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EXHIBIT 10.1
SEVENTH AMENDMENT TO
CREDIT AGREEMENT
THIS SEVENTH AMENDMENT TO CREDIT AGREEMENT (this "Amendment"), dated as
of June 15, 2000, is by and among THE PROFIT RECOVERY GROUP INTERNATIONAL, INC.,
a Georgia corporation (the "Borrower"), certain Subsidiaries of the Borrower
(each a "Subsidiary Guarantor", and collectively, the "Subsidiary Guarantors"),
the Lenders identified on the signature pages hereto (the "Lenders") and BANK OF
AMERICA, N.A., formerly NationsBank, N.A., as Agent for the Lenders (the
"Agent"). All capitalized terms used herein and not otherwise defined herein
shall have the meanings given to such terms in the Credit Agreement (as defined
below).
W I T N E S S E T H:
WHEREAS, the Borrower, the Subsidiary Guarantors, the Lenders and the
Agent entered into that certain Credit Agreement dated as of July 29, 1998 (as
amended or modified from time to time, the "Credit Agreement");
WHEREAS, the parties hereto have agreed to amend the Credit Agreement
as set forth herein;
NOW, THEREFORE, in consideration of the agreements contained herein and
other good and valuable consideration, the parties hereby agree as follows:
1. New Definitions.
(a) A definition of "Adjusted Leverage Ratio" is hereby
added to Section 1.1 of the Credit Agreement and shall read as follows:
"Adjusted Leverage Ratio" means, with respect to the
Consolidated Parties on a consolidated basis for the twelve
month period ending on the last day of any fiscal quarter, the
ratio of (a) Funded Indebtedness of the Consolidated Parties
on a consolidated basis on the last day of such period minus
the aggregate outstanding Attributed Principal Amount of all
Securitization Transactions of the Consolidated Parties on a
consolidated basis on the last day of such period to (b)
Consolidated EBITDA for such period.
(b) A definition of "Attributed Principal Amount" is
hereby added to Section 1.1 of the Credit Agreement and shall read as
follows:
"Attributed Principal Amount" means, on any day, with
respect to any Securitization Transaction entered into by a
Consolidated Party, the aggregate amount (the "Initial
Securitization Proceeds") paid to, or borrowed by, such
Consolidated Party under such Securitization Transaction,
minus the aggregate amount collected or received by the
applicable Person which provided such financing and applied to
the reduction of the Initial Securitization Proceeds under
such Securitization Transaction.
(c) A definition of "Receivables" is hereby added to
Section 1.1 of the Credit Agreement and shall read as follows:
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"Receivables" means any right of payment from or on
behalf of any obligor, whether constituting an account,
chattel paper, instrument, general intangible or otherwise,
arising from the sale by a Consolidated Party of merchandise
or services, and monies due thereunder, security in the
merchandise and services financed thereby, records related
thereto, and the right to payment of any interest or finance
charges and other obligations with respect thereto, proceeds
from claims on insurance policies related thereto, any other
proceeds related thereto, and any other related rights
(d) A definition of "Securitization Transaction" is
hereby added to Section 1.1 of the Credit Agreement and shall read as
follows:
"Securitization Transaction" means any financing
transaction entered into by a Consolidated Party pursuant to
which such Consolidated Party (i) may sell, convey or
otherwise transfer to any Person any Receivables or interests
therein, or (ii) may grant a security interest in any
Receivables or interests therein.
