THIRD AMENDMENT TO
FIRST AMENDED AND RESTATED CREDIT AGREEMENT
This THIRD AMENDMENT TO FIRST AMENDED AND RESTATED CREDIT AGREEMENT
("Third Amendment") is entered into as of November 12, 1997, to be effective
as of September 26,1997, by and among DAMES & XXXXX GROUP (formerly named
Dames & Xxxxx, Inc.), a Delaware corporation (the "Company"), X'XXXXX-
XXXXXXXXXX, INC., as a Guarantied Subsidiary,the several financial
institutions party to the Agreement hereinafter referred to (collectively, the
"Banks" and individually, a "Bank") and BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as agent for such Banks ("Agent") and amends the First
Amended and Restated Credit Agreement dated as of May 24, 1996 among the
Company, the Banks and the Agent, as amended by a First Amendment dated as of
September 17, 1996 and a Second Amendment dated as of November 19, 1996
(as so amended, the "Agreement").
RECITAL
The Borrowers, the Banks, the Issuing Bank and the Agent desire to amend
the Agreement on the terms and conditions set forth in this Third Amendment.
NOW, THEREFORE, the parties hereto agree as follows:
1. Definitions. All terms used herein shall have the same meaning as
in the Agreement unless otherwise defined herein. All references to the
Agreement shall mean the Agreement as hereby amended.
2. Amendatory Provisions. The parties hereby agree that the Agreement
is amended as follows:
2.1 The following definitions in Section 1.3 of the Agreement are
amended and restated in their entirety as follows:
"'Termination Date' means January 26, 2001, or if such day is
not an Offshore Business Day, the next succeeding Offshore Business
Day."
"'Consolidated EBITDA' means, for the most recently completed
four fiscal quarters (the "Applicable Period"), for the Company and
its Subsidiaries on a consolidated basis, an amount equal to the sum
of (i) EBIT plus (ii) the amount of depreciation and amortization
expense deducted in determining Net Income for such Applicable
Period. The EBIT and depreciation and amortization expense of
Persons acquired by the Company and its Subsidiaries within such
Applicable Period may be included on a pro forma basis for the
entire Applicable Period on a consolidated basis provided that the
Agent has received financial statements for such Person audited by
an independent public accounting firm of recognized national
standing for at least one quarter or fiscal year ending within such
Applicable Period."
2.2 Section 2.1(a)(iii)(B) of the Agreement is amended by deleting
"$15,000,000" and inserting "$30,000,000" in lieu thereof.
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2.3 Section7.11 of the Agreement is amended and restated in its entirety
as follows:
"7.11 Leverage Ratio. As to the Company as of the last day
of any fiscal quarter, permit the Leverage Ratio to be greater than
the ratio set forth in the table below (subject to the proviso
immediately following such table) opposite such fiscal quarter or
the period during which such fiscal quarter ends:
Maximum Permitted
Fiscal Quarter(s) Ending In Leverage Ratio
--------------------------- -----------------
December 1996 0.58 to 1
March 1997 through June 1998 0.55 to 1
September 1998 and thereafter 0.50 to 1"
"provided, however, the maximum permitted Leverage Ratio set forth above
shall be reduced by .01 for each $5,000,000 in additional equity issued
from time to time after September 27, 1996, any such reduction to be
effective as of the end of the fiscal quarter in which such equity is
issued; provided, however, the maximum permitted Leverage Ratio shall
not be reduced to less than 0.45 to 1 at any time."
2.4 Section 7.12 of the Agreement is amended and restated in its
entirety as follows:
"7.12 Fixed Charge Coverage Ratio. As to the Company, permit,
as of the last day of any fiscal quarter, the Fixed Charge Coverage
Ratio to be less than the ratio set forth in the table below
opposite such fiscal quarter or the period during which such fiscal
quarter ends:
Maximum Permitted
Fiscal Quarter(s) Ending In Fixed Charge Coverage Ratio
--------------------------- ---------------------------
Through June 1998 1.80 to 1
September 1998 and thereafter 2.00 to 1"
2.5 Section 7.13 of the Agreement is amended and restated in its entirety
as follows:
"7.13 Asset Coverage Ratio. As to the Company as of the last
day of any fiscal quarter, permit its Consolidated Net Funded Debt to
exceed the percentage of Net Eligible Receivables set forth below
opposite such fiscal quarter or the period during which such fiscal
quarter ends:
"Fiscal Quarter(s) Ending In Maximum Percentage
---------------------------- -------------------
December 1996 90%
March 1997 through June 1998 85%
September 1998 and thereafter 80%"
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2.6 Section 7.15 of the Agreement is amended and restated in its entirety
as follows:
"7.15 Consolidated Net Funded Debt to Consolidated EBITDA
Ratio. As to the Company, permit, as of the last day of any fiscal
quarter, the ratio of (a) Consolidated Net Funded Debt to (b)
Consolidated EBITDA for the period of four fiscal quarters ending
on the last day of such fiscal quarter to exceed the ratio set
forth in the table below opposite such fiscal quarter or the period
during which such fiscal quarter ends:
Maximum Permitted
Fiscal Quarter(s) Ending In Leverage Ratio
--------------------------- -----------------
Through March 1997 3.00 to 1
June 1997 through June 1998 2.75 to 1
September 1998 and thereafter 2.50 to 1"
2.7 Attachment 1 to Exhibit G (Compliance Certificate) is amended and
restated in its entirety as set forth on Attachment 1 2 hereto.
