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EXHIBIT 10.14
FIRST AMENDMENT TO FIRST AMENDED AND RESTATED
REVOLVING CREDIT LOAN AGREEMENT
THIS FIRST AMENDMENT TO FIRST AMENDED AND RESTATED REVOLVING REDIT
LOAN AGREEMENT (the "AMENDMENT"), dated as of April 1, 1999, is between THOMAS
GROUP, INC., a Delaware corporation ("BORROWER") and COMERICA BANK-TEXAS, a
Texas banking association ("LENDER").
RECITALS:
Borrower and Lender have entered into that certain First Amended and
Restated Revolving Credit Loan Agreement dated as of December 4, 1996 (as
amended or otherwise modified from time to time, the "AGREEMENT").
Borrower and Lender desire to amend the Agreement.
NOW, THEREFORE, in consideration of the premises herein contained and
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
Definitions
Section I.1 Definitions. Capitalized terms used in this Amendment, to
the extent not otherwise defined herein, shall have the same meanings as in the
Agreement, as amended hereby.
ARTICLE II
Amendments
Section II.1 Amendment to Recitals and to Definitions. Effective as of
the date hereof the following changes are made to the Recitals and Section 1.1:
(a) All references in the Recitals to "$20,000,000" shall be
changed to read "$15,000,000".
(b) The definition of "REDUCTION DATES" is deleted in its
entirety and no replacement definition is provided.
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(c) The existing definitions of the following terms are deleted
in their entirety and are replaced by the following:
"EBITDA" shall mean at any time, and for the previous four
calendar quarters then ending as computed in accordance with GAAP, (a)
the sum of the Borrower's consolidated net income, plus interest
expense, taxes, depreciation and amortization expense for the same
period, plus (b) the non-cash portion of the one-time restructuring
charge taken in the second fiscal quarter of 1998, excluding (c) any
gain or loss from the sale of any capital assets.
"REVOLVING CREDIT COMMITMENT" shall mean the obligation of the
Lender to make Revolving Credit Loans to the Borrower in an aggregate
principal amount at any time outstanding up to but not to exceed
$15,000,000, from the date of this Agreement through December 2, 2003.
(d) The following definition is hereby added to Section 1.1 in
alphabetical order to read as follows:
"NET INTEREST EXPENSE RATIO" shall mean, at any particular time,
the ratio resulting as the quotient of (a) the Borrower's EBITDA for
the immediately preceding twelve-month period divided by (b) the
Borrower's Net Interest Expense.
Section II.2. Amendment to Section 3.1. Effective as of the date of
this Amendment, the following changes are made to Section 3.1:
(e) Section 3.1 of the Agreement is amended by adding the
following sentence to become the last sentence of Section 3.1:
No Letter of Credit will be issued with an expiration date that
extends beyond November 1, 2003.
(f) All references in Section 3.1 to "$20,000,000" shall be
changed to read "$15,000,000".
Section II.3. Amendment to Section 10.1. Effective as of the date of
this Amendment, Section 10.1 of the Agreement is deleted in its entirety and is
replaced by the following:
10.1. Acquisitions; New Subsidiaries. The Borrower will not
engage in any acquisition of stock or assets (an "Acquisition") or
any combination of stock and assets of any entity without the prior
written consent of the Lender. The Borrower will not form any new
Subsidiary unless such subsidiary, simultaneous with its formation,
executes an unlimited guaranty in favor of the Lender, in form and
substance satisfactory to the Lender.
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Section II.4. Amendment to Section 10.2. Effective as of the date of
this Amendment, Section 10.2 of the Agreement is amended by adding thereto the
following sentence to become the last sentence of Section 10.2:
Additionally, the Borrower and each Guarantor agrees that
notwithstanding anything to the contrary contained in this Agreement,
if at any time the Indebtedness should exceed $10,000,000, upon the
request of the Lender, the Borrower and each Guarantor will execute
the documents attached hereto as Annex I, together with such other
documents and agreements which the Lender deems necessary to grant to
the Lender and to perfect a first priority lien and security interest
in all of the Borrower's and each Guarantor's assets, wherever
located.
