EXHIBIT 10.10
CONFORMED
FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this "Amendment"), dated as
of June 30, 2003 (the "First Amendment Effective Date"), is by and among LASON,
INC., a Delaware corporation with its principal offices in Troy, Michigan (the
"Borrower"), the banks and financial institutions listed on the signature pages
hereto (collectively, the "Lenders"), and BANK ONE, NA, with its main office in
Chicago, Illinois, as agent for the Lenders (in such capacity, the "Agent").
RECITALS
A. The Borrower, the Agent and the Lenders are parties to a Credit
Agreement dated as of June 30, 2002 (as now and hereafter amended, the "Credit
Agreement"), pursuant to which the Lenders agreed, subject to the terms and
conditions thereof, to extend credit to the Borrower. The Credit Agreement, all
promissory notes executed by the Borrower in favor of the Agent and/or the
Lenders, and any and all of the Security Documents (including without limitation
all security agreements, mortgages, guaranties, pledges and other instruments,
documents or agreements of any kind evidencing or securing the indebtedness of
the Borrower in favor of the Lenders) are sometimes referred to collectively as
the "Loan Documents." Terms used but not defined herein shall have the
respective meanings ascribed thereto in the Credit Agreement.
B. The Loan Documents were executed in connection with the Borrower's
emergence from protection under Chapter 11 of Title 11 of the United States
Code, and as part of its Plan of Reorganization filed with and approved by the
Bankruptcy Court.
C. Pursuant to the Plan of Reorganization and the Loan Documents, the
Pre-Petition Credit previously advanced by the Lenders to the Borrower was
converted partially into the Term Credit and partially into common stock issued
by the reorganized Borrower.
D. The Borrower has requested that the Agent and the Lenders consent to
certain modified terms and conditions pertaining to the repayment of the Term
Credit, including the prepayment of a portion of the Term Credit and the
establishment of a revolving credit facility to address the Borrower's working
capital requirements.
E. Based upon the foregoing recitals, and without waiving any existing
or future rights or remedies which the Agent and/or the Lenders may have against
any Borrower or any Guarantor, the Agent and the Lenders are willing to amend
the terms of the Credit Agreement under the terms and conditions expressly set
forth herein.
TERMS
In consideration of the premises and of the mutual agreements herein
contained, the parties agree as follows:
ARTICLE 1.
TERM CREDIT RESTRUCTURING PROVISIONS
1.1 Affirmation of Recitals. The Borrower and the Guarantors hereby
acknowledge and affirm the accuracy of the foregoing recitals.
1.2 Conversion of $10,000,000 of Term Credit. After the First Amendment
Effective Date and upon receipt of the prepayment described in Section 1.3
hereof, a portion (such portion to be in the amount of $10,000,000) of the
outstanding principal balance of the Term Credit shall be converted into the
Aggregate Revolving Credit Commitment (as defined herein). Such Aggregate
Revolving Credit Commitment (i) shall be governed by the terms and conditions
set forth in Article 2 of this Amendment, (ii) shall be deemed fully drawn upon
issuance of the Revolving Credit Commitments and (iii) shall be used initially
to prepay $10,000,000 of the outstanding principal balance of the Term Credit
(such prepayment to be applied in inverse order of maturity).
1.3 Additional Prepayment of $5,000,000 of Term Credit. After the First
Amendment Effective Date, in addition to the conversion and related prepayment
as described in Section 1.2 above, the Borrower shall prepay $5,000,000 of the
outstanding principal balance of the Term Credit (such prepayment to be applied
in inverse order of maturity).
1.4 Term Credit Amortization. After giving effect to (i) principal
installment payments and prepayments made by the Borrower prior to the date of
execution of this Amendment and (ii) the mandatory prepayments described in
Sections 1.2 and 1.3 above, the outstanding principal balance of the Term Credit
shall be $28,462,507, and the repayment of such remaining principal balance of
the Term Credit shall be governed by the amortization schedule set forth in
Section 2.5 of this Amendment.
ARTICLE 2.
AMENDMENTS TO CREDIT AGREEMENT AND ESTABLISHMENT OF REVOLVING CREDIT
Effective as of the First Amendment Effective Date, the Credit
Agreement shall be amended as follows:
2.1 The definition of "Floating Rate" in Section 1.1 of the Credit
Agreement is restated in its entirety as follows:
"Floating Rate" means, for any day, a rate per annum equal to
(i) the Alternate Base Rate for such day plus (ii) (A) 2.50%
for the period from the Effective Date through and including
December 31, 2005 and (B) 4.0% thereafter, in each case
changing when and as the Alternate Base Rate changes.
2
2.2 The definition of "Loan" in Section 1.1 of the Credit Agreement is
restated in its entirety as follows:
"Loan" means, with respect to a Lender, such Lender's loan
extended as part of the Term Credit pursuant to Article II and
such Lender's Revolving Credit Loans extended from time to
time pursuant to Article IIA.
2.3 The definition of "Term Credit" in Section 1.1 of the Credit
Agreement is restated in its entirety as follows:
"Term Credit" means the Loans extended as part of the Plan of
Reorganization pursuant to Article II.
2.4 The following new definitions are added to Section 1.1 of the
Credit Agreement in appropriate alphabetical order, stating as follows:
"Advance" means a borrowing under Article IIA made by the
Lenders on the same date, consisting, of the aggregate amount
of the several Revolving Credit Loans made on such date.
"Aggregate Revolving Credit Commitment" means the aggregate of
the Revolving Credit Commitments of all the Lenders, as
reduced from time to time pursuant to the terms hereof.
"Borrowing Base" means, as of any date, an amount equal to 60%
of Eligible Receivables as of such date.
"Borrowing Base Certificate" for any date means an
appropriately completed report as of such date with respect to
the Borrowing Base in form and substance acceptable to the
Agent, certified as true and correct by a duly authorized
officer of the Borrower submitting such Borrowing Base
Certificate.
