EXHIBIT 10.1
EXECUTION COPY
SEVENTH AMENDMENT TO CREDIT AGREEMENT
THIS SEVENTH AMENDMENT TO CREDIT AGREEMENT (this "Amendment"), dated as
of November 1, 2002 (the "Seventh Amendment Effective Date"), is by and among
CORRPRO COMPANIES, INC., an Ohio corporation (the "Company"), CSI COATING
SYSTEMS INC. (the "Canadian Borrower" and, together with the Company, the
"Borrowers"), the lenders set forth on the signature pages hereof (collectively,
the "Lenders") and BANK ONE, NA, with its main office in Chicago, Illinois, and
successor by merger to Bank One, Michigan, as agent for the Lenders (in such
capacity, the "Agent").
RECITALS
A. The Borrowers, the Agent and the Lenders are parties to an Amended
and Restated Credit Agreement dated as of June 9, 2000 (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 Borrowers.
B. The Credit Agreement was amended by a First Amendment to Credit
Agreement dated as of October 19, 2000 (the "First Amendment") among the
Borrowers, the Lenders and the Agent, pursuant to which the parties agreed to
modify certain terms and conditions of the extension of credit to the Borrowers.
C. Prior to May 29, 2001, certain Defaults occurred under the Credit
Agreement due to breaches of Sections 6.19.1 and 6.19.2 of the Credit Agreement
as of the fiscal quarter ending March 31, 2001 (the "May 2001 Defaults"). Based
upon the request of the Borrowers and the Guarantors, the Agent and the Lenders
temporarily waived the May 2001 Defaults subject to the terms and conditions set
forth in a certain letter dated May 29, 2001 (the "Waiver Letter").
D. Prior to the expiration of the temporary waiver set forth in the
Waiver Letter, the Borrowers requested, notwithstanding the occurrence of the
May 2001 Defaults, that the Agent and the Lenders (i) continue to advance
Revolving Credit Loans to the Borrowers under certain modified terms and
conditions of lending, (ii) extend the waiver of the May 2001 Defaults and (iii)
forbear from exercising remedies available under the Loan Documents or at law or
in equity, all in order to (a) permit the Borrowers to develop and implement a
business plan and financial strategy to improve their business operations and
financial condition and (b) permit the Borrowers to develop and implement a
potential financial restructuring plan and strategy that would address, inter
alia, repayment of the indebtedness owed to the Lenders. Pursuant to such
request, the Credit Agreement was further amended by a Second Amendment to
Credit Agreement dated as of June 29, 2001 (the "Second Amendment") among the
Borrowers, the Lenders and the Agent. The Second Amendment, among other things,
granted to the Borrowers a "Restructuring Period" during which the Borrowers
would be permitted to develop and implement their business improvement and
financial restructuring plan.
E. Prior to August 10, 2001, the Borrowers requested that the Agent and
the Lenders extend the Facility Termination Date and agree to certain other
modifications to the provisions of the Credit Agreement. Pursuant to such
request, the Credit Agreement was further amended by a Third Amendment to Credit
Agreement dated as of August 10, 2001 (the "Third Amendment") among the
Borrowers, the Lenders and the Agent.
F. Prior to November 12, 2001, the Borrowers requested that the Agent
and the Lenders further extend the Facility Termination Date, extend the
expiration date of the Restructuring Period and agree to certain other
modifications to the provisions of the Credit Agreement. Pursuant to such
request, the Credit Agreement was further amended by a Fourth Amendment to
Credit Agreement dated as of November 12, 2001 (the "Fourth Amendment") among
the Borrowers, the Lenders and the Agent.
G. Prior to February 11, 2002, the Borrowers requested that the Agent
and the Lenders further extend the Facility Termination Date, extend the
expiration date of the Restructuring Period (also referred to as the
"Improvement Period") and agree to certain other modifications to the provisions
of the Credit Agreement. Pursuant to such request, the Credit Agreement was
further amended by a Fifth Amendment to Credit Agreement dated as of February
11, 2002 (the "Fifth Amendment") among the Borrowers, the Lenders and the Agent.
H. Beginning in March, 2002 and continuing through August 15, 2002, the
Company informed the Lenders and the Agent that certain additional Events of
Default had occurred under the Credit Agreement as follows: (i) violation of the
financial covenants contained in Section 6.19 of the Credit Agreement and
Section 1.2.g of the Fifth Amendment, as of December 31, 2001 and thereafter,
(ii) violation of the provisions contained in Sections 7.5, 7.6 and 7.7 of the
Credit Agreement, as of March 22, 2002 and thereafter, (iii) violation of the
provisions contained in Section 1.4.c and 1.4.e of the Fifth Amendment, as of
March 22, 2002 and thereafter, (iv) violation of the financial reporting
covenants contained in Section 6.1 of the Credit Agreement, as of December 31,
2001 and thereafter, (v) violations under Section 1.2 of the Fifth Amendment as
a result of accounting irregularities at the Company's Australian subsidiary as
of March 31, 2002 and for any period for which the Company's restated financial
statements (which restatement was due to such accounting irregularities) would
have caused the Company to be in violation of financial covenants then in
effect, and (vi) violation of Section 6.7 of the Credit Agreement as a result of
securities law violations in connection with the accounting irregularities at
the Company's Australian subsidiary and the late filing of the Company's Form
10-K for the year ended March 31, 2002 (collectively the "March 2002 Defaults").
The May 2001 Defaults and the March 2002 Defaults are referred to collectively
as the "Existing Defaults".
I. Prior to August 15, 2002, the Borrowers requested that the Agent and
the Lenders further extend the Facility Termination Date, extend the expiration
date of the Improvement Period, waive the March 2002 Defaults and agree to
certain other modifications to the provisions of the Credit Agreement. Pursuant
to such request, the Credit Agreement was further amended by a Sixth Amendment
to Credit Agreement dated as of September 23, 2002 (the "Sixth Amendment") among
the Borrowers, the Lenders and the Agent.
J. The Credit Agreement (as modified by the First Amendment, the Second
Amendment, the Third Amendment, the Fourth Amendment, the Fifth Amendment and
the Sixth Amendment), all promissory notes executed by either Borrower in favor
of the Agent and/or the Lenders, and any and all of the Collateral Documents
executed by any Loan Party (including without limitation all Security
Agreements, Mortgages, Guaranties, pledges of stock and other instruments,
documents or agreements of any kind evidencing or securing the indebtedness of
either Borrower in favor of the Lenders) are sometimes referred to collectively
as the "Loan Documents."
