Exhibit 10.58
EXECUTION VERSION
THIRD AMENDMENT TO CREDIT
AGREEMENT
THIS THIRD AMENDMENT TO CREDIT
AGREEMENT (this “ Amendment ”) is made as of
February 9, 2009 by and among LECG, LLC (the “
Company ”), the financial institutions party hereto
(the “ Lenders ”), and BANK OF AMERICA, N.A.,
successor by merger to LaSalle Bank National Association, as
administrative agent for the Lenders (the “ Administrative
Agent ”).
RECITALS
A.
The Company, the financial
institutions party thereto and the Administrative Agent entered
into a Credit Agreement dated as of December 15, 2006 and
amended as of July 16, 2007 and December 20, 2007 (as so
amended, the “ Credit Agreement ”).
B.
The Company, the Lenders and the
Administrative Agent wish to further amend the Credit Agreement as
set forth herein.
NOW THEREFORE, in consideration of
the matters set forth in the recitals and the covenants and
provisions herein set forth, and other valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1.
Definitions
.
Capitalized terms used but not defined herein are used as defined
in the Credit Agreement.
2.
Amendments
. The
Credit Agreement is hereby amended as follows:
(a)
Section 1.1
of the Credit
Agreement shall be amended at the definition “ Acquired
Debt ”, by deleting “Company” each time it
occurs and replacing it with “Parent”.
(b)
Section 1.1
of the Credit
Agreement shall be amended as the definition “
Administrative Agent ”, by deleting it and replacing
it with the following:
Administrative Agent
means Bank of America, N.A.
(successor by merger to LaSalle) in its capacity as administrative
agent and collateral agent for the Lenders hereunder and any
successor thereto in such capacity.
(c)
Section 1.1
of the Credit
Agreement shall be amended at the definition “ Applicable
Margin ” by deleting it in full and replacing it with the
following:
Applicable Margin
means, for any day, the rate per
annum set forth below opposite the level (the “ Level
”) then in effect, it being understood that the Applicable
Margin for (i) Eurocurrency Rate Loans and the L/C Fee Rate
shall be the percentage set forth under the column
“Eurocurrency Rate Margin and L/C Fee Rate”,
(ii) Base Rate Loans shall be the percentage set forth under
the column
“Base Rate Margin”, and
(iii) the Non-Use Fee Rate shall be the percentage set forth
under the column “Non-Use Fee Rate”:
|
Level
|
|
Total Debt
to EBITDA Ratio
|
|
Eurocurrency
Rate Margin
and
L/C Fee Rate
|
|
Base Rate
Margin
|
|
Non-Use
Fee Rate
|
|
|
I
|
|
Less than or equal to 1.0:1.0
|
|
2.50
|
%
|
1.50
|
%
|
0.45
|
%
|
|
II
|
|
Greater than 1.0:1.0 but less than or equal to
2.0:1.0
|
|
3.00
|
%
|
2.00
|
%
|
0.50
|
%
|
|
III
|
|
Greater than 2.0:1.0
|
|
3.50
|
%
|
2.50
|
%
|
0.50
|
%
|
The Eurocurrency Rate Margin, the
Base Rate Margin, the Non-Use Fee Rate and the L/C Fee Rate shall
be adjusted, to the extent applicable, on the fifth (5th) Business
Day after the Company provides the annual and quarterly financial
statements and other information pursuant to
Sections 10.1.1 or 10.1.2 , as applicable, and
the related Compliance Certificate, pursuant to
Section 10.1.3 . Notwithstanding anything
contained in this paragraph to the contrary, (a) if the
Company fails to deliver the financial statements and Compliance
Certificate in accordance with the provisions of Sections
10.1.1 , 10.1.2 and 10.1.3 , the Eurocurrency
Rate Margin, the Base Rate Margin, the Non-Use Fee Rate and the L/C
Fee Rate shall be based upon Level III above beginning on the
date such financial statements and Compliance Certificate were
required to be delivered until the fifth (5th) Business Day after
such financial statements and Compliance Certificate are actually
delivered, whereupon the Applicable Margin shall be determined by
the then current Level, and (b) no reduction to any Applicable
Margin shall become effective at any time when an Event of Default
or Unmatured Event of Default has occurred and is
continuing.
