Exhibit 10.25
WAIVER AND FIRST AMENDMENT TO CREDIT AGREEMENT
THIS WAIVER AND FIRST AMENDMENT TO CREDIT AGREEMENT ("Waiver and
Amendment"), dated as of December 2, 1997, is entered into by and among
CERIDIAN CORPORATION (the "Company"), BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as agent for itself and the Banks (the "Agent"), the
several financial institutions party to the Credit Agreement (collectively,
the "Banks") and BancAmerica SECURITIES, INC. with THE BANK OF NEW YORK AND
FIRST BANK NATIONAL ASSOCIATION (collectively, the "Co-Agents").
RECITALS
A. The Company, Banks, and Agent are parties to an Amended and
Restated Credit Agreement (the "Credit Agreement") dated as of December 12,
1995 and amended and restated as of July 31, 1997, pursuant to which the
Agent and the Banks have extended certain credit facilities to the Company.
B. The Company has reported to the Agent and the Banks the
existence of a circumstance which could potentially result in a future Event
of Default under the Credit Agreement. The Company has requested that the
Banks waive any such potential Event of Default and agree to certain
amendments of the Credit Agreement.
C. The Banks are willing to waive the potential default under the
Credit Agreement, and to amend the Credit Agreement, subject to the terms and
conditions of this Waiver and Amendment.
NOW, THEREFORE, for valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. Defined Terms. Unless otherwise defined herein, capitalized
terms used herein shall have the meanings, if any, assigned to them in the
Credit Agreement.
2. Defaults and Waiver.
(a) For purposes of this Waiver and Amendment, "Potential
Default" shall mean the Event of Default which would exist on January 1, 1998
under Section 7.10 of the Credit Agreement in the event the sale of Computing
Devices International ("CDI") has not closed on or before December 31, 1997.
(b) Subject to the effectiveness of this Waiver and
Amendment, and provided the sale of CDI has not closed on or before December
31, 1997, the Banks hereby waive compliance by the Company with Section 7.10
of the Credit Agreement for the period January 1, 1998 through March 31, 1998.
(c) Nothing contained herein shall be deemed a waiver of (or
otherwise affect the Agent's or the Banks' ability to enforce) any other
default or Event of Default.
3. Amendments to Credit Agreement.
(a) The Credit Agreement is hereby amended by deleting
Schedule 7.02 attached to the Agreement and substituting the Schedule 7.02
attached to this Waiver and Amendment.
(b) The Credit Agreement is hereby amended by deleting
Section 7.04 in its entirety and substituting the following Section 7.04:
"7.04 Indebtedness. The Company shall not, and shall not
permit any of its Subsidiaries to, incur, assume or suffer to
exist any Indebtedness (a) if a Default or Event of Default has
occurred and is continuing or would result from the incurrence
or assumption of such indebtedness, or (b) if the aggregate
principal amount of all such Indebtedness of such Subsidiaries
would exceed 10% of Consolidated Net Worth; provided, however,
that up to U.S. $150,000,000 (or the Canadian Dollar equivalent)
of purchase money debt incurred by Subsidiaries of the Company to
acquire certain payroll businesses in Canada shall not be
included as Indebtedness for purposes of computing (b) above.
(c) The Credit Agreement is hereby amended by deleting
Section 7.09 in its entirety and substituting the following Section 7.09:
"7.09 Interest Coverage Ratio. On and after the Closing
Date, the Company shall not permit its ratio of (a) EBIT to (b)
Consolidated Interest Expense, all calculated on a consolidated
basis for the immediately preceding four fiscal quarters of the
Company, to be less than 2.75 to 1.00; provided, however, that
for the purposes of computing compliance with this covenant, the
following shall be excluded: (a) charges of $150,000,000 related
to the termination of the development of the CII payroll
processing software recorded in the third quarter of fiscal 1997
plus (b) fiscal fourth quarter 1997 charges of up to $150,000,000
for write-offs of prepaid pension costs, goodwill and other
assets, and for costs of consolidating certain operations.
