FIRST AMENDMENT TO AMENDED AND RESTATED SENIOR SECURED CREDIT AGREEMENT
This FIRST AMENDMENT TO AMENDED AND RESTATED SENIOR SECURED CREDIT
AGREEMENT (this "First Amendment") is entered into as of June 28, 1999 by and
among Cotelligent, Inc., a Delaware corporation ("CI"), and each of the
Consolidated Subsidiaries of CI (each a "Co-Borrower"; sometimes herein CI and
the Co-Borrowers are collectively referred to as the "Borrowers"), and the banks
and other financial institutions party to the Credit Agreement (collectively the
"Lenders" and each individually a "Lender"), BankBoston, N.A. in its capacity as
L/C Issuer (in such capacity, together with any successors thereto in such
capacity, the "L/C Issuer"), BankBoston, N.A. in its capacity as Swingline
Lender (in such capacity, together with any successors thereto in such capacity,
the "Swingline Lender"), and BankBoston N.A., as administrative agent for and
representative of the Lenders (in such capacity, BankBoston N.A. or any
successor in such capacity is referred to herein as the "Agent"). The Lenders,
the L/C Issuer and the Agent are collectively referred to herein as the "Lender
Parties" and each individually as a "Lender Party."
RECITALS
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A. Borrowers and Lender Parties are parties to that certain Amended and
Restated Senior Secured Credit Agreement dated as of March 12, 1999, (the
"Credit Agreement"), pursuant to which the Lenders agreed to make available to
CI certain credit facilities, and certain related loan documents (the "Loan
Documents").
B. Borrowers and the Lender Parties have agreed to make certain amendments
to the Credit Agreement, subject to the conditions and in reliance on the
representations and warranties set forth below.
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, each Lender Party and Borrowers
hereby agree as follows:
AGREEMENT
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1. Defined Terms; Section References. Initially capitalized terms used but
not defined in this First Amendment shall have the meanings assigned to such
terms in the Credit Agreement. All "Section" references herein are to sections
of the Credit Agreement unless otherwise specified.
2. Amendment to Section 1.1 of the Credit Agreement. Section 1.1 of the
Credit Agreement shall be amended by inserting the following new definition of
"Net Loss":
""Net Loss" means, for the relevant period, consolidated net loss after
taxes, determined in accordance with GAAP, of the Borrowers for such period
taken as a single accounting period, provided that there shall be excluded
therefrom (i) the income (or loss) of any Person (other than a Borrower) in
which any Borrower has an equity interest, except to the extent of dividends or
other distributions actually paid to such Borrower by such Person during such
period, (ii) the undistributed income of any Consolidated Subsidiary to the
extent that the declaration or payment of dividends or other distributions by
such Consolidated Subsidiary is not at the time permitted by the terms of its
charter or Contractual Obligations or Applicable Law binding on such
Consolidated Subsidiary, and (iii) the income (or loss) of any Consolidated
Subsidiary that is included in the calculation of Net Income but is attributable
to an owner of Capital Stock of such Consolidated Subsidiary other than CI."
3. Amendment to Section 6.3 of the Credit Agreement. Section 6.3 of the
Credit Agreement is hereby amended and restated to provide in its entirety as
follows:
"Section 6.3. Restricted Payments. No Borrower shall, nor shall any
Borrower permit any Consolidated Subsidiary to, directly or indirectly, declare,
pay or make, or agree to declare, pay or make, any Restricted Payment.
Notwithstanding anything to the contrary in the preceding sentence, during any
twelve month period commencing on or after the Closing Date, CI may with the
prior written consent of the Required Lenders, directly or indirectly, redeem,
purchase or acquire outstanding shares of Capital Stock of CI up to an aggregate
value of $10,000,000 so long as the Leverage Ratio is less than 2.25 to 1.00
after giving effect to any such redemption, purchase or acquisition. If the
Leverage Ratio shall at any time be equal to or greater than 2.25 to 1.00, CI
shall not, directly or indirectly, redeem, purchase or acquire outstanding
shares of Capital Stock of CI until the Borrowers' Leverage Ratio shall be less
than 2.25 to 1.00 . For purposes of this Section 6.3, the amount of any
redemption, purchase or acquisition shall be the amount actually paid to any
stockholder plus any commissions or expenses relating to such redemption,
purchase or acquisition."
