EXHIBIT 10.2
SECOND AMENDMENT TO
CREDIT AGREEMENT
This Second Amendment to Credit Agreement, dated as of September 18,
2003 (the "Amendment") amends that certain Credit Agreement, dated as of July 2,
2002 (the "Original Credit Agreement"), by and among XXXXX & CO., INC., a
Delaware corporation (the "Parent Borrower"), FLEET NATIONAL BANK and the other
lending institutions listed on Schedule 1 to the Credit Agreement (each a
"Lender", and collectively, the "Lenders"), FLEET NATIONAL BANK, as Agent for
the Lenders, JPMORGAN CHASE BANK, as Documentation Agent (the "Documentation
Agent"), and WACHOVIA BANK, NATIONAL ASSOCIATION, as Syndication Agent (the
"Syndication Agent"), as previously amended by the First Amendment to Credit
Agreement, dated as of March 28, 2003 (the Original Credit Agreement as amended
by such amendment is referred to as the "Credit Agreement").
WHEREAS, in accordance with the terms and provisions of the Credit
Agreement, Parent Borrower has requested that the Lenders approve the terms,
provisions and issuance of the "____% Convertible Subordinated Debentures" (the
"Subordinated Debentures") to be issued by the Company pursuant to an Indenture
between Parent Borrower and The Bank of New York, as Trustee, in the form
attached hereto as Exhibit A (the "Indenture");
WHEREAS, the Lenders have agreed, subject to the terms and conditions
set forth in this Amendment (including, without limitation, the amendment of
certain provisions of the Credit Agreement) to approve the terms, provisions and
the issuance of the Subordinated Debentures pursuant to the Indenture,
NOW, THEREFORE, in consideration of these premises, the promises,
mutual covenants and agreements contained in this Amendment and fully intending
to be legally bound hereby, the parties hereby agree as follows:
1. CAPITALIZED TERMS.
Terms used in this Amendment which are not defined herein, but which
are defined in the Credit Agreement, shall have the same respective meanings
herein as therein.
2. AMENDMENT TO CREDIT AGREEMENT.
Subject to the satisfaction of the conditions set forth in Section 6
below, the Credit Agreement is hereby amended as follows:
2.1 Definition of Note Purchase Agreement. The definition of "Note
Purchase Agreement" is hereby amended and restated in its
entirety as follows:
"NOTE PURCHASE AGREEMENT: collectively, the, separate
and several, Note Purchase Agreements, each dated
January 30, 2002, as amended by a First Amendment,
dated as of July 3, 2002, a Second Amendment dated as
of March 28, 2003, between Parent Borrower, on the
one hand, and certain purchasers, on the other hand,
and as may be further amended from time
to time, relating to the sale by Parent Borrower of:
$25,000,000 aggregate principal amount of its 6.90%
Senior Notes, Series A, due January 30, 2007;
$28,000,000 aggregate principal amount of its 7.31%
Senior Notes, Series B, due January 30, 2012; and
$22,000,000 aggregate principal amount of its 7.85%
Senior Notes, Series C, due January 30, 2012."
2.2 Amendment of Section 8.3. Section 8.3 is hereby amended and
restated in its entirety as follows:
"8.3 LEVERAGE RATIO.
Permit (i) the Leverage Ratio at any time
during a time period set forth below to be
more than the ratio set forth below next to
such time period:
Time Period Leverage Ratio
----------- --------------
(Dates Inclusive)
-----------------------------------------------------------------------------
January 1, 2003 to March 31, 2003 3.10 to 1.0
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April 1, 2003 to June 30, 2003 3.90 to 1.0
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July 1, 2003 to September 30, 2003 3.25 to 1.0
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October 1, 2003 to December 31, 2003 2.75 to 1.0
-----------------------------------------------------------------------------
January 1, 2004 to March 31, 2004 3.00 to 1.0
-----------------------------------------------------------------------------
April 1, 2004 and thereafter 2.75 to 1.0; or
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(ii) the Senior Leverage Ratio at any time
after the Amendment Effective Date (as
defined in the Second Amendment to this
Credit Agreement dated September 18, 2003)
to be more than 2.5 to 1.0."
2.3 Amendment of Section 8.15. Section 8.15 is hereby amended by
amending and restating clause (c) thereof in its entirety as
follows:
"(c) Contingent Obligations with respect to
or constituting Indebtedness permitted
pursuant to Section 8.5 hereof (other than
Contingent Obligations of any Subsidiary
with respect to Indebtedness permitted
pursuant to Section 8.5(d))."
