TENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT
Exhibit 10.24
TENTH AMENDMENT
TO LOAN AND SECURITY AGREEMENT
This Tenth Amendment to Loan and Security Agreement (this “Amendment”) is entered into as of December 9, 2011, by and between COMERICA BANK (“Bank”) and XXXXXXXXX.XXX, INC., a Delaware corporation (“Borrower”).
RECITALS
A. Borrower and Bank are parties to that certain Loan and Security Agreement dated as of October 31, 2008, as amended from time to time including by that certain First Amendment to Loan and Security Agreement dated as of February 24, 2009, that certain Second Amendment to Loan and Security Agreement dated as of March 6, 2009, that certain Third Amendment to Loan and Security Agreement dated as of July 7, 2009, that certain Fourth Amendment to Loan and Security Agreement dated as of July 27, 2009, that certain Fifth Amendment to Loan and Security Agreement dated as of January 8, 2010, that certain Sixth Amendment and Waiver to Loan and Security Agreement dated as of October 29, 2010, that certain Seventh Amendment to Loan and Security Agreement dated as of March 1, 2011, that certain Eighth Amendment to Loan and Security Agreement dated as of May 17, 2011 and that certain Ninth Amendment to Loan and Security Agreement dated as of July 20, 2011 (collectively, the “Agreement”).
B. Borrower has requested that Bank amend the Agreement as provided herein. Subject to and on the terms and conditions set forth herein, Bank is willing to amend the Agreement in accordance with the terms of this Amendment, provided that the conditions set forth herein are satisfied, and all security interests and liens under the Loan Documents shall continue to exist and remain in full force and effect.
NOW, THEREFORE, for good and valuable consideration, the receipt of which is hereby acknowledged, the parties agree as follows:
1. The following defined terms in Section 1.1 of the Agreement hereby are amended and restated as follows:
“ACH Sublimit” means a sublimit for Automated Clearing House transactions under the Revolving Line not to exceed an amount equal to One Million Five Hundred Thousand Dollars ($1,500,000) minus any amounts outstanding under the Letter of Credit Sublimit and the Credit Card Services Sublimit, and minus the FX Amount.
“Credit Card Services Sublimit” means a sublimit for corporate credit cards and e-commerce or merchant account services under the Revolving Line not to exceed an amount equal to One Million Five Hundred Thousand Dollars ($1,500,000) minus any amounts outstanding under the Letter of Credit Sublimit and the ACH Sublimit, and minus the FX Amount.
“Letter of Credit Sublimit” means a sublimit for Letters of Credit under the Revolving Line not to exceed an amount equal One Million Five Hundred Thousand Dollars ($1,500,000) minus any amounts outstanding under the ACH Sublimit and the Credit Card Services Sublimit, and minus the FX Amount.
2. Section 1.1 of the Agreement is hereby amended by amending and restating clause (g) of the definition of “Permitted Indebtedness” in its entirety to read as follows:
“(g) (i) Indebtedness in an aggregate outstanding amount not to exceed One Hundred Thousand Dollars ($100,000) for a surety bond issued by Travelers Insurance in favor of the County of Los Angeles to register certain of Borrower’s officers, and (ii) Indebtedness in an aggregate outstanding amount not to exceed One Million Dollars ($1,000,000) under surety bonds issued by an insurance company in favor of other state agencies in connection with registration requirements in the ordinary course of business; and”
3. Section 2.1(b)(vi) of the Agreement is hereby amended and restated in its entirety to read as follows:
(vi) Foreign Exchange Sublimit. Subject to and upon the terms and conditions of this Agreement and any other agreement that Borrower may enter into with the Bank in connection with foreign exchange transactions (“FX Contracts”), Borrower may request Bank to enter into FX Contracts with Borrower due not later than the Revolving Maturity Date. Borrower shall pay any standard issuance and other fees that Bank notifies Borrower will be charged for issuing and processing FX Contracts for Borrower. The FX Amount shall at all times be equal to or less than One Million Five Hundred Thousand Dollars ($1,500,000). The “FX Amount” shall equal the amount determined by multiplying (i) the aggregate amount, in United States Dollars, of FX Contracts between Borrower and Bank remaining outstanding as of any date of determination, by (ii) the applicable Foreign Exchange Reserve Percentage as of such date. The “Foreign Exchange Reserve Percentage” shall be a percentage as determined by Bank, in its sole discretion from time to time. The initial Foreign Exchange Reserve Percentage shall be ten percent (10%).
4. Section 2.1(b)(viii) of the Agreement is hereby amended and restated in its entirety to read as follows:
(viii) Covenant Holiday. Borrower may, at its option, elect not to have any Advances outstanding during specified periods of time (each, a “Covenant Holiday Period”); provided that a Covenant Holiday Period may be deemed to exist so long as all Advances have been repaid in full, notwithstanding the fact that amounts remain outstanding under the ACH Sublimit, the Credit Card Services Sublimit or the Letter of Credit Sublimit. A Covenant Holiday Period shall begin on the Business Day immediately following the date on which Borrower repays, in full, all outstanding Advances, all accrued interest thereon, and all other related outstanding monetary Obligations outstanding under the Revolving Line (other than amounts outstanding under sublimits to the Revolving Line for which an Advance has not been made). During a Covenant Holiday Period, Borrower may not request any Advances, and Bank shall have no obligation to make any Advances. To terminate a Covenant Holiday Period, Borrower shall deliver to Bank at least three (3) Business Days prior to the proposed end of the Covenant Holiday Period, a certificate of a Responsible Officer, in form satisfactory to Bank, certifying that Borrower is in compliance with each of the financial covenants set forth in Section 6.7 hereof as of such date, calculated on a pro forma basis, based on the financial statements for the most recently ended reporting period for which Borrower has delivered (or is then required to deliver) a Compliance Certificate in accordance with Section 6.2, which pro forma calculations shall include taking into account the Obligations to be incurred in connection with the proposed Advance.
