EXHIBIT 6(b)
THIRD AMENDMENT TO CREDIT AGREEMENT DATED AS OF JANUARY 31, 2000
THIRD AMENDMENT TO CREDIT AGREEMENT
This Amendment, dated as of August __, 2001, is made by and between
Analysts International Corporation, a Minnesota corporation (the "Borrower"),
and Xxxxx Fargo Bank, National Association, assignee of Xxxxx Fargo Bank
Minnesota, National Association, f/k/a Norwest Bank Minnesota, National
Association (the "Bank"). RECITALS
The Borrower and the Bank have entered into a Credit Agreement dated as
of January 31, 2000 as amended by a First Amendment to Credit Agreement dated as
of December 12, 2000 and a Second Amendment to Credit Agreement dated as of
April 2, 2001, but effective as of March 30, 2001 (as so amended, the "Credit
Agreement"). Capitalized terms used in these recitals have the meanings given to
them in the Credit Agreement unless otherwise specified.
The Borrower has requested that certain amendments be made to the Credit
Agreement, which the Bank is willing to make pursuant to the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained, it is agreed as follows:
1. DEFINED TERMS. Capitalized terms used in this amendment which are
defined in the credit agreement shall have the same meanings as defined therein,
unless otherwise defined herein. In addition, section 1.1 of the credit
agreement is amended by adding or amending, as the case may be, the following
definitions:
"'Covenant Computation Date' means the last day of each fiscal quarter
of the Borrower."
"'Facility Amount' means $30,000,000, unless said amount is reduced
pursuant to Section 2.8, in which event it means the amount to which said amount
is reduced."
"'Level Status' means Level I Status as defined in Exhibit A to the
Third Amendment and determined pursuant to Section 2.3(e) of the Credit
Agreement and Exhibit A to the Third Amendment."
"'Third Amendment' means the Third Amendment to Credit Agreement dated
as of August __, 2001 by and between the Borrower and the Bank.
2. MARGINS. Section 2.3(e) of the credit agreement is hereby deleted in its
entirety and replaced with the following:
"(e) MARGINS. The Borrower's Level Status shall be deemed to be Level I
Status at all times."
3. FINANCIAL STATEMENTS. Section 5.1(c) of the credit agreement is hereby
deleted in its entirety and replaced with the following:
"(c) As soon as available after the end of each of the Borrower's
fiscal quarters and in any event within 45 days after the end of each of the
Borrower's fiscal quarters, a Compliance Certificate, duly executed by the chief
financial officer of the Borrower."
4. CASH FLOW LEVERAGE RATIO. Section 5.8 of the credit agreement is
hereby deleted in its entirety and replaced with the following:
"Section 5.8 CASH FLOW LEVERAGE RATIO. The Borrower will maintain at
all times its Cash Flow Leverage Ratio, determined as of each Covenant
Computation Date set forth below, at a ratio less than the ratio set forth
opposite such Covenant Computation Date:
COVENANT COMPUTATION DATE CASH FLOW LEVERAGE RATIO
------------------------- ------------------------
June 30, 2001 2.75 to 1.00
September 30, 2001 3.05 to 1.00
December 31, 2001 3.05 to 1.00
Each Covenant Computation 2.50 to 1.00
Date Thereafter
5. DEBT SERVICE COVERAGE RATIO. Section 5.9 of the credit agreement is
hereby deleted in its entirety and replaced with the following:
"Section 5.9 DEBT SERVICE COVERAGE RATIO. The Borrower will at all
times maintain its Debt Service Coverage Ratio, determined as of each Covenant
Computation Date set forth below, at a ratio greater than the ratio set forth
opposite such Covenant Computation Date:
COVENANT COMPUTATION DATE DEBT SERVICE COVERAGE RATIO
June 30, 2001 1.15 to 1.00
September 30, 2001 1.15 to 1.00
December 31, 2001 1.10 to 1.00
Each Covenant Computation 1.20 to 1.00
Date Thereafter
6. CAPITALIZATION RATIO. Section 5.10 of the Credit Agreement is hereby
deleted in its entirety and replaced with the following:
"Section 5.10 CAPITALIZATION. The Borrower will at all times maintain
its Capitalization Ratio, determined as of each Covenant Computation Date set
forth below, at a ratio less than the ratio set forth opposite such Covenant
Computation Date:
COVENANT COMPUTATION DATE CAPITALIZATION RATIO
June 30, 2001 0.305 to 1.00
September 30, 2001 0.305 to 1.00
December 31, 2001 0.305 to 1.00
Each Covenant Computation 0.300 to 1.00
Date Thereafter
