MODIFICATION AGREEMENT
EXHIBIT 10
THIS
MODIFICATION AGREEMENT (“AGREEMENT”) is made to be
effective as of the 2nd day of August 2005, by and between MANUFACTURERS AND TRADERS TRUST COMPANY (“LENDER”) and ABLEST INC., a
Delaware corporation (“BORROWER”).
The LENDER has extended a loan to the BORROWERS in the original principal amount of Seven
Million Five Hundred Thousand Dollars ($7,500,000.00) (“LOAN”), in accordance with the terms and
conditions as set forth in the Credit Agreement, by and between the BORROWER and the LENDER dated
on or about August 12, 2003 (“CREDIT AGREEMENT”). The LOAN is evidenced by the Promissory Note in
the original principal amount of Seven Million Five Hundred Thousand Dollars ($7,500,000.00), dated
on or about August 12, 2003 (“NOTE”) from the BORROWER to the order of the LENDER. The LOAN is
secured by, among other things, all of the BORROWER’S accounts as set forth in the Specific
Security Agreement, by and between the BORROWER and the LENDER dated on or about August 12, 2003
(“SECURITY AGREEMENT”).
The BORROWER has requested that the LENDER modify certain terms of the LOAN. The LENDER has
agreed to the BORROWER’S request, but only in accordance with the terms of this AGREEMENT. The
parties have entered into this AGREEMENT to accomplish such modifications.
Section 1. Definitions. As used in this AGREEMENT, the terms set forth below shall
have the meanings set forth below. Terms defined in this Section or elsewhere in this AGREEMENT
are in all capital letters. The singular use of any defined term includes the plural, and the
plural use includes the singular.
Section 1.1. Laws. The term “LAWS” means all ordinances, statutes, rules, regulations,
orders, injunctions, writs or decrees of any governmental authority.
Section 1.2. Loan Documents. The term “LOAN DOCUMENTS” means collectively the NOTE,
the CREDIT AGREEMENT, the SECURITY AGREEMENT and all other agreements, instruments, documents,
mortgages, deeds of trust, subordination agreements, intercreditor agreements, pledges, affidavits,
powers of attorney, consents, assignments, landlord and mortgage waivers, opinions, collateral
assignments, reimbursement agreements, contracts, notices, leases, financing statements, pledges
and all other written matter, whether heretofore, now or hereafter executed, which evidence or
secure the LOAN.
Section 2. Acknowledgment Of Obligations. The BORROWER acknowledges that: (a) each of
the LOAN DOCUMENTS is the valid and binding obligation of the BORROWER; (b) the LOAN DOCUMENTS are
enforceable in accordance with all stated terms; and (c) the BORROWER has no defenses, claims of
offset, or counterclaims against the enforcement of the LOAN DOCUMENTS in accordance with all
stated terms.
Section 3. Amendment And Modification Of Note. The NOTE is hereby amended and
modified as follows:
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Section 3.1. Section 1(k) of the NOTE is deleted in its entirety, and the following is
placed in lieu thereof:
“LIBOR Rate” shall mean one and one-quarter (1.25) percentage points above LIBOR with an
Interest Period duration of one month, two months or three months, as the same has been
selected by the Borrower.
Section 3.2. Section 1(l) of the NOTE is deleted in its entirety, and the following is
placed in lieu thereof:
“Maturity Date” is the Payment Due Day in August, 2008, provided, however, that the same may
be extended in a writing.
Section 3.3. Section 3 of the NOTE is deleted in its entirety, and the following is
placed in lieu thereof:
3. CONTINUATIONS AND CONVERSIONS. Subject to the provisions immediately set
forth below, upon the expiration of the first Interest Period and each Interest
Period thereafter, on the Continuation Date the LIBOR Rate will be automatically
continued with an Interest Period of the same duration as the Interest Period
duration initially selected above. Unless the Bank shall otherwise consent in
writing, if (i) Borrower has failed to pay when due, in whole or in part, the
indebtedness under the Note (whether upon maturity, acceleration or otherwise), or
(ii) there exists a condition or event which with the passage of time, the giving of
notice or both shall constitute an Event of Default, the Bank, in its sole
discretion, may (i) permit the LIBOR Rate to continue until the last day of the
applicable Interest Period at which time such the Applicable Rate shall
automatically be converted to the Base Rate or (ii) convert the LIBOR Rate to the
Base Rate before the end of the applicable Interest Period. Notwithstanding the
foregoing, upon the occurrence of an Event of Default in Section 8(vi) of the Credit
Agreement, the Applicable Rate shall be automatically converted to the Base Rate
without further action by the Bank and Borrower shall have no right to have the
Applicable Rate converted from the Base Rate to the LIBOR Rate. Nothing herein
shall be construed to be a waiver by the Bank to have the Principal Amount accrue
interest at the Default Rate or the right of the Bank to the amounts set forth in
Section 2(g) of this Note.
