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EXHIBIT 10.1
TENTH AMENDMENT TO
CREDIT AGREEMENT
THIS TENTH AMENDMENT TO CREDIT AGREEMENT (this "Amendment"), dated as
of May 9, 2001, 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 party hereto 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).
WITNESSETH:
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;
WHEREAS, the Borrower has requested and the Lenders have agreed to
amend certain terms of the Credit Agreement as set forth below;
NOW, THEREFORE, in consideration of the agreements contained herein and
other good and valuable consideration, the parties hereby agree as follows:
1. 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 Leverage
Ratio in effect as of the most recent Calculation Date:
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APPLICABLE APPLICABLE APPLICABLE APPLICABLE
PERCENTAGE FOR PERCENTAGE FOR PERCENTAGE FOR PERCENTAGE FOR
PRICING LEVERAGE EURODOLLAR LOANS BASE RATE LOANS LETTER OF UNUSED FEES
LEVEL RATIO CREDIT FEES
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I < 1.0 to 1.0 1.50% 0.0% 1.50% 0.30%
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II < 1.5 to 1.0 but 1.75% 0.25% 1.75% 0.375%
> 1.0 to 1.0
-
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III < 2.0 to 1.0 but 2.00% 0.50% 2.00% 0.375%
> 1.5 to 1.0
-
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IV < 2.5 to 1.0 but 2.25% 0.75% 2.25% 0.50%
> 2.0 to 1.0
-
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V < 3.0 to 1.0 but 2.75% 1.25% 2.75% 0.50%
> 2.5 to 1.0
-
----------------------------------------------------------------------------------------------------------
VI > 3.0 to 1.0 3.25% 1.75% 3.25% 0.50%
-
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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 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 VI 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 "Permitted Acquisition" set forth
in Section 1.1 of the Credit Agreement is hereby amended and restated
in its entirety to read as follows:
"Permitted Acquisition" means an Acquisition by the Borrower
or any Subsidiary of the Borrower for consideration no greater than the
fair market value of the Capital Stock or Property acquired, provided
that (i) the Capital Stock or Property acquired in such Acquisition
constitute Eligible Assets, (ii) the Agent shall have received all
items in respect of the Capital Stock or Property acquired in such
Acquisition (and/or the seller thereof) required to be delivered by the
terms of Section 7.12 and/or Section 7.14, (iii) in the case of an
Acquisition of the Capital Stock of another Person, the board of
directors (or other comparable governing body) of such other Person
shall have duly approved such Acquisition, (iv) the Borrower shall have
delivered to the Agent a Pro Forma Compliance Certificate demonstrating
that, upon giving effect to such Acquisition on a pro forma basis, the
Credit Parties shall be in compliance with all of the covenants set
forth in Section 7.11, (v) the representations and
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warranties made by the Credit Parties in any Credit Document shall be
true and correct in all material respects at and as if made as of the
date of such Acquisition (after giving effect thereto) except to the
extent such representations and warranties expressly relate to an
earlier date, (vi) the cost of such Acquisition (including cash and
non-cash consideration and any assumption of liabilities) shall not
exceed $5,000,000, (vii) after giving effect to such Acquisition, the
aggregate consideration (including cash and non-cash consideration and
any assumption of liabilities) for all such Acquisitions in any fiscal
year of the Borrower shall not exceed $10,000,000 and (viii) such
Acquisition has been approved in writing by the Required Lenders.
Notwithstanding the foregoing, the parties hereto agree that the
Borrower or any Subsidiary of the Borrower may consummate Permitted
Acquisitions without obtaining the prior written approval of the
Required Lenders if the Leverage Ratio (subsequent to March 30, 2001)
has been less than 2.5 to 1.0 for two consecutive fiscal quarters (as
demonstrated in the applicable officer's certificates provided by the
Borrower pursuant to Section 7.11(c)).
2. Mandatory Reduction. Section 3.4(c) of the Credit Agreement is
hereby amended and restated in its entirety to read as follows:
(c) Mandatory Reduction. Following the sale of a
Discontinued Operation or the sale of the Groupe Alma Business pursuant
to the terms of Section 8.5(iv), the Revolving Committed Amount
automatically shall be permanently reduced by (i) an amount equal to
one hundred percent (100%) of the first $50 million of Net Cash
Proceeds received from all such sales and (ii) an amount equal to fifty
percent (50%) of the second $50 million of Net Cash Proceeds received
from all such sales.
