EXHIBIT 10-m

 

WAIVER AND SECOND AMENDMENT TO CREDIT AGREEMENT

 

This Waiver and Second Amendment to Credit Agreement (this “Amendment”) is dated
as of April 7, 2003, and is by and among General Electric Capital Corporation, a
Delaware corporation, individually as a Lender and as Agent and Security Trustee
for the Lenders, Analysts International Corporation, a Minnesota corporation
(“Borrower”), and Medical Concepts Staffing, Inc., a Minnesota corporation
(“Medical Staffing”).

 

W I T N E S S E T H:

 

WHEREAS, pursuant to a certain Credit Agreement dated as of April 11, 2002, by
and among General Electric Capital Corporation, a Delaware corporation,
individually as a Lender and as Agent and Security Trustee for the Lenders, the
other Credit Parties signatory from time to time thereto, and Borrower (as
amended or otherwise modified from time to time, the “Credit Agreement”;
capitalized terms used herein and not otherwise defined herein shall have the
meaning ascribed to such terms in the Credit Agreement), Agent and Lenders
agreed, subject to the terms and provisions thereof, to provide certain loans
and other financial accommodations to Borrower;

 

WHEREAS, Borrower has recently advised Agent and Lenders that Medical Staffing
is a wholly-owned Subsidiary of Borrower engaged in the business of temporary
staffing of medical personnel;

 

WHEREAS, the failure of Borrower to disclose the existence of Medical Staffing
as a Subsidiary of Borrower pursuant to Schedule 3.8 to the Credit Agreement has
caused a breach of Section 3.8 of the Credit Agreement and an Event of Default
pursuant to Section 8.1(f) of the Credit Agreement (“Disclosure Event of
Default”);

 

WHEREAS, Borrower has recently advised Agent and Lenders of a payment in the
aggregate amount of $755,000 to Sarah Spiess (“Spiess”), in full satisfaction of
all deferred compensation obligations of the Credit Parties to Spiess;

 

WHEREAS such payment caused a breach of Section 6.22 of the Credit Agreement and
an Event of Default pursuant to Section 8.1(b) of the Credit Agreement (together
with the Disclosure Event of Default, the “Specified Events of Default”); and

 

WHEREAS, Borrower has requested that Agent and Lenders (i) waive the Specified
Events of Default and (ii) agree to amend the Credit Agreement in certain
respects, as set forth below.

 

NOW, THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:

 

1.        JOINDER AND WAIVER.  AGENT, LENDERS, BORROWER AND MEDICAL STAFFING
HEREBY AGREE THAT FROM AND FOLLOWING THE DATE HEREOF MEDICAL STAFFING SHALL AT
ALL TIMES BE A CREDIT PARTY FOR PURPOSES OF THE CREDIT AGREEMENT AND ALL OTHER
LOAN DOCUMENTS.  SUBJECT TO THE SATISFACTION OF THE CONDITIONS PRECEDENT SET
FORTH IN SECTION 6 OF THIS AMENDMENT, AND IN RELIANCE ON THE REPRESENTATIONS AND
WARRANTIES SET FORTH IN SECTION 8 OF THIS AMENDMENT, AGENT AND LENDERS HEREBY
WAIVE THE SPECIFIED EVENTS OF DEFAULT.  THE FOREGOING IS A LIMITED WAIVER, AND
NOTHING CONTAINED HEREIN SHALL BE DEEMED TO CONSTITUTE A WAVIER OF ANY OTHER
EVENT OF DEFAULT OR ANY OTHER BREACH OF THE CREDIT AGREEMENT OR ANY OTHER LOAN
DOCUMENT THAT MAY HERETOFORE OR HEREAFTER OCCUR OR HAVE OCCURRED AND BE
CONTINUING OR TO MODIFY ANY PROVISION OF THE CREDIT AGREEMENT.

