EXHIBIT 10.3
FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT is made as of the 9 day of
March, 1999, by and between TECHNISOURCE, INC., a Florida corporation, and
TECHNISOURCE OF FLORIDA, INC., a Florida corporation, a wholly-owned subsidiary
of Technisource, Inc. (collectively, the "Borrower"), and NATIONSBANK, N.A., a
national banking association (the "Lender").
W I T N E S S E T H:
WHEREAS, the Borrower and the Lender previously entered into that certain
Credit Agreement dated as of January 29, 1999 (the "Credit Agreement");
WHEREAS, the Borrower has requested, and the Lender has agreed, to modify
and extend the Loan, subject to the terms and conditions contained herein and in
the Credit Agreement; and
WHEREAS, the parties hereto wish to amend the Credit Agreement as provided
herein.
NOW, THEREFORE, in consideration of the sum of Ten Dollars ($10.00) and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and in consideration of the loans or extensions of credit
heretofore now or hereafter made or to be made for the benefit of the Borrower
by the Lender, the parties do hereby agree as follows:
1. The Borrower and the Lender agree that the recitals set forth above are
true, correct, and complete, and are hereby incorporated herein.
2. All capitalized terms used herein and not otherwise defined herein shall
have the meanings ascribed to them in the Credit Agreement.
3. The definition of "Interest Coverage Ratio" contained in Section 1.1 of the
Credit Agreement is hereby amended and restated so that, from and after the
date hereof, it shall read in its entirety as follows:
"INTEREST COVERAGE RATIO" shall mean (i) Borrower's Adjusted EBITL;
divided by (ii) the sum of Interest Expense and Rentals for the Borrower.
4. The definition of "Revolving Credit Maturity Date" contained in Section 1.1
of the Credit Agreement is hereby amended and restated so that, from and
after the date hereof, it shall read in its entirety as follows:
"REVOLVING CREDIT MATURITY DATE" shall mean the date the Revolving
Credit Commitment will mature, which for the purposes of this Agreement is
April 30, 2002.
5. The following definition is hereby added to Section 1.1 of the Credit
Agreement effective from and after the date hereof:
"FIXED CHARGE COVERAGE RATIO" shall mean (i) Borrower's Adjusted EBITDA
plus Rentals less Capitalized Lease Obligations less dividends; divided by
(ii) the sum of Interest Expense, current maturities of long term debt,
Capitalized Lease Obligations and Rentals for the Borrower.
6. Subsection 2.1(c) of the Credit Agreement is hereby amended and restated so
that, from and after the date hereof, it shall read in its entirety as
follows:
(c) INTENTIONALLY DELETED.
7. Subsection 2.7(a) of the Credit Agreement is hereby amended and restated so
that, from and after the date hereof, it shall read in its entirety as
follows:
(a) COMMITMENT FEE: A commitment fee equal to Sixty-two Thousand
Five Hundred Dollars ($62,500.00) due and payable on or before the Closing
Date, and an additional One Hundred Twenty-five Thousand Dollars
($125,000.00) due and payable on or before March 9, 1999.
8. Section 9.17 of the Credit Agreement is hereby amended and restated so
that, from and after the date hereof, it shall read in its entirety as
follows:
9.17 MANAGEMENT.
With respect to Borrower, (a) maintain Xxxxxx X. Xxxxxxx and Xxxxx X.
Xxxxxxxxx as active members of the day-to-day management team of Borrower,
or (b) maintain such other active members of the day-to-day management team
of Borrower as Borrower shall propose in a succession plan which must be
(i) submitted to Lender within sixty (60) days after Xxxxxx X. Xxxxxxx or
Xxxxx X. Xxxxxxxxx ceases to be actively involved in the day-to-day
management of Borrower and (ii) acceptable to Lender in its reasonable
discretion.
9. The following Section 9.19 is hereby added to the Credit Agreement
effective from and after the date hereof:
9.19 FIXED CHARGE COVERAGE RATIO.
At all times, Borrower shall maintain a Fixed Charge Coverage Ratio
equal to or exceeding 1.2 to 1.0. The Fixed Charge Coverage Ratio shall be
tested annually, utilizing the consolidated year-end financial statements
of the Borrower and its Subsidiaries.
10. Section 10.7 of the Credit Agreement is hereby amended and restated so
that, from and after the date hereof, it shall read in its entirety as
follows:
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10.7 INVESTMENTS.
