FIRST AMENDMENT
FIRST AMENDMENT dated as of February 1, 2002 (this "Amendment") to
the Credit Agreement dated as of September 11, 2001 (the "Credit
Agreement") among Volt Information Sciences, Inc., Gatton Volt
Consulting Group Limited, the Guarantors party thereto, the Lenders
party thereto, XX Xxxxxx Xxxxx Bank (formerly known as The Chase
Manhattan Bank), as Administrative Agent, and Fleet National Bank, as
Syndication Agent. Unless the context requires otherwise, capitalized
terms used herein without definition shall have the meanings ascribed to
them in the Credit Agreement.
R E C I T A L S
The parties hereto wish to amend the Credit Agreement in order to,
among other things, (i) anticipate the impending repayment in full of the Senior
Notes, (ii) modify or replace certain financial covenants in contemplation of
such impending repayment, or for other purposes, (iii) provide for certain
additional Subsidiaries to become Guarantors, and (iv) provide for the granting
of Liens on certain assets by certain of the Guarantors.
NOW, THEREFORE, in consideration of the mutual agreements contained
in the Credit Agreement and herein and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby mutually agree as follows:
I. AMENDMENTS
The Credit Agreement is hereby amended as follows:
1.1. The following definitions are hereby added to Section 1.01 of
the Credit Agreement in their respective proper alphabetical order:
"First Amendment to Credit Agreement" shall mean that certain
First Amendment, dated as of February 1, 2002, to the Credit
Agreement.
"Proposed Securitization" shall have the meaning assigned to
such term in Section 5.12.
"Senior Notes Payoff" shall mean the repayment in full
(including any applicable make-whole amount) by the Domestic
Borrower of the Senior Notes on or about March 5, 2002, in
accordance with those certain notices of prepayment, dated January
31, 2002 (the "Senior Notes Prepayment Notices"), given by the
Domestic Borrower to the holders of the Senior Notes in accordance
with the Senior Note Purchase Agreement, true and complete copies of
which notices have been given to the Administrative Agent.
EXHIBIT 4.1(b)
"Senior Notes Prepayment Notices" shall have the meaning assigned to
such term within the defined term "Senior Notes Payoff".
1.2. The term "Material Indebtedness" as defined in Section 1.01 of
the Credit Agreement is hereby amended by the following additional sentence at
the end thereof:
"Notwithstanding the foregoing, Indebtedness under the Senior Notes,
the Noteholder Guaranties of Payment and the Senior Note Purchase
Agreement shall not constitute "Material Indebtedness" for purposes
of this Agreement or the other Credit Documents."
1.3. In Section 6.12 of the Credit Agreement, the phrase "other than
those Liens permitted by the provisions of clauses (a) through (c) of Section
6.02" is hereby restated to read in its entirety as "other than those Liens
permitted by the provisions of Section 6.02".
1.4. References in the Credit Agreement to: (i) Volt-Autologic
Directories S.A., Ltd., a Delaware corporation, shall be to Volt Directories
S.A., Ltd., a Delaware corporation formerly known as Volt-Autologic Directories
S.A., Ltd.; and (ii) Volt Human Resources, Inc., a Delaware corporation, shall
be to Volt Technical Resources, LLC, a Delaware limited liability Company
formerly known as Volt Human Resources, Inc.
II NEW SECTIONS
2.1. Section 3.03 of the Credit Agreement is hereby deleted in its
entirety and replaced with the following:
SECTION 3.03. Governmental Approvals; No Conflicts.
