Second Amendment to Credit and Guaranty Agreement

EX-10.6(B) 3 b40087npex10-6b.txt SECOND AMENDMENT TO CREDIT AND GUARANTY AGREEMENT 1 EXHIBIT 10.6B NETWORK PLUS, INC. SECOND AMENDMENT TO CREDIT AND GUARANTY AGREEMENT This SECOND AMENDMENT, dated as of July 19, 2001 (this "AMENDMENT"), to the Credit and Guaranty Agreement, dated as of September 27, 2000, as amended by the First Amendment, dated February 9, 2001, (such document, as may be further amended, the "CREDIT AGREEMENT"), by and among NETWORK PLUS, INC., a Massachusetts corporation ("COMPANY"), NETWORK PLUS CORP., a Delaware corporation ("HOLDINGS"), the Lenders party hereto from time to time, GOLDMAN SACHS CREDIT PARTNERS L.P. ("GSCP"), as a Joint Lead Arranger (in such capacity, a "JOINT LEAD ARRANGER"), Book Runner (in such capacity,"BOOK RUNNER") and as Syndication Agent (in such capacity,"SYNDICATION AGENT"), FLEET SECURITIES, INC., ("FLEET SECURITIES"), as a Joint Lead Arranger (in such capacity, a "JOINT LEAD ARRANGER"), DLJ BRIDGE FINANCE, INC., as Documentation Agent (in such capacity,"DOCUMENTATION AGENT") and FLEET NATIONAL BANK, as Administrative Agent (together with its permitted successors and assigns in such capacity, "ADMINISTRATIVE AGENT") and as Collateral Agent (together with its permitted successors and assigns in such capacity, "COLLATERAL AGENT"). Capitalized terms used herein not otherwise defined herein or otherwise amended hereby shall have the meanings ascribed thereto in the Credit Agreement. RECITALS: WHEREAS, Company and Holdings have requested that Requisite Lenders agree to amend the Credit Agreement with respect to (i) the financial covenants set forth in Section 6.6(a), (ii) the definition of Borrowing Base Amount and (iii) certain other definitions and covenants, in each case subject to the terms and conditions set forth herein; and WHEREAS, in connection with the foregoing, Requisite Lenders have agreed to amend the Credit Agreement on the terms and conditions set forth herein. NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, the parties hereto agree as follows: SECTION 1. AMENDMENTS TO CREDIT AGREEMENT 1.1 AMENDMENTS TO SECTION 1: DEFINITIONS. A. Section 1.1 of the Credit Agreement is hereby amended by adding thereto the following definitions in proper alphabetical order: "PWC REPORT" means a report from PricewaterhouseCoopers LLP with respect to the financial plan of the Company. "SECOND AMENDMENT" means the Second Amendment dated July 19, 2001 to this Agreement by and among Company, Holdings, Lenders as of the date 1 2 of such amendment, the Joint Lead Arrangers, Book Runner, Syndication Agent, Documentation Agent, Administrative Agent and Collateral Agent." "SECOND AMENDMENT CLOSING DATE" has the meaning assigned to that term in the Second Amendment." B. Section 1.1 of the Credit Agreement is hereby further amended by deleting the definition of "Borrowing Base Amount" therein and substituting therefore the following: "BORROWING BASE AMOUNT" means, at any date of determination, the sum of (i) 80% of Eligible Accounts Receivable plus (ii) 70% of Eligible Unbilled Accounts plus (iii) Eligible Net Property, all as reflected on the most recently delivered Borrowing Base Certificate; provided, however, that the Borrowing Base Amount shall not exceed $145,000,000 at any time without the prior written approval of Requisite Lenders. 1.2 AMENDMENTS TO SECTION 5: AFFIRMATIVE COVENANTS. A. Subsection 5.1 of the Credit Agreement is hereby amended by inserting the following proviso at the end of the last sentence of paragraph (b) thereto: "; provided, however, notwithstanding anything herein to the contrary, the forgoing documents shall be delivered no later than fifteen (15) Business Days after the end of the third Fiscal Quarter of the Fiscal Year 2001." B. Subsection 5.1 of the Credit Agreement is hereby further amended by the addition of a new paragraph (t) at the conclusion thereof as follows: "(t) The Company shall furnish to the Joint Lead Arrangers the PWC Report no later than August 31, 2001." 