Exhibit 10.1
INFORMATION RESOURCES, INC.
FOURTH AMENDMENT TO CREDIT AGREEMENT
This Fourth Amendment to Credit Agreement (herein, the "Amendment") is
entered into as of October 16, 2001, between Information Resources, Inc., the
Banks party thereto, and Xxxxxx Trust and Savings Bank, as Agent for the Banks.
PRELIMINARY STATEMENTS
A. The Borrower and the Banks entered into a certain Credit Agreement,
dated as of October 31, 1997 (the Credit Agreement, as amended prior to the date
hereof, being referred to herein as the "Credit Agreement"). All capitalized
terms used herein without definition shall have the same meanings herein as such
terms have in the Credit Agreement.
B. The Borrower and the Required Banks have agreed to (i) amend the
definition of Consolidated Cash Flow, (ii) amend the definition of EBITDA, (iii)
increase the amount of the L/C Commitment (but without any increase in the
overall Revolving Credit Commitment), (iv) eliminate the Bid Loan facility, (v)
provide for the grant by the Borrower to the Banks of a security interest in the
Borrower's Property (other than any real property), (vi) establish a borrowing
base comprised of accounts receivable which will limit the credit available to
the Borrower under the Credit Agreement and (vii) make certain other amendments
to the Credit Agreement, all under the terms and conditions set forth in this
Amendment.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. AMENDMENTS.
1.1. Each of Sections 1.6, 1.7, 1.8, 1.9, 1.10, 1.11, 1.12, 1.15(b),
1.17(b) of the Credit Agreement shall be amended and restated to read in its
entirety as follows:
Section 1.6. [Intentionally Deleted.]
Section 1.7. [Intentionally Deleted.]
Section 1.8. [Intentionally Deleted.]
Section 1.9. [Intentionally Deleted.]
Section 1.10. [Intentionally Deleted.]
Section 1.11. [Intentionally Deleted.]
Section 1.12. [Intentionally Deleted.]
Section 1.15. (b) [Intentionally Deleted.]
Section 1.17. (b) [Intentionally Deleted.]
1.2. The first sentence of Section 1.20(b) of the Credit Agreement shall
be amended and restated to read in its entirety as follows:
(b) Security Effective Date. At the request of the Borrower, the
Banks have agreed that the provisions of the Security Agreement shall not
become effective, and the Agent and the Banks agree not to perfect the
liens or security interests created or provided for by the Security
Agreement by filing financing statements or taking any other actions to
perfect such security interests or liens, until October 16, 2001 (the
"Security Effective Date").
1.3. Section 4.1 of the Credit Agreement shall be amended by deleting
therefrom the following defined terms, along with their corresponding
definitions: "Bid", "Bid Loan", "Bid Loan Request", "Bid Loan Request
Confirmation", "Bid Note" and "Confirmation of Bid".
1.4. All references in the Credit Agreement and the other Loan Documents
to "Bid", "Bid Loan", "Bid Loan Request", "Bid Loan Request Confirmation", "Bid
Note", and "Confirmation of Bid", and any related references without using such
defined terms to the Bid Loans or the facility for obtaining Bid Loans shall, to
the extent not deleted by the amendments to the Credit Agreement set forth in
Sections 1.1 and 1.2 of this Amendment, be deemed by the parties hereto to have
been deleted and shall no longer be of any force or effect, and the Bid Note
shall no longer be of any force or effect.
1.5. Section 4.1 of the Credit Agreement shall be amended by amending the
following definitions set forth therein to read in their entirety as follows:
"Borrowing Base" means, as of any time it is to be determined,
an amount equal to the sum of (a) 85% of the then outstanding unpaid
net amount (after deduction of the Dilution Reserve) of Eligible
Accounts, plus (b) $20,000,000; provided that the Borrowing Base
shall be computed only as against and on so much of the Collateral
as is included on the certificates to be furnished from time to time
by the Borrower pursuant to Section 7.5(e) hereof and, if required
by the Agent or the Required Banks pursuant to any of the terms
hereof or any Collateral Document, as verified by such other
evidence required to be furnished to the Agent or the Banks pursuant
hereto or pursuant to any such Collateral Document.
