Document:

Exhibit
10.1

 

FIRST AMENDMENT TO AMENDED AND
RESTATED CREDIT AGREEMENT

 

This First Amendment to Amended and Restated Credit Agreement (herein,
the “Amendment”) is entered into as of
October 26, 2004, by and among APAC Customer Services, Inc., an Illinois corporation  (the “Borrower”),
the Banks party hereto (the “Banks”), and
Harris Trust and Savings Bank, as agent for the Banks (the “Agent”).

 

PRELIMINARY STATEMENTS

 

                A.       The Borrower, the Banks, and the Agent
entered into a certain Amended and Restated Credit Agreement, dated as of
December 20, 2002 (herein as the “Credit Agreement”).  All capitalized terms used herein without
definition shall have the same meanings herein as such terms have in the Credit
Agreement.

 

                 B.       The Borrower and the Banks have agreed to
amend the Credit Agreement under the terms and conditions set forth in this
Amendment.

 

Now, Therefore, for good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:

 

Section 1.                                                 Amendments.

 

Subject to the satisfaction of the conditions precedent set forth in
Section 3 below, the Credit Agreement shall be and hereby is amended as
follows:

 

                  1.1.        Section 1.1 of the Credit Agreement
(Revolving Credit Commitments) shall be amended and restated in its entirety to
read as follows:

 

Section 1.1.           Revolving
Credit Commitments.  Subject to the terms and conditions hereof,
each Bank, by its acceptance hereof, severally agrees to make a loan or loans
(individually a “Revolving Loan” and collectively
the “Revolving Loans”) to the Borrower in
U.S. Dollars from time to time on a revolving basis up to the amount of such
Bank’s Revolving Credit Commitment, subject to any reductions thereof pursuant
to the terms hereof, before the Revolving Credit Termination Date.  The sum of the aggregate principal amount of
Revolving Loans, Swing Loans, and L/C Obligations at any time outstanding
shall not exceed the lesser of (i) the Revolving Credit Commitments in
effect at such time and (ii) the Borrowing Base as determined based on the
most recent Borrowing Base Certificate. 
Each Borrowing of Revolving Loans shall be made ratably from the Banks
in proportion to their respective Revolver Percentages.  As provided in Section 1.5(a) 

 

 

hereof, the Borrower may elect
that each Borrowing of Revolving Loans be either Base Rate Loans or Eurodollar
Loans.  Revolving Loans may be repaid and
the principal amount thereof reborrowed before the Revolving Credit Termination
Date, subject to the terms and conditions hereof.

 

                  1.2.        Section 1.2(a) of the Credit
Agreement (Letters of Credit; General Terms) shall be amended and restated in
its entirety as follows:

 

(a)           General Terms. 
Subject to the terms and conditions hereof, as part of the Revolving
Credit, the Issuing Bank shall issue standby and commercial letters of credit
(each a “Letter of Credit”) for the Borrower’s
account in U.S. Dollars in an aggregate undrawn face amount up to the amount of
the L/C Sublimit, provided that
the aggregate L/C Obligations at any time outstanding shall not exceed the
difference between (i) the lesser of the Revolving Credit Commitments in
effect at such time and the Borrowing Base as determined based on the most
recent Borrowing Base Certificate and the (ii) aggregate principal amount
of Revolving Loans and Swing Loans then outstanding.  Each Letter of Credit shall be issued by the
Issuing Bank, but each Bank shall be obligated to reimburse the Issuing Bank
for such Bank’s Revolver Percentage of the amount of each drawing thereunder
and, accordingly, each Letter of Credit shall constitute usage of the Revolving
Credit Commitment of each Bank pro rata in accordance with its Revolver
Percentage.  For purposes of this
Agreement and the other Loan Documents the letters of credit listed on Schedule 1.2
hereof issued by Harris Trust and Savings Bank shall from and after the date of
this Agreement be deemed Letters of Credit issued
under and subject to the terms of this Agreement.  Harris Trust and Savings Bank and the
Borrower agree that from and after the date of this Agreement the Borrower’s
obligations with respect to such letters of credit, including all reimbursement
obligations arising under or relating to the relevant application therefor
(which applications shall each be deemed an Application as hereafter defined
for all purposes of this Agreement and the other Loan Documents) shall be
deemed Obligations arising under this Agreement.

