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EXHIBIT 10.19
SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT (the "AMENDMENT"), dated as
of July 25, 1997, is between SNELLING & XXXXXXXX, INC. ("BORROWER"), a
Pennsylvania corporation, each of the banks or other lending institutions which
is a party hereto (the "BANKS") and BANKBOSTON, N.A. (formerly known as The
First National Bank of Boston), individually as a Bank (in such capacity,
herein "BANKBOSTON") and as agent for the Banks (in such capacity herein the
"AGENT").
RECITALS:
A. Borrower, BankBoston and Agent have entered into that certain
Credit Agreement dated as of January 31, 1996 (as amended by that certain
amendment letter dated August 22, 1996, the "AGREEMENT").
B. BankBoston assigned portions of its right, title and interest
in and to the Agreement to the other Banks pursuant to those certain Assignment
and Acceptances, both dated February 20, 1996.
C. Borrower, the Banks and Agent now desire to amend the
Agreement as herein set forth.
NOW, THEREFORE, in consideration of the premises herein contained and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.1 DEFINITIONS. Capitalized terms used in this
Amendment, to the extent not otherwise defined herein, shall have the same
meanings as in the Agreement, as amended hereby.
ARTICLE 2
Amendments
Section 2.1 AMENDMENT TO THE DEFINED TERM "ADJUSTED EBITDA".
Effective as of June 30, 1997, the definition of the term "Adjusted EBITDA" in
Section 1.1 of the Agreement is amended in its entirety to read as follows:
"ADJUSTED EBITDA" means, for any period (the "SUBJECT
PERIOD"), the total of the following calculated without duplication
for such period: (a) the Borrower's
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EBITDA; PLUS (b), on a pro forma basis, the EBITDA of each Prior
Target or, as applicable, the EBITDA of a Prior Target attributable to
the assets acquired from such Prior Target, for any portion of such
Subject Period occurring prior to the date of the Borrower's
acquisition of such Prior Target or the related assets but only to the
extent such EBITDA for such Prior Target can be established based on
financial statements of the Prior Target prepared in accordance with
GAAP; MINUS (c) the EBITDA of each Prior Company and, as applicable
but without duplication,the EBITDA of Borrower and each Subsidiary
attributable to all Prior Assets, in each case for any portion of such
Subject Period occurring prior to the date of the disposal of such
Prior Companies or Prior Assets. The term "Prior Company" means any
Subsidiary whose capital stock or other equity interests have been
disposed of, or all or substantially all of whose assets have been
disposed of, in each case, in a transaction with an unaffiliated third
party approved in accordance with this Agreement, and shall include
PMC. The term "Prior Assets" means assets that have been disposed of
by a division or branch of Borrower or a Subsidiary in a transaction
with an unaffiliated third party approved in accordance with this
Agreement which would not make the seller a "Prior Company" but
constitute all or substantially all of the assets of such division or
branch.
Section 2.2 AMENDMENT TO THE DEFINED TERMS "APS" AND "PMC".
Effective as of December 31, 1996, the definition of the terms "APS" and "PMC"
in Section 1.1 of the Agreement are amended in their entirety to read as
follows:
"APS" means Advance Processing Systems, Inc., a Delaware corporation.
"PMC" means Temporary Plant Cleaners, Inc., a California corporation
formerly known as Plant Maintenance, Inc. of California, who has been
released from its obligations under the Loan Documents pursuant to
that certain Release dated December 31, 1996.
Section 2.3 AMENDMENT TO THE DEFINED TERM "REVOLVING COMMITMENT".
Effective as of the date hereof, the definition of the term "REVOLVING
COMMITMENT" in Section 1.1 of the Agreement is amended in its entirety to read
as follows:
"REVOLVING COMMITMENT" means as to each Bank, the obligations
of such Bank to make advances of funds and purchase participation
interests in (or with respect to the Agent as a Bank, hold other
interests in) Letters of Credit in an aggregate principal amount at
any one time outstanding up to but not exceeding the amount set forth
in SCHEDULE 1.1(b) or, if applicable in the most recent Assignment and
Acceptance entered into by such Bank after July 7, 1997, as the same
may be reduced or terminated pursuant to SECTION 2.6 or SECTION 12.2
hereof. The aggregate amount of the Revolving Commitments of all
Banks equals Twenty-Two Million Five Hundred Thousand Dollars
($22,500,000.00).
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Section 2.4 AMENDMENT TO SECTION 5.4 (a)(ii). Effective as of
April 30, 1997, the "April 30, 1997" date set out in the first sentence of
Section 5.4 (a)(ii) of the Agreement is amended to be April 30, 1998, and the
"May 15, 1997" date set out in the second sentence of SECTION 5.4 (a)(ii) of
the Agreement is amended to be May 15, 1998.
Section 2.5 AMENDMENT TO SECTION 11.4. The ratio "4.25 to 1.00"
set forth in the third line of SECTION 11.4 of the Agreement is amended to be
"3.50 to 1.00".