"Borrowing Notice" is defined in Section 2A.2.
"Eligible Receivables" means, as of any date, those accounts
receivable of the Borrower valued at the face amount thereof
less sales, excise or similar taxes and less returns,
discounts, claims, credits and allowances of any nature at any
time issued, owing, granted, outstanding, available or claimed
less, without duplication, such reserves as may be established
by the Borrower or on the books and records of the Borrower
and less such reserves as the Agent elects to establish in its
credit judgment, which are payable in U.S. Dollars and in
which the Borrower has granted to the Agent a first-priority
perfected security interest pursuant to the Security
Documents, but shall not include any such account receivable
(a) that is not a bona fide existing obligation created by the
sale and actual delivery of inventory, goods or other property
or the furnishing of services or other good and sufficient
consideration to customers of the Borrower in the ordinary
course of business, (b) that remains outstanding more than 90
days after the earlier of the date of the invoice or the
shipment of the
3
related inventory, goods or other property or the furnishing
of the related services or other consideration, (c) that is
subject to any dispute, contra-account, defense, offset or
counterclaim or any Lien (except those in favor of the Agent
under the Security Documents), unless the account debtor
thereunder has signed an offset waiver letter in form and
substance satisfactory to the Agent, or the inventory, goods,
property, services or other consideration of which such
account receivable constitutes proceeds is subject to any such
Lien, (d) in respect of which the inventory, goods, property,
services or other consideration have been rejected or the
amount is in dispute, (e) that is due from any Affiliate or
Subsidiary of the Borrower, (f) that has been classified by
the Borrower as doubtful or has otherwise failed to meet
established or customary credit standards of the Borrower, (g)
that is payable by any Person located outside the United
States (which shall not be deemed to include any territories
of the United States) or Canada and are not supported by
letters of credit issued to the Agent by commercial banks, and
in form and substance, acceptable to the Agent, (h) that is
payable by the United States or any of its departments,
agencies or instrumentalities or by any state or other
governmental entity, (i) that is payable by any Person as to
which 50% or more of the aggregate amount of such accounts
receivable payable by such Person to the Borrower do not
otherwise constitute Eligible Receivable, (j) that is payable
by any Person that is the subject of any proceeding seeking to
adjudicate it a bankrupt or insolvent or seeking liquidation,
winding up or reorganization, arrangement, adjustment,
protection, relief or composition of it or its debts under any
law relating to bankruptcy, insolvency or reorganization or
relief or protection of debtors or seeking the appointment of
a receiver, trustee, custodian or other similar official for
it or for any substantial part of its property, or that is not
generally paying its debts as they become due or has admitted
in writing its inability to pay its debts generally or has
made a general assignment for the benefit of creditors, (k)
that is evidenced by a promissory note or other instrument,
(l) that is subordinate or junior in right or priority of
payment to any other obligation or claim, or (m) that for any
other reason is at any time reasonably deemed by the Agent in
its reasonable credit judgment to be ineligible.
"First Amendment Effective Date" shall mean June 30, 2003.
"Fixed Charge Coverage Ratio" means, as of the end of any
fiscal quarter, the ratio for the applicable period of (a)
Consolidated EBITDA to (b) Consolidated Interest Expense in
respect of the Secured Obligations.
"Liquidity" means, as of any date, the sum of (i) the
aggregate amount of cash on hand of the Borrower and its
Subsidiaries on such date (as would be reported on a balance
sheet prepared as of such date), plus (ii) the aggregate
amount of Cash Equivalents of the Borrower and its
Subsidiaries on such date plus (iii) the unused available
amount of the Aggregate Revolving Credit Commitment as of such
date.
"Revolving Credit Commitment" means, for each Lender, the
obligation of such Lender to make Revolving Credit Loans not
exceeding the
4
amount set forth opposite its signature below, as it may be
modified from time to time pursuant to the terms hereof.
"Revolving Credit Loan" means, with respect to a Lender, such
Lender's loan made from time to time pursuant to Article IIA
(or any continuation thereof).
"Revolving Credit Termination Date" means December 31, 2005 or
any earlier date on which the Aggregate Revolving Credit
Commitment is reduced to zero or otherwise terminated pursuant
to the terms hereof.
2.5 Section 2.1(c) of the Credit Agreement is restated in its entirety
as follows (such restatement takes into effect the prepayments described
elsewhere in this Amendment):
(c) Repayment of Term Credit. Unless earlier payment is
required under this Agreement, the Borrower hereby
unconditionally promises to pay to the Agent for the pro rata
account of each Lender the unpaid principal amount of the Term
Credit in periodic principal payments as follows:
Payment Date Principal Installment
------------ ---------------------
June 30, 2002 $ 3,249,210
June 30, 2003 $16,000,000
September 30, 2003 $ 1,000,000
December 31, 2003 $ 1,000,000
March 31, 2004 $ 1,000,000
June 30, 2004 $ 1,000,000
September 30, 2004 $ 1,000,000
December 31, 2004 $ 1,000,000
March 31, 2005 $ 1,000,000
June 30, 2005 $ 1,000,000
September 30, 2005 $ 1,000,000
December 31, 2005 $ 1,000,000
March 31, 2006 $ 1,000,000
June 30, 2006 $ 1,000,000
September 30, 2006 $ 1,000,000
December 31, 2006 $ 1,000,000
March 31, 2007 $ 1,000,000
On the Facility Termination Date, the outstanding principal
balance of the Term Credit, if any, shall be paid in full.
