FIRST AMENDMENT AND WAIVER TO THE LOAN AND SECURITY AGREEMENT
First Amendment and Waiver dated as of May 10, 2001 (this "Amendment") to the
Loan Agreement referred to below, between MANAGEMENT ALLIANCE CORPORATION, a
Texas corporation ("Leading Borrower" or "MAC"), INFORMATION SYSTEMS
CONSULTING CORP., a Texas corporation ("ISCC"), DATATEK CONSULTING GROUP
CORPORATION, a Texas corporation ("DCGC"), TEXCEL SERVICES, INC., a
Pennsylvania corporation ("TSI"), and MOUNTAIN, LTD., a Maine corporation
("ML" and, together with MAC, ISCC, DCGC and TSI, the "BORROWERS" and each a
"BORROWER"), DIVERSIFIED CORPORATE RESOURCES, INC., a Texas corporation
("Parent") and any other Credit Party executing this Agreement, and GENERAL
ELECTRIC CAPITAL CORPORATION, a New York corporation ("LENDER").
WITNESSETH:
WHEREAS, Borrower and Lender are parties to that certain Loan and Security
Agreement, dated as of May 2000 (as it may be amended, restated, modified or
supplemented from time to time, the "Loan Agreement") under which Lender
agreed to make certain loans and extensions of credit to the Borrowers; and
WHEREAS, Borrowers have requested that Lender waive certain Event(s) of
Default under Loan Agreement and make certain amendments thereto, as more
fully set forth herein, and Lender is agreeable to such request only on the
terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises, the covenants and
agreements contained herein, and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the parties do
hereby agree that all capitalized terms used herein shall have the meanings
ascribed thereto in the Loan Agreement and do hereby further agree as follows:
STATEMENT OF TERMS
1. WAIVER OF DEFAULT. Lender hereby waives the Events of Default
arising solely out of (i) failure of Parent and its Subsidiaries to maintain
a Fixed Charge Coverage Ratio of at least 1.10 for the period of four
consecutive fiscal quarters ending March 31, 2001, and (ii) failure to
maintain Borrowing Availability for all Borrowers combined of at least
$2,000,000 after giving effect to the purchase of Treasury Stock (as defined
in Schedule G).
2. AMENDMENTS RELATING TO FINANCIAL COVENANTS. Section 4.2 of the
Loan Agreement, as set forth in Schedule G is hereby amended as follows:
a. Fixed Charge Coverage Ratio:
Four consecutive fiscal
quarters ending: Minimum Required
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June 30, 2001 .90 : 1.00
September 30, 2001 1.00 : 1.00
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December 31, 2001 1.00 : 1.00
March 31, 2002, and each
period thereafter 1.10 : 1.00
4. REPRESENTATIONS AND WARRANTIES. To induce Lender to enter into
this Amendment, each Credit Party hereto hereby warrants, represents and
covenants to Lender that: (a) each representation and warranty of the Credit
Parties set forth in the Loan Agreement is hereby restated and reaffirmed as
true and correct on and as of the date hereof after giving affect to this
Amendment as if such representation or warranty were made on and as of the
date hereof (except to the extent that any such representation or warranty
expressly relates to a prior specific date or period in which case it is true
and correct as of such prior date or period), and no Default or Event of
Default has occurred and is continuing as of this date under the Loan
Agreement after giving effect to this Amendment; and (b) each Credit Party
hereto has the power and is duly authorized to enter into, deliver and
perform this Amendment, and this Amendment is the legal, valid and binding
obligation of such Credit Party enforceable against it in accordance with its
terms.
5. CONDITIONS PRECEDENT TO EFFECTIVENESS OF THIS AMENDMENT. The
effectiveness of this Amendment is subject to the fulfillment of the
following conditions precedent:
(a) Lender shall have received one or more counterparts of this
Amendment duly executed and delivered by the Credit Parties hereto;
(b) Any and all Guarantors of the Obligations shall have consented
to the execution, delivery and performance of this Amendment and all of the
transactions contemplated hereby by signing one or more counterparts of this
Amendment in the appropriate space indicated below and returning same to
Lender;
(c) Lender shall have received an Amendment and Waiver Fee of
$15,000 and a Documentation Fee of $500.
6. CONTINUING EFFECT OF LOAN AGREEMENT. Except as expressly
modified hereby, the provisions of the Loan Agreement, and the Liens granted
thereunder, are and shall remain in full force and effect and this Amendment
shall be limited precisely as drafted and shall not constitute a waiver of
any Event of Default or a modification or amendment of any terms and
conditions of the Loan Agreement other than as expressly set forth herein.
The granting of the waiver hereunder shall not impose or imply an obligation
on Lender to grant a waiver on any future occasion.
7. COUNTERPARTS. This Amendment may be executed in multiple
counterparts each of which shall be deemed to be an original and all of which
when taken together shall constitute one and the same instrument.
8. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE
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WITHOUT REGARD TO THE PRINCIPLES THEREOF REGARDING CONFLICTS OF LAWS.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered as of the day and year first specified above.
BORROWERS:
MANAGEMENT ALLIANCE CORPORATION
By: /s/ Anthony G. Schmeck
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Name: Anthony G. Schmeck
Title: Duly Authorized Signatory
INFORMATION SYSTEMS CONSULTING CORP.
By: /s/ Anthony G. Schmeck
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Name: Anthony G. Schmeck
Title: Duly Authorized Signatory
DATATEK CONSULTING GROUP CORPORATION
By: /s/ Anthony G. Schmeck
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Name: Anthony G. Schmeck
Title: Duly Authorized Signatory
TEXCEL SERVICES, INC.
By: /s/ Anthony G. Schmeck
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Name: Anthony G. Schmeck
Title: Duly Authorized Signatory
MOUNTAIN, LTD.
By: /s/ Anthony G. Schmeck
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Name: Anthony G. Schmeck
Title: Duly Authorized Signatory
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OTHER CREDIT PARTIES:
DIVERSIFIED CORPORATE RESOURCES, INC.
By: /s/ Anthony G. Schmeck
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Name: Anthony G. Schmeck
Title: Duly Authorized Signatory
PREFERRED FUNDING CORPORATION
By: /s/ Anthony G. Schmeck
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Name: Anthony G. Schmeck
Title: Duly Authorized Signatory
MAGIC NORTHEAST, INC.
By: /s/ Anthony G. Schmeck
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Name: Anthony G. Schmeck
Title: Duly Authorized Signatory
LENDER:
GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ Vincent X. Donahue
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Name: Vincent X. Donahue
Title: Duly Authorized Signatory
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