Borrower earned during the
current fiscal year, calculated on a cumulative basis for such fiscal
year; provided, however, in the event that the Consolidated Companies
suffer a net loss for any year-to-date fiscal period, Consolidated
Net Income shall be deemed to be $0. The "Minimum Compliance Level"
shall as of any date of determination, be equal to the sum of (x) the
greater of 90% of (i) Consolidated Net Worth as of December 26, 1998
(such amount to be furnished by the Borrower to the Administrative
Agent as soon as practicable after Borrower determines such amount) or
(ii) $90,000,000 plus (y) an additional amount calculated as of the
last day of each fiscal year of Borrower, commencing with fiscal year
1999 and added to the Minimum Compliance Level then in effect as of
the last day of such fiscal year, equal to 50% of the Consolidated Net
Income for such fiscal year of Borrower then ending; provided,
however, in the event that the Consolidated Companies suffer a net
loss for any fiscal year, Consolidated Net Income shall be deemed to
be $0, and further provided that amounts calculated pursuant to clause
(y) above shall be permanent increases in the Minimum Compliance Level
so that in no event shall the Minimum Compliance Level at any date of
determination be less than the amount required at any preceding date
of determination.
3. The Agreement is hereby amended by replacing all references to
"Consolidated Net Income" with the term "Net Income".
C. CONSENT
The Lenders hereby consent to the Borrower's execution and delivery of
the Second Amendment to 9.96% Senior Subordinated Note Due February 1,
2010, by and between the Borrower and New York Life Insurance Company
effective as of December 26, 1998, substantially in the form of Exhibit A
attached hereto.
D. MISCELLANEOUS
1. Representations and Warranties. The Borrower hereby represents
and warrants to the Lenders and the Administrative Agent that:
(a) the execution, delivery and performance of this Amendment
(1) is within its corporate power; (2) has been duly authorized by all
necessary corporate action and shareholder action; (3) does not conflict
with, or result in the breach of the terms, conditions or provisions of, or
constitute a default under, or result in any violation of, or result in the
creation of any Lien upon any of its properties or assets or the properties
and assets of any of its Subsidiaries pursuant to, the charter or articles
of organization or similar document, or By-Laws or operating agreement or
similar document of the Borrower, any award of any arbitrator or any
agreement (including any agreement with stockholders), instrument, order,
judgment, decree, statute, law, rule or regulation to which the Borrower is
subject and (4) does not require the consent, permission, authorization,
order or license of any governmental authority or Person;
(b) this Amendment has been duly executed and delivered for the
benefit of or on behalf of the Borrower and constitutes a legal, valid and
binding obligation of Borrower, enforceable against the Borrower in
accordance with its terms except as the enforceability hereof may be
limited by bankruptcy, insolvency, reorganization, moratorium and other
laws affecting creditors' rights and remedies in general; and
(c) after giving effect to this Amendment, all representations
and warranties set forth in Article VI of the Agreement are true and
correct in all material respects and no Default or Event of Default has
occurred and is continuing as of the date hereof.
2. Survival. Except as expressly provided herein, the Agreement
shall continue in full force and effect, and the unamended terms and
conditions of the Agreement as expressly incorporated herein and ratified
and confirmed in all respects. This Amendment is not intended to be or to
create, nor shall it be construed as, a novation or an accord and
satisfaction.
3. Effect of Amendment. From and after the date hereof, references
to the Agreement shall be references to the Agreement as amended hereby.
4. Entire Understanding. This Amendment constitutes the entire
agreement between the parties hereto with respect to the subject matter
hereof. Neither this amendment nor any provision hereof may be changed,
waived, discharged, modified or terminated orally, but only by an
instrument in writing signed by the parties required to be a party thereto
pursuant to the Agreement.
5. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED IN ALL RESPECTS
BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
GEORGIA(WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF)
AND ALL APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.
6. Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of
which, taken together, shall constitute one and the same document, and
shall be effective as of the date first above written.
7. Severability. In the event that any part of this Amendment shall
be found to be illegal or in violation of public policy, or for any reason
unenforceable at law, such finding shall not invalidate any other part
thereof.
8. Reimbursement of Administrative Agent. Borrower shall reimburse
the Administrative Agent for the reasonable fees and expenses of counsel
for the Administrative Agent in connection with this Amendment.
WITNESS the hand and seal of the parties hereto through their duly
authorized officers, as of the date first above written.
THE XXXXX GROUP, INC.
By: Xxxxx X. Xxxxx
Vice President and Chief Financial Officer
By: Xxxx X. Xxxxxx
Treasurer
Attest: Starr X. Xxxxx
Secretary
Address: [CORPORATE SEAL]
The Xxxxx Group, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attn: Xx. Xxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
[SIGNATURE PAGE TO FIRST AMENDMENT TO CREDIT AGREEMENT]
SUNTRUST BANK, ATLANTA, individually and
as Administrative Agent
By: Xxxxx Xxxx
Title: Senior Vice President
By: Xxxxxx X. Xxxxxxx
Title: Banking Officer
Address:
SunTrust Bank, Atlanta
00 Xxxx Xxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Xx. Xxxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Payment Office:
00 Xxxx Xxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
[SIGNATURE PAGE TO FIRST AMENDMENT TO CREDIT AGREEMENT]
NATIONSBANK, N.A., individually and
as Documentation Agent
By: Xxxxx X. Xxxxxxx
Title: Vice President
Address:
000 Xxxxx Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, XX 00000
Attn: Mr. Xxxxx Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
[SIGNATURE PAGE TO FIRST AMENDMENT TO CREDIT AGREEMENT]
SOUTHTRUST BANK, NATIONAL
ASSOCIATION
By: Xxxxxxx X. Xxxx
Title: Group Vice President
Address:
000 Xxxxx 00xx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxx, XX 00000
Attn: Xx. Xxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
[SIGNATURE PAGE TO FIRST AMENDMENT TO CREDIT AGREEMENT]
FIRST UNION NATIONAL BANK
By: Xxxxx Xxxxxxxx
Title: Vice President
Address:
000 Xxxxx Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, XX 00000-0000
Attn: Xx. Xxxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
[SIGNATURE PAGE TO FIRST AMENDMENT TO CREDIT AGREEMENT]
THE CHASE MANHATTAN BANK
By: Xxxxx X. Xxxxxx
Title: Vice President
Address:
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xx. Xxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
[SIGNATURE PAGE TO FIRST AMENDMENT TO CREDIT AGREEMENT]