7. CURRENT RATIO. Section 5.11 of the credit agreement is hereby deleted
in its entirety and replaced with the following:
"Section 5.11 CURRENT RATIO. The Borrower will at all times maintain
its Current Ratio, determined as of each Covenant Computation Date set forth
below, at a ratio greater than the ratio set forth opposite such Covenant
Computation Date:
COVENANT COMPUTATION DATE CURRENT RATIO
June 30, 2001 1.50 to 1.00
September 30, 2001 1.50 to 1.00
December 31, 2001 1.50 to 1.00
Each Covenant Computation 1.75 to 1.00
Date Thereafter
8. COMMITMENT TO OBTAIN NEW FINANCING. Section 5.13 is hereby added to
the credit agreement as follows:
"SECTION 5.13 COMMITMENT TO OBTAIN NEW FINANCING. The borrower will (a)
obtain a written commitment from a financial institution other than the bank to
provide not less than $30,000,000 of new financing, which commitment shall
include a proposed funding date no later than December 1, 2001, and (b) will
cause a financial institution other than the bank to fund financing to the
borrower in an amount not less than $30,000,000 on or prior to December 1,
2001."
9. RESTRICTED PAYMENTS. Section 6.5 of the credit agreement is hereby
deleted in its entirety and replaced with the following:
"Section 6.5 RESTRICTED PAYMENTS. The Borrower shall not make any
Restricted Payments, except that the foregoing shall not prohibit (a) the
payment of dividends on the Borrower's common stock in an amount not to exceed
an aggregate of $250,000 in any single fiscal quarter of the Borrower, or (b)
the Borrower from repurchasing, on a dollar-for-dollar basis, its common stock
for the purpose of offsetting any 401(k) and/or stock option issuances of its
common stock."
10. NEW COMPLIANCE CERTIFICATE. Exhibit C to the credit agreement is
hereby amended in its entirety and replaced with exhibit b to this amendment.
11. NO OTHER CHANGES. Except as explicitly amended by this amendment, all
of the terms and conditions of the credit agreement shall remain in full force
and effect and shall apply to any advance or letter of credit thereunder.
12. AMENDMENT FEE. In consideration of the bank's entering into this
amendment, the borrower shall pay to the bank, on or before August __, 2001, an
amendment fee in the amount of $45,000. Such fee shall be deemed fully earned by
the bank's execution and delivery of this amendment.
13. CONDITIONS PRECEDENT. This amendment shall be effective when the bank
shall have received an executed original hereof, together with each of the
following, each in substance and form acceptable to the bank in its sole
discretion:
(a) Payment of the fee described in paragraph 12.
(b) Such other matters as the bank may require.
14. REPRESENTATIONS AND WARRANTIES. The borrower hereby represents and warrants
to the bank as follows:
(a) The borrower has all requisite power and authority to execute this
amendment and to perform all of its obligations hereunder, and this amendment
has been duly executed and delivered by the borrower and constitutes the legal,
valid and binding obligation of the borrower, enforceable in accordance with its
terms.
(b) The execution, delivery and performance by the borrower of this
amendment have been duly authorized by all necessary corporate action and do not
(i) require any authorization, consent or approval by any governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, (ii) violate any provision of any law, rule or regulation or of any
order, writ, injunction or decree presently in effect, having applicability to
the borrower, or the articles of incorporation or by-laws of the borrower, or
(iii) result in a breach of or constitute a default under any indenture or loan
or credit agreement or any other agreement, lease or instrument to which the
borrower is a party or by which it or its properties may be bound or affected.
(c) All of the representations and warranties contained in article iv of
the credit agreement are correct on and as of the date hereof as though made on
and as of such date, except to the extent that such representations and
warranties relate solely to an earlier date.
15. REFERENCES. All references in the credit agreement to "this
agreement" shall be deemed to refer to the credit agreement as amended hereby;
and any and all references in the loan documents to the credit agreement shall
be deemed to refer to the credit agreement as amended hereby.