2.6 A new subparagraph (c) is inserted at the end of Section 2.2 of the
Credit Agreement, stating as follows:
(c) Mandatory Prepayments Based on Liquidity. In addition to
all other payments of the Term Credit required hereunder, if
on the last day of any fiscal quarter the total Liquidity of
the Borrower and its Subsidiaries exceeds the respective
amounts set forth in the table below,
5
then fifty percent (50%) of the amount of such excess shall be
remitted to the Lenders as a mandatory prepayment of the Term
Credit. Such prepayment, if any, due for any fiscal quarter
shall be paid not later than fifteen (15) Business Days after
the end of such fiscal quarter. All prepayments under this
Section 2.2(c) shall be applied to principal installments
payable under Section 2.1(c) in the inverse order of maturity.
Date Liquidity Threshold
---- -------------------
September 30, 2003 $18,942,000
December 31, 2003 $16,154,000
March 31, 2004 $15,746,000
June 30, 2004 $14,853,000
September 30, 2004 $13,438,000
December 31, 2004 $13,847,000
March 31, 2005 $13,308,000
June 30, 2005 $12,359,000
September 30, 2005 $11,889,000
December 31, 2005 $12,723,000
March 31, 2006 $11,827,000
June 30, 2006 $10,954,000
September 30, 2006 $10,871,000
December 31, 2006 $11,937,000
March 31, 2007 $13,139,000
2.7 A new Article IIA is inserted at the end of Article II of the
Credit Agreement, stating as follows:
ARTICLE IIA
REVOLVING CREDIT LOANS
2A.1 Revolving Credit Commitment. From and after the First
Amendment Effective Date and prior to the Revolving Credit
Termination Date, each Lender severally agrees, on the term
and conditions set forth in this Agreement, to make Revolving
Credit Loans to the Borrower from time to time in amounts not
to exceed in the aggregate at any one time outstanding the
amount of its Revolving Credit Commitment as the same may be
reduced from time to time. Subject to the terms of this
Agreement, the Borrower may borrow, repay and reborrow
Revolving Credit Loans at any time prior to the Revolving
Credit Termination Date. The Revolving Credit Commitments
shall expire on the Revolving Credit Termination Date.
Principal payments made on or after the Revolving Credit
Termination Date may not be reborrowed The Revolving Credit
Loans must be repaid in full on the Revolving Credit
Termination Date and prepaid at any time the aggregate
Revolving Credit Loans exceed the Borrowing Base by not less
than the amount of such excess.
6
2A.2 Ratable Loans; Method of Borrowing. Each Advance
hereunder shall consist of Revolving Credit Loans made from
the several Lenders ratably in proportion to the ratio that
their respective Revolving Credit Commitments bear to the
Aggregate Revolving Credit Commitment. The Borrower shall give
the Agent irrevocable notice (a "Borrowing Notice") not later
than 10:00 a.m. (Chicago time) at least one Business Day
before the date of a requested Advance, specifying the
requested date of such Advance (which shall be a Business Day)
and the aggregate amount of such Advance. Not later than noon
(Chicago time) on the date specified in the Borrowing Notice,
each Lender shall make available its Revolving Credit Loan in
funds immediately available in Chicago to the Agent at its
address specified herein. The Agent will make the funds so
received from the Lenders available to the Borrower at the
Agent's aforesaid address.
2A.3 Interest Rate. Each Revolving Credit Loan shall bear
interest on the outstanding principal amount thereof, for each
day from and including the date of any Advance to but
excluding the date it is paid, at a rate per annum equal to
the Floating Rate for such day. Changes in the rate of
interest will take effect simultaneously with each change in
the Alternate Base Rate.
2A.4 Rates Applicable After Event of Default. The provisions
of Section 2.4 shall apply to Revolving Credit Loans.
2A.5 Method of Payment. The provisions of Section 2.5 shall
apply to Revolving Credit Loans.
2A.6 Interest Payment Dates; Interest and Fee Basis. Interest
accrued on each Revolving Credit Loan shall be payable on each
Payment Date, commencing with the first such date to occur
after the date hereof and at maturity. Interest and commitment
fees shall be calculated for actual days elapsed on the basis
of a 360-day year. Interest shall be payable for the day an
Advance is made but not for the day of any payment on the
amount paid if payment is received prior to noon (local time)
at the place of payment. If any payment of principal of or
interest on an Advance shall become due on a day which is not
a Business Day, such payment shall be made on the next
succeeding Business Day and, in the case of a principal
payment, such extension of time shall be included in computing
interest in connection with such payment.
2A.7 Notification of Interest Rate Changes and Repayments. The
provisions of Section 2.7 shall apply to Revolving Credit
Loans.
2A.8 Noteless Agreement; Recordation. The provisions of
Section 2.8 shall apply to Revolving Credit Loans.
2A.9 Lending Installations. The provisions of Section 2.9
shall apply to Revolving Credit Loans.
7
2A.10 Commitment Fee; Reductions in Aggregate Revolving Credit
Commitment; Minimum Amount of Each Advance. The Borrower
agrees to pay to the Agent for the account of each Lender a
commitment fee of 0.75% per annum on the daily unused portion
of such Lender's Revolving Credit Commitment from the First
Amendment Effective Date to and including the Revolving Credit
Termination Date, payable on each Payment Date hereafter and
on the Revolving Credit Termination Date. The Borrower may
permanently reduce the Aggregate Revolving Credit Commitment
in whole, or in part ratably among the Lenders in integral
multiples of $500,000, upon at least five Business Days'
written notice to the Agent, which notice shall specify the
amount of any such reduction, provided, however, that the
amount of the Aggregate Revolving Credit Commitment may not be
reduced below the aggregate principal amount of the
outstanding Advances. All accrued commitment fees shall be
payable on the effective date of any termination of the
obligations of the Lenders to make Revolving Credit Loans
hereunder. Each Advance of Revolving Credit Loans shall be in
the minimum amount of $1,000,000 (and in multiples of $500,000
if in excess thereof), provided, however, that any Advance may
be in the amount of the unused Aggregate Revolving Credit
Commitment.
