Exhibit 10.38(h)
EIGHTH AMENDMENT AGREEMENT
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AGREEMENT, dated as of November 9, 2000, to be effective September 30,
2000, among XXXXXX SERVICE GROUP, INC., a New Jersey corporation, XXXXXX
INTERNATIONAL, INC., a Maryland corporation, the "Subsidiaries" signatory
hereto, and GENERAL ELECTRIC CAPITAL CORPORATION, a New York corporation.
Background
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E. Capitalized terms not otherwise defined shall have the meanings
ascribed to them in the Amended and Restated Credit Agreement dated as of
November 7, 1997, between Xxxxxx Service Group, Inc. and General Electric
Capital Corporation (as amended, modified or supplemented from time to time, the
"Credit Agreement").
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F. The Borrower has requested that the Lender, among other things, (i)
increase, from $50,000,000 to $57,000,000, the Working Capital Loan Commitment,
and (ii) decrease, from $35,000,000 to $28,000,000, the Acquisition Loan
Commitment.
G. The Lender has agreed to the Borrower's request subject to the terms
and conditions of this Agreement.
Agreement
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In consideration of the Background, which is incorporated by reference, the
parties, intending to be legally bound, agree as follows:
1. Modifications. All the terms and provisions of the Credit Agreement
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and the other Loan Documents shall remain in full force and effect except as
follows:
(a) The definition of Borrowing Base, contained in Annex A to the
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Credit Agreement, is deleted and the following is substituted therefor:
"Borrowing Base" means on any date of determination thereof, an
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amount equal to the sum of (A) eighty-five percent (85%) of Eligible
Accounts, (B) seventy-five percent (75%) of Eligible Pending Accounts
Receivable and Fixed Contract Accounts Receivable (up to the maximum
amount of $17,000,000 in the aggregate), and (C) forty percent (40%)
of Eligible Inventory (valued on a first in, first out basis) (up to
the maximum amount of $2,000,000 in the aggregate).
(b) The amount of $6,000,000 set forth in subparagraph (a) of
Schedule 6.2(r) to the Credit Agreement is deleted and the amount of $7,800,000
is substituted therefor.
(c) The Fixed Charge Coverage Ratio of 1.1:1.0 of the Fiscal Year
ending December 31, 2000 set forth in subparagraph (c) of Schedule 6.2(r) of the
Credit Agreement is deleted and the Fixed Charge Coverage Ratio of 0.8:1.0 is
substituted therefor.
2. Acknowledgment of Debt. The Borrower acknowledges that as of the date
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of this Agreement, the amounts outstanding under the Working Capital Loan and
the Acquisition Loan are, respectively, $52,505,768.72 and $25,318,099.00.
3. Acknowledgement re: Borrowing Base. The Borrower acknowledges and
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agrees that notwithstanding the terms of the Credit Agreement, the provision in
the definition of Borrowing Base with respect to Working Capital Advances based
on
Eligible Inventory shall not be operative and the Borrower shall not be entitled
to request, and the Lender shall not be required to make, Working Capital
Advances based on Eligible Inventory.
4. Waiver of Financial Covenant. The Lender hereby waives compliance by
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the Borrower with the Fixed Charge Coverage Ratio set forth in subsection (c) of
Schedule 6.2(r) to the Credit Agreement for the Fiscal Quarter ended September
30, 2000, and the Borrower agrees that such waiver shall apply only with respect
to the Fixed Charge Coverage Ratio for the Fiscal Quarter ending September 30,
2000.
5. Acknowledgement re: Excess Working Capital Revolving Loan. The Lender
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and the Borrower acknowledge that from time to time prior to the date of this
Agreement, the amount outstanding under the Working Capital Loan has exceeded
(x) the Working Capital Loan Commitment (less the aggregate outstanding amount
of Letter of Credit Obligations) and/or (y) the Borrowing Base (less the sum of
the aggregate outstanding amount of Letter of Credit Obligations and the
Reserves) (the "Excess Working Capital Revolving Loan"). The Borrower
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acknowledges and agrees that (a) the agreement of the Lender to allow the Excess
Working Capital Revolving Loan does not establish a pattern or practice, (b) the
Lender's allowance of the Excess Working Capital Revolving Loan is in the
Lender's sole discretion, (c) the Excess Working Capital Revolving Loan is one
of the Obligations secured by the liens, security interests and pledges
described in Section 7 hereof, and (d) the Lender is under no obligation to make
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any Excess Working Capital Revolving Loan, the Borrower shall not be permitted
to maintain any Excess Working Capital Revolving Loan without the Lender's prior
written consent, and the existence of an Excess Working Capital Revolving Loan
without the prior written consent of the Lender shall constitute an Event of
Default.