Section 4. Amendment And Modification Of Credit Agreement. The CREDIT AGREEMENT is
hereby amended and modified as follows:
Section 4.1. Section 1(m) of the CREDIT AGREEMENT is deleted in its entirety, and the
following is placed in lieu thereof:
m. “Permitted Acquisitions” means acquisitions: (i) for which the total
consideration paid or to be paid by the Borrower is less than Five Million
Dollars ($5,000,000.00); (ii) for which the total consideration paid or to
be paid by the Borrower in connection therewith when aggregated with the
total consideration paid or to be paid in connection with all other
acquisitions made during such fiscal year of the Borrower, total less than
Ten Million Dollars ($10,000,000.00); and (iii) following the completion of
which, the Borrower remains in compliance with each and every covenant
contained in this Agreement on a pro forma basis.
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Section 4.2. Section 3(a) of the CREDIT AGREEMENT is deleted in its entirety, and the
following is placed in lieu thereof:
a. Issuance of Letters of Credit. The Bank shall issue Letters Of Credit as
requested by the Borrower, provided that no Event of Default has occurred
and is continuing and provided that the aggregate amount of all Letters Of
Credit issued and outstanding and any reimbursement obligations owed to the
Bank arising out of any Letters Of Credit do not exceed Three Million Five
Hundred Thousand Dollars ($3,500,000.00). Any amounts paid by the Bank in
connection with any Letter Of Credit shall be treated as an advance of
proceeds of the Loan, shall be secured by all of the collateral securing the
Loan, and shall bear interest at the Interest Rate. No Letter Of Credit
shall have an expiry date which occurs after the earlier of (i) one year
after the date thereof or (ii) August 1, 2008.
Section 4.3. Section 3(d) of the CREDIT AGREEMENT is deleted in its entirety, and the
following is placed in lieu thereof:
d. Fees, Charges And Other Terms. Upon the issuance of each Letter Of
Credit, the Borrower shall pay to the Bank an issuance fee of one and
one-quarter percent (1.25%) per annum of the face amount of such Letter Of
Credit. In addition, the Borrower shall pay to the Bank such amendment,
extension and other fees as the Bank quotes from time to time with respect
to each Letter Of Credit (which fees shall not be less than Two Hundred
Dollars ($200.00) per fiscal quarter of the Borrower), and shall execute
such applications, reimbursement agreements, or other documents as the Bank
requires from time to time with respect to the issuance, extension,
amendment, or any other requested or required action concerning a Letter Of
Credit.
Section 4.4. Section 7(a) of the CREDIT AGREEMENT is deleted in its entirety, and the
following is placed in lieu thereof:
a. Tangible Net Worth. Permit the Borrower’s Tangible Net Worth to be less
than Sixteen Million Dollars ($16,000,000.00), as of the last day of each
fiscal quarter of the Borrower;
Section 5. Obligors’ Representations And Warranties. As an inducement to the LENDER
to enter into this AGREEMENT, the BORROWER makes the following representations and warranties to
the LENDER and acknowledges the LENDER’S justifiable reliance thereon:
Section 5.1. Authority And Good Standing. The BORROWER: (a) has the power to enter
into this AGREEMENT and any related documents and to perform all of its obligations hereunder and
thereunder; (b) has duly authorized the entry into and performance of this AGREEMENT and all
related documents; and (c) is in good standing in the jurisdiction of its organization and are
qualified to do business and are in good standing in all other jurisdictions in which the BORROWER
transacts business.
Section 5.2. Violations. The execution, delivery, and performance of this AGREEMENT by
the BORROWER will not immediately, or with the passage of time, the giving of notice, or both: (a)
violate any LAWS or result in a default under any contract, agreement, or instrument to which the
BORROWER is a party or by which the BORROWER or any properties of the BORROWER are bound; or (b)
result in the creation or imposition of any security interest in, or lien or encumbrance upon, any
of the assets of the BORROWER, except in favor of the LENDER.