"Consolidated Cash Flow" means, with reference to any period,
(1) the sum of (a) Consolidated Net Income for such period plus all
amounts deducted in arriving at such Consolidated Net Income amount
(but without duplication) in respect of
-2-
(i) Consolidated Interest Expense for such period, plus (ii)
federal, state and local income taxes for such period, plus (iii)
all amounts properly charged for depreciation of fixed assets and
amortization of intangible assets during such period on the books of
the Borrowers and its Consolidated Subsidiaries, plus (iv) all
amounts properly charged for amortization of the InfoScan Costs and
Software Costs during such period on the books of the Borrower and
its Subsidiaries, (b) 100% of the net proceeds received by the
Borrower from any new offering of equity securities of the Borrower
received at any time during such period, (c) 100% of the net
proceeds received by the Borrower from the issuance of any
Subordinated Debt of the Borrower received at any time during such
period, and (d) for the fiscal quarter ended June 30, 2001 only,
100% of the net cash proceeds (up to a maximum of $8,500,000)
received in such period as a result of the termination of the
Nabisco Contract, minus (2) for any period after June 30, 2001, all
non-cash earnings associated with the Nabisco Contract which are
included in Consolidated Net Income for such period.
"Dilution Reserve" means an amount, established at the time of
any calculation of the Borrowing Base for the purposes of such
calculation, equal to 5% of the aggregate gross account receivable
balance (before deduction for ineligible accounts) shown on the
Borrower's balance sheet as of the close of its most recent fiscal
month for which a balance sheet is available.
"EBITDA" means, with reference to any period, (1) the sum of
(a) Consolidated Net Income for such period plus all amounts
deducted in arriving at such Consolidated Net Income amount (but
without duplication) in respect of (i) Consolidated Interest Expense
for such period, plus (ii) federal, state and local income taxes for
such period, plus (iii) all amounts properly charged for
depreciation of fixed assets and amortization of intangible assets
during such period on the books of the Borrower and its Consolidated
Subsidiaries, plus (iv) all amounts properly charged for
amortization of the InfoScan Costs and Software Costs during such
period on the books of the Borrower and its Subsidiaries, and (b)
for the fiscal quarter ended June 30, 2001 only, 100% of the net
cash proceeds (up to a maximum of $8,500,000) received in such
period as a result of the termination of the Nabisco Contract, minus
(2) for any period after June 30, 2001, all non-cash earnings
associated with the Nabisco Contract which are included in
Consolidated Net Income for such period.
"Eligible Account" means each account receivable of the
Borrower that:
-3-
(a) arises out of the sale by the Borrower of finished goods
inventory delivered to and accepted by, or out of the rendition of
services fully performed by the Borrower and accepted by, the
account debtor on such account receivable, and such account
receivable otherwise represents a final sale;
(b) the account debtor on such account receivable is located
within the United States of America or, if such right has arisen out
of the sale of such goods shipped to an account debtor located in
any other country, such right is secured by a valid and irrevocable
letter of credit or insured by foreign credit insurance pursuant to
which any of the Borrower or its transferee may draw on a lender or
insurer reasonably acceptable to the Agent for the full amount
thereof;
(c) is the valid, binding and legally enforceable obligation
of the account debtor obligated thereon and such account debtor is
not (i) a Subsidiary or an Affiliate of the Borrower, (ii) a
shareholder, director, officer or employee of the Borrower or any
Subsidiary, (iii) the United States of America, or any state or
political subdivision thereof, or any department, agency or
instrumentality of any of the foregoing unless the Borrower has
complied with the Assignment of Claims Act or any similar state or
local statute, as the case may be, to the satisfaction of the Agent,
(iv) a debtor under any proceeding under the United States
Bankruptcy Code, as amended, or any other comparable bankruptcy or
insolvency law, or (v) an assignor for the benefit of creditors;
(d) is not evidenced by an instrument or chattel paper
unless the same has been endorsed and delivered to the Agent;
(e) is an asset of the Borrower to which it has good and
marketable title, is freely assignable, is subject to a perfected,
first priority Lien in favor of the Agent for the benefit of the
Banks, and is free and clear of any other Lien other than Liens
permitted by Section 7.11(a) and (b) hereof;
(f) is net of any credit or allowance given by the Borrower
to such account debtor;
(g) is not owing from an account debtor who is also creditor
or supplier of the Borrower, is not subject to any offset,
counterclaim or other defense with respect thereto and, with respect
to said account receivable or the contract or purchase order
-4-
out of which the same arose, no surety bond was required or given in
connection therewith;
(h) is not unpaid more than 120 days (or in the case of
items issued under letters of credit or with the support of foreign
credit insurance as described in clause (b) of this definition, 180
days) after the original invoice date (which must be not more than 5
days subsequent to the shipment date or the date services were fully
performed by the Borrower);
(i) is not owed by an account debtor who is obligated on
accounts receivable owed to the Borrower more than 25% of the
aggregate unpaid balance of which have been past due for longer than
the relevant period specified in subsection (h) above unless the
Agent has approved the continued eligibility thereof;
(j) would not cause the total accounts receivable owing from
any one account debtor and its Affiliates to exceed 10% of all
Eligible Accounts; and
(k) does not arise from a sale to an account debtor on a
xxxx-and-hold, guaranteed sale, sale-or-return, sale-on-approval,
consignment or any other repurchase or return basis.