(d)
Section 1.1
of the Credit
Agreement shall be amended at the definition of “ Base
Rate ” by deleting it in its entirety and replacing it
with the following:
Base Rate means, for any day, a rate per annum equal to
the sum of (a) the highest of (i) the Prime Rate for such
day, (ii) the sum of 0.50% plus the Federal Funds Rate for
such day and (iii) except during a Eurocurrency Unavailability
Period, the Eurocurrency Rate plus 1.00%; plus (b) the Market
Disruption Spread, if any.
(e)
Section 1.1
of the Credit
Agreement shall be amended by adding the following, in appropriate
alphabetical order:
Base Rate Margin
– see the definition of
Applicable Margin.
(f)
Section 1.1
of the Credit
Agreement shall be amended at the definition “ Capital
Expenditures ”, by deleting “Company” and
replacing it with “Parent”.
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(g)
Section 1.1
of the Credit
Agreement shall be further amended by adding the following
definitions, in appropriate alphabetical order:
Collateral
means all property of the Parent,
the Borrower and Domestic Subsidiaries from time to time subject to
or required to be subject to the Lien of the Collateral Documents,
in personal property of such Loan Parties as to which a Lien may be
perfected by a UCC-1 filing (or if required, by Required Lenders
during an Event of Default, by a control agreement), or pursuant to
an assignment of key person life insurance policy.
Collateral Documents
means all agreements, instruments
and documents from time to time executed and delivered in
connection with this Agreement pursuant to which Liens are granted
or purported to be granted to the Administrative Agent in personal
property of the Parent, the Company, and any Domestic Subsidiary to
the extent such Liens may be perfected by the filing of a financing
statement under the Uniform Commercial Code (or, if required by the
Required Lenders during an Event of Default, by a control
agreement), or pursuant to an assignment of life insurance policy,
in each case, securing all or part of the Obligations, or
perfecting any such Lien.
(h)
Section 1.1
of the Credit
Agreement shall be amended at the definition “
Consolidated Net Income ”, by deleting
“Company” each time it occurs and replacing it with
“Parent”.
(i)
Section 1.1
of the Credit
Agreement shall be further amended by adding the following
additional definition, in appropriate alphabetical
order:
Domestic Subsidiary
means any Subsidiary organized and
existing under the laws of the United States or any state thereof
(including the District of Columbia).
(j)
Section 1.1
of the Credit
Agreement shall be further amended by deleting the definition
“ EBIT ” and replacing it with the
following:
EBIT means, for any period, Consolidated Net Income
for such period plus , to the extent deducted in determining
such Consolidated Net Income, without duplication,
(i) Interest Expense, (ii) income tax expense,
(iii) amortization of Signing and Performance Bonus expense,
(iv) non-cash equity compensation expense, (v) other
non-cash charges (excluding any such non-cash charge to the extent
that it represents an accrual or reserve for potential cash items
in the future), (vi) extraordinary non-cash losses (as
determined in accordance with GAAP) incurred other than in the
ordinary course of business, (vii) goodwill impairment expense
per GAAP, and (viii) expensed acquisition costs of up to
$500,000.
(k)
Section 1.1
of the Credit
Agreement shall be further amended at the definition “
Eurocurrency Rate ” by deleting it in its entirety and
replacing it with the following:
3
Eurocurrency Rate
means a rate per annum determined by
the Administrative Agent pursuant to the following
formula:
|
|
Eurocurrency Rate =
|
Eurocurrency Base Rate
|
|
|
|
(1.00 – Eurocurrency Reserve
Percentage)
|
Where,
(a)
“ Eurocurrency Base
Rate ” means:
(i)
for any Interest Period with respect
to a Eurocurrency Rate Loan, the rate per annum equal to
(A) the British Bankers Association LIBOR Rate as published by
Reuters (or other commercially available source providing
quotations of BBA LIBOR as designated by the Administrative Agent
from time to time) (“ BBA LIBOR ”), at
approximately 11:00 a.m., London time, two Business Days prior
to the commencement of such Interest Period, for deposits in the
applicable Designated Currency (for delivery on the first day of
such Interest Period) with a term equivalent to such Interest
Period or (B) if such published rate is not available at such
time for any reason, the rate determined by the Administrative
Agent to be the rate at which deposits in the applicable Designated
Currency for delivery on the first day of such Interest Period in
same day funds in the approximate amount of the Eurocurrency Rate
Loan being made, continued or converted by Bank of America, N.A.