 

2.        AMENDMENTS TO CREDIT AGREEMENT.  SUBJECT TO THE SATISFACTION OF THE
CONDITIONS PRECEDENT SET FORTH IN SECTION 6 OF THIS AMENDMENT, AND IN RELIANCE
ON THE REPRESENTATIONS AND WARRANTIES SET FORTH IN SECTION 8 OF THIS AMENDMENT,
THE CREDIT AGREEMENT IS HEREBY AMENDED AS FOLLOWS:

 

(A)       SECTION 1.6 OF THE CREDIT AGREEMENT IS HEREBY AMENDED TO PROVIDE THAT,
SUBJECT TO ALL RESERVE LIMITATIONS, EXCLUSIONARY CRITERIA AND OTHER LIMITATIONS
SET FORTH THEREIN ON THE SAME TERMS AS ARE APPLICABLE TO THE ACCOUNTS OF
BORROWER, THE ACCOUNTS OF MEDICAL STAFFING MAY QUALIFY AS ELIGIBLE ACCOUNTS;
PROVIDED, HOWEVER, THAT WITHOUT LIMITATION OF ANY OF THE LIMITATIONS AND
EXCLUSIONARY CRITERIA SET FORTH IN SECTION 1.6 OF THE CREDIT AGREEMENT, NO
ACCOUNTS OF MEDICAL STAFFING SHALL QUALIFY AS ELIGIBLE ACCOUNTS UNTIL (I) THE
AGGREGATE OUTSTANDING AMOUNT OF SUCH ACCOUNTS EXCEEDS $250,000 AS OF ANY DATE OF
MEASUREMENT AND (II) AGENT SHALL HAVE COMPLETED A FIELD EXAM OF THE ACCOUNTS OF
MEDICAL STAFFING, AND SHALL BE SATISFIED, IN ITS SOLE DISCRETION, WITH THE
RESULTS THEREOF.  EXHIBIT 4.1(B) TO THE CREDIT AGREEMENT (BORROWING BASE
CERTIFICATE) SHALL BE DEEMED AMENDED TO GIVE EFFECT TO THE PROVISIONS OF THIS
CLAUSE (A).

 

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(B)      CLAUSE (A) OF SECTION 6.3 OF THE CREDIT AGREEMENT IS HEREBY AMENDED BY
AMENDING AND RESTATING CLAUSE (H) SET FORTH THEREIN IN ITS ENTIRETY, AS FOLLOWS:

 

“(H)    the aggregate balance of all such intercompany loans owing to Borrower
shall not exceed (x) $400,000 at any time, with respect to intercompany loans
and/or advances made by Borrower to all Persons described in this clause (vii)
other than Medical Staffing and (y) $1,000,000 at any time, with respect to
intercompany loans and/or advances made by Borrower to Medical Staffing.”

 

(C)       CLAUSE (A) OF SECTION 6.5 OF THE CREDIT AGREEMENT IS HEREBY AMENDED
AND RESTATED IN ITS ENTIRETY AS FOLLOWS:

 

“(a) make any changes in any of its business objectives, purposes or operations
that could in any way adversely affect the repayment of the Loans or any of the
other Obligations or could reasonably be expected to have or result in a
Material Adverse Effect, provided that Medical Staffing shall be permitted to
extend its business to include the provision of temporary staffing of medical
personnel,”

 

(D)      SECTION 6.20 OF THE CREDIT AGREEMENT IS HEREBY AMENDED AND RESTATED IN
ITS ENTIRETY AS FOLLOWS:

 

“None of the Credit Parties other than Borrower shall engage in any trade or
business, or own any assets (other than Stock of their Subsidiaries) or incur
any Indebtedness or Guaranteed Indebtedness (other than the Obligations),
provided that Medical Staffing shall be permitted to engage in its relevant
business and own assets.”

 

3.        ANNEX A TO THE CREDIT AGREEMENT IS HEREBY AMENDED BY INSERTING THE
FOLLOWING DEFINITION IN APPROPRIATE ALPHABETICAL ORDER:

 

“Medical Staffing” means Medical Concepts Staffing, Inc., a Minnesota
corporation and a wholly-owned Subsidiary of Borrower.

 

4.        The definition of “Borrowing Base”, set forth in Annex A to the Credit
Agreement, is hereby amended by inserting the words “and Medical Staffing’s”
after each reference to “Borrower’s” set forth therein.