"Security Agreement" means the Security Agreement dated as of
October 18, 2000, from the Borrower to the Agent, as the same may
from time to time be modified, amended or restated, including
without limitation pursuant to the Amended and Restated Security
Agreement dated as of October 16, 2001 from the Borrower to the
Agent.
"L/C Commitment" means $3,710,402.
1.6. Section 4.1 of the Credit Agreement shall be amended by adding the
following new definition, in its appropriate place in the alphabetical sequence:
"Nabisco Contract" means that certain contract to provide data
collection and analytic services between the Borrower and Nabisco
Company dated October 25, 1999.
1.7. Section 7.5(a) of the Credit Agreement shall be amended by adding
the words "and consolidating" following each usage of the word "consolidated" in
such Section.
1.8. Section 7.5(b) of the Credit Agreement shall be amended by (a)
adding the words "and consolidating" following the two usages of the word
"consolidated" in the second and fourth lines of such Section, and (b) adding
the parenthetical phrase "(except for consolidating
-5-
financial statements, which need not be certified by such accountants)"
following the words "financial statements" in the tenth line of such Section.
1.9. Section 7.5(e) of the Credit Agreement shall be amended and restated
to read in its entirety as follows:
(e) as soon as available, and in any event no later than the
last Business Day of every month (commencing on October 31, 2001), a
Borrowing Base certificate in the form attached hereto as Schedule
7.5(e) showing the computation of the Borrowing Base in reasonable
detail as of the close of business on the fifth day of such month
(or the first Business Day thereafter), prepared by the Borrower and
certified to by its chief financial officer.
1.10. Schedule 7.5(e) to the Credit Agreement shall be amended and
restated to read in its entirety as set forth in Annex A hereto.
SECTION 2. CONDITIONS PRECEDENT.
The effectiveness of this Amendment is subject to the satisfaction of all
of the following conditions precedent:
2.1. The Borrower and the Required Banks shall have executed and
delivered this Amendment.
2.2. The Agent shall have received copies (executed or certified, as may
be appropriate) of all legal documents or proceedings taken in connection with
the execution and delivery of this Amendment to the extent the Agent or its
counsel may reasonably request.
2.3. Legal matters incident to the execution and delivery of this
Amendment and the Security Agreement shall be satisfactory to the Agent and its
counsel.
2.4. The Agent shall have received, for the benefit of the Banks
executing this Amendment on or before October 16, 2001, an amendment fee equal
to $45,000, to be distributed to such Banks based on their ratable share of the
Revolving Credit Commitments.
SECTION 3. CONDITION SUBSEQUENT.
The continued effectiveness of this Amendment on and after October 31,
2001 is subject to the satisfaction of the following condition subsequent:
3.1. The Borrower shall, on or before October 31, 2001, have executed and
delivered to the Agent a security agreement, in form and substance satisfactory
to the Agent, and such UCC financing statements and other security documents
required by the Agent as are sufficient to
-6-
grant the Agent, on behalf of the Banks, a first priority perfected security
interest in all Property of the Borrower (other than real property).
SECTION 4. REPRESENTATIONS.
In order to induce the Banks to execute and deliver this Amendment, the
Borrower hereby represents to the Banks that as of the date hereof, (a) the
representations and warranties set forth in Section 5 of the Credit Agreement
are and shall be and remain true and correct (except that the representations
contained in Section 5.4 shall be deemed to refer to the most recent financial
statements of the Borrower delivered to the Banks), (b) the Borrower is in
compliance with the terms and conditions of the Credit Agreement and no Default
or Event of Default has occurred and is continuing under the Credit Agreement or
shall result after giving effect to this Amendment, and (c) no Bid Loans are
outstanding and no requests therefor are pending.