2.4 Amendment of Section 8.16. Section 8.16 is hereby amended and
restated in its entirety as follows:
"8.16 PAYMENTS AND PREPAYMENTS OF
SUBORDINATED INDEBTEDNESS. 8.16 PAYMENTS AND
PREPAYMENTS OF SUBORDINATED INDEBTEDNESS.
Purchase, redeem, retire or otherwise
acquire for value, other than by issuance of
shares of Capital Stock of a Credit Party,
or set apart any money for a sinking,
defeasance or other analogous fund (or
permit any Subsidiary to do any of the
foregoing) for the
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purchase, redemption, retirement or other
acquisition of, or make (or permit any
Subsidiary to make) any voluntary payment or
prepayment of the principal of, or interest
on, or any other amount owing in respect of,
any Subordinated Indebtedness (or make any
payment or distribution whatsoever with
respect to any Capital Stock issued or
issuable upon conversion of any Subordinated
Indebtedness, other than if such Capital
Stock is issued and outstanding and is
publicly traded common stock of Parent
Borrower, (a) dividends or other
distributions with respect thereto paid at
the same rate and on the same terms as paid
to all holders of such common stock, or (b)
acquisitions thereof as part of a
broad-based repurchase program of the
Company's publicly traded common stock that
is not specifically targeted to, and in
which the holders of such common stock
received upon conversion, or their
Affiliates, do not disproportionately
participate) except for regularly scheduled
payments of principal and interest in
respect thereof required pursuant to the
instruments evidencing such Subordinated
Indebtedness to the extent expressly
approved by the Required Lenders. "
2.5 New Section 8.19. Article 8 is hereby further amended by
adding a new Section 8.19 thereto as follows:
"8.19 MODIFICATION OF SUBORDINATED
INDEBTEDNESS. Without the prior written
approval thereto of the Required Lenders,
amend or modify the terms and provisions of
any Subordinated Indebtedness (a) relating
to the subordination of such Subordinated
Indebtedness to the prior payment in full of
the Senior Indebtedness or (b) in any other
material respect. Notwithstanding the
foregoing, the written approval of the
Required Lenders shall not be required with
respect to any such amendment or
modification (which is not described in
clause (a) immediately above) that: (i)
reduces, or extends the date of payment of,
the principal (exclusive of prepayments) of
or interest on any such Subordinated
Indebtedness; or (ii) reduces the
restrictions on the Parent Borrower and its
Subsidiaries, so long as such reduction is
not in violation of any of the Loan
Documents.
2.6 Amendment of Exhibit E. Exhibit E to the Credit Agreement,
Form of Compliance Certificate, is hereby amended as follows:
"(a) The Form of Compliance Certificate
itself is hereby amended so that paragraph
number '1' thereof is amended and restated
in its entirety as follows:
'1. The Leverage Ratio and the Senior
Leverage Ratio as of _________ (the
"Determination Date") is ______ . ______:
1.00 and _______._______: 1.00,
respectively, as set forth on Schedule 1;'
and
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(b) Schedule 1 to the Compliance
Certificate is hereby amended and restated
to read the same as Schedule 1 attached
hereto."
3. APPROVAL OF SUBORDINATED DEBENTURES.
Subject to this Amendment becoming effective upon the satisfaction of
the conditions set forth in Section 6 below, the issuance by the Parent Borrower
of up to $90,000,000 principal amount of Subordinated Debentures issued
pursuant, to the Indenture in the form attached hereto as Exhibit A, is hereby
approved as Subordinated Indebtedness.
4. REAFFIRMATION OF GUARANTY.
Each of the Guarantors hereby reaffirms each of its continuing
obligations to the Agent and the Lenders under the Guaranty and agrees that
neither this Amendment, the transactions contemplated by this Amendment nor any
further agreements or arrangements whatsoever relating to the Credit Agreement
shall in any way affect the validity and enforceability of the Guaranty or
reduce, impair, or discharge the obligations of any of the Guarantors
thereunder.
5. REPRESENTATIONS, WARRANTIES AND COVENANTS.
Parent Borrower represents, warrants and agrees that:
5.1 Representations in Credit Agreement. Each of the
representations and warranties made by Parent Borrower in the
Credit Agreement is true, correct and complete on and as of
the date hereof with the same full force and effect as if each
of such representations and warranties had been made by the
Parent Borrower on the date hereof and in this Amendment
(except to the extent such representations and warranties
expressly relate to an earlier date).
