EXHIBIT 10.34
WELLS FARGO REVOLVING LINE OF CREDIT NOTE
$10,000,000.00 DENVER, COLORADO
JUNE 30, 2005
FOR VALUE RECEIVED, the undersigned STARTEK, INC. AND STARTEK USA, INC.
("Borrower") promises to pay to the order of WELLS FARGO BANK, NATIONAL
ASSOCIATION ("Bank") at its office at COLORADO RCBO, 1740 BROADWAY, 3RD FLOOR,
DENVER, CO 80274, or at such other place as the holder hereof may designate, in
lawful money of the United States of America and in immediately available funds,
the principal sum of $10,000,000.00, or so much thereof as may be advanced and
be outstanding, with interest thereon, to be computed on each advance from the
date of its disbursement as set forth herein.
1. DEFINITIONS:
As used herein, the following terms shall have the meanings set forth
after each, and any other term defined in this Note shall have the meaning set
forth at the place defined:
1.1 "Business Day" means any day except a Saturday, Sunday or any other day on
which commercial banks in Colorado are authorized or required by law to close.
1.2 "Fixed Rate Term" means a period commencing on a Business Day and continuing
for 1, 2 OR 3 MONTHS, as designated by Borrower, during which all or a portion
of the outstanding principal balance of this Note bears interest determined in
relation to LIBOR; provided however, that no Fixed Rate Term may be selected for
a principal amount less than $100,000.00; and provided further, that no Fixed
Rate Term shall extend beyond the scheduled maturity date hereof. If any Fixed
Rate Term would end on a day which is not a Business Day, then such Fixed Rate
Term shall be extended to the next succeeding Business Day.
1.3 "LIBOR" means the rate per annum (rounded upward, if necessary, to the
nearest whole 1/8 of 1%) determined by dividing Base LIBOR by a percentage equal
to 100% less any LIBOR Reserve Percentage.
(a) "Base LIBOR" means the rate per annum for United States dollar
deposits quoted by Bank as the Inter-Bank Market Offered Rate, with the
understanding that such rate is quoted by Bank for the purpose of
calculating effective rates of interest for loans making reference
thereto, on the first day of a Fixed Rate Term for delivery of funds on
said date for a period of time approximately equal to the number of days
in such Fixed Rate Term and in an amount approximately equal to the
principal amount to which such Fixed Rate Term applies. Borrower
understands and agrees that Bank may base its quotation of the Inter-Bank
Market Offered Rate upon such offers or other market indicators of the
Inter-Bank Market as Bank in its discretion deems appropriate including,
but not limited to, the rate offered for U.S. dollar deposits on the
London Inter-Bank Market.
(b) "LIBOR Reserve Percentage" means the reserve percentage prescribed by
the Board of Governors of the Federal Reserve System (or any successor)
for "Eurocurrency Liabilities" (as defined in Regulation D of the Federal
Reserve Board, as amended), adjusted by Bank for expected changes in such
reserve percentage during the applicable Fixed Rate Term.
1.4 "Prime Rate" means at any time the rate of interest most recently announced
within Bank at its principal office as its Prime Rate, with the understanding
that the Prime Rate is one of Bank's base rates and serves as the basis upon
which effective rates of interest are calculated for those loans making
reference thereto, and is evidenced by the recording thereof after its
announcement in such internal publication or publications as Bank may designate.
Page 1
2. INTEREST:
2.1 Interest. The outstanding principal balance of this Note shall bear interest
(computed on the basis of a 360-day year, actual days elapsed) either (a) at a
fluctuating rate per annum 1.00000% below the Prime Rate in effect from time to
time, or (b) at a fixed rate per annum determined by Bank to be 1.50000% above
LIBOR in effect on the first day of the applicable Fixed Rate Term. When
interest is determined in relation to the Prime Rate, each change in the rate of
interest hereunder shall become effective on the date each Prime Rate change is
announced within Bank. With respect to each LIBOR selection option selected
hereunder, Bank is hereby authorized to note the date, principal amount,
interest rate and Fixed Rate Term applicable thereto and any payments made
thereon on Bank's books and records (either manually or by electronic entry)
and/or on any schedule attached to this Note, which notations shall be prima
facie evidence of the accuracy of the information noted.