 

                  1.3.        Section 1.10(b) of the Credit Agreement
(Prepayments; Mandatory) shall be amended by renaming subsection (ii) as
subsection (iii), and inserting the following new subsection (ii) which
shall read as follows:

 

                (ii)           If at any time the sum of the
aggregate unpaid principal balance of the Revolving Loans, Swing Loans, and the
L/C Obligations then outstanding shall be in excess of 

 

2

 

the Borrowing Base as determined on the basis of the most recent
Borrowing Base Certificate,  the Borrower
shall immediately and without notice or demand  pay
the amount of such excess to the Agent for the account of the Banks as and for
a mandatory prepayment on such Obligations, with each such prepayment first to
be applied to the Revolving Loans and Swing Loans until payment in full thereof
with any remaining balance to be held by the Agent in the Collateral Account as
security for the Obligations owing with respect to the Letters of Credit.

 

                  1.4.        Subsections (iii) and (v) of
Section 1.13(b) of the Credit Agreement (Mandatory
Terminations) shall each be amended and restated in its entirety to
read as follows:

 

                (iii)          Equity Issuance.  If after the date of this Agreement the
Borrower or any Subsidiary shall issue new equity securities (whether common or
preferred stock or otherwise), other than common stock issued in connection
with the exercise of employee stock options or equity plans, or dispose of any
treasury stock, the Borrower shall promptly notify the Agent of the estimated
Net Cash Proceeds of such issuance or disposition, as the case may be, to be
received by or for the account of the Borrower or such Subsidiary in respect
thereof.  On the Business Day of receipt
by the Borrower or such Subsidiary of Net Cash Proceeds of such issuance or
disposition, the Revolving Credit Commitments shall ratably reduce by an amount
equal to 50% of the amount of such Net Cash Proceeds.  The Borrower acknowledges that its
performance hereunder shall not limit the rights and remedies of the Banks for
any breach of Section 8.11 hereof.

 

                (v)           Intentionally deleted.

 

                  1.5.        The definitions of the terms “Applicable
Margin,” “EBITDA,” “Fixed Charges,” “Revolving Credit Commitment,” and “Total
Leverage Ratio” set forth in Section 5.1 of the Credit Agreement
(Definitions) shall each be amended and restated in their entirety to read as
follows:

 

“Applicable Margin” means, with
respect to Loans, Reimbursement Obligations, and the commitment fees and letter
of credit fees payable under Section 2.1 hereof, from October 26,
2004, until the first Pricing Date, 1.25% for Base Rate Loans and Reimbursement
Obligations, 3.00% for Eurodollar Loans and Letter of Credit Fee, and 0.50% for
the Commitment Fee, and thereafter from one Pricing Date to the next the
Applicable Margin means the rates per annum determined in accordance with the
following schedule:

 

3

 

	
  LEVEL

  	
   

  	
  TOTAL

  LEVERAGE

  RATIO
  FOR SUCH

  PRICING
  DATE

  	
   

  	
  APPLICABLE

  MARGIN
  FOR

  BASE
  RATE

  LOANS
  UNDER

  REVOLVING

  CREDIT
  AND

  REIMBURSEMENT

  OBLIGATIONS

  SHALL
  BE:

  	
   

  	
  APPLICABLE

  MARGIN
  FOR

  EURODOLLAR

  LOANS
  AND

  LETTER
  OF

  CREDIT
  FEE

  SHALL
  BE:

  	
   

  	
  APPLICABLE
  MARGIN

  FOR COMMITMENT FEE

  SHALL
  BE:

  	
   

  
	
  IV

  	
   

  	
  Greater than or equal
  to 1.75 to 1.0

  	
   

  	
  1.00

  	
  %

  	
  2.75

  	
  %

  	
  0.50

  	
  %

  
	
  III

  	
   

  	
  Less than 1.75 to 1.0,
  but greater than or equal to 1.25 to 1.0

  	
   

  	
  0.50

  	
  %

  	
  2.25

  	
  %

  	
  0.45

  	
  %

  
	
  II

  	
   

  	
  Less than 1.25 to 1.0,
  but greater than or equal to 0.75 to 1.0

  	
   

  	
  0.25

  	
  %

  	
  2.00

  	
  %

  	
  0.40

  	
  %

  
	
  I

  	
   

  	
  Less than .75 to 1.0

  	
   

