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EXHIBIT 10.1
AMENDMENT NO. 5 & LIMITED WAIVER
TO THE CREDIT AGREEMENT
This AMENDMENT NO. 5 & LIMITED WAIVER TO THE CREDIT AGREEMENT
(this "AMENDMENT") is dated as of September 30, 2000 and entered into by and
among Telespectrum Worldwide, Inc., a Delaware corporation (the "BORROWER"), the
financial institutions listed on the signature pages hereof (the "LENDERS"), BNP
Paribas, as collateral agent (the "AGENT"), and Bank of America, N.A., as
administrative agent for the Lenders (the "ADMINISTRATIVE AGENT").
RECITALS
WHEREAS, the Borrower, the Lenders, the Agent and the
Administrative Agent have entered into a Credit Agreement dated as of June 30,
1999 (as heretofore amended, supplemented or otherwise modified, the "CREDIT
AGREEMENT"). Capitalized terms not otherwise defined in this Amendment have the
same meanings as specified in the Credit Agreement, and
WHEREAS, the Borrower has (i) advised the Agent, the
Administrative Agent and the Lenders of its solicitation of cash investments by
investors on a subordinated basis, (ii) requested that the Lenders extend the
time within which the Borrower must comply with certain repayment obligations
pursuant to the Credit Agreement, (iii) requested that Required Lenders waive
compliance with certain financial covenants set forth in the Credit Agreement
for the fiscal quarter ending on September 30, 2000, and (iv) requested that the
Agent, the Administrative Agent and the Lenders make certain other amendments as
set forth below;
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, the parties hereto agree
as follows:
SECTION 1. Amendments to Credit Agreement. The Credit
Agreement is, effective as of the date hereof and subject to the agreements,
terms and conditions set forth in this Amendment, including, without limitation,
the satisfaction of the conditions precedent set forth in Section 5, hereby
amended as follows:
(a) The definition of "RELATED DOCUMENTS" in Section 1.01
of the Credit Agreement is hereby amended by (i) deleting the word
"and" immediately after "the MDC Subordinated Notes" and inserting a
"," therefor, and (ii) inserting "and the Designated Subordinated
Notes" immediately after "the TLSP Subordinated Debt".
(b) The following new definitions are hereby added to
Section 1.01 of the Credit Agreement in the appropriate alphabetical
order:
(i) "FIFTH AMENDMENT" means Amendment No. 5 and
Limited Waiver to the Credit Agreement dated as of September
30, 2000.
(ii) "FIFTH AMENDMENT EFFECTIVE DATE" as defined
in the Fifth Amendment.
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(iii) "DESIGNATED SUBORDINATED DEBT" means the
indebtedness and all of the obligations of the Borrower under
or in respect of the Designated Subordinated Notes.
(iv) "DESIGNATED SUBORDINATED NOTES" means,
collectively, the promissory notes issued by the Borrower
after September 30, 2000 and on or before November 15, 2000,
in an aggregate principal amount not to exceed $30,000,000
containing terms and conditions (including, without
limitation, the subordination thereof to all Obligations under
or in respect of the Loan Documents) satisfactory to the
Agent, the Administrative Agent and the Required Lenders in
their sole discretion, as amended, supplemented or otherwise
modified from time to time in accordance with their terms and
the terms of this Agreement.
(v) "NEW EQUITY CONTRIBUTION" means the
contribution by investors of $3,000,000 in Net Cash Proceeds
to the Borrower on terms satisfactory to the Agent in
accordance with Section 5.01(p) of this Agreement.
(c) Section 2.04(a) of the Credit Agreement is hereby
amended by deleting the reference to "September 30, 2000" contained in
the table therein and substituting therefor "November 15, 2000".
