Exhibit 10.3
FIRST AMENDMENT TO
LOAN AND SECURITY AGREEMENT
THIS FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT (this "Amendment"),
dated August 27, 2002, is entered into among SALESLINK CORPORATION, a Delaware
corporation, INSOLUTIONS INCORPORATED, a Delaware corporation, ON-DEMAND
SOLUTIONS, INC., a Massachusetts corporation, PACIFIC DIRECT MARKETING CORP., a
California corporation, SALESLINK MEXICO HOLDING CORP., a Delaware corporation
(each herein called a "Borrower" and collectively, the "Borrowers"), the lenders
party hereto (herein collectively called the "Lenders" and each individually
called a "Lender") and LASALLE BANK NATIONAL ASSOCIATION, as a Lender and as
Agent for the Lenders.
W I T N E S S E T H:
WHEREAS, Borrowers and Lenders are parties to a Loan and Security
Agreement, dated October 30, 2001 (the "Existing Loan Agreement" and as the
Existing Loan Agreement is amended and modified by this Amendment, the "Amended
Loan Agreement"); and
WHEREAS, Borrowers have requested that Lenders amend the Existing Loan
Agreement in certain respects and the Lenders are willing to amend the Existing
Loan Agreement in certain respects as provided herein.
NOW, THEREFORE, in consideration of the premises and mutual agreements
herein contained, the parties hereto agree as follows:
SECTION 1
DEFINED TERMS
1.1 Definitions. When used in this Agreement, the following terms
shall have the following meanings:
"SL Supply" shall mean SL Supply Chain Services International
Corp., a Delaware corporation.
"SL Supply Reimbursement Agreement" shall mean that certain
Reimbursement Agreement dated as of August 27, 2002 between SalesLink
and SL Supply.
"SL Supply Collateral Assignment" shall mean that certain
Collateral Assignment of Reimbursement Agreement dated as of August 27,
2002 by SalesLink in favor of Agent.
1.2 Other Definitions. Terms defined in the Existing Loan
Agreement and not otherwise defined herein are used herein as therein defined.
SECTION 2
AMENDMENTS TO EXISTING LOAN AGREEMENT
2.1 Addition of Definition. Section 1.1 of the Existing Loan
Agreement is hereby amended by adding the following definition, in proper
alphabetical order:
"SL Supply" shall mean SL Supply Chain Services International
Corp., a Delaware corporation.
2.2 Amendment to Letter of Credit Sublimit. The definition of
"Letter of Credit Sublimit" in Section 1.1 of the Existing Loan Agreement is
hereby amended by deleting the reference to the amount "$4,000,000" and
substituting therefor "$7,500,000."
2.3 Amendment to Letter of Credit Issuance Restrictions. Section
2.13(A)(ii) of the Existing Loan Agreement is hereby amended by deleting the
section in its entirety and substituting therefor the following:
"In no event shall: (a) the aggregate amount of the Letter of
Credit Obligations at any time exceed the Letter of Credit Sublimit;
(b) the sum at any time of (1) the aggregate amount of Letter of Credit
Obligations and (2) the aggregate principal balance of all outstanding
Loans issued pursuant to the Revolving Credit Facility exceed the
lesser of the then current Availability and the Borrowing Base; (c) the
expiration date of any Letter of Credit (including, without limitation,
Letters of Credit issued with an automatic "evergreen" provision
providing for renewal absent advance notice by Borrowers or the Issuing
Lender), or the date for payment of any draft presented thereunder and
accepted by the Issuing Lender, be later than the Letter of Credit
Expiry Date; provided, however, that the expiration date of a Letter of
Credit issued by Borrowers at the request or on the behalf of SL Supply
shall not have an expiration date later than one year after its
issuance and shall not include an automatic or "evergreen" provision
providing for renewal of such Letter of Credit."
