AMENDMENT NO. 2 TO LOAN AGREEMENT
Exhibit 10.26
AMENDMENT NO. 2 TO LOAN AGREEMENT
This Amendment No. 2 (the “Amendment”) dated as of December 9, 2005, is among Bank of America, N.A. (the “Bank”), Resources Connection, Inc. (“Borrower 1”), and Resources Connection LLC (“Borrower 2”) (Borrower 1 and Borrower 2 are sometimes referred to collectively as the “Borrowers” and individually as the “Borrower”).
RECITALS
A. The Bank and the Borrowers entered into a certain Loan Agreement dated as of March 26, 2004 (together with any previous amendments, the “Agreement”).
B. The Bank and the Borrowers desire to amend the Agreement.
AGREEMENT
| 1. | Definitions. Capitalized terms used but not defined in this Amendment shall have the meaning given to them in the Agreement. |
| 2. | Amendments. The Agreement is hereby amended as follows: |
| 2.1 | In Paragraph 1.1(a) of the Agreement, the amount “Ten Million and 00/100 Dollars ($10,000,000.00)” is changed to “Three Million and 00/100 Dollars ($3,000,000.00)”. |
| 2.2 | In Paragraph 1.2 of the Agreement, the date “December 1, 2005” is changed to “December 1, 2007”. |
| 2.3 | In Paragraph 1.6(b) of the Agreement, the amount “Ten Million and 00/100 Dollars ($10,000,000.00)” is changed to “Three Million and 00/100 Dollars ($3,000,000.00)”. |
| 2.4 | Paragraph 7.3 of the Agreement is deleted in its entirety. |
| 2.5 | Paragraph 7.4 of the Agreement is amended to read in its entirety as follows: |
“7.4 Profitability. To maintain on a consolidated basis a positive net income after taxes for each annual accounting period, measured on a rolling four-quarter basis. For the purposes of this covenant, nonrecurring, extraordinary income/expenses and extraordinary gains/losses shall be excluded from the calculation.”
| 2.6 | Paragraph 7.5 of the Agreement is deleted in its entirety. |
| 2.7 | The heading of Paragraph 7.8 of the Agreement is amended to read in its entirety as follows: |
“Other liens. Not to create, assume, or allow, any security interest or lien (including judicial liens) on property any Borrower now or later owns, except:”
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| 2.8 | A new Paragraph 7.24 is added to the Agreement, which reads in its entirety as follows: |
“7.24 Bank as Principal Depository. To maintain the Bank as its principal depository bank, including for the maintenance of business, cash management, operating and administrative deposit accounts.”
| 2.9 | Paragraph 9.4 of the Agreement is amended to read in its entirety as follows” |
| (a) | This paragraph concerns the resolution of any controversies or claims between the parties, whether arising in contract, tort or by statute, including but not limited to controversies or claims that arise out of or relate to: (i) this agreement (including any renewals, extensions or modifications); or (ii) any document related to this agreement (collectively a “Claim”). For the purposes of this arbitration provision only, the term “parties” shall include any parent corporation, subsidiary or affiliate of the Bank involved in the servicing, management or administration of any obligation described or evidenced by this agreement. |
| (b) | At the request of any party to this agreement, any Claim shall be resolved by binding arbitration in accordance with the Federal Arbitration Act (Title 9, U.S. Code) (the “Act”). The Act will apply even though this agreement provides that it is governed by the law of a specified state. The arbitration will take place on an individual basis without resort to any form of class action. |
| (c) | Arbitration proceedings will be determined in accordance with the Act, the then-current rules and procedures for the arbitration of financial services disputes of the American Arbitration Association or any successor thereof (“AAA”), and the terms of this paragraph. In the event of any inconsistency, the terms of this paragraph shall control. If AAA is unwilling or unable to (i) serve as the provider of arbitration or (ii) enforce any provision of this arbitration clause, any party to this agreement may substitute another arbitration organization with similar procedures to serve as the provider of arbitration. |
| (d) | The arbitration shall be administered by AAA and conducted, unless otherwise required by law, in any U.S. state where real or tangible personal property collateral for this credit is located or if there is no such collateral, in the state specified in the governing law section of this agreement. All Claims shall be determined by one arbitrator; however, if Claims exceed Five Million Dollars ($5,000,000), upon the request of any party, the Claims shall be decided by three arbitrators. All arbitration hearings shall commence within ninety (90) days of the demand for arbitration and close within ninety (90) days of commencement and the award of the arbitrator(s) shall be issued within thirty (30) days of the close of the hearing. However, the arbitrator(s), upon a showing of good cause, may extend the commencement of the hearing for up to an additional sixty (60) days. The arbitrator(s) shall provide a concise written statement of reasons for the award. The arbitration award may be submitted to any court having jurisdiction to be confirmed, judgment entered and enforced. |