5.2 No Default or Event of Default. No Default or Event of Default
exists on the date of this Amendment (after giving effect to
all of the arrangements and transactions contemplated by this
Amendment and the issuance of the Subordinated Debentures as
contemplated herein).
5.3 Binding Effect of Documents; Amendment as Loan Document. This
Amendment, the Subordinated Debentures and the Indenture being
executed by the Credit Parties in connection herewith have
been duly authorized, executed and delivered by each Credit
Party and are in full force and effect as of the date hereof
and the agreements and obligations of each such Credit Party
contained herein and therein constitute the legal, valid, and
binding obligations of each Credit Party enforceable against
such Credit Party in accordance with their respective terms,
except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally. This
Amendment constitutes a Loan Document.
5.4 Use of Proceeds. It shall use all of the "Net Proceeds" (as
hereinafter defined) from the issuance and sale of the
Subordinated Debentures as follows:
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(a) At least $50,000,000 shall be used to prepay
the principal amount of the Revolving Credit
Loans in accordance with Section 2.7(a) of
the Credit Agreement;
(b) Next, Net Proceeds shall be used to pay the
interest required to be paid, pursuant to
Section 2.7(c) of the Credit Agreement, with
respect to such prepayment of the Revolving
Credit Loans and the fees and expenses of
the Agent and the Lenders in connection with
the execution, delivery and performance of
this Amendment, including, without
limitation, the Facility Fee required to be
paid pursuant to Section 3.2(a) of the
Credit Agreement;
(c) Next, up to $25,000,000 of Net Proceeds may
be used to prepay the notes issued pursuant
to the Note Purchase Agreement (including
principal, interest and fees associated with
such prepayment); and
(d) Then, the Net Proceeds shall be used to
further prepay the principal amount of
Revolving Credit Loans, in accordance with
Section 2.7(a) of the Credit Agreement,
together with interest required to be paid,
pursuant to Section 2.7(c) of the Credit
Agreement, and other fees and expenses in
connection with such prepayment.
For purposes of this Amendment, (i) "Net Proceeds" shall mean
the proceeds from the issuance and sale of the Subordinated
Debentures after deducting all placement agent fees and
expenses and all out-of-pocket legal, accounting and other
costs and expenses incurred in connection therewith; and (ii)
to the extent the Subordinated Debentures are issued in more
than one traunch, the provisions of Sections 5.4 and 5.5 shall
be applied on a cumulative basis.
5.5 Reduction of Aggregate Commitment Amount. The Aggregate
Commitment Amount shall be permanently reduced, pursuant to
Section 2.6(a) of the Credit Agreement, by the amount of the
principal prepayment of Revolving Credit Loans pursuant to
Sections 5.4(a) and (d); provided, however, that (i) if such
amount exceeds $75,000,000, Parent Borrower shall not be
required to reduce the Aggregate Commitment Amount by more
than $75,000,000; and (ii) the amount by which the Aggregate
Commitment Amount would otherwise have been reduced pursuant
to this Section 5.5 shall be decreased by the principal amount
of a Revolving Credit Loan, the Borrowing Date of which is on
or before the 15th Business Day immediately following the
Amendment Effective Date, to the extent (x) the principal
amount of such Revolving Credit Loan does not exceed
$25,000,000, (y) the Agent receives evidence satisfactory to
it that the proceeds of such Revolving Credit Loan will be
used to immediately prepay (or satisfy a put-option with
respect to) the notes issued pursuant to the Note Purchase
Agreement), and (z) the amount by which the Aggregate
Commitment Amount is reduced pursuant to this Section 5.5 is
not decreased below $50,000,000. A prepayment of the notes
issued pursuant to the Note Purchase Agreement, pursuant to
item (ii) above, shall be considered a prepayment pursuant to
Section 5.4(c) of this Amendment for purposes of the
limitation set forth therein.
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6. CONDITIONS TO EFFECTIVENESS.