K. The Improvement Period granted to Borrowers, as extended under the
Sixth Amendment, expired on October 31, 2002. Notwithstanding such expiration
and notwithstanding the occurrence and continuation of the Existing Defaults,
the parties mutually agreed that the Agent and the Lenders further extend the
expiration date of the Improvement Period. Additionally, the parties mutually
agreed that the Agent and the Lenders continue to permit the Borrowers to
develop and implement their business improvement and financial restructuring
plan under the terms and conditions set forth in this Amendment.
L. 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
the Borrowers or any Guarantor, the Agent and the Lenders are willing to amend
the terms of the Credit Agreement (including the Second Amendment, the Third
Amendment , the Fourth Amendment, the Fifth Amendment and the Sixth Amendment)
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.
PROVISIONS FOR IMPROVEMENT PERIOD
1.1 Affirmation of Recitals. The Borrowers and the Guarantors hereby
acknowledge and affirm the accuracy of the foregoing recitals.
1.2 Improvement Period Conditions. Section 1.3 of the Second Amendment
set forth certain "restructuring conditions" governing the Borrowers'
implementation of their business improvement and financial restructuring plan.
Such "restructuring conditions" were amended and restated in Section 1.2 of the
Third Amendment, Section 1.2 of the Fourth Amendment, Section 1.2 of the Fifth
Amendment and Section 1.2 of the Sixth Amendment, and are hereby further amended
and restated in their entirety as set forth below in this Section 1.2. Nothing
contained herein, however, shall be deemed to modify or retract the terms and
conditions that were applicable under the Second Amendment, the Third Amendment,
the Fourth Amendment, the Fifth Amendment and/or the Sixth Amendment during the
period from and including the Second Amendment Effective Date through and
including the date immediately preceding the Seventh Amendment Effective Date.
All actions performed by or on behalf of the Borrowers during such period in
furtherance of their obligations under the Second Amendment, the Third
Amendment, the Fourth Amendment, the Fifth Amendment and/or the Sixth Amendment
are hereby confirmed and ratified, and the Agent and the Lenders shall be
entitled to retain the full benefit of such performance. There shall be no
disgorgement, refund or rescission with respect to any payment made by or on
behalf of the Borrowers and received by the Agent or the Lenders pursuant to the
terms of the Second Amendment, the Third Amendment, the Fourth Amendment, the
Fifth Amendment and/or the Sixth Amendment. Except to the extent expressly
modified by the terms set forth below, each of the terms and conditions set
forth in the Second Amendment, the Third Amendment, the Fourth Amendment, the
Fifth Amendment and/or the Sixth Amendment is hereby confirmed and ratified and
shall remain in full force and effect as provided therein. From and after the
Seventh Amendment Effective Date, subject to strict compliance with the terms
and conditions set forth herein, the Lenders agree to forbear from enforcing
their rights and remedies based on the Existing Defaults while the Borrowers and
their consultants continue to develop and implement their plan for improvement
of the Borrowers' business and financial condition, provided that (i) the
Lenders' waiver of the Existing Defaults shall be solely in accordance with the
terms and conditions set forth in the Second Amendment, the Third Amendment, the
Fourth Amendment, the Fifth Amendment and the Sixth Amendment (as modified
herein) and (ii) such agreement to forbear shall not create a waiver of the
right of the Agent or the Lenders, upon the occurrence of a default hereunder or
a Default (other than the Existing Defaults) under the Loan Documents, to
enforce available rights and remedies at any time, in their sole discretion, in
accordance with the Credit Agreement (as previously modified and as modified
herein) and the other Loan Documents. Absent an earlier default hereunder or
Default (other than the Existing Defaults) under the Loan Documents, the period
during which the Lenders shall forbear is from the Second Amendment Effective
Date through January 31, 2003 (the "Improvement Period"). The Lenders'
forbearance shall be governed by and subject to the following terms and
conditions:
a. The Borrowers shall keep the Agent, the Lenders
and their consultants apprised of the Borrowers' business and
financial operations and of any material discussions and
negotiations (other than discussions or negotiations in the
ordinary course of the Borrowers' business) pertaining to
lessors, vendors, suppliers, customers, other creditors, joint
venture partners or potential purchasers of any business
segments or significant assets of any Borrowers. Reports on
such matters shall be provided periodically and not less
frequently than monthly.
b. Notwithstanding any prior practice, the Borrowers
shall strictly comply with the financial reporting
requirements under the Loan Documents, as modified herein. In
addition to the reporting requirements set forth in Section
6.1 of the Credit Agreement (as modified herein), (i) not
later than Wednesday of each week during the Improvement
Period, the Borrowers and their financial advisors will
deliver to the Agent and the Lenders, in form and detail
satisfactory to the Agent, weekly updates to the detailed
13-week rolling cash flow forecast as required under Section
4.4 of the Sixth Amendment; (ii) not later than the twentieth
(20th) day of each month during the Improvement Period, the
Borrowers and their financial advisors will deliver to the
Agent and the Lenders, in form and detail satisfactory to the
Agent, (x) a summary of agings of accounts payable and
accounts receivable for the Borrowers as of the end of the
prior month, (y) a duly-executed Borrowing Base Certificate as
of the last Business Day of the prior month, together with
supporting information as required by the Credit Agreement,
and (z) a duly-executed Compliance Certificate with respect to
the cash flow restrictions set forth in subparagraph f below;
(iii) the Company shall, immediately upon receipt thereof,
deliver to the Agent copies of any correspondence, letters of
intent, agreements or similar documents pertaining in any
manner to any proposed sale or other disposition of any assets
of the Company or its Subsidiaries other than in the ordinary
course of business; and (iv) the Company shall provide to the
Agent, within five (5) business days following any request by
the Agent, a current listing of correct names and addresses of
account debtors (together with periodic updates to such
listing upon request by the Agent). If requested by the Agent,
the Borrowers promptly shall provide detailed backup for the
monthly summary of agings of accounts payable and accounts
receivable.
c. The Borrowers shall pay when due all amounts owed
to the Agent and the Lenders under the Loan Documents.
d. The aggregate outstanding amount of the Revolving
Credit Loans, together with the face amount of any Facility
LCs, shall not exceed the maximum amount described in Article
2 of the Second Amendment (as modified by Article 2 of the
Sixth Amendment). From and after the date of execution of this
Amendment, the Borrowers shall, absent emergency circumstances
demonstrated to the satisfaction of the Agent, request
Revolving Credit Loans not more frequently than twice per
week. Each such request shall be based upon a Borrowing Base
Certificate submitted pursuant to subparagraph b above,
updated to reflect finally-collected funds applied against the
Revolving Credit Loans pursuant to the Borrowers' dominion of
funds arrangement with the Agent.
e. All representations and warranties made by the
Borrowers under the Second Amendment, the Third Amendment, the
Fourth Amendment, the Fifth Amendment, the Sixth Amendment and
under this Amendment, shall be true and correct.
f. (i) There shall be no change having a Material
Adverse Effect on the financial performance or condition of
the Borrowers as compared with the projections submitted to
and approved by the Agent and the Lenders in the Accepted
Forecast pursuant to Section 4.4 of this Amendment.