2.4 Amendment to Use of Proceeds Covenant. Section 7.2(H) of the
Existing Loan Agreement is hereby amended by deleting the section in its
entirety and substituting therefore the following:
"Use of Proceeds. Use proceeds of the Loans as follows: (a)
the proceeds of Loans under the Revolving Credit Facility shall be used
to refinance certain existing debt, to finance working capital of
Borrowers and their Subsidiaries and to issue Letters of Credit to
vendors of SL Supply but in no event may proceeds of any Loan made
under the Revolving Credit Facility be (i) used to finance operations
of Borrowers or any of their Subsidiaries outside of the United States
or (ii) invested, lent or otherwise contributed to any Subsidiary of
any of the Borrowers, including, without limitation SalesLink de
Mexico, S. de X.X. de
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C.V., a Mexico corporation, in either case until such time as Agent
shall have received evidence satisfactory to it, in its reasonable
discretion, of the creation, perfection and the relative priority of a
security interest in the Property of such Borrower or Subsidiary
located outside of the United States including, such Borrower's or
Subsidiary's Inventory and Accounts located outside of the United
States together with an opinion of counsel to that effect acceptable to
Agent in its reasonable discretion and (b) the proceeds of Term Loan
shall be used to refinance certain existing debt and to recover Capital
Expenditures made by Borrowers; but in no event may proceeds of any
Loan made under the Term Loan be used to finance operations of
Borrowers or any Subsidiaries outside of the United States or invested,
lent or otherwise contributed to any Subsidiary of any of the
Borrowers, including, without limitation SalesLink de Mexico, S. de
X.X. de C.V., a Mexico corporation. In no event may proceeds of any
Loan made either under the Revolving Credit Facility or the Term Loan
be invested, lent or otherwise contributed to Twin Solutions LLC; and"
2.4 Amendment to Negative Covenant Regarding Loans. Section 7.3(D)
of the Existing Loan Agreement is hereby amended by deleting the section in its
entirety and substituting therefore the following:
"Loans. Make any loans or other advances of money (other than
salary) to any other Borrower, or any Affiliate, officers, directors,
employees or agents of Affiliates or such Borrower or to any other
Person, except for (i) such loans or advances to employees in the
ordinary course of business consistent with past practice, loans or
advances to any other Borrower that are subordinated to the Liabilities
on terms satisfactory to Agent and (ii) the issuance of Letters of
Credit to the vendors of SL Supply;"
SECTION 3
REPRESENTATIONS AND WARRANTIES
Each Borrower hereby jointly and severally represents and warrants to
Lenders that:
3.1 Due Authorization, etc. The execution and delivery of this
Amendment, the SL Supply Reimbursement Agreement and the SL Supply Collateral
Assignment and the performance of such Borrower's obligations under the Amended
Loan Agreement are duly authorized by all necessary corporate action, do not
require any filing or registration with or approval or consent of any
governmental agency or authority, do not and will not conflict with, result in
any violation of or constitute any default under any provision of its articles
of incorporation or by-laws of that of any of its Subsidiaries or any material
agreement or other document binding upon or applicable to it or any of its
Subsidiaries (or any of their respective properties) or any material law or
governmental regulation or court decree or order applicable to it or any of its
Subsidiaries, and will not result in or require the creation or imposition of
any Lien in any of its properties or the properties of any of its Subsidiaries
pursuant to the provisions of any agreement binding upon or applicable to it or
any of its Subsidiaries.
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3.2 Validity. This Amendment, the SL Supply Reimbursement
Agreement and the SL Supply Collateral Assignment have been duly executed and
delivered by such Borrower and by SL Supply and, together with the Amended Loan
Agreement, are the legal, valid and binding obligations of such Borrower and SL
Supply to the extent such Borrower is a party thereto, enforceable against such
Borrower in accordance with their respective terms subject, as to enforcement
only, to bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforceability of the rights of creditors generally.
3.3 Representations and Warranties. The representations and
warranties contained in Section 6 of the Existing Loan Agreement are true and
correct on the date of this Amendment, except to the extent (a) that such
representations and warranties solely relate to an earlier date or (b) changed
by circumstances permitted by the Amended Loan Agreement.
SECTION 4
CONDITIONS PRECEDENT
The amendment to the Existing Loan Agreement set forth in Section 2 of
this Amendment shall become effective upon satisfaction of all of the following
conditions precedent:
4.1 Receipt of Documents. Agent shall have received all of the
following, each in form and substance satisfactory to Agent:
(a) Amendment. A counterpart original of this Amendment duly
executed by Borrowers.
(b) Secretary's Certificate. A certificate of the secretary
or an assistant secretary of each Borrower dated the date of the
execution of this Amendment or such other date as shall be acceptable
to Agent, substantially in the form of Exhibit A to this Amendment.
(c) Certificate. A certificate dated the date of each
Borrower's execution of this Amendment and signed by the President or a
Vice President of such Borrower, substantially in the form of Exhibit B
to this Amendment.
(d) SL Supply Reimbursement Agreement. The SL Supply
Reimbursement Agreement in the form of Exhibit C to this Amendment,
duly executed by the parties thereto.