2A.11 Collateral Security; Further Assistance. The provisions
of Section 2.11 shall apply to Revolving Credit Loans.
2A.12 Replacement of Lender. The provisions of Section 2.12
shall apply to Revolving Credit Loans.
2A.13 Non-Receipt of Funds by the Agent. Unless the Borrower
or a Lender, as the case may be, notifies the Agent prior to
the date on which it is scheduled to make payment to the Agent
of (i) in the case of a Lender, the proceeds of a Revolving
Credit Loan or (ii) in the case of the Borrower, a payment of
principal, interest or fees to the Agent for the account of
the Lenders, that it does not intend to make such payment, the
Agent may assume that such payment has been made. The Agent
may, but shall not be obligated to, make the amount of such
payment available to the intended recipient in reliance upon
such assumption. If such Lender or the Borrower, as the case
may be, has not in fact made such payment to the Agent, the
recipient of such payment shall, on demand by the Agent, repay
to the Agent the amount so made available together with
interest thereon in respect of each day during the period
commencing on the date such amount was so made available by
the Agent until the date the Agent recovers such amount at a
rate per annum equal to (x) in the case of payment by a
Lender, the Federal Funds Effective Rate for such day for the
first three days and, thereafter, the interest rate applicable
to the relevant Revolving Credit Loan or (y) in the case of
payment by the Borrower, the interest rate applicable to the
relevant Revolving Credit Loan.
2.8 A new Section 4.3 is added at the end of Article IV of the Credit
Agreement, stating as follows:
8
4.3. Conditions to Each Advance of Revolving Credit Loans. The
Lenders shall not be required to make any Advance of Revolving
Credit Loans unless on the applicable date of such Advance:
(i) There exists no Default or Event of Default.
(ii) The representations and warranties contained in
Article V are true and correct as of such date except
to the extent any such representation or warranty is
stated to relate solely to an earlier date, in which
case such representation or warranty shall have been
true and correct on and as of such earlier date.
(iii) All legal matters incident to the making of
such Advance shall be satisfactory to the Lenders and
their counsel
(iv) The Borrower shall have submitted a
duly-completed and certified Borrowing Base
Certificate, and the aggregate outstanding principal
amount of the Revolving Credit Loans, together with
the aggregate amount described in the Borrowing
Notice, shall not exceed the Borrowing Base.
Each Borrowing Notice with respect to each such Advance shall
constitute a representation and warranty by the Borrower that
the conditions contained in Sections 4.3(i) and (ii) have been
satisfied.
2.9 Section 5.5 of the Credit Agreement is restated in its entirety as
follows:
5.5 Litigation. Except for the Cases and the Lason Class
Action (as defined in the Confirmation Order), there are no
actions, investigations, suits or proceedings pending or, to
the knowledge of the Borrower, threatened, at law, in equity
or in arbitration, before any court, other Governmental
Authority or other Person, (i) against or affecting the
Borrower, any of its Subsidiaries or any of their respective
properties that would be reasonably likely to have a Material
Adverse Effect or (ii) asserting the invalidity of this
Agreement or any of the other Credit Documents.
2.10 A new subparagraph (i) is added at the end of Section 6.2 of the
Credit Agreement, stating as follows:
(i) Not later than the fifteenth (15th) Business Day of each
month, a duly-completed and certified Borrowing Base
Certificate as of the end of the prior month.
2.11 Section 7.1 of the Credit Agreement is restated in its entirety as
follows:
7.1 Consolidated EBITDA. The Borrower will not permit
Consolidated EBITDA, in each case measured cumulatively for
the period commencing July 1, 2003 and ending on the last day
of
9
each month set forth below, to be less than the amount set
forth below opposite such period:
Period Ending Consolidated EBITDA Amount
------------- --------------------------
July, 2003 $ 180,000
August, 2003 $ 400,000
September, 2003 $ 730,000
October, 2003 $ 1,000,000
November, 2003 $ 1,240,000
December, 2003 $ 1,440,000
January, 2004 $ 1,680,000
February, 2004 $ 1,870,000
March, 2004 $ 2,290,000
April, 2004 $ 2,650,000
May, 2004 $ 3,060,000
June, 2004 $ 4,050,000
July, 2004 $ 4,270,000
August, 2004 $ 4,610,000
September, 2004 $ 5,230,000
October, 2004 $ 5,530,000
November, 2004 $ 5,810,000
December, 2004 $ 6,390,000
January, 2005 $ 6,770,000
February, 2005 $ 6,990,000
March, 2005 $ 7,710,000
April, 2005 $ 7,950,000
May, 2005 $ 8,210,000
June, 2005 $ 9,490,000
July, 2005 $ 9,740,000
August, 2005 $ 9,910,000
September, 2005 $10,120,000
October, 2005 $10,550,000
November, 2005 $10,850,000
December, 2005 $11,250,000
10
January, 2006 $11,410,000
February, 2006 $11,660,000
March, 2006 $11,910,000
April, 2006 $12,210,000
May, 2006 $12,460,000
June, 2006 $12,730,000
July, 2006 $13,040,000
August, 2006 $13,340,000
September, 2006 $13,700,000
October, 2006 $14,080,000
November, 2006 $14,450,000
December, 2006 $14,760,000
January, 2007 $15,090,000
February, 2007 $15,410,000
March, 2007 $15,730,000
April, 2007 $16,030,000
May, 2007 $16,300,000
June, 2007 $16,510,000
2.12 Section 7.2 of the Credit Agreement is restated in its entirety as
follows:
7.2 Capital Expenditures. The Borrower will not, and will not
permit any Subsidiary to, expend for Capital Expenditures
during any period ending on the day set forth below, in excess
of the aggregate amount set forth below opposite such period:
Fiscal Quarter Ending Amount
--------------------- ------
September 30, 2003 $ 1,500,000
Two Fiscal Quarters Ending Amount
-------------------------- ------
December 31, 2003 $ 2,500,000
Three Fiscal Quarters Ending Amount
---------------------------- ------
March 31, 2004 $ 3,500,000
Four Fiscal Quarters Ending Amount
--------------------------- ------
June 30, 2004 $ 3,500,000
September 30, 2004 $ 3,900,000
December 31, 2004 $ 4,250,000
11
March 31, 2005 $ 4,425,000
June 30, 2005 $ 4,650,000
September 30, 2005 $ 4,875,000
December 31, 2005 $ 5,100,000
March 31, 2006 $ 5,400,000
June 30, 2006 $ 5,600,000
September 30, 2006 $ 5,800,000
December 31, 2006 $ 6,000,000
March 31, 2007 $ 6,100,000
June 30, 2007 $ 6,200,000;
provided, however, that there shall be excluded from the
foregoing limitation Capital Expenditures made by Subsidiaries
that are Designated Assets on Plan Effectiveness.