2. Amended Definitions.
(a) The definition of "Applicable Percentage" set forth
in Section 1.1 of the Credit Agreement is hereby amended and restated
in its entirety to read as follows:
"Applicable Percentage" means, for purposes of
calculating the applicable interest rate for any day for any
Revolving Loan, the applicable rate of the Unused Fee for any
day for purposes of Section 3.5(b) and the applicable rate of
the Letter of Credit Fee for any day, the appropriate
applicable percentage corresponding to the Adjusted Leverage
Ratio in effect as of the most recent Calculation Date:
APPLICABLE APPLICABLE
PERCENTAGE PERCENTAGE APPLICABLE
ADJUSTED APPLICABLE FOR FOR PERCENTAGE
PRICING LEVERAGE PERCENTAGE FOR BASE RATE LETTER OF FOR UNUSED
LEVEL RATIO EURODOLLAR LOANS LOANS CREDIT FEES FEES
------- ------------ ---------------- ---------- ----------- ----------
I < 1.0 to 1.0 1.00% 0.0% 1.00% 0.25%
II < 1.5 to 1.0 1.25% 0.0% 1.25% 0.25%
but > 1.0 to 1.0
-
III < 2.0 to 1.0 1.50% 0.0% 1.50% 0.30%
but > 1.5 to 1.0
-
IV < 2.5 to 1.0 1.75% 0.25% 1.75% 0.375%
but > 2.0 to 1.0
-
V > 2.5 to 1.0 2.25% 0.75% 2.25% 0.50%
-
The Applicable Percentages shall be determined and adjusted
quarterly on the date (each a "Calculation Date") five
Business Days after the date by which the Borrower is required
to provide the officer's certificate in accordance with the
provisions of Section 7.1(c) for the most recently ended
fiscal quarter of the Consolidated Parties; provided, however,
if the Borrower fails to provide the officer's certificate to
the Agency Services
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Address as required by Section 7.1(c) for the last day of the
most recently ended fiscal quarter of the Consolidated Parties
preceding the applicable Calculation Date, the Applicable
Percentage from such Calculation Date shall be based on
Pricing Level V until such time as an appropriate officer's
certificate is provided, whereupon the Applicable Percentage
shall be determined by the Leverage Ratio as of the last day
of the most recently ended fiscal quarter of the Consolidated
Parties preceding such Calculation Date. Each Applicable
Percentage shall be effective from one Calculation Date until
the next Calculation Date. Any adjustment in the Applicable
Percentages shall be applicable to all existing Loans as well
as any new Loans made or issued.
(b) The definition of "Consolidated Interest Expense" set
forth in Section 1.1 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
"Consolidated Interest Expense" means, for any
period, interest expense (including the amortization of debt
discount and premium, the interest component under Capital
Leases and the implied interest component under Securitization
Transactions) of the Consolidated Parties on a consolidated
basis for such period, as determined in accordance with GAAP.
(c) A new clause (m) is hereby added to the definition of
"Indebtedness" set forth in Section 1.1 of the Credit Agreement and
shall read as follows:
and (m) the outstanding Attributed Principal Amount
under any Securitization Transaction.
(d) The definition of "Fixed Charge Coverage Ratio" set
forth in Section 1.1 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
"Fixed Charge Coverage Ratio" means, as of the end of
each fiscal quarter of the Consolidated Parties for the twelve
month period ending on such date, the ratio of (a) the sum of
(i) Consolidated EBIT for the applicable period plus (ii)
Consolidated Rental Expense for the applicable period plus
(iii) any amortization of intangible assets for the applicable
period to (b) the sum of (i) Consolidated Interest Expense for
the applicable period plus (ii) Consolidated Rental Expense
for the applicable period plus (iii) all costs (other than the
implied interest component under the Securitization
Transactions) incurred by the Consolidated Parties during the
applicable period in connection with all Securitization
Transactions.
(e) A new clause (xii) is hereby added to the definition
of "Permitted Liens" set forth in Section 1.1 of the Credit Agreement
and shall read as follows:
(xii) Liens created or deemed to exist in
connection with any Securitization Transaction permitted under
Section 8.1(i), but only to the extent that any such Lien
relates to the applicable Receivables actually sold,
contributed or otherwise conveyed pursuant to such
Securitization Transaction.
3. Leverage Ratio. Section 7.11(ii) of the Credit Agreement is
hereby amended and restated in its entirety to read as follows:
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(ii) Leverage Ratio. The Leverage Ratio, as of the last
day of each fiscal quarter of the Consolidated Parties, shall be less
than or equal to 3.0 to 1.0.
4. Indebtedness. A new clause (i) is hereby added to Section 8.1
of the Credit Agreement and shall read as follows:
(i) Indebtedness and obligations of the Consolidated
Parties (whether recourse or nonrecourse) in connection with
Securitization Transactions; provided that (i) prior to December 31,
2000, the Attributed Principal Amount for all such Securitization
Transactions entered into by the Consolidated Parties shall not exceed
$50,000,000 in the aggregate and (ii) beginning on January 1, 2001, for
each fiscal year thereafter, the Consolidated Parties may enter into
additional Securitization Transactions so long as the aggregate
Attributed Principal Amount for all such Securitization Transactions
occurring during such fiscal year shall not exceed an amount equal to
15% of the Total Assets of the Consolidated Parties as of the last day
of the fiscal year most recently ended prior to the beginning of such
fiscal year; provided, further, however, that after January 1, 2001,
the aggregate Attributed Principal Amount for all such Securitization
Transactions of the Consolidated Parties shall not exceed $100,000,000
in the aggregate.