This Amendment shall become effective on the first date when the
following conditions are met (the "Amendment Effective Date"):
6.1 Counterparts to Amendment. The Agent shall have received
counterparts hereof signed by the Required Lenders and all of
the Credit Parties (or, in the case of any Required Lender as
to which an executed counterpart shall not have been received,
the Agent shall have received in form satisfactory to it a
telecopy or other written confirmation from such party of
execution of a counterpart hereof by such party);
6.2 Amendment Fee. The Agent shall have received payment, for the
account of each of the Lenders executing and delivering a
counterpart of this Agreement (to be disbursed among them, pro
rata, in accordance with their respective Commitment
Percentages), of an amendment fee in an amount equal to
$175,000;
6.3 Indenture and Subordinated Debentures. The Agent shall have
received evidence satisfactory to it that the Indenture has
been executed by all of the parties thereto, and that
Subordinated Debentures, in the form attached to said
Indenture, aggregating at least $50,000,000 in principal
amount, have been issued pursuant thereto;
6.4 Prepayment of Revolving Credit Loans. The Agent shall have
received, pursuant to Section 2.7 of the Credit Agreement, a
prepayment of the Revolving Credit Loans, in accordance with
Sections 2.7(a) and (c) thereof and Section 5.4 of this
Amendment, in the principal amount of at least $50,000,000 and
the Aggregate Commitment Amount shall have been permanently
reduced in accordance with Section 5.5 of this Amendment. The
Agent shall have received payment of the Facility Fee,
pursuant to Section 3.2(a) of the Credit Agreement in
connection with such reduction and prepayment and all other
fees and expenses payable in connection therewith required by
the Credit Agreement;
6.5 Prepayment of Other Senior Indebtedness. The Agent shall have
received evidence satisfactory to it that the Net Proceeds
from the issuance and sale of the Subordinated Debentures that
remain after application in accordance with Sections 5.4(a)
and (b) of this Amendment shall have been applied to the
prepayment of the notes issued pursuant to the Note Purchase
Agreement in accordance with Section 5.4(c) of this Amendment;
6.6 Other Fees and Expenses. The Agent shall have received payment
of all other costs, fees and expenses (including, without
limitation, reasonable legal fees and expenses for which
invoices shall have been submitted to the Parent Borrower) and
other compensation payable to it on or prior to the Amendment
Effective Date in connection with the Loan Documents; and
6.7 Additional Documents. The Agent shall have received all
documents it may reasonably request relating to the corporate
or other authority for this Amendment and the other documents
related thereto, and any other matters relevant hereto, all in
form and substance satisfactory to the Agent,
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provided that this Amendment shall not become effective or be binding upon any
party hereto unless all of the foregoing conditions are satisfied not later than
October 1, 2003. Promptly after the Amendment Effective Date occurs, the Agent
shall notify the Parent Borrower and the Lenders thereof, and such notice shall
be conclusive and binding on all parties hereto.
7. RATIFICATION; MISCELLANEOUS.
Except as expressly amended hereby, the Credit Agreement and all
documents, instruments and agreements related thereto are hereby ratified and
confirmed in all respects. All references to the Credit Agreement in any Loan
Document or related agreement or instrument shall hereafter refer to the Credit
Agreement as amended hereby.
8. NO IMPLIED WAIVER.
Except as expressly provided herein, nothing contained herein shall
constitute a waiver of, impair or otherwise affect any Obligations, any other
obligations of any of the Credit Parties or any right of the Agent or any Lender
consequent thereon.
9. EXPENSES.
Regardless of whether the Amendment Effective Date ever occurs, Parent
Borrower agrees to pay all reasonable fees and expenses incurred by Agent in
connection with the preparation and negotiation of this Amendment, including,
without limitation, the reasonable fees and expenses of Agent's counsel.
10. COUNTERPARTS.
This Amendment may be executed in one or more counterparts, each of
which shall be deemed an original but which together shall constitute one and
the same instrument.
11. GOVERNING LAW.
THIS AMENDMENT SHALL FOR ALL PURPOSES BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO
PRINCIPLES OF CONFLICTS OF LAW).
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IN WITNESS WHEREOF, the parties have executed this Amendment to Credit
Agreement as of the day first written above.