1.3 AMENDMENTS TO SECTION 6: NEGATIVE COVENANTS. A. Subsection 6.6(a) of the Credit Agreement is hereby amended by revising Schedule 6.6(a) to the Credit Agreement so that the minimum quarterly Revenue requirements set forth opposite the Fiscal Quarter's ending June 30, 2001 and September 30, 2001 of $81,000,000 and $92,500,000 respectively shall be deleted and replaced by $76,000,000 in each case. B. Subsection 6.6(c) of the Credit Agreement is hereby amended by revising Schedule 6.6(c) to the Credit Agreement so that the Consolidated EBITDA requirement set forth opposite the Fiscal Quarter ending September 30, 2001 of $500,000 shall be deleted and replaced by $100,000. SECTION 2. CONDITIONS PRECEDENT TO EFFECTIVENESS 2.1 The effectiveness of the amendments set forth at Section 1 hereof are 2 3 subject to the satisfaction, or waiver, of the following conditions on or before the date hereof (the "SECOND AMENDMENT CLOSING DATE"): (a) The Company, Holdings and the Requisite Lenders shall have indicated their consent by the execution and delivery of the signature pages hereof to the Administrative Agent. (b) As of the Second Amendment Closing Date, the representations and warranties contained herein and in the other Credit Documents shall be true, correct and complete in all respects on and as of the Second Amendment Closing Date to the same extent as though made on and as of that date, except to the extent such representations and warranties specifically relate to an earlier date, in which case such representations and warranties shall have been true, correct and complete in all respects on and as of such earlier date. (c) As of the Second Amendment Closing Date and after giving effect to this Amendment, no event shall have occurred and be continuing that would constitute an Event of Default or a Default. (d) The Company and/or Holdings shall have signed an engagement letter, a copy of which has been provided to the Agents, with PricewaterhouseCoopers LLP ("PWC") which shall provide that PWC shall provide a report (the "PWC REPORT") to the Administrative Agent with respect to various financial reporting matters relating to Holdings and its Subsidiaries and that, in connection therewith, will be provided (i) reasonable access to the books and records of Holdings and its Subsidiaries and management of Holdings and Subsidiaries and (ii) such other information as PWC may reasonably request and that Company and/or Holdings will pay the reasonable fees and expenses of PWC in connection with such engagement. (e) The Administrative Agent and Lenders shall have received such other documents and information regarding Credit Parties and the Credit Agreement as the Administrative Agent or Lenders may reasonably request. SECTION 3. REPRESENTATIONS AND WARRANTIES 3.1 In order to induce Lenders to enter into this Amendment, each applicable Credit Party represents and warrants to each Lender, as of the date hereof and upon giving effect to this Amendment: (a) as of the date hereof and after giving effect to this Amendment, there exists no Event of Default under the Credit Agreement; and (b) that the representations and warranties contained in each of the Credit Documents is true, correct and complete in all respects on and as of the date hereof to the same extent as though made on and as of that date, except to the extent such 3 4 representations and warranties specifically relate to an earlier date, in which case such representations and warranties shall have been true, correct and complete in all respects on and as of such earlier date. SECTION 4. ACKNOWLEDGMENT AND CONSENT 4.1 Holdings has (i) guaranteed the Obligations and (ii) created Liens in favor of Lenders on certain Collateral to secure its obligations under Section 7 of the Credit Agreement. Holdings is referred to herein as the "CREDIT SUPPORT PARTY", and the Credit Agreement and the Pledge and Security Agreement, dated as of September 27, 2000, between the Company, each of the grantors party thereto and Fleet National Bank, as Collateral Agent (as such may be amended, supplemented or modified) (the "PLEDGE AND SECURITY AGREEMENT") are collectively referred to herein as the "CREDIT SUPPORT DOCUMENTS". 4.2 The Credit Support Party hereby acknowledges that it has reviewed the terms and provisions of the Credit Agreement and this Amendment and consents to the amendment of the Credit Agreement effected pursuant to this Amendment. The Credit Support Party hereby confirms that each Credit Support Document to which it is a party or otherwise bound and all Collateral encumbered thereby will continue to guarantee or secure, as the case may be, to the fullest extent possible in accordance with the Credit Support Documents, the payment and performance of all Guaranteed Obligations under the Credit Agreement and the Secured Obligations (as such term is defined in the Pledge and Security Agreement) under the Pledge and Security Agreement, as the case may be, including without limitation the payment and performance of all such Guaranteed Obligations under the Credit Agreement and the Secured Obligations (as such term is defined in the Pledge and Security Agreement) under the Pledge and Security Agreement in respect of the Obligations of Company now or hereafter existing under or in respect of the Credit Agreement, as amended by this Amendment, and grants to the Collateral Agent a continuing lien on and security interest in and to all Collateral as collateral security for the prompt payment and performance in full when due of the Guaranteed Obligations under the Credit Agreement and the Secured Obligations (as such term is defined in the Pledge and Security Agreement) under the Pledge and Security Agreement (whether at stated maturity, by acceleration or otherwise). 