EXHIBIT 10
MODIFICATION AGREEMENT
     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”).
RECITALS
     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.
     NOW, THEREFORE, in consideration of the premises, and other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereby agree as follows:
AGREEMENT
     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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EXHIBIT 10
     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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EXHIBIT 10
     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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EXHIBIT 10
          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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EXHIBIT 10
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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EXHIBIT 10
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.
     IN WITNESS WHEREOF, the parties have executed this AGREEMENT with the
specific intention of creating a document under seal to be effective as of the
date first above written.