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EXHIBIT 10.33
AMENDMENT NO. 1 TO AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDMENT NO. 1 TO AMENDED AND RESTATED CREDIT AGREEMENT (this
"Amendment"), dated as of June 22, 2001, is by and among XXXXX ENTERPRISES,
INCORPORATED, a Florida corporation (the "Borrower"), certain Subsidiaries of
the Borrower, as Guarantors (the "Guarantors"), the various lending institutions
parties hereto and BANK OF AMERICA, N.A., a national banking association, as
agent for the Lenders (in such capacity, the "Agent").
W I T N E S S E T H:
WHEREAS, the Borrower, the Guarantors, the various lending institutions
parties hereto and the Agent are parties to that certain Amended and Restated
Credit Agreement, dated as of May 2, 2000, (the "Existing Credit Agreement");
and
WHEREAS, the Borrower, the Guarantors, the Required Lenders (as defined
in the Existing Credit Agreement) and the Agent have agreed to amend the
Existing Credit Agreement as set forth herein.
NOW, THEREFORE, in consideration of the agreements herein contained,
the parties hereby agree as follows:
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DEFINITIONS
SECTION 1.1. Certain Definitions. Unless otherwise defined herein or
the context otherwise requires, terms used in this Amendment, including its
preamble and recitals, have the following meanings (such meanings to be equally
applicable to the singular and plural forms thereof):
"Amended Credit Agreement" means the Existing Credit Agreement as
amended hereby.
"Amendment No. 1 Effective Date" is defined in Section 3.1.
SECTION 1.2. Other Definitions. Unless otherwise defined herein or the
context otherwise requires, terms used in this Amendment, including its preamble
and recitals, have the meanings provided in the Amended Credit Agreement.
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AMENDMENTS TO EXISTING CREDIT AGREEMENT
Effective as of the Amendment No. 1 Effective Date, the Existing Credit
Agreement is hereby amended in accordance with these Sections 2.1 through 2.5.
Except as so amended, the Existing Credit Agreement, the Notes and the other
Credit Documents shall continue in full force and effect.
SECTION 2.1. Amendments to Section 1.
(a) Section 1.1 of the Existing Credit Agreement is
hereby amended by inserting, in the alphabetically appropriate place,
the following definition:
"Amendment No. 1" means Amendment No. 1 to Credit
Agreement, dated as of June 22, 2001, among the Borrower, the
Guarantors, the Required Lenders and the Agent, amending this
Credit Agreement as then in effect.
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(b) Section 1.1 of the Existing Credit Agreement is
hereby amended by amending in their entirety the definitions for
"Aggregate Revolving Committed Amount" and "Applicable Percentage" to
read as follows:
"Aggregate Revolving Committed Amount" means the
aggregate amount of Revolving Commitments in effect from time
to time, being currently ONE HUNDRED MILLION DOLLARS
($100,000,000).
"Applicable Percentage" means for any day, the rate
per annum set forth below opposite the applicable Consolidated
Leverage Ratio then in effect, it being understood that the
Applicable Percentage for (i) Base Rate Loans shall be the
percentage set forth under the column "Base Rate Margin", (ii)
Eurocurrency Loans and the Letter of Credit Fee shall be the
percentage set forth under the column "Eurocurrency Margin and
Letter of Credit Fee" and (iii) the Commitment Fee shall be
the percentage set forth under the column "Commitment Fee".