6. Amendment Fee. In consideration of the Borrower's execution and
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delivery of this Agreement, the Borrower is simultaneously paying to the Lender
the amount of $30,000 in immediately available funds (the "Amendment Fee") which
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shall be deemed one of the Obligations.
7. Conditions Precedent. The Lender's obligations under this Agreement
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are contingent upon the Lender's receipt of the following, all in form, scope
and content acceptable to the Lender in its sole discretion:
(a) Amendment Agreement. This Agreement duly executed by the parties
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hereto;
(b) Allonges. The First Allonge to Revolving Promissory Note in the
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form of the attached Exhibit 1 and the Third Allonge to Acquisition Loan Note in
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the form of the attached Exhibit 2, each duly drawn to the order of the Lender;
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and
(c) Amendment Fee. Payment of the Amendment Fee; and
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(d) Other. Such other agreements and instruments as the Lender shall
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require.
8. Reaffirmation By Borrower. The Borrower acknowledges and agrees, and
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reaffirms, that it is legally, validly and enforceably indebted to the Lender
under the Notes without defense, counterclaim or offset, and that it is legally,
validly and enforceably liable to the Lender for all costs and expenses of
collection and attorneys' fees related to or in any way arising out of this
Agreement, the Credit Agreement, the Notes and the other Loan Documents. The
Borrower hereby restates and agrees to be bound by all covenants contained in
the Credit Agreement and the other Loan Documents and hereby reaffirms that all
of the representations and warranties contained in the Credit Agreement remain
true and correct in all material respects. The Borrower represents that except
as set forth in the Credit Agreement, there are not pending or to the Borrower's
knowledge threatened, legal proceedings to which the Borrower or any of the
Guarantors is a party, or which materially or adversely affect the transactions
contemplated by this Agreement or the ability of the Borrower or any of the
Guarantors to conduct
its business. The Borrower acknowledges and represents that the resolutions of
the Borrower dated on or about November 7, 1997, remain in full force and effect
and have not been amended, modified, rescinded or otherwise abrogated.
9. Reaffirmation by Guarantors. Each of the Guarantors acknowledges that
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each is legally and validly indebted to the Lender under the Guaranty of each
without defense, counterclaim or offset. Each of the Guarantors affirms that the
Guaranty of each remains in full force and effect and acknowledges that the
Guaranty of each encompasses, without limitation, the Obligations, as modified
herein.
10. Reaffirmation of Collateral. The Borrower and each of the Guarantors
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reaffirms the liens, security interests and pledges granted pursuant to the Loan
Documents to secure the obligations of each thereunder.
11. Representations re: Bank Accounts. The Borrower represents that
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Schedule A sets forth each bank account held or maintained by the Borrower, the
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name of the financial institution holding such account, the address of such
financial institution where such account is located, the account number and the
purpose for which such account is being used.
12. Other Representations By Borrower and Guarantors. Except with respect
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to Excess Revolving Working Capital Loans which the Lender extended to the
Borrower from time to time prior to the date of this Agreement, the Borrower and
each Guarantor represents and confirms that (a) no Default or Event of Default
has occurred and is continuing and the Lender has not given its consent to or
waived any Default or Event of Default and (b) the Credit Agreement and the
other Loan Documents are in full force and effect and enforceable against the
Borrower and each Guarantor in accordance with the terms thereof. The Borrower
and each Guarantor represents and confirms that as of the date hereof, each has
no claim or defense (and the Borrower and each Guarantor hereby waives every
claim and defense) against the Lender arising out of or relating to the Credit
Agreement and the other Loan Documents or the making, administration or
enforcement of the Loans and the remedies provided for under the Loan Documents.
13. No Waiver By Lender. The Borrower and each Guarantor acknowledges
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that (a) by the execution by each of this Agreement, the Lender is not waiving
any Default or Event of Default, whether now existing or hereafter occurring,
disclosed or undisclosed, by the Borrower under the Loan Documents and (b) the
Lender reserves all rights and remedies available to it under the Loan Documents
and otherwise.
The parties have executed this Agreement as of the date first above
written.
Borrower:
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XXXXXX SERVICE GROUP, INC.
By___________________________________________
Xxxxxxx X. Xxxxxxxxxx
Title: Senior Vice President - Finance
Parent:
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XXXXXX INTERNATIONAL, INC.