XXXXX & CO., INC., Parent Borrower
By: /s/ C. Xxxx Xxxxxxxx
-----------------------------------------
Name: Xxxx Xxxxxxxx
Title: Senior Vice President and Chief Financial Officer
FLEET NATIONAL BANK, as a Lender and as Agent
By: /s/ Xxxxx X. Bardwig
-----------------------------------------
Name: Xxxxx X. Bardwig
Title: Senior Vice President
JPMORGAN CHASE BANK, as a Lender
and as Documentation Agent
By: /s/ Xxxxx Xxxxxxxxxx
-----------------------------------------
Name: Xxxxx Xxxxxxxxxx
Title: Vice President
WACHOVIA BANK, NATIONAL ASSOCIATION,
as a Lender
By: /s/ Xxxxxxx Xxxxxx
-----------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Assistant Vice President
HSBC BANK USA, as a Lender
By: /s/ Xxxxx Xxxxx
-----------------------------------------
Name: Xxxxx Xxxxx
Title: Vice President
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THE ROYAL BANK OF SCOTLAND, PLC, as a Lender
By: /s/ Xxxxxx Xxxxx
-----------------------------------------
Name: Xxxxxx Xxxxx
Title: Senior Vice President
U.S. Bank N.A., as Lender and successor to Firstar Bank
By: /s/ Xxxxx X. Xxxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President
THE BANK OF NEW YORK, as a Lender
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
GUARANTORS:
XXXXX BUSINESS COMMUNICATIONS, INC.,
a New York corporation
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
XXXXX BUSINESS SOLUTIONS, INC.,
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
XXXXX ENTERPRISE SOLUTIONS, L.L.C.,
a New York limited liability company
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
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XXXXX OF ATLANTA, INC.,
a Georgia corporation
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
XXXXX OF BOSTON, INC.,
a Massachusetts corporation
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
XXXXX OF CHICAGO, INC.,
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
XXXXX OF CLEVELAND, INC.,
a Ohio corporation
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
XXXXX OF DALLAS LIMITED PARTNERSHIP,
a Delaware limited partnership
By: XXXXX OF DALLAS, INC.,
a Delaware corporation, as General Partner
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
XXXXX OF LOS ANGELES, INC.,
a California corporation
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
XXXXX OF NEW YORK CITY, L.L.C.,
a New York limited liability company
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
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XXXXX OF PHOENIX, INC.,
an Arizona corporation
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
XXXXX OF SOUTH BEND, INC.,
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
BGS COMPANIES, INC.,
a Delaware corporation, (also as successor by merger
with Xxxxx Localization, Inc., a Delaware corporation)
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
XXXXX TRANSLATION SERVICES, LLC,
a New York limited liability company
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
DOCUMENT MANAGEMENT SERVICES, INC.,
a Massachusetts corporation
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
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Schedule 1 to Compliance Certificate
dated __/__/__
CALCULATION OF THE LEVERAGE RATIO AND SENIOR LEVERAGE RATIO
1. Funded Debt as of the Determination Date. $____________
2. Subordinated Indebtedness as of the
Determination Date. $____________
3. Funded Debt excluding Subordinated
Indebtedness as of the Determination Date. $____________
4. Consolidated Net Income from continuing
operations, for the period comprised of the
four fiscal quarters ended on the
Determination Date (or if the Determination
Date is not the last day of a fiscal quarter,
for the period of the four fiscal quarters
immediately preceding the Determination Date) $____________
5. All Interest Expense of Parent Borrower and
its Subsidiaries to the extent utilized in
determining Item 4 $____________
6. Provision for federal, state and local income
taxes of the Parent Borrower and its
Subsidiaries, to the extent utilized in
determining Item 4 $____________
7. Depreciation and amortization (other than
amortization of debt discount) to the extent
utilized in determining Item 4 $____________
8. Extraordinary items of the Parent Borrower
and its Subsidiaries (including, but not
limited to: restructuring, integration and
asset impairment charges; expenses related to
acquisitions; gains or losses on asset sales;
transaction related expenses; royalty expense
borne by Seller within the trailing 12
months; provisions for doubtful accounts (net
of write-offs); and provision for deferred
employee compensation and retirement
benefits) in each case to the extent utilized
in determining Item 4 $____________
9. All other non-cash income, expense, gains and
losses to the extent utilized in determining
Item 4 and not otherwise added or subtracted,
as applicable, by the foregoing items 5
through 8
10. Consolidated EBITDA (Item 4 plus the sum of
Items 5 through 7 minus or plus, as
applicable, Items 8 and 9) $____________
11. Leverage Ratio
(Item 1 : Item 10) _._:1.00
12. Senior Leverage Ratio
(Item 3: Item 10) _._:1.00
13. Maximum permitted Leverage Ratio pursuant to
Section 8.3 of the Credit Agreement:
(a) January 1, 2003 to March 31, 2003 3.10 to 1.0
(b) April 1, 2003 to June 30, 2003 3.90 to 1.0
(c) July 1, 2003 to September 30, 2003 3.25 to 1.0
(d) October 1, 2003 to December 31, 2003 2.75 to 1.0
(e) January 1, 2004 to March 31, 2004 3.00 to 1.0
(f) April 1, 2004 and thereafter 2.75 to 1.0
14. Maximum permitted Senior Leverage Ratio
pursuant to Section 8.3 of the Credit
Agreement: 2.5:1.00
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