Pricing Consolidated Base Rate Eurocurrency Commitment
Level Leverage Margin Margin and Letter of Fee
Ratio Credit Fee
------------- ---------------------- ----------------- ---------------------- ---------------
I > 1.75 0.50% 2.25% 0.40 %
II > 1.25 but <= 1.75 0.25% 2.00% 0.375%
III > 0.75 but <= 1.25 0% 1.75% 0.35 %
IV > 0.25 but <= 0.75 0% 1.50% 0.325%
V <= 0.25 0% 1.25% 0.30 %
The Applicable Percentage shall be determined and adjusted
quarterly on the date five (5) Business Days after the date by
which the annual and quarterly compliance certificates and
related financial statements and information are required in
accordance with the provisions of Sections 7.1(a) and (b) and
Section 7.2(b), as appropriate (each date of a rate change as
described in the sentence hereafter referred to as a "Rate
Determination Date"); provided that (i) the current Applicable
Percentages shall be based on Pricing Level V, shall be
effective on the Amendment No. 1 Effective Date and shall be
adjusted as shown above based on the Consolidated Leverage
Ratio; and (ii) in the event an annual or quarterly compliance
certificate and the related financial statements and
information are not delivered timely by the date required by
the provisions of Sections 7.1(a) and (b) and Section 7.2(b),
as appropriate, the Applicable Percentages shall be based on
Pricing Level I until such time as an appropriate compliance
certificate and the related financial statements and
information are delivered, whereupon the applicable Pricing
Level shall be adjusted based on the information contained in
such compliance certificate and related financial statements
and information. The Applicable Percentage shall be effective
from a Rate Determination Date until the next such Rate
Determination Date. The Agent shall determine the appropriate
Applicable Percentages in the pricing matrix that is based on
the Consolidated Leverage Ratio promptly upon receipt of the
quarterly or annual compliance certificate and related
financial information and shall promptly notify the Borrower
and the Lenders of any change thereof. Such determinations by
the Agent shall be conclusive absent manifest error.
Adjustments in the Applicable Percentages shall be effective
as to existing Extensions of Credit as well as new Extensions
of Credit made thereafter.
SECTION 2.2. Amendment to Sections 7.9(b) and 7.9(c). Sections 7.9(b)
and 7.9(c) of the Existing Credit Agreement are hereby amended in their entirety
to read as follows:
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(b) Consolidated Leverage Ratio. There shall be
maintained, as of the end of each fiscal quarter (commencing with the
fiscal quarter ending June 30, 2001), a Consolidated Leverage Ratio of
not greater than 2.50 to 1.0.
(c) Consolidated Fixed Charge Coverage Ratio. There shall
be maintained, as of the last day of each fiscal quarter, a
Consolidated Fixed Charge Coverage Ratio of no less than the ratio
shown below opposite the applicable period corresponding thereto:
Period Ratio
------ -----
Through June 30, 2001 1.40 to 1.00
July 1, 2001 through September 30, 2001 1.70 to 1.00
October 1, 2001 through December 31, 2001 2.00 to 1.00
January 1, 2002 and thereafter 2.20 to 1.00
SECTION 2.3. Amendment to Sections 8.3(d) and 8.3(e). Sections 8.3(d)
and 8.3(e) of the Existing Credit Agreement are hereby amended in their entirety
to read as follows:
(d) Acquire all or any portion of the capital stock or
securities of any other Person or purchase, lease or otherwise acquire
(in a single transaction or a series of related transactions) all or
any substantial part of the Property of any other Person, unless (i)
the aggregate cash cost of any such individual acquisition (which
includes assumed Indebtedness) in any fiscal year shall not exceed
$25,000,000; and (ii) the aggregate cash cost of all such acquisitions
(which shall include assumed Indebtedness) shall not in any fiscal year
exceed $50,000,000; provided, however, the foregoing restrictions shall
only be applicable to a particular transaction if, after giving effect
to such transaction, Consolidated Funded Debt exceeds cash and Cash
Equivalents of the Consolidated Group;
(e) Make Capital Expenditures in any fiscal year in
excess of 25% of revenues for the prior fiscal year; provided, however,
the foregoing restriction shall only be applicable to a particular
transaction if, after giving effect to such transaction, Consolidated
Funded Debt exceeds cash and Cash Equivalents of the Consolidated
Group.
SECTION 2.4. Amendment to Section 8.7. Section 8.7 of the Existing
Credit Agreement is hereby amended in its entirely to read as follows:
8.7 RESTRICTED PAYMENTS.
Make or permit any Restricted Payments if such Restricted
Payment would (i) cause the Borrower to be in violation of any of the
financial covenants set forth in Section 7.9 or (ii) in any fiscal
year, cause the aggregate amount of all Restricted Payments in such
fiscal year to exceed five percent (5%) of Consolidated Net Worth as of
the end of the preceding fiscal year.