2.13 A new Section 7.4 is added to the Credit Agreement at the end of
Article VII, stating as follows:
7.4 Fixed Charge Coverage Ratio. As of the end of each fiscal
quarter, the Borrower will maintain a Fixed Charge Coverage
Ratio not less than the ratios set forth in the table below.
The Fixed Charge Coverage Ratio will be calculated on a
quarterly basis for the four consecutive fiscal quarters then
most recently ended (provided that if there are fewer than
four full consecutive fiscal quarters beginning with the
fiscal quarter commencing July 1, 2003 and ending with the
fiscal quarter most recently ended, then the Fixed Charge
Coverage Ratio will be calculated for such fewer number of
consecutive fiscal quarters).
Fiscal Quarter Ending Ratio
--------------------- -----
September 30, 2003 1.22
Two Fiscal Quarters Ending Ratio
-------------------------- -----
December 31, 2003 1.35
Three Fiscal Quarters Ending Ratio
---------------------------- -----
March 31, 2004 1.49
Four Fiscal Quarters Ending Ratio
--------------------------- -----
June 30, 2004 2.02
September 30, 2004 2.78
December 31, 2004 3.40
March 31, 2005 4.14
June 30, 2005 5.19
September 30, 2005 5.68
December 31, 2005 6.56
March 31, 2006 7.08
June 30, 2006 7.56
September 30, 2006 8.06
12
December 31, 2006 8.61
March 31, 2007 9.26
June 30, 2007 9.91
2.14 Section 9.1(c) of the Credit Agreement is restated in its entirety
as follows:
(c) The Borrower shall fail to observe, perform or comply with
any condition, covenant or agreement contained in any of
Sections 6.2(e), 6.3(i), 6.8 or in Article VII or Article
VIII; provided, however, that with respect to any failure by
the Borrower to satisfy the Consolidated EBITDA financial
covenant set forth in Section 7.1 for any month, if the
shortfall in actual Consolidated EBITDA as of the end of such
month is greater than $1,000,000, then an immediate Event of
Default shall exist, and if the shortfall in actual
Consolidated EBITDA as of the end of such month is equal to or
less than $1,000,000, then an Event of Default shall occur
only if, at the end of the next succeeding month, the Borrower
remains out of compliance with the Consolidated EBITDA
financial covenant.
2.15 The following sentence is inserted at the end of Section 11.12 of
the Credit Agreement:
Notwithstanding anything herein to the contrary, confidential
information shall not include, and each Lender (and each
employee, representative or other agent of any Lender) may
disclose to any and all Persons, without limitation of any
kind, the "tax treatment" and "tax structure" (in each case,
within the meaning of Treasury Regulation Section 1.6011-4) of
the transactions contemplated hereby and all materials of any
kind (including opinions or other tax analyses) that are or
have been provided to such Lender relating to such tax
treatment or tax structure; provided that, with respect to any
document or similar item that in either case contains
information concerning such tax treatment or tax structure of
the transactions contemplated hereby as well as other
information, this sentence shall only apply to such portions
of the document or similar item that relate to such tax
treatment or tax structure.
ARTICLE 3.
REPRESENTATIONS
Each Borrower represents and warrants to the Agent and the Lenders
that:
3.1 The execution, delivery and performance by it of this Amendment are
within its powers, have been duly authorized by all necessary action and are not
in contravention with any law, rule or regulation, or any judgment, decree,
writ, injunction, order or award of any arbitrator, court or governmental
authority, of the terms of its Articles of Incorporation or By-laws, or any
contract or undertaking to which it is a party or by which it or its property is
or may be bound.
3.2 This Amendment is its legal, valid and binding obligation,
enforceable against it in accordance with the terms hereof.
13
3.3 No consent, approval or authorization of or declaration,
registration or filing with any governmental authority or any nongovernmental
person or entity, including, without limitation, any of its creditors or
stockholders, is required on its part in connection with the execution, delivery
and performance of this Amendment or as a condition to the legality, validity or
enforceability of this Amendment.
3.4 After giving effect to the amendments herein contained, the
representations and warranties contained in Article V of the Credit Agreement
are true on and as of the date hereof with the same force and effect as if made
on and as of the date hereof.
ARTICLE 4.
ADDITIONAL COVENANTS OF THE COMPANY
The Company shall:
4.1 Promptly perform and observe, and cause each other Borrower and
each Guarantor to perform and observe, its respective obligations set forth in
this Amendment.
4.2 Cause each of the Guarantors to execute the Consent and Agreement
at the end of this Amendment.
4.3 Promptly deliver to the Lenders such information as has previously
been requested in writing by the Lenders, the Agent or the Agent's financial
consultant.
4.4 Promptly execute and deliver, and cause each other Borrower and
each Guarantor to execute and deliver, such other documents as the Agent or the
Lenders may reasonably request.