2.2 Selection of Interest Rate Options. At any time any portion of this Note
bears interest determined in relation to LIBOR, it may be continued by Borrower
at the end of the Fixed Rate Term applicable thereto so that all or a portion
thereof bears interest determined in relation to the Prime Rate or to LIBOR for
a new Fixed Rate Term designated by Borrower. At any time any portion of this
Note bears interest determined in relation to the Prime Rate, Borrower may
convert all or a portion thereof so that it bears interest determined in
relation to LIBOR for a Fixed Rate Term designated by Borrower. At such time as
Borrower requests an advance hereunder or wishes to select a LIBOR option for
all or a portion of the outstanding principal balance hereof, and at the end of
each Fixed Rate Term, Borrower shall give Bank notice specifying: (a) the
interest rate option selected by Borrower; (b) the principal amount subject
thereto; and (c) for each LIBOR selection, the length of the applicable Fixed
Rate Term. Any such notice may be given by telephone (or such other electronic
method as Bank may permit) so long as, with respect to each LIBOR selection, (i)
if requested by Bank, Borrower provides to Bank written confirmation thereof not
later than 3 Business Days after such notice is given, and (ii) such notice is
given to Bank prior to 10:00 a.m. on the first day of the Fixed Rate Term, or at
a later time during any Business Day if Bank, at it's sole option but without
obligation to do so, accepts Borrower's notice and quotes a fixed rate to
Borrower. If Borrower does not immediately accept a fixed rate when quoted by
Bank, the quoted rate shall expire and any subsequent LIBOR request from
Borrower shall be subject to a redetermination by Bank of the applicable fixed
rate. If no specific designation of interest is made at the time any advance is
requested hereunder or at the end of any Fixed Rate Term, Borrower shall be
deemed to have made a Prime Rate interest selection for such advance or the
principal amount "to which such Fixed Rate Term applied.
2.3 Taxes and Regulatory Costs. Borrower shall pay to Bank immediately upon
demand, in addition to any other amounts due or to become due hereunder, any and
all (a) withholdings, interest equalization taxes, stamp taxes or other taxes
(except income and franchise taxes) imposed by any domestic or foreign
governmental authority and related in any manner to LIBOR, and (b) future,
supplemental, emergency or other changes in the LIBOR Reserve Percentage,
assessment rates imposed by the Federal Deposit Insurance Corporation, or
similar requirements or costs imposed by any domestic or foreign governmental
authority or resulting from compliance by Bank with any request or directive
(whether or not having the force of law) from any central bank or other
governmental authority and related in any manner to LIBOR to the extent they are
not included in the calculation of LIBOR. In determining which of the foregoing
are attributable to any LIBOR option available to Borrower hereunder, any
reasonable allocation made by Bank among its operations shall be conclusive and
binding upon Borrower.
2.4 Payment of Interest. interest accrued on this Note shall be payable on the
LAST day of each MONTH, commencing JULY 31, 2005.
2.5 Default Interest. From and after the maturity date of this Note, or such
earlier date as all principal owing hereunder becomes due and payable by
acceleration or otherwise, the outstanding principal balance of this Note shall
bear interest until paid in full at an increased rate per annum (computed on the
basis of a 360-day year, actual days elapsed) equal to 4% above the rate of
interest from time to time applicable to this Note.
Page 2
3. BORROWING AND REPAYMENT:
3.1 Borrowing and Repayment. Borrower may from time to time during the term of
this Note borrow, partially or wholly repay its outstanding borrowings, and
reborrow, subject to all of the limitations, terms and conditions of this Note
and of the Credit Agreement between Borrower and Bank defined below; provided
however, that the total outstanding borrowings under this Note shall not at any
time exceed the principal amount stated above. The unpaid principal balance of
this obligation at any time shall be the total amounts advanced hereunder by the
holder hereof less the amount of principal payments made hereon by or for any
Borrower, which balance may be endorsed hereon from time to time by the holder.
The outstanding principal balance of this Note shall be due and payable in full
on JUNE 30, 2007.
