EXHIBIT 10.1
THIRD AMENDMENT TO
LOAN AND SECURITY AGREEMENT
THIS THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT (this "Amendment"),
dated November 12, 2002, is entered into among SALESLINK CORPORATION, a
Delaware corporation, INSOLUTIONS INCORPORATED, a Delaware corporation,
ON-DEMAND SOLUTIONS, INC., a Massachusetts corporation, PACIFIC DIRECT
MARKETING CORP., a California corporation, SALESLINK MEXICO HOLDING CORP., a
Delaware corporation (each herein called a "Borrower" and collectively, the
"Borrowers"), the lenders party hereto (herein collectively called the
"Lenders" and each individually called a "Lender") and LASALLE BANK NATIONAL
ASSOCIATION, as a Lender and as Agent for the Lenders.
W I T N E S S E T H:
WHEREAS, Borrowers and Lenders are parties to a Loan and Security Agreement,
dated October 30, 2001, as amended by that certain First Amendment to Loan and
Security Agreement dated as of August 27, 2002 and that certain Consent and
Second Amendment to Loan and Security Agreement dated as of October 30, 2002
(the "Existing Loan Agreement" and as the Existing Loan Agreement is amended
and modified by this Amendment, the "Amended Loan Agreement"); and
WHEREAS, Borrowers have requested that Lenders amend the Existing Loan
Agreement in certain respects and the Lenders are willing to amend the Existing
Loan Agreement in certain respects as provided herein.
NOW, THEREFORE, in consideration of the premises and mutual agreements
herein contained, the parties hereto agree as follows:
SECTION 1
DEFINED TERMS
Terms defined in the Existing Loan Agreement and not otherwise defined
herein are used herein as therein defined.
SECTION 2
AMENDMENT TO EXISTING LOAN AGREEMENT
2.1 Addition of Definition. The following definitions are hereby added to
Section 1.1 of the Existing Loan Agreement, each in proper alphabetical order:
"Cash Collateral Account" shall mean a deposit account maintained with
Agent, which deposit account and all the funds deposited therein will be
subject to
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a first priority security interest in favor of Agent, for its benefit and
the benefit of the Lenders, upon such terms as are required by Agent, into
which Borrowers deposit funds required to be deposited by them pursuant to
Section 3.2(C). Borrowers shall not have access to funds deposited in the
Cash Collateral Account.
"Cash Collateralized Letter of Credit" shall have the meaning ascribed to
it in Section 2.13(A)(iii).
2.2 Amendment to Definition. The definition of "Letter of Credit Sublimit"
in Section 1.1 of the Existing Loan Agreement is hereby amended by deleting the
definition in its entirety and substituting therefor:
"Letter of Credit Sublimit" shall mean an aggregate amount not to exceed
the Aggregate Revolving Credit Commitment.
2.3 Amendment to Issuance of Letters of Credit.
(a) Section 2.13(A)(ii) of the Existing Loan Agreement is hereby amended
by deleting the section in its entirety and substituting therefor the
following:
(ii) In no event shall: (a) the aggregate amount of the Letter of Credit
Obligations at any time exceed the Letter of Credit Sublimit; (b) the sum at
any time of (1) the aggregate amount of Letter of Credit Obligations and (2)
the aggregate principal balance of all outstanding Loans issued pursuant to
the Revolving Credit Facility exceed the then current Availability, except
as provided by Section 2.13(A)(iii); and (c) the expiration date of any
Letter of Credit (including, without limitation, Letters of Credit issued
with an automatic "evergreen" provision providing for renewal absent advance
notice by Borrowers or the Issuing Lender), or the date for payment of any
draft presented thereunder and accepted by the Issuing Lender, be later than
the Letter of Credit Expiry Date; provided, however, that the expiration
date of a Letter of Credit issued by Borrowers at the request or on the
behalf of SL Supply shall not have an expiration date later than one year
after its issuance and shall not include an automatic or "evergreen"
provision providing for renewal of such Letter of Credit.