(d) The Credit Agreement is hereby amended by deleting
Section 7.13 and substituting the following Section 7.13:
"7.13 Contracts of Subsidiaries. The Company shall not
permit any of its Subsidiaries (other than Computing
Devices Canada Ltd., Computing Devices Company Ltd. and its
subsidiaries, or any Canadian payroll processing subsidiary
purchased or established after the Effective Date) to enter into
any contract restricting the ability of such Subsidiary to pay
dividends or make loans to the Company or Subsidiaries of the
Company."
4. Representations and Warranties. The Company hereby represents
and warrants to the Agent and the Banks as follows:
(a) Other than the Potential Default, no Event of Default has
occurred and is continuing.
(b) The execution, delivery, and performance by the Company of
this Waiver and Amendment have been duly authorized by all
necessary corporate and other action and do not and will not
require any other registration with, consent or approval of,
notice to or action by, any Person (including any Governmental
Authority) in order to be effective and enforceable. The Credit
Agreement as amended by this Waiver and Amendment constitutes the
legal, valid, and binding obligations of the Company, enforceable
against it in accordance with its respective terms, except as
such enforceability may be limited by applicable bankruptcy,
insolvency, or similar laws affecting the enforcement of
creditors' rights generally or by equitable principles relating
to enforceability.
(c) Subject to the Potential Default, all representations and
warranties of the Company contained in the Credit Agreement are
true and correct on and as of the date of this Waiver and
Amendment with the same effect as if made on and as of such date
(except to the extent such representations and warranties
expressly refer to an earlier date, in which case they shall be
true and correct as of such earlier date).
(d) The Company is entering into this Waiver and Amendment on
the basis of its own investigation and for its own reasons,
without reliance upon the Agent and the Banks or any other
Person.
5. Effective Date. This Waiver and Amendment will become
effective as of December 2, 1997 (the "Effective Date"), provided that each
of the following condition precedents are satisfied:
(a) The Agent has received from the Company and the Majority
Banks a duly executed original (or, if elected by the Agent,
an executed facsimile copy) of this Waiver and Amendment.
(b) The Agent has received from the Company a copy of a
resolution passed by the board of directors of such
corporation, certified by the Secretary or an Assistant Secretary
of the Company as being in full force and effect on the date
hereof, authorizing the execution, delivery, and performance of
this Waiver and Amendment.
(c) All representations and warranties contained herein are true
and correct as of the Effective Date.
6. Reservation of Rights. The Company acknowledges and agrees
that neither the Agent's nor the Banks' forbearance in exercising their
rights and remedies in connection with the Potential Default, nor the
execution and delivery by the Agent and the Banks of this Waiver and
Amendment, shall be deemed (i) to create a course of dealing or otherwise
obligate the Agent or the Banks to forbear or execute similar waivers under
the same or similar circumstances in the future, or (ii) to waive,
relinquish, or impair any right of the Agent or the Banks to receive any
indemnity or similar payment from any Person or entity as a result of any
matter arising from or relating to the Potential Default.
7. Miscellaneous.
(a) Except as herein expressly amended, all terms, covenants,
and provisions of the Credit Agreement are and shall remain in full force and
effect and all references therein to such Credit Agreement shall henceforth
refer to the Credit Agreement as amended by this Waiver and Amendment. This
Waiver and Amendment shall be deemed incorporated into, and a part of, the
Credit Agreement.
(b) This Waiver and Amendment shall be binding upon and inure
to the benefit of the parties hereto and thereto and their respective
successors and assigns. No third party beneficiaries are intended in
connection with this Waiver and Amendment.
(c) This Waiver and Amendment shall be governed by and
construed in accordance with the law of the State of Illinois.
