AMENDMENT NO. 3 TO CREDIT AGREEMENT
THIS AMENDMENT NO. 3 TO CREDIT AGREEMENT (this "Amendment No. 3"),
dated as of March 18, 1998, is made among DECISIONONE CORPORATION, a Delaware
corporation (the "Borrower"), the various financial institutions from time to
time parties thereto (collectively, the "Lenders"), DLJ CAPITAL FUNDING, INC.,
as syndication agent (the "Syndication Agent") for the Lenders, BANKBOSTON,
N.A., as documentation agent (the "Documentation Agent") for the Lenders, and
NATIONSBANK OF TEXAS, N.A., as administrative agent (the "Administrative Agent",
and, together with the Syndication Agent, the "Agents") for the Lenders.
W I T N E S S E T H:
WHEREAS, the Borrower, the Lenders and the Agents are parties to a
Credit Agreement, dated as of August 7, 1997 and amended as of September 17,
1997 and January 12, 1998 (as modified and supplemented and in effect from time
to time, the "Credit Agreement"); and
WHEREAS, the Borrower has requested that the Lenders amend certain
pricing terms, financial covenants and other provisions contained in the Credit
Agreement; and
WHEREAS, the Lenders have agreed, subject to the terms and conditions
hereinafter set forth, to amend the Credit Agreement as set forth herein;
NOW, THEREFORE, in consideration of the agreements herein contained,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
I. PART
DEFINITIONS
A. SUBPART Certain Definitions. Unless otherwise defined herein or the context
otherwise requires, terms used in this Amendment No. 3, including its preamble
and recitals, have the following meanings (such meanings to be equally
applicable to the singular and plural forms thereof):
"Administrative Agent" is defined in the preamble.
"Agents" is defined in the preamble.
"Amendment No. 3" is defined in the preamble.
"Borrower" is defined in the preamble.
"Credit Agreement" is defined in the first recital.
"Documentation Agent" is defined in the preamble.
"Lenders" is defined in the preamble.
"Syndication Agent" is defined in the preamble.
"Third Amendment Effective Date" is defined in Subpart 3.1.
A. SUBPART Other Definitions. Unless otherwise defined herein or the context
otherwise requires, terms used in this Amendment No. 3, including its preamble
and recitals, have the meanings ascribed thereto in the Credit Agreement.
I. PART
AMENDMENTS TO CREDIT AGREEMENT
Effective on (and subject to the occurrence of) the Third Amendment
Effective Date, the Credit Agreement is hereby amended in accordance with this
Part II. Except to the extent amended by this Amendment No. 3, the Credit
Agreement is and shall continue to be in full force and effect and is hereby
ratified and confirmed in all respects.
A. SUBPART Amendment to Section 1.1. Section 1.1 of the Credit Agreement is
hereby amended as set forth in this Subpart 2.1.
a) The definition of "Applicable Margin" contained in Section 1.1 of the Credit
Agreement is hereby amended to read in its entirety as set forth below:
"`Applicable Margin' means at all times during the applicable
periods set forth below,
(a) from the Closing Date through (but excluding) the Third
Amendment Effective Date, with respect to the unpaid principal amount
of
each Term-B Loan maintained as a (i) Base Rate Loan, 1.50% per annum
and (ii) LIBO Rate Loan, 2.75% per annum;
(b) from the Third Amendment Effective Date through (but
excluding) September 30, 1998, with respect to the unpaid principal
amount of each Term-B Loan maintained as a (i) Base Rate Loan, 1.75%
per annum and (ii) LIBO Rate Loan, 3.00% per annum;
(c) at all times on or after September 30, 1998, with respect to
the unpaid principal amount of each Term-B Loan, the rate determined
by reference to the applicable Leverage Ratio and at the applicable
percentage per annum set forth below under the column entitled
"Applicable Margin for Base Rate Loans", in the case of Base Rate
Loans, or by reference to the applicable Leverage Ratio and at the
applicable percentage per annum set forth below under the column
entitled "Applicable Margin for LIBO Rate Loans", in the case of LIBO
Rate Loans:
Applicable Margin for Term-B Loans
Applicable Margin Applicable Margin
For Base for LIBO
Leverage Ratio Rate Loans Rate Loans
-------------- ---------- ----------
greater than or equal to 6.0:1 1.75% 3.00%
less than 6.0:1 1.50% 2.75%
(d) from the Closing Date through (but excluding) the date upon
which the Compliance Certificate for the second full Fiscal Quarter
ending after the Closing Date is delivered by the Borrower to the
Administrative Agent pursuant to clause (c) of Section 7.1.1, with
respect to the unpaid principal amount of each (i) Swing Line Loan
(each of which shall be borrowed and maintained only as a Base Rate
Loan) and each Revolving Loan and Term-A Loan maintained as a Base
Rate Loan, 1.25% per annum, and (ii) Revolving Loan and Term-A Loan
maintained as a LIBO Rate Loan, 2.50% per annum;
(e) from the date of the delivery of the Compliance Certificate
described in clause (d) above through (but excluding) the Third
Amendment Effective Date, with respect to the unpaid principal amount
of each Swing Line Loan (each of which shall be borrowed and
maintained only as a Base Rate Loan) and each Revolving Loan and
Term-A Loan, the rate determined by reference to the applicable
Leverage Ratio and at the applicable percentage per annum set forth
below under the column entitled "Applicable Margin for Base Rate
Loans", in the case of Base Rate Loans, or by reference to the
applicable Leverage Ratio and at the applicable percentage per annum
set forth below under the column entitled "Applicable Margin for LIBO
Rate Loans", in the case of LIBO Rate Loans:
Applicable Margin
for Revolving Loans Applicable Applicable
and Term-A Loans Margin for Base Margin for LIBO
Leverage Ratio Rate Loans Rate Loans
-------------- ---------- ----------
greater than or equal to 5.0:1 1.25% 2.50%
greater than or equal to
4.0:1 and less than 5.0:1 0.75% 2.00%
greater than or equal to
3.0:1 and less than 4.0:1 0.25% 1.50%
less than 3.0:1 0.00% 1.00%
(f) from the Third Amendment Effective Date through (but not
excluding) September 30, 1998, with respect to the unpaid principal
amount of each (i) Swing Line Loan (each of which shall be borrowed
and maintained only as a Base Rate Loan) and each Revolving Loan and
Term-A Loan maintained as a Base Rate Loan, 1.50% per annum and (ii)
Revolving Loan and Term-A Loan maintained as a LIBO Rate Loan, 2.75%
per annum; and
(g) at all times on or after September 30, 1998, with respect to
the unpaid principal amount of each Swing Line Loan (each of which
shall be borrowed and maintained only as a Base Rate Loan) and each
Revolving Loan and Term-A Loan, the rate determined by reference to
the applicable Leverage Ratio and at the applicable percentage per
annum set forth below under the column entitled "Applicable Margin for
Base Rate Loans", in the case of Base Rate Loans, or by reference to
the applicable Leverage Ratio and at the applicable percentage per
annum set forth below under the column entitled "Applicable Margin for
LIBO Rate Loans", in the case of LIBO Rate Loans:
Applicable Margin for
Revolving Loans and Applicable Applicable
Term-A Loans Margin for Base Margin for LIBO
Leverage Ratio Rate Loans Rate Loans
-------------- ---------- ----------
greater than or equal to 6.0:1 1.50% 2.75%
greater than or equal to
5.0:1 and less than 6.0:1 1.25% 2.50%
greater than or equal to
4.0:1 and less than 5.0:1 0.75% 2.00%
greater than or equal to
3.0:1 and less than 4.0:1 0.25% 1.50%
less than 3.0:1 0.00% 1.00%
The Leverage Ratio used to compute the Applicable Margin for
Swing Line Loans, Revolving Loans and Term-A Loans for any day
referred to in clause (e) or (g) above, or for Term-B Loans for any
day referred to in clause (c) above, shall be the Leverage Ratio set
forth in the Compliance Certificate most recently delivered by the
Borrower to the Administrative Agent on or prior to such day pursuant
to clause (c) of Section 7.1.1. Changes in the Applicable Margin for
Swing Line Loans, Revolving Loans, Term-A Loans and Term-B Loans
resulting from a change in the Leverage Ratio shall become effective