3. Fixed Charge Coverage Ratio. Section 7.11(i) of the Credit
Agreement is hereby amended and restated in its entirety to read as follows:
(i) Fixed Charge Coverage Ratio. The Fixed Charge
Coverage Ratio, as of the last day of each fiscal quarter of the
Consolidated Parties, shall be greater than or equal to:
(a) From March 31, 2001 to and including June
29, 2001, 2.50 to 1.0;
(b) From June 30, 2001 to and including
September 29, 2001, 1.75 to 1.0;
(c) From September 30, 2001 to and including
December 30, 2001, 2.0 to 1.0; and
(d) From December 31, 2001 and thereafter, 3.0
to 1.0.
4. Leverage Ratio. Section 7.11(ii) of the Credit Agreement is
hereby amended and restated in its entirety to read as
follows:
(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:
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(a) From March 31, 2001 to and including June
29, 2001, 3.0 to 1.0;
(b) From June 30, 2001 to and including
September 29, 2001, 3.75 to 1.0;
(c) From September 30, 2001 to and including
December 30, 2001, 3.25 to 1.0, and
(d) From December 31, 2001 and thereafter, 2.50
to 1.0.
5. Net Worth. The following sentence is hereby added at the end
of Section 7.11(iii) of the Credit Agreement and shall read as follows:
For purposes of determining compliance with the Net Worth covenant set
forth above, the base number of $105,000,000 set forth above shall be
reduced by the amount of any net book losses realized from the sale of
the Groupe Alma Business or any Discontinued Operation up to an amount
not exceeding $50 million in the aggregate for all such sales.
6. Consolidated EBITDA. A new Section 7.11(vi) is hereby added to
the Credit Agreement and shall read as follows:
(vi) Consolidated EBITDA. Consolidated EBITDA for each
period of the Consolidated Parties set forth below shall not be less
than (a) $15 million for the three month period ending June 30, 2001,
(b) $20 million for the three month period ending September 30, 2001
and (c) $25 million for the three month period ending December 31,
2001.
7. 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) and (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.
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8. Conditions Precedent.
(a) This Amendment shall become effective upon the
receipt by the Agent of counterparts of this Amendment, duly executed
by the Borrower, the Subsidiary Guarantors, the Agent and the Required
Lenders.
(b) The Agent shall have received a legal opinion from
counsel to the Credit Parties in form and substance satisfactory to the
Agent.
(c) The Borrower shall pay to the Agent, for the account
of each Lender who (i) provides positive oral consent to the Amendment
on or before May 8, 2001 and (ii) executes this Amendment on or before
May 9, 2001, an amendment fee equal to 0.25% of such Lender's Revolving
Commitment.
9. 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
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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.
(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
Collateral 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
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/ John M. Cook
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Name: John M. Cook
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Title: CEO
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SUBSIDIARY
GUARANTORS: PRGFS, INC.
PRGLS, INC.
PRGRS, INC., each a Delaware corporation
By: /S/ Clinton McKellar, Jr.
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Name: Clinton McKellar, Jr.
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Title: SVP
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SUBSIDIARY
GUARANTORS: THE PROFIT RECOVERY GROUP USA, 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, 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.,
THE PROFIT RECOVERY GROUP GREECE, INC.,
THE PROFIT RECOVERY GROUP PORTUGAL, INC.,
PAYMENT TECHNOLOGIES, INC., each a
Georgia corporation
By: /S/ Clinton McKellar, Jr.
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Name: Clinton McKellar, Jr.
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Title: SVP
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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: /S/ Nancy S. Goldman
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Name: Nancy S. Goldman
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Title: Senior Vice President
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LENDERS: UNION BANK OF CALIFORNIA, N.A.
By: /S/ Hagop Y. Jazmadarian
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Name: Hagop Y. Jazmadarian
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Title: Vice President
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FIRST UNION NATIONAL BANK
By: /S/ David L. Driggers
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Name: David L. Driggers
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Title: Managing Director
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WACHOVIA BANK, N.A.
By: /S/ Katherine W. Glista
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Name: Katherine W. Glista
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Title: Senior Vice President
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FLEET NATIONAL BANK
By: /S/ Thomas Engles
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Name: Thomas Engles
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Title: Senior Vice President
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CREDIT LYONNAIS NEW YORK BRANCH
By: /S/ Attila Koc
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Name: Attila Koc
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Title: Senior Vice President
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SUNTRUST BANK
By: /S/ Daniel S. Komitor
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Name: Daniel S. Komitor
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Title: Director
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By: /S/ Brian K. Peters
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Name: Brian K. Peters
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Title: Managing Director
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CREDIT AGRICOLE INDOSUEZ
By: /S/ Michael R. Quiray
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Name: Michael R. Quiray
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Title: VP, SR Manager
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By: /S/ Michael Mullins
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Name: Michael Mullins
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Title: AVP, Credit Analyst
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LASALLE BANK NATIONAL ASSOCIATION
By: /S/ Heather J. Bartell
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Name: Heather J. Bartell
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Title: Vice President
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