AMENDMENT NO. 2 TO CREDIT AGREEMENT
PREAMBLE: THIS AMENDMENT NO. 2 TO CREDIT AGREEMENT, dated as of March 10, 2000
("the Amendment"), is made by and among LAWGIBB GROUP, INC., formerly known as
Law Companies Group, Inc., a corporation organized under the laws of the State
of Georgia, United States ("LCGI"), as Borrowers' Representative and as a
Guarantor; LAW ENGINEERING AND ENVIRONMENTAL SERVICES, INC., a corporation
organized under the laws of the State of Georgia, United States ("U.S.
Borrower"), and XXXX LTD, a company organized under the laws of the United
Kingdom ("International Borrower"; the International Borrower and the U.S.
Borrower sometimes hereinafter called, collectively, herein the "Borrowers" or,
individually, a "Borrower"), as Borrowers; LAW ENVIRONMENTAL CONSULTANTS, INC.,
a corporation organized under the laws of the State of Georgia, United States
("LECI"), LAW INTERNATIONAL, INC., a corporation organized under the laws of the
State of Georgia, United States ("LII"), XXXX INTERNATIONAL HOLDINGS, INC., a
corporation organized under the laws of the State of Delaware ("GIH"), and XXXX
HOLDINGS LTD., a corporation organized under the laws of the United Kingdom
("GHL"; GHL, GIH, LII and LECI, together with other Subsidiaries becoming
Guarantors hereafter pursuant to the operation and effect of Section 7.15, are
sometimes hereinafter called, collectively, the "Subsidiary Guarantors" and,
individually, a "Subsidiary Guarantor"), as additional Guarantors; BANK OF
AMERICA, N.A., a national banking association organized under the laws of the
United States ("BOA") (the successor to Bank of America National Trust and
Savings Association), acting individually and through its London Branch (in such
latter capacity, BOA is sometimes called herein, "XXXX"), as Issuing Bank,
Overdraft Bank, International Agent and a Lender; BOA (the successor to Bank of
America, FSB), as U.S. Agent and a Lender; and any other financial institutions
party hereto from time to time (herein sometimes called, collectively, together
with BOA and XXXX, the "Lenders" or, individually, a "Lender"), as Lenders; for
the purpose of setting forth certain modifications and amendments to that
certain Credit Agreement, dated as January 15, 1998, among the above-named
parties (as amended pursuant to an Amendment No. 1 to Credit Agreement dated as
of October 16, 1998 ("First Amendment"), hereinafter referred to herein as the
"Credit Agreement"), to which said parties have agreed.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto hereby agree as follows:
1. Definitions. Capitalized terms used herein, but not otherwise expressly
defined herein, shall have the meanings given to such terms in the Credit
Agreement.
2. Amendments. (a) Maturity Date. Responsive to the request of Borrowers'
Representative, made in writing to the U.S. Agent on a timely basis in
accordance with the procedures set forth in the definition of "Maturity Date" in
Section 1.1 of the Credit Agreement, the Lenders hereby extend the Maturity Date
by one (1) year, that is, to January 15, 2003.
(b) Revolving Loan Amount. The "Revolving Loan Amount" definition, set forth in
Section 1.1 of the Credit Agreement, is hereby deleted, and the following
revised definition of "Revolving Loan Amount" is set forth in lieu thereof:
"Revolving Loan Amount" means the sum of Fifty-Eight Million Dollars
($58,000,000), reducing to Forty-Eight Million Dollars ($48,000,000), effective
on January 1, 2001; and reducing further to Forty-Three Million Dollars
($43,000,000), effective on January 1, 2002.
(c) Mandatory Reduction of Commitments. The dates "January 1, 2000" and "January
1, 2001," set forth in Section 2.7 of the Credit Agreement (as amended pursuant
to the First Amendment), at clauses (i) and (ii), respectively, thereof, in the
first sentence thereof, shall be amended to read, instead, "January 1, 2001" and
"January 1, 2002," respectively.
(d) Acquisitions. The words and figures "Two Million Dollars ($2,000,000)" and
"Seven Million Five Hundred Thousand Dollars ($7,500,000)" set forth in Section
8.5 of the Credit Agreement, at subclauses (iv)(A) and (B), respectively,
thereof, shall be amended to read, instead, "Ten Million Dollars ($10,000,000)"
and "Twenty Million Dollars ($20,000,000)".