  	
  0

  	
  %

  	
  1.75

  	
  %

  	
  0.35

  	
  %

  

 

For purposes hereof, the term “Pricing
Date” means, for any fiscal quarter of the Borrower ending on or
after March 31, 2005, the date on which the Administrative Agent is in
receipt of the Borrower’s most recent financial statements (and, in the case of
the year-end financial
statements, audit report) for the fiscal quarter then ended, pursuant to
Section 8.5 hereof.  The
Applicable Margin shall be established based on the Total Leverage Ratio for
the most recently completed fiscal quarter and the Applicable Margin
established on a Pricing Date shall remain in effect until the next Pricing
Date.  If the Borrower has not delivered
its financial statements by the date such financial statements (and, in the
case of the year-end
financial statements, audit report) are required to be delivered under
Section 8.5 hereof, until such financial statements and audit report are
delivered, the Applicable Margin shall be the highest Applicable Margin (i.e., Level IV shall apply).  If the Borrower subsequently delivers such
financial statements before the next Pricing Date, the Applicable Margin
established by such late delivered financial statements shall take effect from the
date of delivery until the next Pricing Date. 
In all other circumstances, the Applicable Margin established by such
financial statements shall be in effect from the Pricing Date that occurs
immediately after the 

 

4

 

end of the fiscal quarter covered
by such financial statements until the next Pricing Date.  Each determination of the Applicable Margin
made by the Agent in accordance with the foregoing shall be conclusive and
binding on the Borrower and the Banks if reasonably determined.

 

“EBITDA” means, with reference to
any period, Net Income for such period plus the sum
(without duplication) of all amounts deducted in arriving at such Net Income
amount in respect of (a) Interest Expense for such period,
(b) federal, state and local income taxes for such period, (c) all
amounts properly charged for depreciation of fixed assets and amortization of
intangible assets (including, without limitation, goodwill, deferred expenses
and organization costs) for such period, and (d) (i) for periods
ending on or before February 27, 2005, cash and non-cash charges relating to restructuring and asset
impairment charges incurred during the Borrower’s 2004 fiscal year, not to
exceed:  (A) $6,250,000 for the nine
months ending September 26, 2004, (B) $6,500,000 for the ten months
ending October 24, 2004, (C) $6,750,000 for the eleven months ending
November 21, 2004, (D) $7,000,000 for the twelve months ending
January 2, 2005, (E) $7,000,000 for the twelve months ending January 30,
2005, and (F) $7,000,000 for the twelve months ending February 27,
2005, and (ii) for periods ending on or after March 31, 2005,
non-cash charges incurred not to exceed $2,500,000 for such period.

 

“Fixed Charges” means, with
reference to any period, the sum (without duplication) of (a) the
aggregate amount of payments required to be made by the Borrower and its
Subsidiaries during such period in respect of principal on all Indebtedness for
Borrowed Money (whether at maturity, as a result of mandatory sinking fund
redemption, mandatory prepayment, acceleration or otherwise, but excluding
payments made on the Revolving Credit during such period), plus
(b) Interest Expense for such period payable in cash, plus
(c) federal, state, and local income taxes payable in cash (net of any
income tax refunds) during such period, plus (d) dividends payable by the
Borrower in cash during such period.

 

“Revolving Credit Commitment”
means, as to any Bank, the obligation of such Bank to make Revolving Loans and
to participate in Swing Loans and Letters of Credit issued for the account of
the Borrower hereunder in an aggregate principal or face amount at any one time
outstanding not to exceed the amount set forth opposite such Bank’s name on
Schedule 1.1 attached hereto and made a part hereof, as the same may be
modified at any 

 

5

 

time or from time to time
pursuant to the terms hereof.  The
Borrower and the Banks acknowledge and agree that the Revolving Credit
Commitments of the Banks as of October 26, 2004, aggregate $50,000,000.

 

“Total Leverage Ratio” means, at
any time the same is to be determined, the ratio of (a) Total Funded Debt
at such time to (b) EBITDA for the most recently completed period of
twelve consecutive months then ended.

 

                  1.6.        Section 5.1 of the Credit Agreement
(Definitions) shall be further amended by adding the following new defined
terms:  “Account Debtor,” “Borrowing
Base,” “Borrowing Base Certificate,” “Eligible Invoiced Receivables,” “Eligible
Unbilled Receivables,” and “Receivables” in appropriate alphabetical order, to
read as follows, respectively:

 

“Account Debtor” means any Person
obligated to make payment on any Receivable.

