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EXHIBIT 10.34
FIFTH AMENDMENT TO REVOLVING CREDIT AGREEMENT
This Fifth Amendment to Revolving Credit Agreement ("Fifth Amendment")
is made as of June 29, 1999, by and among PROVANT, Inc. ("Borrower"), a Delaware
business corporation having its principal place of business at ▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, certain banks consisting of
Fleet National Bank, a national banking association ("Fleet"), BankBoston, N.A.,
a national banking association ("BankBoston"), Norwest Bank Iowa, N.A., a
national banking association ("Norwest"), and State Street Bank and Trust
Company, a Massachusetts trust company ("State Street") (collectively, the
"Banks"), and Fleet National Bank, as agent for itself and the other Banks (the
"Agent").
RECITALS
WHEREAS, the Borrower, the Banks, and the Agent previously entered into
that certain Revolving Credit Agreement, dated as of April 8, 1998, and
subsequently entered into the First, Second, Third and Fourth Amendments thereto
(said Revolving Credit Agreement, as so amended prior to the date hereof, the
"Credit Agreement"), pursuant to which the Banks have made available to the
Borrower a revolving credit loan facility having a maximum available borrowing
amount of $75,000,000; and
WHEREAS, the parties hereto now desire to further amend or modify the
Credit Agreement in certain respects to order to (i) permit the restructuring of
the direct and indirect ownership by the Borrower of its Subsidiaries, (ii)
permit the incurring of certain inter-company debt, (iii) provide for the
creation of a new holding company Subsidiary, (iv) provide for additional or
confirmatory pledges of stock from certain Subsidiaries; and (v) carry out
certain other waivers or modifications of, or consents under, the provisions of
the Credit Agreement.
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt of which is hereby acknowledged, the parties
hereto hereby agree to modify, amend, and waive certain provisions of the Credit
Agreement and to provide for the consent of the Majority Banks as to certain
aspects of the transactions described above, in the following manner:
Section 1. Definitions. All capitalized terms used herein without
definition shall have the respective meanings provided therefor in the Credit
Agreement.
Section 2. Restructuring; Waiver or Consent Regarding Specific
Provisions. Notwithstanding the provisions of Sections 7.13(a), 8.1, 8.3, 8.4
and 8.10 of the Credit Agreement, the Majority Banks hereby grant their waiver
of such provisions, as necessary, and their consent in order to permit the
following series of transactions:
(a) the creation of a new Subsidiary, PROVANT Utah, Inc., organized in
the State of Utah ("Newco"), as a wholly owned-direct Subsidiary of the
Borrower;
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(b) the contribution by the Borrower to Newco of all of the capital
stock of KC Resources Creative Solutions, Inc., ▇▇▇▇ Retail Learning Systems,
Inc., Star Mountain, Inc. and Gulliver Ritchie Associates, Inc., all being
existing Subsidiaries (the "Intermediate Subsidiaries"); and
(c) the payment by each of the Intermediate Subsidiaries of a dividend
in the form of a promissory note in the stated principal amounts of (i)
$18,000,000 as to KC, (ii) $16,000,000 as to ▇▇▇▇, (iii) $34,000,000 as to Star,
and (iv) $25,200,000 as to GRA, respectively, each being an unsecured 10-year
term note with interest at the Prime Rate plus one and one-half percent (1.5%)
per annum, adjusted annually, and having no amortization of principal
(collectively, the "Inter-company Notes").
A chart of the new corporate structure of the Borrower and its
Subsidiaries is attached hereto as Appendix I and incorporated herein by
reference. The transactions described in this Section 2 are collectively
referred to as the "Newco Restructuring."
Section 3. Conditions to Effectiveness. This Fifth Amendment shall become
effective only upon completion of the following actions:
(a) the execution and delivery to the Agent of an Amendment and
Confirmation of Guaranty, dated the date hereof and substantially in the form
attached hereto as Exhibit A, by each of the Borrower's Subsidiaries;
(b) the execution and delivery to the Agent by the Borrower and Newco
of an Amended and Restated Stock Pledge Agreement, dated the date hereof (the
"Restated Pledge Agreement") and substantially in the form attached hereto as
Exhibit B, documenting or confirming the pledge to the Agent of (i) all of the
capital stock of the Intermediate Subsidiaries held by Newco, (ii) all of the
capital stock of Newco held by the Borrower, and (iii) all of the capital stock
of all other Subsidiaries which remain directly owned by the Borrower following
the Newco Restructuring;
(c) the physical delivery to, or possession by, the Agent of stock
certificates representing all of the outstanding capital stock being pledged in
accordance with clause (b) above, accompanied by new or substituted stock power
endorsements executed in blank;
(d) the delivery to the Agent and the other Banks of an opinion letter
of ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ & Fish, LLP, counsel to the Borrower and the Subsidiaries,
respecting the transactions contemplated by this Fifth Amendment, in a form and
addressing such specific matters as may be reasonably requested by the Banks;
(e) a certificate of an appropriate officer of the Borrower and each
Subsidiary which is a party to the documents referenced in clauses (a) - (c)
above, certifying as to its charter
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documents and by-laws, the incumbency of signing officers, and the adoption
of necessary corporate votes;
(f) a certificate of legal existence and good standing of PROVANT Utah,
Inc. from the Secretary of State of Utah;
(g) certified copies of the Inter-company Notes;
(h) a Subordination Agreement, dated the date hereof and substantially
in the form attached hereto as Exhibit C, pursuant to which the Inter-company
Notes are to be subordinated to the payment of all Indebtedness owing to the
Banks under the Loan Documents; and
(i) such other documents or information as the Agent or any Bank may
reasonably request.