By___________________________________________
Xxxxxxx X. Xxxxxxxxxx
Title: Senior Vice President - Finance
Subsidiaries:
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XXXXXX TECHNOLOGY SOLUTIONS, INC.
By___________________________________________
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Senior Vice President and Chief
Financial Officer
XXXXXX TELECOM, INC.
By___________________________________________
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Senior Vice President and Chief
Financial Officer
XXXXXX SERVICES, INC.
By___________________________________________
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Senior Vice President and Chief
Financial Officer
XXXXXX UTILITY SERVICE, INC.
By___________________________________________
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Senior Vice President and Chief
Financial Officer
Lender:
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GENERAL ELECTRIC CAPITAL CORPORATION
By___________________________________________
Name:
Title: Duly Authorized Signatory
Bank Accounts
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Address of
Financial Financial
Institution Institution Account No. Purpose of Account
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A/P Travel Clearing
Account
Payroll Deduction 65
Clearing
Bank of America 3750369140
WellsFargo 4518090386 P/R Funding
PNC Bank 0000000000
Nationsbank 3750369153 Lockbox
Summit Bank 0154129917 Cafeteria
Xxxxx Fargo 4896048154
UJB Western Union 119024144
Summit Bank 1541132497
First Security Bank 6132300036
First Bank 1871002058
Bank of America 0570607482
Bank of America 0394603207
Chemical Bank 0000000
Nationsbank 5130159350
Nationsbank 3750203510
Nationsbank MF 3750052046
Bank One Arizona 22011595
Xxxxx Fargo 0217954478
Fleet Bank 9427748895
Fleet Bank 9404 -113790 Main Acct.
Fleet Bank 9404-113811
Fleet Bank 9404-113803 Disbursement Acct.
1st Natl. Bk. of Chicago 2135033094108
Schedule A
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FIRST ALLONGE
TO
REVOLVING PROMISSORY NOTE
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1. THIS FIRST ALLONGE TO REVOLVING PROMISSORY NOTE (this "Allonge") is
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dated as of September 30, 2000, to be attached to, modify, and be a part of the
Revolving Promissory Note dated as of November 7, 1997, in the original
principal amount of $50,000,000 (as renewed, reissued, exchanged, consolidated,
amended, modified, replaced or supplemented from time to time, the "Note") of
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XXXXXX SERVICE GROUP, INC. (the "Maker") in favor of GENERAL ELECTRIC CAPITAL
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CORPORATION.
2. The Maker agrees that all of the terms of the Note remain in full
force and effect except as follows:
(a) The amount "$50,000,000" contained in the upper left hand corner
of the Note is deleted and the amount "$57,000,000" is substituted
therefor.
(b) The phrase "FIFTY MILLION DOLLARS ($50,000,000)" contained in
Section 1 of the Note is deleted and the phrase "FIFTY-SEVEN MILLION
DOLLARS ($57,000,000)" is substituted therefor.
3. The Maker has executed and delivered this Allonge as of the date first
written above.
XXXXXX SERVICE GROUP, INC.
By________________________________________
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Senior Vice President and Chief
Financial Officer
Exhibit 1
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THIRD ALLONGE
TO
ACQUISITION LOAN NOTE
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1. THIS THIRD ALLONGE TO ACQUISITION LOAN NOTE (this "Allonge") is dated
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as of September, 2000, to be attached to, modify, and be a part of the
Acquisition Loan Note dated as of November 7, 1997, in the original principal
amount of $15,000,000 (as renewed, reissued, exchanged, consolidated, amended,
modified, replaced or supplemented from time to time, the "Note") of XXXXXX
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SERVICE GROUP, INC. (the "Maker") in favor of GENERAL ELECTRIC CAPITAL
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CORPORATION.
2. The Maker agrees that all of the terms of the Note remain in full
force and effect except as follows:
(a) The amount "$35,000,000" contained in the upper left hand corner
of the Note is deleted and the amount "$28,000,000" is substituted
therefor.
(b) The phrase "THIRTY-FIVE MILLION DOLLARS ($35,000,000)" contained
in Section 1 of the Note is deleted and the phrase "TWENTY-EIGHT MILLION
DOLLARS ($28,000,000)" is substituted therefor.
3. The Maker has executed and delivered this Allonge as of the date first
written above.
XXXXXX SERVICE GROUP, INC.
By________________________________________
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Senior Vice President and Chief
Financial Officer
Exhibit 2
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