 

“Borrowing Base” means, as of any
time it is to be determined, the sum of:

 

                (a)           85% of the then outstanding unpaid
amount of Eligible Invoiced Receivables; plus

 

                (b)           40% of the then outstanding unpaid
amount of Eligible Unbilled Receivables;

 

provided that the Borrowing Base
shall be determined by reference to the Borrowing Base Certificate most
recently delivered pursuant to Section 8.5(a) hereof and such
determination shall remain in effect until delivery of the next Borrowing Base
Certificate and provided further that the
Borrowing Base shall be computed only as against and on so much of such
Collateral as is included on the Borrowing Base Certificates furnished from
time to time by the Borrower pursuant to this Agreement and, if required by the
Agent or the Required Banks pursuant to any of the terms hereof or any Collateral
Document, as verified by such other evidence reasonably required to be
furnished to the Agent or the Banks pursuant hereto or pursuant to any such
Collateral Document.

 

“Borrowing Base Certificate”
means the certificate in the form of Exhibit H hereto, or in such other
form acceptable to the Agent, to be delivered to the Agent and the Lenders
pursuant to Section 8.5 hereof.

 

6

 

“Eligible Invoiced Receivables”
means any Receivable of the Borrower or any Guarantor which as of the date of
the most recent Borrowing Base Certificate:

 

                (a)           arises out of the rendition of
services fully performed and accepted by, the Account Debtor on such
Receivable, and such Receivable does not represent a pre-billed Receivable
or a progress billing;

 

                (b)           is payable
in U.S. Dollars and the Account Debtor on such Receivable is located within the
United States of America;

 

                (c)           is the valid, binding and legally
enforceable obligation of the Account Debtor obligated thereon and such Account
Debtor is not (i) a Subsidiary or an Affiliate of the Borrower,
(ii) a shareholder, director, officer or employee of the Borrower or any
Subsidiary, (iii) the United States of America, or any state or political
subdivision thereof, or any department, agency or instrumentality of any of the
foregoing, unless the Assignment of Claims Act or any similar state or local
statute, as the case may be, is complied with to the satisfaction of the Agent,
(iv) a debtor under any proceeding under the United States Bankruptcy
Code, as amended, or any other comparable bankruptcy or insolvency law, or
(v) an assignor for the benefit of creditors;

 

                (d)           is not
evidenced by an instrument or chattel paper unless the same has been endorsed
and delivered to the Agent;

 

                (e)           is an asset of such Person to which
it has good and marketable title, is freely assignable, and is subject to a
perfected, first priority Lien in favor of the Agent free and clear of any
other Liens (other than Liens permitted by Section 8.8(a) or (b) hereof
arising by operation of law which are subordinate to the Liens in favor of the
Agent);

 

                (f)            is not subject to any counterclaim,
defense or offset asserted by the Account Debtor or subject to any contra
account owing to the Account Debtor (unless the amount of such Receivable is
net of the amount of such counterclaim, defense, offset or contra account);

 

                (g)           is net of the aggregate amount of “credits
prior to” with respect to such Account Debtor (i.e.,
credit memo issued to or for the benefit of such Account Debtor which have been
outstanding for more than 90 days);

 

7

 

                (h)           no surety
bond was required or given in connection with said Receivable or the contract
or purchase order out of which the same arose;

 

                (i)            it is evidenced by an invoice to the
Account Debtor dated not more than 45 calendar days subsequent to the
completion of performance of the relevant services and is issued on ordinary
trade terms requiring payment within 45  days of
invoice date;

 

                (j)            is not
unpaid more than 60 days after the original due date; and

 

                (k)           is not owed
by an Account Debtor who is obligated on Receivables more than 25% of the
aggregate unpaid balance of which have been past due for longer than the
relevant period specified in subsection (j) above unless the Agent has
approved the continued eligibility thereof.

 

“Eligible Unbilled Receivables”
means any Receivable of the Borrower or any Guarantor which, as of the date of
the most recent Borrowing Base Certificate, complies with each of the
eligibility criteria set forth in clauses (a)-(h),
both inclusive, and clause (k) of the definition of Eligible Invoiced
Receivable, and such Receivable relates to services rendered not more than
45 calendar days prior to the determination date.