(d) Section 2.06(b)(ii) of the Credit Agreement is hereby
amended by adding the following proviso to the end thereof:
"; provided, further, however, that so long as no
Default shall have occurred and be continuing, in the case of clause
(B) Net Cash Proceeds derived from the issuance of the Designated
Subordinated Notes shall, on the date received by the Borrower or any
of its Subsidiaries, be applied to the Advances as follows:
first, in accordance with Section 2.04(a), ratably to
the Term Lenders the aggregate outstanding principal amount of the Term
Advances due on November 15, 2000 and December 31, 2000,
second, in accordance with Section 2.04(a), ratably
to the Term Lenders an aggregate outstanding principal amount of not
less than $5,675,000,
third, to permanently repay all Revolving Credit
Advances and terminate the Revolving Credit Commitments in accordance
Section 2.05(a); it being understood that the Borrower and the Agent
each respectively waive the applicable notice requirements of Section
2.05(a),
fourth, to repay any Working Capital Advances made
from, and including, the Fifth Amendment Effective Date through the
date of receipt by the Borrower or any of its Subsidiaries of Net Cash
Proceeds of the Designated Subordinated Debt,
fifth, if requested in writing to the Borrower, with
a copy to the Agent, by providers of any portion of the Net Equity
Contribution, to repay such portions of the Net Equity Contribution as
requested, and
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sixth, to repay Working Capital Advances in an amount
not less than the remaining Net Cash Proceeds after giving effect to
this proviso."
(e) Section 5.01 of the Credit Agreement is hereby
amended by adding a new clause (p) as follows:
"(p) New Equity Contribution. Prior to the making of
any Working Capital Advances or any Revolving Credit Advances on or
after the Fifth Amendment Effective Date, Net Cash Proceeds from the
New Equity Contribution shall have been placed in an escrow account
with Agent on terms and conditions satisfactory to Agent, including,
without limitation, the condition that (i) $2,000,000 of such funds
shall be released and deemed invested in the Borrower on the second
Business Day following the initial public disclosure by the Borrower of
its financial results for the fiscal quarter ended September 30, 2000,
and (ii) the remaining $1,000,000 shall be released and deemed invested
in the Borrower concurrently upon satisfaction of the following
conditions: (y) the making of the investment in eSatisfy contemplated
by Section 2(a) of the Fifth Amendment shall have been made by the
Borrower, and (z) the making of the Working Capital Advances
contemplated by Section 2(b) of the Fifth Amendment shall have been
made by the Working Capital Lenders. Borrower acknowledges and agrees
that any failure to comply with the terms of this Section 5.01(p) shall
constitute an immediate Default."
(f) Section 5.02(b)(i) of the Credit Agreement is hereby
amended by deleting the word "and" immediately after clause (B)
thereof, inserting the word "and" immediately after clause (C) thereof,
and adding a new clause (D) as follows:
"(D) the Designated Subordinated Debt; provided
that (i) on or prior to the issuance of the Designated
Subordinated Debt, Borrower shall have received Net Cash
Proceeds from the New Equity Contribution in accordance with
Section 5.01(p), (ii) the fees, costs and expenses to be paid
by the Borrower or any of its Subsidiaries in connection with
the incurrence of the Designated Subordinated Debt shall not
exceed $2,000,000, and (iii) the Net Cash Proceeds of the
issuance of the Designated Subordinated Notes are applied as
required by Section 2.06(b)(ii)."
(g) Section 5.02(b)(ii)(F) of the Credit Agreement is
hereby amended by deleting the word "or" immediately after subclause
(2) thereof, inserting a "," therefor, inserting ",or" immediately
after subclause (3), and adding a new subclause (4) as follows:
"(4) not due to [Siebel/Genesis];"
(h) Section 5.02(g) of the Credit Agreement is hereby
amended by deleting the word "and" immediately after clause (D)
thereof, inserting the word "and" immediately after clause (E) thereof,
and adding a new clause (F) as follows:
"(F) so long as no Default has occurred and is
continuing, and upon the release from escrow pursuant to
Section 5.01(p) of Net Cash Proceeds from the
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New Equity Contribution, Investments in an aggregate amount
not to exceed $1,000,000 in eSatisfy; provided that such
Investments are made by the Borrower on or before November 15,
2000;"
SECTION 2. Conditions to Amendments. Notwithstanding anything
to the contrary contained in the Credit Agreement, as amended by this Amendment
(the "AMENDED AGREEMENT"), and in consideration of the amendments set forth in
Section 1 above,
(a) the Borrower shall not request any Borrowings nor
shall any of the Lenders make any Advances during the period commencing
on the Fifth Amendment Effective Date through November 15, 2000 (such