(b) Section 2.13(A) of the Existing Loan Agreement is hereby amended by
adding the following:
(iii) In the event Borrowers request the issuance of any Letter(s) of
Credit that would, if issued, result in the sum of (1) the aggregate amount
of Letter of Credit Obligations and (2) the aggregate principal amount of
Loans outstanding under the Revolving Credit Facility to exceed the then
current Availability (a "Cash Collateralized Letter of Credit"), Borrowers
may request that the Issuing Lender issue a Cash Collateralized Letter of
Credit provided that Borrowers, jointly and severally, deposit cash in an
amount equal to such excess
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in the Cash Collateral Account prior to the issuance of any such Cash
Collateralized Letter of Credit. To the extent that one or more Cash
Collateralized Letter(s) of Credit expire and are not extended or are
otherwise terminated without any continuing liability to Agent, the Issuing
Lender or the Lenders, which results in the sum of (i) the aggregate
principal amount of Loans outstanding under the Revolving Credit Facility
plus (ii) the aggregate amount of Letter of Credit Obligations being equal
to or less than the Availability as of such date, Agent shall refund the
cash held in the Cash Collateral Account to the Borrowers within five (5)
Business Days. In addition, following any such deposit of cash in the Cash
Collateral Account, at any time and from time to time that the sum of (i)
the aggregate principal amount of Loans outstanding under the Revolving
Credit Facility plus (ii) the aggregate principal amount of Letter of Credit
Obligations becomes equal to or less than the sum of (x) the Availability
plus (y) the amount of cash held in the Cash Collateral Account as of such
date, Agent shall refund to the Borrowers within (5) Business Days a sum of
cash held in the Cash Collateral Account equal to such excess. Any deposit
made to the Cash Collateral Account pursuant to this Section 2.13(A)(iii)
shall be used exclusively to facilitate the issuance of Cash Collateralized
Letters of Credit requested in violation of Section 2.13(A)(ii)(b), and
shall not affect the Availability or Borrowing Base.
2.4 Amendment to Mandatory Prepayment Requirements. Section 3.2(C) of the
Existing Loan Agreement is hereby amended by deleting the section in its
entirety and substituting therefor the following:
(C) Mandatory Prepayment. Borrowers shall not permit the sum of (i) the
aggregate principal amount of Loans outstanding under the Revolving Credit
Facility plus (ii) the Letter of Credit Obligations at any time to exceed
the Availability. Borrowers agree, jointly and severally, to make such
payments to Agent on the Loans outstanding under the Revolving Credit
Facility which are necessary to cure any such excess within two Business
Days after the occurrence thereof. To the extent that any payment made under
the previous sentence is insufficient to cause the Letter of Credit
Obligations to be equal to or less then the Availability, Borrowers agree,
jointly and severally, to immediately deposit with Agent an amount of cash
equal to the entire Letter of Credit Obligation with respect to one or more
Letters of Credit which are causing the deficiency (which, for this purpose,
shall be deemed to be Cash Collateralized Letters of Credit) in the Cash
Collateral Account. To the extent that one or more Cash Collateralized
Letter(s) of Credit expire and are not extended or are otherwise terminated
without any continuing liability to Agent, the Issuing Lender or the
Lenders, which results in the sum of (i) the aggregate principal amount of
Loans outstanding under the Revolving Credit Facility plus (ii) the
aggregate amount of Letter of Credit Obligations being equal to or less than
the Availability as of such date, Agent shall refund the cash held in the
Cash Collateral Account to the Borrowers within five (5) Business Days. In
addition, following any such deposit of cash in the Cash Collateral Account,
at any time and from time to time that the
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sum of (i) the aggregate principal amount of Loans outstanding under the
Revolving Credit Facility plus (ii) the aggregate principal amount of Letter
of Credit Obligations becomes equal to or less than the sum of (x) the
Availability plus (y) the amount of cash held in the Cash Collateral Account
as of such date, Agent shall refund to the Borrowers within (5) Business
Days a sum of cash held in the Cash Collateral Account equal to such excess.
No Lender shall be under an obligation to make Loans under the Revolving
Credit Facility or to issue any Letter of Credit during the period that any
such excess described in the first sentence of this Section 3.2(C) exists or
would result from the making of an additional Loan under the Revolving
Credit Facility or issuing an additional Letter of Credit.