 

“Receivables” means all rights to
the payment of a monetary obligation, now or hereafter owing to the Borrower or
any Guarantor, evidenced by accounts, instruments, chattel paper, or general
intangibles.

 

                  1.7.        Section 6.6 of the Credit Agreement
(No Material Adverse Change) shall be
amended and restated in its entirety to read as follows:

 

                Section 6.6.           No Material Adverse Change.  Since September 26, 2004, there has been
no Material Adverse Effect.

 

                  1.8.        Section 8.5(a) of the Credit Agreement
(Financial Reports) shall be amended and
restated in its entirety to read as follows:

 

                (a)(i)        as soon as available, and in any event
within 15 days after the last day of each fiscal month, a Borrowing Base
Certificate showing the computation of the Borrowing Base in reasonable detail
as of the close of business on the last day of such fiscal month, together with
an accounts receivable aging, prepared by the Borrower and certified to by its
chief financial officer or 

 

8

 

another officer of the Borrower reasonably acceptable to the Agent;
(ii) as soon as available, and in any event within 30 days after the
close of each fiscal month, a copy of the consolidated and consolidating
balance sheet of the Borrower and its Subsidiaries as of the last day of such
period and the consolidated and consolidating statements of income and cash
flows of the Borrower and its Subsidiaries for the fiscal month and for the
fiscal year-to-date period then ended, each in reasonable detail
showing in comparative form the figures for the corresponding date and period
in the previous fiscal month, prepared by the Borrower in accordance with GAAP;
and (iii) as soon as available, and in any event within 45 days after the close
of each fiscal quarter of each fiscal year of the Borrower, a copy of the
consolidated and consolidating balance sheet of the Borrower and its
Subsidiaries as of the last day of such period and the consolidated and
consolidating statements of income and cash flows of the Borrower and its
Subsidiaries for the fiscal year-to-date period then ended each in reasonable
detail showing in comparative form the figures for the corresponding date and
period in the previous fiscal year and the current year’s operating budget,
prepared by the Borrower in accordance with GAAP (in the case of the fourth
fiscal quarter financial statements, subject to being in draft form pending
delivery of the final year-end financial statements as provided in
subsection (j) below) and certified to by the Borrower’s chief financial
officer, or another officer of the Borrower reasonably acceptable to the Agent;

 

                  1.9.        Section 8.7(h) of the Credit
Agreement (Indebtedness for Borrowed Money) shall
be amended and restated in its entirety to read as follows:

 

(h)           additional unsecured indebtedness of the Borrower and its
Subsidiaries in an aggregate amount not to exceed $5,000,000 at any one time
outstanding.

 

                1.10.        Section 8.8(l) of the Credit
Agreement (Liens) shall be amended and restated in
its entirety to read as follows:

 

                (l)            Intentionally deleted.

 

                1.11.        Section 8.9(l) of the Credit
Agreement (Investments, Acquisitions, Loans, Advances and
Guaranties) shall be amended and restated in its entirety to read as
follows:

 

                (l)            loans by
the Borrower to, or other investments by the Borrower in, any one or more
Guarantor in the ordinary course of the Borrower’s business not otherwise
permitted by this Section 

 

9

 

aggregating not more than
$25,000,000 at any one time outstanding;

 

                1.12.        Sections 8.9(o) and (p) (Investments, Acquisitions, Loans, Advances and Guaranties)
shall each be amended and restated in their entirety to read as follows:

 

(o)           Intentionally Omitted;

 

(p)           investments in joint ventures with other Persons formed to
provide goods or services in an Eligible Line of Business, and loans and
guaranties to such joint ventures, in an aggregate amount not to exceed
$500,000 during any twelve-month period;

 

                1.13.        Section 8.12 of the Credit Agreement (Dividends and Certain Other Restricted Payments) shall be
amended and restated in its entirety to read as follows:

 

                Section 8.12.        Dividends
and Certain Other Restricted Payments.  The Borrower shall not, nor shall it permit
any Subsidiary to, (a) declare or pay any dividends on or make any other
distributions in respect of any class or series of its capital stock or other
equity interests (other than dividends payable solely in its capital stock) or
(b) directly or indirectly purchase, redeem or otherwise acquire or retire
any of its capital stock or other equity interests or any warrants, options, or
similar instruments to acquire the same (except out of the proceeds of, or in
exchange for, a substantially concurrent issue and sale of capital stock) or
(c) prepay any Indebtedness for Borrowed Money aggregating in excess of
$2,000,000 (other than the prepayment of the Loans and L/C Obligations)
(collectively, “Restricted Payments”); provided, however, that the foregoing shall not apply to or
operate to prevent dividends paid to the Borrower by its Subsidiaries.