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Section 5.3. Litigation. There is no pending or threatened claim, audit,
investigation, action or other legal proceeding or judgment, order or award of any court, agency or
other governmental authority or arbitrator (any, an “ACTION”) which involves the BORROWER, its
subsidiaries or their respective assets and might have a material adverse effect upon the BORROWER
or any subsidiary or threaten the validity of the LOAN, any of the LOAN DOCUMENTS or any related
document or action. BORROWER will immediately notify the LENDER in writing upon acquiring
knowledge of any such ACTION.
Section 5.4. Liens. The LENDER holds perfected liens and security interests in and to
the assets of the BORROWER as required by the terms and conditions of the LOAN DOCUMENTS, which
liens shall survive intact the transactions contemplated by this AGREEMENT in the same lien
priority existing prior to this AGREEMENT.
Section 5.5. Enforceability. This AGREEMENT and all of the LOAN DOCUMENTS, as
modified and amended in accordance herewith, are the valid and binding obligations of the BORROWER,
as indicated, and are fully enforceable in accordance with all stated terms.
Section 6. Credit Agreement. The BORROWER hereby ratifies and reaffirms the terms and
conditions of the CREDIT AGREEMENT, and acknowledges that the CREDIT AGREEMENT, will continue to be
fully enforceable against the BORROWER in accordance with all stated terms after the execution and
delivery of this AGREEMENT and the consummation of the transactions contemplated herein.
Section 7. Security Agreement. The BORROWER hereby ratifies and reaffirms the terms
and conditions of the SECURITY AGREEMENT, and acknowledges that the SECURITY AGREEMENT, will
continue to be fully enforceable against the BORROWER in accordance with all stated terms after the
execution and delivery of this AGREEMENT and the consummation of the transactions contemplated
herein.
Section 8. No Other Modifications Of Loan Documents. The parties acknowledge that
except as specifically stated in this AGREEMENT, the LOAN DOCUMENTS shall not be deemed to have
been amended, modified or changed in any respect, and shall continue to be enforceable against the
parties thereto in accordance with all stated terms. Nothing contained herein is intended to
limit, vary, or terminate any liens, pledges, security interests or mortgage liens presently
existing for the benefit of the LENDER or to alter the lien priority thereof. The BORROWER
reaffirms and ratifies all of such liens, pledges, security interests or mortgage liens previously
granted for the benefit of the LENDER.
Section 9. Further Assurances. The BORROWER agrees to execute and deliver to the
LENDER such other and further documents as may, from time to time, be reasonably requested by the
LENDER in order to execute or enforce the terms and conditions of this AGREEMENT or any of the LOAN
DOCUMENTS.
Section 10. No Novation; No Refinance. It is the intent of each of the BORROWER and
of the LENDER that nothing contained in this AGREEMENT shall be deemed to effect or accomplish or
otherwise constitute a novation of any of the obligations owed by any of the BORROWER to the LENDER
or to be a refinance of the LOAN. Nothing contained herein shall be deemed to extinguish,
terminate or impair any of the duties or obligations owed by the BORROWER to the LENDER with
respect to the LOAN, or the LOAN DOCUMENTS.
Section 11. Enforceability. This AGREEMENT shall inure to the benefit of and be
enforceable against the BORROWER and the LENDER and their respective successors and
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assigns.
Section 12. Choice Of Law; Consent To Jurisdiction; Agreement As To Venue. This
AGREEMENT shall be construed, performed and enforced and its validity and enforceability determined
in accordance with the LAWS of the State of Maryland (excluding, however, conflict of LAWS
principles). The BORROWER consents to the jurisdiction of the courts of the State of Maryland and
the jurisdiction of the United States District Court for the District of Maryland, if a basis for
federal jurisdiction exists. The BORROWER waives any right to object to the maintenance of a suit
in any of the state or federal courts of the State of Maryland on the basis of improper venue or
inconvenience of forum.
Section 13. Amendment. This AGREEMENT may be amended only by a writing duly executed
by the BORROWER and by the LENDER.