4. Amendment to Section 6.5.2 of the Credit Agreement. Section 6.5.2 of the
Credit Agreement is hereby amended and restated to provide in its entirety as
follows:
"6.5.2. Minimum Net Worth. (a) As of the last day of each Fiscal Quarter
ending before June 30, 1999, Net Worth shall not be less than the sum of (i)
$97,006,500, plus (ii) with respect to each Permitted Acquisition which is
accounted for as a "pooling of interests" an amount equal to 100% of the
positive increase in Net Worth as a result of such Permitted Acquisition, plus
(iii) an amount equal to 75% of the cumulative positive Net Income beginning
January 1, 1999, plus (iv) an amount equal to 100% of the net proceeds of all
issuances of Capital Stock by CI on or after January 1, 1999, and (b) beginning
with the Fiscal Quarter ending on June 30, 1999 and for each Fiscal Quarter
thereafter, as of the last day of each such Fiscal Quarter, Net Worth shall not
be less than the sum of (i) 95% of Net Worth as of June 30, 1999 plus (ii) with
respect to each Permitted Acquisition which is accounted for as a "pooling of
interests" and closes after June 30, 1999, an amount equal to 100% of the
positive increase in Net Worth as a result of such Permitted Acquisition, plus
(iii) an amount equal to 75% of the cumulative positive Net Income beginning
July 1, 1999, plus (iv) an amount equal to 100% of the net proceeds of all
issuances of Capital Stock by CI on or after July 1, 1999."
5. Amendment to Section 6.5 of the Credit Agreement. Section 6.5 of the
Credit Agreement shall be amended by inserting the following new Section 6.5.4:
"6.5.4. Maximum Net Loss. Borrowers' Net Loss for the Fiscal Quarter ending
during June 1999, shall not be greater than Eighteen Million Dollars
($18,000,000)."
6. Amendment to Schedule R-1 of the Credit Agreement. Schedule R-1 of the
Credit Agreement is hereby amended and restated to provide in its entirety as
set forth on Schedule R-1 to this First Amendment.
7. Amendment to Schedule 4.3 of the Credit Agreement. Schedule 4.3 of the
Credit Agreement is hereby amended and restated to provide in its entirety as
set forth on Schedule 4.3 to this First Amendment.
8. Amendment Fee. On the date hereof, CI shall pay to Agent, for the
ratable benefit of the Lenders, an amendment fee (the "Amendment Fee") of One
Hundred Twenty Five Thousand Dollars ($125,000).
9. Conditions Precedent to the Effectiveness of this First Amendment.
Lender Parties' obligations under this First Amendment are conditioned upon, and
this First Amendment shall be effective as of June 28, 1999 upon satisfaction in
full of each of the following:
(a) Agent shall have received this First Amendment, duly executed by each
appropriate Person and in form and substance satisfactory to Agent and its
counsel;
(b) Borrowers shall have paid to Agent (i) the Amendment Fee; and (ii) all
amounts then due and payable pursuant to Section 9.1 of the Credit Agreement
which shall have been presented for payment;
(c) All of the representations and warranties of Borrowers contained
herein, in the Credit Agreement and in each other Loan Document shall be true
and correct in all material respects on and as of the effective date of this
First Amendment, as though made on and as of that date (except to the extent
that such representations and warranties expressly relate to an earlier date or
reflect changes brought about by this First Amendment);
(d) Borrowers' Board of Directors shall have authorized Borrowers to
execute and deliver this First Amendment;
(e) No Default or Event of Default shall have occurred and be continuing or
would result from the consummation of the transactions contemplated in this
First Amendment; and
(f) All other documents, certificates, consents and opinions required by
Agent in connection with the transactions contemplated by this First Amendment
shall have been executed and delivered in form and substance satisfactory to
Agent in its sole and absolute discretion.
10. Representations and Warranties. In order to induce Lender Parties to
enter into this First Amendment, Borrowers make the following representations
and warranties:
(a) The representations and warranties contained in the Credit Agreement
(and in the Schedules thereto) and each of the other Loan Documents (and in the
Schedules thereto) are true, correct and complete in all material respects at
and as of the effective date of this First Amendment (except to the extent that
such representations and warranties expressly relate to an earlier date or
reflect changes brought about by this First Amendment); and
(b) This First Amendment and all other agreements and documents executed by
Borrowers in connection herewith have been duly executed and delivered by
Borrowers and constitute the legal, valid and binding obligations of Borrowers,
enforceable against Borrowers in accordance with their terms, except as
enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws relating to the enforcement of the rights of creditors
generally, or the exercise of judicial discretion with respect to equitable
remedies.