3. Representations and Warranties. The Borrowers hereby jointly and
severally represent and warrant to the Agent, the Issuing Bank and the Banks:
3.1 Authority. Each Borrower has all necessary corporate power and has
taken all action necessary to make this Third Amendment, the Agreement, and all
other agreements and instruments executed in connection herewith and therewith,
the valid and enforceable obligations they purport to be.
3.2 No Legal Obstacle to Agreement. Neither the execution of this Third
Amendment, the making by the Borrowers of any borrowings under the Agreement,
nor the performance of the Agreement has constituted or resulted in or will
constitute or result in a breach of the provisions of any contract to which
any Borrower is a party, or the violation of any law, judgment, decree or
governmental order, rule or regulation applicable to any Borrower, or result in
the creation under any agreement or instrument of any security interest, lien,
charge, or encumbrance upon any of the assets of any Borrower other than in
favor of the Agent, the Issuing Bank and the Banks. No approval or
authorization of any governmental authority is required to permit the
execution, delivery or performance by the Borrowers of this Third Amendment,
the Agreement, or the transactions contemplated hereby or thereby, or the
making of any borrowing by the Borrowers under the Agreement.
3.3 Incorporation of Certain Representations. The representations and
warranties set forth in Section 5 of the Agreement are true and correct in all
respects on and as of the date hereof as though made on and as of the date
hereof.
3.4 Default. No Default or Event of Default under the Agreement has
occurred and is continuing.
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4. Conditions, Effectiveness. The effectiveness of this Third
Amendment shall be subject to the compliance by the Borrowers with their
respective agreements herein contained, and to the delivery of the following
to the Agent in form and substance satisfactory to the Agent:
4.1 Amendment Fee. An amendment fee equal to 1/10 of the Facility Amount
payable on the date hereof to the Agent for the benefit of the Banks in
accordance with their respective Pro Rata Shares.
4.2 Work Fee. A work fee described in the term sheet dated October 29,
1997 payable on the date hereof to the Agent for the sole benefit of BofA.
4.3 Other Evidence. Such other evidence with respect to any Borrower or
any other person as Agent or the Majority Banks may reasonably request to
establish the consummation of the transactions contemplated hereby and the
taking of all corporate proceedings in connection with this Third Amendment
and the Agreement and the compliance with the conditions set forth herein.
5. Miscellaneous.
5.1 Effectiveness of the Agreement. Except as hereby amended, the
Agreement shall remain in full force and effect.
5.2 Waivers. This Third Amendment is specific in time and in intent and
does not constitute, nor should be construed as, a waiver of any other right,
power or privilege under the Agreement, or under any agreement, contract,
indenture, document or instrument mentioned in the Agreement; nor does
it preclude other or further exercise hereof or the exercise of any other
right, power or privilege, nor shall any waiver of any right, power,
privilege or default hereunder, or under any agreement, contract,
indenture, document or instrument mentioned in the Agreement, constitute a
waiver of any other default of the same or of any other term or provision.
5.3 Counterparts. This Third Amendment may be executed in any number of
counterparts and all of such counterparts taken together shall be deemed to
constitute one and the same instrument. This Third Amendment shall not become
effective until the Borrowers, the Agent, the Issuing Bank and the Banks
shall have signed a copy hereof, whether the same or counterparts, and the
same shall have been delivered to the Agent.
5.4 Jurisdiction. This Third Amendment, and any instrument or
agreement required hereunder, shall be governed by and construed under the
laws of the State of California.
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IN WITNESS WHEREOF, the parties have caused this Third Amendment to the
executed by their duly authorized representatives as of the day and year
first written above.
DAMES & XXXXX GROUP
(formerly named Dames & Xxxxx, Inc.)
By: /s/ Xxxx X. Xxxxx
--------------------------
Title: Executive VP and
Chief Financial Officer
X'XXXXX-XXXXXXXXXX, INC., as a
Guarantied Subsidiary
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------
Title: Vice President
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as
Agent, a Bank and Issuing Bank
By: /s/ Xxxxxx Xxxxxxxx
------------------------
Title: Managing Director
SANWA BANK CALIFORNIA
By: /s/ X. X. Xxxxxxx
------------------------
Title: Vice President
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ATTACHMENT 1 TO COMPLIANCE CERTIFICATE
The following calculations are as of the date of the attached financial
statements and for the fiscal period then ended.
