Exhibit 10.6
FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT ("Amendment") is made as of
December 30, 1998 by and among AMERICAN CAPITAL STRATEGIES, LTD., a Delaware
corporation (the "Borrower"), LASALLE NATIONAL BANK, a national banking
association (individually, "LaSalle"), as agent ("Agent") and the Banks
described in the Credit Agreement (as hereinafter defined).
RECITALS
A. The Agent, the Banks and the Borrower entered into a Credit
Agreement dated as of October 30, 1998 ("Credit Agreement").
B. The parties to the Credit Agreement desire to enter into this
Amendment for the purpose of (1) increasing the Revolving Commitment Amount by
$5,000,000 (such increase, the "Additional Credit") from $25,000,000 to
$30,000,000, and (2) adding First Tennessee Bank National Association ("FTBNA")
as a Bank under the Credit Agreement with a Commitment equal to the Additional
Credit.
AGREEMENT
In consideration of the matters set forth in the recitals and the
covenants and provisions herein set forth, and other valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
1. Definitions. Capitalized terms used but not defined herein are used
as defined in the Credit Agreement.
2. Revolving Commitment Amount The amount "$25,000,000" contained in
the definition of Revolving Commitment Amount is hereby deleted and replaced
with the amount "$30,000,000."
3. Schedule 2.1. Schedule 2.1 of the Credit Agreement is hereby deleted
and replaced by Schedule 2.1 hereto.
4. Addition of Bank. FTBNA by execution and delivery of this Amendment
shall become a Bank party to the Credit Agreement. This Amendment shall not
constitute an assignment under Section 14.9 but rather an amendment to increase
the Revolving Commitment Amount and allocate the Additional Credit to FTBNA a
new Bank under the Credit Agreement. From and after the date hereof, FTBNA shall
be a Bank for all purposes (and shall have all of the rights and obligations of
a Bank under the Credit Agreement) and have a Commitment and Pro Rata Share
equal to the Additional Credit as set forth on Schedule 2.1 hereto. The new Pro
Rata Share of LaSalle (as proportionately reduced by the Additional Credit) is
set forth on Schedule 2.1.
5 416753.3 5. Waiver; Amendments. Section 14.1 of the Credit Agreement
is amended to add the following new clause (vi) to the fourth sentence of
Section 14.1 before the words "without, in each case, the consent of all Banks."
"(vi) amend the definitions of "Borrowing Base" or "Eligible Investment
Assets"
The Agent, LaSalle and the Borrower further agree that until such time as
LaSalle as a Bank owns less than 66 2/3% (the level necessary for "Required
Banks"), any amendments, modifications or waivers to the financial covenants set
forth in Section 10 or the default provisions set forth in Section 12, shall
require the consent to all Banks. At such time that LaSalle (or any of its
affiliates) owns less than 66 2/3% the preceding sentence shall automatically
become null and void.
6. Consent. Notwithstanding anything to the contrary set forth in
Section 10.7 or 10.10 to the Credit Agreement, the Banks hereby consent to the
Borrower borrowing up to $5,000,000 of unsecured senior debt from US
Investigations Services, Inc. for a period of 90 days from the date hereof;
provided, that after giving effect to such loan the Borrower is in compliance
with all financial and other covenants contained in the Credit Agreement and no
Event of Default or Unmatured Event of Default otherwise exists. The Borrowing
Base shall be deemed reduced by the aggregate principal amount of such loan and
the commitment thereunder. The Borrower shall not be permitted to repay such
loan if after giving effect thereto the Borrower would not be in compliance with
the financial and other covenants in the Credit Agreement or an Event of Default
or Unmatured Event of Default would otherwise exist under the Credit Agreement.
7. Repayment of FTBNA. Notwithstanding anything to the contrary set
forth in the Credit Agreement, the Borrower agrees to repay any amounts borrowed
from FTBNA on or before May 1, 1999 (the "FTBNA Repayment"), and upon receipt of
the FTBNA Repayment the Revolving Commitment Amount shall be reduced by the
amount of the Additional Credit and FTBNA shall cease to be a Bank under the
Credit Agreement; provided that the Borrower shall not be permitted to make the
FTBNA Repayment if after giving effect thereto the Borrower would not be in
compliance with the financial and other covenants in the Credit Agreement or an
Event of Default or Unmatured Event of Default would otherwise exist under the
Credit Agreement. If the Borrower is unable to make the FTBNA Repayment on or
before May 1, 1999 in compliance with this Section 7, such failure shall
constitute an Event of Default under the Credit Agreement. The Agent and LaSalle
agree that the FTBNA Repayment shall be permitted as a one-time non pro-rata
permanent reduction of the Revolving Commitment amount on the conditions set
forth above.
8. Representations and Warranties of Borrower. To induce the Agent and
the Banks to execute this Amendment, the Borrower represents and warrants to the
Agent and the Banks as follows:
(a) The Borrower is in good standing in its jurisdiction of
organization and in each jurisdiction where it conducts its business
and has all requisite power and authority to execute, deliver and
perform this Amendment.