SECTION 5. MISCELLANEOUS.
5.1. Except as specifically amended herein, the Credit Agreement shall
continue in full force and effect in accordance with its original terms.
Reference to this specific Amendment need not be made in the Credit Agreement,
the Notes, or any other instrument or document executed in connection therewith,
or in any certificate, letter or communication issued or made pursuant to or
with respect to the Credit Agreement, any reference in any of such items to the
Credit Agreement being sufficient to refer to the Credit Agreement as amended
hereby.
5.2. The Borrower agrees to pay on demand all costs and expenses of or
incurred by the Agent in connection with the negotiation, preparation, execution
and delivery of this Amendment and the replacement Notes, including the fees and
expenses of counsel for the Agent.
5.3. This Amendment may be executed in any number of counterparts, and by
the different parties on different counterpart signature pages, all of which
taken together shall constitute one and the same agreement. Any of the parties
hereto may execute this Amendment by signing any such counterpart and each of
such counterparts shall for all purposes be deemed to be an original. This
Amendment shall be governed by the internal laws of the State of Illinois.
[SIGNATURE PAGES TO FOLLOW]
-7-
This Fourth Amendment to Credit Agreement is dated as of the date first
above written.
INFORMATION RESOURCES, INC.
By
Name________________________________
Title_______________________________
Accepted and agreed to as of the date and year first above written.
XXXXXX TRUST AND SAVINGS BANK, in its
individual capacity as a Bank and as
Agent
By
Name________________________________
Title_______________________________
LASALLE BANK NATIONAL ASSOCIATION
By
Name________________________________
Title_______________________________
THE BANK OF NEW YORK
By
Name________________________________
Title_______________________________
-8-
ANNEX A TO FOURTH AMENDMENT TO CREDIT AGREEMENT
SCHEDULE 7.5(E)
BORROWING BASE CERTIFICATE
To: Xxxxxx Trust and Savings Bank, as
Agent under, and the Banks party to,
the Credit Agreement described below.
Pursuant to the terms of the Credit Agreement dated as of October 31, 1997
among us as amended from time to time (the "Credit Agreement"), we submit this
Borrowing Base Certificate to you and certify that the information set forth
below and on any attachments to this Certificate is true, correct and complete
as of the date of this Certificate.
A. ACCOUNTS IN BORROWING BASE
1. Gross Accounts __________________
Less
(a) Amounts due from affiliates __________________
(b) Ineligible sales (i.e. not within the __________________
U.S. or not supported by an eligible
letter of credit)
(c) Owed by an account debtor who is a __________________
Subsidiary or an Affiliate
(d) Other non-trade receivables __________________
(e) Owed by an account debtor who is in an __________________
insolvency or reorganization proceeding
(f) Government items __________________
(g) Credits/allowances/retainage __________________
(h) Unpaid more than 120 days past invoice __________________
date
(i) Items issued under letters of credit or __________________
with foreign credit insurance unpaid
more than 180 days past invoice date
(j) 25% taint factor items __________________
(k) Ineligible because of 10% concentration __________________
factor
(l) Contra items __________________
(m) Advance xxxxxxxx/cash in advance __________________
invoices
(n) Unbilled AR __________________
(o) Dilution Reserve __________________
(5% of line 1)
(p) Otherwise ineligible __________________
2. Total Deductions (sum of lines A1a - A1p) __________________
3. Eligible Accounts (line A1 minus line A2) __________________
4. Accounts in Borrowing Base __________________
(line A3 x .85)
5. Plus $20,000,000 base amount $20,000,000
6. Sum of Line 4 and Line 5 __________________
B. REVOLVING CREDIT ADVANCES
1. Committed Loans __________________
2. Swing Loans __________________
3. L/C Obligations __________________
4. Total Revolving Credit Advances (sum of __________________
lines B1 - B3)
C. UNUSED AVAILABILITY
(line A6 minus line B4) __________________
Dated as of this ___________ day of __________________, 20____.
INFORMATION RESOURCES, INC.
By
Name_____________________________________
Title____________________________________
-2-