3.2 Advances. Advances hereunder, to the total amount of the principal sum
available hereunder, may be made by the holder at the oral or written request of
(a) A. EMMET STEPHENSON, JR. OR STEVEN D. BUTLER OR LANCE ZINGALE OR RODD
GRANGER OR KEVIN COMSTOCK, any one acting alone, who are authorized to request
advances and direct the disposition of any advances until written notice of the
revocation of such authority is received by the holder at the office designated
above, or (b) any person, with respect to advances deposited to the credit of
any deposit account of any Borrower, which advances, when so deposited, shall be
conclusively presumed to have been made to or for the benefit of each Borrower
regardless of the fact that persons other than those authorized to request
advances may have authority to draw against such account. The holder shall have
no obligation to determine whether any person requesting an advance is or has
been authorized by any Borrower.
3.3 Application of Payments. Each payment made on this Note shall be credited
first, to any interest then due and second, to the outstanding principal balance
hereof. All payments credited to principal shall be applied first, to the
outstanding principal balance of this Note which bears interest determined in
relation to the Prime Rate, if any, and second, to the outstanding principal
balance of this Note which bears interest determined in relation to LIBOR, with
such payments applied to the oldest Fixed Rate Term first.
4. PREPAYMENT:
4.1 Prime Rate. Borrower may prepay principal on any portion of this Note which
bears interest determined in relation to the Prime Rate at any time, in any
amount and without penalty.
4.2 LIBOR. Borrower may prepay principal on any portion of this Note which bears
interest determined in relation to LIBOR at any time and in the minimum amount
of $100,000.00; provided however, that if the outstanding principal balance of
such portion of this Note is less than said amount, the minimum prepayment
amount shall be the entire outstanding principal balance thereof. In
consideration of Bank providing this prepayment option to Borrower, or if any
such portion of this Note shall become due and payable at any time prior to the
last day of the Fixed Rate Term applicable thereto by acceleration or otherwise,
Borrower shall pay to Bank immediately upon demand a fee which is the sum of the
discounted monthly differences for each month from the month of prepayment
through the month in which such Fixed Rate Term matures, calculated as follows
for each such month:
(a) Determine the amount of interest which would have accrued each month
on the amount prepaid at the interest rate applicable to such amount had
it remained outstanding until the last day of the Fixed Rate Term
applicable thereto.
(b) Subtract from the amount determined in (a) above the amount of
interest which would have accrued for the same month on the amount prepaid
for the remaining term of such Fixed Rate Term at LIBOR in effect on the
date of prepayment for new loans made for such term and in a principal
amount equal to the amount prepaid.
(c) If the result obtained in (b) for any month is greater than zero,
discount that difference by LIBOR used in (b) above.
Page 3
Each Borrower acknowledges that prepayment of such amount may result in Bank
incurring additional costs, expenses and/or liabilities, and that it is
difficult to ascertain the full extent of such costs, expenses and/or
liabilities. Each Borrower, therefore, agrees to pay the above-described
prepayment fee and agrees that said amount represents a reasonable estimate of
the prepayment costs, expenses and/or liabilities of Bank. If Borrower fails to
pay any prepayment fee when due, the amount of such prepayment fee shall
thereafter bear interest until paid at a rate per annum 2.000% above the Prime
Rate in effect from time to time (computed on the basis of a 360-day year,
actual days elapsed). Each change in the rate of interest on any such past due
prepayment fee shall become effective on the date each Prime Rate change is
announced within Bank.
5. EVENTS OF DEFAULT:
This Note is made pursuant to and is subject to the terms and conditions
of that certain Credit Agreement between Borrower and Bank dated as of JUNE 30,
2003, as amended from time to time (the "Credit Agreement"). Any default in the
payment or performance of any obligation under this Note, or any defined event
of default under the Credit Agreement, shall constitute an "Event of Default"
under this Note.