and with a term equivalent to such Interest Period would be offered
by Bank of America, N.A.’s London Branch to major banks in
the London interbank Eurocurrency market at their request at
approximately 11:00 a.m. (London time) two Business Days prior
to the commencement of such Interest Period; and
(ii)
for any day with respect to a Base
Rate Loan, the rate per annum equal to (A) BBA LIBOR for
Dollar deposits being delivered in the London interbank market for
a term of one month commencing that day (or, if such day is not a
Business Day, on the next preceding Business Day) or (B) if
such published rate is not available at such time for any reason,
the rate determined by the Administrative Agent to be the rate at
which deposits in Dollars for delivery on such day (or, if such day
is not a Business Day, on the next preceding Business Day) in same
day funds in the approximate amount of the Base Rate Loan being
made, continued or converted by Bank of America, N.A. and with a
term equal to one month would be offered by Bank of America,
N.A.’s London Branch to major banks in the London interbank
Eurocurrency market at their request at the date and time of
determination; and
4
(b)
“ Eurocurrency Reserve
Percentage ” means, for any day during any Interest
Period (or in the case of any Base Rate Loan, any other day of
determination), the reserve percentage (expressed as a decimal,
carried out to five decimal places) in effect on such day, whether
or not applicable to any Lender, under regulations issued from time
to time by the FRB for determining the maximum reserve requirement
(including any emergency, supplemental or other marginal reserve
requirement) with respect to eurocurrency funding (currently
referred to as “Eurocurrency liabilities”). The
Eurocurrency Rate for each outstanding Eurocurrency Rate Loan shall
be adjusted automatically as of the effective date of any change in
the Eurocurrency Reserve Percentage.
(l)
Section 1.1
of the Credit
Agreement shall be further amended by deleting the definition
“ Eurocurrency Rate Loan ” and replacing it with
the following:
Eurocurrency Rate Loan
means any Loan which bears interest
at a rate determined by reference to the Eurocurrency Rate
(excluding any Loan that bears interest based on clause
(iii) of the definition of Base Rate).
(m)
Section 1.1
of the Credit
Agreement shall be further amended by inserting in alphabetical
order the following additional definition:
Eurocurrency Unavailability
Period means any period
of time during which a notice delivered to the Company in
accordance with Section 8.3 shall remain in force and
effect.
(n)
Section 1.1
of the Credit
Agreement shall be further amended at the definition “
Fixed Charge Coverage Ratio ”, by deleting the phrase
“Rentals for such Computation Period” each time it
appears, and replacing it with “Rentals of the Parent and its
Subsidiaries for such Computation Period”.
(o)
Section 1.1
of the Credit
Agreement shall be further amended, at the definition “
Interest Expense ”, by deleting “Company”
and replacing it with “Parent”.
(p)
Section 1.1
of the Credit
Agreement shall be further amended, at the definition “
Loan Documents ”, by deleting such definition and
replacing it with the following:
Loan Documents
means this Agreement, the Notes, the
Letters of Credit, the Master Letter of Credit Agreement, the L/C
Applications, the Agent Fee Letter, the Guaranty and Pledge
Agreement, the Collateral Documents, and all documents, instruments
and agreements delivered in connection with the
foregoing.
(q)
Section 1.1
of the Credit
Agreement shall be further amended by adding, in appropriate
alphabetical order, the following definition:
5
Market Disruption
Spread means zero, unless
a notice delivered pursuant to Section 8.2 is in
effect, in which case, such spread shall be a rate per annum equal
to 2.00%.
(r)
Section 1.1
of the Credit
Agreement shall be further amended by adding, in appropriate
alphabetical order, the following definition:
Minimum Asset Coverage
Ratio means, in respect
of the Parent and its Subsidiaries on a consolidated basis, as of
any date of determination, (i) the sum of cash and net
accounts receivable, divided by (ii) Total Debt, as of such
date.
(s)
Section 1.1
of the Credit
Agreement shall be further amended by deleting the defined term
“Required Lenders” and replacing it with the
following:
Required Lenders
means, at any time, two or more
Lenders whose Pro Rata Shares exceed 50% as determined pursuant to
clause (b) of the definition of “Pro Rata
Share”.