period being the "WAIVER PERIOD"), provided, however, that solely
during the Waiver Period and following the deposit of the Net Cash
Proceeds from the New Equity Contribution into escrow pursuant to
Section 5.01(p) of the Credit Agreement, the Borrower may request
Working Capital Borrowings or Revolving Credit Borrowings, and the
Working Capital Lenders and Revolving Credit Lenders shall make Working
Capital Advances or Revolving Credit Advances, as applicable, in each
case in an aggregate amount not to exceed $2,000,000 so long as no
Default shall have occurred and be continuing at the time of such
request or on the date of such Working Capital Advance or Revolving
Credit Advance; provided further that the proceeds of such Working
Capital Borrowings or Revolving Credit Borrowings may be used solely
for the Borrower's general corporate purposes and working capital
needs; provided further that deposit of the Net Cash proceeds from the
new Equity Contribution into escrow pursuant to Section 5.01(p) of the
Credit Agreement and until the release from escrow pursuant to Section
5.01(p) of the Credit Agreement of the Net Cash Proceeds of the New
Equity Contribution, the Borrower may use an aggregate amount of
proceeds of the Working Capital Advances and/or the Revolving Credit
Advances no greater than $666,667 to make Investments in eSatisfy;
provided further, however, that until such time as the Borrower shall
have made Investments in eSatisfy after the Fifth Amendment Effective
Date, the amount of Net Cash Proceeds of the New Equity Contribution
available to the Borrower shall be reduced by $1,000,000 unless the
Lenders have agreed to make $1,000,000 in additional Working Capital
Advances to be used solely for the Borrower's general corporate
purposes and working capital needs thereby increasing the $2,000,000
amount referred to in this section to $3,000,000, and
(b) furthermore, so long as the Net Cash Proceeds from
the New Equity Contribution have been deposited into escrow pursuant to
Section 5.01(p) of the Credit Agreement, the Borrower may request
Working Capital Borrowings, and the Working Capital Lenders shall make
Working Capital Advances, in each case in an aggregate amount not to
exceed $3,000,000 so long as no Default shall have occurred and be
continuing at the time of such request or on the date of such Working
Capital Advance; provided that the proceeds of such Working Capital
Borrowings may be used solely to meet the Borrower's obligations to pay
interest on Term Advances and Working Capital Advances pursuant to
Section 2.07(a) of the Credit Agreement.
SECTION 3. Waivers. Subject to the agreements, terms and
conditions set forth herein, including, without limitation, the satisfaction of
the conditions precedent set forth in Section 5, and in reliance on the
representations and warranties of the Borrower herein
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contained, the undersigned Required Lenders hereby waive Borrower's compliance
with (i) the maximum Leverage Ratio set forth in Section 5.04(a)(ii) of the
Credit Agreement solely for the for the fiscal quarter ending in September 2000,
(ii) the minimum Fixed Charge Coverage Ratio set forth in Section 5.04(b) of the
Credit Agreement solely for the Rolling Period ending on September 30, 2000, and
(iii) the minimum Interest Coverage Ratio set forth in Section 5.04(c) of the
Credit Agreement solely for the Rolling Period ending in the fiscal month period
ending in September 2000.
SECTION 4. Limitation of Waivers. Without limiting the
generality of the provisions of Section 8.01 of the Credit Agreement, the
waivers set forth in Section 3 above shall be limited precisely as written and
relate solely to the noncompliance by the Borrower with the provisions of
Sections 5.04(a)(ii), 5.04(b) and 5.04(c) of the Credit Agreement in the manner
and to the extent described above, and nothing in this Amendment shall be deemed
to:
(a) constitute a waiver of compliance by the Borrower
with respect to (i) Sections 5.04(a)(ii), 5.04(b) and 5.04(c) of the
Credit Agreement in any other instance or (ii) any other term,
provision or condition of the Credit Agreement or any other instrument
or agreement referred to therein (whether in connection with Sections
5.04(a)(ii), 5.04(b) and 5.04(c) of the Credit Agreement or otherwise);
or
(b) prejudice any right or remedy that the Agent,
Administrative Agent or any Lender may now have (except to the extent
such right or remedy may have been based upon existing defaults that
will not exist after giving effect to this Amendment) or may have in
the future under or in connection with the Credit Agreement or any
other instrument or agreement referred to therein;
provided, however, that the waivers set forth in Section 3 of this Amendment
shall cease to be of any force or effect on November 15, 2000.
Except as expressly set forth herein, the terms, provisions
and conditions of the Credit Agreement and the other Loan Documents shall remain
in full force and effect and in all other respects are hereby ratified and
confirmed.