2.5 Amendment to Security Interest. Section 4.1 of the Existing Loan
Agreement is hereby amended by deleting the section in its entirety and
substituting therefor the following:
4.1 Security Interest. To secure the prompt payment to each Lender of the
Liabilities, each Borrower grants to Agent, for the benefit of the Agent and
the Lenders, a continuing security interest in and to all of such Borrower's
Property including the following Property and interest in Property of such
Borrower, whether now owned or existing or to be acquired or arising and
wherever located: (i) all Accounts, Inventory, Equipment, General
Intangibles, tax refunds, chattel paper, instruments, letters of credit,
investment property, including, without limitation, stocks, bonds, interests
in limited liability companies, partnership interests, securities,
certificates of deposit, mutual fund shares, securities entitlements,
including, without limitation, all of each Borrower's rights to any
securities account, any free credit balance or other money owing by any
securities intermediary with respect to such account, all securities and
commodities held by Agent or any of its Affiliates, all commodity contracts
held by any Borrower and all commodity accounts held by any Borrower,
documents and documents of title evidencing or issued with respect to any of
the foregoing; (ii) all of such Borrower's deposit accounts (general or
special) with and credits and other claims against Agent or any Lender;
(iii) all of such Borrower's now owned or to be acquired monies, and any and
all other property of such Borrower now or to be coming into the actual
possession, custody or control of Agent, any Lender or any agent or
affiliate of any Lender in any way or for any purpose (whether for
safekeeping, deposit, custody, pledge, transmission, collection or
otherwise); (iv) all insurance proceeds of or relating to any of the
foregoing; (v) all of such Borrower's books and records, including without
limitation customer lists, credit files, computer programs, printouts and
other materials, relating to any of the foregoing; (vi) the Cash Collateral
Account; and (vii) all accessions and additions to, substitutions for, and
replacements, products and proceeds of any of the foregoing.
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SECTION 3
REPRESENTATIONS AND WARRANTIES
Each Borrower hereby jointly and severally represents and warrants to
Lenders that:
3.1 Due Authorization, etc. The execution and delivery of this Amendment and
the performance of such Borrower's obligations under the Amended Loan Agreement
are duly authorized by all necessary corporate action, do not require any
filing or registration with or approval or consent of any governmental agency
or authority, do not and will not conflict with, result in any violation of or
constitute any default under any provision of its articles of incorporation or
by-laws of that of any of its Subsidiaries or any material agreement or other
document binding upon or applicable to it or any of its Subsidiaries (or any of
their respective properties) or any material law or governmental regulation or
court decree or order applicable to it or any of its Subsidiaries, and will not
result in or require the creation or imposition of any Lien in any of its
properties or the properties of any of its Subsidiaries pursuant to the
provisions of any agreement binding upon or applicable to it or any of its
Subsidiaries.
3.2 Validity. This Amendment has been duly executed and delivered by such
Borrower and, together with the Amended Loan Agreement, are the legal, valid
and binding obligations of such Borrower to the extent such Borrower is a party
thereto, enforceable against such Borrower in accordance with their respective
terms subject, as to enforcement only, to bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforceability of the
rights of creditors generally.
3.3 Representations and Warranties. The representations and warranties
contained in Section 6 of the Existing Loan Agreement are true and correct on
the date of this Amendment, except to the extent (a) that such representations
and warranties solely relate to an earlier date or (b) changed by circumstances
permitted by the Amended Loan Agreement.
SECTION 4
CONDITIONS PRECEDENT
The amendments to the Existing Loan Agreement set forth in Section 2 of this
Amendment shall become effective upon satisfaction of all of the following
conditions precedent:
4.1 Receipt of Documents. Agent shall have received all of the following,
each in form and substance satisfactory to Agent:
(a) Amendment. A counterpart original of this Amendment duly executed by
Borrowers.
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(b) Secretary's Certificate. A certificate of the secretary or clerk of
each Borrower dated the date of the execution of this Amendment or such
other date as shall be acceptable to Agent, substantially in the form of
Exhibit A to this Amendment.
(c) President's Certificate. A certificate dated the date of each
Borrower's execution of this Amendment and signed by the President of each
Borrower, substantially in the form of Exhibit B to this Amendment.
(d) Other. Such other documents as Agent may reasonably request.
4.2 Other Conditions. No Event of Default or Default shall have occurred and
be continuing.
SECTION 5
MISCELLANEOUS
5.1 Warranties and Absence of Defaults. In order to induce Lenders to enter
into this Amendment, each Borrower jointly and severally hereby warrants to
Lenders, as of the date of the actual execution of this Amendment, (a) no Event
of Default or Default has occurred which is continuing as of such date and (b)
the representations and warranties in Section 3 of this Amendment are true and
correct.