Section 2.6 AMENDMENT TO SECTION 11.7. The table set out in
Section 11.7 of the Agreement is amended in its entirety to read as follows:
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FISCAL YEAR AMOUNT
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Ending December 31, 1996 $2,000,000
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Ending December 31, 1997 $1,250,000
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Each Fiscal Year thereafter $ 500,000
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Section 2.7 Amendment to Schedules. The Agreement is amended to
add Schedule 1.1(b) thereto to read in its entirety as set out on Schedule
1.1(b) hereto.
ARTICLE 3
CONDITIONS PRECEDENT
Section 3.1 CONDITIONS. The effectiveness of this Amendment is
subject to the satisfaction of the following conditions precedent:
(a) Agent shall have received all of the following, each
dated (unless otherwise indicated) the date of this Amendment, in form
and substance satisfactory to the Agent:
(i) RESOLUTIONS. Resolutions of the Board of
Directors of Borrower, each Obligated Party (other than the
Shareholders) and the General Partner certified by its
Secretary or an Assistant Secretary which authorize its
execution, delivery, and performance of this Amendment and the
other Loan Documents to which it is or is to be a party
hereunder;
(ii) SECRETARY CERTIFICATE. A certificate executed by
the Secretary or an Assistant Secretary of Borrower and each
Obligated Party (other than the Shareholders) and the General
Partner certifying to (A) the names of its officers authorized
to sign this Amendment and each of the other Loan Documents
to which Borrower is or is to be a party hereunder (including
the certificates contemplated herein) together with specimen
signatures of such officers if such specimen
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signatures had not previously been provided; (B) its articles
of incorporation or that such articles have not changed since
the Closing Date; (C) its bylaws or that such bylaws have not
changed since the Closing Date; and (D) with respect to the
General Partner only, to a true and correct copy of the
certificate of limited partnership of Arimathea and the
agreement of limited partnership of Arimathea or that such
documents have not changed since the Closing Date;
(iii) GOVERNMENTAL CERTIFICATES. Certificates of the
appropriate government officials of the state of incorporation
of Borrower, each Obligated Party (other than the
Shareholders) and the General Partner as to its existence and,
as applicable, good standing, each dated a current date;
(iv) REVOLVING NOTES. A Revolving Note for each Bank
in the original principal amount equal to such Bank's
increased Commitment, duly executed by Borrower;
(v) OPINION OF COUNSEL. A favorable opinion of legal
counsel to Borrower, each Obligated Party (other than the
Shareholders) and the General Partner) as to such matters the
Agent may reasonably request;
(vi) ADDITIONAL INFORMATION. Agent shall have
received such additional documents, instruments and
information as Agent or its legal counsel, Jenkens &
Xxxxxxxxx, a Professional Corporation, may request; and
(b) The representations and warranties contained
herein and in all other Loan Documents, as amended hereby, shall be
true and correct as of the date hereof as if made on the date hereof;
(c) No Default shall have occurred and be continuing;
(d) All proceedings taken in connection with the
transactions contemplated by this Amendment and all documents,
instruments, and other legal matters incident thereto shall be
satisfactory to Agent and its legal counsel, Jenkens & Xxxxxxxxx, a
Professional Corporation; and
(e) Borrower shall have paid an up-front fee of 3/8% on
each Bank's incremental increase in its Revolving Commitment.
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ARTICLE 4
RATIFICATIONS, REPRESENTATIONS AND WARRANTIES
Section 4.1 RATIFICATIONS. The terms and provisions set forth in
this Amendment shall modify and supersede all inconsistent terms and provisions
set forth in the Agreement and except as expressly modified and superseded by
this Amendment, the terms and provisions of the Agreement and the other Loan
Documents are ratified and confirmed and shall continue in full force and
effect. Borrower, Agent and each Bank agree that the Agreement as amended
hereby and the other Loan Documents shall continue to be legal, valid, binding
and enforceable in accordance with their respective terms.
Section 4.2 REPRESENTATIONS AND WARRANTIES. Borrower hereby
represents and warrants to Agent and each Bank that (i) the execution, delivery
and performance of this Amendment and any and all other Loan Documents executed
and/or delivered in connection herewith have been authorized by all requisite
action on the part of Borrower and each Obligated Party and will not violate
the articles of incorporation, bylaws, agreement of limited partnership or
certificate of limited partnership, as applicable, of Borrower, the General
Partner and each other Obligated Party, as applicable (ii) the representations
and warranties contained in the Agreement, as amended hereby, and any other
Loan Document are true and correct on and as of the date hereof as though made
on and as of the date hereof, (iii) no Default has occurred and is continuing;
(iv) Borrower and each Obligated Party are each in full compliance with all
covenants and agreements contained in the Agreement as amended hereby and the
other Loan Documents.