SECTION 5. Conditions of Effectiveness. This Amendment shall
become effective as of the date first above written (the "FIFTH AMENDMENT
EFFECTIVE DATE") when, and only when:
(a) Agent shall have received on or before the Fifth
Amendment Effective Date, in form and substance satisfactory to Agent
and in sufficient copies for each Lender Party (i) counterparts of this
Amendment executed by the Borrower and the Required Lenders and each
Working Capital Lender or, as to any of the Lenders, advice
satisfactory to the Agent that such Lender has executed this Amendment,
and (ii) the consent attached hereto executed by each Guarantor (the
"CONSENT"), and
(b) Borrower, by its execution of this Amendment, has
consented to the retention of Xxxxxxxx & Xxxxx LLC as financial advisor
to the Agent on behalf of the Lenders ("XXXXXXXX & XXXXX"), and
representatives of Xxxxxxxx & Xxxxx have begun
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the procedures agreed upon by the Borrower and the Agent on the
premises, wherever located, of the Borrower and its Subsidiaries.
This Amendment is subject to the provisions of Section 8.01 of
the Credit Agreement.
SECTION 6. Representations and Warranties of the Borrower. As
of the Fifth Amendment Effective Date, the Borrower represents and warrants as
follows:
(a) The Borrower is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction
indicated in the recital of parties to this Amendment.
(b) The execution, delivery and performance by the
Borrower of this Amendment and the Loan Documents, as amended hereby,
to which it is or is to be a party, and the consummation of the
transactions contemplated hereby, are within the Borrower's corporate
powers, have been duly authorized by all necessary corporate action and
do not (i) contravene the Borrower's charter or by-laws, (ii) violate
any law, rule or regulation (including, without limitation, Regulation
X of the Board of Governors of the Federal Reserve System), or any
order, writ, judgment, injunction, decree, determination or award,
(iii) conflict with or result in the breach of, or constitute a default
under, any contract, loan agreement, indenture, mortgage, deed of
trust, lease or other instrument binding on or affecting any Loan
Party, any of its Subsidiaries or any of their properties or (iv)
except for the Liens created under Loan Documents, result in or require
the creation or imposition of any Lien upon or with respect to any of
the properties of any Loan Party or any of its Subsidiaries.
(c) No authorization or approval or other action by, and
no notice to or filing with, any governmental authority or regulatory
body or any other third party is required for the due execution,
delivery or performance by the Borrower of this Amendment or any of the
Loan Documents, as amended hereby, to which it is or is to be a party.
(d) This Amendment has been duly executed and delivered
by the Borrower. This Amendment and each of the other Loan Documents,
as amended hereby, to which the Borrower is a party are legal, valid
and binding obligations of the Borrower, enforceable against the
Borrower in accordance with their respective terms.
(e) There is no action, suit, investigation, litigation
or proceeding affecting any Loan Party or any of its Subsidiaries,
including any Environmental Action, pending or threatened before any
court, governmental agency or arbitrator that (i) could be reasonably
likely to have a Material Adverse Effect (other than as set forth on
Schedule 4.01) to the Credit Agreement) or (ii) purports to affect the
legality, validity or enforceability of this Amendment or any of the
other Loan Documents, as amended hereby, or the consummation of any of
the transactions contemplated hereby.
(f) The representations and warranties contained in each
Loan Document are true and correct on and as of the Fifth Amendment
Effective Date, other than any such
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representations or warranties that, by their terms, refer to a specific
date other than the Fifth Amendment Effective Date, in which case as of
such specific date.
(g) No Defaults exist under the Credit Agreement.
SECTION 7. Reference to and Effect on the Credit Agreement and
the Loan Documents. (a) On and after the Fifth Amendment Effective Date, each
reference in the Credit Agreement to "this Agreement", "hereunder", "hereof" or
words of like import referring to the Credit Agreement, and each reference in
the Notes and each of the other Loan Documents to "the Credit Agreement",
"thereunder", "thereof" or words of like import referring to the Credit
Agreement, shall mean and be a reference to the Amended Agreement.
(b) The Credit Agreement, the Notes and each of the other
Loan Documents, as specifically amended by this Amendment, are and
shall continue to be in full force and effect and are hereby in all
respects ratified and confirmed. Without limiting the generality of the
foregoing, the Collateral Documents and all of the Collateral described
therein do and shall continue to secure the payment of all Obligations
of the Loan Parties under the Loan Documents, in each case as amended
by this Amendment.