SECTION 2.5. Amendment to Schedules. Effective on (and subject to the
occurrence of) the Amendment No. 1 Effective Date, Schedule 2.1(a) and Schedule
6.6 to the Existing Credit Agreement are hereby deleted in their entirety and
new Schedules 2.1(a) and 6.6 attached hereto are substituted therefor.
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CONDITIONS TO EFFECTIVENESS
SECTION 3.1. Amendment No. 1 Effective Date. This Amendment shall be
and become effective as of the date hereof (the "Amendment No. 1 Effective
Date") when all of the conditions set forth in this Section 3.1 shall have been
satisfied, and thereafter, this Amendment No. 1 shall be known, and may be
referred to, as "Amendment No. 1."
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SECTION 3.1.1. Execution of Counterparts. The Agent shall
have received (including by telecopy) counterparts of this Amendment
No. 1 which shall have been duly executed on behalf of the Borrower,
the Guarantors, the Agent and the Required Lenders.
SECTION 3.1.2. Legal Details, Etc. All documents executed or
submitted pursuant hereto shall be reasonably satisfactory in form and
substance to the Agent and its counsel prior to or by the time of
closing. Prior to or by the time of closing, the Agent and its counsel
shall have received all information, and such counterpart originals or
such certified or other copies of such originals, as the Agent or its
counsel may reasonably request, and all legal matters incident to the
transactions contemplated by this Amendment No. 1 shall be reasonably
satisfactory to the Agent and its counsel.
SECTION 3.1.3. Payment of Amendment Fee. The Borrower shall
have paid to the Agent a fee in connection with this Amendment in an
amount equal to 0.20% multiplied by the aggregate Revolving Commitments
(after giving effect to this Amendment) of the Consenting Lenders (as
defined below) such fee being for the account of each such Lender pro
rata according to such Lender's Revolving Commitment; provided,
however, that such fee shall be payable only to those Lenders (the
"Consenting Lenders") that shall have returned executed signature pages
to this Amendment no later than 5:00 P.M. EDT on Thursday, June 21,
2001, as directed by the Agent.
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MISCELLANEOUS
SECTION 4.1. Representations and Warranties. The Borrower hereby
represents and warrants to the Agent and the Lenders that, after giving effect
to this Amendment, (a) no Default or Event of Default exists under the Amended
Credit Agreement or any of the other Credit Documents and (b) the
representations and warranties set forth in Section 6 of the Amended Credit
Agreement are, subject to the limitations set forth therein, true and correct in
all material respects as of the date hereof (except for those which expressly
relate to an earlier date).
SECTION 4.2. Cross-References. References in this Amendment to any
Section are, unless otherwise specified, to such Section of this Amendment.
SECTION 4.3. Instrument Pursuant to Existing Credit Agreement. This
Amendment is a document executed pursuant to the Existing Credit Agreement and
shall (unless otherwise expressly indicated therein) be construed, administered
and applied in accordance with the terms and provisions of the Existing Credit
Agreement.
SECTION 4.4. Credit Documents. The Borrower and the Guarantors hereby
confirm and agree that the Credit Documents are, and shall continue to be, in
full force and effect, and hereby ratify and confirm in all respects their
obligations thereunder, except that, upon the effectiveness of, and on and after
the date of this Amendment, all references in each Credit Document to the
"Credit Agreement", "thereunder", "thereof" or words of like import referring to
the Existing Credit Agreement shall mean the Amended Credit Agreement.
SECTION 4.5. Counterparts, Effectiveness, Etc. This Amendment may be
executed by the parties hereto in several counterparts, each of which shall be
deemed to be an original and all of which shall constitute together but one and
the same agreement. Delivery of executed counterparts of this Amendment by
telecopy shall be effective as an original and shall constitute a representation
that an original shall be delivered.
SECTION 4.6. Governing Law; Entire Agreement. THIS AMENDMENT SHALL BE
DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE
STATE OF NORTH CAROLINA WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES
THEREOF.
SECTION 4.7. Successors and Assigns. This Amendment shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective duly authorized officers as of the day and year
first above written.
BORROWER: XXXXX ENTERPRISES, INCORPORATED
By:
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Name:
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Title:
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GUARANTORS: XXXXX REALTY, INC.