6. MISCELLANEOUS:
6.1 Remedies. Upon the occurrence of any Event of Default, the holder of this
Note, at the holder's option, may declare all sums of principal and interest
outstanding hereunder to be immediately due and payable without presentment,
demand, notice of nonperformance, notice of protest, protest or notice of
dishonor, all of which are expressly waived by each Borrower, and the
obligation, if any, of the holder to extend any further credit hereunder shall
immediately cease and terminate. Each Borrower shall pay to the holder
immediately upon demand the full amount of all payments, advances, charges,
costs and expenses, including reasonable attorneys' fees (to include outside
counsel fees and all allocated costs of the holder's in-house counsel), expended
or incurred by the holder in connection with the enforcement of the holder's
rights and/or the collection of any amounts which become due to the holder under
this Note, and the prosecution or defense of any action in any way related to
this Note, including without limitation, any action for declaratory relief,
whether incurred at the trial or appellate level, in an arbitration proceeding
or otherwise, and including any of the foregoing incurred in connection with any
bankruptcy proceeding (including without limitation, any adversary proceeding,
contested matter or motion brought by Bank or any other person) relating to any
Borrower or any other person or entity.
6.2 Obligations Joint and Several. Should more than one person or entity sign
this Note as a Borrower, the obligations of each such Borrower shall be joint
and several.
6.3 Governing Law. This Note shall be governed by and construed in accordance
with the laws of the State of Colorado.
Page 4
IN WITNESS WHEREOF, the undersigned has executed this Note as of the date first
written above.
STARTEK, INC.
By: /s/ Steve Butler
------------------------------
Title: CEO
----------------------------
By: /s/ Rodd Granger
------------------------------
Title: INTERIM CFO
---------------------------
STARTEK USA, INC.
By: /s/ Steve Butler
------------------------------
Title: CEO
----------------------------
By: /s/ Rodd Granger
------------------------------
Title: INTERIM CFO
---------------------------
Page 5
WELLS FARGO CORPORATE RESOLUTION: BORROWING
TO: WELLS FARGO BANK, NATIONAL ASSOCIATION ("Bank")
RESOLVED: That this corporation, STARTEK USA, INC., proposes to obtain
credit from time to time, or has obtained credit, from Bank.
BE IT FURTHER RESOLVED, that any TWO of the following officers:
CHAIRMAN OF THE BOARD, PRESIDENT/CHIEF EXECUTIVE OFFICER, CHIEF FINANCIAL
OFFICER, EXECUTIVE VICE PRESIDENT
of this corporation be and they are hereby authorized and empowered for and on
behalf of and in the name of this corporation and as its corporate act and deed:
(a) To borrow money from Bank and to assume any liabilities of any other
person or entity to Bank, in such form and on such terms and conditions as shall
be agreed upon by those authorized above and Bank, and to sign and deliver to
Bank such promissory notes and other evidences of indebtedness for money
borrowed or advanced and/or for indebtedness assumed as Bank shall require; such
promissory notes or other evidences of indebtedness may provide that advances be
requested by telephone communication and by any officer, employee or agent of
this corporation so long as the advances are deposited into any deposit account
of this corporation with Bank; this corporation shall be bound to Bank by, and
Bank may rely upon, any communication or act, including telephone
communications, purporting to be done by any officer, employee or agent of this
corporation provided that Bank believes, in good faith, that the same is done by
such person.
(b) To contract for the issuance by Bank of letters of credit, to discount
with Bank notes, acceptances and evidences of indebtedness payable to or due
this corporation, to endorse the same and execute such contracts and instruments
for repayment thereof to Bank as Bank shall require, to enter into foreign
exchange transactions with or through Bank, and to enter into interest rate
hedging transactions with Bank in connection with any indebtedness authorized
hereby.
(c) To mortgage, encumber, pledge, convey, grant, assign or otherwise
transfer all or any part of this corporation's real or personal property for the
purpose of securing the payment of any of the promissory notes, contracts,
instruments and other evidences of indebtedness authorized hereby, and to
execute and deliver to Bank such deeds of trust, mortgages, pledge agreements,
security agreements and/or other related documents as Bank shall require.
(d) To perform all acts and to execute and deliver all documents described
above and all other contracts and instruments which Bank deems necessary or
convenient to accomplish the purposes of this resolution and/or to perfect or
continue the rights, remedies and security interests to be given to Bank
pursuant hereto, including without limitation, any modifications, renewals
and/or extensions of any of this corporation's obligations to Bank, however
evidenced.
