1
Exhibit 10.4
SECOND AMENDMENT TO MORTGAGE LOAN AGREEMENT
THIS SECOND AMENDMENT TO MORTGAGE LOAN AGREEMENT (the "Second
Amendment") is entered into effective as of the 30th day of September, 1998 by
PRECISION RESPONSE CORPORATION (as "Borrower"), and NATIONSBANK, N.A., as Bank
under that certain Mortgage Loan Agreement dated May 29, 1998 ("NationsBank").
W I T N E S S E T H:
WHEREAS, that certain Mortgage Loan Agreement (the "Mortgage Loan
Agreement") was executed as of May 29, 1998 by Borrower and NationsBank; and
WHEREAS, the Mortgage Loan Agreement was modified by First Amendment
dated as of June 30, 1998; and
WHEREAS, the parties desire to further modify the Mortgage Loan
Agreement as set forth herein.
NOW THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, the parties do hereby modify the Mortgage Loan
Agreement as follows:
1. DEFINITIONS. The definitions of "EBIT" and "EBITDA" in Section 1.01
are hereby modified in their entirety to read as follows:
"EBIT" means, for any Four-Quarter Period ending on the date
of computation thereof, the sum of, without duplication, (i)
net income excluding therefrom the restructuring and other
non-recurring charges of the Borrower incurred in the fiscal
quarter ended September 30, 1997, and excluding therefrom the
non-cash portion of the restructuring and other non-recurring
charges of the Borrower incurred in the fiscal quarter ended
September 30, 1998, (ii) interest expense, and (iii) taxes on
income of the Borrower, and (iv) any extraordinary loss in
such period minus (v) any extraordinary gain in such period,
all determined on a consolidated basis in accordance with
Generally Accepted Accounting Principles applied on a
Consistent Basis.
"EBITDA" means, for any Four-Quarter Period ending on the date
of computation thereof, the sum of, without duplication, (i)
net income excluding therefrom the restructuring and other
non-recurring charges of the Borrower incurred in the fiscal
quarter ended September 30, 1997, and excluding therefrom the
non-cash portion of the restructuring and other non-recurring
charges of the Borrower incurred in the fiscal quarter
ended September 30, 1998, (ii) interest expense, (iii) income
tax expense of the Borrower, (iv) amortization expense of the
Borrower, (v) depreciation of the Borrower and its
Subsidiaries, and (vi) any extraordinary loss in such period
minus (vii) any extraordinary gain in such period, all
determined on a consolidated basis in accordance with
Generally Accepted Accounting Principles applied on a
Consistent Basis.
2
2. NEGATIVE COVENANTS. Sections 5.01 and 5.03 are hereby modified in
their entirety to read as follows:
5.01 NET WORTH. Permit Net Worth to be less than (i) as at the last
day of each succeeding fiscal quarter of the Borrower and
until (but excluding) the last day of the next following
fiscal quarter of the Borrower, the sum of (A) the amount of
$78,000,000.00 plus (B) 85% of the net income (with no
reduction for net losses during any period) for the fiscal
quarter of the Borrower ending on such day plus (C) 100% of
the aggregate Net Proceeds of the issuance of equity
securities or other capital investments.
5.03 FIXED CHARGE COVERAGE RATIO. Permit the ratio of (a) the sum
of EBITDA for any Four-Quarter Period plus Rents Expense for
such Four-Quarter Period to (b) the sum of interest expense
for such Four-Quarter Period plus Rents Expense for such
Four-Quarter Period plus income tax expense for such
Four-Quarter Period plus 20% of Funded Debt outstanding as of
the last day of the applicable Four-Quarter Period to be less
than 1.80 to 1.00 as of the last day of each Four-Quarter
Period.
3. SALE OF SUBSIDIARY. NationsBank hereby consents to the sale (the
"Sale") by Borrower of the capital stock of Tiger Construction, Inc. ("Tiger"),
and NationsBank agrees that upon consummation of the Sale Tiger will no longer
be deemed a Subsidiary or one of the Subsidiaries of Borrower.
4. REAFFIRMATION. Except as expressly modified herein, the Mortgage
Loan Agreement is hereby reaffirmed in its entirety.
PRECISION RESPONSE CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxx
------------------------------
Title: Vice President and Treasurer
-----------------------------
NATIONSBANK, N.A
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------
Xxxxxxx X. Xxxxxx
Senior Vice President
-2-
3
Commonwealth of the Bahamas )
) SS
Nassau )
The foregoing instrument was acknowledged before me this 16th day of
November, 1998 by Xxxxxx X. Xxxxxx, as Vice President and Treasurer of Precision
Response Corporation, a Florida corporation, who [ ] is personally known to me
or [X] has produced passport #000000000 as identification.
(Seal)
/s/ Xxxxxxxxx X. XxXxxxxxx
-----------------------------------------
Notary Public
My commission expires: 31/12/98
Commonwealth of the Bahamas )
) SS
Nassau )
The foregoing instrument was acknowledged before me this 16th day of
November, 1998 by Xxxxxxx X. Xxxxxx, as Senior Vice President of NationsBank
N.A., a national banking association, who [ ] is personally known to me or [X]
has produced passport #0452785281 as identification.
(Seal)
/s/ Xxxxxxxxx X. XxXxxxxxx
-----------------------------------------
Notary Public
My commission expires: 31/12/98
-3-