(ii) For each "Measuring Period" (defined
below) during the Improvement Period, the actual cumulative
"Net Cash Flow" (defined below) of the Company and its
domestic Subsidiaries on a consolidated basis during such
Measuring Period shall equal or exceed the projected
cumulative Net Cash Flow for such Measuring Period as set
forth in the Accepted Forecast, within a negative variance of
the greater of $500,000 or 10% of cumulative budgeted Net Cash
Flow for each Measuring Period. The term "Net Cash Flow" shall
mean the excess (if any) of the consolidated aggregate cash
receipts of the Company and its domestic Subsidiaries during
the relevant period (excluding (a) any advances of Loans under
the Credit Agreement and (b) the amount of Net Cash Proceeds
generated by any transaction and distributed to the Lenders as
required by the Credit Agreement) compared to the consolidated
aggregate cash disbursements of the Company and its domestic
Subsidiaries during such period for operating expenses, taxes
and debt service (but excluding principal repayments and
interest payments to the Lenders and to the Noteholders, and
excluding professional fees incurred in connection with the
investigation of the Company's Australian subsidiary), all as
shown on the reports required pursuant to Section 4.4 of this
Amendment and prepared in a manner consistent with the
presentation set forth in the Accepted Forecast. The
cumulative Net Cash Flow of the Company and its domestic
Subsidiaries shall be measured as of the end of each calendar
month, for the cumulative period commencing April 1, 2002 and
ending on the last day of each successive month (each a
"Measuring Period") (i.e., the first Measuring Period shall be
a one-month period commencing April 1, 2002 and ending April
30, 2002, the second Measuring Period shall be a two-month
period commencing April 1, 2002 and ending May 31, 2002,
etc.).
(iii) The Borrowers shall not, absent the
prior written consent of the Required Lenders, (a) disburse
any funds for purposes other than those set forth in the
Accepted Forecast or (b) disburse any funds in an amount that
would cause a violation of the net cash flow restrictions set
forth above, and shall not in any event disburse any funds in
a manner inconsistent with any other restrictions set forth in
this Amendment or the Loan Documents.
g. The Company will not permit the Consolidated
EBITDA of the Company and its Subsidiaries to be less than (i)
$6,687,000 for the four consecutive fiscal quarters ending
June 30, 2001, (ii) $8,628,000 for the four consecutive fiscal
quarters ending September 30, 2001, (iii) $8,860,000 for the
four consecutive fiscal quarters ending December 31, 2001,
(iv) $12,665,000 for the four consecutive fiscal quarters
ending March 31, 2002, (v) $1,901,000 for the three
consecutive months ending June 30, 2002, (vi) $5,279,000 for
the six consecutive months ending September 30, 2002, (vii)
$9,594,000 for the nine consecutive months ending December 31,
2002, (viii) $11,009,000 for the twelve consecutive months
ending March 31, 2003, or (ix) $2,533,000 for the three
consecutive months ending June 30, 2003. The parties
acknowledge that Consolidated EBITDA is calculated without
regard to extraordinary
gains or losses other than in the ordinary course of business.
For the avoidance of doubt, the parties further acknowledge
that, for purposes of this subparagraph, the term
"Consolidated EBITDA" shall be calculated exclusive of (w)
commissions related to asset dispositions, (x) gains or losses
recognized upon asset dispositions, (y) any increase (or
decrease) in EBITDA resulting from the completion of a
particular asset disposition in a month that is after (or
before) the projected sale date, and (z) restructuring charges
and professional fees incurred in connection with the
investigation of the Company's Australian subsidiary.
h. No action or proceeding shall be commenced against
any Borrower that would, if adversely determined, cause a
Material Adverse Effect or prevent, impair or delay the
completion of the Borrowers' business improvement plan. With
respect to those actions or proceedings currently pending (as
listed on Schedule 1.2h hereof), there shall be no event that
would cause a Material Adverse Effect or prevent, impair or
delay the completion of the Borrowers' business improvement
plan.
i. Absent prior approval on behalf of the Agent and
the Lenders, no Borrower shall (i) file with any bankruptcy
court or be the subject of any petition under title 11 of the
United States Code (the "Bankruptcy Code"), (ii) be the
subject of any order for relief issued under the Bankruptcy
Code, (iii) file or be the subject of any petition seeking any
liquidation, reorganization, adjustment, protection,
arrangement, composition, dissolution or similar relief under
any present or future federal or state act or law relating to
bankruptcy, insolvency, reorganization or other relief for
debtors, (iv) have sought or consented to or acquiesced in the
appointment of any receiver, trustee, conservator, liquidator,
custodian or other similar official, or (v) be the subject of
any order, judgment or decree entered by any court of
competent jurisdiction approving a petition filed against such
party for any liquidation, reorganization, adjustment,
protection, arrangement, composition, dissolution or similar
relief under any present or future federal or state act or law
relating to bankruptcy, insolvency, reorganization or other
relief for debtors.
j. The Agent, the Lenders or their representatives or
consultants shall be permitted to conduct field examinations
of the Company and its Subsidiaries and audits of any
collateral securing the obligations of the Borrowers to the
Lenders. The Borrowers shall compensate the Agent or the
Lenders for such audits in accordance with the Agent's or each
Lender's schedule of fees, as applicable, and as such
schedules may be amended from time to time. The foregoing
permission to conduct audits shall not restrict or impair the
right of the Agent or the Lenders to inspect the collateral
and any records pertaining thereto at such times and at such
intervals as the Agent or the Required Lenders may require.