 

5.        Collection Reserve.  Borrower and Medical Staffing hereby acknowledge
and agree that, without otherwise limiting Agent’s right to establish and adjust
Reserves, the Collection Reserve (as identified on the Borrowing Base
Certificate) is $3,200,000 as of the date hereof, as the same may be adjusted
from time to time in Agent’s reasonable credit judgment.

 

6.        Conditions Precedent.  The effectiveness of the waivers and amendments
contemplated hereby is subject to the prior receipt by Agent of each of the
following documents and agreements, each in form and substance acceptable to
Agent in its sole discretion:

 

(a)       A Guaranty executed by Medical Staffing;

 

(b)      A Pledge Agreement executed by Borrower with respect to all of the
outstanding Stock of Medical Staffing, together with the share certificates
evidencing all such Stock and a stock power executed in blank;

 

(C)       A SECURITY AGREEMENT EXECUTED BY MEDICAL STAFFING IN FAVOR OF AGENT;

 

(D)      A TRADEMARK SECURITY AGREEMENT EXECUTED BY MEDICAL STAFFING IN FAVOR OF
AGENT;

 

(E)       AN INTERCOMPANY NOTE EXECUTED BY MEDICAL STAFFING IN FAVOR OF
BORROWER, ACCOMPANIED BY AN ALLONGE EXECUTED IN BLANK BY BORROWER;

 

(F)       A SECRETARY’S CERTIFICATE OF MEDICAL STAFFING, WITH RESPECT TO
ARTICLES OF INCORPORATION, BY-LAWS, AUTHORIZING RESOLUTIONS AND INCUMBENCY 
SIGNATURES; AND

 

(G)      AN OPINION OR OPINIONS OF COUNSEL TO MEDICAL STAFFING WITH RESPECT TO
THE DOCUMENTS, AGREEMENTS AND TRANSACTIONS DESCRIBED HEREIN.

 

7.        REFERENCES; EFFECTIVENESS.  AGENT AND BORROWER HEREBY AGREE THAT ALL
REFERENCES TO THE CREDIT AGREEMENT WHICH ARE CONTAINED IN ANY OF THE OTHER LOAN
DOCUMENTS SHALL REFER TO THE CREDIT AGREEMENT AS AMENDED BY THIS AMENDMENT.

 

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8.        REPRESENTATIONS AND WARRANTIES.  TO INDUCE AGENT TO ENTER INTO THIS
AMENDMENT, EACH OF BORROWER AND MEDICAL STAFFING HEREBY JOINTLY AND SEVERALLY
REPRESENTS AND WARRANTS TO AGENT THAT:

 

(A)       THE EXECUTION, DELIVERY AND PERFORMANCE BY BORROWER AND MEDICAL
STAFFING OF THIS AMENDMENT AND EACH OTHER AGREEMENT AND DOCUMENT CONTEMPLATED
HEREBY ARE WITHIN ITS CORPORATE POWER, HAVE BEEN DULY AUTHORIZED BY ALL
NECESSARY CORPORATE ACTION, HAVE RECEIVED ALL NECESSARY GOVERNMENTAL APPROVAL
(IF ANY SHALL BE REQUIRED), AND DO NOT AND WILL NOT CONTRAVENE OR CONFLICT WITH
ANY PROVISION OF LAW APPLICABLE TO BORROWER OR MEDICAL STAFFING, THE ARTICLES OF
INCORPORATION AND BY-LAWS OF BORROWER OR MEDICAL STAFFING, ANY ORDER, JUDGMENT
OR DECREE OF ANY COURT OR GOVERNMENTAL AGENCY, OR ANY AGREEMENT, INSTRUMENT OR
DOCUMENT BINDING UPON BORROWER OR MEDICAL STAFFING OR ANY OF THEIR RESPECTIVE
PROPERTIES;

 