4.5 With respect to any sums required to be paid under the terms of
this Amendment to the Agent or the Lenders prior to the date of execution
hereof, pay such sums immediately upon execution of this Amendment.
ARTICLE 5.
MISCELLANEOUS.
5.1 Cross References. References in the Credit Agreement or in any
note, certificate, instrument or other document to the "Credit Agreement" shall
be deemed to be references to the Credit Agreement as amended hereby and as
further amended from time to time.
5.2 Closing Fee. The Borrower shall pay to the Agent, for the ratable
benefit of the Lenders, a closing fee in the amount of $150,000, upon execution
of this Amendment.
5.3 Expenses and Costs. The Borrower agrees to pay and to save the
Agent and the Lenders harmless for the payment of all reasonable and documented
fees, out-of-pocket disbursements, and other costs and expenses incurred by or
on behalf of the Agent or any Lender arising in any way in connection with this
Amendment, or any other document relating to indebtedness described in the
recitals to this Amendment, including the reasonable and documented fees and
expenses of Xxxxxxxxx Xxxxxx PLLC, counsel to the Agent, and AlixPartners, LLC,
consultant to the Agent, and specifically including, without limitation, (a) the
cost of any financial audit or inquiry conducted by the Agent, any Lender or
their
14
consultants, (b) the fees and expenses of counsel for the Agent or any Lender
for the work performed as a result of the Borrower's proposed restructuring or
financial problems, and for the preparation, examination and approval of this
Amendment or any documents in connection with this Amendment, (c) for the
payment of all reasonable and documented fees and out-of-pocket disbursements
incurred by the Agent or any Lender, including reasonable attorneys' fees, in
any way arising from or in connection with any action taken by the Agent or any
Lender to monitor, advise, enforce or collect the obligations described in the
recitals hereto or to enforce any obligations of the Borrower or any Guarantor
under this Amendment or the other documents referred to herein, including any
actions to lift the automatic stay or to otherwise in any way participate in any
bankruptcy, reorganization or insolvency proceeding of any Borrower or Guarantor
or in any trial or appellate proceedings, and (d) any reasonable and documented
expenses or fees (including reasonable attorneys' fees) incurred in relation to
or in defense of any litigation instituted by the Borrower, any Guarantor or any
third party against the Agent or any Lender arising from or relating to the
obligations described in the recitals hereto or this Amendment, including any
so-called "lender liability" action. All of these expenses and fees (including
reasonable attorneys' fees) shall be part of the obligations and indebtedness
owing under the Credit Agreement, and shall be secured by all of the collateral
described in the Security Documents. In the event the Borrower fail to pay any
such fees, expenses and costs within five (5) days of being invoiced therefor,
the Agent or the Lenders, as the case may be, shall be permitted to charge the
accounts of the Borrower for such fees, expenses and costs, without prejudice to
any other rights or remedies of the Agent or the Lenders. The rights and
remedies of the Agent and the Lenders contained in this paragraph shall be in
addition to, and not in lieu of, the rights and remedies contained in the Credit
Agreement, the Security Documents and as otherwise provided by law.
5.4 No Course of Dealing; Review of the Borrower's Business Plan. The
Borrower and the Guarantors acknowledge and agree that notwithstanding any
course of dealing between the Borrower and the Lenders prior to the date hereof,
the Lenders shall have no obligation to make Loans to the Borrower outside of
the strict conditions and requirements of the Credit Agreement (as modified
herein) nor to refrain from exercising available remedies except as expressly
set forth herein. The Agent and the Lenders shall be under no obligation
whatsoever to consent to the Borrower's business plan as the same may be revised
from time to time, and instead the Agent's and the Lenders' consideration of the
Borrower's business plan shall be undertaken by the Agent and the Lenders in
their sole, absolute and unreviewable discretion.
5.5 Reservation of Rights; No Waiver by Conduct. Nothing herein shall
be deemed to constitute a waiver of any existing Defaults or Events of Default,
or a waiver of any new Defaults or Events of Default or of any other provision
of any of the documents referred to herein, and nothing herein shall in any way
prejudice the rights and remedies of the Agent and/or the Lenders under any of
the documents referred to herein or applicable law. Further, the Agent and the
Lenders shall have the right to waive any conditions set forth in this Amendment
and/or such documents, in their sole discretion, and any such waiver shall not
prejudice, waive or reduce any other right or remedy which the Agent or the
Lenders may have against the Borrower or any Guarantor. No waiver of the rights
or any condition of this Amendment and/or any other document by the Agent or the
Lenders shall be effective unless the same shall be contained in a writing
signed by authorized representatives of the Agent or the Lenders, as the case
may be, in the manner required by Section 11.5 of the Credit Agreement. No
course of dealing on the part of the Agent or the Lenders, nor any delay or
failure on the part of the Agent or the Lenders in exercising any right, power
or privilege hereunder shall operate as a waiver of such right, power or
privilege, nor shall any single or partial exercise thereof preclude any further
exercise thereof or the exercise of any other right, power or privilege.
5.6 Release. The Borrower and each Guarantor represents and warrants
that it is not aware of any claims or causes of action against the Agent or any
Lender, any participant lender or any of their successors or assigns, and that
it has no defenses, offsets or counterclaims with respect to the indebtedness
15
owed by the Borrower to the Lenders. Notwithstanding this representation and as
further consideration for the agreements and understandings herein, the Borrower
and Guarantors, on behalf of themselves and their respective employees, agents,
executors, heirs, successors and assigns, hereby release the Agent and the
Lenders, their respective predecessors, officers, directors, employees, agents,
attorneys, affiliates, subsidiaries, successors and assigns, from any liability,
claim, right or cause of action which now exists or hereafter arises as a result
of acts, omissions or events occurring on or prior to the date hereof, whether
known or unknown, including but not limited to claims arising from or in any way
related to the Credit Agreement or the business relationship among the Borrower,
the Guarantors, the Agent and the Lenders.