Further, the Borrowers acknowledge and agree that the Agent,
on behalf of itself and the Lenders, reserves the right to
engage the services of one or more appraisers to evaluate the
properties of the Company and its Subsidiaries. The Borrowers
acknowledge their responsibility to reimburse the Agent for
the fees and disbursements incurred by such parties in
connection with such engagements.
k. Neither the Company nor any of its Subsidiaries
shall take any action or fail to take any action within its
reasonable control that would cause a material adverse change
in the ability of the Company and its Subsidiaries to obtain
supplies or other assets to continue their operations. Upon
the occurrence of any event not within the reasonable control
of the Company or its Subsidiaries that would cause a material
adverse change in the ability of the Company and its
Subsidiaries to obtain supplies or other
assets to continue their operations, the Company shall
immediately initiate and diligently complete such actions as
may be necessary to avoid any impairment or delay in the
operations of the Company and its Subsidiaries.
l. Notwithstanding anything in the Credit Agreement
to the contrary (including without limitation the provisions
of Section 6.11 of the Credit Agreement), during the
Improvement Period, absent the prior written consent of the
Required Lenders, the Company shall not, and shall not permit
or cause any of its Subsidiaries to, create, incur, assume or
suffer to exist any Indebtedness other than Indebtedness as
permitted under subsections 6.11(i), (ii), (iii), (iv), (v),
(vii) and (viii) of the Credit Agreement (with respect to
clause (vii), only to the extent that such Indebtedness is in
existence immediately prior to the Seventh Amendment Effective
date as described in Schedule 1.2l, provided that no increase
in the amount thereof shall be permitted).
m. During the Improvement Period, absent the prior
written consent of the Required Lenders, the Company shall
not, and shall not permit or cause any of its Subsidiaries to,
create, incur or suffer to exist any Lien other than Liens as
permitted under Section 6.15 of the Credit Agreement.
n. Notwithstanding anything in the Credit Agreement
to the contrary (including without limitation the provisions
of Section 6.13 of the Credit Agreement), during the
Improvement Period, neither the Company nor any of its
Subsidiaries shall agree to or consummate the sale,
assignment, lease, conveyance, transfer or other disposition
of any of its assets, except for (i) sales of inventory in the
ordinary course of business, (ii) the disposition in the
ordinary course of business of assets no longer required for
business operations, provided that such assets shall not have
a value exceeding $30,000 per item and $300,000 in the
aggregate on a cumulative basis during the Improvement Period,
or (iii) the disposition of other assets under terms approved
by the Required Lenders as evidenced by the prior written
consent of the Agent (provided that such consent shall require
the approval of all of the Lenders in the event of any
proposed disposition of all or substantially all of the
Collateral). With respect to clause (iii) of the preceding
sentence, the Company has designated certain non-core assets
or business units that it intends to list for sale or
otherwise dispose of as soon as practicable. Schedule 1.2n
attached to the Sixth Amendment identifies each such
designated non-core asset or business unit (each a "Targeted
Asset Disposition") and the Company's estimate of the net cash
proceeds to be generated from the sale or other disposition of
each such Targeted Asset Disposition (the "Targeted Asset Cash
Proceeds"). A copy of the listing agreement (if applicable)
with respect to each of such assets shall be delivered to the
Agent and the Lenders as soon as available. The Company shall,
immediately upon receipt thereof, provide to the Agent and the
Lenders copies of any written agreements or letters of intent
pertaining to the potential sale of any of such assets. With
respect to any transaction that is approved by the Required
Lenders under the provisions of this Amendment and otherwise
is permissible under the Credit Agreement (as modified
herein), such transaction shall be consummated within the time
parameters and other terms and conditions as disclosed in the
applicable written agreement or letter of intent. Based upon
the Company's request, 100% of the net cash proceeds (after
deducting customary and reasonably commissions and transaction
expenses and after deducting any taxes attributable to the
transaction) generated by each such transaction shall upon
closing immediately be paid to the Lenders and the Noteholders
(in the proportion of fifty-six percent (56%) to the Lenders
and forty-four percent (44%) to the Noteholders) . The portion
of such net cash proceeds remitted to the Lenders shall be
applied as a
repayment of outstanding principal balance of the Revolving
Credit Loans (and the amount of such repayment shall
constitute a permanent reduction of the amount of the
Aggregate Commitments).
o. Notwithstanding anything in the Credit Agreement
to the contrary (including without limitation the provisions
of Sections 6.12 and 6.14 of the Credit Agreement), during the
Improvement Period, absent the consent of the Required
Lenders, neither the Company nor any of its Subsidiaries shall
agree to or consummate, or make or suffer to exist, any
Investment or Acquisition, or extend credit to any other
Person, or extend any credit to any other Person, or enter
into any merger or consolidation, or enter into any similar
business arrangement or combination, except for transactions
permitted under subsections 6.14 (i) and (ii) of the Credit
Agreement (with respect to clause (ii), only to the extent in
existence immediately prior to the Seventh Amendment Effective
Date).
p. Notwithstanding anything in the Credit Agreement
to the contrary, during the Improvement Period neither the
Company nor any of its Subsidiaries shall advance any loans or
credit to any officer, director, stockholder or other
Affiliate of the Company or any of its Subsidiaries, or
otherwise enter into any similar transaction (provided that
the Company may continue to implement intercompany
transactions with its Wholly-Owned Subsidiaries - other than
its Australian Subsidiary - consistent with past practice),
nor shall the Company or any of its Subsidiaries forgive or
defer any payment of principal or interest with respect to any
existing loan or advance to any such officer, director,
stockholder or other Affiliate.
q. Notwithstanding anything in the Credit Agreement
to the contrary (including without limitation the provisions
of Sections 6.10 of the Credit Agreement), during the
Improvement Period, absent the prior written consent of the
Required Lenders, the Company shall not, and shall not permit
or cause any of its Subsidiaries to declare or pay any
dividends or make any distributions on its Capital Stock or
redeem, repurchase or otherwise acquire or retire any of its
Capital Stock, provided that any Subsidiary may continue to
declare and pay dividends or make distributions to the Company
or to a Wholly-Owned Subsidiary consistent with past practice.
r. During the Improvement Period, neither the Company
nor any of its Subsidiaries shall pay any discretionary bonus
or similar compensation award to any of their respective
officers or employees except pursuant to a comprehensive plan
approved by the Required Lenders. The preceding sentence shall
not limit the right of the Company or its Subsidiaries to pay
any bonus (i) required under any written employment agreement,
incentive plan or similar "guaranteed" bonus plan in existence
immediately prior to the Second Amendment Effective Date, (ii)
under its annual incentive plan for the fiscal year ending
March 31, 2003 (provided that such plan is satisfactory to the
Agent) or (iii) negotiated as part of a recruitment "signing
bonus" consistent with past practice. Upon request, the
Company shall deliver to the Lenders and the Agent copies of
any applicable employment agreements, incentive plans or
similar "guaranteed" bonus plans.
s. The Company shall pay to the Agent, for the
benefit of the Lenders, an amendment fee in the amount of
$35,000.00. Not less than one-half of such fee shall be paid
not later than December 18, 2002, and the remainder shall be
paid not later than December 31, 2002.
t. Commencing on the Second Amendment Effective Date
and thereafter, there shall be no principal payments made to
the Noteholders in respect of the Noteholder Obligations
unless, simultaneously with the making of any such payment,
the Borrowers pay to the Lenders the "Reduction Amount" (as
such term is defined in Article 2 of the Second Amendment).