(as of the first day following the Fiscal Quarter in respect of which
such Compliance Certificate was required to be delivered) upon
delivery by the Borrower to the Administrative Agent of a new
Compliance Certificate pursuant to clause (c) of Section 7.1.1. In the
event such Compliance Certificate indicates a Leverage Ratio that
would result in an Applicable Margin which is greater or lesser than
the Applicable Margin theretofore in effect, then (A) such greater or
lesser Applicable Margin shall be deemed to be in effect for all
purposes of this Agreement from the first day following the Fiscal
Quarter in respect of which such Compliance Certificate was required
to be delivered by the Borrower to the Administrative Agent pursuant
to clause (c) of Section 7.1.1 and (B) if the Borrower shall have
theretofore made any payment of interest in respect of Swing Line
Loans, Revolving Loans, Term-A Loans or Term-B Loans, or of Letter of
Credit fees pursuant to the first sentence of Section 3.3.3, in any
such case in respect of the period from the first day following the
Fiscal Quarter in respect of which such Compliance Certificate was
required to be delivered to the actual date of delivery of such
Compliance Certificate, then, on the next Quarterly Payment Date,
either (x) if the new Applicable Margin rate is greater than the
Applicable Margin rate theretofore in effect, the Borrower shall pay
as a supplemental payment of interest and/or Letter of Credit
fees, an amount which equals the difference between the amount of
interest and Letter of Credit fees that would otherwise have been paid
based on such new Leverage Ratio and the amount of such interest and
Letter of Credit fees actually so paid, or (y) if the new Applicable
Margin rate is less than the Applicable Margin rate theretofore in
effect, an amount shall be deducted from the interest on Revolving
Loans, Commitment Fees and Letter of Credit fees (in the case of
differences in respect of interest on Revolving Loans and Letter of
Credit fees) or from the interest on Term-A Loans (in the case of
differences in respect of interest on Term-A Loans) or from the
interest on Term-B Loans (in the case of differences in respect of
interest on Term-B Loans) thereafter payable by the Borrower in an
amount which equals the difference between the amount of interest and
Letter of Credit fees so paid and the amount of interest and Letter of
Credit fees that would otherwise have been paid based on such new
Leverage Ratio (or, if no such payment by the Borrower to the
Revolving Lenders, Term-A Lenders or Term-B Lenders, as the case may
be, will thereafter accrue hereunder, or if the amount that so accrues
is less than such difference, then (i) in the case of interest on
Revolving Loans and Term-A Loans and Letter of Credit fees, the
Revolving Lenders or Term-A Lenders, as the case may be, will promptly
pay to the Borrower an amount equal to such difference, less the
amount, if any, of such accrued and unpaid payments, and (ii) in the
case of interest on Term-B Loans, if (but only if) there are any
Term-B Loans outstanding at the time that any such amount is
determined, an amount equal to such difference, less the amount, if
any, of such accrued and unpaid payments, shall be credited against
the principal of such Term-B Loans then outstanding).".
(b) Clause (b)(iii) of the definition of "Excess Cash Flow" contained
in Section 1.1 of the Credit Agreement is hereby amended by replacing the words
"actually paid" contained in the first line thereof with the words "actually
(without duplication) paid or payable".
(c) Clause (b)(v) of the definition of "Fixed Charge Coverage Ratio"
contained in Section 1.1 of the Credit Agreement is hereby amended by replacing
the words "actually paid" contained in the first line thereof with the words
"actually (without duplication) paid or payable".
A. SUBPART Amendment to Section 6.6. Section 6.6 of the Credit Agreement is
hereby amended by replacing the date of "June 30, 1996" contained in the first
line thereof with the date of "December 31, 1997".