Loans made pursuant to a special resolution and loans made by offices of
Bank other than the office to which this resolution is delivered shall be in
addition to foregoing limitation.
BE IT FURTHER RESOLVED, that the authority hereby conferred is in addition
to that conferred by any other resolution heretofore or hereafter delivered by
this corporation to Bank and shall continue in full force and effect until Bank
shall have received notice in writing, certified by the Secretary of this
corporation, of the revocation hereof by a resolution duly adopted by the Board
of Directors of this corporation. Any such revocation shall be effective only as
to credit which is extended or committed by Bank, or actions which are taken by
this corporation pursuant to the resolutions contained herein, subsequent to
Bank's receipt of such notice. The authority hereby conferred shall be deemed
retroactive, and any and all acts authorized herein which were performed prior
to the passage of this resolution are hereby approved and ratified.
Page 1
CERTIFICATION
I, RODD GRANGER, Secretary of STARTEK USA, INC., a corporation created and
existing under the laws of COLORADO, do hereby certify and declare that the
foregoing is a full, true and correct copy of the resolutions duly passed and
adopted by the Board of Directors of said corporation, by written consent of all
Directors of said corporation or at a meeting of said Board duly and regularly
called, noticed and held on MARCH 3, 2004, at which meeting a quorum of the
Board of Directors was present and voted in favor of said resolutions; that said
resolutions are now in full force and effect; that there is no provision in the
Articles of Incorporation or Bylaws of said corporation, or any shareholder
agreement, limiting the power of the Board of Directors of said corporation to
pass the foregoing resolutions and that such resolutions are in conformity with
the provisions of such Articles of Incorporation and Bylaws; and that no
approval by the shareholders of, or of the outstanding shares of, said
corporation is required with respect to the matters which are the subject of the
foregoing resolutions.
IN WITNESS WHEREOF, I have hereunto set my hand, and if required by Bank
affixed the corporate seal of said corporation, as of JUNE 28, 2005.
/s/ Rodd Granger
----------------
ASST, Secretary
(SEAL)
Page 2
WELLS FARGO CORPORATE RESOLUTION: BORROWING
TO: WELLS FARGO BANK, NATIONAL ASSOCIATION ("Bank")
RESOLVED: That this corporation, STARTEK, INC., proposes to obtain credit
from time to time, or has obtained credit, from Bank.
BE IT FURTHER RESOLVED, that any TWO of the following officers:
CHAIRMAN OF THE BOARD, PRESIDENT/CHIEF EXECUTIVE OFFICER, CHIEF FINANCIAL
OFFICER, EXECUTIVE VICE PRESIDENT
of this corporation be and they are hereby authorized and empowered for and on
behalf of and in the name of this corporation and as its corporate act and deed:
(a) To borrow money from Bank and to assume any liabilities of any other
person or entity to Bank, in such form and on such terms and conditions as shall
be agreed upon by those authorized above and Bank, and to sign and deliver to
Bank such promissory notes and other evidences of indebtedness for money
borrowed or advanced and/or for indebtedness assumed as Bank shall require; such
promissory notes or other evidences of indebtedness may provide that advances be
requested by telephone communication and by any officer, employee or agent of
this corporation so long as the advances are deposited into any deposit account
of this corporation with Bank; this corporation shall be bound to Bank by, and
Bank may rely upon, any communication or act, including telephone
communications, purporting to be done by any officer, employee or agent of this
corporation provided that Bank believes, in good faith, that the same is done by
such person.
(b) To contract for the issuance by Bank of letters of credit, to discount
with Bank notes, acceptances and evidences of indebtedness payable to or due
this corporation, to endorse the same and execute such contracts and instruments
for repayment thereof to Bank as Bank shall require, to enter into foreign
exchange transactions with or through Bank, and to enter into interest rate
hedging transactions with Bank in connection with any indebtedness authorized
hereby.
