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EXHIBIT 10.14
AMENDMENT NO. 1 TO AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDMENT NO. 1 TO AMENDED AND RESTATED CREDIT AGREEMENT (this
"Amendment"), dated as of March 17, 1998, is entered into by and among PERSONNEL
GROUP OF AMERICA, INC. (the "Borrower"), CERTAIN SUBSIDIARIES OF THE BORROWER
IDENTIFIED ON THE SIGNATURES PAGES HERETO (the "Guarantors"), EACH PERSON
IDENTIFIED AS AN "EXISTING LENDER" ON THE SIGNATURE PAGES HERETO (the "Existing
Lenders"), EACH PERSON IDENTIFIED AS A "NEW LENDER" ON THE SIGNATURE PAGES
HERETO (the "New Lenders" and, together with the Existing Lenders, the
"Lenders") and NATIONSBANK, N.A., as agent for the Lenders (in such capacity,
the "Agent").
W I T N E S S E T H:
WHEREAS, pursuant to an Amended and Restated Credit Agreement dated as
of June 23, 1997 (the "Existing Credit Agreement") among the Borrower, the
Guarantors, the Existing Lenders and the Agent, the Existing Lenders have
extended commitments to make certain credit facilities available to the
Borrower; and
WHEREAS, the parties hereto have agreed to amend the Existing Credit
Agreement as set forth herein;
NOW, THEREFORE, in consideration of the agreements herein contained,
the parties hereby agree as follows:
PART I
DEFINITIONS
SUBPART 1.1. Certain Definitions. Unless otherwise defined
herein or the context otherwise requires, the following terms used in
this Amendment, including its preamble and recitals, have the following
meanings:
"Amended Credit Agreement" means the Existing Credit
Agreement as amended hereby.
"Amendment No. 1 Effective Date" is defined in
Subpart 4.1.
SUBPART 1.2. Other Definitions. Unless otherwise defined
herein or the context otherwise requires, terms used in this Amendment,
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including its preamble and recitals, have the meanings provided in the
Amended Credit Agreement.
PART II
ASSIGNMENTS AND ASSUMPTIONS
The Existing Lenders hereby sell and assign, without recourse, to the
Lenders, and the Lenders hereby purchase and assume, without recourse, from the
Existing Lenders, effective as of the Amendment No. 1 Effective Date, such
interests in the Existing Lenders' rights and obligations under the Existing
Credit Agreement (including, without limitation, the Commitments of the Existing
Lenders on the Amendment No. 1 Effective Date and the Loans owing to the
Existing Lenders which are outstanding on the Amendment No. 1 Effective Date) as
shall be necessary in order to give effect to the reallocations of the Committed
Amounts and Commitment Percentages effected by the amendment to Schedule 2.1(a)
to the Existing Credit Agreement pursuant to Subpart 3.6. Each of the Lenders
hereby makes and agrees to be bound by all the representations, warranties and
agreements set forth in Section 11.3(b) of the Existing Credit Agreement, except
that this Amendment shall serve in lieu of the assignment agreement referenced
in Section 11.3(b). From and after the Amendment No. 1 Effective Date (i) each
of the Lenders shall be a party to and be bound by the provisions of the Amended
Credit Agreement and, to the extent of the interests assigned hereby, have the
rights and obligations of a Lender thereunder and under the other Credit
Documents and (ii) each of the Existing Lenders shall, to the extent of the
interests assigned hereby, relinquish its rights and be released from its
obligations under the Existing Credit Agreement. The Agent shall record in the
register referred to in Section 11.3(c) of the Existing Credit Agreement on the
Amendment No. 1 Effective Date the information relating to the assignments and
assumptions effected pursuant to this Part II. The Agent hereby agrees (i) that
no transfer fee shall be payable under Section 11.3(b) of the Existing Credit
Agreement or otherwise in connection with the assignments effected pursuant to
this Part II and (ii) to pay to each Lender an amendment fee as separately
agreed to by the Agent and such Lender.
PART III
AMENDMENTS TO EXISTING CREDIT AGREEMENT
Effective on (and subject to the occurrence of) the Amendment No. 1
Effective Date, the Lenders agree with the Credit Parties that the Existing
Credit Agreement shall be amended in accordance with this Part III. Except as so
amended, the Existing Credit Agreement shall continue in full force and effect.