The Transactions: (a) do not require any consent or approval
of, registration or filing with, or any other action by, any
Governmental Authority, except (i) such as have been obtained or
made and are in full force and effect, and (ii) such as may be
necessary to perfect any Lien granted under any Credit Document to
the Lenders or to the Administrative Agent on their behalf; (b) will
not violate any applicable law or regulation or the charter, by-laws
or other organizational documents of the Domestic Borrower or any of
its Subsidiaries (including Gatton and the Guarantors) or any order
of any Governmental Authority; (c) after giving effect to the Senior
Notes Payoff, will not violate or result in a default under any
indenture, agreement or other instrument binding upon the Domestic
Borrower or any of its Subsidiaries (including Gatton and the
Guarantors) or its assets, or give rise to a right thereunder to
require any payment to be made by the Domestic Borrower or any of
its Subsidiaries (including Gatton and the Guarantors); and (d) will
not result in the creation or imposition of any Lien on any asset of
the Domestic Borrower or any of its Subsidiaries (including Gatton
and the Guarantors), except as permitted by Section 6.02.
2.2. The text set forth in Section 5.10 of the Credit Agreement is
hereby designated as subsection (a) thereof, and the following new subsection
(b) is hereby added at the end of such Section:
EXHIBIT 4.1(b)
(b) At the times specified in Section 5.11 and in Section
5.12, the Domestic Borrower shall cause the respective applicable
collateral grantors referenced therein, to the extent not already
"Guarantors", to become "Guarantors" under the Guaranty of Payment,
jointly and severally with all the other Guarantors, by joining in
this Agreement and the Guaranty of Payment pursuant to documentation
reasonably satisfactory to the Administrative Agent.
2.3. The following new Sections 5.11 and 5.12 are hereby added to
the Credit Agreement:
SECTION 5.11. Collateralization.
Contemporaneously with the Senior Notes Payoff, or on such
earlier day as the Administrative Agent may require, the Domestic
Borrower shall cause each of the Subsidiaries set forth on Schedule
5.11, annexed to the First Amendment to Credit Agreement (which
Subsidiaries are the only domestic subsidiaries engaged in (A) its
telephone directory business segment, (B) the telecommunications
business group within its telecommunications business segment, or
(C) engaged in its computer systems segment), to grant to the
Administrative Agent, the Lenders and the Issuing Bank a security
interest in all of their respective domestic Accounts Receivable as
collateral security for their respective obligations under this
Agreement, the Guaranty of Payment and the other Credit Documents to
which they respectively may be party. Such collateral grant shall be
made pursuant to documentation reasonably satisfactory to the
Administrative Agent, which shall include a security agreement and
an amendment to this Agreement to, among other things, expand the
scope of the term "Credit Documents" and to include events of
default under such required security agreement as an Event of
Default. Such resulting security interest shall be of first priority
except as the Administrative Agent otherwise may permit (with regard
to the Senior Note Purchase Agreement, if then outstanding, or
otherwise). If any such collateral grantor is not a Guarantor as of
the time required for such collateral grant then, simultaneously
therewith, such collateral grantor shall become a party hereto and a
"Guarantor" under the Guaranty of Payment in accordance with Section
5.10(b). Notwithstanding Sections 6.02(g) and 6.03(b)(ii), sales or
transfers of Accounts Receivables constituting collateral in
accordance with this Section only may be made to: (x) a Subsidiary
that is (or thereby becomes) both a Guarantor and collateral
grantor; and (y) the Domestic Borrower, but only if the Domestic
Borrower is a collateral grantor with regard to such Accounts
Receivables. At the Administrative Agent's request made at any time
after the effective date of the First Amendment to Credit Agreement,
the Administrative Agent may cause to be performed a field exam of
the Domestic Borrower's and the Guarantors' Accounts Receivable, at
the sole cost and expense of the Domestic Borrower and the
Guarantors.
SECTION 5.12. Securitization.