(c) To mortgage, encumber, pledge, convey, grant, assign or otherwise
transfer all or any part of this corporation's real or personal property for the
purpose of securing the payment of any of the promissory notes, contracts,
instruments and other evidences of indebtedness authorized hereby, and to
execute and deliver to Bank such deeds of trust, mortgages, pledge agreements,
security agreements and/or other related documents as Bank shall require.
(d) To perform all acts and to execute and deliver all documents described
above and all other contracts and instruments which Bank deems necessary or
convenient to accomplish the purposes of this resolution and/or to perfect or
continue the rights, remedies and security interests to be given to Bank
pursuant hereto, including without limitation, any modifications, renewals
and/or extensions of any of this corporation's obligations to Bank, however
evidenced.
Loans made pursuant to a special resolution and loans made by offices of
Bank other than the office to which this resolution is delivered shall be in
addition to foregoing limitation.
BE IT FURTHER RESOLVED, that the authority hereby conferred is in addition
to that conferred by any other resolution heretofore or hereafter delivered by
this corporation to Bank and shall continue in full force and effect until Bank
shall have received notice in writing, certified by the Secretary of this
corporation, of the revocation hereof by a resolution duly adopted by the Board
of Directors of this corporation. Any such revocation shall be effective only as
to credit which is extended or committed by Bank, or actions which are taken by
this corporation pursuant to the resolutions contained herein, subsequent to
Bank's receipt of such notice. The authority hereby conferred shall be deemed
retroactive, and any and all acts authorized herein which were performed prior
to the passage of this resolution are hereby approved and ratified.
Page 1
CERTIFICATION
I, RODD GRANGER, Secretary of STARTEK, INC., a corporation created and
existing under the laws of DELAWARE, do hereby certify and declare that the
foregoing is a full, true and correct copy of the resolutions duly passed and
adopted by the Board of Directors of said corporation, by written consent of all
Directors of said corporation or at a meeting of said Board duly and regularly
called, noticed and held on March 3, 2004, at which meeting a quorum of the
Board of Directors was present and voted in favor of said resolutions; that said
resolutions are now in full force and effect; that there is no provision in the
Articles of Incorporation or Bylaws of said corporation, or any shareholder
agreement, limiting the power of the Board of Directors of said corporation to
pass the foregoing resolutions and that such resolutions are in conformity with
the provisions of such Articles of Incorporation and Bylaws; and that no
approval by the shareholders of, or of the outstanding shares of, said
corporation is required with respect to the matters which are the subject of the
foregoing resolutions.
IN WITNESS WHEREOF, I have hereunto set my hand, and if required by Bank
affixed the corporate seal of said corporation, as of JUNE 28, 2005.
/s/ Rodd Granger
-----------------------------
Asst. Secretary
(SEAL)
Page 2
SECOND AMENDMENT TO CREDIT AGREEMENT
THIS AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is entered into
as of June 30, 2005, by and between STARTEK, INC., a Delaware corporation and
STARTEK USA, INC., a Colorado corporation (individually and collectively,
"Borrower"), and WELLS FARGO BANK, NATIONAL ASSOCIATION ("Bank").
RECITALS
WHEREAS, Borrower is currently indebted to Bank pursuant to the terms
and conditions of that certain Credit Agreement between Borrower and Bank dated
as of June 30, 2003, as amended from time to time ("Credit Agreement").
WHEREAS, Bank and Borrower have agreed to certain changes in the terms
and conditions set forth in the Credit Agreement and have agreed to amend the
Credit Agreement to reflect said changes.
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree that the Credit
Agreement shall be amended as follows:
1. Section 1.1. (a) is hereby amended by deleting "June 30, 2005" as
the last day on which Bank will make advances under the Line of Credit, and by
substituting for said date "June 30, 2007," with such change to be effective
upon the execution and delivery to Bank of a promissory note dated as of June
30, 2005 (which promissory note shall replace and be deemed the Line of Credit
Note defined in and made pursuant to the Credit Agreement) and all other
contracts, instruments and documents required by Bank to evidence such change.
2. Section 1.1. (b) is hereby deleted in its entirety, and the
following substituted therefor:
"SECTION 1.1. (b) Limitation on Borrowinqs. Outstanding
borrowings under the Line of Credit, to a maximum of the principal amount set
forth above, shall not at any time exceed an aggregate of Ten Million Dollars
($10,000,000.00)."