5.7 Performance by Lenders and Agent; No Agency; Borrower Remains in
Control. The Borrower and each Guarantor acknowledges and agrees that the Agent
and the Lenders have fully performed all of their obligations under the Credit
Agreement and all documents executed in connection with the Credit Agreement,
and that all actions taken by the Agent and the Lenders are reasonable and
appropriate under the circumstances and within their rights under the Credit
Agreement and all other documents executed in connection therewith and otherwise
available. The actions of the Agent and the Lenders taken pursuant to this
Amendment and the documents referred to herein are in furtherance of the efforts
of the Agent and the Lenders as secured lenders seeking to collect the
obligations owed to the Lenders. Nothing contained in this Amendment shall be
deemed to create a partnership, joint venture or agency relationship of any
nature between the Borrower and the Lenders or the Agent. The Borrower, the
Guarantors, the Agent and the Lenders agree that notwithstanding the provisions
of this Amendment, each Borrower remains in control of its business operations
and determines the business plans (including employment, management and
operating directions) for its business.
5.8 Entire Agreement; Severability. The Credit Agreement, as amended by
this Amendment, constitutes the entire understanding of the parties with respect
to the subject matter hereof and may only be modified or amended by a writing
signed by the party to be charged. If any provision of this Amendment is in
conflict with any applicable statute or rule of law or otherwise unenforceable,
such offending provision shall be null and void only to the extent of such
conflict or unenforceability, but shall be deemed separate from and shall not
invalidate any other provision of this Amendment.
5.9 No Other Promises or Inducements. There are no promises or
inducements which have been made to any signatory hereto to cause such signatory
to enter into this Amendment other than those which are set forth in this
Amendment. The Borrower and each Guarantor acknowledges that its authorized
officers have thoroughly read and reviewed the terms and provisions of this
Amendment and are familiar with same, that the terms and provisions contained
herein are clearly understood by such Borrower or Guarantor and have been fully
and unconditionally consented to by such Borrower or Guarantor, and that such
Borrower or Guarantor has had full benefit and advice of counsel of its own
selection, or the opportunity to obtain the benefit and advice of counsel of its
own selection, in regard to understanding the terms, meaning and effect of this
Amendment, and that this Amendment has been entered into by the Borrower and
Guarantor freely, voluntarily, with full knowledge, and without duress, and that
in executing this Amendment, the Borrower and Guarantors are relying on no other
representations, either written or oral, express or implied, made by any other
party hereto, and that the consideration hereunder received by the Borrower has
been actual and adequate.
5.10 Ratification. The Borrower agrees that the Credit Agreement, the
Security Documents and all other documents and agreements executed by the
Borrower or the Guarantors in connection with the Credit Agreement in favor of
the Agent or any Lender are ratified and confirmed and shall remain in full
force and effect as amended hereby, and that there is no set off, counterclaim
or defense with respect to any of the foregoing.
16
5.11 Counterparts; Effectiveness. This Amendment may be executed in any
number of counterparts with the same effect as if the signatures thereto and
hereto were upon the same instrument. Facsimile copies of signatures shall be
treated as original signatures for all purposes under this Amendment. This
Amendment shall become effective as of June 30, 2003 when each of the following
has been satisfied:
(a) Receipt by the Agent of counterparts of this Amendment duly
executed by the Borrower and each Lender, and counterparts of the Consent and
Agreement annexed hereto duly executed by each Guarantor.
(b) With respect to any interest, fees or other charges previously
required to be paid by the Borrower under the terms of the Credit Agreement,
receipt by the Agent of full payment of such interest, fees or other charges.
(c) Copies, certified by the Secretary or Assistant Secretary of the
Borrower and Guarantor, of its Board of Directors' resolutions and of
resolutions or actions of any other body authorizing the execution of this
Amendment and all Security Documents to be executed in connection herewith to
which the Borrower or Guarantor, as applicable, is a party.
(d) An incumbency certificate, executed by the Secretary or Assistant
Secretary of the Borrower and each Guarantor, which shall identify by name and
title and bear the signatures of the Authorized Officers and any other officers
of the Borrower and each Guarantor authorized to sign this Amendment and all
Security Documents to be executed in connection herewith to which the Borrower
and each Guarantor is a party, upon which certificate the Agent and the Lenders
shall be entitled to rely until informed of any change in writing by the
Borrower and such Guarantor.
(e) A written opinion of the Borrower's and Guarantors' counsel,
addressed to the Agent and Lenders and in form and substance satisfactory to the
Agent.
(f) Executed copies of all Security Documents and other documents in
connection therewith requested by the Agent, together with all necessary
consents and other related documents in connection therewith, insurance
certificates, financing statements, environmental reports, opinions of foreign
counsel, original stock certificates and related transfer powers, UCC, judgment
and other lien and encumbrance searches, title searches and insurance, surveys
and other documents required by the Agent.
(g) Delivery of such other agreements and documents, and the
satisfaction of such other conditions as may be reasonably required by the
Agent, and such evidence of the perfection and priority of all liens and
security interests as required by the Agent, all of which shall be satisfactory
to the Agent and its counsel to the extent required by the Agent.
5.12 Other Documents. The Borrower and each Guarantor agrees to execute
and deliver any and all documents reasonably deemed necessary or appropriate by
the Agent or the Lenders to carry out the intent of and/or to implement this
Amendment.
5.13 Governing Law. This Amendment shall be governed by and construed
in accordance with the laws of the State of Michigan without giving effect to
choice of law principles of such State.
5.14 Miscellaneous. This Amendment is made for the sole benefit and
protection of the Borrower, the Agent and the Lenders and their respective
successors and permitted assigns (provided that the Borrower shall not be
permitted, absent the prior written consent of all of the Lenders, to assign any
of its rights or obligations under this Amendment). No other person or entity
shall have any rights
17
whatsoever under this Amendment. Time shall be of the strictest essence in the
performance of each and every one of the Borrower's obligations hereunder.