5. No course of dealing on the part of Bank or its officers, nor any failure or delay in the exercise of any right by Bank, shall operate as a waiver thereof, and any single or partial exercise of any such right shall not preclude any later exercise of any such right. Bank’s failure at any time to require strict performance by Borrower of any provision shall not affect any right of Bank thereafter to demand strict compliance and performance. Any suspension or waiver of a right must be in writing signed by an officer of Bank.
6. Unless otherwise defined, all initially capitalized terms in this Amendment shall be as defined in the Agreement. The Agreement, as amended hereby, shall be and remain in full force and effect in accordance with its respective terms and hereby is ratified and confirmed in all respects. Except as expressly set forth herein, the execution, delivery, and performance of this Amendment shall not operate as a waiver of, or as an amendment of, any right, power, or remedy of Bank under the Agreement, as in effect prior to the date hereof. Borrower ratifies and reaffirms the continuing effectiveness of all promissory notes, guaranties, security agreements, mortgages, deeds of trust, environmental agreements, and all other instruments, documents and agreements entered into in connection with the Agreement, and specifically ratifies and confirms the pledge of the equity interests in each of its Subsidiaries. Borrower hereby further affirms its absolute and unconditional promise to pay to Bank the Advances, other Credit Extensions all other amounts due under the Letters of Credit and the other Loan Documents (including, without limitation, the Obligations), at the times and in the amounts provided for therein. Borrower confirms and agrees that the obligations of Borrower to Bank under the Agreement as supplemented hereby are secured by and entitled to the benefits of the Loan Documents. The parties agree that this Amendment shall be deemed to be one of
the Loan Documents under the Agreement, Nothing in this Amendment shall constitute a satisfaction of Borrower’s Obligations.
7. In order to induce Bank to enter into this Amendment, Borrower hereby represents and warrants to Bank as follows:
7.1 The representations and warranties contained in the Agreement and the other Loan Documents were true and correct in all material respects when made and continue to be true and correct in all material respects as of the date of this Amendment, except to the extent that such representations and warranties relate expressly to an earlier date only, in which case, they remain true and correct in all material respects as of such earlier date.
7.2 Both before and immediately after giving effect to this Amendment and the other transactions contemplated hereby, no Event of Default, or other event or circumstance that with the giving of notice or the passage of time could become an Event of Default, has occurred and is continuing.
7.3 The execution, delivery, and performance by Borrower of this Amendment and the other documents, instruments and agreements to which Borrower is a party delivered or to be delivered to Bank in connection herewith (i) are within the corporate powers of Borrower and have been duly authorized by all necessary corporate action on the part of Borrower, (ii) do not require any governmental or third party consents, except those which have been duly obtained and are in full force and effect, (iii) do not and will not conflict with any requirement of law, Borrower’s or any Guarantor’s articles or certificate of incorporation, bylaws, operating agreement, partnership agreement, minutes or resolutions, (iv) after giving effect to this Amendment, do not result in any breach of or constitute a default under any agreement or instrument to which Borrower, any Guarantor or any of their respective Subsidiaries is a party or by which they or any of their respective properties are bound, and (v) do not result in or require the creation or imposition of any mortgage, deed of trust, pledge, lien, security interest or other charge or encumbrance of any nature upon any of the assets or properties of Borrower or any Guarantor, other than those in favor of Bank.
7.4 This Amendment and the other instruments and agreements delivered or to be delivered to Bank in connection herewith have been duly executed and delivered by Borrower and constitutes the legal, valid, and binding obligation of Borrower, enforceable against Borrower in accordance with their respective terms, except to the extent that (i) enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws of general application affecting the rights and remedies of creditors, (ii) enforcement may be subject to general principles of equity, and (iii) the availability of the remedies of specific performance and injunctive relief may be subject to the discretion of the court before which any proceedings for such remedies may be brought.
8. As a condition to the effectiveness of this Amendment, Bank shall have received, in form and substance satisfactory to Bank, the following:
(a) this Amendment, duly executed by Borrower;
(b) affirmations of guaranty and security agreements duly executed by each of XXXXXXXXXXXX.XXX, LLC, a Delaware limited liability company, XXXXXXXXX.XXX TEXAS, LLC, a Texas limited liability company, LZ FINANCIAL SERVICES LLC, a Delaware limited liability company, UNITED STATES CORPORATION AGENTS, INC., a California corporation, UNITED STATES CORPORATION AGENTS, INC., a Nevada corporation, and UNITED STATES CORPORATION AGENTS, INC., a Maryland corporation;
(c) an amount equal to all Bank Expenses incurred through the date of this Amendment, which amounts may be debited from any of Borrower’s accounts with Bank; and
(d) such other documents, instruments and certificates, and completion of such other matters, as Bank may reasonably deem necessary or appropriate.
9. This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one instrument.
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IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the first date above written.
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XXXXXXXXX.XXX, INC. | |
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By: |
/s/ Xxxx X. Xxxxxxx |
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Title: |
CFO |
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COMERICA BANK | |
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By: |
/s/ Xxxxx X. Xxxxxx |
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Title: |
SVP |
[Signature Page to Tenth Amendment to Loan and Security Agreement]