Upon payment to the Lenders of the Reduction Amount, the
Borrowing Base and the Aggregate Commitments shall be
permanently reduced by such amount, which may not be
reborrowed. The parties acknowledge that, as of the Sixth
Amendment Effective Date, the "Reduction Ratio" (as such term
is defined in the Second Amendment) was 1.272.
u. Notwithstanding anything in the Credit Agreement
to the contrary, the Borrowers shall not, and shall not permit
any Subsidiary to, make any Capital Expenditures that exceed
in the aggregate for the Borrowers and their Subsidiaries (a)
$1,750,000 during the fiscal year ending Xxxxx 00, 0000, (x)
$500,000 during the three-month period ending June 30, 2002,
(c) $1,000,000 during the six-month period ending September
30, 2002, (d) $1,300,000 during the nine-month period ending
December 31, 2002, (e) $1,500,000 during the twelve-month
period ending March 31, 2003 or (f) $500,000 during the
three-month period ending June 30, 2003.
v. During the Improvement Period (as such Improvement
Period may be extended from time to time) the Company shall
continue to employ or engage, a full-time chief restructuring
officer acceptable to the Agent and the Required Lenders. The
chief restructuring officer will have authority that is
independent of the authority of other officers of the Company
and will report directly to the Company's board of directors.
The scope of authority of the chief restructuring officer
shall be acceptable to the Agent and the Required Lenders. The
Agent and the Lenders will have unrestricted access to
communicate directly with the chief restructuring officer.
w. The Company has advised the Agent and the Lenders
that the Company intends to consult with one or more
investment banking firms to explore various strategic
alternatives, including refinancing and/or the sale of certain
assets or divisions. Subject to the approval requirements set
forth below, the Company will retain an acceptable investment
banking firm not later than December 6, 2002. The Company
shall keep representatives of the Agent and the Lenders
apprised of all consultations with investment banking firms.
The Company shall not engage any investment banking firm
unless the identity of such firm and the scope of the
engagement are acceptable to the Agent and the Required
Lenders. The Company agrees to promptly provide to the Agent
all reports and other information prepared for or on behalf of
the Company by any investment banking firm or similar
consultant. The Company acknowledges and agrees that the
Agent, its consultants and counsel shall have direct access to
any investment banking firm or similar consultant engaged on
behalf of the Company, and each of such parties is authorized
to discuss information related to the Company with the Agent,
the Lenders or their consultants or counsel. All parties
acknowledge that Xxxxx, Xxxxxxx & Xxxx has been retained by
the Company with respect to two (2) specific asset
dispositions and with respect to the Company's North American
operations, and the Agent and the Lenders have approved such
retentions (which shall not be deemed approval for the Company
to retain such firm for any other engagement).
x. The Company shall continue to implement the cost
savings measures identified in the report submitted to the
Agent and the Lenders on May 20, 2002.
y. Not later than December 31, 2002, the Company
shall provide to the Agent and its advisors an updated written
report on the current status of all proceedings and
investigations related to the Company's Australian Subsidiary,
including without limitation any interim conclusions, pending
or completed actions in response thereto, and the status of
the administration of the business and assets of such
Subsidiary. Until completion of such administration, further
updated status reports on such matters shall be provided to
the Agent and its advisors not less frequently than weekly.
z. Not later than December 6, 2002, the Company shall
have retained either Xxxxx Xxxxxxxx PLC or, subject to the
same conditions as described in subparagraph w above, another
investment banking firm with respect to the potential sale of
its Middle East operations and business assets, and such
investment banking firm shall promptly complete offering
materials and assist in the valuation of such operations and
business assets. Further, with respect to such Middle East
operations and business assets, (i) not later than February
21, 2003, the Company shall provide to the Agent and the
Lenders a recommendation whether such operations and business
assets shall be sold to one or more third parties versus a
management-led transaction, (ii) if the Company decides
(subject to approval by the Required Lenders) to pursue a sale
to one or more third parties, (A) not later than February 21,
2003, the Company and its investment banking firm shall
develop a list of potential purchasers and (B) not later than
February 28, 2003, the Company and its investment banking firm
shall submit preliminary offering materials to interested
potential purchasers, and (iii) if the Company decides
(subject to approval by the Required Lenders) to pursue a
management-led transaction, such transaction shall be
consummated using a timetable agreed to by the Company and the
Required Lenders. In all events, the terms and conditions of
any potential sale of the Company's Middle East operations and
business assets shall be subject to approval by the Required
Lenders (as evidenced by the prior written consent of the
Agent).
aa. Not later than December 6, 2002, the Company
shall have retained Xxxxx Xxxxxxxx PLC or, subject to the same
conditions as described in subparagraph w above, another
investment banking firm with respect to the potential sale of
its United Kingdom operations and business assets, and such
investment banking firm shall promptly complete offering
materials and assist in the valuation of such operations and
business assets. Further, with respect to such United Kingdom
operations and business assets, (i) not later than January 25,
2003, the Company shall provide to the Agent and the Lenders a
recommendation whether such operations and business assets
shall be sold to one or more third parties versus a
management-led transaction, (ii) if the Company decides
(subject to approval by the Required Lenders) to pursue a sale
to one or more third parties, (A) not later than January 25,
2003, the Company and its investment banking firm shall
develop a list of potential purchasers and (B) not later than
January 31, 2003, the Company and its investment banking firm
shall submit preliminary offering materials to interested
potential purchasers, and (iii) if the Company decides
(subject to approval by the Required Lenders) to pursue a
management-led transaction, such transaction shall be
consummated using a timetable agreed to by the Company and the
Required Lenders. In all events, the terms and conditions of
any potential sale of the Company's United Kingdom operations
and business assets shall be subject to approval by the
Required Lenders (as evidenced by the prior written consent of
the Agent).
bb. Not later than January 1, 2003, the Company shall
either (i) enter into a binding agreement (the terms of which
agreement must be acceptable to the Required
Lenders, as evidenced by the prior written consent of the
Agent) to sell the operations and business assets of its Asian
operations and subsidiaries or (ii) initiate a process
acceptable to the Required Lenders for the winding up and
liquidation of its Asian operations and business assets.
cc. The Company shall pay or cause to be paid all
accrued but unpaid interest owing by its Australian Subsidiary
to Bank One, NA (including interest accruing during the
Improvement Period).
dd. There shall be no other Default or Unmatured
Default under the Credit Agreement (as modified herein) or the
other Loan Documents (except for the Existing Defaults
expressly acknowledged and waived in this Amendment through
the effective date hereof).