(e) Indebtedness. (i) The words and figure "Five Hundred Thousand Dollars
($500,000)" set forth in Section 8.6 of the Credit Agreement, at clause (h)
thereof, shall be amended to read, instead, "Three Million Dollars
($3,000,000)".
(ii) The word "and" is hereby deleted at the end of subsection (h) of Section
8.6, subsection (i) of Section 8.6 is hereby re-lettered to become subsection
(j), the reference to subsection (h) in re-lettered subsection (j) is hereby
changed to a reference to subsection (i) and the following subsection (i) is
inserted therein:
(i) Indebtedness evidenced by the "Dividend Note", as defined in the Amendment
No.2 to Credit Agreement, dated as of March 10, 2000, among the parties to the
Credit Agreement; and
(f) Contingent Obligations. The words and figure "Five Hundred Thousand Dollars
($500,000)" set forth in Section 8.9 of the Credit Agreement, at subsection (c)
thereof, shall be amended to read instead "Five Million Dollars ($5,000,000)".
(g) Restricted Payments. Section 8.11 of the Credit Agreement is hereby amended
by adding the following new clauses (d) and (e) at the end of such Section:
(d) LCGI may purchase or redeem shares of its Capital Stock as required to
maintain compliance with ERISA and pursuant to provisions of the Law Companies
Group, Inc. 401k Savings Plan.
(e) Provided no Event of Default exists or would result therefrom, LCGI may make
payment for the vested portion of terminated employees' "in-the-money" options
to acquire Capital Stock of LCGI pursuant to provisions of options granted under
the Law Companies Group, Inc. Stock Option Plan.
3. Cancellation of CAPEX Dollar Loan Commitments. Effective as of the date
hereof, the CAPEX Dollar Loan Commitments are hereby cancelled such that the
U.S. Borrower shall have no further right to obtain CapEx Dollar Loans under the
Credit Agreement. On the date hereof the outstanding principal balance of the
CAPEX Dollar Loans is zero.
4. Finance Company Transaction. Borrowers' Representative has notified the U.S.
Agent that Borrowers intend to consummate the following transaction: (a) LCGI
will form LawGibb Capital, Inc., a Delaware corporation ("Finance Company"), (b)
LCGI will contribute all of the capital stock of the U.S. Borrower to Finance
Company, such that the U.S. Borrower will be the wholly-owned Subsidiary of
Finance Company and (c) the U.S. Borrower will declare a dividend payable to
Finance Company as its sole shareholder in the amount of eighty percent (80%) of
the U.S. Borrower's net equity (expected to be approximately $34,000,000) and
will evidence its obligations in respect of such dividend by issuing to Finance
Company its unsecured promissory note in the amount of such dividend (the
"Dividend Note"), bearing interest at a rate of eight and one-half percent
(8.5%) per annum, and with principal thereunder payable quarterly in
installments followed by a balloon payment due at maturity.
Pursuant to Borrowers' Representative's request, Lenders hereby consent to such
transactions, notwithstanding the restrictions and prohibitions contained in the
Credit Agreement, including, without limitation, in Section 8.2 of the Credit
Agreement (restricting transfers of assets), Section 8.4 of the Credit Agreement
(restricting Investments), Section 8.6 of the Credit Agreement (restricting
Indebtedness), Section 8.7 of the Credit Agreement (restricting transactions
with Affiliates) and Section 8.11 of the Credit Agreement (restricting
dividends), subject, however, to satisfaction of the following conditions
precedent:
(a) In accordance with the requirements of Sections 7.15 and 8.2 of the Credit
Agreement, (i) Finance Company shall execute and deliver to the U.S. Agent a
Joinder Agreement in substantially the form of Exhibit O to the Credit
Agreement, (ii) LCGI shall cause all of the capital stock of Finance Company to
be delivered to the Collateral Agent (together with undated stock powers in
blank) and pledged to the Collateral Agent pursuant to a pledge agreement in
substantially the form of the Pledge Agreement and otherwise in form reasonably
acceptable to the Collateral Agent, (iii) Finance Company shall grant to the
Collateral Agent a security interest in all of its assets pursuant to a security
agreement in substantially the form of the Security Agreement and otherwise in
form reasonably acceptable to the Collateral Agent, and (iv) LCGI and Finance
Company shall deliver to the Collateral Agent such other documentation as the
Collateral Agent may reasonably request in connection with the foregoing,
including, without limitation, UCC-1 financing statements, certified resolutions
and legal opinions, all in form, content and scope reasonably satisfactory to
the Collateral Agent.