3. Section 1.2. (c) is hereby deleted in its entirety,
without substitution.
4. Section 4.3. is hereby deleted in its entirety, and the following
substituted therefor:
"SECTION 4.3. FINANCIAL STATEMENTS. Provide to Bank all of the
following, in form and detail satisfactory to Bank:
(a) Quarterly consolidated balance sheets, statements of income,
retained earnings and cash flow, in accordance with generally
accepted accounting principles, together with calculations
confirming Borrower's compliance with all financial covenants,
certified by a senior financial officer, within 45 days after the
end of each quarter;
(b) Annual Consolidated balance sheets, statements of income,
retained earnings and cash flow, with an unqualified opinion from a
recognized independent accounting firm, together with calculations
confirming Borrower's compliance with all financial covenants,
certified by a senior financial officer, within 90 days after the
end of each fiscal year;
(c) One-year projections due annually, no later than 1 degrees
days after Board approval;
(d) Other information reasonably requested by Bank."
5. Section 4.9. is hereby deleted in its entirety, and the following
substituted therefor:
"SECTION 4.9. FINANCIAL CONDITION. Maintain Borrower's financial
condition as follows using generally accepted accounting principles
consistently applied and used consistently with prior practices
(except to the extent modified by the definitions herein):
(a) Tangible Net Worth. Borrower will maintain a Tangible Net
Worth of $90,000,000.00 at December 31, 2004, and shall increase
(but never decrease) at each subsequent fiscal quarter end by an
amount equal to 25% of net income (but only if positive). Tangible
Net Worth is defined as total shareholders equity plus subordinated
debt less intangible assets.
(b) Profitability. Borrower will generate minimum Net Profit
After Tax of $1.00 on a rolling four-quarter basis, measured
quarterly. Borrower will not generate losses in two consecutive
quarters.
(c) Material Contracts. Borrower will notify Bank of the
termination of any material contract, defined as any customer that
generates over 10% of total revenues for the prior four-fiscal
quarters."
6. Section 7.2. is hereby deleted in its entirety, and the following
substituted therefor:
"SECTION 7.2. NOTICES. All notices, requests and demands which
any party is required or may desire to give to any other party under
any provision of this Agreement must be in writing delivered to each
party at the following address:
BORROWER: STARTEK, INC.
44 Cook Street, Suite 400
Denver, CO 80206
STARTEK USA, INC.
44 Cook Street, Suite 400
Denver, CO 80206
BANK: WELLS FARGO BANK, NATIONAL ASSOCIATION
Colorado RCBO
1740 Broadway
Denver, CO 80274
or to such other address as any party may designate by written
notice to all other parties. Each such notice, request and demand
shall be deemed given or made as follows: (a) if sent by hand
delivery, upon delivery; (b) if sent by mail, upon the earlier of
the date of receipt or three (3) days after deposit in the U.S.
mail, first class and postage prepaid; and (c) if sent by telecopy,
upon receipt."
7. Except as specifically provided herein, all terms and conditions of
the Credit Agreement remain in full force and effect, without waiver or
modification. All terms defined in the Credit Agreement shall have the same
meaning when used in this Amendment. This Amendment and the Credit Agreement
shall be read together, as one document.
8. Borrower hereby remakes all representations and warranties contained
in the Credit Agreement and reaffirms all covenants set forth therein. Borrower
further certifies that as of the date of this Amendment there exists no Event of
Default as defined in the Credit Agreement, nor any condition, act or event
which with the giving of notice or the passage of time or both would constitute
any such Event of Default.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the day and year first written above.
WELLS FARGO BANK,
STARTEK, INC. NATIONAL ASSOCIATION
By: /s/ Steve Butler By: /s/ Wendee Crowley
Title: CEO Wendee Crowley
Assistant Vice President
By: /s/ Rodd Granger
Title: Interim CFO
STARTEK USA, INC.
By: /s/ Steve Butler
Title: CEO
By: /s/ Rodd Granger
Title: Interim CFO