(e) SL Supply Collateral Assignment. The SL Supply
Collateral Assignment in the form of Exhibit D to this Amendment, duly
executed by the parties thereto.
(f) Other. Such other documents as Agent may reasonably
request.
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4.2 Other Conditions. No Event of Default or Default shall have
occurred and be continuing.
SECTION 5
MISCELLANEOUS
5.1 Warranties and Absence of Defaults. In order to induce Lenders
to enter into this Agreement, each Borrower jointly and severally hereby
warrants to Lenders, as of the date of the actual execution of this Amendment,
(a) no Event of Default or Default has occurred which is continuing as of such
date and (b) the representations and warranties in Section 3 of this Amendment
are true and correct.
5.2 Documents Remain in Effect. Except as amended and modified by
this Amendment, the Existing Loan Agreement and the other documents executed
pursuant to the Existing Loan Agreement remain in full force and effect and each
Borrower hereby ratifies, adopts and confirms its representations, warranties,
agreements and covenants contained in, and obligations and liabilities under,
the Existing Loan Agreement and the other documents executed pursuant to the
Existing Loan Agreement.
5.3 Reference to Loan Agreement. On and after the effective date
of this Amendment, each reference in the Amended Loan Agreement to "this
Agreement," "hereunder," "hereof," "herein" or words of like import, and each
reference to the "Loan Agreement" in any Note and in any Loan Documents, or
other agreements, documents or other instruments executed and delivered pursuant
to the Amended Loan Agreement, shall mean and be a reference to the Amended Loan
Agreement.
5.4 Headings. Headings used in this Amendment are for convenience
of reference only, and shall not affect the construction of this Amendment.
5.5 Counterparts. This Amendment may be executed in any number of
counterparts, and by the parties hereto on the same or separate counterparts,
and each such counterpart, when executed and delivered, shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same Amendment.
5.6 Expenses. Borrowers agree to pay on demand all costs and
expenses of Lenders (including reasonable fees, charges and disbursements of
Lenders' attorneys) in connection with the preparation, negotiation, execution,
delivery and administration of this Amendment and all other instruments or
documents provided for herein or delivered or to be delivered hereunder or in
connection herewith. In addition, Borrowers agree to pay, and save Lenders
harmless from all liability for, any stamp or other taxes which may be payable
in connection with the execution or delivery of this Amendment, the borrowings
under the Amended Loan Agreement, and the execution and delivery of any
instruments or documents provided for herein or delivered or to be delivered
hereunder or in connection herewith. All obligations provided in this Section
5.6 shall survive any termination of this Amendment or the Amended Loan
Agreement.
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5.7 Governing Law. This Amendment shall be a contract made under
and governed by the internal laws of the State of Illinois. Wherever possible,
each provision of this Amendment shall be interpreted in such manner as to be
effective and valid under applicable laws, but if any provision of this
Amendment shall be prohibited by or invalid under such laws, such provisions
shall be ineffective only to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining provisions
of this Amendment.
5.8 Successors. This Amendment shall be binding upon Borrowers,
Lenders and their respective successors and assigns, and shall inure to the
benefit of Borrowers, Lenders and the successors and assigns of Lenders.
[signature page attached]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized and delivered at
Chicago, Illinois as of the date first above written.
BORROWERS:
---------
SALESLINK CORPORATION,
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxxx, Xx.
-------------------------
Name: Xxxxx X. Xxxxxxx, Xx.
Title: President and CEO
INSOLUTIONS INCORPORATED,
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxxx, Xx.
-------------------------
Name: Xxxxx X. Xxxxxxx, Xx.
Title: President
ON-DEMAND SOLUTIONS, INC.,
a Massachusetts corporation
By: /s/ Xxxxx X. Xxxxxxx, Xx.
-------------------------
Name: Xxxxx X. Xxxxxxx, Xx.
Title: President
PACIFIC DIRECT MARKETING CORP.,
a California corporation
By: /s/ Xxxxx X. Xxxxxxx, Xx.
-------------------------
Name: Xxxxx X. Xxxxxxx, Xx.
Title: President
SALESLINK MEXICO HOLDING CORP.,
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxxx, Xx.
-------------------------
Name: Xxxxx X. Xxxxxxx, Xx.
Title: President
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LENDERS:
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LASALLE BANK NATIONAL ASSOCIATION,
as a Lender and as Agent
By: /s/ Xxxxxx X. Xxxxx
-------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
CITIZEN'S BANK OF MASSACHUSETTS,
as a Lender
By: /s/ Xxxxx X. Xxxxxx
-------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
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