A. SECTION 7.11 LEVERAGE RATIO:
1. Principal amount of all indebtedness
for borrowed money: $___________________
2. Standby letters of credit
supporting Indebtedness: $___________________
3. Unrestricted cash and marketable
securities held in excess of
$20,000,000: $___________________
4. Consolidated Net Funded Debt
(Lines A1+A2 less Line A3): $___________________
5. Consolidated Net Worth: $___________________
6. Total Capital (Lines A4+A5): $___________________
7. Actual Leverage Ratio
(Line A4/Line A6): ____________ to 1.00
Maximum Permitted Leverage Ratio
Maximum Permitted
Fiscal Quarter(s) Ending In Leverage Ratio
--------------------------- ------------------
December 1996 0.58 to 1
March 1997 through June 1998 0.55 to 1
September 1998 and thereafter 0.50 to 1
provided, however, the maximum permitted Leverage Ratio set forth
above shall be reduced by .01 for each $5,000,000 in additional
equity issued from time to time after September 27, 1996, any such
reduction to be effective as of the end of the fiscal quarter in
which such equity is issued; provided, however, the maximum
permitted Leverage Ratio shall not be reduced to less than 0.45
to 1 at any time.
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B. SECTION 7.12 FIXED CHARGE COVERAGE RATIO:
1. EBIT for the most recently completed four fiscal quarters
("Applicable Period"):
a. Net Income: $___________________
b. Extraordinary losses: $___________________
c. Tax Expense: $___________________
d. Interest Expense: $___________________
e. Extraordinary gains: $___________________
f. EBIT (See NOTE 1)
(Lines a+b+c+d less Line e): $___________________
2. Operating Lease Expense: $___________________
3. EBIT plus Operating Lease
Expense (Lines B1f + B2): $___________________
4. Interest Expense plus Operating
Lease Expense (Lines B1d+B2): $___________________
5. Actual Fixed Charge Coverage Ratio
(Line B3/Line B4): ____________ to 1:00
Minimum Permitted Fixed Charge Coverage Ratio:
Maximum Permitted
Fixed Charge
Fiscal Quarter(s) Ending In Coverage Ratio
--------------------------- -----------------
Through June 1998 1.80 to 1
September 1998 and thereafter 2.00 to 1
NOTE 1: EBIT and depreciation and amortization expense of Persons acquired
within Applicable Period may be included on a pro forma basis for the entire
Applicable Period on a consolidated basis provided that the Agent has received
financial statements for such Person audited by an independent public
accounting firm of recognized national standing for at least one quarter
or fiscal year ending within such Applicable Period.
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C. SECTION 7.13 ASSET COVERAGE RATIO:
1. Consolidated Net Funded Debt
(Line A4): $_____________________
2. Net Eligible Receivables: $_____________________
3. Actual Asset Coverage Ratio
(Line C1/Line C2): _____________________%
Maximum Permitted Asset Coverage Ratio:
Fiscal Quarter(s) Ending In Maximum Percentage
--------------------------- ------------------
December 1996 90%
March 1997 through June 1998 85%
September 1998 and thereafter 80%
D. SECTION 7.14 MINIMUM NET WORTH:
1. Closing Date Net Worth: $120,000,000
2. 50% of Net Income after 9/27/96: $____________________
3. 75% of proceeds from issuance of common
stock since 11/1/96: $____________________
4. Minimum Permitted Minimum Net Worth
(Lines D1+D2+D3): $____________________
5. Actual Net Worth: $____________________
The following calculations are as of the date of the attached
financial statements and for four fiscal quarters ending on such date.
E. SECTION 7.15 CONSOLIDATED NET FUNDED DEBT TO CONSOLIDATED
EBITDA RATIO:
1. Consolidated Net Funded Debt
(Line A4): $____________________
2. Consolidated EBIT (Line B1f): $____________________
3. Depreciation Expense: $____________________
4. Amortization Expense: $____________________
5. Consolidated EBITDA (Lines E2+E3+E4): $____________________
6. Actual Consolidated Net Funded Debt
to Consolidated EBITDA Ratio
(Line E1/Line E5): _____________ to 1:00
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Maximum Permitted Consolidated Net Funded
Debt to Consolidated EBITDA Ratio:
Maximum Permitted
Fiscal Quarter(s) Ending In Leverage Ratio
--------------------------- -----------------
Through March 1997 3.00 to 1
June 1997 through June 1998 2.75 to 1
September 1998 and thereafter 2.50 to 1
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