Make or suffer to exist any Investments, except that this prohibition
shall not apply to (i) the purchase of direct obligations of the government
of the United States of America, or any agency thereof, or obligations
unconditionally guaranteed by the United States of America; (ii)
certificates of deposit of any bank organized or licensed to conduct a
banking business under the laws of the United States or any State thereof;
(iii) Investments in commercial paper which, at the time of acquisition by
the Borrower or any Subsidiary, is accorded the highest rating category by
a nationally recognized credit rating agency; (iv) other Investments of the
Borrower existing as of the date of execution hereof as shown on Schedule
II hereof; and (v) Investments made in conformity with the Investment
Guidelines as shown on Exhibit "F" hereof.
11. Exhibit "F" attached to this Amendment is hereby added as Exhibit "F" to
the Credit Agreement effective from and after the date hereof.
12. Subsection 12.1(c) of the Credit Agreement is hereby amended and restated
so that, from and after the date hereof, it shall read in its entirety as
follows:
(c) The Borrower shall default in the performance of any other
agreement, covenant or obligation contained in this Agreement (other than
the defaults specifically enumerated in this Section 12.1), and any such
default shall not be cured within ten (10) days after notice thereof is
sent by the Lender to the Borrower; or
13. Borrower agrees to pay on demand all reasonable costs and expenses of the
Lender (as more fully set forth on the Expense and Disbursement Statement
of even date herewith executed by Borrower and Lender) in connection with
the preparation, printing, execution, and delivery of this Amendment and
the other instruments and documents to be delivered hereunder and
thereunder, including the reasonable fees and out-of-pocket expenses of
legal counsel for the Lender, with respect thereto, and the reasonable fees
of independent public accountants, and other outside experts retained by
the Lender in connection with the enforcement of this Amendment and the
other instruments and documents to be delivered hereunder. In addition, the
Borrower shall pay any and all stamp and other taxes payable or determined
to be payable in connection with the execution and delivery of this
Amendment and the instruments and documents to be delivered hereunder, and
agrees to save the Lender harmless from and against any and all liabilities
with respect to or resulting from any delay in paying or omitting to pay
such taxes. All obligations provided for in this paragraph shall survive
any termination of this Amendment or the Credit Agreement.
14. Lender acknowledges that the making and performance of the Credit Agreement
(as amended by this Amendment), the Note and applicable Related Documents
dated as of January 29, 1999, was approved and ratified by the Board of
Directors of each Borrower on February 3, 1999, and Lender agrees that the
representations, warranties and statements contained in Section 8.2 of the
Credit Agreement (and similar provisions in
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any of the Related Documents) to the contrary are hereby amended to the
extent necessary to reflect the date of such approval and ratification.
15. WAIVER AND RELEASE. AS A MATERIAL INDUCEMENT FOR THE LENDER TO EXECUTE THIS
AMENDMENT, THE BORROWER DOES HEREBY RELEASE, WAIVE, DISCHARGE, COVENANT NOT
TO XXX, ACQUIT, SATISFY AND FOREVER DISCHARGE THE LENDER, ITS OFFICERS,
DIRECTORS, EMPLOYEES, ATTORNEYS AND AGENTS AND ITS AFFILIATES AND ASSIGNS
FROM ANY AND ALL LIABILITY, CLAIMS, COUNTERCLAIMS, DEFENSES, ACTIONS,
CAUSES OF ACTION, SUITS, CONTROVERSIES, AGREEMENTS, PROMISES AND DEMANDS
WHATSOEVER IN LAW OR IN EQUITY WHICH THE BORROWER EVER HAD, NOW HAS, OR
WHICH ANY PERSONAL REPRESENTATIVE, SUCCESSOR, HEIR OR ASSIGN OF THE
BORROWER HEREAFTER CAN, SHALL OR MAY HAVE AGAINST THE LENDER, ITS OFFICERS,
DIRECTORS, EMPLOYEES, ATTORNEYS AND AGENTS, AND ITS AFFILIATES AND ASSIGNS,
FOR, UPON OR BY REASON OF ANY MATTER, CAUSE OR THING WHATSOEVER, THROUGH
THE DATE HEREOF. THE BORROWER FURTHER EXPRESSLY COVENANTS WITH AND WARRANTS
UNTO THE LENDER AND ITS AFFILIATES AND ASSIGNS, THAT THERE EXIST NO CLAIMS,
COUNTERCLAIMS, DEFENSES, OBJECTIONS, OFFSETS OR CLAIMS OF OFFSET AGAINST
THE LENDER OR THE OBLIGATION OF THE BORROWER TO PAY THE LENDER ALL AMOUNTS
OWING UNDER THE NOTE, THE CREDIT AGREEMENT AND ALL ASSOCIATED LOAN
DOCUMENTS AS AND WHEN THE SAME BECOME DUE AND PAYABLE.