5. Asset Dispositions. Section 8.5 of the Credit Agreement is
hereby amended and restated in its entirety to read as follows:
8.5 Asset Dispositions.
The Credit Parties will not permit any Consolidated Party to
make any Asset Disposition (including, without limitation, any Sale and
Leaseback Transaction) other than (i) the sale of inventory in the
ordinary course of business for fair consideration, (ii) the sale or
disposition of machinery and equipment no longer used or useful in the
conduct of such Person's business, (iii) the sale of accounts
receivable to the Factor pursuant to the Factoring Agreement, (iv) the
sale of accounts receivable pursuant to any Securitization Transaction
permitted by Section 8.1(i) and (v) other sales of assets during any
fiscal year having an aggregate fair market value of less than an
amount equal to 10% of Total Assets of the Consolidated Parties.
6. Restricted Payments. Section 8.7 of the Credit Agreement is
hereby amended and restated in its entirety to read as follows:
8.7 Restricted Payments.
The Credit Parties will not permit any Consolidated Party to,
directly or indirectly, declare, order, make or set apart any sum for
or pay any Restricted Payment, except (a) to make dividends payable
solely in the same class of Capital Stock of such Person, (b) to make
dividends or other distributions payable to the Borrower (directly or
indirectly through Subsidiaries), (c) the redemption of Capital Stock
of the Borrower from any officer or director of the Borrower or any of
its Subsidiaries provided that the aggregate price paid for all such
shares purchased during the term of this Credit Agreement shall not
exceed $250,000 and (d) so long as no Default or Event of Default
exists prior to and after giving effect to such transaction, the
Borrower may repurchase shares of its Capital Stock in an amount not to
exceed during the term of this Credit Agreement an aggregate amount
equal to $50,000,000.
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7. Conditions Precedent. The effectiveness of this Amendment is
subject to satisfaction of each of the following conditions:
(a) The Agent shall have received counterparts of this
Amendment, duly executed by the Borrower, the Subsidiary Guarantors,
the Agent and the Required Lenders.
(b) The Borrower shall pay to the Agent, for the account
of each Lender who executes this Amendment on or before June 15, 2000,
an amendment fee equal to 0.25% of such Lender's Revolving Commitment.
(c) The Agent shall have received a legal opinion from
counsel to the Credit Parties in form and substance satisfactory to the
Agent.
8. Miscellaneous.
(a) The term "Credit Agreement" as used in each of the
Credit Documents shall hereafter mean the Credit Agreement as amended
by this Amendment. Except as herein specifically agreed, the Credit
Agreement, and the obligations of the Credit Parties thereunder and
under the other Credit Documents, are hereby ratified and confirmed and
shall remain in full force and effect according to their terms.
(b) The Credit Parties acknowledge and confirm (i) that
the Agent, on behalf of the Lenders, has a valid and enforceable first
priority security interest in the Collateral, (ii) that the Borrower's
obligation to repay the outstanding principal amount of the Loans and
reimburse the Issuing Lender for any drawing on a Letter of Credit is
unconditional and not subject to any offsets, defenses or
counterclaims, (iii) that the Agent and the Lenders have performed
fully all of their respective obligations under the Credit Agreement
and the other Credit Documents, and (iv) by entering into this
Amendment, the Lenders do not waive or release any term or condition of
the Credit Agreement or any of the other Credit Documents or any of
their rights or remedies under such Credit Documents or applicable law
or any of the obligations of any Credit Party thereunder.
(c) The Credit Parties represent and warrant to the
Lenders that (i) the representations and warranties of the Credit
Parties set forth in Section 6 of the Credit Agreement are true and
correct as of the date hereof, (ii) no event has occurred and is
continuing which constitutes a Default or an Event of Default and (iii)
no Credit Party has any counterclaims, offsets, credits or defenses to
the Credit Documents and the performance of its obligations thereunder,
or if any Credit Party has any such claims, counterclaims, offsets,
credits or defenses to the Credit Documents or any transaction related
to the Credit Documents, same are hereby waived, relinquished and
released in consideration of the Lenders' execution and delivery of
this Amendment.
(d) This Amendment may be executed in any number of
counterparts, each of which when so executed and delivered shall be an
original, but all of which shall constitute one and the same
instrument. It shall not be necessary in making proof of this Amendment
to produce or account for more than one such counterpart.
(e) This Amendment shall be governed by and construed in
accordance with, the laws of the State of Georgia.
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(f) This Amendment shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and
assigns.
(g) The Borrower and the Guarantors, as applicable,
affirm the liens and security interests created and granted in the
Credit Agreement and the Credit Documents and agree that this Amendment
shall in no manner adversely affect or impair such liens and security
interests.