Section 14. Waiver. No failure or delay by the LENDER in the exercise or enforcement
of any of its rights under any LOAN DOCUMENT shall be a waiver of such right or remedy nor shall a
single or partial exercise or enforcement thereof preclude any other or further exercise or
enforcement thereof or the exercise or enforcement of any other right or remedy. The LENDER may at
any time or from time to time waive all or any rights under this AGREEMENT or under any LOAN
DOCUMENT, but any such waiver must be specific and in writing and no such waiver shall constitute,
unless specifically so expressed by the LENDER in writing, a future waiver of performance or exact
performance by the BORROWER. No notice to or demand upon the BORROWER in any instance shall
entitle the BORROWER to any other or further notice or demand in the same, similar or other
circumstance.
Section 15. Obligations Unconditional. The BORROWER’S obligations hereunder and as
set forth in the LOAN DOCUMENTS are absolute and unconditional, and are independent of any defense
or rights of set-off, recoupment or counterclaim which the BORROWER might have against the LENDER.
The BORROWER agrees that all payments required to be made by it shall be made free of any
deductions and without abatement, diminution or set-off. Until the LOAN has been fully repaid and
all other obligations of the BORROWER owed to the LENDER have been fully performed: (a) no payment
provided for herein or by the terms of any of the LOAN DOCUMENTS shall be suspended or
discontinued; and (b) the BORROWER shall fully perform and observe all of their respective
covenants and agreements contained herein and in the LOAN DOCUMENTS, including without limitation,
the covenants and agreements to make all payments required under the LOAN DOCUMENTS, as amended
pursuant to this AGREEMENT.
Section 16. Expenses. The BORROWER agrees to reimburse the LENDER upon demand for the
costs and expenses incurred by the LENDER in connection with the preparation of this AGREEMENT,
including reasonable attorneys’ fees.
Section 17. Counterparts And Delivery. This AGREEMENT may be executed and delivered
in counterparts, and shall be fully enforceable against each signatory, even if all designated
signatories do not actually execute this AGREEMENT. This AGREEMENT, and the signatures to this
AGREEMENT, may be delivered via facsimile.
SECTION 18. RELEASE. IN ORDER TO INDUCE THE LENDER TO ENTER INTO THIS AGREEMENT, THE
BORROWER FOREVER RELEASES AND DISCHARGES THE LENDER AND THE LENDER’S OFFICERS, DIRECTORS,
EMPLOYEES, ATTORNEYS, AGENTS, SUCCESSORS, AND ASSIGNS (COLLECTIVELY, THE “RELEASED PARTIES”) FROM
ANY AND ALL CLAIMS, CAUSES OF ACTION, SUITS AND DAMAGES (INCLUDING CLAIMS FOR ATTORNEYS’ FEES AND
COSTS) WHICH THE BORROWER EVER HAD OR MAY NOW HAVE AGAINST ANY OF THE RELEASED PARTIES, WHETHER
KNOWN OR
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UNKNOWN, INCLUDING BUT NOT LIMITED TO ANY AND ALL CLAIMS BASED UPON OR RELYING ON ANY
ALLEGATIONS OR ASSERTIONS OF DURESS, ILLEGALITY, UNCONSCIONABILITY, BAD FAITH, BREACH OF CONTRACT,
REGULATORY VIOLATIONS, NEGLIGENCE, MISCONDUCT, OR ANY OTHER TORT, CONTRACT OR REGULATORY CLAIM OF
ANY KIND OR NATURE. THIS RELEASE IS INTENDED TO BE FINAL AND IRREVOCABLE AND IS NOT SUBJECT TO THE
SATISFACTION OF ANY CONDITIONS OF ANY KIND.
Section 19. Waiver Of Jury Trial. The BORROWER and the LENDER agree that any suit,
action, or proceeding, whether claim or counterclaim, brought or instituted by the BORROWER, the
LENDER, or any successor or assign of he BORROWER or the LENDER, on or with respect to this
AGREEMENT or any of the LOAN DOCUMENTS or which in any way relates, directly or indirectly, to the
obligations of any of the BORROWER to the LENDER under this AGREEMENT or any of the LOAN DOCUMENTS
or the dealings of the parties with respect thereto, shall be tried by a court and not by a jury.
THE BORROWER AND THE LENDER HEREBY EXPRESSLY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY SUCH SUIT,
ACTION, OR PROCEEDING.