(B)      EACH OF THE CREDIT AGREEMENT, THE OTHER LOAN DOCUMENTS, AS AMENDED BY
THIS AMENDMENT, AND EACH OTHER AGREEMENT AND DOCUMENT CONTEMPLATED HEREBY IS THE
LEGAL, VALID AND BINDING OBLIGATION OF BORROWER AND/OR MEDICAL STAFFING (AS
APPLICABLE), ENFORCEABLE AGAINST BORROWER AND/OR MEDICAL STAFFING (AS
APPLICABLE) IN ACCORDANCE WITH THEIR TERMS, EXCEPT AS SUCH ENFORCEABILITY MAY BE
LIMITED BY APPLICABLE BANKRUPTCY, REORGANIZATION, MORATORIUM, FRAUDULENT
TRANSFER OR OTHER SIMILAR LAWS AFFECTING CREDITORS’ RIGHTS GENERALLY OR BY
PRINCIPLES GOVERNING THE AVAILABILITY OF EQUITABLE REMEDIES;

 

(C)       AFTER GIVING EFFECT TO THE AMENDMENTS SET FORTH HEREIN, THE
REPRESENTATIONS AND WARRANTIES CONTAINED IN THE CREDIT AGREEMENT AND THE OTHER
LOAN DOCUMENTS ARE TRUE AND ACCURATE AS OF THE DATE HEREOF WITH THE SAME FORCE
AND EFFECT AS IF SUCH HAD BEEN MADE ON AND AS OF THE DATE HEREOF;

 

(D)      AFTER GIVING EFFECT TO THE AMENDMENTS SET FORTH HEREIN, BORROWER HAS
PERFORMED ALL OF ITS OBLIGATIONS UNDER THE CREDIT AGREEMENT AND THE LOAN
DOCUMENTS TO BE PERFORMED BY IT ON OR BEFORE THE DATE HEREOF AND AS OF THE DATE
HEREOF, BORROWER IS IN COMPLIANCE WITH ALL APPLICABLE TERMS AND PROVISIONS OF
THE CREDIT AGREEMENT AND EACH OF THE LOAN DOCUMENTS TO BE OBSERVED AND PERFORMED
BY IT AND, EXCEPT TO THE EXTENT OTHERWISE WAIVED BY THE PROVISIONS HEREOF, NO
EVENT OF DEFAULT OR OTHER EVENT WHICH, UPON NOTICE OR LAPSE OF TIME OR BOTH,
WOULD CONSTITUTE AN EVENT OF DEFAULT, HAS OCCURRED.

 

9.        COUNTERPARTS.  THIS AMENDMENT MAY BE EXECUTED IN ANY NUMBER OF
COUNTERPARTS AND BY THE DIFFERENT PARTIES ON SEPARATE COUNTERPARTS, AND EACH
SUCH COUNTERPART SHALL BE DEEMED TO BE AN ORIGINAL, BUT ALL SUCH COUNTERPARTS
SHALL TOGETHER CONSTITUTE BUT ONE AND THE SAME AMENDMENT.

 

10.      CONTINUED EFFECTIVENESS.  EXCEPT AS AMENDED HEREBY, THE CREDIT
AGREEMENT AND EACH OF THE LOAN DOCUMENTS SHALL CONTINUE IN FULL FORCE AND EFFECT
ACCORDING TO ITS TERMS.

 

11.      COSTS AND EXPENSES. BORROWER HEREBY AGREES THAT ALL EXPENSES INCURRED
BY AGENT IN CONNECTION WITH THE PREPARATION, NEGOTIATION AND CLOSING OF THE
TRANSACTIONS CONTEMPLATED HEREBY, INCLUDING, WITHOUT LIMITATION, REASONABLE
ATTORNEYS’ FEES AND EXPENSES, SHALL BE PART OF THE OBLIGATIONS.

 

IN WITNESS WHEREOF, this Amendment has been executed as of the day and year
first written above.

 

 

 

 

ANALYSTS INTERNATIONAL CORPORATION

 

 

 

 

 

 

 

 

By

 

 

 

 

Its

 

 

 

 

 

 

 

MEDICAL CONCEPTS STAFFING, INC.

 

 

 

 

 

 

 

 

By

 

 

 

 

Its

 

 

 

 

 

 

 

 

GENERAL ELECTRIC CAPITAL CORPORATION,
as Agent, Security Trustee and Lender

 

 

 

 

 

 

 

 

By

 

 

 

 

Its

 

 

 

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