Section 4. Additional Covenants of Borrower. As a condition to the
willingness of the Banks to enter into this Fifth Amendment, the Borrower
further covenants and agrees, for itself and all of its Subsidiaries, as
follows:
(a) The Borrower shall cause Newco to exist and operate solely for the
purposes of (i) owning all of the capital stock of the Intermediate
Subsidiaries, and (ii) providing administrative, marketing and related services
to the Borrower's Subsidiaries.
(b) No additional Subsidiaries may be formed or acquired directly or
indirectly by the Borrower, except (i) pursuant to the provisions of the Credit
Agreement, or (ii) upon the prior written consent of the Majority Banks.
Section 5. Additional Modifications to Credit Agreement. The parties hereto
agree that the Credit Agreement shall be further modified and amended in the
following manner:
(a) In Section 8.1, a new clause (j) shall be added to read as follows:
"(j) Indebtedness temporarily existing immediately following a
Permitted Acquisition, to the extent permitted by Section 8.5.1(c)."
(b) In Section 8.2, a new clause (ix) shall be added to read as follows:
"(ix) liens temporarily existing at the time of any Permitted
Acquisition which are not otherwise permitted pursuant to the
provisions of this Section 8.2, so long as such liens are terminated in
accordance with the provisions of Section 8.5.1(c)."
(c) In Section 8.5.1, a new clause (c) shall be added to read as follows:
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"(c) Notwithstanding the otherwise applicable provisions of
Sections 8.1 and 8.2 hereof dealing with permitted Indebtedness and
liens, the Borrower or any acquiring Subsidiary in a Permitted
Acquisition may temporarily allow to remain outstanding any existing
purchase money equipment financing arrangement, capital equipment lease
or secured or unsecured working capital credit facility which was
originated by the company or business which is being acquired as part
of the Permitted Acquisition and which is not otherwise permitted to
remain outstanding by the provisions of Sections 8.1 and/or 8.2,
provided, however, that the foregoing right shall be temporary only so
as to permit an orderly post-Acquisition payoff and termination by the
Borrower of all such arrangements or facilities not later than fifteen
(15) days following the date of the Permitted Acquisition."
(d) The term "Stock Pledge Agreement" appearing in the Credit Agreement
or the Loan Documents shall be deemed to mean and refer to the Restated Pledge
Agreement.
Section 6. Loan Documents Ratified and Confirmed. The Credit Agreement,
the Notes and each of the other Loan Documents, as specifically supplemented or
amended by this Fifth Amendment and the other documents executed in connection
herewith, are and shall continue to be in full force and effect and are hereby
in all respects ratified and confirmed. The waivers and consents embodied in
this Fifth Amendment are limited to the specific matters and circumstances
described herein, and no further or additional waiver as to any other
obligations under the Credit Agreement shall be deemed to be granted hereby.
Without limiting the generality of the foregoing, the Security Documents and all
of the collateral described therein do, and shall continue to, secure the
payment of all obligations under the Credit Agreement, in each case as amended
or supplemented pursuant to this Fifth Amendment.
Section 7. Bringdown. The Borrower hereby confirms that all
representations and warranties with respect to the Borrower and any Subsidiaries
contained in the Credit Agreement and each of the other Loan Documents and in
any other certificate or document delivered in connection therewith are true and
correct as of the date hereof, and that no Default or Event of Default is
outstanding or would be created by the consummation of the transactions
described herein.
Section 8. Costs and Expenses. The Borrower agrees to pay on demand all
reasonable costs and expenses of the Agent and the Banks, including without
limitation all reasonable fees and expenses of counsel, in connection with the
preparation, execution and delivery of this Fifth Amendment and the other
documents and instruments to be delivered herewith.
Section 9. Miscellaneous. This Fifth Amendment may be executed in
several counterparts and by each party on a separate counterpart, each of which
when executed and delivered shall be an original, and all of which together
shall constitute one instrument. In proving this Fifth Amendment, it shall not
be necessary to produce or account for more than
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one such counterpart signed by the party against whom enforcement is sought.
This Fifth Amendment is intended to take effect as a sealed instrument and shall
for all purposes be construed in accordance with and governed by the laws of The
Commonwealth of Massachusetts, (excluding the laws applicable to conflicts or
choice of law).
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IN WITNESS WHEREOF, the parties hereto have caused this Fifth Amendment
to be duly executed as an instrument under seal as of the date first above
written.
PROVANT, INC.
By:/s/ ▇▇▇▇▇ ▇▇▇▇▇
Title: Executive Vice President
BANKBOSTON, N.A.
By:/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
FLEET NATIONAL BANK
By:/s/ ▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
NORWEST BANK IOWA, N.A.
By:_____________________________
Title:
STATE STREET BANK AND TRUST
COMPANY
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
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FLEET NATIONAL BANK, as AGENT
By:/s/ ▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
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