(b) The stock of the U.S. Borrower shall be transferred by LCGI to Finance
Company subject to the Lien of the Collateral Agent therein arising pursuant to
the applicable Pledge Agreement, and, further, Finance Company shall pledge such
stock to the Collateral Agent pursuant to a pledge agreement in substantially
the form of the Pledge Agreement and otherwise in form and substance reasonably
satisfactory to the Collateral Agent.
(c) The Dividend Note and any other documentation pertaining to the transactions
described in this Section 4 shall be in form and substance satisfactory to the
Agent.
(d) The Dividend Note shall have been assigned to the Collateral Agent pursuant
to an assignment agreement in form and substance satisfactory to the Collateral
Agent.
(e) Finance Company and each other Obligor shall have executed and delivered to
the Agent such other documents, instruments and agreements as the Agent may
request in connection with the transactions contemplated hereby.
The consent set forth in this Section 4 is limited to the matters set forth
expressly herein and shall not be, or be deemed to be, a waiver of any Default
or Event of Default or a consent to any matter not expressly set forth in this
Section 4.
5. Intellectual Property. Borrowers' Representative has further notified the
U.S. Agent that Borrowers intend to consummate the following transaction: (a)
the U.S. Borrower will form Law Asset Management, Inc., a Delaware corporation
("Royalty Company No.2"), and GIH will form LawGibb Management, Inc., a Delaware
corporation ("Royalty Company No.1; Royalty Company No. 1 and Royalty Company
Xx. 0, xxxxxxxxxxxx, xxx "Xxxxxxx Xxxxxxxxx"), (x) in exchange for the stock of
Royalty Company No. 2, the U.S. Borrower will transfer to Royalty Company No. 2
all of its trademarks and other intellectual property, (c) in exchange for the
stock of Royalty Company No. 1, GIH will transfer to Royalty Company No. 1 all
of its trademarks and other intellectual property, (d) LCGI will form LawGibb
Licensing, Inc., a Delaware corporation ("Licensing Company"), (e) Licensing
Company and each of the Royalty Companies will enter into license agreements
pursuant to which the Royalty Companies will license the trademarks and other
intellectual property owned by them to Licensing Company in exchange for a fixed
royalty fee and (f) Licensing Company will enter into sublicense agreements with
those Obligors which use such intellectual property in their businesses pursuant
to which it will license such intellectual property to such Obligors in exchange
for an arms-length royalty fee (all of the licenses described in clauses (e) and
(f), collectively, the "License Agreements").
Pursuant to Borrowers' Representative's request, Lenders hereby consent to such
transactions, notwithstanding the restrictions and prohibitions contained in the
Credit Agreement, including, without limitation, in Sections 8.2, 8.6 and 8.7 of
the Credit Agreement, subject, however, to the satisfaction of the following
conditions precedent:
(a) In accordance with the requirements of Sections 7.15 and 8.2 of the Credit
Agreement, (i) each of the Royalty Companies and the Licensing Company shall
execute and deliver to the U.S. Agent a Joinder Agreement in substantially the
form of Exhibit O to the Credit Agreement, (ii) each Obligor owning stock of a
Royalty Company or the Licensing Company shall cause all of such capital stock
to be delivered to the Collateral Agent (together with undated stock powers in
blank) pursuant to a pledge agreement in substantially the form of the Pledge
Agreement and otherwise in form reasonably acceptable to the Collateral Agent,
(iii) each Royalty Company and the Licensing Company shall grant to the
Collateral Agent a security interest in all of its assets pursuant to a security
agreement in substantially the form of the Security Agreement and otherwise in
form reasonably acceptable to the Collateral Agent and (iv) each Royalty Company
and the Licensing Company shall deliver to the Collateral Agent such other
documentation as the Collateral Agent may reasonably request in connection with
the foregoing, including, without limitation, UCC-1 financing statements,
certified resolutions and legal opinions, all in form, content and scope
reasonably satisfactory to the Collateral Agent.
(b) All of the intellectual property shall be transferred to the Royalty
Companies subject to the Lien of the Collateral Agent therein, and each Royalty
Company shall execute and deliver to the Collateral Agent such intellectual
property security agreements and collateral assignments as the Collateral Agent
shall request in form and substance satisfactory to the Collateral Agent, in
form for recording in the United States Patent and Trademark Office.