SUBPART 3.1. Amendment to Section 1.1. The pricing grid
contained in the definition of "Applicable Percentage" set forth in
Section
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1.1 of the Existing Credit Agreement is hereby amended in its
entirety to read as follows:
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Applicable
Applicable Percentage for Applicable
Pricing Percentage for Standby Letter of Percentage for
Level Consolidated Leverage Ratio Eurodollar Loans Credit Fee Unused Fee
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I Less than 1.25:1.00 0.500% 0.500% 0.125%
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II Greater than or equal to 1.25:1.00, but 0.750% 0.750% 0.150%
less than 2.25:1.00
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III Greater than or equal to 2.25:1.00, but 1.000% 1.000% 0.225%
less than 3.00:1.00
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IV Greater than or equal to 3.00:1.00, but 1.250% 1.250% 0.250%
less than 3.50:1.00
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V Greater than or equal to 3.50:1.00 1.375% 1.375% 0.350%
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SUBPART 3.2. Further Amendment to Section 1.1. The definition
of "Permitted Acquisition" set forth in Section 1.1 of the Existing
Credit Agreement is hereby amended in its entirety to read as follows:
"Permitted Acquisition" means:
(i) acquisitions by the Borrower or its Subsidiaries
of all or any portion of the capital stock or securities or
all, substantially all or any portion of the assets of any
Person engaged in a business or businesses substantially
similar to any business currently conducted by the Borrower or
any of its Subsidiaries, provided that (A) the purchase price
(including the fair market value of any capital stock of the
Borrower provided as a portion thereof) of any such
acquisition individually does not exceed 25% of Consolidated
Net Worth, (B) the purchase price (excluding the fair market
value of any capital stock of the Borrower provided as a
portion thereof) of any such acquisition individually does not
exceed 12.5% of Consolidated Net Worth, (C) no portion of the
purchase price of any such acquisition shall consist of any
stock other than common stock of the Borrower, (D) such
acquisition is approved by the board of directors of such
Person (if applicable or required), and (E) after giving
effect on a Pro Forma Basis to any such acquisition (including
but not limited to any Indebtedness to be incurred by the
Borrower or any of its Subsidiaries in connection therewith),
(1) no Default or Event of Default would exist hereunder and
(2) one of the following subclauses (x) or (y) is true: (x)
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either the Consolidated Leverage Ratio is less than or equal
to 3.25:1.00 and the Consolidated Senior Leverage Ratio is
less than or equal to 1.75:1.00 or (y) such acquisition occurs
prior to any follow-on equity issuance by the Borrower in an
amount of not less than $75,000,000, but in any event not
later than September 30, 1998, and either (I) such Person
being acquired is listed on Schedule 1.1D and neither the cash
payment at closing nor the scheduled contingent payment in
connection with such acquisition exceeds the applicable
maximum amount set forth on Schedule 1.1D or (II) the purchase
price of such acquisition, together with all other
acquisitions permitted pursuant to this subclause
(i)(E)(2)(y)(II) of the definition of Permitted Acquisition,
is not more than $25,000,000; and
(ii) any merger or consolidation permitted by Section
8.4(b).
As used herein, the "purchase price" of any acquisition shall
include, without duplication, the non-contingent purchase
price, all acquired liabilities, all non-compete payments and
the principal amount of any seller financing, but shall
exclude the contingent purchase price and all fees and
expenses.
SUBPART 3.3. Amendment to Section 2.1(a). The reference to
"ONE HUNDRED TWENTY-FIVE MILLION DOLLARS ($125,000,000)" in Section
2.1(a) of the Existing Credit Agreement is hereby replaced with a
reference to "TWO HUNDRED MILLION DOLLARS ($200,000,000)".