The Domestic Borrower has advised the Administrative Agent and
the Lenders that the Domestic Borrower, together with its domestic
EXHIBIT 4.1(b)
Subsidiaries engaged with it in their staffing solutions business
(except those acting in a paying agency capacity), are proposing to
engage in a securitization transaction of up to $100,000,000 with
regard to Accounts Receivables generated from such business (the
"Proposed Securitization"). The Proposed Securitization is not
permitted under this Agreement absent the consent of (at least,
depending upon the exact terms thereof) the Required Lenders, which
consent has not been granted as of February 1, 2002, nor is there
any obligation whatsoever on the part of any Lender to grant its
consent thereto. In the event that the Proposed Securitization has
not become effective on or prior to April 15, 2002, then, on such
date or as soon thereafter as is practicable but not later than
April 30, 2002, the Domestic Borrower shall, and shall cause each of
its domestic Subsidiaries engaged in such business (except those
acting in a paying agency capacity) to, grant to the Administrative
Agent, the Lenders and the Issuing Bank a security interest in all
of their respective domestic Accounts Receivable generated from such
business as collateral security for their respective obligations
under this Agreement, the Guaranty of Payment (other than in the
case of the Domestic Borrower) and the other Credit Documents to
which they respectively may be party. Such collateral grant shall be
made pursuant to documentation reasonably satisfactory to the
Administrative Agent, which shall include a security agreement and
an amendment to this Agreement to, among other things, expand the
scope of the term "Credit Documents" and to include events of
default under such required security agreement as an Event of
Default. Such resulting security interest shall be of first priority
except as the Administrative Agent otherwise may permit (with regard
to the Senior Note Purchase Agreement, if then outstanding, or
otherwise). If any such collateral grantor (other than the Domestic
Borrower) is not a Guarantor as of the time required for such
collateral grant then, simultaneously therewith, such collateral
grantor shall become a party hereto and a "Guarantor" under the
Guaranty of Payment in accordance with Section 5.10(b).
Notwithstanding Sections 6.02(g) and 6.03(b)(ii), sales or transfers
of Accounts Receivables constituting collateral in accordance with
this Section only may be made to: (x) a Subsidiary that is (or
thereby becomes) both a Guarantor and collateral grantor; and (y)
the Domestic Borrower, but only if the Domestic Borrower is a
collateral grantor with regard to such Accounts Receivables.
2.4. Section 6.01 of the Credit Agreement is hereby deleted in its
entirety and replaced with the following:
SECTION 6.01. Indebtedness.
The Domestic Borrower will not, and will not permit any
Subsidiary to, create, incur, assume or permit to exist any
Indebtedness, except:
EXHIBIT 4.1(b)
(a) Indebtedness created under this Agreement, the Guaranty of
Payment or any other Credit Document;
(b) prior to the Senior Notes Payoff, Indebtedness of (i) the
Domestic Borrower evidenced by the Senior Notes, and (ii) one or
more Subsidiaries under the Noteholder Guaranties of Payment, in
each case not exceeding $30,000,000 in aggregate principal amount at
any one time;
(c) advances from customers received in the ordinary course of
business;
(d) performance guaranties, trade guarantees, and bid
guarantees of the performance of contractual obligations of wholly
owned Subsidiaries of the Domestic Borrower; provided that such
guarantees and contractual obligations arise in the ordinary course
of business and that such contractual obligations are not for
borrowed money;
(e) other Indebtedness of the Domestic Borrower and its
Subsidiaries constituting Intercompany Debt, in any amount (subject
to compliance with Section 5.10);
(f) other Indebtedness, existing as of the date of the First
Amendment to Credit Agreement (and set forth on Schedule 6.01(f)
annexed thereto), of the Domestic Borrower and its Subsidiaries to
one or more other Persons (and including unused amounts under such
credit facilities), and any and all extensions, renewals and
replacements of any such Indebtedness provided that the aggregate
principal amount thereof (whether used or unused) is not increased;
(g) Guarantees by the Domestic Borrower of Indebtedness of its
Subsidiaries, except to the extent such Subsidiary Indebtedness
otherwise would be prohibited under this Agreement; and
(h) other Indebtedness of the Domestic Borrower, excluding
Debt for Borrowed Money.
2.5. Section 6.02 of the Credit Agreement is hereby deleted in its
entirety and replaced with the following:
SECTION 6.02. Liens; Certain Asset Sales.