11. References. All references in the Credit Agreement to "this Agreement",
"hereof", "herein", "hereto", or words of similar import, and all references in
all other Loan Documents to "the Credit Agreement" or "the Amended and Restated
Credit Agreement" shall be, and shall be deemed to be for all purposes,
references to the Credit Agreement as amended.
12. Credit Agreement and Other Loan Documents Otherwise Not Affected.
Except as expressly amended pursuant to this First Amendment, the Credit
Agreement and each of the other Loan Documents shall remain unchanged and in
full force and effect and are hereby ratified and confirmed in all respects.
Each Lender Party continues to reserve any and all rights and remedies under the
Credit Agreement and each of the other Loan Documents, and no failure, delay or
discontinuance on the part of any Lender Party in exercising any right, power or
remedy thereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, power or remedy preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
This First Amendment and the Credit Agreement shall be read together, as one
document.
13. Binding Effect. This First Amendment shall be binding upon, inure to
the benefit of and be enforceable by Borrowers and each Lender Party and their
respective successors and assigns, as permitted pursuant to the Credit
Agreement.
14. Time of the Essence. Time and exactitude of each of the terms,
obligations, covenants and conditions of this First Amendment are hereby
declared to be of the essence.
15. Governing Law. THIS FIRST AMENDMENT IS A CONTRACT UNDER THE LAWS OF THE
STATE OF CALIFORNIA AND SHALL FOR ALL PURPOSES BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY SUCH LAWS (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE
OF LAW).
16. Counterparts. This First Amendment may be executed in several
counterparts and by each party on a separate counterpart, each of which when
executed and delivered shall be an original, and all of which together shall
constitute one instrument. In proving any matter with respect to this First
Amendment it shall not be necessary to produce or account for more than one such
counterpart signed by the party against whom enforcement is sought.
IN WITNESS WHEREOF, the parties hereto have duly executed this First
Amendment, as of the date first above written.
Agent:
BankBoston, N.A.,
a national banking association,
as Agent, Swingline Lender, L/C Issuer
and a Lender
By: /S/ Xxxxxx X. XxxXxxxxxx
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Name: Xxxxxx X. XxxXxxxxxx
Title: Vice President
Lenders:
U.S. Bank,
a national banking association
By: /S/ Xxxxxxx Xxxx
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Name: Xxxxxxx Xxxx
Title: Assistant Vice President
Fleet National Bank,
a national banking association
By: /S/ Xxxxxxx X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx
Title: Assistant Vice President
Bank of America National Trust and
Savings Association, a national banking
association
By:
Name:
Title:
Banque Nationale de Paris
San Xxxxxxxxx Xxxxxx
By: /S/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
Title: Vice President
By: /S/ Xxxxxxx X. XxXxxxxxxxx
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Name: Xxxxxxx X. XxXxxxxxxxx
Title: Vice President
Borrowers:
Cotelligent, Inc.,
a Delaware corporation
By: /S/ Xxxxxxx X. Xxxxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxxxx
Title: Senior Vice President
Cotelligent USA, Inc.,
a California corporation
By: /S/ Xxxxxxxx X. Xxxx
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Name: Xxxxxxxx X. Xxxx
Title: Secretary
Fastech, Inc.,
a Pennsylvania corporation
By: /S/ Xxxxxxxx X. Xxxx
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Name: Xxxxxxxx X. Xxxx
Title: Secretary
The Xxxxx Companies, Inc.,
a Florida corporation
By: /S/ Xxxxxxxx X. Xxxx
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Name: Xxxxxxxx X. Xxxx
Title: Secretary
First Amendment
Schedule R-1
Schedule R-1
Cotelligent USA, Inc.:
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Phone: (000) 000-0000
Fax:(000) 000-0000
Fastech, Inc.:
000 Xxxxxxx
Xxxxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
The Xxxxx Companies, Inc.:
000 Xxxxx Xxxxxx Xxxx Xxxxx
Xxxxx 000
Xxxxxxxxxxx, XX 00000-0000
Phone: (000) 000-0000
Fax: (000) 000-0000
First Amendment
Schedule 4.3
SCHEDULE 4.3
SUBSIDIARIES AND OTHER INVESTMENTS
SUBSIDIARIES
NAME OF COMPANY STATE OF INCORPORATION OWNERSHIP INTEREST
1. Cotelligent, Inc. Delaware Parent
2. The Xxxxx Companies, Inc. Florida 100% by Cotelligent USA, Inc.
3. Fastech, Inc. Pennsylvania 100% by Cotelligent USA, Inc.
4. Cotelligent USA, Inc. California 100% by Cotelligent, Inc.
OTHER INVESTMENTS
None.