16. RELEASE. The borrower hereby absolutely and unconditionally releases and
forever discharges the bank, and any and all participants, parent corporations,
subsidiary corporations, affiliated corporations, insurers, indemnitors,
successors and assigns thereof, together with all of the present and former
directors, officers, agents and employees of any of the foregoing, from any and
all claims, demands or causes of action of any kind, nature or description,
whether arising in law or equity or upon contract or tort or under any state or
federal law or otherwise, which the borrower has had, now has or has made claim
to have
against any such person for or by reason of any act, omission, matter,
cause or thing whatsoever arising from the beginning of time to and including
the date of this amendment, whether such claims, demands and causes of action
are matured or unmatured or known or unknown.
17. COSTS AND EXPENSES. The borrower hereby reaffirms its agreement under
the credit agreement to pay or reimburse the bank on demand for all costs and
expenses incurred by the bank in connection with the loan documents and all
other documents contemplated thereby, including without limitation all
reasonable fees and disbursements of legal counsel. Without limiting the
generality of the foregoing, the borrower specifically agrees to pay all fees
and disbursements of counsel to the bank for the services performed by such
counsel in connection with the preparation of this amendment and the documents
and instruments incidental hereto. The borrower hereby agrees that the bank may,
at any time or from time to time in its sole discretion and without further
authorization by the borrower, make a loan to the borrower under the credit
agreement, or apply the proceeds of any loan, for the purpose of paying any such
fees, disbursements, costs and expenses and the fee required under paragraph 12
hereof.
18. MISCELLANEOUS. This amendment may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original and all of which counterparts, taken together, shall constitute one and
the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first written above.
XXXXX FARGO BANK, NATIONAL ASSOCIATION
ANALYSTS INTERNATIONAL CORPORATION
By By
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Xxxxxxx X. Xxxxxxxx Xxxxx X. Xxxxxxxxxxx
Its Vice President Its Vice President - Finance
EXHIBIT A TO THIRD AMENDMENT
TO CREDIT AGREEMENT
PRICING GRID
----------------------------------------------------------------------------------------------------------------
EURODOLLAR RATE
LEVEL APPLICATION PERIOD BASE RATE MARGIN MARGIN UNUSED FEE
----------------------------------------------------------------------------------------------------------------
I at all times 0.25% 3.00% 0.500%
----------------------------------------------------------------------------------------------------------------
"Level I Status" exists at all times.
EXHIBIT B TO THIRD AMENDMENT
TO CREDIT AGREEMENT
COMPLIANCE CERTIFICATE
__________________, 2001
Xxxxx Fargo Bank National Association
0000 Xxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxxx
COMPLIANCE CERTIFICATE
Ladies and Gentlemen:
Reference is made to the Credit Agreement dated as of January
31, 2000, as amended by a First Amendment to Credit Agreement dated as of
December 12, 2000, a Second Amendment to Credit Agreement dated as of March
30, 2001, but effective as of April 2, 2001 and a Third Amendment to Credit
Agreement dated as of August __, 2001 (as so amended, the "Credit
Agreement"), entered into between Xxxxx Fargo Bank, National Association, a
national banking association and
Analysts International Corporation, a
Minnesota corporation (the "Borrower").
All terms defined in the Credit Agreement and not otherwise
defined herein shall have the meanings given them in the Credit Agreement.
This is a Compliance Certificate submitted in connection with
the Borrower's reporting obligations under Section 5.1(c) of the Credit
Agreement as of and for its fiscal quarter ending _____________________,
200_ (the "Reporting Date") and includes the Borrower's financial statements
(the "Statements") prepared as of and for the Reporting Date.
I hereby certify to you as follows:
1. I am the chief financial officer of the Borrower, and I am familiar with
the financial statements and financial affairs of the Borrower.
2. The Statements, and the computations below, have been prepared in accordance
with GAAP.