The Domestic Borrower will not, and will not permit any
Subsidiary to, create, incur, assume or permit to exist any Lien on
any property or asset now owned or hereafter acquired by it, or
assign or sell any income or revenues (including Accounts
Receivable) or rights in respect of any thereof, except:
(a) any Lien securing the Indebtedness permitted under clause
(a) of Section 6.01;
EXHIBIT 4.1(b)
(b) Permitted Encumbrances;
(c) any Lien on any property or asset of the Domestic Borrower
or any Subsidiary existing on the date of this Agreement and set
forth in Schedule 6.02; provided that (i) such Lien shall not
encumber or apply to any other property or asset of the Domestic
Borrower or any Subsidiary and (ii) such Lien shall secure only
those obligations which it secures on said date;
(d) Liens securing Subsidiary Indebtedness permitted under
clause (f) of Section 6.01;
(e) Liens securing Indebtedness arising from a Thousand Oaks
Financing (to the extent permitted under Section 6.01), provided
that such Liens do not encumber or apply to any asset or property
other than the Thousand Oaks Building and the rents, fixtures and
other personal property associated therewith, which would ordinarily
be encumbered in a conventional mortgage financing;
(f) prior to the Senior Notes Payoff, equal and ratable Liens
granted to the holders of the Senior Notes to the extent required
under Senior Note Purchase Agreement by virtue of the Liens granted
in accordance with Section 5.11; and
(g) assignments or sales of Accounts Receivable permitted
under clause (ii) of Section 6.03(b).
2.6. Clause (ii) of subsection (b) of Section 6.03 is hereby deleted
in its entirety and replaced with the following:
"(ii) subject to the limitations set forth in Sections 5.11 and
5.12, and to any other limitations as may be set forth from time to
time in any security agreement included as a Credit Document, sales
or transfers of Accounts Receivable from the Domestic Borrower to a
Guarantor, from a Guarantor to the Domestic Borrower or from a
Guarantor to another Guarantor,"
2.7. Section 6.10 of the Credit Agreement is hereby deleted in its
entirety and replaced with the following:
SECTION 6.10. Certain Financial Covenants
(a) The Domestic Borrower will not permit or suffer
Consolidated Net Worth at the end of any fiscal year to be less than
the sum of (i) $230,000,000 and (ii) 50% of Consolidated Net Income
for the fiscal year (if greater than zero for such year) of the
Domestic Borrower being measured.
EXHIBIT 4.1(b)
(b) The Domestic Borrower will not permit or suffer the ratio,
as of the last day of any fiscal quarter of the Domestic Borrower,
of (i) EBITDA for the period of four consecutive fiscal quarters of
the Domestic Borrower ending on such date to (ii) tax expense
attributable to operating income and to interest income plus gross
interest expense, dividends and Current Portion of Long Term Debt
(excluding any part thereof attributable to the Senior Notes), to be
less than 1.5 to 1.0.
(c) The Domestic Borrower will not permit or suffer the ratio,
as of the last day of any fiscal quarter of the Domestic Borrower,
of (i) Debt for Borrowed Money to (ii) EBITDA (measured for the four
fiscal quarters then ended), to be greater than 3.0 to 1.0; except
that: (A) as of the last day of the fourth quarter of the 2001
fiscal year the level may exceed 3.0 to 1.0 but may not exceed 3.15
to 1.0; and (B) as of the last day of each of the second and third
quarters of the 2002 fiscal year the level may exceed 3.0 to 1.0 but
may not exceed 3.75 to 1.0
(d) The Domestic Borrower will not permit or suffer the ratio
of (i) the total amount of Eligible Accounts Receivable less the
amount of all reserves against uncollectibility (both general and
specific) taken by the Domestic Borrower reporting group to (ii) the
aggregate principal Indebtedness then outstanding under this
Agreement, the Senior Note Purchase Agreement and any other
obligation (but only if unsubordinated and unsecured) of any kind
(constituting Indebtedness), whether actual, contingent or otherwise
(including the amount of all undrawn letters of credit), of the
Domestic Borrower and its Subsidiaries determined on a consolidated
basis in accordance with GAAP, to be less than 2.0 to 1.0 as of the
end of any fiscal quarter of the Domestic Borrower.