SUBPART 3.4. Amendment to Section 7.11(b). Section 7.11(b) of
the Existing Credit Agreement is hereby amended in its entirety to read
as follows:
7.11 FINANCIAL COVENANTS.
* * *
(b) Consolidated Leverage Ratio. The Consolidated
Leverage Ratio as of the last day of each fiscal quarter shall
be no greater than:
From the Closing Date to, and including, the
last day of the third fiscal quarter of 1998 4.25 : 1.00
At all times after the last day of the third fiscal
quarter of 1998 4.00 : 1.00
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SUBPART 3.5. Addition of Schedule 1.1D. A new Schedule 1.1D in
the form of Schedule 1.1D attached hereto is hereby added to the
Existing Credit Agreement.
SUBPART 3.6. Amendments to Schedule 2.1(a). Schedule 2.1(a) of
the Existing Credit Agreement is hereby deleted in its entirety and a
new schedule in the form of Schedule 2.1(a) attached hereto is
substituted therefor.
PART IV
CONDITIONS TO EFFECTIVENESS
SUBPART 4.1. Amendment No. 1 Effective Date. This Amendment
shall be and become effective as of the date hereof (the "Amendment No.
1 Effective Date") when all of the conditions set forth in this Subpart
4.1 shall have been satisfied, and thereafter this Amendment shall be
known, and may be referred to, as "Amendment No. 1."
SUBPART 4.1.1. Execution of Counterparts of Amendment. The
Agent shall have received counterparts (or other evidence of execution,
including telephonic message, satisfactory to the Agent) of this
Amendment, which collectively shall have been duly executed on behalf
of each of the Borrower, the Guarantors, the Agent and the Lenders.
SUBPART 4.1.2. Delivery of New Promissory Notes. The Agent
shall have received from the Borrower new promissory notes for the
Lenders in the amounts of their respective Commitments under the
Amended Credit Agreement and substantially in the form of the original
Notes under the Existing Credit Agreement (but with notation thereon
that such Notes are given in substitution for and replacement of the
original Notes).
SUBPART 4.1.3. Joinder of New Subsidiaries. The Agent shall
have received from the Borrower, in form and substance satisfactory to
the Agent, (a) a joinder agreement to the Amended Credit Agreement
executed by all direct and indirect subsidiaries of the Borrower that
are not parties to the Existing Credit Agreement (the "New
Subsidiaries"), (b) an amendment to the pledge agreement whereby all of
the capital stock of the New Subsidiaries is pledged to the Agent for
the benefit of the Lenders and (c) such corporate authority documents,
UCC financing statements and other documents as are reasonably
requested by the Agent in connection with the foregoing.
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PART V
MISCELLANEOUS
SUBPART 5.1. Cross-References. References in this Amendment to
any Part or Subpart are, unless otherwise specified, to such Part or
Subpart of this Amendment.
SUBPART 5.2. Instrument Pursuant to Existing Credit Agreement.
This Amendment is a Credit Document executed pursuant to the Existing
Credit Agreement and shall (unless otherwise expressly indicated
therein) be construed, administered and applied in accordance with the
terms and provisions of the Existing Credit Agreement.
SUBPART 5.3. References in Other Credit Documents. At such
time as this Amendment shall become effective pursuant to the terms of
Subpart 4.1, all references in the Credit Documents to the "Credit
Agreement" shall be deemed to refer to the Credit Agreement as amended
by this Amendment.
SUBPART 5.4. Representations and Warranties. The Borrower
hereby represents and warrants that (i) the conditions precedent to the
initial Loans were satisfied as of the Closing Date (assuming
satisfaction of all requirements in such conditions that an item be in
form and/or substance reasonably satisfactory to the Agent or any
Lenders or that any event or action have been completed or performed to
the reasonable satisfaction of the Agent or any Lenders), (ii) the
representations and warranties contained in Section 6 of the Existing
Credit Agreement (as amended by this Amendment) are correct on and as
of the date hereof as though made on and as of such date and after
giving effect to the amendments contained herein and (iii) no Default
or Event of Default exists under the Existing Credit Agreement on and
as of the date hereof and after giving effect to the amendments
contained herein.
SUBPART 5.5. Liens. The Borrower and the Guarantors, as
applicable, affirm the liens and security interests created and granted
in the Credit Documents (including, without limitation, the Pledge
Agreement) and agree that this Amendment shall in no manner adversely
effect or impair such liens and security interests.