 

                1.14.        Subsections (a), (c), and (d) of
Section 8.22 of the Credit Agreement (Financial Covenants; Total Leverage
Ratio, Fixed Charge Coverage Ratio, and Capital Expenditures)  shall each be amended and restated in its entirety to read
as follows:

 

                  (a) Total Leverage Ratio.  The Borrower shall not at any time, during the
periods set forth below, permit the Total Leverage Ratio to be greater than:

 

10

 

	
  FROM AND INCLUDING

  	
   

  	
  TO AND INCLUDING

  	
   

  	
  TOTAL LEVERAGE

  RATIO
  SHALL NOT

  BE
  GREATER

  THAN:

  	
   

  
	
  September 1,
  2004

  	
   

  	
  October 23, 2004

  	
   

  	
  2.00 to 1.0

  	
   

  
	
  October
  24, 2004

  	
   

  	
  November 20, 2004

  	
   

  	
  2.25 to 1.0

  	
   

  
	
  November 21,
  2004

  	
   

  	
  January 1, 2005

  	
   

  	
  2.75 to 1.0

  	
   

  
	
  January 2,
  2005

  	
   

  	
  February 26, 2005

  	
   

  	
  3.50 to 1.0

  	
   

  
	
  February
  27, 2005

  	
   

  	
  March 30, 2005

  	
   

  	
  3.50 to 1.0

  	
   

  
	
  March 31,
  2005

  	
   

  	
  and at all times
  thereafter

  	
   

  	
  2.50 to 1.0

  	
   

  

 

                (c)           Coverage Ratios.  (I) As of the last day of
each month set forth below, the Borrower shall maintain a ratio of
(a) EBITDA for the most recently completed twelve fiscal months to
(b) the sum of (i) Interest Expense for such period, plus
(ii) the aggregate amount of payments required to be made by the Borrower
and its Subsidiaries during such period in respect of principal on all
Indebtedness for Borrowed Money (whether at maturity, as a result of mandatory
sinking fund redemption, mandatory prepayment, acceleration or otherwise, but
excluding payment made on the Revolving Credit) (the “Debt
Service Coverage Ratio”) of not less than:

 

	
  Fiscal Month Ending

  	
   

  	
  Debt Service Coverage

  Ratio Shall Not Be Less

  Than

  	
   

  
	
  September 26,
  2004

  	
   

  	
  4.00 to 1.0

  	
   

  
	
  October
  24, 2004

  	
   

  	
  2.50 to 1.0

  	
   

  
	
  November
  21, 2004

  	
   

  	
  1.50 to 1.0

  	
   

  
	
  January 2,
  2005

  	
   

  	
  1.50 to 1.0

  	
   

  
	
  January
  30, 2005

  	
   

  	
  1.50 to 1.0

  	
   

  
	
  February
  27, 2005

  	
   

  	
  2.00 to 1.0

  	
   

  

 

(II)           As
of the last day of each fiscal quarter of the Borrower (commencing March 31,
2005), the Borrower shall maintain a Fixed Charge Coverage Ratio for the four
fiscal quarters of the Borrower then ended of not less than 1.25 to 1.0.

 

11

 

                (d)           Capital Expenditures.  The Borrower shall not, nor shall it permit
any Subsidiary to, expend or become obligated for Capital Expenditures in an
aggregate amount in excess of (i) $8,000,000 during the period from
January 1, 2004, through and including September 26, 2004, and
(ii) $12,000,000 during the fiscal year of Borrower ending January 2,
2005 and during the four consecutive fiscal quarters of the Borrower ending on
March 31, 2005.

 

                1.15.        The covenant compliance worksheet
attached to Exhibit F to the Credit Agreement shall be amended and restated to
read as set forth on the Attachment to Compliance Certificate attached hereto
and made a part hereof.