2.8 In clause (d) of Article VII of the Credit Agreement, the word
"or" is deleted after "5.08" and replaced with a comma, and ", 5.11 and 5.12"
are inserted after "5.10" and before the comma.
2.9 In Article VII of the Credit Agreement, the word "or" at the end
of clause (m) thereof is hereby removed and instead inserted following the
semicolon at the end of clause (n) thereof, and the following new clause (o) is
hereby added after clause (n) of such Article:
(o) the Domestic Borrower shall fail to repay in full the
Indebtedness evidenced by the Senior Notes in accordance with the
Senior Notes Prepayment Notices or in advance thereof;
III. MISCELLANEOUS
3.1. Each Borrower and each Guarantor (subject, mutatis mutandis, to
Section 9.17 of the Credit Agreement) hereby represents and warrants that:
EXHIBIT 4.1(b)
(a) its execution, delivery and performance of each of this
Amendment and any other agreement, instrument or document executed and delivered
in connection with this Amendment (i) is within its corporate powers, (ii) has
been duly authorized by all necessary corporate action, (iii) does not
contravene any law, rule or regulation applicable to it and (iv) does not
violate or create a breach or default under its organizational documents or,
after giving effect to the Senior Notes Payoff, any contractual provision
binding on it or affecting it or any of its property;
(b) this Amendment (and the Credit Agreement as amended hereby)
constitutes its legal, valid and binding obligation enforceable against it in
accordance with its terms, except as enforcement thereof may be subject to (i)
the effect of any applicable bankruptcy, insolvency, reorganization, moratorium
or similar law affecting creditors' rights generally, and (ii) general
principles of equity (regardless of whether such enforcement is sought in a
proceeding in equity or at law);
(c) after giving effect to this Amendment and the Senior Notes
Payoff, and to the transactions contemplated hereby: (i) there is no Default;
and (ii) all obligations of the Borrowers and the Guarantors under or in
connection with the Credit Agreement, as amended hereby, are payable in
accordance with the terms of the Credit Agreement as amended hereby, without any
defense, setoff or counterclaim of any kind; and
(d) the representations and warranties of each Borrower and each
Guarantor appearing in the Credit Documents were true and correct in all
material respects as of the date when made and, after giving effect to this
Amendment, the Senior Notes Payoff and the transactions contemplated hereby,
continue to be true and correct in all material respects on the date hereof,
except: (i) as to any such representation or warranty which by its terms applies
only as to a specified date; and (ii) in the case of any other representation or
warranty, to the extent of changes resulting from transactions or events not
prohibited by the Credit Documents.
3.2. The Domestic Borrower agrees to pay on demand all reasonable
costs and expenses of the Administrative Agent incurred by it in connection with
or arising out of the negotiation, preparation, review, execution and delivery
of this Amendment and the agreements and instruments referred to herein and the
transactions contemplated hereby (including the reasonable fees and expenses of
counsel to the Administrative Agent).
3.3. At any time and from time to time, upon the written request of
the Administrative Agent and at the sole cost and expense of the Domestic
Borrower, the Borrowers and the Guarantors will promptly execute, acknowledge
and/or deliver all such further instruments and agreements and take such further
actions as may be reasonably necessary or appropriate to more fully implement
the purposes of this Amendment, the Credit Agreement as amended hereby, and the
other Credit Documents.
3.4. The Credit Agreement, as amended hereby, and the other Credit
Documents are hereby ratified and confirmed and shall continue in full force and
effect.
EXHIBIT 4.1(b)
All references in any Credit Document to the Credit Agreement shall be deemed to
be references to the Credit Agreement as amended by this Amendment, and as the
same may be further amended, supplemented or otherwise modified from time to
time.
3.5. This Amendment sets forth the entire agreement of the parties
with respect to the subject matter hereof.
3.6. Neither this Amendment nor any provision hereof may be waived,
amended or modified except pursuant to an agreement complying with Section
9.02(b) of the Credit Agreement.