2
(b) The execution, delivery and performance of this Amendment
(i) has been duly authorized by all requisite action of the Borrower
and (ii) will not (A) violate (1) any provision of law, statute, rule
or regulation or the articles/certificate of incorporation or other
constitutive documents, partnership agreements or the by-laws or
regulations of the Borrower, (2) any order of any court, or any rule,
regulation or order of any other agency of government binding upon the
Borrower, or (3) any provisions of any material indenture, agreement or
other instrument to which the Borrower is a party, or by which the
Borrower or any of its properties or assets is or may be bound, (B) be
in conflict with, result in a breach of or constitute (alone or with
notice or lapse of time or both) a default under any indenture,
agreement or other instrument referred to in clause (ii)(a)(3) above.
(c) This Amendment constitutes the legal, valid and binding
obligations of the Borrower enforceable in accordance with its terms,
subject to bankruptcy, insolvency or similar laws affecting the
enforceability of creditors' rights generally and to general principles
of equity).
(d) The representations and warranties in the Loan Documents
(including but not limited to Section 9 of the Credit Agreement) are
true and correct in all material respects with the same effect as
though made on and as of the date of this Amendment.
9. Affirmation. Except as expressly amended hereby, the Credit
Agreement and the other Loan Documents are and shall continue in full force and
effect and the Borrower hereby fully ratifies and affirms each Loan Document to
which it is a party. Reference in any of this Amendment, the Credit Agreement or
any other Loan Document to the Credit Agreement shall be a reference to the
Credit Agreement as amended hereby and as further amended, modified, restated,
supplemented or extended from time to time. This Amendment shall constitute a
Loan Document for purposes of the Credit Agreement and the other Loan Documents.
Each Guarantor joins in this Amendment solely for the purpose of consenting to
the terms hereof, and each Guarantor hereby unconditionally consents to the term
of this Amendment and fully ratifies and affirms the Guaranty, taking into
account this Amendment (including the increase in the Commitment hereunder,
which shall be included in the Liabilities under the Guaranty).
10. Acknowledgment of FTBNA. FTBNA hereby confirms that it has received
a copy of the Credit Agreement and the exhibits and schedules thereto, together
with copies of the documents which were required to be delivered under the
Credit Agreement as a condition to the making of the initial Loans thereunder.
The Assignee acknowledges and agrees that it (i) has made and will continue to
make such inquiries and has taken and will take such care on its own behalf as
would have been an original party to the Credit Agreement and (ii) has made and
will continue to make, independently and without reliance upon the Agent,
LaSalle or any other Bank and based on such documents and information as it has
deemed appropriate, its own credit analysis and decisions relating to the Credit
Agreement. FTBNA further acknowledges and agrees that neither the Agent nor the
Assignor has made any representation or warranty about the creditworthiness of
the Company or any other party to the Credit Agreement or with respect to the
legality, validity, sufficiency or enforceability of the Credit Agreement or any
other Loan Document or the value of any security therefor. This assignment shall
be made without recourse to the Assignor.
3
11. Counterparts. This Amendment may be executed in two or more
counterparts, each of which shall constitute an original, but all of which when
taken together shall constitute one instrument.
12. Headings. The headings and captions of this Amendment are for the
purposes of reference only and shall not affect the construction of, or be taken
into consideration in interpreting, this Amendment.
13. Conditions to Amendment. This Amendment is subject to satisfaction
in full of all of the following conditions in full of all of the following
conditions precedent, each of which shall be satisfactory to the Agent and the
Lenders.
(a) Amendment. The Borrower shall have executed and delivered
to the Agent this Amendment.
(b) Authorization. The Borrower shall have delivered to the
Agent such documents and instruments (including incumbency certificate
and directors resolutions for each Borrower) as the Agent may require
to demonstrate authorization by the Borrower to execute and deliver
this Amendment.
(c) Note. The Borrower shall have executed and delivered to
FTBNA a Note reflecting the allocations set forth on Schedule 2.1.
14. Further Assurances. The Borrower agrees to execute and deliver in
form and substance satisfactory to the Lenders such further documents,
instruments, amendments, financing statements and to take such further action,
as may be necessary from time to time to perfect and maintain the liens and
security interests created by the Loan Documents, as amended hereby.
15. APPLICABLE LAW. THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF THE STATE OF ILLINOIS WITHOUT GIVING EFFECT TO
ILLINOIS CHOICE OF LAW DOCTRINE.
4
SCHEDULE 2.1
BANKS AND PRO RATA SHARES
-------------------------------------------------------------------------------
Pro Rata Share
of Revolving
Bank Commitment Amount Pro Rata Share
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
LaSalle National Bank $25,000,000 83.333333334%
First Tennessee Bank
National Association $5,000,000 16.666666666%
TOTALS $30,000,000 100%
5
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their duly authorized officers, all as of the day and year first
above written.
BORROWER:
AMERICAN CAPITAL STRATEGIES, LTD.
By:____________________________________
Its:___________________________________
LASALLE NATIONAL BANK,
Individually and as Agent.
By:____________________________________
Its:___________________________________
FIRST TENNESSEE BANK NATIONAL
ASSOCIATION
By:____________________________________
Its:___________________________________
FIRST TENNESSEE BANK NATIONAL
ASSOCIATION
000 Xxxxxxx Xxxxxx
Xxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxx Xxxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their duly authorized officers, all as of the day and year first
above written.
CONSENT OF GUARANTORS:
ACS CAPITAL INVESTMENTS CORPORATION
By:
----------------------------------
Title:
-------------------------------
AMERICAN CAPITAL STRATEGIES LABOR RESEARCH, INC.
By:
----------------------------------
Title:
-------------------------------
ACS GENPAR, INC.
By:
----------------------------------
Title:
-------------------------------