4.3 The Credit Support Party acknowledges and agrees that any of the Credit Support Documents to which it is a party or otherwise bound shall continue in full force and effect and that all of its obligations thereunder shall be valid and enforceable and shall not be impaired or limited by the execution or effectiveness of this Amendment. The Credit Support Party represents and warrants that all representations and warranties contained in the Credit Agreement, as amended by this Amendment, and the Credit Support Documents to which it is a party or otherwise bound are true, correct and complete in all material respects on and as of the Second Amendment Closing Date to the same extent as though made on and as of that date, except to the extent such representations and warranties specifically relate to an earlier date, in which case they were true, correct and complete in all material respects on and as of such earlier date. 4 5 4.4 The Credit Support Party acknowledges and agrees that (i) notwithstanding the conditions to effectiveness set forth in this Amendment, such Credit Support Party is not required by the terms of the Credit Agreement or any other Credit Document to consent to the amendments to the Credit Agreement effected pursuant to this Amendment and (ii) nothing in the Credit Agreement, this Amendment or any other Credit Document shall be deemed to require the consent of such Credit Support Party to any future amendments to the Credit Agreement. SECTION 5. MISCELLANEOUS 5.1 This Amendment shall be binding upon the parties hereto and their respective successors and assigns and shall inure to the benefit of the parties hereto and the successors and assigns of Lenders. No Credit Party's rights or obligations hereunder or any interest therein may be assigned or delegated by any Credit Party without the prior written consent of all Lenders. 5.2 In case any provision in or obligation hereunder shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby. 5.3 On and after the Second Amendment Closing Date, each reference in the Credit Agreement to "this Agreement", "hereunder", "hereof", "herein" or words of like import referring to the Credit Agreement, and each reference in the other Credit Documents to the "Credit Agreement", "thereunder", "thereof" or words of like import referring to the Credit Agreement shall mean and be a reference to the Credit Agreement as amended by this Amendment. 5.4 Except as specifically amended by this Amendment, the Credit Agreement and the other Credit Documents shall remain in full force and effect and are hereby ratified and confirmed. 5.5 The execution, delivery and performance of this Amendment shall not, except as expressly provided herein, constitute a waiver of any provision of, or operate as a waiver of any right, power or remedy of any Agent or Lender under, the Credit Agreement or any of the other Credit Documents. 5.6 Section headings herein are included herein for convenience of reference only and shall not constitute a part hereof for any other purpose or be given any substantive effect. 5.7 THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. 5 6 5.8 This Amendment may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument. As set forth herein, this Amendment shall become effective upon the execution of a counterpart hereof by each of the parties hereto and receipt by Company, Holdings and Administrative Agent and Syndication Agent of written or telephonic notification of such execution and authorization of delivery thereof. [The remainder of this page is intentionally left blank.] 6 7 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first written above. COMPANY: NETWORK PLUS, INC. By: __________________________ Name: Title: CREDIT SUPPORT NETWORK PLUS CORP. PARTIES: By: __________________________ Name: Title: S-1 8 JOINT LEAD ARRANGER, BOOK RUNNER, SYNDICATION AGENT AND A LENDER: GOLDMAN SACHS CREDIT PARTNERS L.P. By: __________________________ Authorized Signatory S-2 9 ADMINISTRATIVE AGENT, COLLATERAL AGENT AND A LENDER: FLEET NATIONAL BANK By: __________________________ Name: Title: S-3 10 DOCUMENTATION AGENT: DLJ BRIDGE FINANCE, INC. By: __________________________ Name: Title: S-4 11 LENDERS: NETPLUS FUNDING, INC. By: __________________________ Name: Title: S-5 12 IBM CREDIT CORPORATION By: __________________________ Name: Title: S-6