 

                1.16.        A new Exhibit H (Borrowing
Base Certificate) shall be added to the Credit Agreement to read as
set forth in Exhibit H attached hereto.

 

                1.17.        Schedule 1.1 to the Credit
Agreement (Commitments) shall be amended and
restated in its entirety to read as set forth on Schedule 1.1 attached
hereto.

 

Section 2.                                                 Consent to ITI
Conversion.

 

The Borrower has advised the Banks that the Borrower’s Wholly-owned
Subsidiary, ITI Holdings, Inc., a Delaware corporation (“Old ITI”),
has converted into ITI Holdings, LLC, a Delaware limited liability company (“ITI”) pursuant to Section 18-214 of the Delaware
Limited Liability Company Act and Section 266 of the Delaware General
Corporation Law (the “Conversion”).  The Banks, by signing below, hereby consent
to the Conversion and waive any Default or Event of Default arising from the
Conversion.  By signing below, ITI, the
Borrower, and the Banks hereby acknowledge and confirm that ITI has assumed and
become liable for all obligations of Old ITI under or pursuant to the Guaranty
and the other Loan Documents (including, without limitation, the Collateral
Documents) executed by Old ITI to the same extent and with the same force and
effect as if ITI had originally executed such documents.  ITI, the Borrower, and the Banks further
acknowledge and agree that all references to Old ITI contained in the Credit
Agreement, the Guaranty, and any other Loan Documents shall be deemed
references to ITI and all representations and warranties and covenants made by
or with respect to Old ITI shall be deemed made by or with respect to ITI.  By signing below, the Borrower and ITI hereby
represent that the limited liability company interests of ITI are
uncertificated.  ITI, the Borrower, and
the Banks further acknowledge and agree that, as a result of the Conversion,
Schedules A and C to the Pledge Agreement shall each be amended and restated in
their entirety to read as set forth on Schedules A and C, respectively,
attached hereto.

 

Section 3.                                                 Conditions
Precedent.

 

The effectiveness of this Amendment is subject to the satisfaction of
all of the following conditions precedent:

 

12

 

                  3.1.        The Borrower and the Required Banks
shall have executed and delivered this Amendment.

 

                  3.2.        The Guarantors shall have executed and
delivered to the Banks their reaffirmation and consent to this Amendment in the
form set forth below.

 

                  3.3.        The Agent shall have received an
amendment fee for each of the Banks approving this Amendment in writing by the
close of business on October 26, 2004, equal to 0.15% multiplied by such
Bank’s Revolving Credit Commitment in effect after giving effect to this
Amendment (such fee to be fully earned on the date hereof and non-refundable).

 

                  3.4.        The Agent shall have received such
evaluations and certifications as it may reasonably require (including a
Borrowing Base Certificate) in order to reasonably satisfy itself as to the
value of the Collateral and the financial condition of the Borrower and its
Subsidiaries.

 

                  3.5.        The Agent shall have received copies
(executed or certified, as may be appropriate) of all legal documents or
proceedings taken in connection with the execution and delivery of this
Amendment.

 

                  3.6.        The Agent shall have received
(a) copies certified by the Secretary of State of Delaware of the
Certificate of Conversion of ITI Holdings, Inc. into ITI Holdings, LLC (“ITI”), the certificate of formation of ITI, and a good
standing certificate of ITI (dated no earlier than thirty (30) days prior to
the date hereof), (b) a copy certified by an officer reasonably acceptable
to the Agent of ITI’s operating agreement and, to the extent necessary, any
ratifying resolutions regarding the execution and delivery of the Loan
Documents by ITI and performance of ITI’s obligations thereunder, and (c) a
current incumbency certificate containing the name, title, and signatures of
ITI’s authorized officers.

 

Section 4.                                                 Representations.

 

In order to induce the Banks to execute and deliver this Amendment, the
Borrower hereby represents to the Banks that as of the date hereof the
representations and warranties set forth in Section 6 of the Credit
Agreement, as amended hereby, are and shall be and remain true and correct,
except to the extent that any such representation or warranty relates solely to
an earlier time or that any change therein is not reasonably likely to have a
Material Adverse Effect, and the Borrower is in compliance with the terms and
conditions of the Credit Agreement and no Default or Event of Default has
occurred and is continuing under the Credit Agreement or shall result after
giving effect to this Amendment.