(d) This Waiver and Amendment may be executed in any number
of counterparts, each of which shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument. Each
of the parties hereto understands and agrees that this document (and any
other document required herein) may be delivered by any party thereto either
in the form of an executed original or an executed original sent by facsimile
transmission to be followed promptly by mailing of a hard copy original, and
that receipt by the Agent of a facsimile transmitted document purportedly
bearing the signature of a Bank or the Company shall bind such Bank or the
Company, respectively, with the same force and effect as the delivery of a
hard copy original. Any failure by the Agent to receive the hard copy
executed original of such document shall not diminish the binding effect of
receipt of the facsimile transmitted executed original of such document of
the party whose hard copy page was not received by the Agent.
(e) This Waiver and Amendment, together with the Credit
Agreement, contains the entire and exclusive agreement of the
parties hereto with reference to the matters discussed herein and therein.
This Waiver and Amendment supersedes all prior drafts and communications with
respect thereto. This Waiver and Amendment may not be amended except in
accordance with the provisions of Section 10.01 of the Credit Agreement.
(f) If any term or provision of this Waiver and Amendment
shall be deemed prohibited by or invalid under any applicable law, such
provision shall be invalidated without affecting the remaining provisions of
this Waiver and Amendment or the Credit Agreement, respectively.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their proper and duly authorized officers as of the
day and year first above written.
CERIDIAN CORPORATION
By: /s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President & Treasurer
Address for notices:
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Attention: Treasury Department
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BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Agent
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Name: R. ▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Managing Director
Address for notices:
Bank of America National Trust and Savings Association
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Attn: Agency Administrative Services #5596
Re: Ceridian
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THE BANK OF NEW YORK
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Title: Vice President
Lending Office:
The Bank of New York
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Attention: Commercial Lending Office
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Address for notices:
The Bank of New York
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THE CHASE MANHATTAN BANK
By: /s/▇▇▇▇ ▇▇▇▇▇ III
Name: ▇▇▇▇ ▇▇▇▇▇ III
Title:
Lending Office:
The Chase Manhattan Bank
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Address for notices:
The Chase Manhattan Bank
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FIRST AMERICAN NATIONAL BANK
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Title: Sr. Vice President
Lending Office:
First American National Bank
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Attention: Frenisa Joy
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Address for notices:
First American National Bank
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FIRST BANK NATIONAL ASSOCIATION
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
Lending Office:
First Bank National Association
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Address for notices:
First Bank National Association
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PNC BANK, NATIONAL ASSOCIATION
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Title: Assistant Vice President
Lending Office:
PNC Bank, National Association
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Address for notices:
PNC Bank, National Association
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▇▇▇▇▇ FARGO BANK, N.A.
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
Lending Office:
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Address for notices:
▇▇▇▇▇ Fargo Bank, N.A.
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TORONTO DOMINION BANK (TEXAS), INC.
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
Lending Office:
Toronto Dominion Bank (Texas), Inc.
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Address for notices:
Toronto Dominion Bank (Texas), Inc.
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THE LONG TERM CREDIT BANK OF JAPAN, LTD.
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: Sr. Vice President
Lending Office:
The Long Term Credit Bank of Japan, Ltd.
New York Branch
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Address for notices:
The Long Term Credit Bank of Japan, Ltd.
New York Branch
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NATIONSBANK
By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Sr. Vice President
LENDING OFFICE:
NationsBank
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ADDRESS FOR NOTICES:
NationsBank
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BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION as a Bank
By: /s/R. ▇▇▇ ▇▇▇▇▇▇▇▇▇
Name:
Title: Managing Director
Lending Office:
Bank of America-Account Administration
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Address for notices:
Bank of America-Account Administration
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With a copy to:
Bank of America NT&SA
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Address for payment:
Bank of America NT&SA
ABA No. ▇▇▇-▇▇▇-▇▇▇
Attn: Agency Administrative Services
No. 5596
Credit to Account No. 12339-15086