Notwithstanding the provisions of this Section 1.2, all indebtedness of the
Borrowers to the Lenders shall be due and payable on demand in the discretion of
the Required Lenders (i) upon any failure of any one or more of the conditions
set forth in this Section 1.2 or (ii) upon expiration or termination of the
Improvement Period as provided in and subject to Section 1.6 hereof. Further,
any failure of any one or more of the conditions set forth in this Section 1.2
shall constitute a Default under the Loan Documents (without the necessity of
any notice or cure period).
1.3 No Course of Dealing; Review of the Borrowers' Business Plan. The
Borrowers and the Guarantors acknowledge and agree that notwithstanding any
course of dealing between the Borrowers and the Lenders prior to the date
hereof, the Lenders shall have no obligation to make Loans to the Borrowers
outside of the strict conditions and requirements of the Credit Agreement (as
modified herein) nor to forbear from exercising available remedies except as
expressly set forth herein. Notwithstanding any past practice, the Borrowers and
the Guarantors agree that (i) the Agent and the Lenders shall not be obligated
or expected to honor any "overdrafts" or items for which funds of the Borrowers
are not immediately available, and (ii) the Agent and the Lenders shall not be
obligated or expected to provide any credit references on behalf of the
Borrowers, and any inquiries in this regard may be referred back to the
Borrowers or their advisors. The Agent and the Lenders shall be under no
obligation whatsoever to consent to the Borrowers' updated and revised business
plan as the same may be further revised from time to time, and instead the
Agent's and the Lenders' consideration of the Borrowers' updated and revised
business plan shall be undertaken by the Agent and the Lenders in their sole and
absolute discretion. The Agent's and the Lenders' consideration of the
Borrowers' updated and revised business plan shall be without prejudice to (i)
the possibility that the Agent or the Lenders may conclude that such business
plan, as further revised from time to time, does not adequately address the
Borrowers' defaults under the Loan Documents and/or the potential erosion of
collateral supporting the Borrowers' indebtedness to the Lenders, or (ii) the
right of the Agent or the Lenders, in accordance with the terms hereof, to
exercise rights or remedies available due to defaults under the Loan Documents
(as modified herein).
1.4 Defaults. In addition to any events of default specified in the
Loan Documents, the following shall constitute a Default under this Amendment
and under the Loan Documents:
a. Any Borrower or any Guarantor shall fail to comply with,
perform or observe any term, condition, covenant or agreement set forth in this
Amendment;
b. Any representation or warranty of Borrowers or Guarantors
contained in this Amendment shall be untrue in any material respect when made or
shall, during the term of this Amendment, become impaired, untrue or misleading;
c. With the exception of the Existing Defaults waived as set
forth in the Second Amendment and in the Sixth Amendment, the occurrence of any
new or further violation of the sections of the Credit Agreement implicated by
any of the Existing Defaults;
d. The occurrence of any default under the Senior Note
Agreement;
e. Any further change having a Material Adverse Effect shall
occur in business, properties, operations or condition (financial or otherwise)
of any Borrower or any Guarantor; or
f. The Aggregate Total Outstandings of all Lenders shall on
any date exceed the Borrowing Base as of such date, and the Borrowers shall fail
to pay on such date not less than the amount of such excess for application
against the Aggregate Total Outstandings.
1.5 Expiration; No Further Extension Implied. The Borrowers and the
Guarantors acknowledge that the Agent and the Lenders have no obligation to
extend the term of the Improvement Period or further extend the Facility
Termination Date, or forbear from enforcing their rights and remedies before the
end of the Improvement Period in the event of any failure of any one or more of
the terms and conditions expressed herein, that no course of dealing that would
permit arguing for further extensions contrary to the Lenders' wishes exists or
is capable of being inferred, and that nothing contained herein or otherwise is
intended to be a promise or agreement to continue to extend the term of the
Improvement Period beyond January 31, 2003 or the Facility Termination Date
beyond July 31, 2003 or to extend any further credit to the Borrowers except as
provided in the Credit Agreement as herein amended. Furthermore, no future
agreement by the Agent and the Lenders to continue to extend the term of the
Improvement Period beyond January 31, 2003 or the Facility Termination Date
beyond July 31, 2003 or any other agreement shall be valid or enforceable unless
it is contained in a final written agreement signed by authorized
representatives of the Agent and the Required Lenders (or, to the extent
required by Section 8.2 of the Credit Agreement, all of the Lenders).
Preliminary understandings or agreements on one or more issues during the course
of any negotiations and prior to the finalization thereof shall not be binding
unless and until such a final written agreement is executed on behalf of the
applicable parties.
1.6 Remedies Upon Default or Termination. The Improvement Period shall
expire automatically upon the earlier to occur of:
(i) a further Default or a default under this Amendment or any
document or agreement comprising the Loan Documents, and without notice or an
opportunity to cure such Default or default under this Amendment, or
(ii) except as provided in a further written agreement (if
any) among the Borrowers, the Agent and the Required Lenders pertaining to the
repayment of the Borrowers' obligations, January 31, 2003.
Upon the expiration of the Improvement Period, if the Borrowers are not then in
full compliance with all provisions of the Loan Documents (as amended by this
Amendment but without the benefit of any waiver of defaults except as expressly
provided in Section 5.3 of the Second Amendment and Section 5.3 of this
Amendment), upon the election of the Required Lenders but without further
notice, all of the Borrowers' obligations to the Lenders shall be immediately
due and payable (to the extent not already due and payable), all undertakings of
the Agent and the Lenders hereunder, including without limitation the Agent's
and the Lenders' forbearance, shall terminate without notice to the Borrowers
and without the requirement of any further action by or on behalf of the Agent
or the Lenders, the waiver of the Existing Defaults as set forth in the Second
Amendment and in the Sixth Amendment shall be deemed rescinded
ab initio, and the Agent or the Lenders shall have the right to exercise any
remedies provided in this Amendment or any of the Loan Documents, or under
applicable law or in equity. All rights and remedies of the Agent and the
Lenders shall be cumulative and not exclusive, and the Agent or the Lenders
shall be entitled to pursue one or more rights and/or remedies simultaneously or
sequentially without the necessity of an election of remedies.