B. SUBPART Amendment to Section 7.2.4. Section 7.2.4 of the Credit Agreement is
hereby amended in its entirety to read as set forth below:
"SECTION 7.2.4. Financial Covenants.
a) Adjusted EBITDA. The Borrower will not permit Adjusted EBITDA for the period
of four consecutive Fiscal Quarters ending on the last day of any Fiscal Quarter
occurring during any period set forth below to be less than the amount set forth
opposite such period:
Period Adjusted EBITDA
Closing Date to 3/31/98 $87,500,000
4/1/98 to 9/30/98 $80,000,000
10/1/98 to 12/31/98 $85,000,000
1/1/99 to 3/31/99 $90,000,000
4/1/99 to 6/30/99 $95,000,000
7/1/99 to 9/30/99 $100,000,000
10/1/99 to 12/31/99 $102,500,000
1/1/00 to 3/31/00 $105,000,000
4/1/00 to 6/30/00 $107,500,000
7/1/00 to 9/30/00 $110,000,000
10/1/00 to 12/31/00 $115,000,000
1/1/01 to 3/31/01 $117,500,000
4/1/01 to 6/30/01 $120,000,000
7/1/01 to 9/30/01 $122,500,000
10/1/01 to 12/31/01 $125,000,000
1/1/02 to 3/31/02 $127,500,000
4/1/02 to 6/30/02 $130,000,000
7/1/02 to 6/30/03 $140,000,000
7/1/03 to 6/30/04 $150,000,000
7/1/04 and thereafter $175,000,000
a) Leverage Ratio. The Borrower will not permit the Leverage Ratio as of the end
of any Fiscal Quarter occurring during any period set forth below to be greater
than the ratio set forth opposite such period:
Period Leverage Ratio
Closing Date to 3/31/98 6.75:1
4/1/98 to 9/30/98 7.75:1
10/1/98 to 12/31/98 7.25:1
1/1/99 to 3/31/99 6.75:1
4/1/99 to 6/30/99 6.50:1
7/1/99 to 9/30/99 6.25:1
10/1/99 to 12/31/99 6.00:1
1/1/00 to 3/31/00 5.75:1
4/1/00 to 9/30/00 5.50:1
10/1/00 to 3/31/01 5.25:1
4/1/01 to 6/30/01 5.00:1
7/1/01 to 9/30/01 4.75:1
10/1/01 to 12/31/01 4.50:1
1/1/02 to 6/30/02 4.25:1
7/1/02 to 6/30/03 3.75:1
7/1/03 to 6/30/04 3.50:1
7/1/04 and thereafter 3.00:1
a) Interest Coverage Ratio. The Borrower will not permit the Interest Coverage
Ratio as of the end of any Fiscal Quarter ending after the Closing Date and
occurring during any period set forth below to be less than the ratio set forth
opposite such period:
Interest Coverage
Period Ratio
-----
Closing Date to 3/31/98 1.75:1
4/1/98 to 6/30/98 1.50:1
7/1/98 to 9/30/98 1.40:1
10/1/98 to 12/31/98 1.45:1
1/1/99 to 9/30/99 1.50:1
10/1/99 to 12/31/99 1.60:1
1/1/00 to 3/31/00 1.70:1
4/1/00 to 6/30/00 1.80:1
7/1/00 to 9/30/00 2.00:1
10/1/00 to 3/31/01 2.10:1
4/1/01 to 12/31/01 2.25:1
1/1/02 to 6/30/02 2.50:1
7/1/02 to 6/30/03 2.75:1
7/1/03 and thereafter 3.50:1
a) Fixed Charge Coverage Ratio. The Borrower will not permit the Fixed Charge
Coverage Ratio as of the end of any Fiscal Quarter occurring during any period
set forth below to be less than the ratio set forth opposite such period:
Period Fixed Charge Coverage Ratio
Closing Date to 6/30/98 1.10:1
7/1/98 and thereafter 1.00:1".
I. PART
CONDITIONS TO EFFECTIVENESS
A. SUBPART Effective Date. This Amendment No. 3 shall be and become effective
upon the prior or concurrent satisfaction of each of the conditions precedent
set forth in this Subpart 3.1 (the "Third Amendment Effective Date").
1. SUBPART Execution of Counterparts. The Agents shall have received
counterparts of this Amendment No. 3 duly executed by the Borrower and each of
the Required Lenders (or evidence thereof satisfactory to the Agents). The
delivery of an executed counterpart hereof by the Borrower shall constitute a
representation and warranty by the Borrower that, on the Third Amendment
Effective Date, after giving effect to this Amendment No. 3, all statements set
forth in Section 5.2.1 of the Credit Agreement, as amended by this Amendment No.