ARTICLE 5
MISCELLANEOUS
Section 5.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made in this Amendment or any other Loan
Document including any Loan Document furnished in connection with this
Amendment shall survive the execution and delivery of this Amendment and the
other Loan Documents, and no investigation by Agent or any Bank or any closing
shall affect the representations and warranties or the right of Agent or any
Bank to rely upon them.
Section 5.2 REFERENCE TO AGREEMENT. Each of the Loan Documents,
including the Agreement and any and all other agreements, documents, or
instruments now or hereafter executed and delivered pursuant to the terms
hereof or pursuant to the terms of the Agreement as amended hereby, are hereby
amended so that any reference in such Loan Documents to the Agreement shall
mean a reference to the Agreement as amended hereby.
Section 5.3 EXPENSES OF LENDER. As provided in the Agreement,
Borrower agrees to pay on demand all costs and expenses incurred by Agent in
connection with the preparation, negotiation, and execution of this Amendment
and the other Loan Documents executed pursuant hereto.
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Section 5.4 SEVERABILITY. Any provision of this Amendment held by
a court of competent jurisdiction to be invalid or unenforceable shall not
impair or invalidate the remainder of this Amendment and the effect thereof
shall be confined to the provision so held to be invalid or unenforceable.
Section 5.5 APPLICABLE LAW. This Amendment shall be governed by
and construed in accordance with the laws of the State of Texas and the
applicable laws of the United States of America.
Section 5.6 SUCCESSORS AND ASSIGNS. This Amendment is binding upon
and shall inure to the benefit of Agent, each Bank and Borrower and their
respective successors and assigns, except Borrower may not assign or transfer
any of its rights or obligations hereunder without the prior written consent of
all the Banks.
Section 5.7 COUNTERPARTS. This Amendment may be executed in one or
more counterparts, and on telecopy counterparts each of which when so executed
shall be deemed to be an original, but all of which when taken together shall
constitute one and the same agreement.
Section 5.8 EFFECT OF WAIVER. No consent or waiver, express or
implied, by Agent or any Bank to or for any breach of or deviation from any
covenant, condition or duty by Borrower or any Obligated Party shall be deemed
a consent or waiver to or of any other breach of the same or any other
covenant, condition or duty.
Section 5.9 HEADINGS. The headings, captions, and arrangements
used in this Amendment are for convenience only and shall not affect the
interpretation of this Amendment.
Section 5.10 ENTIRE AGREEMENT. THIS AMENDMENT AND ALL OTHER
INSTRUMENTS, DOCUMENTS AND AGREEMENTS EXECUTED AND DELIVERED IN CONNECTION WITH
THIS AMENDMENT EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND
SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS AND
UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THIS AMENDMENT, AND MAY
NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO
ORAL AGREEMENTS AMONG THE PARTIES HERETO.
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Executed as of the date first written above.
XXXXXXXX AND XXXXXXXX, INC.
By: /s/ J. XXXXXXX XXXXX
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J. Xxxxxxx Xxxxx
Senior Vice President
BANKBOSTON, N.A., formerly The
First National Bank of Boston,
individually as a Bank and as the
Agent
By: /s/ E. XXXXX XXXXX, XX.
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Name: E. Xxxxx Xxxxx, Xx.
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Title: Managing Director
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BANK ONE, TEXAS, N.A.
By: /s/ X. XXXXXX
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X. Xxxxxx
Vice President
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION
By: /s/ XXXXXX XXXXXX
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Xxxxxx Xxxxxx
Vice President
Each Obligated Party hereby consents and agrees to this Amendment and
agrees that the Loan Documents to which it is a party shall remain in full
force and effect and shall continue to be its legal, valid and binding
obligation enforceable against it in accordance with their respective terms.
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XXXXXXXX AND XXXXXXXX, INC.
By: /s/ J. XXXXXXX XXXXX
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J. Xxxxxxx Xxxxx
Senior Vice President
ADVANCE PROCESSING SYSTEMS, INC.
By: /s/ J. XXXXXXX XXXXX
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J. Xxxxxxx Xxxxx
President
/s/ XXXXXX X. XXXXXXXX, XX.
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Xxxxxx X. Xxxxxxxx, Xx., individually
/s/ XXXX X. XXXXXXXX
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Xxxx X. Xxxxxxxx, individually
ARIMATHEA ASSOCIATES, LTD.
By: Nehemiah, Inc., its general
partner
By: /s/ J. XXXXXXX XXXXX
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J. Xxxxxxx Xxxxx
Vice President and Treasurer
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SCHEDULE 1.1(b)
to
Second Amendment
to
Snelling & Snelling
Credit Agreement
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Bank Revolving Commitment
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1. BankBoston, N.A. $ 9,562,500
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2. Bank One, Texas, N.A. $ 5,625,000
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3. Texas Commerce Bank National Association $ 7,312,500
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Total $22,500,000
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Schedule 1.1(b) to Second Amendment - Solo Page