5.2 Documents Remain in Effect. Except as amended and modified by this
Amendment, the Existing Loan Agreement and the other documents executed
pursuant to the Existing Loan Agreement remain in full force and effect and
each Borrower hereby ratifies, adopts and confirms its representations,
warranties, agreements and covenants contained in, and obligations and
liabilities under, the Existing Loan Agreement and the other documents executed
pursuant to the Existing Loan Agreement.
5.3 Reference to Loan Agreement. On and after the effective date of this
Amendment, each reference in the Amended Loan Agreement to "this Agreement,"
"hereunder," "hereof," "herein" or words of like import, and each reference to
the "Loan Agreement" in any Note and in any Loan Documents, or other
agreements, documents or other instruments executed and delivered pursuant to
the Amended Loan Agreement, shall mean and be a reference to the Amended Loan
Agreement.
5.4 Headings. Headings used in this Amendment are for convenience of
reference only, and shall not affect the construction of this Amendment.
5.5 Counterparts. This Amendment may be executed in any number of
counterparts, and by the parties hereto on the same or separate counterparts,
and each such counterpart, when executed and delivered, shall be deemed to be
an original, but all such counterparts shall together constitute but one and
the same Amendment.
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5.6 Expenses. Borrowers agree to pay on demand all costs and expenses of
Agent (including reasonable fees, charges and disbursements of Agent's
attorneys) in connection with the preparation, negotiation, execution, delivery
and administration of this Amendment and all other instruments or documents
provided for herein or delivered or to be delivered hereunder or in connection
herewith. In addition, Borrowers agree to pay, and save Lenders harmless from
all liability for, any stamp or other taxes which may be payable in connection
with the execution or delivery of this Amendment, the borrowings under the
Amended Loan Agreement, and the execution and delivery of any instruments or
documents provided for herein or delivered or to be delivered hereunder or in
connection herewith. All obligations provided in this Section 5.6 shall survive
any termination of this Amendment or the Amended Loan Agreement.
5.7 Governing Law. This Amendment shall be a contract made under and
governed by the internal laws of the State of Illinois. Wherever possible, each
provision of this Amendment shall be interpreted in such manner as to be
effective and valid under applicable laws, but if any provision of this
Amendment shall be prohibited by or invalid under such laws, such provisions
shall be ineffective only to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining
provisions of this Amendment.
5.8 Successors. This Amendment shall be binding upon Borrowers, Lenders,
Agent and their respective successors and assigns, and shall inure to the
benefit of Borrowers, Lenders, Agent and the successors and assigns of Lenders.
[signature page attached]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized and delivered
at Chicago, Illinois as of the date first above written.
BORROWERS:
SALESLINK CORPORATION,
a Delaware corporation
By: /s/ Bryce C. Boothby, Jr.
-----------------------------
Name: Bryce C. Boothby, Jr.
Title: President and CEO
INSOLUTIONS INCORPORATED,
a Delaware corporation
By: /s/ Bryce C. Boothby, Jr.
-----------------------------
Name: Bryce C. Boothby, Jr.
Title: President
ON-DEMAND SOLUTIONS, INC.,
a Massachusetts corporation
By: /s/ Bryce C. Boothby, Jr.
-----------------------------
Name: Bryce C. Boothby, Jr.
Title: President
PACIFIC DIRECT MARKETING CORP.,
a California corporation
By: /s/ Bryce C. Boothby, Jr.
-----------------------------
Name: Bryce C. Boothby, Jr.
Title: President
SALESLINK MEXICO HOLDING CORP.,
a Delaware corporation
By: /s/ Bryce C. Boothby, Jr.
-----------------------------
Name: Bryce C. Boothby, Jr.
Title: President
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LENDERS:
LASALLE BANK NATIONAL ASSOCIATION,
as a Lender and as Agent
By: /s/ David M. Bacon
-----------------------------
Name: David M. Bacon
Title: Loan Officer
CITIZEN'S BANK OF MASSACHUSETTS,
as a Lender
By: /s/ Ralph L. Letner
-----------------------------
Name: Ralph L. Letner
Title: Vice President
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