1.7 Reservation of Rights; No Waiver by Conduct. The Second Amendment,
as modified by the Third Amendment, the Fourth Amendment, the Fifth Amendment
and the Sixth Amendment, and as further modified by this Amendment, grants a
limited forbearance until January 31, 2003 only, or until an earlier Default,
upon the terms and conditions set forth in the Second Amendment, the Third
Amendment, the Fourth Amendment, the Fifth Amendment, the Sixth Amendment and
this Amendment. Excepting only the waiver of the Existing Defaults as set forth
in the Second Amendment and in the Sixth Amendment, nothing herein shall be
deemed to constitute a waiver of any new Unmatured Defaults or Defaults 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 Borrowers or the Guarantors.
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 8.2 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.
1.8 Survival. All representations, warranties, covenants, agreements,
releases and waivers made by or on behalf of the Borrowers or any Guarantor
under this Amendment shall survive and continue after the expiration or
termination of the Improvement Period.
ARTICLE 2.
AMENDMENTS
Effective as of the Seventh Amendment Effective Date, the Credit
Agreement shall be amended as follows:
2.1 A new definition of "Seventh Amendment Effective Date" is added to
Section 1.1 of the Credit Agreement in appropriate alphabetical order, stating
as follows:
"Seventh Amendment Effective Date" shall mean November 1,
2002.
2.2 Section 6.19.3 of the Credit Agreement is amended and restated in
its entirety as follows:
6.19.3 Minimum Consolidated Net Worth. The Company will at all
times maintain Consolidated Net Worth of not less than (i) $28,482,000
for the period from the Sixth Amendment Effective Date to and including
September 29, 2002, (ii) $31,140,000 for the period from September 30,
2002 to and including Xxxxxxxx 00, 0000, (xxx) $34,735,000 for the
period from December 31, 2002 to and including Xxxxx 00, 0000,
(xx) $35,595,000 for the period from March 31, 2003 to and including
June 29, 2003 and (v)thereafter, $37,708,000.
During the Improvement Period, the parties agree that Consolidated Net
Worth shall be calculated exclusive of (a) gains or losses recognized upon asset
dispositions or (b) any impairment to goodwill or other intangible assets to the
extent required by new accounting regulations promulgated after the date of the
Credit Agreement. Further, for any period after June 30, 2002 and during the
remainder of the Improvement Period, the parties agree that Consolidated Net
Worth shall be calculated without deducting any Interest Expense incurred after
June 30, 2002 or income tax expense incurred after June 30, 2002.
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.
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 BORROWERS
Each Borrower shall:
4.1 Promptly perform and observe, and cause 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 Guarantor to execute
and deliver, such other documents as the Agent or the Lenders may reasonably
request.
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 Expenses and Costs. Each Borrower, jointly and severally, agrees to
pay and to save the Agent and the Lenders harmless for the payment of all 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 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 consultants, (b) the fees
and expenses of counsel for the Agent or any Lender for the work performed as a
result of the Borrowers' defaults 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 fees and
out-of-pocket disbursements incurred by the Agent or any Lender, including
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 Borrowers 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 expenses or fees (including attorneys' fees) incurred
in relation to or in defense of any litigation instituted by any 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 attorneys' fees) shall be part of the Obligations owing under
the Credit Agreement, and shall be secured by all of the collateral described in
the Collateral Documents. In the event the Borrowers 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
any 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
Collateral Documents and as otherwise provided by law.
5.3 Waiver of March 2002 Defaults. The Borrowers have requested that
the Lenders and the Agent confirm the waiver of the March 2002 Defaults as
provided in Section 5.3 of the Sixth Amendment. Pursuant to such request, the
Lenders and the Agent hereby confirm the waiver of the March 2002 Defaults for
the period prior to the effectiveness of this Amendment and, so long as there is
no occurrence of a new Default (for purposes hereof, a new Default includes a
new or further violation of any of the sections of the Credit Agreement
implicated in any of the Existing Defaults), for the remainder of the
Improvement Period. Such waiver shall not extend to any period of time after the
Improvement Period except to the extent expressly provided in a further written
agreement among the Borrowers and the Required Lenders, provided that such
waiver shall automatically survive the expiration of the Improvement Period if
the Borrowers are then in full compliance with all provisions of the Loan
Documents (as amended by this Amendment but without the benefit of any waiver of
defaults except as
set forth in this Section 5.3 and in Section 5.3 of the Second Amendment). The
Borrowers acknowledge and agree that the waiver contained herein is a limited,
specific and one-time waiver as described above. Such limited waiver (a) shall
not modify or waive any other term, covenant or agreement contained in any of
the Loan Documents, and (b) shall not be deemed to have prejudiced any present
or future right or rights which the Agent or the Lenders now have or may have
under this Amendment, the Credit Agreement (as modified hereby) or the other
Loan Documents
5.4 Release. Each 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
owed by the Borrowers to the Lenders. Notwithstanding this representation and as
further consideration for the agreements and understandings herein, the
Borrowers 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 Borrowers, the Guarantors, the Agent and the
Lenders.
5.5 Performance by Lenders and Agent; No Agency; Borrowers Remain in
Control. Each 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 among the Borrowers and the Lenders or the Agent. The Borrowers, 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.
5.6 Entire Agreement; Severability. The Credit Agreement, as previously
amended and 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.
5.7 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. Each 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 the Borrower or Guarantor and have been fully
and unconditionally consented to by the Borrower or Guarantor, and that the
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 Guarantor is 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.
5.8 Sufficiency of Improvement Period. Each Borrower represents that:
(a) it has no intention to file or acquiesce in the filing of any bankruptcy or
insolvency proceeding hereafter, absent approval on behalf of the Agent and the
Lenders of such proceeding; and (b) the Improvement Period and forbearance
allowed by the Second Amendment, the Third Amendment, the Fourth Amendment, the
Fifth Amendment and the Sixth Amendment (as modified herein) are sufficient for
the Borrowers to accomplish the commitments they have undertaken in the Second
Amendment, the Third Amendment, the Fourth Amendment, the Fifth Amendment and
the Sixth Amendment (as modified herein).