(t)
Section 1.1
of the Credit
Agreement shall be further amended, at the definition “
Subsidiary ”, by deleting “Company” and
replacing it with “Parent”.
(u)
Section 1.1
of the Credit
Agreement shall be further amended, at the definition “
Total Debt ”, by replacing “Company” each
time it appears, and replacing it with
“Parent”.
(v)
Section 1.1
of the Credit
Agreement shall be further amended, by deleting the definition
“ Total Net Leverage Ratio ”.
(w)
Section 1.1
of the Credit
Agreement shall be further amended by adding the following
additional definition in appropriate alphabetical
order:
Total Debt to EBITDA
Ratio means, as of the
last day of any Fiscal Quarter, the ratio of (a) Total Debt as
of such day to (b) EBITDA for the Computation Period ending on
such day.
(x)
Section 1.1
of the Credit
Agreement shall be further amended, at the definition “
Wholly-Owned Subsidiary ”, by deleting the phrase
“as to any Person”, and replacing it with “as to
the Parent”.
(y)
Section 4.1
of the Credit
Agreement shall be amended by deleting clause (a) thereof
and replacing it with the following:
(a)
At all times while such Loan is a
Base Rate Loan, at a rate per annum equal to the sum of the Base
Rate plus the Applicable Margin from time to time in effect;
and
(z)
Section 8.2
of the Credit
Agreement shall be deleted in its entirety and replaced with the
following:
6
8.2
Basis for Determining Interest
Rate Inadequate or Unfair .
(a)
If:
(i)
the Administrative Agent reasonably
determines (which determination shall be binding and conclusive on
the Company absent manifest error) that by reason of circumstances
affecting the interbank Eurocurrency Rate market adequate and
reasonable means do not exist for ascertaining the applicable
Eurocurrency Rate; or
(ii)
the Required Lenders advise the
Administrative Agent that the Eurocurrency Rate as determined by
the Administrative Agent will not adequately and fairly reflect the
cost to such Lenders of maintaining or funding Eurocurrency Rate
Loans for such Interest Period (taking into account any amount to
which such Lenders may be entitled under Section 8.1 )
or that the making or funding of Eurocurrency Rate Loans has become
impracticable as a result of an event occurring after the date of
this Agreement which in the opinion of such Lenders materially
affects such Loans;
then the Administrative Agent shall promptly notify
the other parties thereof and, so long as such circumstances shall
continue, (A) no Lender shall be under any obligation to make
or convert any Base Rate Loans into Eurocurrency Rate Loans and
(B) on the last day of the current Interest Period for each
Eurocurrency Rate Loan, such Loan shall, unless then repaid in
full, automatically convert to a Base Rate Loan.
(b)
If the Lenders having 25% or more of
the Commitments determine (which determination shall be conclusive
and binding upon the Company) that the Eurocurrency Rate or the
Base Rate, as the case may be, will not adequately and fairly
reflect the cost to such Lenders (as conclusively certified by such
Lenders) of making or maintaining their affected Loans, the
Administrative Agent shall give notice thereof to the Company and
the Lenders as soon as practicable thereafter and, upon delivery of
such notice and until the Administrative Agent (upon the
instruction of the such Lenders) revokes such notice, the Market
Disruption Spread shall be included in the calculation of Base Rate
and Eurocurrency Rate.
(aa)
Section 8.3
of the Credit
Agreement shall be deleted in its entirety and replaced with the
following:
8.3
Illegality
. If any Lender determines
that any change in law or regulation after the Closing Date has
made it unlawful, or that any governmental authority has changed
its interpretation of any applicable law or regulation after the
Closing Date and asserted that it is unlawful, for any Lender or
its applicable lending office to make, maintain or fund
Eurocurrency Rate Loans, or to determine or charge interest rates
based upon the Eurocurrency Rate, or any governmental authority has
imposed material restrictions on the authority of such
7
Lender to purchase or sell, or to
take deposits of, Dollars in the London interbank market, then, on
notice thereof by such Lender to the Company through the
Administrative Agent, any obligation of such Lender to make or
continue Eurocurrency Rate Loans, or to convert Base Rate Loans to
Eurocurrency Rate Loans, or, if such notice relates to the
unlawfulness or asserted unlawfulness of charging interest based on
the Eurocurrency Rate to make Base Rate Loans as to which the
interest rate is determined with referenc