3.7. This Amendment shall be construed in accordance with and
governed by the laws of the State of New York without regard to conflicts of
laws principles of New York State law other than ss. 5-1401 of the New York
General Obligations Law.
3.8. This Amendment may be executed in any number of counterparts,
each of which shall be deemed an original, and all of which taken together shall
constitute but one agreement. Delivery of an executed signature page of this
Amendment by telecopy shall be as effective as delivery of a manually executed
counterpart of this Amendment.
3.9. This Amendment shall become effective as of the date first
above written, provided that each of the following conditions shall have been
satisfied on or before February 4, 2002:
(a) the Administrative Agent shall have received counterparts of
this Amendment executed and delivered by each of the Borrowers, the Guarantors,
the Required Lenders and the Administrative Agent;
(b) all legal matters incident to this Amendment, the other
instruments and agreements relating hereto and the transactions contemplated
hereby shall be satisfactory to the Administrative Agent (who shall be entitled
to rely on the advise of its counsel in connection therewith);
(c) the Administrative Agent shall have received such other
documents and certificates as it may reasonably request, all in form and
substance satisfactory to the Administrative Agent in its reasonable discretion;
(d) counsel to the Administrative Agent shall have been paid $10,000
on account of its accrued and unpaid (and future, if applicable) legal fees and
disbursements; and
(e) each of the Lenders signing below, prior to noon on February 4,
2002 (as evidenced by a facsimile received by the Administrative Agent or its
counsel by such time on such date) shall have received payment of an amendment
fee equal to one-eighth of one percent of each such Lender's respective
Commitment.
EXHIBIT 4.1(b)
The Administrative Agent shall notify the Borrowers, the Guarantors
and the Lenders if and when all of the foregoing conditions shall have been
satisfied, and such notice shall be conclusive and binding.
EXHIBIT 4.1(b)
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed by their respective authorized officers as of the day and year
first above written.
VOLT INFORMATION SCIENCES, INC. XX XXXXXX XXXXX BANK (f/k/a The
(a New York corporation) Chase Manhattan Bank), as a Lender and
as Administrative Agent
By:_____________________________ By:_____________________________________
Name: Name:
Title: Title:
GATTON VOLT CONSULTING GROUP VOLT MANAGEMENT CORP.
LIMITED (a Delaware corporation)
(a United Kingdom corporation)
By:_____________________________ By:_____________________________________
Name: Name:
Title: Title:
FLEET NATIONAL BANK, VOLT DELTA RESOURCES, INC.
as a Lender (a Nevada corporation)
By:_____________________________ By:_____________________________________
Name: Name:
Title: Title:
BANK OF AMERICA, N.A., DATANATIONAL, INC.
as a Lender (a Delaware corporation)
By:_____________________________ By:_____________________________________
Name: Name:
Title: Title:
MELLON BANK, N.A., VOLT DIRECTORIES S.A., LTD.
as a Lender (a Delaware corporation f/k/a
Volt-Autologic Directories S.A.,
Ltd.)
By:_____________________________ By:_____________________________________
Name: Name:
Title: Title:
XXXXX FARGO BANK, N.A., VOLT TECHNICAL RESOURCES, LLC.
as a Lender (a Delaware limited liability company
formerly known as Volt Human
Resources, Inc.)
By:_____________________________ By:_____________________________________
Name: Name:
Title: Title:
EXHIBIT 4.1(b)
XXXXX TSB BANK PLC, VOLT INFORMATION SCIENCES
as a Lender FUNDING, INC.
(a Delaware corporation)
By:_____________________________ By:_____________________________________
Name: Name:
Title: Title:
By:_____________________________
Name:
Title:
EXHIBIT 4.1(b)
Schedule 5.11
(i) Volt Telecommunications Group, Inc., a Delaware corporation, (ii) Volt Delta
Resources, Inc., a Nevada corporation, (iii) Volt Delta Resources, Inc., a
Delaware corporation, (iv) DataNational, Inc., a Delaware corporation, and (v)
DataNational, Inc., a Georgia corporation.
EXHIBIT 4.1(b)