5.9 Ratification. The Borrowers agree that the Credit Agreement, the
Collateral Documents and all other documents and agreements executed by the
Borrowers or the Guarantors in connection with the Credit Agreement in favor of
the Agent, the Collateral 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. Terms
used but not defined herein shall have the respective meanings ascribed thereto
in the Credit Agreement.
5.10 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 November 1, 2002 when each of the
following has been satisfied:
(a) Receipt by the Agent of counterparts of this Amendment duly
executed by each 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 either Borrower under the terms of any waiver letter,
extension letter, amendment or other agreement, receipt by the Agent of full
payment of such interest, fees or other charges.
(c) Payment of the amendment fee required under this Amendment. In the
event such fee is not received immediately upon execution of this Amendment by
the Borrowers, the Agent is authorized at any time thereafter to charge the
Company's account(s) in the amount of such fee.
(d) Receipt by the Agent of copies, certified by the Secretary or
Assistant Secretary of each Borrower and each Guarantor, of its Board of
Directors' resolutions and of resolutions or actions of any other body
authorizing the execution of this Amendment and all Collateral Documents to be
executed in connection herewith to which such Borrower or such Guarantor, as
applicable, is a party.
(e) Receipt by the Agent of an incumbency certificate, executed by the
Secretary or Assistant Secretary of each Borrower and each Guarantor, which
shall identify by name and title and bear the signatures of the Authorized
Officers and any other officers of each Borrower and each Guarantor authorized
to sign this Amendment and all Collateral Documents to be executed in connection
herewith to which each 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 such Borrower and such Guarantor.
(f) Receipt by the Agent of a written opinion of the general counsel of
the Borrowers and the Guarantors, addressed to the Agent and Lenders and in form
and substance satisfactory to the Agent.
(g) To the extent not previously delivered, receipt by the Agent
(within five days following written request by the Agent, or within such longer
period of time as may be acceptable to the Agent) of executed copies of all
Collateral 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.
(h) The Company and the Noteholders shall have executed an amendment to
the Senior Note Agreement, which amendment shall be satisfactory in form and
substance to the Agent and shall not expire by its terms prior to the Facility
Termination Date.
(i) Delivery of such other agreements and documents, and the
satisfaction of such other conditions as may be reasonably required by the
Agent, including without limitation a solvency certificate of each Borrower, 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.
5.11 Other Documents. Each 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.
5.12 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.
5.13 Miscellaneous. This Amendment is made for the sole benefit and
protection of the Borrowers, the Agent and the Lenders and their respective
successors and permitted assigns (provided that the Borrowers shall not be
permitted, absent the prior written consent of all of the Lenders, to assign any
of their respective rights or obligations under this Amendment). No other person
or entity shall have any rights whatsoever under this Amendment. Time shall be
of the strictest essence in the performance of each and every one of the
Borrowers' obligations hereunder.
5.14 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 Borrowers, the Guarantors, 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.
5.15 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.
5.16 Waiver of Jury Trial; Consent to Jurisdiction. (a) The Borrowers,
each Guarantor, each Lender and the Agent hereby specifically ratifies and
confirms the waiver of jury trial set forth in Section 16.2 of the Credit
Agreement. Without limiting the generality of the preceding ratification and
confirmation, the Borrowers, 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
Borrowers, 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) Each Borrower and each Guarantor agrees that any legal action or
proceeding with respect to this Amendment or any related instrument or
agreement, including the Credit Agreement as previously amended and as amended
hereby, or with respect to the transactions contemplated hereby, may be brought
in any court of the State of Michigan, sitting in or having jurisdiction over
the County of Wayne, Michigan, or in any federal court located within the
Eastern District of Michigan, and Borrowers and Guarantors hereby submit to and
accept generally and unconditionally the non-exclusive jurisdiction of those
courts with respect to their person and property and irrevocably consent to
service of process in connection with any such action or proceeding by mailing
such service of process (certified or registered, if capable of certification or
registration) to Borrowers and/or Guarantors at the address they may have from
time to time provided to the Agent. Borrowers and Guarantors hereby irrevocably
waive any objection based upon jurisdiction, improper venue or forum non
conveniens in any such suit or proceeding in the above-described courts. Nothing
contained herein shall limit the right of the Agent or the Lenders to serve
process in any other manner permitted by law or limit the right of the Agent or
the Lenders to commence any such action or proceeding in the courts of any other
jurisdiction. Any judicial proceeding by any Borrower or any Guarantor against
the Agent or any Lender involving this Amendment shall be brought only in a
court in Xxxxx County, Michigan or federal court located within the Eastern
District of Michigan.
[signatures next page]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed and delivered as of the date and year first above written.
CORRPRO COMPANIES, INC.
By: Xxxxxx X. Xxxxx
--------------------------------------
Title: Senior Vice President
-----------------------------------
CSI COATING SYSTEMS INC.
By: Xxxxxx X. Xxx
--------------------------------------
Title: Vice President
----------------------------------
BANK ONE, NA, AS AGENT AND AS A LENDER
By: Xxxx X. Xxxxxxxx
--------------------------------------
Title: Vice President
----------------------------------
PNC BANK, NATIONAL ASSOCIATION
By: Xxxxx Xxxxxxxx
--------------------------------------
Title: Vice President
----------------------------------
KEY BANK
By: Xxxx X. Xxxx
--------------------------------------
Title: Vice President
----------------------------------
FIRSTMERIT BANK
By: Xxxx Xxxxxx
--------------------------------------
Title: Senior Vice President
----------------------------------
COMERICA BANK
By: Xxxxxxx X. Xxxxxx
--------------------------------------
Title: Vice President
----------------------------------
FIFTH THIRD BANK (NORTHEASTERN OHIO)
By: Xxxxx De Vries
--------------------------------------
Title: Commercial Banking Officer
----------------------------------
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, Collateral 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.
GOOD-ALL ELECTRIC, INC.
By: Xxxxxx X. Xxxxx
--------------------------------------
Title: Vice President
----------------------------------
BASS SOFTWARE, INC.
By: Xxxxxx X. Xxxxx
--------------------------------------
Title: Vice President
----------------------------------
OCEAN CITY RESEARCH CORP.
By: Xxxxxx X. Xxxxx
--------------------------------------
Title: Vice President
----------------------------------
CCFC, INC.
By: Xxxxxx X. Xxxxx
--------------------------------------
Title: Vice President
----------------------------------
XXXXXXXX COSASCO SYSTEMS, INC.
By: Xxxxxx X. Xxxxx
--------------------------------------
Title: Vice President
----------------------------------