By:
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Name:
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Title:
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XXXXX E-COMMERCE INCORPORATED
By:
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Name:
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Title:
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LENDERS: BANK OF AMERICA, N.A., individually in its
capacity as a Lender and in its capacity as Agent
By:
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Name:
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Title:
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SUNTRUST BANK
By:
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Name:
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Title:
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FIRST UNION NATIONAL BANK
By:
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Name:
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Title:
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BANK ONE, NA (formerly known as The First National
Bank of Chicago)
By:
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Name:
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Title:
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FLEET NATIONAL BANK
By:
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Name:
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Title:
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SOUTHTRUST Bank, formerly known as SouthTrust
Bank, National Association
By:
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Name:
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Title:
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BANQUE NATIONALE DE PARIS,
HOUSTON AGENCY
By:
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Name:
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Title:
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Schedule 2.1(a)
Schedule of Lenders and Commitments
Revolving
Revolving Commitment
Lender Committed Amount Percentage
Bank of America, N.A. $ 20,000,000 20.0%
000 X. Xxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
xxxx.xxxxxxxx@xxxxxxxxxxxxx.xxx
SunTrust Bank $ 20,000,000 20.0%
000 X. Xxxxxxx Xxxxxx
00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attn: Xxxxxxxx Xxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
xxxxxxxx.xxxxxxxx@xxxxxxxx.xxx
First Union National Bank $ 16,666,666 16.7%
000 X. Xxxxxx Xxxxx
Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Attn: Xxxx Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
xxxx.xxxxx0@xxxxxxxxxx.xxx
Bank One, NA $ 11,666,667 11.7%
Bank Xxx Xxxxx
Xxxxx XX0-0000, 00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Price
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Fleet National Bank $ 11,666,667 11.7%
000 Xxxxxxx Xxxxxx
XX XXX 0-0-0
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxx Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
xxxxxx_xxxxxx@xxxxx.xxx
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SouthTrust Bank $ 10,000,000 10.0%
000 Xxxxx 00xx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: Florida Corporate Banking (Tampa)
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
xxxxxx.xxxxxxxxxx@xxxxxxxxxx.xxx
Banque Nationale de Paris $ 10,000,000 10.0%
Houston Agency
000 Xxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn: Xxxx Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
xxxx.xxxxx@xx.xxxxxxxx.xxx
$100,000,000 100.00%
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SCHEDULE 6.6
MATERIAL LITIGATION
Taken individually, the matters described below could reasonable be
expected, in the event of an unfavorable outcome, to result in a loss in excess
of $1 million. Matters which could not reasonable be expected, in the event of
an unfavorable outcome, to result in a loss in excess of $1 million are not
listed.
1. Shareholder class action lawsuits.
Sixteen purported class action lawsuits have been filed against
Borrower and certain of it officers alleging violations of federal securities
laws. All of the actions have been consolidated into one case which is pending
in the United States District Court for the Middle District of Florida. The
plaintiffs purport to assert claims on behalf of a class of purchasers of the
Borrower's common stock during the period from July 27, 1998 through September
18, 2000.
a. Procedural posture of the litigation.
All of the cases filed have been consolidated into one action
before one judge. The lead plaintiff has filed an amended complaint and the
Borrower and the other defendants filed a motion to dismiss. The court did not
grant the motion to dismiss and the Borrower has filed its answer to the amended
complaint. Plaintiffs have filed a motion for class certification. The
plaintiffs have propounded extensive requests for the production of documents to
which the Borrower has begun responding.
b. Overview of the facts.
The consolidated action claims violations of Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder. Among other things, the consolidated action alleges that during
2000, 1999 and 1998, the Borrower and certain of its officers made materially
false statements concerning the Borrower's financial condition and its future
prospects. The consolidated complaint also claims that certain of the Borrower's
quarterly financial statements during 1999 and 1998 were not prepared in
accordance with generally accepted accounting principles.
c. Insurance coverage.
The Borrower maintained during the period pertinent to the
consolidated complaint, $20 million of directors and officers insurance coverage
for both it and its officers and directors. The deductible of $250,000 has been
met. The primary carrier, National Union, has issued a coverage and reservation
of rights letter that raises the potential of a lack of coverage solely under
exclusions that are typically raised at the early stages of cases such as these.
d. Conclusion.