3, are true and correct as of such date.
II. PART
MISCELLANEOUS
A. SUBPART Cross-References. References in this Amendment No. 3 to any Part or
Subpart are, unless otherwise specified, to such Part or Subpart of this
Amendment No. 3. References in this Amendment No. 3 to any Article or Section
are, unless otherwise specified, to such Article or Section of the Credit
Agreement.
B. SUBPART Loan Document Pursuant to Credit Agreement. This Amendment No. 3 is a
Loan Document executed pursuant to the Credit Agreement and shall (unless
otherwise expressly indicated herein) be construed, administered and applied in
accordance with the terms and provisions of the Credit Agreement, as amended
hereby, including Article X thereof.
C. SUBPART Counterparts, etc. This Amendment No. 3 may be executed by the
parties hereto in several counterparts, each of
which shall be deemed to be an original and all of which shall constitute
together but one and the same Agreement.
D. SUBPART Governing Law. THIS AMENDMENT NO. 3 SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
E. SUBPART Successors and Assigns. This Amendment No. 3 shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns.
SUBPART 4.6 Limitation. Except as expressly provided hereby, all of the
representations, warranties, terms, covenants and conditions of the Credit
Agreement and each other Loan Document shall remain unamended and unwaived and
shall continue to be, and shall remain, in full force and effect in accordance
with their respective terms. The amendments, modifications and consents set
forth herein shall be limited precisely as provided for herein, and shall not be
deemed to be a waiver of, amendment of, consent to or modification of any other
term or provision of the Credit Agreement or of any term or provision of any
other Loan Document or other instrument referred to therein or herein, or of any
transaction or further or future action on the part of the Borrower or any other
Person which would require the consent of the Agents or any of the Lenders under
the Credit Agreement or any such other Loan Document or instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 3
to be executed by their respective officers hereunto duly authorized as of the
day and year first above written.
DECISIONONE CORPORATION
By:
Title:
DLJ CAPITAL FUNDING, INC.,
as the Syndication Agent
and as Lender
By:
Title:
NATIONSBANK OF TEXAS, N.A.,
as the Administrative Agent
and as Lender
By:
Title:
BANKBOSTON, N.A.,
as the Documentation Agent
and as Lender
By:
Title:
LENDERS:
BANK OF MONTREAL
By: ___________________________
Name:
Title:
THE BANK OF NOVA SCOTIA
By:________________________________
Name:
Title:
BANK OF TOKYO-MITSUBISHI TRUST
COMPANY
By: _______________________________
Name:
Title:
BANQUE FRANCAISE DU COMMERCE
EXTERIEUR
By: _____________________________
Name:
Title:
CORESTATES BANK, N.A.
By: _____________________________
Name:
Title:
CREDIT LYONNAIS NEW YORK BRANCH
By: ____________________________
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO
By: _____________________________
Name:
Title:
THE FUJI BANK, LIMITED
NEW YORK BRANCH
By: ____________________________
Name:
Title:
IMPERIAL BANK, A CALIFORNIA BANKING
CORPORATION
By: ____________________________
Name:
Title:
THE LONG-TERM CREDIT BANK OF JAPAN,
LIMITED, NEW YORK BRANCH
By: _____________________________
Name:
Title:
XXXXXX BANK LTD. - NEW YORK BRANCH
By: ____________________________
Name:
Title:
THE MITSUBISHI TRUST AND BANKING
CORPORATION
By: ____________________________
Name:
Title:
PNC BANK, NATIONAL ASSOCIATION
By: __________________________
Name:
Title:
BEAR, XXXXXXX INVESTMENT
PRODUCTS INC.
By: ___________________________
Name:
Title:
THE SUMITOMO BANK, LIMITED,
NEW YORK BRANCH
By: ____________________________
Name:
Title:
XXXXX FARGO BANK, N.A.
By: ____________________________
Name:
Title:
CAPTIVA FINANCE LTD.
By: ____________________________
Name:
Title:
CAPTIVA II FINANCE LTD.