3. The following computations set forth the Borrower's compliance or
non-compliance with the requirements set forth in the Financial Covenants
as of the Reporting Date:
SECTION 5.8 CASH FLOW LEVERAGE RATIO
Total Funded Debt (a) $___________
EBITDA (b) $___________
Restructuring Charges (c) $___________
Investment Banking
Charges (d) $___________
Cash Flow Leverage Ratio = a/(b+c+d) for March 31, 2001 through November 30,
2001
Cash Flow Leverage Ratio = a/b thereafter
A. Pursuant to Section 5.8 of the Credit Agreement, as of the Reporting
Date, the Borrower's Cash Flow Leverage Ratio was _____ to 1.00 which / /
satisfies / / does not satisfy the requirement that such ratio be less than
______ to 1.00 on the Reporting Date as set forth in the table below:
COVENANT COMPUTATION DATE CASH FLOW LEVERAGE RATIO
June 30, 2001 2.75 to 1.00
September 30, 2001 3.05 to 1.00
December 31, 2001 3.05 to 1.00
Each Covenant Computation Date Thereafter 2.50 to 1.00
SECTION 5.9 DEBT SERVICE COVERAGE RATIO
EBITDA $___________
+ Rental Expense $___________
+ Investment Banking Charges $___________
- Capital Expenditures $___________
- Taxes $___________
- Restricted Payments $___________
= Debt Service Cash Flow (a) $___________
Debt Service Requirement
Principal Payments $___________
+ Interest Payments $___________
+ Rental Expense $___________
=Total Debt Service
Requirements (b) $___________
Debt Service Coverage Ratio = a/b
B. Pursuant to Section 5.9 of the Credit Agreement, as of the Reporting
Date, the Borrower's Debt Service Coverage Ratio was _____ to 1.00 which / /
satisfies / / does not satisfy the requirement that such ratio be greater
than ______ to 1.00 on the Reporting Date as set forth in the table below:
COVENANT COMPUTATION DATE DEBT SERVICE COVERAGE RATIO
June 30, 2001 1.15 to 1.00
September 30, 2001 1.15 to 1.00
December 31, 2001 1.10 to 1.00
Each Covenant Computation Date Thereafter 1.20 to 1.00
SECTION 5.10 CAPITALIZATION RATIO
Total Funded Debt (a) $___________
Total Funded Debt (b) $___________
Net Worth (c) $___________
Capitalization Ratio = a/(b+c)
C. Pursuant to Section 5.10 of the Credit Agreement, as of the Reporting
Date, the Borrower's Capitalization Ratio was _____ to 1.00 which / /
satisfies / / does not satisfy the requirement that such ratio be less than
______ to 1.00 on the Reporting Date as set forth in the table below:
COVENANT COMPUTATION DATE CAPITALIZATION RATIO
June 30, 2001 0.305 to 1.00
September 30, 2001 0.305 to 1.00
December 31, 2001 0.305 to 1.00
Each Covenant Computation Date Thereafter 0.300 to 1.00
SECTION 5.11 CURRENT RATIO
Current Assets (a) $___________
Current Liabilities (b) $___________
Current Ratio = a/b
D. Pursuant to Section 5.11 of the Credit Agreement, as of the Reporting
Date, the Borrower's Current Ratio was _____ to 1.00 which / / satisfies / /
does not satisfy the requirement that such ratio be greater than ______ to
1.00 on the Reporting Date as set forth in the table below:
COVENANT COMPUTATION DATE CURRENT RATIO
June 30, 2001 1.50 to 1.00
September 30, 2001 1.50 to 1.00
December 31, 2001 1.50 to 1.00
Each Covenant Computation Date Thereafter 1.75 to 1.00
SECTION 5.12 CONSOLIDATED NET WORTH
Total Assets (a) $___________
Total Liabilities (b) $___________
Consolidated Net Worth: a-b
E. Pursuant to Section 5.12 of the Credit Agreement, as of the Reporting
Date, the Borrower's Consolidated Net Worth was $__________________, which
/ / satisfies / / does not satisfy the requirement that such net worth be at
least $74,261,000 PLUS 50% of its cumulative Net Income.
SECTION 6.12 CAPITAL EXPENDITURES
F. Pursuant to Section 6.12 of the Credit Agreement, for the twelve month
period ending on the Reporting Date, the Borrower and any Subsidiary has
expended or contracted to expend for Capital Expenditures,
$___________________ in the aggregate which / / satisfies / / does not
satisfy the requirement that such expenditures be less than $5,000,000 for
any consecutive twelve month period.
Attached hereto are all relevant facts in reasonable detail to evidence, and
the computations of, the financial covenants referred to above.
4. I have no knowledge of the occurrence of any Default or Event of Default
under the Credit Agreement, except as set forth in the attachments, if any,
hereto.
Very truly yours,
ANALYSTS INTERNATIONAL CORPORATION
By
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Its