The Borrower's potential loss exposure depends on numerous
variables such as the ruling on the motion for class certification (which could
narrow the number of claimants in the class), the ability of the plaintiff's to
prove that the diminution in Borrower's market capitalization proximately and
actually resulted from any of the conduct alleged in the complaint, and the
performance of the Borrower's stock price in the relatively near future.
2. Xxxxx Realty, Inc. adv. Xxxxxxx Construction, Inc.
One of the Borrower's subsidiaries, Xxxxx Realty, Inc. ("Sykes
Realty"), filed a complaint against Xxxxxxx Construction, Inc. ("Bogatay") on or
about September 8, 1999, alleging defects in the Borrower's Xxxxxxx Xxxxx,
Xxxxxx call center facility, which Bogatay constructed. Sykes Realty believes
that it has suffered or will suffer damages in the approximate amount of $1.3
million as a result of Xxxxxxx'x faulty construction work. Bogatay filed a
counterclaim against the Borrower and one of its employees, Xxxxx Xxxxx for
indemnification concerning the
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damages that Sykes Realty sought from Bogatay. Prior to trial, which occurred in
the second quarter of 2001, Sykes Realty's insurance carrier, paid $1 million to
Sykes Realty in full settlement of its obligations under the insurance policy.
At the conclusion of the trial, the jury awarded Sykes Realty the approximate
sum of $550,000. Bogatay has informally indicated that it intends to appeal the
verdict, but has offered to give up its appeal for a reduction in the award.
3. Kyrus Corporation adv. Xxxxx Enterprises, Incorporated.
Litigation is pending in the Court of Common Pleas for Greenville
County, South Carolina. The Borrower has been sued by Kyrus Corporation, a South
Carolina corporation, with respect to certain contractual arrangements between
the parties, regarding a Software License and Software Contracts Assignment
Agreement (the "License/Agreement"), under which the Borrower licensed to Kyrus
certain software and assigned to Kyrus certain customer (end-user) contracts
relating to those customers' use of the licensed software. The License/Agreement
is dated on or about July 1998.
a. Claims.
First, Kyrus alleges that the Borrower breached its express
and implied warranties under the License/Agreement, including those of
merchantability and fitness for a particular purpose, by reason that the
software was not functional, did not conform to specifications, and was not year
2000 compliant, and that the customer contracts assigned to Kyrus were in breach
or default by the Borrower. No specific damages amount is stated in the
complaint with respect to the alleged breach of warranties.
Kyrus also claims it is owned more than $2.2 million by the
Borrower for direct costs incurred by Kyrus in providing support services to the
Borrower's customers regarding the assigned customer contracts in excess of
certain agreed upon support limits. The Borrower intends to assert, as a defense
to this claim, that Kyrus failed to give timely notice in accordance with the
notice provisions of the License/Agreement.
Finally, Kyrus claims it is owed $4.5 million of the
consideration paid to the Borrower by Kyrus. Alternatively, Kyrus demands that
Sykes return to Kyrus certain shares of Kyrus preferred stock having an
aggregate par value of $4.5 million.
b. Insurance coverage.
The Borrower has forwarded the lawsuit to its insurance
carrier and has been informed by a representative of its insurance carrier that
the types of allegations contained in the complaint, because they appear to
relate to the functionality of the software product (and subject to any further
amendments of the complaint by the plaintiff), are generally covered by existing
insurance policies of the Borrower, which, in the aggregate, provide
approximately $20 million of coverage. The primary carrier, Chubb Group of
Insurance Companies, has however, issued a coverage and reservation of rights
letter that raises the potential of a lack of coverage under exclusions that are
typically raised at the early stages of cases such as these.
c. Status of the case.
The Borrower has filed an answer denying the allegations
regarding functionality and asserting, among others, the defenses described
above. The parties recognize that the facts involved in this litigation are
extremely complex, and have therefore agreed to a stay in the litigation to
permit informal discovery. The stay is currently in effect until the beginning
of August, at which time the parties intend to meet to discuss settlement. In
the event a satisfactory resolution cannot be attained at that meeting, it is
likely that the stay will be lifted and formal discovery will commence. It is
also likely that if this matter proceeds towards trial, it will do so very
quickly due to the accelerated trial docket in Greenville County