5.15 Construction. This Amendment shall not be construed more strictly
against the Lenders or the Agent merely by virtue of the fact that the same has
been prepared by the Lenders and the Agent or their counsel, it being recognized
that the Borrower, the Agent and the Lenders have contributed substantially and
materially to the preparation of this Amendment, and each of the parties hereto
waives any claim contesting the existence and the adequacy of the consideration
given by any of the other parties hereto in entering into this Amendment.
5.16 Headings. The headings of the various paragraphs in this Amendment
are for convenience of reference only and shall not be deemed to modify or
restrict the terms or provisions hereof.
5.17 Waiver of Jury Trial; Consent to Jurisdiction. (a) The Borrower,
each Guarantor, each Lender and the Agent hereby specifically ratifies and
confirms the waiver of jury trial set forth in Section 11.16 of the Credit
Agreement. Without limiting the generality of the preceding ratification and
confirmation, the Borrower, each Guarantor, each Lender and the Agent, after
consulting or having had the opportunity to consult with counsel, knowingly,
voluntarily and intentionally waives any right any of them may have to a trial
by jury in any litigation or proceeding based upon or arising out of this
Amendment or any related instrument or agreement or any of the transactions
contemplated by this Amendment or any conduct, dealing, statements (whether oral
or written) or actions of any of them. None of the Borrower, the Guarantors, the
Lenders or the Agent shall seek to consolidate, by counterclaim or otherwise,
any such action in which a jury trial has been waived with any other action in
which a jury trial cannot be or has not been waived. These provisions shall not
be deemed to have been modified in any respect or relinquished by any party
hereto except by a written instrument executed by such party.
(b) The Borrower and each Guarantor hereby specifically ratifies and
confirms the consent to jurisdiction set forth in Section 11.3 of the Credit
Agreement.
[signatures begin on next page]
18
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed and delivered as of the date and year first above written.
LASON, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------------
Title: Chief Financial Officer
-----------------------------------
REVOLVING CREDIT COMMITMENT: BANK ONE, NA, AS AGENT AND AS A LENDER
$2,302,100 By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------
Title: Commercial Banking Officer
-----------------------------------
REVOLVING CREDIT COMMITMENT: COMERICA BANK
$934,200 By: /s/ Xxxxxxx X. Xxxx
--------------------------------------
Title: Vice President
-----------------------------------
REVOLVING CREDIT COMMITMENT: CREDIT LYONNAIS
$934,200 By: /s/ Xxxx-Xxxxxxx van Essche
--------------------------------------
Title: Vice President
-----------------------------------
REVOLVING CREDIT COMMITMENT: NATIONAL CITY BANK
$747,400 By: /s/ Xxxx X. XxXxxxxxxxx
--------------------------------------
Title: Senior Vice President
-----------------------------------
19
REVOLVING CREDIT COMMITMENT: ABN AMRO BANK N.V.
$747,400 By: /s/ Xxxxxx X. Xxxxxxxx
--------------------------------------
Title: Group Senior Vice President
-----------------------------------
And By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------
Title: Senior Vice President
-----------------------------------
REVOLVING CREDIT COMMITMENT: STANDARD FEDERAL BANK
$597,900 By: /s/ Xxxx X. Xxxxxxx
--------------------------------------
Title: First Vice President
-----------------------------------
REVOLVING CREDIT COMMITMENT: UNION BANK OF CALIFORNIA, N. A.
$597,900 By: /s/ Xxxxxx X. Xxxx
--------------------------------------
Title: Vice President
-----------------------------------
REVOLVING CREDIT COMMITMENT: MIZUHO CORPORATE BANK, LTD.
$597,900 By: /s/ Xxxx X. Xxxxxxx
--------------------------------------
Title: Senior Vice President
-----------------------------------
REVOLVING CREDIT COMMITMENT: XX XXXXXX CHASE BANK
$448,400 By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------------
Title: Vice President
-----------------------------------
REVOLVING CREDIT COMMITMENT: ARK-CLO 2000-1, LIMITED
BY: PATRIARCH PARTNERS, LLC
$1,195,800 ITS COLLATERAL MANAGER
By: /s/ Xxxx Xxxxxx
--------------------------------------
Title: Manager
-----------------------------------
20
REVOLVING CREDIT COMMITMENT: GE CAPITAL CFE, INC.
$448,400 By: /s/ Xxxxxxx X. Xxxxx
--------------------------------------
Title: Duly Authorized Signatory
-----------------------------------
REVOLVING CREDIT COMMITMENT: BARCLAYS BANK PLC
NEW YORK BRANCH
$448,400
By: /s/ Xxxx Xxxxxx
--------------------------------------
Title: Director
-----------------------------------
21
CONSENT AND AGREEMENT OF GUARANTORS
As of the date and year first above written, each of the undersigned
hereby:
a) fully consents to the terms and provisions of the above Amendment
and the consummation of the transactions contemplated thereby and agrees to all
terms and provisions of the above Amendment applicable to it;
b) agrees that each Guaranty, Security Document and all other
agreements executed by any of the undersigned in connection with the Credit
Agreement or otherwise in favor of the Agent or the Lenders (collectively, the
"Guarantor Documents") are hereby ratified and confirmed and shall remain in
full force and effect, and each of the undersigned acknowledges that it has no
setoff, counterclaim or defense with respect to any Guarantor Document; and
c) acknowledges that its consent and agreement hereto is a condition to
the Lenders' obligation under this Amendment and it is in its interest and to
its financial benefit to execute this consent and agreement.
LASON SYSTEMS, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------------
Its: Chief Financial Officer
----------------------------------
LASON INTERNATIONAL, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------------
Its: Chief Financial Officer
----------------------------------
22