 

13

 

Section 5.                                                 Miscellaneous.

 

               5.1.       The Borrower heretofore executed and
delivered to the Agent and the Banks the Collateral Documents. The Borrower
hereby acknowledges and agrees that the Liens created and provided for by the
Collateral Documents continue to secure, among other things, the Obligations
arising under the Credit Agreement as amended hereby; and the Collateral Documents
and the rights and remedies of the Agent and the Banks thereunder, the
obligations of the Borrower thereunder, and the Liens created and provided for
thereunder remain in full force and effect and shall not be affected, impaired
or discharged hereby.  Nothing herein
contained shall in any manner affect or impair the priority of the liens and
security interests created and provided for by the Collateral Documents as to
the indebtedness which would be secured thereby prior to giving effect to this
Amendment.

 

               5.2.       Except as specifically amended herein,
the Credit Agreement shall continue in full force and effect in accordance with
its original terms.  Reference to this
specific Amendment need not be made in the Credit Agreement, the Notes, or any
other instrument or document executed in connection therewith, or in any
certificate, letter or communication issued or made pursuant to or with respect
to the Credit Agreement, any reference in any of such items to the Credit
Agreement being sufficient to refer to the Credit Agreement as amended hereby.

 

               5.3.       The Borrower agrees to pay on demand all
reasonable costs and expenses of or incurred by the Agent in connection with
the negotiation, preparation, execution and delivery of this Amendment,
including the reasonable fees and expenses of counsel for the Agent.

 

               5.4.       This Amendment may be executed in any
number of counterparts, and by the different parties on separate counterpart
signature pages, and all such counterparts taken together shall be deemed to
constitute one and the same agreement. 
This Amendment, and the rights and duties of the parties hereto, shall
be construed and determined in accordance with the laws of the State of
Illinois.

 

[Signature Pages to Follow]

 

14

 

This First Amendment to Amended and Restated Credit Agreement is
entered into as of the date and year first above written.

 

	
   

  	
   

  	
  APAC Customer Services, Inc.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
  Name

  	
   

  
	
   

  	
   

  	
   

  	
  Title

  	
   

  
	
   

  	
  Accepted and agreed to.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Harris Trust And Savings
  Bank, in its individual capacity as a Bank and as Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
  Name

  	
   

  
	
   

  	
   

  	
   

  	
  Title

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  U.S. Bank National Association

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
  Name

  	
   

  
	
   

  	
   

  	
   

  	
  Title

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Bank of America, N.A.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
  Name

  	
   

  
	
   

  	
   

  	
   

  	
  Title

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  LaSalle Bank National Association

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
  Name

  	
   

  
	
   

  	
   

  	
   

  	
  Title

  	
   

  

 

15Exhibit 10.1

 

M&I Marshall & Ilsley Bank

651 Nicollet Mall

Minneapolis, MN  55402

 

October 13, 2004

 

Mike
Erdmann

Enpath
Medical, Inc.

15301
Highway 55 West

Minneapolis,
MN 55447

Dear
Mr. Erdmann:

Pursuant to the
provisions of Section 5.1(g) of the Revolving Credit And Term Loan Agreement
(the “Loan Agreement”) dated October 17, 2003 and as amended via Letter
Amendment No. 1 dated March 18, 2004 and Letter Amendment No. 2 dated July 19,
2004, the Borrower agreed it would maintain a Senior Funded Debt Ratio to not
be greater than 1.25 to 1.0 for the twelve months ended 9/30/04 and each fiscal
quarter end thereafter.

 

The Borrower’s financial
statements for the period ending 9/30/04 indicate the Borrower exceeded the
aforementioned Senior Funded Debt Ratio covenant limit of 1.25 to 1.0.  The Borrower has requested waiver of such
covenant violation.  M&I Marshall
& Ilsley Bank (the “Bank”) hereby notifies the Borrower that the Bank
agrees to waive, and by issuance of this letter do hereby waive, the
aforementioned covenant violation.  This
waiver is solely for the requirements described above and shall not constitute
a waiver or amendment by the Bank of any other covenant or term under the Loan
Agreement.  The Loan Agreement remains in
full force and effect, except as specifically waived by the terms herein.

 

Sincerely,

 

Steve Nolander

Commercial Banking
Officer

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00073-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00073-of-00352.parquet"}]]