Section II.5. Addition of New Section 10.14. Effective as of the date
hereof, the following new Section 10.14. is added to the Agreement:
10.14 Consecutive Losses. Permit any "Loss" to exist on a
rolling two-quarter basis. For purposes of this covenant, "Loss"
shall mean as of any date of computation any negative number
resulting from the computation of net income for the previous two
quarters, as computed in accordance with GAAP (excluding within the
computation of net income all extraordinary and non-recurring charges
to income).
ARTICLE III
Conditions Precedent
The effectiveness of this Amendment is subject to the condition that
all parties hereto (including Guarantors) shall have executed the same and that
Lender shall have received as of the date hereof, in form and substance
satisfactory to Lender, an amended Note and resolutions of the Board of
Directors of Borrower certified by a senior officer which authorize the
execution, delivery, and performance by Borrower of this Amendment.
ARTICLE IV
Ratification and Other Agreements
Section IV.1 Ratification. The terms and provisions set forth in this
Amendment shall modify and supersede all inconsistent terms and provisions set
forth in the Agreement and except as expressly modified and superseded by this
Amendment, the terms and provisions of the Agreement, the Note and all other
documents executed in connection with the Agreement are hereby ratified and
confirmed and shall continue in full force and effect. Borrower and Lender
agree that the Agreement as amended hereby and all other documents executed in
connection with the
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Agreement or this Amendment to which Borrower is a party shall continue to be
legal, valid, binding and enforceable in accordance with their respective terms.
Section IV.2. Representations and Warranties. Borrower hereby
represents and warrants to Lender that (a) the execution, delivery and
performance of this Amendment and any and all other documents executed and/or
delivered in connection herewith have been authorized by all requisite
corporate action on the part of Borrower and will not violate the certificate
of incorporation or bylaws of Borrower or any agreement to which Borrower or
any of its properties is bound, (b) except for certain amendments to the
Borrower's certificate of incorporation dated July 10, 1998, neither the
certificate of incorporation nor the bylaws of Borrower have been amended or
revoked since the date of the Agreement and such certificate of incorporation
and bylaws are in full force and effect, (c) the representations and warranties
contained in the Agreement, as amended hereby, and any other documents executed
in connection therewith or herewith are true and correct on and as of the date
hereof as though made on and as of the date hereof, (d) no Event of Default has
occurred and is continuing and no event or condition has occurred that with the
giving of notice or lapse of time or both would be an Event of Default, and (e)
Borrower is in full compliance with all covenants and agreements contained in
the Agreement as amended hereby.
Section IV.3. Agreement. If any provision hereof extends any
Termination Date, it is agreed that any covenants in the Agreement which,
because of references to dates, could be interpreted as expiring prior to any
Termination Date (as extended by this Amendment) are automatically extended in
scope until such time as all Indebtedness is paid in full.
Section IV.4. Certain References to Borrower. It is agreed that all
references to "BORROWER" in Sections 5, 6, and 7 of the Agreement shall be
deemed to be references to the Borrower and its Subsidiaries on a consolidated
basis. Additionally, all annual Financial Statements shall be audited
statements.
ARTICLE V
Miscellaneous
Section V.1. Survival of Representations and Warranties. All
representations and warranties made in this Amendment or any other document
executed in connection herewith shall survive the execution and delivery of
this Amendment, and no investigation by Lender or any closing shall affect the
representations and warranties or the right of Lender to rely upon them.
Section V.2. Reference to Agreement. Each of the Agreement and any and
all other agreements, documents, or instruments now or hereafter executed and
delivered pursuant to the terms hereof or pursuant to the terms of the
Agreement as amended hereby, are hereby amended so that any reference in such
documents to the Agreement shall mean a reference to the Agreement as amended
hereby.
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Section V.3. Expenses of Lender. As provided in the Agreement,
Borrower agrees to pay on demand all reasonable costs and expenses incurred by
Lender in connection with the preparation, negotiation, and execution of this
Amendment and any other documents executed pursuant hereto and any and all
amendments, modifications, and supplements thereto, including without
limitation the costs and reasonable fees of Lender's legal counsel, and all
costs and expenses incurred by Lender in connection with the enforcement or
preservation of any rights under the Agreement, as amended hereby, or any other
document executed in connection therewith, including without limitation the
costs and reasonable fees of Lender's legal counsel.