(h) Each Credit Party hereby represents and warrants as
follows:
(i) Each Credit Party has taken all necessary
action to authorize the execution, delivery and performance of
this Amendment.
(ii) This Amendment has been duly executed and
delivered by the Credit Parties and constitutes each of the
Credit Parties' legal, valid and binding obligations,
enforceable in accordance with its terms, except as such
enforceability may be subject to (i) bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer, moratorium
or similar laws affecting creditors' rights generally and (ii)
general principles of equity (regardless of whether such
enforceability is considered in a proceeding at law or in
equity).
(iii) No consent, approval, authorization or order
of, or filing, registration or qualification with, any court
or governmental authority or third party is required in
connection with the execution, delivery or performance by any
Credit Party of this Amendment.
(i) The Guarantors (i) acknowledge and consent to all of
the terms and conditions of this Amendment, (ii) affirm all of their
obligations under the Credit Documents and (iii) agree that this
Amendment and all documents executed in connection herewith do not
operate to reduce or discharge the Guarantors' obligations under the
Amended Credit Agreement or the other Credit Documents.
(j) This Amendment together with the other Credit
Documents represent the entire agreement of the parties and supersedes
all prior agreements and understandings, oral or written if any,
relating to the Credit Documents or the transactions contemplated
herein and therein.
[The remainder of this page is intentionally left blank.]
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Each of the parties hereto has caused a counterpart of this Amendment
to be duly executed and delivered as of the date first above written.
BORROWER: THE PROFIT RECOVERY GROUP
INTERNATIONAL, INC., a Georgia corporation
By: /s/ XXXXX XXXXXXXXX
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Name: Xxxxx Xxxxxxxxx
Title: Executive Vice President and C.F.O.
SUBSIDIARY
GUARANTORS: PRGFS, INC.
PRGLS, INC.
PRGRS, INC., each a Delaware corporation
By: /s/ XXXXX XXXXXXXXX
----------------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Executive Vice President and C.F.O.
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SUBSIDIARY
GUARANTORS: THE PROFIT RECOVERY GROUP
INTERNATIONAL I, INC.
THE PROFIT RECOVERY GROUP U.K., INC.
THE PROFIT RECOVERY GROUP ASIA,
INC.
THE PROFIT RECOVERY GROUP CANADA,
INC.
THE PROFIT RECOVERY GROUP NEW
ZEALAND, INC.
THE PROFIT RECOVERY GROUP
NETHERLANDS, INC.
THE PROFIT RECOVERY GROUP BELGIUM,
INC.
THE PROFIT RECOVERY GROUP MEXICO,
INC.
THE PROFIT RECOVERY GROUP FRANCE,
INC.
THE PROFIT RECOVERY GROUP
AUSTRALIA, INC.
THE PROFIT RECOVERY GROUP
GERMANY, INC.
PRG INTERNATIONAL HOLDING
COMPANY, INC.
THE PROFIT RECOVERY GROUP
SWITZERLAND, INC.
THE PROFIT RECOVERY GROUP SOUTH
AFRICA, INC.,
THE PROFIT RECOVERY GROUP
SPAIN, INC.
THE PROFIT RECOVERY GROUP
ITALY, INC.,
PAYMENT TECHNOLOGIES, INC., each a
Georgia corporation
By: /s/ XXXXX XXXXXXXXX
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Name: Xxxxx Xxxxxxxxx
Title: Executive Vice President and C.F.O.
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AGENT: BANK OF AMERICA, N.A.,
(formerly NationsBank, N.A.),
individually in its capacity as a
Lender and in its capacity as Agent
By:
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Name:
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Title:
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LENDERS: UNION BANK OF CALIFORNIA, N.A.
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By:
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Name:
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Title:
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FIRST UNION NATIONAL BANK
By:
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Name:
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Title:
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WACHOVIA BANK, N.A.
By:
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Name:
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Title:
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FLEET NATIONAL BANK
By:
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Name:
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Title:
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CREDIT LYONNAIS NEW YORK BRANCH
By:
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Name:
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Title:
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SUNTRUST BANK, ATLANTA
By:
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Name:
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Title:
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By:
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Name:
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Title:
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PNC BANK, NATIONAL ASSOCIATION
By:
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Name:
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Title:
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CREDIT AGRICOLE INDOSUEZ
By:
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Name:
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Title:
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By:
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Name:
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Title:
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LASALLE BANK NATIONAL ASSOCIATION
By:
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Name:
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Title:
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