16. REAFFIRMATION BY BORROWER. THE BORROWER ACKNOWLEDGES AND REAFFIRMS THAT ALL
WARRANTIES, REPRESENTATIONS AFFIRMATIVE COVENANTS AND NEGATIVE COVENANTS
SET FORTH IN THE CREDIT AGREEMENT REMAIN IN FULL FORCE AND EFFECT ON THE
DATE HEREOF AS IF MADE ON THE DATE HEREOF.
17. AMENDED AGREEMENT. THIS AGREEMENT AMENDS THE CREDIT AGREEMENT, AND THE
BORROWER ACKNOWLEDGES AND AGREES THAT THE SECURITY INTERESTS, RIGHTS,
DUTIES, AND OBLIGATIONS OF THE BORROWER AND THE LENDER CREATED BY THE
CREDIT AGREEMENT ARE NOT EXTINGUISHED, BUT ARE REAFFIRMED AND REMAIN IN
FULL FORCE AND EFFECT AS PROVIDED IN THE CREDIT AGREEMENT. IN THE EVENT OF
ANY CONFLICT BETWEEN THE TERMS AND PROVISIONS OF THE CREDIT AGREEMENT AND
THE TERMS AND PROVISIONS OF THIS AMENDMENT, THE TERMS AND PROVISIONS OF
THIS AMENDMENT SHALL CONTROL AND PREVAIL.
18. MANDATORY ARBITRATION. Any controversy or claim between or among the
parties hereto including but not limited to those arising out of or
relating to this Amendment or any related agreements or instruments,
including any claim based on or arising from an alleged tort,
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shall be determined by binding arbitration in accordance with the Federal
Arbitration Act (or if not applicable, the applicable state law), the Rules
of Practice and Procedure for the Arbitration of Commercial Disputes of
Judicial Arbitration and Mediation Services, Inc. (J.A.M.S.), and the
"Special Rules" set forth below. In the event of any inconsistency, the
Special Rules shall control. Judgment upon any arbitration award may be
entered in any court having jurisdiction. Any party to this Amendment may
bring an action, including a summary or expedited proceeding, to compel
arbitration of any controversy or claim to which this Amendment applies in
any court having jurisdiction over such action.
(a) SPECIAL RULES. The arbitration shall be conducted in the city of the
Borrower's domicile at time of this Amendment's execution and
administered by Endispute, Inc. d/b/a J.A.M.S./Endispute who will
appoint an arbitrator; if J.A.M.S./Endispute is unable or legally
precluded from administering the arbitration, then the American
Arbitration Association will serve. All arbitration hearings will be
commenced within ninety (90) days of the demand for arbitration;
further, the arbitrator shall only, upon a showing of cause, be
permitted to extend the commencement of such hearing for up to an
additional sixty (60) days.
(b) RESERVATION OF RIGHTS. Nothing in this Amendment shall be deemed to
(i) limit the applicability of any otherwise applicable statutes of
limitation or repose and any waivers contained in this Amendment; or
(ii) be a waiver by Lender of the protection afforded to it by 12
U.S.C. ss.91 or any substantially equivalent state law; oR (iii) limit
the right of Lender (A) to exercise self help remedies such as (but
not limited to) setoff, or (B) to foreclose against any real or
personal property collateral, or (C) to obtain from a court
provisional or ancillary remedies such as (but not limited to)
injunctive relief or the appointment of a receiver. Lender may
exercise such self help rights, foreclose upon such property, or
obtain such provisional or ancillary remedies before, during or after
the pendency of any arbitration proceeding brought pursuant to this
Amendment. Neither this exercise of self help remedies nor the
institution or maintenance of an action for foreclosure or provisional
or ancillary remedies shall constitute a waiver of the right of any
party, including the claimant in any such action, to arbitrate the
merits of the controversy or claim occasioning resort to such
remedies.
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IN WITNESS WHEREOF, the parties hereto have executed this First Amendment
to Credit Agreement as of the day and year first above written.
[BORROWER]:
TECHNISOURCE, INC.,
a Florida corporation
By: /s/ XXXXXX X. XXXXXXX
----------------------------
Xxxxxx X. Xxxxxxx, President
TECHNISOURCE OF FLORIDA, INC.,
a Florida corporation
By: /s/ XXXXXX X. XXXXXXX
----------------------------
Xxxxxx X. Xxxxxxx, President
[LENDER]:
NATIONSBANK, N.A., a national banking
association
By: /s/ XXXXXXX X. XXXXXXX
--------------------------
Xxxxxxx X. Xxxxxxx,
Senior Vice President
[ACKNOWLEDGMENTS APPEAR ON NEXT PAGE]
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