| (e) | The arbitrator(s) will give effect to statutes of limitation in determining any Claim and may dismiss the arbitration on the basis that the Claim is barred. For purposes of the application of the statute of limitations, the service on AAA under applicable AAA rules of a notice of Claim is the equivalent of the filing of a lawsuit. Any dispute concerning this arbitration provision or whether a Claim is arbitrable shall be determined by the arbitrator(s). The arbitrator(s) shall have the power to award legal fees pursuant to the terms of this agreement. |
| (f) | This paragraph does not limit the right of any party to: (i) exercise self-help remedies, such as but not limited to, setoff; (ii) initiate judicial or non-judicial foreclosure against any real or personal property collateral; (iii) exercise any judicial or power of sale rights, or (iv) act in a court of law to obtain an interim remedy, such as but not limited to, |
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| injunctive relief, writ of possession or appointment of a receiver, or additional or supplementary remedies. |
| (g) | The procedure described above will not apply if the Claim, at the time of the proposed submission to arbitration, arises from or relates to an obligation to the Bank secured by real property. In this case, all of the parties to this agreement must consent to submission of the Claim to arbitration. If both parties do not consent to arbitration, the Claim will be resolved as follows: The parties will designate a referee (or a panel of referees) selected under the auspices of AAA in the same manner as arbitrators are selected in AAA administered proceedings. The designated referee(s) will be appointed by a court as provided in California Code of Civil Procedure Section 638 and the following related sections. The referee (or presiding referee of the panel) will be an active attorney or a retired judge. The award that results from the decision of the referee(s) will be entered as a judgment in the court that appointed the referee, in accordance with the provisions of California Code of Civil Procedure Sections 644 and 645. |
| (h) | The filing of a court action is not intended to constitute a waiver of the right of any party, including the suing party, thereafter to require submittal of the Claim to arbitration. |
| (i) | By agreeing to binding arbitration, the parties irrevocably and voluntarily waive any right they may have to a trial by jury in respect of any Claim. Furthermore, without intending in any way to limit this agreement to arbitrate, to the extent any Claim is not arbitrated, the parties irrevocably and voluntarily waive any right they may have to a trial by jury in respect of such Claim. This provision is a material inducement for the parties entering into this agreement. |
3. Representations and Warranties. When the Borrowers sign this Amendment, each Borrower represents and warrants to the Bank that: (a) there is no event which is, or with notice or lapse of time or both would be, a default under the Agreement except those events, if any, that have been disclosed in writing to the Bank or waived in writing by the Bank (b) the representations and warranties in the Agreement are true as of the date of this Amendment as if made on the date of this Amendment, (c) this Amendment does not conflict with any law, agreement, or obligation by which any Borrower is bound, and (d) if the Borrower is a business entity or a trust, this Amendment is within each Borrower’s powers, has been duly authorized, and does not conflict with any of its organizational papers.
4. Effect of Amendment. Except as provided in this Amendment, all of the terms and conditions of the Agreement shall remain in full force and effect.
5. Counterparts. This Amendment may be executed in counterparts, each of which when so executed shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument.
6. FINAL AGREEMENT. BY SIGNING THIS DOCUMENT EACH PARTY REPRESENTS AND AGREES THAT: (A) THIS DOCUMENT REPRESENTS THE FINAL AGREEMENT BETWEEN PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF, (B) THIS DOCUMENT SUPERSEDES ANY COMMITMENT LETTER, TERM SHEET OR OTHER WRITTEN OUTLINE OF TERMS AND CONDITIONS RELATING TO THE SUBJECT MATTER HEREOF, UNLESS SUCH COMMITMENT LETTER, TERM SHEET OR OTHER WRITTEN OUTLINE OF TERMS AND CONDITIONS EXPRESSLY PROVIDES TO THE CONTRARY, (C) THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES, AND (D) THIS DOCUMENT MAY NOT BE CONTRADICTED BY EVIDENCE OF ANY PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR UNDERSTANDINGS OF THE PARTIES.
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This Amendment is executed as of the date stated at the beginning of this Amendment.
| BORROWER(S): | BANK: | |||||||
| Resources Connection, Inc. | Bank of America, N.A. | |||||||
| By: | /s/ Stephen J. Giusto | By: | /s/ Marlal Asadoorian | |||||
| Stephen J. Giusto, Secretary | Authorized Signer | |||||||
| Resources Connection LLC | ||||||||
| By: | Resources Connection, Inc. a Delaware Corporation, as Sole Member | |||||||
| By: | /s/ Stephen J. Giusto | |||||||
| Stephen J. Giusto, Executive VP/CFO | ||||||||
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