(c) The License Agreements (including, without limitation, the royalties payable
thereunder) and all other documents pertaining to the transactions contemplated
hereby shall be in form and substance satisfactory to the Agent. The rights of
the Obligors under the License Agreements shall have been assigned to the
Collateral Agent as additional Collateral.
(d) The Royalty Companies, the Licensing Company and each other Obligor shall
have executed and delivered to the Agent such other documents, instruments and
agreements as the Agent may request in connection with the transactions
contemplated hereby.
The consent set forth in this Section 5 is limited to the matters set forth
expressly herein and shall not be, or be deemed to be, a waiver of any Default
or Event of Default or a consent to any matter not expressly set forth in this
Section 5.
6. MISCELLANEOUS
(a) Effect of Amendment. Except as set forth expressly herein, all terms of the
Credit Agreement and the other Loan Documents, as amended hereby, shall be and
remain in full force and effect and shall constitute the legal, valid, binding
and enforceable obligations of Obligors. To the extent any terms and conditions
in any of the Loan Documents shall contradict or be in conflict with any terms
or conditions of the Credit Agreement, after giving effect to this Amendment,
such terms and conditions are hereby deemed modified and amended accordingly to
reflect the terms and conditions of the Credit Agreement as modified and amended
hereby.
(b) Reaffirmation of Representatives and Warranties. Obligors hereby ratify and
reaffirm all of the representations and warranties set forth in the Credit
Agreement and the other Loan Documents, except to the extent that such
representations and warranties relate to an earlier date or may be untrue or
incorrect solely as a result of occurrences permitted under the Credit
Agreement, and subject to the updates thereto set forth on Annex I hereto.
(c) Ratification. Obligors hereby restate, ratify and reaffirm each and every
term and condition set forth in the Credit Agreement, as amended hereby, and the
Loan Documents effective as of the date hereof.
(d) Estoppel. Obligors hereby acknowledge and agree that, as of the date hereof,
and after giving effect to this Amendment, no Default or Event of Default has
occurred and is continuing.
(e) Governing Law. This Amendment shall be governed by Georgia law, and shall
constitute a Loan Document.
(f) Costs and Expense. Obligors agree to pay all reasonable costs and expenses
of Lenders, Issuers and Agents incurred in connection with the preparation,
execution, delivery and enforcement of this Amendment and all other Loan
Documents executed in connection herewith, the closing hereof, and any other
transactions contemplated hereby, including the reasonable fees and
out-of-pocket expenses of counsel.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed and delivered and have hereunto affixed their respective seals by,
through and in the presence of their respective proper and duly authorized
officers as of the day and year first above written.
U.S. Agent: BANK OF AMERICA, N.A., (SEAL)
as successor to Bank of America, FSB
By:
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Title:
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U.S. Lender: BANK OF AMERICA, N.A. (SEAL)
as successor to Bank of America, FSB
By:
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Title:
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International Lender: BANK OF AMERICA, N.A., (SEAL)
successor to Bank of America National Trust
and Savings Association
By:
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Title:
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International Agent: BANK OF AMERICA, N.A., (SEAL)
successor to Bank of America National Trust
and Savings Association
By:
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Title:
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Issuing Bank (International): BANK OF AMERICA, N.A., (SEAL)
successor to Bank of America National Trust
and Savings Association
By:
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Title:
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Overdraft Bank: BANK OF AMERICA, N.A., (SEAL)
successor to Bank of America National Trust
and Savings Association
By:
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Title:
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Issuing Bank (U.S.): BANK OF AMERICA, N.A., (SEAL)
as successor to Bank of America National Trust
and Savings Association
By:
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Title:
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Borrowers' Representative and LAWGIBB GROUP, INC., (SEAL)
Guarantor: f/k/a Law Companies Group, Inc.
By:
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Title:
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Borrowers: LAW ENGINEERING AND ENVIRONMENTAL SERVICES,
INC. (SEAL)
By:
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Title:
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Attest:
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Title:
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XXXX LTD. (SEAL)
By:
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Title:
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Attest:
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Title:
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Guarantors: LAW ENVIRONMENTAL CONSULTANTS, INC. (SEAL)
By:
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Title:
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LAW INTERNATIONAL, INC. (SEAL)
By:
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Title:
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XXXX INTERNATIONAL HOLDINGS, INC. (SEAL)
By:
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Title:
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XXXX HOLDINGS LTD. (SEAL)
By:
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Title:
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