SUBPART 5.6. Acknowledgment of Guarantors. The Guarantors
acknowledge and consent to all of the terms and conditions of this
Amendment and agree that this Amendment and all documents executed in
connection herewith do not operate to reduce or discharge the
Guarantors' obligations under the Amended Credit Agreement or the other
Credit Documents. The Guarantors further acknowledge and agree that the
Guarantors have no claims, counterclaims, offsets,
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or defenses to the Credit Documents and the performance of the
Guarantors' obligations thereunder or if the Guarantors did have any
such claims, counterclaims, offsets or defenses to the Credit Documents
or any transaction related to the Credit Documents, the same are hereby
waived, relinquished and released in consideration of the Lenders'
execution and delivery of this Amendment.
SUBPART 5.7. No Other Changes. Except as expressly modified
and amended in this Amendment, all the terms, provisions and conditions
of the Credit Documents shall remain unchanged and shall continue in
full force and effect.
SUBPART 5.8. Counterparts. This Amendment 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.
SUBPART 5.9. Governing Law. THIS AMENDMENT SHALL BE DEEMED TO
BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE
OF NORTH CAROLINA WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW
PRINCIPLES THEREOF.
SUBPART 5.10. Successors and Assigns. This Amendment shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns.
[The remainder of this page has been left blank intentionally]
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This Amendment No. 1 to Amended and Restated Credit Agreement is
executed as of the day and year first written above.
BORROWER: PERSONNEL GROUP OF AMERICA, INC.,
a Delaware corporation
By: /s/ Xxx X. Xxxxxxxx, Xx.
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Name: Xxx X. Xxxxxxxx, Xx.
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Title: Senior Vice President
GUARANTORS: STAFFPLUS, INC.,
a Delaware corporation
PFI CORP.,
a Delaware corporation
INFOTECH SERVICES, INC.,
a North Carolina corporation
XXXXXXXXX SYSTEMS, INC.,
a Virginia corporation
WORD PROCESSING PROFESSIONALS, INC.,
a New York corporation
XXXXX XXXXXX CONSULTING, INC.,
a California corporation
XXXXXXXX-XXXXXX ASSOCIATES, INC.,
a Massachusetts corporation
XXXXX-XXXXX ASSOCIATES, INC.,
a Massachusetts corporation
BAL ASSOCIATES, INC.,
a California corporation
CREATIVE CORPORATE STAFFING, INC.,
a North Carolina corporation
ADVANCED BUSINESS CONSULTANTS, INC.,
a North Carolina corporation
By: /s/ Xxx X. Xxxxxxxx, Xx.
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Name: Xxx X. Xxxxxxxx, Xx.
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Title: Vice President of each of the
above-named Guarantors
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EXISTING
LENDERS: NATIONSBANK, N.A.,
individually in its capacity as a Lender
and in its capacity as Agent
By: /s/ Xxxx X. Xxxxxxxx
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Name: Xxxx X. Xxxxxxxx
Title: Vice President
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, AS SUCCESSOR
BY MERGER TO BANK OF AMERICA ILLINOIS
By: /s/ Xxxxxxx X. XxXxxxxx
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Name: Xxxxxxx X. XxXxxxxx
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Title: Vice President
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BANQUE PARIBAS
By: /s/ Xxxxx X. Xxxxxxxxx
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Name: Xxxxx X. Xxxxxxxxx
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Title: Vice President
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By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
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Title: Vice President
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COMERICA BANK
By: /s/ Xxxxxx X. Xxxxx
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Name: Xxxxxx X. Xxxxx
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Title: Vice President
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CREDIT LYONNAIS ATLANTA AGENCY
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
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Title: First Vice President and Manager
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[Lender Signatures Continue]
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THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ Xxxxx X. McNeek
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Name: Xxxxx X. McNeek
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Title: Authorized Agent
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PNC BANK, NATIONAL ASSOCIATION
By: /s/ Xxxxxx X. Xxxxxxxx, Xx.
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Name: Xxxxxx X. Xxxxxxxx, Xx.
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Title: Vice President
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FIRST UNION NATIONAL BANK
By: /s/ Xxxxx Xxxxxxx
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Name: Xxxxx Xxxxxxx
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Title: Vice President
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NEW
LENDERS: WACHOVIA BANK, N.A.
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
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Title: Vice President
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