(c) The execution, delivery and effectiveness of this
Amendment shall not, except as expressly provided herein, operate as a
waiver of any right, power or remedy of any Lender or the Agent under
any of the Loan Documents, nor constitute a waiver of any provision of
any of the Loan Documents.
SECTION 8. Costs and Expenses. The Borrower agrees to pay on
demand all costs and expenses of the Agent in connection with the preparation,
execution, delivery and administration, modification and amendment of this
Amendment and the other instruments and documents to be delivered hereunder
(including, without limitation, the reasonable fees and expenses of counsel for
the Agent) in accordance with the terms of Section 8.04 of the Credit Agreement.
SECTION 9. Execution in Counterparts. This Amendment may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute but one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Amendment by telecopier shall be effective as delivery of a manually executed
counterpart of this Amendment.
SECTION 10. Governing Law. This Amendment shall be governed
by, and construed in accordance with, the laws of the State of New York.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their respective officers thereunto, duly
authorized, as of the date first above written.
TELESPECTRUM WORLDWIDE, INC.
By ________________________________
Title:
X-0
0
XXX XXXXXXX,
as Agent and as Lender
By ________________________________
Title:
By ________________________________
Title:
BANK OF AMERICA, N.A.,
as Administrative Agent and as Lender
By ________________________________
Title:
BANKBOSTON, N.A.
By ________________________________
Title:
IBJ WHITEHALL BANK & TRUST COMPANY
By ________________________________
Title:
TORONTO DOMINION (TEXAS), INC.
By ________________________________
Title:
XXX XXXXXX PRIME RATE
INCOME TRUST
By ________________________________
Title:
X-0
00
XXX XXXXXX SENIOR FLOATING RATE FUND
By ________________________________
Title:
XXX XXXXXX SENIOR INCOME TRUST
By ________________________________
Title:
XXXXX FARGO BANK, N.A.
By ________________________________
Title:
FIRST SOURCE FINANCIAL, LLP
By First Source Financial, Inc.,
its agent/manager
By ________________________________
Title:
KZH ING-1 LLC
By ________________________________
Title:
KZH ING-2 LLC
By ________________________________
Title:
KZH ING-3 LLC
By ________________________________
Title:
S-3
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ARCHIMEDES FUNDING, L.L.C.
By: ING Capital Advisors LLC,
as Collateral Manager
By ________________________________
Title:
ARCHIMEDES FUNDING II, LTD.
By: ING Capital Advisors LLC,
as Collateral Manager
By ________________________________
Title:
S-4
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CONSENT
Dated as of September __, 2000
The undersigned, each Guarantor under either (x) the Guaranty
dated as of June 30, 1999 (the "U.S. Guaranty") in favor of the Secured Parties
(as defined in the Credit Agreement referred to in the foregoing Amendment) or
(y) the Guaranty dated as of June 30, 1999 (the "Canadian Guaranty" and
collectively with the U.S. Guaranty, the "Guaranties") in favor of the Secured
Parties (as defined in the Credit Agreement referred to in the foregoing
Amendment), hereby consents to such Amendment and hereby confirms and agrees
that (a) notwithstanding the effectiveness of such Amendment, the Guaranty to
which each of the undersigned is a party and each of the Collateral Documents
is, and shall continue to be, in full force and effect and is hereby ratified
and confirmed in all respects, except that on and after the effectiveness of
such Amendment, each reference in each Guaranty and each of the Collateral
Documents to the "Credit Agreement", "thereunder", "thereof" or words of like
import shall mean and be a reference to the Credit Agreement, as amended by such
Amendment, and (b) the Collateral Documents to which Guarantor is a party and
all of the Collateral described therein do, and shall continue to, secure the
payment of all of the Secured Obligations (in each case, as defined therein).
TLSP TRADEMARKS, INC.
By ________________________________
Title:
TELESPECTRUM GOVERNMENT SERVICES, INC.
By ________________________________
Title:
FIRST DOMINION FUNDING III
By ________________________________
Title:
S-5
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CRW FINANCIAL INC.
By ________________________________
Title:
TELESPECTRUM WORLDWIDE (CANADA) INC.
By ________________________________
Title:
S-6