Section V.4. Severability. Any provision of this Amendment held by a
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.
Section V.5. Applicable Law. This Amendment and all other documents
executed pursuant hereto shall be deemed to have been made and to be
performable in Dallas, Dallas County, Texas and shall be governed by and
construed in accordance with the laws of the State of Texas.
Section V.6. Successors and Assigns. This Amendment is binding upon
and shall inure to the benefit of Lender, Borrower, Guarantor and their
respective successors and assigns, except Borrower may not assign or transfer
any of its rights or obligations hereunder without the prior written consent of
Lender.
Section V.7. Counterparts. This Amendment may be executed in one or
more counterparts, each of which when so executed shall be deemed to be an
original, but all of which when taken together shall constitute one and the
same instrument.
Section V.8. Effect of Waiver. No consent or waiver, express or
implied, by Lender to or for any breach of or deviation from any covenant,
condition or duty by Borrower or any obligated party shall be deemed a consent
or waiver to or of any other breach of the same or any other covenant,
condition or duty.
Section V.9. Headings. The headings, captions, and arrangements used
in this Amendment are for convenience only and shall not affect the
interpretation of this Amendment.
Section V.10. Non-Application of Chapter 346 of Texas Finance Code.
The provisions of Chapter 346 of the Texas Finance Code, as amended (formerly
Chapter 15 of the Texas Credit Code (Vernon's Texas Civil Statutes), Article
5069-15), are specifically declared by the parties not to be applicable to this
Amendment or any of the Loan Documents or the transactions contemplated hereby.
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Section V.11. ENTIRE AGREEMENT. THE AGREEMENT, THIS AMENDMENT AND ALL
OTHER INSTRUMENTS, DOCUMENTS AND AGREEMENTS EXECUTED AND DELIVERED IN
CONNECTION WITH THE AGREEMENT OR THIS AMENDMENT EMBODY THE FINAL, ENTIRE
AGREEMENT AMONG THE PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS,
AGREEMENTS, REPRESENTATIONS AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL,
RELATING TO THIS AMENDMENT, AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE
OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE
PARTIES HERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES HERETO.
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Executed as of the date first written above.
BORROWER:
THOMAS GROUP, INC.,
a Delaware corporation
By:
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J. Thomas Williams,
Chief Executive Officer and President
LENDER:
COMERICA BANK-TEXAS
By:
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David Terry, Vice President
The undersigned guarantors hereby (i) consent and agree to this
Amendment and (ii) confirm and agree that the Guaranty of each Guarantor is in
full force and effect and is the legal, valid and binding obligation of each of
the undersigned guarantors enforceable against each such guarantor in
accordance with its terms. Additionally, Thomas Group Information Technologies,
Inc., formerly Thomas Group Acquisition, Corp. ("TGA"), agrees that it has
succeeded to all guarantee liabilities of Bermac Communications, Inc.
("BERMAC") by reason of the merger of Bermac into TGA; TGA subsequently changed
its name to Thomas Group Information Technologies, Inc.
GUARANTORS:
THOMAS GROUP GMBH
By:
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Philip J. Lovell, Managing Director
THOMAS GROUP (SWITZERLAND) GMBH
By:
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Robert French, Managing Director
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THOMAS GROUP OF LOUISIANA, INC.
By:
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Alexander W. Young, President
THOMAS GROUP INFORMATION
TECHNOLOGIES, INC., formerly Thomas Group
Acquisition, Corp., and successor-by-merger
to Bermac Communications, Inc.
By:
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Alexander W. Young, President
THOMAS GROUP ASIA PRIVATE LIMITED
By:
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Alexander W. Young, Officer
THOMAS GROUP OF SWEDEN, INC.
By:
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J. Thomas Williams, President
THOMAS GROUP HONG KONG, LIMITED
By:
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Herbert D. Locke, Officer
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ANNEX I
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