By: ____________________________
Name:
Title:
KZH HOLDING CORPORATION III
By: ____________________________
Name:
Title:
INDOSUEZ CAPITAL FUNDING III, LIMITED
By: Indosuez Capital Luxembourg,
as Collateral Manager
By: _____________________
Name:
Title:
SENIOR DEBT PORTFOLIO
By: Boston Management and Research,
as Investment Advisor
By: _________________________
Name:
Title:
CYPRESSTREE INVESTMENT PARTNERS I,
LTD.,
By: CypressTree Investment Management
Company, as Portfolio Manager
By: ____________________________
Name:
Title:
PARAMOUNT COMPANY
By: Pilgrim America Investments, Inc.
As its Investment Manager
By: ____________________________
Name:
Title:
By: PPM AMERICA, INC., as attorney
in fact,
on behalf of Xxxxxxx National Life
Insurance Company
By: _____________________________
Name:
Title:
CIBC INC.
By: ____________________________
Name:
Title:
DEEPROCK & COMPANY
By: Xxxxx Xxxxx Management
as Investment Advisor
By: ___________________________
Name:
Title:
CRESCENT/MACH I PARTNERS, L.P.
By: TCW Asset Management Company
Its Investment Manager
By: _________________________
Name:
Title:
XXX XXXXXX AMERICAN CAPITAL PRIME
RATE INCOME TRUST
By: _____________________________
Name:
Title:
NEW YORK LIFE INSURANCE COMPANY
By: ____________________________
Name:
Title:
NEW YORK LIFE INSURANCE AND
ANNUITY CORPORATION
By: ____________________________
Name:
Title:
PRIME INCOME TRUST
By: ___________________________
Name:
Title:
KZH-ING-I CORPORATION
By: ____________________________
Name:
Title:
ROYALTON COMPANY
By: Pacific Investment Management
Company, as its Investment
Advisor
By: _______________________
Name:
Title:
DELANO COMPANY
By: Pacific Investment Management
Company, as its Investment
Advisor
By: __________________________
Name:
Title:
DEBT STRATEGIES FUND, INC.
By: __________________________
Name:
Title:
ALLSTATE INSURANCE COMPANY
By: ___________________________
Name:
Title:
GCB INVESTMENT PORTFOLIO
by CITIBANK, N.A.
By: __________________________
Name:
Title:
KZH-SOLEIL CORPORATION
By: _________________________
Name:
Title:
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY
By: __________________________
Name:
Title:
FLOATING RATE PORTFOLIO
By: Chancellor LGT Senior Secured
Management Inc., as attorney
in fact
By: __________________________
Name:
Title:
KZH-CRESCENT CORPORATION
By: ________________________
Name:
Title:
CONTINENTAL ASSURANCE COMPANY
SEPARATE ACCOUNT (E)
By: TCW Asset Management Company
as Attorney-in-Fact
By: __________________________
Name:
Title:
By: ________________________
Name:
Title:
ARCHIMEDES FUNDING, L.L.C.
By: ING Capital Advisors Inc.,
as Collateral Manager
By: __________________________
Name:
Title:
MELLON BANK, N.A.
By: _________________________
Name:
Title:
BANKBOSTON, N.A.
By: ___________________________
Name:
Title:
Xxxxxxx Xxxxx Global Investment
Series:
INCOME STRATEGIES PORTFOLIO
By: Xxxxxxx Xxxxx Asset Management,
L.P., as Investor Advisor
By: _________________________
Name:
Title:
XXXXXXX XXXXX SENIOR FLOATING RATE
FUND, INC.
By: __________________________
Name:
Title:
OCTAGON CREDIT INVESTORS LOAN
PORTFOLIO (a unit of the Chase
Manhattan Bank)
By: __________________________
Name:
Title:
XXX XXXXXX CLO I, LIMITED
By: ___________________________
Name:
Title:
OSPREY INVESTMENTS PORTFOLIO
by CITIBANK, N.A., as Manager
By: _______________________
Name:
Title:
KZH-PAMCO CORPORATION
By: _____________________
Name:
Title:
CREDIT SUISSE FIRST BOSTON INC.
By: _________________________
Name:
Title:
