Exhibit 10.1
THIRD
AMENDED AND RESTATED
LOAN AGREEMENT
BY AND AMONG
DYNAMICS RESEARCH CORPORATION
DRC INTERNATIONAL CORPORATION
X.X. XXXX ASSOCIATES, INC.
as the Borrowers,
and
THE LENDERS PARTY HERETO
and
XXXXX BROTHERS XXXXXXXX & CO.,
as Administrative Agent
and
TD BANKNORTH, N.A.
as Documentation Agent
and
BANK OF AMERICA, N.A.
as Syndication Agent
as of September 29, 2006
TABLE OF CONTENTS
ARTICLE 1 - DEFINITIONS.................................................... 2
ARTICLE 2 - AGENTED BORROWINGS............................................. 15
2-1. Designation of Agent Borrower.................................... 15
2-2. Operation of Loan Arrangement.................................... 15
2-3. Loans Directly to Borrower....................................... 15
2-4. Continuation of Authority of Lead Borrower....................... 16
2-5. Concerning Joint and Several Liability of the Borrowers.......... 16
2-6. Indemnification.................................................. 18
ARTICLE 3 - THE REVOLVING CREDIT/LIBOR PROVISIONS.......................... 19
3-1. Establishment of Revolving Credit................................ 19
3-2. Reductions of Commitment......................................... 19
3-3. Procedures Under Revolving Credit................................ 19
3-4. The Loan Account................................................. 22
3-5. The Revolving Credit Note........................................ 23
3-6. Payment of Loan Account.......................................... 23
3-7. Interest......................................................... 23
3-8. Duration of Interest Periods..................................... 24
3-9. Changed Circumstances............................................ 24
3-10. Payments and Prepayments......................................... 25
3-11. Fees............................................................. 26
3-12. Fees For L/C's................................................... 26
3-13. Effect of Honor of L/C's......................................... 27
3-14. Additional Provisions Relating to L/C's.......................... 27
3-15. Indemnification.................................................. 29
3-16. Computation of Interest and Fees................................. 30
3-17. Automatic Payment................................................ 30
3-18. Additional Costs, Etc............................................ 30
3-19. Capital Adequacy................................................. 31
3-20. Lenders' Commitments............................................. 32
3-21. Replacement Lenders.............................................. 32
ARTICLE 4 - CONDITIONS PRECEDENT........................................... 32
4-1. Corporate Due Diligence.......................................... 33
4-2. Opinion.......................................................... 33
4-3. Officers' Certificates........................................... 33
4-4. Guaranties....................................................... 33
4-5. Lien Search Results.............................................. 33
4-6. Consents and Approvals........................................... 33
4-7. All Fees and Expenses Paid....................................... 33
4-8. Lockbox.......................................................... 33
4-9. Additional Documents............................................. 34
4-10. No Defaults under Applicable Law or Material Agreements.......... 34
(i)
4-11. No Litigation.................................................... 34
4-12. Representations and Warranties................................... 34
4-13. No Suspension Event.............................................. 34
4-14. No Adverse Change................................................ 34
ARTICLE 5 - GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS.............. 34
5-1. Payment and Performance of Liabilities........................... 34
5-2. Due Organization - Corporate Authorization - No Conflicts........ 34
5-3. Maintain Accounts................................................ 35
5-4. Trade Names...................................................... 35
5-5. Locations........................................................ 36
5-6. Title to Assets.................................................. 36
5-7. Indebtedness..................................................... 37
5-8. Insurance Policies............................................... 38
5-9. Licenses......................................................... 39
5-10. Leases........................................................... 39
5-11. Requirements of Law.............................................. 39
5-12. Maintain Properties.............................................. 39
5-13. Pay Taxes........................................................ 39
5-14. No Margin Stock.................................................. 40
5-15. ERISA............................................................ 40
5-16. Hazardous Materials.............................................. 41
5-17. Litigation....................................................... 41
5-18. Dividends and Redemptions........................................ 41
5-19. Guarantees and Investments....................................... 42
5-20. New Leases....................................................... 43
5-21. Mergers and Consolidations....................................... 43
5-22. Sale of Assets................................................... 44
5-23. Protection of Assets............................................. 44
5-24. Line of Business................................................. 45
5-25. Affiliate Transactions........................................... 45
5-26. Additional Assurances............................................ 45
5-27. Adequacy of Disclosure........................................... 45
5-28. Government Contracts............................................. 46
5-29. Capital Expenditures............................................. 46
5-30. Other Covenants.................................................. 46
ARTICLE 6 - AMENDED AND RESTATED LOAN AGREEMENT............................ 46
ARTICLE 7 - FINANCIAL AND OTHER REPORTING REQUIREMENTS/ FINANCIAL
COVENANTS............................................................... 47
7-1. Maintain Records................................................. 47
7-2. Access to Records................................................ 47
7-3. Prompt Notice to Lender.......................................... 47
7-4. Financial Statements, Certificates and Information............... 48
7-5. Additional Financial Information................................. 49
(ii)
7-6. Audits and Appraisals............................................ 50
7-7. Consolidated EBIT to Consolidated Interest Expense............... 50
7-8. Consolidated Total Net Worth..................................... 50
7-9. Leverage Ratio................................................... 50
7-10. Net Profit....................................................... 50
ARTICLE 8 - EVENTS OF DEFAULT.............................................. 51
8-1. Failure to Pay................................................... 51
8-2. Failure to Make Other Payments................................... 51
8-3. Failure to Perform Certain Liabilities........................... 51
8-4. Failure to Perform Other Liabilities............................. 51
8-5. Misrepresentation................................................ 51
8-6. Default of Other Debt............................................ 51
8-7. Business Failure................................................. 52
8-8. Judgment......................................................... 52
8-9. Restraint of Business............................................ 52
8-10. Material Adverse Change.......................................... 52
8-11. Change in Ownership.............................................. 53
8-12. Casualty Loss.................................................... 53
8-13. Material Agreement............................................... 53
8-14. Termination of Existence......................................... 53
8-15. Termination of Guaranty.......................................... 53
8-16. Challenge to Loan Documents...................................... 53
8-17. Indictment - Forfeiture.......................................... 53
ARTICLE 9 - RIGHTS AND REMEDIES UPON DEFAULT............................... 54
9-1. Termination of Commitments....................................... 54
9-2. Rights and Remedies.............................................. 54
9-3. Distribution of Funds............................................ 55
ARTICLE 10 - NOTICES....................................................... 56
10-1. Notice Addresses................................................. 56
10-2. Notice Given..................................................... 57
ARTICLE 11 - TERM OF AGREEMENT............................................. 57
11-1. Termination of Revolving Credit.................................. 57
11-2. Effect of Termination............................................ 57
ARTICLE 12 - GENERAL....................................................... 57
12-1. Successors and Assigns........................................... 57
12-2. Severability..................................................... 57
12-3. Amendments; Course of Dealing.................................... 58
12-4. Costs and Expenses............................................... 58
12-5. Copies and Facsimiles............................................ 58
12-6. Massachusetts Law................................................ 59
12-7. Consent to Jurisdiction.......................................... 59
(iii)
12-8. Indemnification.................................................. 59
12-9. Rules of Construction............................................ 60
12-10. Intent........................................................... 61
12-11. Setoff........................................................... 61
12-12. Maximum Interest Rate............................................ 61
12-13. Waivers.......................................................... 61
12-14. Payments; Application............................................ 62
12-15. Receipt of Agreement............................................. 62
12-16. Counterparts; Integration; Effectiveness......................... 63
ARTICLE 13 - THE AGENT..................................................... 63
13-1. Authorization; Non-Reliance by Lenders; Reliance by
Administrative Agent; Dispute Resolution...................... 63
13-2. Employees and Agents............................................. 64
13-3. No Liability..................................................... 64
13-4. No Representations............................................... 65
13-5. Funding Procedures; Payments..................................... 65
13-6. Holders of Notes................................................. 67
13-7. Indemnity........................................................ 67
13-8. Administrative Agent as Lender; Limitation on other Agents'
Liability..................................................... 67
13-9. Resignation...................................................... 68
13-10. Notification of Suspension Events and Events of Default;
Distributions of Notices and Documents by Administrative
Agent......................................................... 68
13-11. Duties in the Case of Enforcement................................ 69
13-12. Delinquent Lender................................................ 69
13-13. Assignment and Participation..................................... 70
13-14. Pledge to Federal Reserve........................................ 72
13-15. Consent or Approval.............................................. 72
13-16. Treatment of Confidential Information............................ 73
13-17. Consents, Amendments, Waivers, etc............................... 74
13-18. U.S. Patriot Act................................................. 75
13-19. Foreign Asset Control Regulations................................ 75
(iv)
THIRD AMENDED AND RESTATED LOAN AGREEMENT
As of September 29, 2006
THIS THIRD AMENDED AND RESTATED LOAN AGREEMENT (hereinafter, the
"AGREEMENT") is made by and among
Xxxxx Brothers Xxxxxxxx & Co. (hereinafter, the "ADMINISTRATIVE
AGENT"), a general partnership organized under the laws of the State of New
York with offices at 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000
and
TD Banknorth, N.A. (hereinafter, the "DOCUMENTATION AGENT") a
national banking association with offices at 7 New England Executive Park,
Xxxxxxxxxx, Xxxxxxxxxxxxx 00000
and
Bank of America, N.A. (hereinafter, the "SYNDICATION AGENT"),
national banking association with offices at 000 Xxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000,
as Agents on behalf of Xxxxx Brothers Xxxxxxxx & Co., TD Banknorth, N.A., Bank
of America, N.A., and the other financial institutions which may hereafter
become parties to this Agreement (each such party a "LENDER" and collectively
the "LENDERS"),
and
Dynamics Research Corporation (hereinafter, the "LEAD BORROWER"),
a Massachusetts corporation, with its principal executive offices at 00
Xxxxxxxx Xxxx, Xxxxxxx, Xxxxxxxxxxxxx, as agent for itself and each of
DRC International Corporation ("INTERNATIONAL"), a Massachusetts
corporation with its principal executive offices at 00 Xxxxxxxx Xxxx,
Xxxxxxx, Xxxxxxxxxxxxx; and
X.X. Xxxx Associates, Inc. ("X.X. XXXX"), a Delaware corporation
with its principal executive offices at 00 Xxxxxxxx Xxxx, Xxxxxxx,
Xxxxxxxxxxxxx;
(Each of the Lead Borrower, International, and X.X. Xxxx, being sometimes
hereinafter referred to individually as a "BORROWER" and collectively as
the "BORROWERS"),
in consideration of the mutual covenants contained herein and benefits to be
derived herefrom.
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WITNESSETH:
ARTICLE 1- DEFINITIONS.
As herein used, the following terms have the following meanings or are
defined in the section of this Agreement so indicated:
"ACCOUNTS": include, without limitation, "accounts" as defined in the UCC,
and also all: accounts, accounts receivable, credit card receivables,
notes, drafts, acceptances, and other forms of obligations and receivables
and rights to payment for credit extended and for goods sold or leased, or
services rendered, whether or not yet earned by performance; all "contract
rights" as formerly defined in the UCC; all Inventory which gave rise
thereto, and all rights associated with such Inventory, including the right
of stoppage in transit; all reclaimed, returned, rejected or repossessed
Inventory (if any) the sale of which gave rise to any Account.
"ACCOUNT DEBTOR": has the meaning given that term in the UCC.
"ADMINISTRATIVE AGENT'S RIGHTS AND REMEDIES": is defined in Section 9-2.
"AFFECTED LENDER": is defined in Section 3-21.
"AFFILIATE": as applied to any Person, a spouse of such Person, any
relative (by blood, adoption or marriage) of such Person within the third
degree, any managing member, director or officer of such Person, any
corporation, association, firm or other entity of which such Person is a
managing member, director or officer and any other Person directly or
indirectly controlling, controlled by or under direct or indirect common
Control with such Person.
"AGENTS": collectively, the Documentation Agent, the Administrative Agent,
and the Syndication Agent.
"ANNUAL FEE": is defined in Section 3-11(c).
"ASSIGNMENT AND ACCEPTANCE": is defined in Section 13-13(a).
"AVAILABILITY": is defined in Section 3-1(b).
"BANKRUPTCY CODE": Title 11, U.S.C., as amended from time to time.
"BASE RATE": shall mean, from time to time, the higher of (a) the "base
rate" announced from time to time by the Administrative Agent, or (b) the
Federal Funds Effective Rate plus one-half (.50%) percent per annum. Any
change in such Base Rate shall be effective, for purposes of the
calculation of interest due hereunder, when made effective generally by the
Administrative Agent, notice of which the Administrative Agent shall
endeavor to promptly provide to the Lead Borrower.
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"BASE RATE MARGIN": see Pricing Grid (as defined herein).
"BASE MARGIN LOAN": any Revolving Credit Loan bearing interest at the Base
Rate.
"BORROWERS": is defined in the Preamble.
"BUSINESS DAY": any day other than (a) a Saturday or Sunday; (b) a day on
which the Administrative Agent is not open to the general public to conduct
business; or (c) a day on which banks in Boston, Massachusetts generally
are not open to the general public for the purpose of conducting commercial
banking business.
"CAPITAL EXPENDITURES": any payment made directly or indirectly by any
Borrower or any of their respective Subsidiaries for the purpose of
acquiring or constructing fixed assets, real property or equipment which in
accordance with GAAP would be added as a debit to the Consolidated fixed
asset account of the Lead Borrower and its Subsidiaries, including without
limitation amounts paid or payable under any conditional sale or other
title retention agreement or under any lease or other periodic payment
arrangement which is of such a nature that payment obligations of a
borrower thereunder would be required by GAAP to be capitalized and shown
as liabilities on the Consolidated balance sheet of the Lead Borrower and
its Subsidiaries.
"CAPITAL LEASE": any lease which should be capitalized in accordance with
GAAP.
"CLOSING DATE": September 29, 2006.
"COMMITMENT": as to each Lender, the amount of the Revolving Credit set
forth on EXHIBIT 1.
"COMMITMENT PERCENTAGE": as to each Lender, the percentage of the Revolving
Credit set forth on EXHIBIT 1.
"COMPLIANCE CERTIFICATE": see Exhibit 7-4(c).
"CONFIDENTIAL INFORMATION": is defined in Section 13-16.
"CONSOLIDATED": with reference to any term herein, shall mean that term as
applied to the accounts of the Lead Borrower and its Subsidiaries,
consolidated in accordance with GAAP.
"CONSOLIDATED OPERATING CASH FLOW": shall mean the sum of (i) Consolidated
Net Income before taxes, plus (ii) Consolidated Interest Expense, plus
(iii) depreciation and amortization deducted in the calculation of
Consolidated Net Income, minus (iv) income taxes paid in cash (net of any
tax refunds actually received in cash) by the Lead Borrower and its
Subsidiaries, minus (v) Capital Expenditures not funded by interest bearing
Indebtedness, all as determined in accordance with GAAP.
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"CONSOLIDATED TOTAL FUNDED INDEBTEDNESS": means, as of the date of
calculation, the total outstanding Indebtedness under the Revolving Credit
Loan.
"CONSOLIDATED TOTAL NET WORTH": shall mean the difference between Total
Assets of the Lead Borrower and its Subsidiaries and Total Liabilities of
the Lead Borrower and its Subsidiaries (in each instance, exclusive of
pension asset gains or losses), plus all Subordinated Debt, less the sum
of:
(a) the value of minority equity interests of the Lead Borrower and
its Subsidiaries in unconsolidated, affiliated entities; and
(b) the aggregate amount of all loans made by the Lead Borrower and
its Subsidiaries to any officer, employee or shareholder thereof.
"CONTROL": Person(s) shall be deemed to Control another Person if such
Person(s) directly or indirectly possess the power to direct or cause the
direction of the management and policies of such other Person, whether
through ownership of voting securities, by contract, or otherwise.
"CONVERT, CONVERSION AND CONVERTED": the conversion of a Loan from one type
to Loans of another type.
"COSTS OF COLLECTION": includes, without limitation, all reasonable
attorneys' fees and reasonable out-of-pocket expenses incurred by the
Administrative Agent's attorneys, and all reasonable out-of-pocket costs
incurred by the Administrative Agent in the administration of the
Liabilities and/or the Loan Documents, including, without limitation,
reasonable out-of-pocket costs and expenses associated with travel on
behalf of the Administrative Agent, which costs and expenses are directly
or indirectly related to or in respect of the Administrative Agent's:
negotiation, documentation, and amendment of any Loan Document; or efforts
to preserve, protect, collect, or enforce the Liabilities, and/or the
Administrative Agent' Rights and Remedies against or in respect of any
guarantor or other person liable in respect of the Liabilities (whether or
not suit is instituted in connection with such efforts). The Costs of
Collection are Liabilities and, at the Lenders' option after five (5) days'
written notice to the Lead Borrower, may bear interest at the rate which
the Lenders may charge the Borrowers hereunder as if such had been lent,
advanced, and credited by the Lenders to, or for the benefit of, the
Borrowers.
"DELINQUENT LENDER": is defined in Section 13-12.
"DOCUMENTS OF TITLE": has the meaning given that term in the UCC.
"EBIT": for any period, the Consolidated Net Income of the Lead Borrower
and its Subsidiaries for such period adjusted by adding back thereto
amounts deducted in computing such Consolidated Net Income in respect of
each of (a) Consolidated
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Interest Expense, and (b) provision for taxes in respect of income and
profits of the Lead Borrower and its Subsidiaries, as determined in
accordance with GAAP.
"EBITDA": for any period, the Consolidated Net Income of the Lead Borrower
and its Subsidiaries for such period adjusted by adding back thereto
amounts deducted in computing such Consolidated Net Income in respect of
each of (a) Consolidated Interest Expense, (b) provision for taxes in
respect of income and profits of the Lead Borrower and its Subsidiaries,
and (c) depreciation and amortization of the Lead Borrower and its
Subsidiaries, as determined in accordance with GAAP.
"ELIGIBLE ASSIGNEE": any of (a) a commercial bank, life insurance company
or other entity organized under the laws of the United States, or any State
thereof or the District of Columbia, and having total assets in excess of
$1,000,000,000; or (b) a savings and loan association, savings bank or
other entity organized under the laws of the United States, or any State
thereof or the District of Columbia, and having a net worth of at least
$100,000,000, calculated in accordance with generally accepted accounting
principles.
"EMPLOYEE BENEFIT PLAN": as defined in ERISA.
"ENCUMBRANCE": each of the following:
(a) any security interest, mortgage, pledge, hypothecation, lien,
attachment, or charge of any kind (including any agreement to give any of
the foregoing); the interest of a lessor under a Capital Lease; conditional
sale or other title retention agreement; sale of accounts receivable or
chattel paper; or other arrangement pursuant to which any Person is
entitled to any preference or priority with respect to the property or
assets of another Person or the income or profits of such other Person or
which constitutes an interest in property to secure an obligation; each of
the foregoing whether consensual or non-consensual and whether arising by
way of agreement, operation of law, legal process or otherwise; and
(b) the filing of any financing statement under the UCC or comparable
law of any jurisdiction.
"ENVIRONMENTAL LAWS": each of the following: (a) any federal, state, local
or municipal law, rule, order, regulation, statute, ordinance, code, decree
or requirement which regulates environmental protection matters, including,
without limitation, Hazardous Materials, as is now or hereafter in effect;
and (b) the common law relating to damage to Persons or property from
Hazardous Materials.
"EQUITY ISSUANCE": shall mean the sale or issuance by any Borrower of any
shares of its stock, options or warrants for the purchase of any of its
stock, or other equity or equity instruments.
"ERISA": the Employee Retirement Income Security Act of 1974, as amended.
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"ERISA AFFILIATE": any Person which is under common control with any
Borrower within the meaning of Section 4001 of ERISA or is part of a group
which includes any Borrower and which would be treated as a single employer
under Section 414 of the Internal Revenue Code of 1986, as amended.
"EVENTS OF DEFAULT": is defined in Article 8.
"EXISTING L/CS": those L/Cs for the account of the Borrowers issued
pursuant to the terms and conditions of the Existing Loan Agreement, and
set forth on Exhibit BB hereto.
"EXISTING LOAN AGREEMENT": is defined in Article 6.
"FACILITY FEE": is defined in Section 3-11(a).
"FEDERAL FUNDS EFFECTIVE RATE": for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight
Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding
Business Day by the Federal Reserve Bank of New York, or, if such rate is
not so published for any day that is a Business Day, the average (rounded
updates, if necessary, to the next 1/100 of 1%) of the quotations for such
date for such transactions received by the Administrative Agent from three
Federal funds brokers of recognized standing selected by it.
"FUTURE COMMITMENT": is defined in Section 13-12.
"GAAP": principles which are consistent with those promulgated or adopted
by the Financial Accounting Standards Board and its predecessors (or
successors) in effect and applicable to that accounting period in respect
of which reference to GAAP is being made.
"GOODS": has the meaning given that term in the UCC.
"GOVERNMENT CONTRACT": any contract, agreement or purchase order as to
which any Borrower and the United States government or any agency or
instrumentality thereof are parties or as to which any Borrower and any
State or Commonwealth of the United States or any agency, instrumentality
or political subdivision thereof are parties.
"HAZARDOUS MATERIALS:" any (a) hazardous materials, including, without
limitation, mold, hazardous waste, hazardous or toxic substances, petroleum
products, which (as to any of the foregoing) are defined or regulated as a
hazardous material in or under any Environmental Law described in clause
(a) of the definition thereof, and (b) oil in any physical state.
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"INDEBTEDNESS": all indebtedness and obligations of or assumed by any
Person on account of or in respect to any of the following: (i) in respect
of money borrowed (including any indebtedness which is non-recourse to the
credit of such Person but which is secured by an Encumbrance on any asset
of such Person) whether or not evidenced by a promissory note, bond,
debenture or other written obligation to pay money; (ii) for the payment,
deferred for more than thirty (30) days, of the purchase price of goods or
services (other than current trade liabilities of such Person incurred in
the ordinary course of business and payable in accordance with customary
practices); (iii) in connection with any letter of credit or acceptance
transaction (including, without limitation, the face amount of all letters
of credit and acceptances issued for the account of such Person or
reimbursement on account of which such Person would be obligated); (iv) in
connection with the sale or discount of accounts receivable or chattel
paper of any Borrower; (v) on account of deposits or advances; and (vi) as
lessee under Capital Leases. "Indebtedness" of any Person shall also
include: (x) Indebtedness of any third party secured by an Encumbrance on
any asset of such Person, whether or not such Indebtedness is assumed by
such Person; (y) any guaranty, endorsement, suretyship or other undertaking
pursuant to which such Person may be liable on account of any obligation of
any third party; and (z) the Indebtedness of a partnership or joint venture
in which such Person is a general partner or joint venturer.
"INDEMNIFIED PARTY": is defined in Section 3-15.
"INDEMNIFIED PERSON": is defined in Section 12-8.
"INSTALLMENT AMOUNT": is defined in Section 3-15(a).
"INTEREST EXPENSE": for any period, with respect to any Person, the
aggregate amount (determined in accordance with GAAP) of interest paid or
payable during such period by such Person in respect of all Indebtedness
for borrowed money, Capital Leases and the deferred purchase price of
property.
"INTEREST PERIOD":
(a) With respect to each LIBOR Loan, subject to subsection (c), below,
the period commencing on the date of the making or continuation of or
conversion to such LIBOR Loan and ending one, two, three or six months
thereafter, as the Lead Borrower may elect in the applicable Notice of
Borrowing or Conversion.
(b) With respect to each Base Margin Loan, the period commencing on
the date of the making or continuation of or conversion to such Base Margin
Loan and ending on that date (1) as of which the subject Base Margin Loan
is converted to a LIBOR Loan, as the Lead Borrower may elect in the
applicable
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Notice of Borrowing or Conversion, or (2) on which the subject Base Margin
Loan is paid by the Borrowers.
(c) Provided that the setting of Interest Periods is in all instances
subject to the following:
(i) if any Interest Period with respect to a LIBOR Loan would
otherwise end on a day that is not a LIBOR Business Day, that Interest
Period shall be extended to the next succeeding LIBOR Business Day
unless the result of such extension would be to carry such Interest
Period into another calendar month, in which event such Interest
Period shall end on the immediately preceding LIBOR Business Day;
(ii) if any Interest Period with respect to a Base Margin Loan
would end on a day that is not a Business Day, that Interest Period
shall end on the next succeeding Business Day;
(iii) if the Lead Borrower shall fail to give notice as provided
in Section 3-8, herein, the Lead Borrower shall be deemed to have
requested a conversion of the affected LIBOR Loan to a Base Margin
Loan on the last day of the then current Interest Period with respect
thereto;
(iv) any Interest Period relating to any LIBOR Loan that begins
on the last LIBOR Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar month
at the end of such Interest Period) shall end on the last LIBOR
Business Day of a calendar month;
(v) any Interest Period relating to any LIBOR Loan that would
otherwise extend beyond the Maturity Date of the Revolving Credit
Loans shall end on such Maturity Date; and
(vi) there shall be no more than six (6) Interest Periods
outstanding at any one time for LIBOR Loans.
"INTEREST PAYMENT DATE": with reference to:
(a) any LIBOR Loan, (i) on the last day of each Interest Period,
provided that interest on LIBOR Loans having an Interest Period of six
months shall be payable on the last day of the third month of such Interest
Period and on the last day of the Interest Period; and
(b) any Base Margin Loan which is a Revolving Credit Loan, on the last
day of each calendar quarter and on the Termination Date.
"INVENTORY": includes, without limitation, "inventory" as defined in the
UCC and also all: packaging, advertising, and shipping materials related to
any of the foregoing,
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and all names or marks affixed or to be affixed thereto for identifying or
selling the same; Goods held for sale or lease or furnished or to be
furnished under a contract or contracts of sale or service by any Borrower,
or used or consumed or to be used or consumed in any Borrower's business;
Goods of said description in transit: returned, repossessed and rejected
Goods of said description; and all documents (whether or not negotiable)
which represent any of the foregoing.
"INVESTMENTS": all expenditures made and all liabilities incurred
(contingently or otherwise), without duplication, for the acquisition of
stock or Indebtedness of, or for loans, advances, capital contributions or
transfers of property to, or in respect of any guaranties (or other
commitments as described under Indebtedness), or obligations of, any
Person. In determining the aggregate amount of Investments outstanding at
any particular time: (a) the amount of any Investment represented by a
guaranty shall be taken at not less than the principal amount of the
obligations guaranteed and still outstanding; (b) there shall be included
as an Investment all interest accrued with respect to Indebtedness
constituting an Investment unless and until such interest is paid; (c)
there shall be deducted in respect of each such Investment any amount
received as a return of capital (but only by repurchase, redemption,
retirement, repayment, liquidating dividend or liquidating distribution);
(d) there shall not be deducted in respect of any Investment any amounts
received as earnings on such Investment, whether as dividends, interest or
otherwise, except that accrued interest included as provided in the
foregoing clause (b) may be deducted when paid; and (e) there shall not be
deducted from the aggregate amount of Investments any decrease in the value
thereof.
"L/C": any letter of credit, the issuance of which is procured by any
Lender for the account of any Borrower and any acceptance made on account
of such letter of credit.
"LEASE": any lease or other agreement, no matter how styled or structured,
pursuant to which any Borrower is entitled to the use or occupancy of any
space.
"LENDER" OR "LENDERS": are defined in Preamble.
"LEVERAGE RATIO": is described in Section 7-9.
"LIABILITIES" includes, without limitation, all and each of the following,
whether now existing or hereafter arising:
(a) Any and all direct and indirect liabilities, debts, and
obligations of any Borrower to the Administrative Agent or any Lender, each
of every kind, nature, and description arising under this Agreement or any
of the other Loan Documents.
(b) Each obligation to repay any loan, advance, indebtedness, note,
obligation, overdraft, or amount now or hereafter owing by any Borrower to
any
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Lender (including all future advances whether or not made pursuant to a
commitment by any Lender), whether or not any of such are liquidated,
unliquidated, primary, secondary, secured, unsecured, direct, indirect,
absolute, contingent, or of any other type, nature, or description, or by
reason of any cause of action which the Lender may hold against any
Borrower arising under this Agreement or any of the Loan Documents.
(c) All interest, fees, and charges and other amounts which may be
charged by the Administrative Agent or the Lenders to any Borrower and/or
which may be due from any Borrower to any Lender from time to time arising
under this Agreement or any of the Loan Documents.
(d) All costs and expenses incurred or paid by the Administrative
Agent or the Lenders arising under this Agreement or any of the other Loan
Documents (including, without limitation, Costs of Collection, reasonable
attorneys' fees, and all court and litigation costs and expenses).
(e) Any and all covenants of any Borrower to or with the
Administrative Agent or any Lender and any and all obligations of any
Borrower to act or to refrain from acting, in each case, in accordance with
this Agreement or any of the other Loan Documents.
"LIBOR BUSINESS DAY": any day on which commercial banks are open for
international business (including dealings in dollar deposits) in London
for such other LIBOR interbank market as may be selected by the
Administrative Agent in its sole discretion acting in good faith.
"LIBOR LOAN": any Revolving Credit Loan bearing interest at the LIBOR Rate.
"LIBOR MARGIN": see Pricing Grid defined below.
"LIBOR RATE": that per annum rate which is the aggregate of the LIBOR Offer
Rate, plus the LIBOR Margin.
"LIBOR OFFER RATE": that rate of interest (rounded upwards, if necessary,
to the next 1/100 of 1%) determined by the Administrative Agent to be (i)
the prevailing rate per annum at which deposits on U.S. Dollars are offered
to the Lender by first-class banks in the London interbank market in which
the Lender regularly participates at or about 10:00 A.M. (Boston time)
three (3) LIBOR Business Days before the first day of the Interest Period,
for a deposit approximately in the amount of the subject LIBOR Loan for a
period of time approximately equal to such Interest Period, divided by (ii)
one minus the Reserve Percentage.
"LINE (UNUSED) FEE": is defined in Section 3-11(b).
"LINE FEE PERCENTAGE": see Pricing Grid defined below.
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"LOAN": any Revolving Credit Loan.
"LOAN ACCOUNT": is defined in Section 3-4.
"LOAN DOCUMENTS": this Agreement, the Notes and each other instrument and
document executed and/or delivered as contemplated by ARTICLE 4, below, and
each other instrument or document from time to time executed and/or
delivered in connection with the arrangements contemplated hereby,
including, without limitation, any transaction which arises out of any cash
management, depository, investment, letter of credit, interest rate
protection, or equipment leasing services provided by any Lender or any
Affiliate of any Lender, as each may be amended from time to time.
"MATERIAL ADVERSE CHANGE": any event, matter or condition which has or
could reasonably be expected to have a material adverse effect on (a) the
business, condition (financial or otherwise), assets (including intangible
assets), properties, income or prospects of the Borrowers (taken as a
whole), and/or (b) the Borrowers' ability to pay and perform all of the
Liabilities owing by them to the Administrative Agent and the Lenders in
accordance with the terms thereof.
"MATURITY DATE": September 29, 2009.
"MOODY'S": Xxxxx'x Investor Services, Inc.
"NET INCOME": income (or loss), excluding extraordinary items of income (or
loss), of a Person for the period in question (taken as a cumulative
whole), after deducting therefrom all operating expenses, reserves and
other proper deductions (including any minority interest expense), all
determined in accordance with GAAP. For purposes hereof, the Consolidated
Net Income of the Lead Borrower and its Subsidiaries shall include the Net
Income of any other Persons acquired prior to the date that it either
becomes a Subsidiary of such Borrower, is merged into or consolidated with
such Borrower, or such other Person's assets are assigned, directly or
indirectly, to such Borrower, provided that, in the case of each of the
foregoing, (i) the Net Income of such other Person shall only be so
included to the extent that such Net Income is attributable to such other
Person or to such assets as are acquired from such other Person for the
relevant period, all to the satisfaction of the Administrative Agent, and
(ii) any discrepancies in accounting treatment between such Borrower and
such other Person are conformed so as to make the foregoing determination,
to the satisfaction of the Administrative Agent.
"NET PROCEEDS": the gross sales price generated by the sale of any asset or
property outside the ordinary course of business or any Equity Issuance,
less reasonable fees and expenses (including commissions) customarily
incurred in similar arms-length sales and transfer taxes directly
attributable to such sale or Equity Issuance less income taxes payable from
such proceeds within sixteen months after such sale.
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"NOTE(S)": the Revolving Credit Notes.
"PERMITTED ACQUISITION": an acquisition by any of the Borrowers of a
controlling interest in, or substantially all of the assets of, any Person,
provided that the Lead Borrower certifies to the Lenders that (i) at the
time of the contemplated acquisition or immediately thereafter, there is no
then existing Event of Default; (ii) the Borrowers are in compliance with
all financial covenants, calculated exclusive and inclusive of the
contemplated acquisition, on a pro forma basis; (iii) the acquisition is
within the Borrowers' current business plan and accretive to earnings
within the following twelve (12) months; and (iv) such acquisition shall
not require total consideration from the Borrowers in excess of (a)
$10,000,000 for any single acquisition, or (b) $15,000,000 in the aggregate
in any calendar year.
"PERMITTED LIENS": is defined in Section 5-6.
"PERSON": any natural person, and any corporation, trust, partnership,
limited liability company, joint venture, or other enterprise or entity.
"PRICING GRID":
LEVEL I LEVEL II LEVEL III
-------------- ----------- -----------------
BASIS FOR PRICING:
Leverage Ratio less than 1.50 1.50 - 2.00 greater than 2.00
Base Rate Margin 0% 0% 0%
LIBOR Margin 1.50% 2.00% 2.50%
Line Fee Percentage 0.25% 0.375% 0.50%
Changes in pricing shall be effective five (5) Business Days after delivery
by the Lead Borrower to the Administrative Agent of its quarterly
Compliance Certificate together with supporting financial information
satisfactory to the Administrative Agent; provided, however, in no event
shall changes in pricing be made, even if the conditions for another level
are satisfied, until the Administrative Agent receives the quarterly
Compliance Certificate, together with supporting financial information
satisfactory to the Administrative Agent that reflects that the conditions
for another level have been satisfied.
"REEMPLOYMENT PERIOD": is defined in Section 3-15(a).
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"RELATED ENTITY": refers to (a) any Affiliate (other than directors and
officers); and (b) any corporation, limited liability company trust,
partnership, joint venture, or other enterprise which: is a parent,
brother-sister, subsidiary, or affiliate, of any Borrower; could have such
enterprise's tax returns or financial statements consolidated with any
Borrower; could be a member of the same controlled group of corporations
(within the meaning of Section 1563(a)(1), (2) and (3) of the Internal
Revenue Code of 1986, as amended from time to time) of which any Borrower
is a member; Controls or is Controlled by the Borrower or any Affiliate of
the Borrower.
"RENEWAL/CONVERSION NOTICE": is defined in Section 3-8.
"REQUIRED LENDERS": Any two or more Lenders holding in the aggregate at
least sixty-six and two-thirds percent (66 2/3%) of the amounts outstanding
on the Loans, or, if no amounts are outstanding, of the Commitment
Percentages of the Total Commitment.
"REQUIREMENT OF LAW": as to any Person: (a)(i) all statutes, rules,
regulations, orders, or other requirements having the force of law and (ii)
all court orders and injunctions, arbitrator's decisions, and/or similar
rulings, in each instance ((i) and (ii)) of or by any federal, state,
municipal, and other governmental authority, or court, tribunal, panel, or
other body which has or claims jurisdiction over such Person, or any
property of such Person, or of any other Person for whose conduct such
Person would be responsible; (b) that Person's charter, certificate of
incorporation, articles of organization, and/or other organizational
documents, as applicable; and (c) that Person's by-laws and/or other
instruments which deal with corporate or similar governance, as applicable.
"RESERVE PERCENTAGE": the decimal equivalent of the highest rate applicable
to any Lender under regulations issued from time to time by the Board of
Governors of the Federal Reserve System for determining the maximum reserve
requirement of each Lender with respect to "Eurocurrency liabilities" as
defined in such regulations. The Reserve Percentage applicable to a
particular LIBOR Loan shall be based upon that in effect during the subject
Interest Period, with changes in the Reserve Percentage which take effect
during such Interest Period to take effect (and to consequently change any
interest rate determined with reference to the Reserve Percentage) if and
when such change is applicable to such loans.
"RESPONSIBLE OFFICER": as to any Person, the president or chief executive
officer of such Person or, with respect to financial matters, the chief
financial officer or treasurer of such Person or, in either case, such
other executive officers as may be designated from time to time by such
Person in writing to the Administrative Agent.
"REVOLVING LOAN CEILING": shall mean Fifty Million Dollars
($50,000,000.00).
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"REVOLVING CREDIT": is defined in Section 3-1.
"REVOLVING CREDIT LOAN": means any loan or advance made pursuant to the
Revolving Credit.
"REVOLVING CREDIT NOTE": is defined in Section 3-5.
"S & P": Standard & Poor's Ratings Group, a division of the McGraw Hill
Companies, Inc.
"STATED AMOUNT": the maximum amount for which an L/C may be honored.
"SUBORDINATED DEBT": (a) The existing Indebtedness of the Borrowers which
is designated as "Subordinated Debt" in Exhibit 5-7 attached hereto, and
(b) any other Indebtedness of a Borrower which matures in its entirety and
by its terms (or by the terms of the instrument under which it is
outstanding and to which appropriate reference is made in the instrument
evidencing such Subordinated Debt) is made subordinate and junior in right
of payment to the Liabilities by provisions reasonably satisfactory in form
and substance to the Lenders, the Administrative Agent, and the
Administrative Agent's counsel.
"SUBSIDIARY": any partnership, corporation, limited liability company,
association, trust, or other business entity of which the Lead Borrower
shall at any time own directly or indirectly through a Subsidiary or
Subsidiaries at least a majority (by number of votes) of the outstanding
Voting Interests.
"SUSPENSION EVENT": any occurrence, circumstance, or state of facts which
(a) is an Event of Default; or (b) would become an Event of Default if any
requisite notice were given and/or any requisite period of time were to run
and such occurrence, circumstance, or state of facts were not absolutely
cured within any applicable grace period.
"TERMINATION DATE": the earliest of (a) the Maturity Date, or (b) the
occurrence of an Event of Default under Section 8-7 hereof, or (c) the date
set by the Administrative Agent by notice to the Lead Borrower, which
notice sets the Termination Date on account of the occurrence of an Event
of Default other than as described in Section 8-7.
"TOTAL ASSETS": all assets of any Borrower determined in accordance with
GAAP.
"TOTAL COMMITMENT": shall mean the aggregate Commitments of the Lenders as
set forth on Exhibit 1 annexed hereto.
"TOTAL DEBT SERVICE": shall mean the sum of (i) required principal payments
made on all interest bearing Indebtedness of the Lead Borrower and its
Subsidiaries, plus (ii) Capital Lease payments of the Lead Borrower and its
Subsidiaries, plus (iii) to the extent not included in the foregoing
clauses (i) and (ii), Consolidated Interest
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Expense of the Lead Borrower and its Subsidiaries, all as determined in
accordance with GAAP.
"TOTAL LIABILITIES": all liabilities and obligations of any Borrower
determined in accordance with GAAP.
"UCC": the Uniform Commercial Code as presently in effect in Massachusetts
(Mass. Gen. Laws, Ch. 106).
"VOTING INTERESTS": stock or similar interests, of any class or classes
(however designated), the holders of which are at the time entitled, as
such holders, to vote for the election of a majority of the directors (or
persons performing similar functions) of the partnership, corporation,
association, trust or other business entity involved, whether or not the
right so to vote exists by reason of the happening of a contingency.
ARTICLE 2- AGENTED BORROWINGS
2-1. Designation of Agent Borrower. Each Borrower hereby designates the
Lead Borrower as the agent of that Borrower to discharge the duties and
responsibilities of the Lead Borrower as provided herein.
2-2. Operation of Loan Arrangement.
(a) Except as otherwise provided in this Article, Revolving Credit Loans
and requests for the issuance of L/Cs shall be requested solely by the Lead
Borrower as agent for each Borrower.
(b) Any Revolving Credit Loan which may be made by the Lenders and which is
directed to the Lead Borrower is received by the Lead Borrower in trust for that
or those of the Borrowers who are intended to receive such advance. The Lead
Borrower shall distribute the proceeds of any such advances solely to the
Borrowers. Each Borrower shall be directly indebted to the Lenders for each
Revolving Credit Loan distributed to that Borrower by the Lead Borrower,
together with all accrued interest thereon, as if that amount had been advanced
directly by the Lenders to that Borrower (whether or not the subject advance was
based upon the accounts of the Borrower which actually received such
distribution), in addition to which each Borrower shall be obligated to the
Lenders in that amount on account of that Borrower's having guarantied the
Liabilities.
(c) The Administrative Agent and the Lenders shall have no responsibility
to inquire as to the distribution of the Revolving Credit Loans made through the
Lead Borrower as described herein.
2-3. Loans Directly to Borrower.
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(a) If, for any reason, and at any time during the term of this Agreement,
any Borrower, including the Lead Borrower as agent for the Borrowers, shall be
unable to, or prohibited from carrying out the terms and conditions of this
Agreement (as determined by the Administrative Agent in the Administrative
Agent's sole and absolute discretion), then the Lenders may make Revolving
Credit Loans directly to, and issue L/Cs directly for the account of, such of
the Borrowers as the Administrative Agent determines to be appropriate, which
Revolving Credit Loans or issuances of L/Cs may be made without regard to the
procedures otherwise included in this Article 2.
(b) Each of the Borrowers shall remain liable to the Lenders for the joint
and several payment and performance of all Liabilities notwithstanding any
determination by the Administrative Agent to cease making Revolving Credit Loans
or issuing L/Cs to or for the benefit of any Borrower.
2-4. Continuation of Authority of Lead Borrower. The authority of the Lead
Borrower to request Revolving Credit Loans on behalf of, and to bind, the
Borrowers, shall continue unless and until the Administrative Agent acts as
provided in Section 2-3, above, or the Administrative Agent actually receives(a)
written notice of: (i) the termination of such authority, and (ii) the
subsequent appointment of a successor Lead Borrower, which notice is signed by
the respective Responsible Officer of each Borrower then eligible for borrowing
under this Agreement; and
(b) written notice from such successive Lead Borrower (i) accepting such
appointment; (ii) acknowledging that such removal and appointment has been
effected by the respective Responsible Officer of such Borrowers eligible for
borrowing under this Agreement; and (iii) acknowledging that, from and after the
date of such appointment, the newly appointed Lead Borrower shall be bound by
the terms hereof, and that as used herein, the term "Lead Borrower" shall mean
and include the newly appointed Lead Borrower.
2-5. Concerning Joint and Several Liability of the Borrowers.
(a) Each of the Borrowers is accepting joint and several liability
hereunder and under the other Loan Documents in consideration of the financial
accommodations to be provided by the Lenders and the Administrative Agent under
this Agreement, for the mutual benefit, directly and indirectly, of each of the
Borrowers and in consideration of the undertakings of each other Borrower to
accept joint and several liability for the Liabilities.
(b) Each of the Borrowers, jointly and severally, hereby irrevocably and
unconditionally accepts, not merely as a surety but also as a co-debtor, joint
and several liability with the other Borrowers, with respect to the payment and
performance of all of the Liabilities (including, without limitation, any
Liabilities arising under this Section 2-5), it being the intention of the
parties hereto that all of the Liabilities shall be joint and several
obligations of each of the Borrowers, without preferences or distinction among
them.
(c) If and to the extent that any of the Borrowers shall fail to make any
payment with respect to any of the Liabilities as and when due or to perform any
of the Liabilities in
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accordance with the terms thereof, then in each such event the other Borrowers
will make such payment with respect to, or perform, such Liability.
(d) The Liabilities of each of the Borrowers under the provisions of this
Section 2-5 constitute the full recourse Liabilities of each of the Borrowers
enforceable against each such Borrower to the full extent of its properties and
assets, irrespective of the validity, regularity or enforceability of this
Agreement or any other circumstance whatsoever.
(e) Except as otherwise expressly provided in this Agreement, each of the
Borrowers hereby waives notice of acceptance of its joint and several liability,
notice of any Loans made or L/Cs issued under this Agreement, notice of the
occurrence of any Event of Default, or of any demand for any payment under this
Agreement, notice of any action at any time taken or omitted by any Lender or
the Administrative Agent under or in respect of any of the Liabilities, any
requirement of diligence or to mitigate damages and, generally, to the extent
permitted by applicable law, all demands, notices and other formalities of every
kind in connection with this Agreement. Each of the Borrowers hereby assents to,
and waives notice of, any extension or postponement of the time for the payment
of any of the Liabilities, the acceptance of any payment of any of the
Liabilities, the acceptance of any partial payment thereon, any waiver, consent
or other action or acquiescence by any Lender or the Administrative Agent at any
time or times in respect of any Event of Default by any of the Borrowers in the
performance or satisfaction of any term, covenant, condition or provision of
this Agreement, any and all other indulgences whatsoever by any Lender or the
Administrative Agent in respect of any of the Liabilities, and the taking,
addition, substitution or release, in whole or in part, at any time or times, of
any security for any of the Liabilities or the addition, substitution or
release, in whole or in part, of any of the Borrowers. Without limiting the
generality of the foregoing, each of the Borrowers assents to any other action
or delay in acting or failure to act on the part of any Lender or the
Administrative Agent with respect to the failure by any of the Borrowers to
comply with any of its respective Liabilities, including, without limitation,
any failure strictly or diligently to assert any right or to pursue any remedy
or to comply fully with applicable laws or regulations thereunder, which might,
but for the provisions of this Section 2-5, afford grounds for terminating,
discharging or relieving any of the Borrowers, in whole or in part, from any of
its Liabilities under this Section 2-5, it being the intention of each of the
Borrowers that, so long as any of the Liabilities hereunder remain unsatisfied,
the Liabilities of such Borrowers under this Section 2-5 shall not be discharged
except by performance and then only to the extent of such performance. The joint
and several liability of the Borrowers hereunder shall continue in full force
and effect notwithstanding any absorption, merger, amalgamation or any other
change whatsoever in the name, membership, constitution or place of formation of
any of the Borrowers, any Lender or any Agent.
(f) The provisions of this Section 2-5 are made for the benefit of the
Lenders and the Administrative Agent and their respective successors and
assigns, and may be enforced by it or them from time to time against any or all
of the Borrowers as often as occasion therefor may arise and without requirement
on the part of the Lenders or the Agent or such successor or assign first to
xxxxxxxx any of its or their claims or to exercise any of its or their rights
against any of the other Borrowers or to exhaust any remedies available to it or
them against any of the other Borrowers or to resort to any other source or
means of obtaining payment of any of the
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Liabilities hereunder or to elect any other remedy. The provisions of this
Section 2-5 shall remain in effect until all of the Liabilities shall have been
paid in full or otherwise fully satisfied. If at any time, any payment, or any
part thereof, made in respect of any of the Liabilities, is rescinded or must
otherwise be restored or returned by any Lender or the Agent upon the
insolvency, bankruptcy or reorganization of any of the Borrowers, or otherwise,
the provisions of this Section 2-5 will forthwith be reinstated in effect, as
though such payment had not been made.
(g) Each of the Borrowers hereby agrees that it will not enforce any of its
rights of contribution or subrogation against the other Borrowers with respect
to any liability incurred by it hereunder or under any of the other Loan
Documents, any payments made by it to any of the Lenders or the Agent with
respect to any of the Liabilities or any collateral security therefor until such
time as all of the Liabilities have been irrevocably paid in full in cash. Any
claim which any Borrower may have against any other Borrower with respect to any
payments to the Lenders or the Agent hereunder or under any other Loan Documents
are hereby expressly made subordinate and junior in right of payment, without
limitation as to any increases in the Liabilities arising hereunder or
thereunder, to the prior payment in full of the Liabilities and, in the event of
any insolvency, bankruptcy, receivership, liquidation, reorganization or other
similar proceeding under the laws of any jurisdiction relating to any Borrower,
its debts or its assets, whether voluntary or involuntary, all such Liabilities
shall be paid in full before any payment or distribution of any character,
whether in cash, securities or other property, shall be made to any other
Borrower therefor.
(h) Each of the Borrowers hereby agrees that the payment of any amounts due
with respect to the Indebtedness owing by any Borrower to any other Borrower is
hereby subordinated to the prior payment in full in cash of the Liabilities.
Each Borrower hereby agrees that after the occurrence and during the continuance
of any Default or Event of Default, such Borrower will not demand, xxx for or
otherwise attempt to collect any Indebtedness of any other Borrower owing to
such Borrower until the Liabilities shall have been paid in full in cash. If,
notwithstanding the foregoing sentence, such Borrower shall collect, enforce or
receive any amounts in respect of such Indebtedness, such amounts shall be
collected, enforced and received by such Borrower as trustee for the Agent and
be paid over to the Agent for the pro-rata accounts of the Lenders to be applied
to repay the Liabilities.
2-6. Indemnification. The Lead Borrower and each Borrower respectively
shall indemnify, defend, and save and hold the Administrative Agent and each
Lender harmless from and against any liabilities, claims, demands, expenses, or
losses made against or suffered by the Administrative Agent or any Lender on
account of, or arising out of, the Loans, the Administrative Agent and each
Lenders' reliance upon loan requests made by the Lead Borrower, or any other
action taken by the Administrative Agent and each Lender hereunder or under any
of the Loan Documents, except for any liability, claim, demand, expense, or loss
as to which a final judicial determination is made and from which no appeal is
available (in a proceeding in which the Administrative Agent and each Lender has
had an opportunity to be heard) that the Administrative Agent or any Lender had
acted in a grossly negligent manner, in actual bad faith or with willful
misfeasance.
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ARTICLE 3 - THE REVOLVING CREDIT/LIBOR PROVISIONS
3-1. Establishment of Revolving Credit.
(a) The Lenders hereby establish a revolving line of credit (hereinafter,
the "REVOLVING CREDIT") in the Borrowers' favor pursuant to which each Lender,
subject to, and in accordance with, this Agreement, severally agrees to make
Revolving Credit Loans and issue L/Cs and otherwise provide financial
accommodations to and for the account of the Borrowers, in each instance up to
the amount of such Lender's Commitment Percentage of Availability, but in no
event exceeding the maximum amount of such Lender's Commitment. The amount
available for borrowing under the Revolving Credit shall be determined by the
Lenders by reference to Availability, as determined by the Lenders from time to
time hereafter.
(b) As used herein, the term "AVAILABILITY" refers at any time to up to:
(A) the Revolving Loan Ceiling
Minus
(B) The then unpaid principal balance of the Loan Account
Minus
(C) The aggregate amounts then undrawn on all outstanding L/C's,
acceptances or any other accommodations issued or incurred, or caused
to be issued or incurred, by the Lenders for the account and/or the
benefit of any of the Borrowers.
(c) The proceeds of borrowings under the Revolving Credit shall be utilized
solely to pay transaction costs, refinance Indebtedness under the Existing Loan
Agreement, for working capital purposes, for repayment of draws under any L/C,
for Permitted Acquisitions, and for general corporate purposes.
3-2. Reductions of Commitment. The Total Commitment with respect to the
Revolving Credit may be voluntarily reduced, at the Borrowers' option, in
minimum increments of $1,000,000.00, with any payment of interest, subject to
the payment of the Line (Unused) Fee described below.
3-3. Procedures Under Revolving Credit.
(a) The Lead Borrower may request Revolving Credit Loans from time to time
under, in each instance in accordance with such procedures as may from time to
time be acceptable to the Administrative Agent, including, without limitation,
notice to the Administrative Agent of any requested borrowing by 11:00 A.M.
Boston, Massachusetts time on the proposed day of the subject Revolving Credit
Loans.
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(b) Subject to the provisions of this Agreement, a Revolving Credit Loan
duly and timely requested by the Lead Borrower shall be made and L/Cs shall be
issued pursuant hereto, provided that:
(i) The Availability will not be exceeded; and
(ii) The Revolving Credit has not been suspended as provided in
Section 3-3(j).
(c) A Revolving Credit Loan or advance shall be deemed to have been made
under the Revolving Credit upon the charging of the amount of such Revolving
Credit Loan to the Loan Account.
(d) There shall not be any recourse to, nor liability of, the
Administrative Agent or the Lenders on account of any of the following:
(i) (1) Any reasonable delay in the Lenders' making of any Revolving
Credit Loan requested under the Revolving Credit, and/or (2) any decline by
the Lenders to make, any Revolving Credit Loan requested under the
Revolving Credit while any Suspension Event has occurred and is continuing.
(ii) Any delay in the proceeds of any such Revolving Credit Loan
constituting collected funds.
(iii) Any delay in the receipt, and/or any loss, of funds which
constitute a Revolving Credit Loan, the wire transfer of which was properly
initiated by the Administrative Agent in accordance with wire instructions
provided to the Administrative Agent by the Lead Borrower.
(e) The Administrative Agent may rely on any request for a Revolving Credit
Loan or financial accommodation which the Administrative Agent, in good faith,
believes to have been made by a Person duly authorized to act on behalf of the
Lead Borrower and may decline to make any such requested Revolving Credit Loan
or to provide any such financial accommodation pending the Administrative
Agent's being furnished with such documentation concerning that Person's
authority to act as may be satisfactory to the Administrative Agent.
(f) A request by the Lead Borrower for any financial accommodation under
the Revolving Credit or of the issuance of an L/C or any other accommodations
shall be irrevocable and shall constitute certification by the Lead Borrower and
each Borrower that as of the date of such request, each of the following is true
and correct:
(i) There has been no Material Adverse Change in the Borrowers'
financial condition taken as a whole, from the most recent financial
information furnished the Lenders pursuant to this Agreement.
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(ii) Each representation which is made herein or in any of the Loan
Documents is then true and complete as of and as if made on the date of
such request (except to the extent such representation refers to a specific
earlier date).
(iii) No Suspension Event is then extant.
(g) The Borrowers shall immediately become indebted to the Lenders for the
amount of each Revolving Credit Loan under or pursuant to this Agreement when
such Revolving Credit Loan is made.
(h) (i) The Lead Borrower may request that the Administrative Agent issue
L/C's for the account of any Borrower. Each such request shall be in such manner
as may from time to time be acceptable to the Administrative Agent, and which
may include, without limitation, (A) telephone notice to such person as may be
designated by the Administrative Agent or (B) written notice.
(ii) The Administrative Agent, in the Administrative Agent's
discretion in each instance, may issue any L/C so requested by the Lead
Borrower, provided that
(A) the aggregate Stated Amount, following the requested issuance
thereof, would not exceed the Availability;
(B) the L/C (if so issued) is in form satisfactory to the
Administrative Agent;
(C) after giving effect to the issuance of the requested L/C, the
aggregate Stated Amount of all L/C's then outstanding, does not exceed
$5,000,000.00; and
(D) the expiry of the L/C is not later than the Maturity Date of
the Revolving Credit.
(iii) The Borrowers and/or the Lead Borrower shall execute such
documentation to apply for and support the issuance of an L/C as may be
required by the Administrative Agent, provided that no security shall be
required in connection therewith.
(i) The Administrative Agent, without the request of the Lead Borrower, may
advance under the Revolving Credit any amount which any Borrower is obligated to
pay to the Administrative Agent or for which any Borrower or the Administrative
Agent becomes obligated on account of, or in respect to, any L/C. Such advance
shall be made even if such advance would result in Availability's being
exceeded. Such action on the part of the Administrative Agent shall not
constitute a waiver by the Administrative Agent or any Lender of its rights
under Section 3-4(e) below.
(j) Upon the occurrence from time to time of any Suspension Event:
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(i) The Administrative Agent, with the prior written consent of the
Required Lenders may, or shall, at the request of the Required Lenders,
suspend the Revolving Credit immediately.
(ii) The Lenders shall not be obligated to make any loans or advance,
or to provide any financial accommodation hereunder or to issue any L/C.
(iii) The Administrative Agent, with the prior written consent of the
Required Lenders may, or shall, at the request of the Required Lenders,
suspend the right of the Lead Borrower to request any LIBOR Loan or to
convert any Base Margin Loan to a LIBOR Loan.
(k) Subject to the satisfaction of all conditions precedent hereunder, each
Lender will make available to the Administrative Agent on the proposed date of
any Revolving Credit Loan by wire transfer of immediately available funds not
later than 1:00 P.M., Boston time, the aggregate amount of its Commitment
Percentage of such Revolving Credit Loan requested by the Lead Borrower, and the
Administrative Agent shall promptly advance such amounts to the Lead Borrower in
accordance with the terms hereof.
3-4. The Loan Account.
(a) An account (hereinafter, the "LOAN ACCOUNT") shall be opened on the
books of the Administrative Agent, in which Loan Account a record may be kept of
all Revolving Credit Loans made by the Lenders to the Borrowers under or
pursuant to the Revolving Credit and of all payments thereon.
(b) The Administrative Agent may also keep a record (either in the Loan
Account or elsewhere, as the Administrative Agent may from time to time elect)
of all interest, fees, service charges, costs, expenses, and other debits owed
the Administrative Agent and each Lender on account of the Liabilities under the
Revolving Credit and of all credits against such amounts so owed.
(c) All credits against the Liabilities shall be conditional upon final
payment to the Administrative Agent of the items giving rise to such credits.
The amount of any item credited against the Liabilities which is charged back
against the Administrative Agent for any reason or is not so paid shall be a
Liability and shall be added to the Loan Account, whether or not the item so
charged back or not so paid is returned.
(d) Except as otherwise provided herein, all fees, service charges, costs,
and expenses for which the Borrowers are obligated hereunder are payable within
thirty (30) days of notice from the Administrative Agent to the Lead Borrower.
In the determination of Availability, the Administrative Agent may deem fees,
service charges, accrued interest, and other payments as having been advanced
under the Revolving Credit whether or not such amounts are then due and payable.
(e) The Administrative Agent, without the request of the Lead Borrower, may
advance under the Revolving Credit any interest, fee, service charge, or other
payment to which
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the Administrative Agent or any Lender is entitled from any Borrower pursuant
hereto and may charge the same to the Loan Account notwithstanding that such
amount so advanced may result in Availability's being exceeded. Any amount which
is added to the principal balance of the Loan Account as provided in this
Subsection shall bear interest at the interest rate applicable from time to time
to the unpaid principal balance of the Loan Account.
(f) Any statement rendered by the Administrative Agent to the Lead Borrower
concerning the Liabilities shall be considered correct and accepted by the
Borrowers and shall be conclusively binding upon the Borrowers unless the Lead
Borrower provides the Administrative Agent with written objection thereto within
sixty (60) days from the mailing of such statement, which written objection
shall indicate, with particularity, the reason for such objection. The Loan
Account and the Administrative Agent's books and records concerning the loan
arrangement contemplated herein and the Liabilities shall be prima facie
evidence and proof of the items described therein.
3-5. The Revolving Credit Note. The obligation to repay Revolving Credit
Loans, with interest as provided herein, shall be evidenced by certain notes
(hereinafter, collectively, the "REVOLVING CREDIT NOTE") payable to each Lender
in a principal amount equal to such Lender's Commitment Percentage of the
Revolving Credit, in the form of EXHIBIT 3-5, annexed hereto, executed by each
Borrower in favor of such Lender. Neither the original nor a copy of any
Revolving Credit Note shall be required, however, to establish or prove any
Liability on account thereof. In the event that a Revolving Credit Note is ever
lost, mutilated, or destroyed, the Borrowers shall execute a replacement thereof
and deliver such replacement to the subject Lender, subject to such Lender
providing a commercially reasonable indemnity in connection therewith.
3-6. Payment of Loan Account.
(a) The Borrowers shall repay the then entire unpaid balance of the Loan
Account and all other Liabilities on the Termination Date (as to which, see
Article 11, below).
(b) The Borrowers, without notice or demand from the Administrative Agent,
shall pay the Administrative Agent that amount, from time to time, which is
necessary so that Availability is equal to or greater than $0.
3-7. Interest.
(a) Revolving Credit Loans shall initially bear interest at the Base Rate
or, at the Lead Borrower's option in accordance with the terms hereof, the LIBOR
Rate, as specified from time to time by the Lead Borrower in the
Renewal/Conversion Notice with respect to the subject Revolving Credit Loan or
as otherwise provided in this Agreement.
(b) The Borrowers shall pay interest on each Revolving Credit Loan in
arrears on the applicable Interest Payment Date for that Loan and on the
Termination Date.
(c) Following the occurrence and during the continuance of any Event of
Default (and whether or not the Lenders exercise their rights on account
thereof), upon notice from the
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Administrative Agent to the Lead Borrower, the outstanding principal balance of
the Revolving Credit Loans shall bear interest at a rate per annum equal to the
rate (including the Base Rate Margin or the LIBOR Margin, as applicable) in
effect from time to time plus two and 00/100 percent (2.00%) per annum.
3-8. Duration of Interest Periods.
(a) Subject to the limitation described herein, the Lead Borrower shall
have the option to elect an Interest Period to be applicable to a Revolving
Credit Loan by giving notice of such election (a "RENEWAL/CONVERSION NOTICE") in
the form of EXHIBIT 3-8, annexed hereto received no later than 10:00 Boston time
one (1) Business Day before the end of the then applicable Interest Period if
such Loan is to be converted to a Base Margin Loan and three (3) Business Days
before (and not counting) the end of the then applicable Interest Period if such
Loan is to be continued as, or converted to, a LIBOR Loan; provided, however,
that (a) any Conversion of LIBOR Loans may be made only on the last day of the
respective Interest Period for such Loans, and (b) no loan may be Converted to a
LIBOR Loan when any Event of Default has occurred and is continuing. Each such
Conversion Request shall be by telephone, telecopy, electronic mail, telex or
cable, in each case confirmed immediately in writing in the manner specified for
notices herein, and shall, within the restrictions specified above, specify (i)
the date of such Conversion, (ii) the Loans to be Converted, and (iii) if such
Conversion is to LIBOR Loan the duration of the initial Interest Period for such
Loans. Each Conversion Request with respect to LIBOR Loans shall be irrevocable
and binding on the Borrowers.
(b) If the Administrative Agent does not receive a notice of election of,
or conversion to, an Interest Period for a LIBOR Loan pursuant to subsection (a)
within the applicable time limits specified therein, the Lead Borrower shall be
deemed to have elected to convert such Loan in whole into a Base Margin Loan on
the last day of the then current Interest Period with respect thereto.
(c) The Lead Borrower shall not select, renew, or convert any Revolving
Credit Loan such that there are more than six (6) interest rates applicable to
the Revolving Credit Loans in the aggregate which are LIBOR Loans at any one
time.
(d) LIBOR Loans shall each be in an amount of not less than Five Hundred
Thousand and no/100 Dollars ($500,000.00) and Five Hundred Thousand and no/100
Dollars ($500,000.00) increments in excess of such minimum.
(e) If, after giving a Conversion Request, the Lead Borrower fails to
borrow or Convert any LIBOR Loan, the Lead Borrower shall indemnify the
Administrative Agent and each Lender against any loss or expense incurred by the
Administrative Agent and each Lender as a result of such failure, including,
without limitation, any loss or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by any Lender to fund or
maintain a LIBOR Loan to be made by such Lender and the compensation as provided
for in Section 3-15, herein.
3-9. Changed Circumstances. In the event that:
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(a) On any day on which the rate for a LIBOR Loan would otherwise be set,
the Administrative Agent shall have determined in good faith (which
determination shall be final and conclusive) that adequate and fair means do not
exist for ascertaining either such rate; or
(b) At any time that the Administrative Agent shall have determined in good
faith (which determination shall be final and conclusive) that:
(i) the continuation of or conversion of any Revolving Credit Loan to
a LIBOR Loan has been made impracticable or unlawful by (A) the occurrence
of a contingency that materially and adversely affects the applicable
market or (B) compliance by any Lender in good faith with any applicable
law or governmental regulation, guideline or order or interpretation or
change thereof by any governmental authority charged with the
interpretation or administration thereof or with any request or directive
of any such governmental authority having the force of law; or
(ii) the indices on which the interest rates for LIBOR Loans shall no
longer represent the effective cost to the Lenders for U.S. dollar deposits
in the interbank market for deposits in which they regularly participate;
then, and in any such event, the Administrative Agent shall forthwith so
notify the Lead Borrower thereof. Until the Administrative Agent notifies
the Lead Borrower that the circumstances giving rise to such notice no
longer apply, the obligation of the Lenders to make LIBOR Loans of the type
affected by such changed circumstances or to permit the Lead Borrower to
select the affected interest rate as otherwise applicable to any Revolving
Credit Loans shall be suspended. If at the time the Administrative Agent so
notifies the Lead Borrower, the Lead Borrower has previously given the
Administrative Agent a Renewal/Conversion Notice with respect to one or
more LIBOR Loans, but such LIBOR Loans have not yet gone into effect, such
notification shall be deemed to be void and the Lead Borrower may only
borrow Base Margin Loans and shall furnish a substitute Renewal/Conversion
Notice. Upon the expiration of the Interest Period for any LIBOR Loan which
is outstanding on the date of such notification, the amount of such LIBOR
Loan shall thereafter constitute a Base Margin Loan.
3-10. Payments and Prepayments.
(a) Base Margin Loans may be prepaid at any time and from time to time
without premium or penalty.
(b) Any LIBOR Loan may be prepaid, upon not less than three (3) Business
Days' prior written notice to the Administrative Agent, without penalty,
provided that (1) each partial prepayment shall be in the principal amount of
$500,000.00 or an integral multiple thereof, (2) if such prepayment is on any
day other than the last day of the Interest Period relating thereto, such amount
prepaid shall be accompanied by any additional amounts necessary to compensate
the Lenders for any costs incurred by the Lenders in accordance with Section
3-15, herein, including any interest or fees payable by the Lenders to lenders
of funds obtained by them in order to make
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or maintain its LIBOR Loans hereunder and (3) any amount prepaid shall be
accompanied by accrued interest on the principal repaid to the date of payment.
(c) In the event that at the time of any such prepayment Loans are
outstanding of more than one type, the amount prepaid shall be applied first to
any Base Margin Loan prior to application to any LIBOR Loans.
(d) Any premium due hereunder upon such prepayment shall be due and payable
upon any prepayment whatsoever, whether voluntary or involuntary, to the extent
permitted by law, and after acceleration of the unpaid principal balance of the
Liabilities after the occurrence and during the continuance of an Event of
Default.
3-11. Fees.
(a) As compensation for the Lenders' commitment included herein to make
loans and advances to the Borrowers and as compensation for the Lenders'
maintenance of sufficient funds available for such purpose, the Lenders shall
have earned a FACILITY FEE (so referred to herein) of $30,000.00 (to be shared
by the Lenders as agreed among the Lenders).
(b) In addition to any other fee by the Borrowers on account of the
Revolving Credit, the Borrowers shall pay to the Administrative Agent, for the
pro rata benefit of the Lenders, a LINE (UNUSED) FEE (so referred to herein) in
arrears, on the first day of each quarter (or relevant pro rata portion thereof)
(and on the Termination Date). The Line (Unused) Fee shall be equal to the Line
Fee Percentage of the average difference, during the quarter just ended (or
relevant period with respect to the payment being made on the Termination Date)
between the Revolving Loan Ceiling and the unpaid principal balance of the Loan
Account.
(c) In addition to any other fee by the Borrowers on account of the
Revolving Credit, the Borrowers shall pay the Administrative Agent, for its own
account, an annual fee (the "ANNUAL FEE") of $20,000.00 payable on September 1,
2006 and each anniversary thereof.
(d) The Borrower shall not be entitled to any credit, rebate or repayment
of any Facility Fee, Annual Fee or Line (Unused) Fee previously earned by the
Administrative Agent or the Lenders pursuant to this Section notwithstanding any
termination of this Agreement or suspension or termination of the Lenders'
obligation to make Loans and advances hereunder.
3-12. Fees For L/C's.
(a) Prior to the issuance of any L/C, the Borrowers shall pay to the
Administrative Agent, for the pro rata benefit of the Lenders, a fee on account
of such L/C based upon the Administrative Agent's then current fee schedule for
like L/C's.
(b) In addition to the fee to be paid as provided in Subsection (a), above,
the Borrowers shall pay to the Administrative Agent, on demand, all issuance,
processing, negotiation, amendment, and administrative fees and other amounts on
account of, or in respect to, each L/C.
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3-13. Effect of Honor of L/C's. The Borrowers shall reimburse the
Administrative Agent for the amount of any honoring of any L/C. Any such
honoring which is not so reimbursed on the Business Day when so honored shall
constitute a Revolving Credit Loan.
3-14. Additional Provisions Relating to L/C's.
(a) The obligations of the Borrowers with respect to L/Cs shall be absolute
and unconditional. The obligations of the Borrowers with respect to L/Cs shall
rank pari passu with the obligations of the Borrowers to repay all other
Liabilities. The Borrowers, the Administrative Agent and the Lenders acknowledge
and agree that all Existing L/Cs shall be deemed L/Cs issued pursuant to this
Agreement. The Administrative Agent's rights, powers, privileges and immunities
specified in or arising under this Agreement with respect to L/C's are in
addition to any heretofore or at any time hereafter otherwise created or
arising, whether by statute or rule of law or contract.
(b) The Borrowers will
(i) promptly examine the copy of any L/C (and any amendments thereof)
sent to it by the Administrative Agent;
(ii) promptly examine all instruments and documents delivered to it
from time to time by the Administrative Agent; and
(iii) within three (3) Business Days of receipt thereof, provide the
Administrative Agent with written notice of any irregularity or claim of
non-compliance with the instructions of such person or entity.
The Borrowers are conclusively deemed to have waived any such claim against the
Administrative Agent and its correspondents unless such notice is so timely
given.
(c) The Borrowers will
(i) procure promptly any necessary documentation, permits, or licenses
for the import, export or shipping of the property in connection with which
any L/C is issued;
(ii) comply with all foreign and domestic governmental requirements
relating to the shipment or financing of such property; and
(iii) furnish such evidence that the above-noted requirements have
been fulfilled as the Administrative Agent reasonably may require.
(d) The Borrowers will jointly and severally indemnify the Administrative
Agent and each Lender for and hold harmless against any and all claims, loss,
liability, or damage, including attorneys' reasonable fees, howsoever arising
from or in connection with the surrender or endorsement of any xxxx of lading,
warehouse receipt or documents of title at any time held by the Administrative
Agent, or any of its correspondents in connection with any L/C.
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(e) None of the Administrative Agent's correspondents or any advising,
negotiating, or paying bank with respect to any L/C, shall be responsible in any
way for:
(i) performance by any beneficiary under any L/C of that beneficiary's
or payee's obligations to any Borrower; or
(ii) the form, sufficiency, correctness, genuineness, authority of any
person signing, falsification, or the legal effect of, any documents called
for under any L/C if (with respect to the foregoing) such documents on
their face appear to be in order.
(f) The Administrative Agent may honor, as complying with the terms of any
L/C and of any drawing thereunder, any drafts or other documents otherwise in
order, but signed or issued by an administrator, executor, conservator, trustee
in bankruptcy, debtor in possession, assignee for the benefit of creditors,
liquidator, receiver, or other legal representative of the party authorized
under such L/C to draw or issue such drafts or other documents.
(g) Unless otherwise agreed to, in the particular instance, the Borrowers
hereby authorize the Administrative Agent to (i) select an advising bank, if
any; (ii) select a paying bank, if any; and (iii) select a negotiating bank.
(h) All directions, correspondence, and funds transfers relating to any L/C
are at the risk of the Borrowers. The Administrative Agent shall have discharged
its obligations under any L/C which, or the drawing under which, includes
payment instructions, by the initiation of the method of payment called for in,
and in accordance with, such instructions (or by any other commercially
reasonable and comparable method). The Administrative Agent does not assume any
responsibility for any inaccuracy, interruption, error, or delay in transmission
or delivery by post, telegraph or cable, or for any inaccuracy of translation.
(i) The Administrative Agent's rights, powers, privileges and immunities
specified in or arising under this Agreement are in addition to any heretofore
or at any time hereafter otherwise created or arising, whether by statute or
rule of law or contract.
(j) Except to the extent otherwise expressly provided hereunder or agreed
to in writing by the Administrative Agent, and the Borrowers, the L/C will be
governed by the Uniform Customs and Practice for Documentary Credits,
International Chamber of Commerce, Publication No. 500, and any subsequent
revisions thereof.
(k) If any change in any law, executive order or regulation, or any
directive of any administrative or governmental authority (whether or not having
the force of law), or in the interpretation thereof by any court or
administrative or governmental authority charged with the administration
thereof, shall either:
(i) impose, modify or deem applicable any reserve, special deposit or
similar requirements against L/C's heretofore or hereafter caused to be
issued by the Administrative Agent or any Lender or with respect to which
the Administrative Agent or any Lender has an obligation to lend to fund
drawings thereunder; or
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(ii) impose on Administrative Agent or any Lender any other condition
or requirements relating to any such L/C's;
and the result of any event referred to in clause (i) or (ii), above, shall be
to increase the cost to such Person of issuing or maintaining any L/C, then,
upon demand by such Person and delivery by such Person to the Lead Borrower of a
certificate of an officer of such Person describing such change in law,
executive order, regulation, directive, or interpretation thereof, its effect on
such Person, and the basis for determining such increased costs and their
allocation, the Borrowers within five (5) Business Days after receipt of such
notice shall pay to such Person, from time to time as specified by such Person,
such amounts as shall be sufficient to compensate such Person for such increased
cost. The Administrative Agent's or such Lender's determination of costs
incurred under clause (k) (i) or (ii) above, shall be conclusive and binding on
the Borrowers in the absence of manifest error.
(l) The obligations of the Borrowers under this Agreement with respect to
L/C's are absolute, unconditional, and irrevocable and shall be performed
strictly in accordance with the terms hereof under all circumstances, whatsoever
including, without limitation, the following:
(i) Any lack of validity or enforceability or restriction, restraint,
or stay in the enforcement of this Agreement, any L/C, or any other
agreement or instrument relating thereto.
(ii) Any amendment or waiver of, or consent to the departure from, all
or any of the above.
(iii) The existence of any claim, set-off, defense, or other right
which the Borrowers may have at any time against the beneficiary of the
L/C.
3-15. Indemnification. Each Borrower jointly and severally agrees to
indemnify the Administrative Agent and each Lender and to hold the
Administrative Agent and each Lender (each an "INDEMNIFIED PARTY") harmless from
and against any loss, cost or expense (including loss of anticipated profits)
that an Indemnified Party may sustain or incur as a consequence of (a) default
by the Borrowers in payment of the principal amount of or any interest on any
LIBOR Loans as and when due and payable, including any such loss or expense
arising from interest or fees payable by an Indemnified Party to lenders of
funds obtained by it in order to maintain its LIBOR Loans, (b) default by the
Borrowers in making a borrowing or conversion after the Lead Borrower has given
(or is deemed to have given) a Conversion Request, or (c) the making of any
payment of any LIBOR Loan or the making of any conversion of any such Loan to a
Base Margin Loan on a day that is not the last day of the applicable Interest
Period with respect thereto, whether due to voluntary prepayment, payment
realized from any guarantor after the occurrence of an Event of Default, or
otherwise, including interest or fees payable by an Indemnified Party to lenders
of funds obtained by it in order to maintain any such Loans. Such loss shall
include, without limitation, an amount calculated as follows:
(a) First, the Indemnified Party shall determine the amount by which (i)
the total amount of interest which would have otherwise accrued hereunder on
each installment of
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principal so paid or not borrowed, during the period beginning on the date of
such payment or failure to borrow and ending on the date such installment would
have been due (the "REEMPLOYMENT PERIOD"), exceeds (ii) the total amount of
interest which would accrue, during the Reemployment Period, on any readily
marketable bond or other obligation of the United States of America designated
by the Indemnified Party in its sole discretion at or about the time of such
payment, such bond or other obligation of the United States of America to be in
an amount equal (as nearly as may be) to the amount of principal so paid or not
borrowed and to have a maturity comparable to the Reemployment Period, and the
interest to accrue thereon to take account of amortization of any discount from
par or accretion of premium above par at which the same is selling at the time
of designation. Each sum amount is hereafter referred to as an "INSTALLMENT
AMOUNT".
(b) Second, each Installment Amount shall be treated as payable as of the
date on which the related principal installment would have been payable by the
Borrowers had such principal installment not been prepaid or not borrowed.
(c) Third, the amount to be paid on each such date shall be the present
value of the Installment Amount determined by discounting the amount thereof
from the date on which such Installment Amount is to be treated as payable, at
the same annual interest rate as that payable upon the bond or other obligation
of the United States of America designated as aforesaid by the Indemnified
Party.
3-16. Computation of Interest and Fees. Interest and all fees payable on
account of the Liabilities shall be computed daily on the basis of a year of 360
days and paid for the actual number of days for which due. If the due date for
any payment of principal is extended by operation of law, interest shall be
payable for such extended time. If any payment required by this Agreement or any
other Loan Document becomes due on a day that is not a Business Day, such
payment may be made on the next succeeding Business Day (or prior Business Day
in connection with a LIBOR Loan), and such extension shall be included in
computing interest in connection with such payment.
3-17. Automatic Payment. The Borrowers authorize the Administrative Agent
to automatically debit the Borrowers' demand deposit accounts with the
Administrative Agent on the Interest Payment Date or such other dates when due
for all principal, interest, fees, costs, commissions, service charges and
expenses due to the Lenders on account of the Liabilities.
3-18. Additional Costs, Etc.. If any present or future applicable law,
which expression, as used herein, includes statutes, rules and regulations
thereunder and interpretations thereof by any competent court or by any
governmental or other regulatory body or official charged with the
administration or the interpretation thereof and requests, directives,
instructions and notices at any time or from time to time hereafter made upon or
otherwise issued to any Lender by any central bank or other fiscal, monetary or
other authority (whether or not having the force of law), shall:
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(a) subject any Lender to any tax, levy, impost, duty, charge, fee,
deduction or withholding of any nature with respect to this Agreement, the other
Loan Documents, or the Loans (other than taxes based upon or measured by the
income or profits of the Lender), or
(b) materially change the basis of taxation (except for changes in taxes on
income or profits) of payments to any Lender of the principal of or the interest
on any Loans or any other amounts payable to the Lender under this Agreement or
the other Loan Documents, or
(c) impose or increase or render applicable (other than to the extent
specifically provided for elsewhere in this Agreement) any special deposit,
reserve, assessment, liquidity, capital adequacy or other similar requirements
(whether or not having the force of law) against assets held by, or deposits in
or for the account of, or loans by, or commitments of an office of the Lender,
or
(d) impose on any Lender any other conditions or requirements with respect
to this Agreement, the other Loan Documents, the Loan, or any class of loans or
commitments of which any Loan forms a part;
and the result of any of the foregoing is
(i) to increase the cost to any Lender of making, funding, issuing,
renewing, extending or maintaining any of the Loans, or
(ii) to reduce the amount of principal, interest or other amount
payable to any Lender hereunder on account of any of the Loans, or
(iii) to require any Lender to make any payment or to forego any
interest or other sum payable hereunder, the amount of which payment or
foregone interest or other sum is calculated by reference to the gross
amount of any sum receivable or deemed received by such Lender from the
Borrowers hereunder,
then, and in each such case, the Borrowers will, upon demand made by such
Lender at any time and from time to time and as often as the occasion
therefor may arise, pay to such Lender such additional amounts as will be
sufficient to compensate such Lender for such additional cost, reduction,
payment or foregone interest or other sum, provided such Lender furnishes
the Lead Borrower and the Administrative Agent with a copy of such request
together with an explanation therefor and such Lender makes such request
consistent with its practices relative to similar borrowers.
3-19. Capital Adequacy. If any Lender shall have determined that the
adoption of any applicable law, rule, regulation, guideline, directive or
request (whether or not having force of law) regarding capital requirements, or
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by such Lender with any of the foregoing
imposes or increases a requirement by such Lender to allocate capital resources
to the Loans made, or to be made, hereunder, which has or would have the effect
of reducing the return on such Lender's capital to a level below that which such
Lender could have achieved (taking into consideration
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such Lender's then existing policies with respect to capital adequacy and
assuming full utilization of such Lender's capital) but for such adoption,
change or compliance, by any amount deemed by such Lender to be material: (i)
such Lender shall promptly after its commercially reasonable determination of
such occurrence give notice thereof to the Lead Borrower together with an
explanation therefor; and (ii) the Borrowers shall pay to such Lender as an
additional fee from time-to-time on demand such amount as the Lender certifies
to be the amount that will compensate it for such reduction. In determining such
amounts, such Lender may use any reasonable averaging and attribution methods.
3-20. Lenders' Commitments. (a) The obligations of each Lender are several
and not joint. No Lender shall have any obligation to make any Revolving Credit
Loan in excess of the lesser of the following:
(i) that Lender's Commitment Percentage of the subject Revolving
Credit Loan or of Availability,
(ii) that Lender's Commitment of the Revolving Credit.
(b) No Lender shall have any liability to the Borrowers on account of the
failure of any other Lender to provide any Revolving Credit Loan nor any
obligation to make up any shortfall which may be created by such failure.
3-21. Replacement Lenders. In the event that the Borrowers become obligated
to pay additional amounts or increased amounts to, or receive notice from, any
Lender pursuant to Sections 3-9, 3-18 or 3-19 hereof (an "AFFECTED LENDER"),
then, unless such Affected Lender has theretofore removed or cured the
conditions which resulted in the obligation to pay such additional amounts or
increased amounts, and so long as no Event of Default then exists, the Borrowers
may, on thirty (30) Business Day's prior written notice from the Lead Borrower
to the Administrative Agent and the Affected Lender, cause the Affected Lender
to (and such Affected Lender shall) assign without recourse, such Affected
Lender's Commitment at such time together with all accrued but unpaid interest
and fees to either (x) another Lender willing to accept such assignment, or (y)
to an Eligible Assignee, to the extent available, in each instance pursuant to
the provisions of Section 13-13 below. Each of the Administrative Agent and the
Affected Lender shall reasonably cooperate with the Lead Borrower, without
recourse to either such Person, in effectuating the replacement of such Affected
Lender under this Section. The exercise by the Borrowers of their rights under
this Section shall be at the Borrowers' sole cost and expense and at no cost or
expense to the Administrative Agent, the Affected Lender or any of the other
Lenders. The terms of this Section shall not in any way limit the Borrowers'
obligation to pay to any Affected Lender compensation owing to such Affected
Lender pursuant to Section 3-18 or 3-19.
ARTICLE 4 - CONDITIONS PRECEDENT.
Precedent to the effectiveness of this Agreement, the establishment of the
financing arrangements contemplated hereby, the making of the first loan under
the Revolving Credit, the documents respectively described in Section 4-1
through and including Section 4-9, each in form
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and substance satisfactory to the Administrative Agent shall have been delivered
to the Administrative Agent, and the conditions respectively described in
Sections 4-10 through and including 4-14, shall have been satisfied:
4-1. Corporate Due Diligence.
(a) Certificates of corporate good standing issued by the respective
Secretary of State of the Borrowers' state of organization.
(b) A Certificate of each Borrower's Assistant Clerk of the due adoption,
continued effectiveness, and setting forth the texts of, each corporate
resolution adopted in connection with the establishment of the loan arrangement
contemplated by the Loan Documents and attesting to the true signatures of each
Person authorized as a signatory to any of the Loan Documents.
4-2. Opinion. An opinion of counsel to the Borrowers in form and substance
satisfactory to the Administrative Agent.
4-3. Officers' Certificates. A Certificate executed by the President and
the Treasurer of each Borrower and stating that, among other things, the
representations and warranties made by such Borrower to the Administrative Agent
and the Lenders in the Loan Documents are true and complete as of the date of
such Certificate, that no event has occurred which is or which, solely with the
giving of notice or passage of time (or both) would be an Event of Default, and
that certain provisions of this Agreement concerning the waiver of jury trial,
the designation of and submission to the exclusive jurisdiction and venue of
certain courts, and other various waivers and indemnifications have brought to
such Borrower's attention.
4-4. Guaranties. The Administrative Agent shall have received unlimited
guaranties in form and substance acceptable to the Administrative Agent wherein
each Borrower shall unconditionally guaranty all Liabilities of the other
Borrowers to the Administrative Agent and each Lender.
4-5. Lien Search Results. The Administrative Agent shall have received the
results of UCC and tax lien searches (and the equivalent thereof in all
applicable foreign jurisdictions) with respect to the Borrowers in form and
substance reasonably satisfactory to the Administrative Agent.
4-6. Consents and Approvals. All necessary consents and approvals to the
transactions contemplated hereby shall have been obtained and shall be
reasonably satisfactory to the. Administrative Agent.
4-7. All Fees and Expenses Paid. All fees due at or immediately after the
first funding under the Revolving Credit and all costs and expenses incurred by
the Administrative Agent in connection with the establishment of the credit
facilities contemplated hereby (including the reasonable fees and expenses of
counsel to the Administrative Agent) shall have been paid in full.
4-8. Lockbox. The lockbox agreement required under Section 5-3 below.
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4-9. Additional Documents. Such additional instruments and documents as the
Administrative Agent or their counsel reasonably may require or request.
4-10. No Defaults under Applicable Law or Material Agreements. The
consummation of the transactions contemplated hereby shall not (a) violate any
Requirement of Law or (b) conflict with, or result in a default or event of
default under, any material agreement of any Borrower.
4-11. No Litigation. Except as noted on EXHIBIT 5-17, there shall not exist
any litigation or other proceedings the result of which would have a Material
Adverse Change.
4-12. Representations and Warranties. Each of the representations made by
or on behalf of any Borrower in this Agreement or in any of the other Loan
Documents or in any other report, statement, document, or paper provided by any
or on behalf of any Borrower shall be true and complete in all material respects
as of the date as of which such representation or warranty was made.
4-13. No Suspension Event. No Suspension Event shall then exist.
4-14. No Adverse Change. Except as noted on EXHIBIT 4-14, no event shall
have occurred or failed to occur, which occurrence or failure had or could
reasonably be expected to have a materially adverse effect upon the Borrowers'
financial condition, operating results, or cash flows from the Borrowers'
financial condition at December 31, 2005.
ARTICLE 5 - GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS.
To induce the Administrative Agent and the Lenders to establish the loan
arrangement contemplated herein and to make Loans and advances and to provide
financial accommodations under the Revolving Credit (each of which Loans shall
be deemed to have been made in reliance thereupon), the Borrowers, in addition
to all other representations, warranties, and covenants made by the Borrowers in
any other Loan Document, make those representations, warranties, and covenants
included in this Agreement.
5-1. Payment and Performance of Liabilities. The Borrowers shall pay each
Liability when due (or when demanded if payable on demand) or within any
applicable grace period and shall promptly, punctually, and faithfully perform
each other Liability.
5-2. Due Organization - Corporate Authorization - No Conflicts.
(a) Each Borrower presently is, and shall hereafter remain, in good
standing as a corporation in the State referenced in the Preamble hereto and is,
and shall hereafter remain, duly qualified and in good standing in every other
State in which, by reason of the nature or location of such Borrower's assets or
operation of such Borrower's business, such qualification may be necessary,
except for such States in which failure to be so qualified and in good standing
would not result in a Material Adverse Change.
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(b) Each Subsidiary is listed on EXHIBIT 5-2, annexed hereto. Each
Subsidiary is, and shall hereafter remain, in good standing in the State in
which incorporated and is, and shall hereafter remain, duly qualified in each
other State in which, by reason of such entity's assets or the operation of such
entity's business, such qualification may be necessary, except for such States
in which failure to be so qualified and in good standing would not result in a
Material Adverse Change. The Borrowers shall provide the Administrative Agent
with prior written notice of any entity's becoming or ceasing to be a
Subsidiary.
(c) Each Borrower has all requisite corporate power and authority to
execute and deliver to the Administrative Agent all and singular the Loan
Documents to which such Borrower is a party and has and will hereafter retain
all requisite corporate power to perform all and singular the Liabilities.
(d) The execution and delivery by each Borrower of each Loan Document to
which it is a party; each Borrower's consummation of the transactions
contemplated by such Loan Documents; and each Borrower's performance under those
of the Loan Documents to which it is a party; the borrowings hereunder; and the
use of the proceeds thereof:
(i) Have been duly authorized by all necessary corporate action.
(ii) Do not, and will not, contravene in any material respect any
provision of any Requirement of Law or obligation of such Borrower.
(iii) Will not result in the creation or imposition of, or the
obligation to create or impose, any Encumbrance (other than Permitted
Liens) upon any assets of any Borrower pursuant to any Requirement of Law
or obligation.
(e) The Loan Documents have been duly executed and delivered by each
Borrower party thereto and are the legal, valid and binding obligations of each
Borrower party thereto, enforceable against each Borrower party thereto in
accordance with their respective terms.
5-3. Maintain Accounts. To permit the Administrative Agent to monitor the
Borrowers' financial performance and condition, each Borrower shall maintain all
of such Borrower's depository accounts with any of the Lenders or other
depository institutions disclosed to, and reasonably acceptable to the
Administrative Agent, with all significant deposits to be maintained with any
Lender. Upon the occurrence of an Event of Default which continues uncured or
waived, all third party depository accounts shall be transferred to, maintained
with, and controlled by the Administrative Agent. Any amounts not deposited
directly with the Lenders and received by any third party institution during any
transition shall be transferred on a daily basis to an account established and
controlled by the Administrative Agent.
5-4. Trade Names.
(a) The conduct by any Borrower of such Borrower's business does not
infringe on the patents, industrial designs, trademarks, trade names, trade
styles, brand names, service marks, logos, copyrights, trade secrets, know-how,
confidential information, or other intellectual or proprietary property of any
third Person, that could result in a Material Adverse Change.
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(b) Each Borrower owns and possesses, or has the right to use, all patents,
industrial designs, trademarks, trade names, trade styles, brand names, service
marks, logos, copyrights, trade secrets, know-how, confidential information, and
other intellectual or proprietary property of any third Person necessary for
such Borrower's conduct of its business.
5-5. Locations. All of the assets of the Borrowers, and the books, records,
and papers of the Borrowers pertaining thereto, are kept and maintained solely
at the chief executive offices of the Borrowers stated in the Preamble of this
Agreement, and at those locations which are listed on EXHIBIT 5-5, annexed
hereto, which EXHIBIT includes all service bureaus with which any such records
are maintained and the names and addresses of each of the Borrower's landlords.
The Borrowers shall not remove any of the books, records, and papers of the
Borrowers pertaining to the assets of the Borrowers from said chief executive
offices or those locations listed on EXHIBIT 5-5.
5-6. Title to Assets. Each Borrower is, and shall hereafter remain, the
owner of all of its present and future assets, free and clear of all
Encumbrances, other than the following ("PERMITTED LIENS"):
(a) The mortgages and security interests (including Capital Leases)
referred to in EXHIBIT 5-6 attached hereto, or any renewal, extension or
refunding of any such mortgage or security interest in an amount not exceeding
the amount thereof remaining unpaid immediately prior to such renewal, extension
or refunding;
(b) Liens for taxes and other amounts not yet delinquent or being contested
in good faith as provided in Section 5-13; liens in connection with workmen's
compensation, unemployment insurance or other social security obligations; liens
securing the performance of bids or performance bonds, tenders, contracts,
leases, statutory obligations, surety and appeal bonds, liens to secure progress
or partial payments and other liens of like nature arising in the ordinary
course of business; mechanics', workmen's, materialmen's, carrier's,
warehousemen's, or other like liens arising in the ordinary course of business
in respect of obligations which are not yet due or which are being contested in
good faith; and other liens or encumbrances incidental to the conduct of the
business of any Borrower or any Subsidiary or to the ownership of their
respective properties or assets, which were not incurred in connection with the
borrowing of money or the obtaining of credit and which do not, individually or
in the aggregate, materially detract from the value of the properties or assets
of the Borrowers and their Subsidiaries or materially affect the use thereof in
the operation of their business;
(c) Encumbrances in the nature of (i) zoning restrictions, (ii) easements,
(iii) restrictions of record on the use of real property, (iv) landlords' and
lessors' encumbrances on rented premises and (v) restrictions on transfers or
assignments of leases, which in each case do not, individually or in the
aggregate, materially detract from the value of the encumbered property or
impair the use thereof in the business of any Borrower or any Subsidiary;
(d) Liens in respect of judgments or awards, to the extent that such
judgments or awards are permitted by Section 5-7(j);
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(e) Restrictions under federal and state securities laws on the transfer of
securities;
(f) Restrictions under foreign trade regulations, other governmental rules
and regulations, and subcontracts on the transfer or licensing of certain assets
of the Borrowers and their Subsidiaries;
(g) Liens and security interests granted to third parties in connection
with purchase money security interest or leases to secure amounts not to exceed
$1,500,000 in the aggregate at any time outstanding; and
(h) Liens on assets in existence at the time such assets are acquired
pursuant to a Permitted Acquisition, provided that such liens are not incurred
in connection with, or in anticipation of, such Permitted Acquisition and do not
attach to any other assets of any Borrower or any Subsidiary.
The Borrowers have not, and shall not, enter into a negative pledge agreement,
or similar agreement, affecting their assets with any other party.
5-7. Indebtedness. The Borrowers do not, and shall not hereafter, have any
Indebtedness with the exceptions of:
(a) Indebtedness to the Administrative Agent and the Lenders under this
Agreement and the other Loan Documents;
(b) Indebtedness existing as of the Closing Date of any wholly-owned
Subsidiary to a Borrower or any other wholly-owned Subsidiary and of a Borrower
to any wholly-owned Subsidiary; provided, however, that (i) all moneys due from
a Borrower to any Subsidiary which is not a Borrower will be expressly
constituted as a Subordinated Debt and (ii) no Borrower shall repay any such
moneys due to any Subsidiary at any time unless no Event of Default exists and
no event which, with the giving of notice or lapse of time or both, would
constitute an Event of Default exists or will exist after such repayment;
(c) Current liabilities of a Borrower or any Subsidiary (other than for
borrowed money) incurred in the ordinary course of its business and in
accordance with customary trade practices;
(d) Existing Indebtedness of a Borrower or any Subsidiary referred to in
EXHIBIT 5-7 attached hereto, and renewals and extensions thereof, provided that
(i) the aggregate principal amount of such Indebtedness is not at any time
increased, (ii) no material terms applicable to such Indebtedness shall be more
favorable to the renewal or extension lenders than the terms that are applicable
to the holders of such Indebtedness on the date hereof and (iii) the interest
rate applicable to such Indebtedness shall be a market interest rate as of the
time of such renewal or extension;
(e) Indebtedness of a Borrower or any Subsidiary secured by Permitted
Liens;
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(f) Indebtedness of a Borrower or any Subsidiary in respect of guarantees
to the extent the underlying Indebtedness is permitted by this Section 5-7;
(g) Subordinated Debt;
(h) Unfunded pension and benefit liabilities so long as each Borrower is in
compliance with Section 5-15, provided that the Lead Borrower's excess of the
present value of accrued pension benefits over the value of plan assets shall
not exceed $20,000,000 as determined under the plan's assumptions for funding
purposes.
(i) To the extent payment thereof shall not at the time be required by
Section 5-13, Indebtedness in respect of taxes, assessments, governmental
charges and claims for labor, material and supplies;
(j) Indebtedness in respect of judgments or awards (i) which have been in
force for less than the applicable appeal period or (ii) in respect to which any
Borrower or any Subsidiary shall at the time in good faith be prosecuting an
appeal or proceedings for review, and in each case such Borrower or such
Subsidiary shall have taken appropriate reserves therefor in accordance with
GAAP;
(k) Indebtedness in respect of deferred taxes arising in the ordinary
course of business;
(l) Any other unsecured Indebtedness in an amount not to exceed $
1,000,000, in the aggregate at any time outstanding; and
(m) Indebtedness in the nature of Capital Leases permitted by Section 5-20
hereunder.
5-8. Insurance Policies.
(a) EXHIBIT 5-8, annexed hereto, is a schedule of all insurance policies
owned by any Borrower or under which any Borrower is the named insured. Each of
such policies is in full force and effect. Neither any Borrower nor, to the
knowledge of the Borrowers, the issuer of any such policy is in default or
violation of any such policy.
(b) Each Borrower will maintain or cause to be maintained on all insurable
properties now or hereafter owned by such Borrower or any Subsidiary insurance
against loss or damage by fire or other casualty to the extent customary with
respect to like properties of companies conducting similar businesses and will
maintain or cause to be maintained public liability and workmen's compensation
insurance insuring such Borrower and its Subsidiaries to the extent customary
with respect to companies conducting similar businesses and, upon request, will
furnish to the Administrative Agent satisfactory evidence of the same. In the
event of the failure by any Borrower to maintain insurance as required herein,
the Administrative Agent, at its option, may obtain such insurance at the cost
and expense of the Borrowers. Each Borrower shall furnish to the Administrative
Agent certificates or other evidence reasonably satisfactory to the
Administrative Agent regarding compliance by such Borrower with the foregoing
insurance provisions.
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5-9. Licenses. EXHIBIT 5-9, annexed hereto, is a schedule of all material
license, distributor, franchise, and similar agreements issued to any Borrower,
or to which any Borrower is a party. Each of such agreements is in full force
and effect. Neither any Borrower nor, to the knowledge of the Borrowers, any
other party to any such agreement is in material default or violation of any
such agreement and no Borrower has received any notice or threat of cancellation
of any such agreement.
5-10. Leases. EXHIBIT 5-10, annexed hereto, is a schedule of all presently
effective Leases and Capital Leases having an outstanding amount due in excess
of $500,000. Each of such Leases and Capital Leases is in full force and effect.
Neither any Borrower nor, to the knowledge of the Borrowers, any other party to
any such Lease or Capital Lease is in material default or violation of any such
Lease or Capital Lease and no Borrower has received any notice or threat of
cancellation of any such Lease or Capital Lease. Each Borrower hereby authorizes
the Administrative Agent at any time and from time to time after the occurrence
and during the continuance of any Event of Default to contact any of the
Borrowers' landlords in order to confirm each Borrower's continued compliance
with the terms and conditions of any Lease between such Borrower and that
landlord and to discuss such issues, concerning such Borrower's occupancy under
such Lease, as the Administrative Agent may determine. Borrower further
represents that the aggregate amount due under all other present Leases and
Capital Leases not set forth in EXHIBIT 5-10 does not exceed $1,000,000.
5-11. Requirements of Law. Except as set forth on EXHIBIT 5-11, each
Borrower is in material compliance with, and shall hereafter comply with and use
its assets in material compliance with, all Requirements of Law. No Borrower has
received any notice of any material violation of any Requirement of Law which
material violation has not been cured or otherwise remedied.
5-12. Maintain Properties. Each Borrower shall:
(a) Keep its assets in good order and repair (ordinary reasonable wear and
tear and insured casualty excepted).
(b) Not suffer or cause the waste or destruction of any material part of
its assets.
(c) Not use any of its assets in violation of any policy of insurance
thereon.
(d) Not sell, lease, or otherwise dispose of any of its assets, other than
as set forth in Section 5-22.
5-13. Pay Taxes.
(a) Except as set forth in EXHIBIT 5-13, to the best of the Borrowers'
knowledge, there are no examinations of or with respect to any Borrower
presently being conducted by the Internal Revenue Service or any state taxing
authority.
(b) Except as set forth in EXHIBIT 5-13 and except as would not be
material, each Borrower has, and hereafter shall: pay, as they become due and
payable, all taxes and
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unemployment contributions and other charges of any kind or nature levied,
assessed or claimed against such Borrower or its assets by any Person whose
claim could result in an Encumbrance upon any asset of such Borrower or by any
governmental authority; properly exercise any trust responsibilities imposed
upon such Borrower by reason of withholding from employees' pay; timely make all
contributions and other payments as may be required pursuant to any Employee
Benefit Plan now or hereafter established by such Borrower; and timely file all
tax and other returns and other reports with each governmental authority to whom
each Borrower is obligated to so file, provided that neither any Borrower nor
any Subsidiary shall be required to pay any such tax, assessment, charge, levy
or claim if the amount, applicability or validity thereof shall currently be
contested in good faith by appropriate proceedings promptly initiated and
diligently conducted and if such Borrower or such Subsidiary, as the case may
be, shall have set aside on its books such reserves, if any, with respect
thereto as are required by GAAP and deemed appropriate by such Borrower and its
independent public accountants.
(c) Except as set forth in EXHIBIT 5-13, subject to the Borrowers' rights
under subsection (b) above, in the event of the failure by any Borrower to
comply with subsection (b) above, the Administrative Agent, at its option, may,
but shall not be obligated to, pay any taxes, unemployment contributions, and
any and all other charges levied or assessed upon such Borrower or its assets by
any Person or governmental authority, and make any contributions or other
payments on account of any Borrower's Employee Benefit Plan as the
Administrative Agent, in the Administrative Agent's reasonable discretion, may
deem necessary or desirable to protect, maintain or preserve any or all of the
properties or assets of such Borrower or the value thereof or any right or
remedy pertaining thereto; provided, however, the Administrative Agent's making
of any such payment shall not constitute a cure or waiver of any Event of
Default occasioned by such Borrower's failure to have made such payment.
5-14. No Margin Stock. No Borrower is engaged in the business of extending
credit for the purpose of purchasing or carrying any margin stock (within the
meaning of Regulations U. and X. of the Board of Governors of the Federal
Reserve System of the United States). No part of the proceeds of any borrowing
from any Lender will be used at any time to purchase or carry any such margin
stock or to extend credit to others for the purpose of purchasing or carrying
any such margin stock.
5-15. ERISA. Neither any Borrower nor any ERISA Affiliate shall:
(a) Materially violate or fail to be in material compliance with the terms
of any Borrower's Employee Benefit Plan.
(b) Fail timely to file all material reports and filings required by ERISA
to be filed by any Borrower that may result in material liability to any
Borrower.
(c) Engage in any non-exempt "prohibited transactions" or any "reportable
events" for which reportable events notice to the Pension Benefit Guaranty
Corporation is not waived pursuant to regulations (respectively as described in
ERISA).
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(d) Engage in, or commit, any act such that a material tax or penalty could
be imposed upon any Borrower on account thereof pursuant to ERISA.
(e) Accumulate any material funding deficiency within the meaning of ERISA,
except to the extent permitted by Section 5-7(h).
(f) Terminate any Employee Benefit Plan such that a lien in any material
amount could be asserted against any material assets of any Borrower on account
thereof pursuant to ERISA.
(g) Be a member of, contribute to, or have any material obligation under
any Employee Benefit Plan which is a multiemployer plan within the meaning of
Section 4001(a) of ERISA that subjects it to a material potential withdrawal
liability under Title IV of ERISA.
5-16. Hazardous Materials.
(a) Except as set forth on EXHIBIT 5-16, no Borrower has: (i) been legally
responsible for any release or threat of release of any Hazardous Material or
(ii) received notification of any release or threat of release of any Hazardous
Material from any site or vessel occupied or operated by any Borrower and/or of
the incurrence of any expense or loss in connection with the assessment,
containment, or removal of any release or threat of release of any Hazardous
Material from any such site or vessel.
(b) Each Borrower shall: (i) dispose of any Hazardous Material only in
compliance with all Environmental Laws and (ii) not store on any site or vessel
occupied or operated by any Borrower and not transport or arrange for the
transport of any Hazardous Material, except if such storage or transport is in
the ordinary course of any Borrower's business and is in compliance with all
Environmental Laws.
(c) Each Borrower shall provide the Administrative Agent with written
notice upon such Borrower's obtaining knowledge of any incurrence of any expense
or loss by any governmental authority or other Person in connection with the
assessment, containment, or removal of any Hazardous Material, for which expense
or loss any Borrower may be liable.
5-17. Litigation. Except as set forth on EXHIBIT 5-17, there is not
presently pending or threatened by or against any Borrower any suit, action,
proceeding, or investigation which, if determined adversely to such Borrower,
would result in a Material Adverse Change upon the Borrowers' financial
condition, taken as a whole, or ability to conduct their business as such
business is presently conducted or is contemplated to be conducted in the
foreseeable future.
5-18. Dividends and Redemptions. None of the Borrowers will:
(a) Pay any cash dividend or make any other distribution other than stock
dividends in respect of any class of such Borrower's capital stock, except for
distributions by any Borrower to the Lead Borrower.
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(b) Redeem, retire, defease, purchase or otherwise acquire any shares of
any class of capital stock (or set aside or otherwise deposit or invest any sums
for such purpose) for any consideration other than common stock or apply or set
apart any sum, or make any other distribution (by reduction of capital or
otherwise) in respect of any such shares or agree to do any of the foregoing,
except for the periodic redemption or repurchase of capital stock, provided that
(i) no Event of Default is then existing and would not exist after giving effect
to any contemplated redemption or repurchase and (ii) all such redemptions or
repurchases shall in no event exceed the lesser of (A) ten percent (10%) of the
then outstanding capital stock of any Borrower, or (B) $10,000,000 in the
aggregate.
5-19. Guarantees and Investments. None of the Borrowers will, nor will any
Borrower permit any Subsidiary to, make or permit to remain outstanding any loan
or advance to, or guarantee or endorse (except as a result of endorsing
negotiable instruments for deposit or collection in the ordinary course of
business) or otherwise assume or remain liable with respect to any obligation
of, or make or own any investment in, or acquire (except in the ordinary course
of business) the properties or assets of, any Person, except:
(a) Extensions of credit by a Borrower or any Subsidiary in the ordinary
course of business in accordance with customary trade practices (including the
acceptance of promissory notes in respect of delinquent Accounts);
(b) The presently outstanding Investments, loans and advances, if any, and
the presently existing guarantees, if any, of any Borrower and its Subsidiaries,
all to the extent set forth on EXHIBIT 5-19 attached hereto;
(c) Direct obligations of the United States of America or any department or
agency thereof maturing not more than one year from the date of acquisition
thereof;
(d) Certificates of deposit, repurchase agreements, time deposits
(including sweep accounts), demand deposits, bankers' acceptances, money market
deposits or other similar types of Investments maturing not more than one year
from the date of acquisition thereof and evidencing direct obligations of any
Lender or any lender within the United States of America having capital surplus
and undivided profits in excess of $50,000,000;
(e) Investments in commercial paper maturing within ninety (90) days from
the date of acquisition thereof and having, at such date of acquisition, rated
at least P-1 by Xxxxx'x or A-1 by S&P, or carrying an equivalent rating by a
nationally recognized rating agency;
(f) Any mutual fund or other pooled investment vehicle which invests
principally in obligations described in subparagraphs (c), (d) or (e) above and
having, at the date of investment in such fund or vehicle, one of the two
highest credit ratings from Xxxxx'x or S & P;
(g) Equity investments by any Borrower's wholly-owned Subsidiaries in any
other wholly-owned Subsidiary and of a Borrower in any of its wholly-owned
Subsidiaries;
(h) Guaranties by a Borrower of the other Borrowers' Indebtedness pursuant
to the Revolving Credit Loans;
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(i) Guarantees by a Borrower of Indebtedness and other obligations incurred
by Subsidiaries to the extent permitted by Section 5-7;
(j) Capital Expenditures to the extent permitted by Section 5-29;
(k) Guarantees by any Borrower of any of the other Liabilities;
(l) Any new Capital Leases permitted under Section 5-20;
(m) Mergers or consolidations permitted under Section 5-21:
(n) Any Investment relating to any deferred portion of the purchase price
in connection with a permitted sale;
(o) Permitted Acquisitions; and
(p) Any other Investments or Guarantees in an amount not to exceed
$2,000,000 in the aggregate outstanding at any time;
provided, however, if after giving effect to any of the foregoing, any
Borrower or any Subsidiary of any Borrower shall create a Subsidiary, the
Lead Borrower shall cause such Subsidiary to execute and deliver to the
Administrative Agent and the Lenders such documentation as such Persons may
reasonably require to (x) either (i) join this Agreement as a "Borrower",
or (ii) execute a guaranty of the Liabilities, and (y) to otherwise
effectuate the intentions of this Agreement and the other Loan Documents.
5-20. New Leases. None of the Borrowers will, nor will any Borrower permit
any Subsidiary to, enter into any Capital Lease, except as permitted below or as
otherwise permitted under Sections 5-7 and 5-10. From and after the Closing
Date, none of the Borrowers will, and none of the Borrowers will permit any
Subsidiary to, enter into any new lease during any fiscal year (including any
new Capital Leases, but excluding renewals of any existing leases) as lessee if,
immediately after giving effect thereto, the aggregate rental obligations
(excluding payments required to be made by the lessee in respect of taxes and
insurance whether or not denominated as rent, and excluding payments incurred in
connection with a renewal of any existing lease) of all of the Borrowers and
their respective Subsidiaries under all such leases entered into during such
fiscal year after the Closing Date shall exceed $2,000,000 in the aggregate in
such fiscal year; provided, however, that to the extent rental obligations under
any lease are reimbursable by such Borrower's customer pursuant to a binding
contract between such Borrower and such customer, such rental obligations shall
be excluded from the foregoing provision of this sentence. Upon the reasonable
request of the Administrative Agent, the Lead Borrower will obtain a landlord's
waiver reasonably acceptable to the Administrative Agent on any existing or new
leased location occupied by any Borrower.
5-21. Mergers and Consolidations. None of the Borrowers will, nor will any
Borrower permit any Subsidiary to, enter into any merger or consolidation,
except the following:
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(a) Any wholly-owned Subsidiary of a Borrower may merge or be liquidated
into a Borrower or any other wholly-owned Subsidiary of a Borrower so long as
after giving effect to any such merger to which a Borrower is a party such
Borrower shall be the surviving or resulting Person;
(b) Mergers constituting Investments permitted by Section 5-19(f) so long
as after giving effect to any such merger to which a Borrower is a party such
Borrower shall be the surviving or resulting Person; and
(c) Permitted Acquisitions.
5-22. Sale of Assets.
(a) Except as expressly permitted under Section 5-21, none of the Borrowers
will, nor will any Borrower permit any Subsidiary to, sell, lease or otherwise
dispose of all or any substantial part of its properties or assets, except for
the sale of Metrigraphics Precision Manufacturing Group for fair market value in
an arm's length transaction and except for the following: Each Borrower and its
Subsidiaries may sell or otherwise dispose of assets that are no longer used or
useful in the business of the applicable Borrower or Subsidiary, for fair market
value that, when aggregated with all other sales and dispositions pursuant to
this clause, is in exchange for up to $2,000,000 of gross sales proceeds
received by a Borrower; provided, however, that no Borrower shall dispose of any
portion of its books and records without the prior consent of the Required
Lenders; provided further that, immediately before and after giving effect to
any such disposition (including the disposition of Metrigraphics Precision
Manufacturing Group), no Event of Default exists. The Required Lenders' consent
shall be requested no less than ten (10) days prior to the scheduled closing
date of a proposed sale. The Net Proceeds of any sale shall be applied to the
outstanding principal balance of the Revolving Credit Loans.
(b) The Lead Borrower may sell, lease or otherwise transfer any of its
properties or assets to any other Borrower, provided that (i) the Borrowers
provide a notice thereof to the Administrative Agent prior to each such transfer
(which notice shall include a description and a good faith estimate of the fair
market value of the property or assets being so transferred and, to the extent
applicable, the revenues that were generated by such property or assets in the
immediately preceding fiscal year of the Lead Borrower), and (ii) immediately
before and after giving effect thereto no Event of Default exists; and
(c) Each Borrower and its Subsidiaries may license products and intangible
assets for fair market value in the ordinary course of business.
5-23. Protection of Assets. Upon the occurrence and during the continuance
of any Event of Default, after notice to the Lead Borrower, the Administrative
Agent, at the Administrative Agent's discretion, and from time to time, may
discharge any tax or Encumbrance on any of the properties or assets of the
Borrowers, or take any other action that the Administrative Agent may deem
necessary or desirable to repair, insure, maintain or preserve any such
properties or assets. The Administrative Agent shall not have any obligation to
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undertake any of the foregoing and shall have no liability on account of any
action so undertaken except where there is a specific finding in a judicial
proceeding (in which the Administrative Agent has had an opportunity to be
heard), from which finding no further appeal is available, that Administrative
Agent had acted in actual bad faith or in a grossly negligent manner. Each
Borrower shall pay to the Administrative Agent, on demand, or the Administrative
Agent, in its discretion, may add to the Loan Account, all amounts paid or
incurred by the Administrative Agent pursuant to this section. The obligation of
the Borrowers to pay such amounts is a Liability.
5-24. Line of Business. The Borrowers shall not engage in any business
other than the business in which they are currently engaged or a business
reasonably related thereto.
5-25. Affiliate Transactions. Except as expressly permitted under Section
5-21, the Borrowers shall not make any payment, nor give any value to any
Related Entity except for goods and services actually purchased by a Borrower
from, or sold by a Borrower to, such Related Entity for a price which shall
(a) be competitive and fully deductible as an "ordinary and necessary
business expense" and/or fully depreciable under the Internal Revenue Code of
1986 and the Treasury Regulations, each as amended; and
(b) not differ from that which would have been charged in an arms length
transaction.
5-26. Additional Assurances. Each Borrower shall execute and deliver to the
Administrative Agent such instruments, documents, and papers, and shall do all
such things from time to time hereafter as the Administrative Agent may request
to carry into effect the provisions and intent of this Agreement; and to comply
with all applicable statutes and laws.
5-27. Adequacy of Disclosure.
(a) All annual and quarterly financial statements of the Borrowers
furnished to the Lenders by the Borrowers for any period ending on or after
December 31, 2005 have been prepared in accordance with GAAP consistently
applied and present fairly the condition of the Borrowers at the date(s) thereof
and the results of operations and cash flows for the period(s) covered, except
that quarterly financial statements remain subject to year-end adjustments and
the addition of notes. There has been no change in the financial condition,
results of operations, or cash flows of the Borrowers since the date(s) of such
financial statements, other than changes in the ordinary course of business,
which changes have not been materially adverse, either singularly or in the
aggregate.
(b) The Borrowers do not have any contingent obligations or obligation
under any Lease or Capital Lease which is not noted in the Borrowers' financial
statements furnished to the Lenders or has been otherwise disclosed in writing
to the Lenders prior to the execution of this Agreement.
(c) To the best of each Borrower's knowledge, no document, instrument,
agreement, or paper (exclusive of projections delivered to the Lenders by the
Borrowers in good faith) now
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or hereafter given the Lenders by or on behalf of the Borrowers or any guarantor
of the Liabilities in connection with the Lenders' execution of this Agreement
contains or will contain any untrue statement of a material fact or omits or
will omit to state a material fact necessary in order to make the statements
therein not misleading. Except as set forth on EXHIBIT 4-14, there is no fact
known to any Borrower which has resulted in, or which, in the foreseeable future
could result in, a Material Adverse Change on the financial condition of any
Borrower or any such guarantor which has not been disclosed in writing to the
Lenders.
5-28. Government Contracts. Each Government Contract is valid, binding and
in full force and effect, and, other than as set forth on EXHIBITS 4-14 OR 5-28,
there is no event which has occurred or exists, which constitutes or which with
notice, the happening of any event and/or the passage of time, would constitute,
a default or breach under any Government Contract or would cause the
acceleration of any obligation of any party thereto or give rise to any right of
termination or cancellation thereof. Except as set forth on EXHIBITS 4-14 OR
5-28, the Borrowers have no reason to believe that the parties to the Government
Contracts will not fulfill their obligations thereunder in all material
respects.
5-29. Capital Expenditures. None of the Borrowers will, nor will any
Borrower permit any Subsidiary to, make any Capital Expenditures during any
fiscal year of the Lead Borrower unless the aggregate amount of all Capital
Expenditures committed to be made by all Borrowers and their respective
Subsidiaries in such fiscal year does not exceed $6,000,000 in fiscal year 2006,
or $6,500,000 in any fiscal year thereafter.
5-30. Other Covenants. No Borrower shall indirectly do or cause to be done
any act which, if done directly by such Borrower, would breach any covenant
contained in this Agreement.
ARTICLE 6- AMENDED AND RESTATED LOAN AGREEMENT.
This Agreement amends and restates in its entirety that certain Second
Amended and Restated Loan Agreement dated as of September 1, 2004, by and among
certain of the Borrowers, the Administrative Agent and others named therein,
which in turn amended and restated that certain Amended and Restated Loan
Agreement dated as of June 28, 2002, by and among certain of the Borrowers, the
Administrative Agent and others named therein, which in turn amended and
restated that certain Loan and Security Agreement dated as of February 10, 2000
by and among certain of the Borrowers, the Administrative Agent and others named
therein (collectively, the "EXISTING LOAN AGREEMENT"). On the Closing Date, the
rights and obligations of the parties under the Existing Loan Agreement shall be
subsumed within and be governed by this Agreement; provided, however, that each
of the "Revolving Credit Loans" (as such term is defined in the Existing Loan
Agreement) outstanding under the Existing Loan Agreement on the Closing Date
shall, for purposes of this Agreement, be included as Revolving Credit Loans
hereunder and each of the "L/Cs" (as defined in the Existing Loan Agreement)
outstanding under the Existing Loan Agreement on the Closing Date shall be L/Cs
hereunder.
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ARTICLE 7 - FINANCIAL AND OTHER REPORTING REQUIREMENTS/ FINANCIAL COVENANTS.
7-1. Maintain Records. Each Borrower shall:
(a) Keep proper books of account, in which full, true, and accurate entries
shall be made of all of each Borrower's transactions, all in accordance with
GAAP applied consistently with prior periods to fairly reflect the financial
condition of each Borrower at the close of, and its results of operations for,
the quarterly and annual periods or reporting.
(b) Keep accurate current records of its properties and assets in
accordance with such Borrower's normal business practices.
(c) Retain independent certified public accountants who are reasonably
satisfactory to the Administrative Agent and instruct such accountants to fully
cooperate with, and be available to, the Administrative Agent to discuss such
Borrower's financial performance, financial condition, operating results,
controls, and such other matters, within the scope of the retention of such
accountants, as may be raised by the Administrative Agent.
(d) Not change such Borrower's fiscal year.
(e) Not change such Borrower's taxpayer identification number.
7-2. Access to Records.
(a) Each Borrower shall, upon reasonable advance notice, accord the
Administrative Agent and the Administrative Agent's representatives with access
from time to time as the Administrative Agent and such representatives may
require to all properties owned by or over which any Borrower has control,
except to the extent such information is classified. The Administrative Agent,
and such representatives, shall have the right, and each Borrower will permit
the Administrative Agent and such representatives from time to time as the
Administrative Agent and such representatives may request, to examine, inspect,
copy, and make extracts from any and all of any Borrower's books, records,
electronically stored data, papers, and files, except to the extent such
information is classified. Each Borrower shall make the Borrowers' copying
facilities available to the Administrative Agent and such representatives for
reasonable copying of documents.
(b) Each Borrower hereby authorizes the Administrative Agent and its
representatives to inspect, copy, duplicate, review, cause to be reduced to hard
copy, run off, draw off, and otherwise use any and all computer or
electronically stored information or data which relates to any Borrower (except
to the extent such information is classified), which information or data is in
the possession of any Borrower or any service bureau, contractor, accountant, or
other person, and directs any such service bureau, contractor, accountant, or
other person fully to cooperate with the Administrative Agent and its
representatives with respect thereto.
7-3. Prompt Notice to Lender. The Lead Borrower shall provide the
Administrative Agent with written notice promptly upon the occurrence of any of
the following events, which
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written notice shall be with reasonable particularity as to the facts and
circumstances in respect of which such notice is being given:
(a) Any change in any of the Borrower's executive officers (as defined by
the Securities and Exchange Commission) or a majority of its directors in any
fiscal year.
(b) Any material change to the terms of any material contract to which any
Borrower is a party which could result in a Material Adverse Change in the
business, operations, or financial status of any Borrower.
(c) Any Material Adverse Change in the business, operations, or financial
affairs of any Borrower.
(d) Any litigation which, if determined adversely to any Borrower, could
reasonably be expected to result in a Material Adverse Change in the financial
condition of any Borrower.
7-4. Financial Statements, Certificates and Information. Each Borrower will
furnish or cause to be furnished to each Lender:
(a) Within one hundred twenty (120) days after the end of each fiscal year
of the Lead Borrower, (i) the Consolidated balance sheets of the Lead Borrower
and its Subsidiaries as at the end of such year and (ii) the related
Consolidated statements of income and surplus and cash flow for such year,
setting forth in comparative form with respect to such Consolidated financial
statements figures for the previous fiscal year, all in reasonable detail,
together with the opinion thereon of independent public accountants selected by
the Lead Borrower and reasonably satisfactory to the Lenders, which opinion
shall be in form generally recognized as unqualified and shall state that the
financial statements have been prepared in accordance with GAAP applied on a
basis consistent with that of the preceding fiscal year (except for changes, if
any, which shall be specified and approved in such opinion);
(b) Within forty-five (45) days after the end of each of the first three
quarterly accounting periods in each fiscal year of the Lead Borrower, (i) the
unaudited Consolidated balance sheets of the Lead Borrower and its Subsidiaries
as at the end of such period, (ii) the related unaudited Consolidated statements
of income and surplus and cash flows for such period and for the period from the
beginning of the current fiscal year to the end of such period, all in
reasonable detail and signed by the chief financial officer or treasurer of the
Lead Borrower;
(c) Upon furnishing any financial statement required pursuant to Sections
7-4(a) or 7-4(b), a Compliance Certificate substantially in the form of EXHIBIT
7-4(C) attached hereto, in each case (A) as of the last Business Day of the
immediately preceding reporting period, and (B) signed by the chief financial
officer or treasurer of the Lead Borrower;
(d) Together with the financial statements delivered pursuant to
subparagraph (b) above, a summary of each Borrower's backlog of
revenue-generating Government Contracts as of the date of such financial
statements;
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(e) Upon each request for a Loan in connection with a contemplated
acquisition, a covenant Compliance Certificate.
(f) Promptly, but in not event later than ten (10) days, after the same
become publicly available, copies of all periodic and other reports, proxy
statements and other materials filed by the Lead Borrower with the Securities
and Exchange Commission (including all form 10Q's and 10K's), or any
governmental authority succeeding to any of or all of the functions of said
Commission, or with any national securities exchange, or distributed to its
shareholders generally, as the case may be (with the exhibits relating thereto
to be provided, at the Lead Borrower's expense, upon the request of the
Administrative Agent);
(g) Promptly, but in no event later than ten (10) days, upon their becoming
available, copies of any periodic or special reports filed by any Borrower or
any Subsidiary with any federal, state or local governmental agency or
authority, if such reports indicate any Material Adverse Change in the business,
operations, affairs, or condition (financial or otherwise) of the Borrowers and
the Subsidiaries, taken as whole, or if copies thereof are requested by the
Administrative Agent, and copies of any notices and communications from any
federal, state or local governmental agency or authority which specifically
relate to a Borrower or any Subsidiary, which could result in a Material Adverse
Change;
(h) Forthwith upon any officer of any Borrower obtaining knowledge of any
condition or event which constitutes an Event of Default or which, after notice
or lapse of time or both, would constitute an Event of Default, a certificate
given by such officer specifying in reasonable detail the nature and period of
existence thereof and what action any Borrower has taken or proposes to take
with respect thereto;
(i) Within forty-five (45) days of each fiscal year end of the Lead
Borrower, annual financial projections for the next fiscal year; and
(j) To the extent not prohibited by applicable law, such other information
regarding the business, affairs and condition of the Borrowers and their
respective Subsidiaries as the Administrative Agent may from time to time
reasonably request. To the extent not prohibited by applicable law, each
Borrower will permit the Administrative Agent or any Lender to inspect the books
and any of the properties or assets of such Borrower and its Subsidiaries at
such reasonable times as the Administrative Agent or such Lender, whichever is
applicable, may from time to time request. All costs and expenses of the
Administrative Agent or any such Lender in connection with or relating to any
request made under this Section 7-4 shall, if no Event of Default has occurred
and is continuing, be paid by the Administrative Agent or such Lender, whichever
is applicable, making such request and, upon the occurrence and during the
continuance of an Event of Default, be paid by the Borrowers.
7-5. Additional Financial Information. In addition to the foregoing, the
Borrowers shall promptly, but in no event later than ten (10) days, provide the
Administrative Agent with such other and additional information (except to the
extent such information is classified) concerning the Borrowers, the properties
and assets of the Borrowers, the operation of the Borrowers' business, and the
Borrowers' financial condition, including original counterparts of
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financial reports and statements, as Administrative Agent may from time to time
reasonably request from any Borrower, including, without limitation, such
information with respect to the status of any pending United States government
audit of the Borrowers' Government Contracts.
7-6. Audits and Appraisals.
(a) So long as no Event of Default has occurred and is continuing, the
Administrative Agent may, from time to time, conduct commercial finance audits
of the Borrowers' books and records (in each event, at the Administrative
Agent's expense), such exams to be conducted not more than once during any one
(1) consecutive twelve (12) month period. After the occurrence of an Event of
Default which is continuing, the Administrative Agent may, from time to time,
conduct commercial finance audits of the Borrowers' books and records (in each
event, at the Borrowers' expense, but not to exceed $5,000.00 per exam).
(b) The Administrative Agent, at the expense of the Borrowers, may
participate in and/or observe each physical count and/or inventory of Inventory
which is undertaken on behalf of the Borrowers.
(c) Upon the Administrative Agent's reasonable request after the occurrence
and during the continuance of an Event of Default, the Borrowers shall permit
the Administrative Agent to obtain appraisals of the Borrowers' assets (in all
events, at the Borrowers' expense) conducted by such appraisers as are
satisfactory to the Administrative Agent.
7-7. Consolidated EBIT to Consolidated Interest Expense. The Borrowers
shall at all times maintain a ratio of Consolidated EBIT to Consolidated
Interest Expense of greater than 3.00 to 1.00 for each fiscal quarter end,
calculated on a rolling four (4) fiscal quarter basis.
7-8. Consolidated Total Net Worth. The Borrowers shall not at any time
permit their Consolidated Total Net Worth to be less than that amount which is
equal to the aggregate of (i) (x) $70,000,000.00 minus (y) payments made in
consideration of any stock repurchase or redemption permitted pursuant to
Section 5-18 hereof, plus (ii) an amount equal to fifty percent (50%) of the
Borrowers' Consolidated Net Income for each fiscal quarter on a cumulative basis
with no reduction for loss, plus (iii) an amount equal to seventy-five percent
(75%) of the Net Proceeds from (a) any Equity Issuance after the date hereof
and/or (b) the incurrence by the Borrowers of any Subordinated Debt after the
date hereof, on a cumulative basis, to be tested as of the end of each fiscal
quarter of the Lead Borrower, commencing with the fiscal quarter ending as of
September 30, 2006.
7-9. Leverage Ratio. The Borrowers will not at any time permit their ratio
of Consolidated Total Funded Indebtedness to the Borrowers' Consolidated
trailing four quarter EBITDA (tested on a pro forma basis in connection with
contemplated acquisitions) (the "LEVERAGE RATIO") to be greater than 2.50 to
1.00, which ratio shall be tested as of the end of each fiscal quarter.
7-10. Net Profit. The Borrowers shall earn a minimum Consolidated Net
Income, as determined in accordance with GAAP, of at least $1.00, measured
quarterly as of the end of each fiscal quarter of each fiscal year on a
cumulative basis as and for each such fiscal year.
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ARTICLE 8 - EVENTS OF DEFAULT.
Upon the occurrence and during the continuance of any one or more of the
following events (herein, "EVENTS OF DEFAULT"):
8-1. Failure to Pay. The failure by the Borrowers to pay any principal
and/or interest amount under the Revolving Credit Loan within three (3) calendar
days of when due; or
8-2. Failure to Make Other Payments. The failure by the Borrowers to pay
any other Liabilities within ten (10) calendar days of when due or, if longer,
within any applicable grace period; or
8-3. Failure to Perform Certain Liabilities. The failure by the Borrowers
to promptly, punctually and faithfully perform, discharge, or comply with any
Liability set forth under Sections 5-2, 5-6 (other than non-consensual liens
which shall be included within the scope of Section 8-4), 5-7, 5-8, 5-12(b),
5-12(c), 5-18, 5-19, 5-20, 5-21, 5-22, 5-29, 7-4, 7-7, 7-8, 7-9 and 7-10; or
8-4. Failure to Perform Other Liabilities. Any Borrower shall default in
the observance or performance of any other agreement contained in this Agreement
or any other Loan Document (other than as provided in Sections 8-1, 8-2 and 8-3
above), and such default shall continue unremedied for a period of thirty (30)
calendar days after the earlier of (i) the date on which a Responsible Officer
of any Borrower first learns of such failure or (ii) the date on which written
notice of such failure shall have been given to any Borrower by the
Administrative Agent, plus such additional time as may be required to cure such
default because of delays which are beyond the control of the Borrowers, so long
as such default is susceptible of being cured and the Borrowers are acting in
good faith and are making diligent efforts to cure such default and are keeping
the Administrative Agent apprised of such efforts; provided, however: (a) it is
understood that any default which may be cured by the payment of money which the
Borrowers do not have shall not be considered a circumstance beyond the control
of the Borrowers; and (b) the entire cure period under this Section 8-4 shall
not exceed the aggregate of sixty (60) calendar days and shall not apply to any
event which is otherwise an Event of Default pursuant to any other clause of
this ARTICLE 8; or
8-5. Misrepresentation. Any representation or warranty now or hereafter
made by any Borrower to the Administrative Agent or any Lender, in this
Agreement or in any other Loan Document or which is contained in any
certificate, document or financial or other statement furnished by any such
Borrower at any time under or in connection with this Agreement or any such
other Loan Document was not true or accurate in all material respects when given
or when deemed to have been given; or
8-6. Default of Other Debt. Any Borrower or any Subsidiary shall default in
(i) the payment of any Indebtedness in respect of borrowed money (other than the
Liabilities), any Capital Lease or the deferred purchase price of any property
(which, in each case, shall not include the Borrowers' accounts payable incurred
in the ordinary course of the Borrowers' business) and such default (A) shall
continue after giving effect to any applicable grace periods
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and (B) shall be in respect of an aggregate amount of principal (whether or not
due) and accrued interest exceeding $1,000,000; or (ii) the performance or
compliance with any term of any agreement or instrument relating to such
Indebtedness and such default (A) shall continue, without having been duly
cured, waived or consented to, beyond the period of grace, if any, specified in
such agreement or instrument, (B) shall be in respect of an aggregate amount of
principal (whether or not due) and accrued interest exceeding $1,000,000, and
(C) shall permit the acceleration of such Indebtedness prior to its stated
maturity; or
8-7. Business Failure. Any act by, against, or relating to any Borrower, or
its property or assets, which act constitutes the application for, consent to,
or sufferance of the appointment of a receiver, trustee, or other person,
pursuant to court action or otherwise, over all, or any part of any Borrower's
property; the granting of any trust mortgage or execution of an assignment for
the benefit of the creditors of any Borrower, or the occurrence of any other
voluntary or involuntary liquidation or extension of debt agreement for any
Borrower; the failure by any Borrower to generally pay the debts of such
Borrower as they mature; adjudication of bankruptcy or insolvency relative to
any Borrower; the entry of an order for relief or similar order with respect to
any Borrower in any proceeding pursuant to the Bankruptcy Code or any other
federal bankruptcy law; the filing of any complaint, application, or petition by
or against any Borrower initiating any matter in which such Borrower is or may
be granted any relief from the debts of such Borrower pursuant to the Bankruptcy
Code or any other insolvency statute or procedure, provided that the Borrowers
shall have thirty (30) days in which to dismiss any such involuntary proceeding;
the calling or sufferance of a meeting of creditors of any Borrower; the meeting
by any Borrower with a formal or informal creditors' committee; the offering by
or entering into by any Borrower of any composition, extension, or any other
arrangement seeking relief from or extension of the debts of such Borrower, or
the initiation of any other judicial or non- judicial proceeding or agreement
by, against, or including any Borrower which seeks or intends to accomplish a
reorganization or arrangement with creditors; or
8-8. Judgment. A final judgment which, with other outstanding final
judgments against any or all of the Borrowers and its Subsidiaries, exceeds an
aggregate of $1,000,000 shall be rendered against any Borrower or any Subsidiary
and if, within sixty (60) days after entry thereof, such judgment shall not have
been insured to the reasonable satisfaction of the Administrative Agent or
discharged or execution thereof stayed pending appeal, or if, within sixty (60)
days after the expiration of any such stay, such judgment shall not have been
discharged, or if any such judgment shall not be discharged forthwith upon the
commencement of proceedings to foreclose any lien, attachment or charge which
may attach as security therefor and before any of the property or assets of any
Borrower or any Subsidiary shall have been seized in satisfaction thereof; or
8-9. Restraint of Business. The entry of any court order which enjoins,
restrains or in any way prevents any Borrower from conducting all or any
material part of its business affairs in the ordinary course; or
8-10. Material Adverse Change. There shall have occurred a Material Adverse
Change (other than an event or condition to the extent disclosed on EXHIBITS
4-14 or 5-28) that, to the
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extent curable, is not cured within thirty (30) days following the date on which
any Borrower has notice (actual or constructive) thereof'; or
8-11. Change in Ownership. (a) Any change in the identity of any person
currently acting as chief financial officer or chief executive officer of the
Lead Borrower, unless the Lead Borrower shall engage a replacement officer
reasonably acceptable to the Administrative Agent within sixty (60) days of such
officer's departure and/or (b) any Person shall acquire 35% or more of the
capital stock of the Lead Borrower and/or (c) the failure of the Lead Borrower
to own 100% of the capital stock of each of the other Borrowers; or
8-12. Casualty Loss. The occurrence of any uninsured loss, theft, damage or
destruction to, or of, any of the property or assets of the Borrowers in excess
of $2,000,000.00; or
8-13. Material Agreement. The default by any Borrower, or termination as a
result of any such default, under any material license, distributor, franchise
or similar agreement used or useful in the operation of the Borrowers' business,
including, without limitation, any license issued by any applicable licensing
authority, which would reasonably be expected to result in a Material Adverse
Change; or
8-14. Termination of Existence. Except as expressly permitted hereunder,
the termination of existence, dissolution, winding up, or liquidation of the
Lead Borrower; or
8-15. Termination of Guaranty. The termination, or attempted termination,
of any guaranty by any guarantor of the Liabilities; or
8-16. Challenge to Loan Documents.
(a) Any challenge by or on behalf of any Borrower or any guarantor of the
Liabilities to the validity of any Loan Document or the applicability or
enforceability of any Loan Document strictly in accordance with the subject Loan
Document's terms or which seeks to void, avoid, limit, or otherwise adversely
affect any payment made pursuant thereto; or
(b) Any determination by any court or any other judicial or government
authority that any Loan Document is not enforceable strictly in accordance with
the subject Loan Document's terms or which voids, avoids, limits, or otherwise
adversely affects any payment made pursuant thereto.
8-17. Indictment - Forfeiture. Except as set forth on EXHIBITS 4-14 or
5-28, the indictment of, or institution of any legal process or proceeding
against, any Borrower, under any federal, state, municipal, and other civil or
criminal statute, rule, regulation, order, or other requirement having the force
of law where the relief, penalties, or remedies sought or available include the
forfeiture of any property of such Borrower and/or the imposition of any stay or
other order, the effect of which would reasonably be expected to result in a
Material Adverse Change,
then, and in any such event, so long as the same may be continuing, the
Administrative Agent may, with the consent of the Required Lenders, or shall, at
the request and instruction of
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the Required Lenders, and by notice in writing to the Borrowers, declare all
amounts owing with respect to this Agreement, the Notes and the other Loan
Documents to be, and they shall thereupon forthwith become, immediately due and
payable without presentment, demand, protest or other notice of any kind, all of
which are hereby expressly waived by the Borrowers; provided that, in the event
of any Event of Default specified in Section 8-7 above, all such amounts shall
become immediately due and payable automatically and without any requirement of
notice from the Administrative Agent.
ARTICLE 9 - RIGHTS AND REMEDIES UPON DEFAULT
In addition to all of the rights, remedies, powers, privileges, and
discretions which the Administrative Agent and/or the Lenders are provided prior
to the occurrence of an Event of Default, the Administrative Agent shall have
the following rights and remedies upon the occurrence and during the continuance
of any Event of Default.
9-1. Termination of Commitments. The Administrative Agent may with the
consent of the Required Lenders, and shall if directed by the Required Lenders,
by written notice to the Lead Borrower, (i) declare the principal of and accrued
interest in respect of the Liabilities to be forthwith due and payable,
whereupon the principal of and accrued interest in respect of the Liabilities,
and all other amounts then due hereunder, shall become forthwith due and payable
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived by each Borrower, and/or (ii) terminate the
Commitment of the Lenders, whereupon the Total Commitment of the Lenders (and
the Commitment of each individual Lender) to make Loans and issue L/Cs hereunder
shall forthwith terminate without any other notice of any kind; and with respect
to any event described in Section 8-7 above, the Commitments shall automatically
terminate and the principal of the Liabilities then outstanding, together with
accrued interest thereon and all other amounts then due hereunder, shall
automatically become due and payable, without presentment, demand, protest or
any other notice of any kind, all of which are hereby expressly waived by each
of the Borrowers, anything contained herein or in any other Loan Document to the
contrary notwithstanding. Without limiting any provision of this Agreement or of
any Loan Document, an Event of Default under this Agreement shall also
constitute an event of default under each of the Loan Documents.
9-2. Rights and Remedies.
(a) The rights, remedies, powers, privileges, and discretions of the
Administrative Agent hereunder (herein, the "ADMINISTRATIVE AGENT'S RIGHTS AND
REMEDIES") shall be cumulative and not exclusive of any rights or remedies which
it would otherwise have. No delay or omission by the Administrative Agent in
exercising or enforcing any of the Agent's Rights and Remedies shall operate as,
or constitute, a waiver thereof. No waiver by the Administrative Agent of any
Event of Default or of any default under any other agreement shall operate as a
waiver of any other default hereunder or under any other agreement. No single or
partial exercise of any of the Administrative Agent's Rights or Remedies, and no
express or implied agreement or transaction of whatever nature entered into
between the Administrative Agent and any Person, at any time, shall preclude the
other or further exercise of the Administrative Agent's Rights and Remedies. No
waiver by the Administrative Agent of any of the Administrative
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Agent's Rights and Remedies on any one occasion shall be deemed a waiver on any
subsequent occasion, nor shall it be deemed a continuing waiver. All of the
Administrative Agent's Rights and Remedies and all of the Administrative Agent's
rights, remedies, powers, privileges, and discretions under any other agreement
or transaction are cumulative, and not alternative or exclusive, and may be
exercised by the Administrative Agent at such time or times and in such order of
preference as the Administrative Agent in its sole discretion may determine. The
Administrative Agent's Rights and Remedies may be exercised without resort or
regard to any other source of satisfaction of the Liabilities.
(b) Without limiting the provisions of subsection (a) above, if and only if
an Event of Default has occurred and be continuing, then on the Business Day
that the Lead Borrower receives notice from the Administrative Agent demanding
the deposit of cash collateral pursuant to this paragraph, the Borrowers shall
deposit in a cash collateral account, under the sole dominion and control of the
Administrative Agent, an amount in cash equal to 103% of the stated amount of
the outstanding L/Cs as of such date plus any accrued and unpaid interest
thereon. Each such deposit shall be held by the Administrative Agent as
collateral for the payment and performance of the Liabilities of the Borrowers.
The Administrative Agent shall have exclusive dominion and control, including
the exclusive right of withdrawal, over such cash collateral account. Other than
any interest earned on the investment of such deposits, which investments shall
be made at the option and sole discretion of the Administrative Agent at the
request of the Lead Borrower and at the Borrowers' risk and expense, such
deposits shall not bear interest. Interest or profits, if any, on such
investments shall accumulate in such account. Moneys in such cash collateral
account shall be applied by the Administrative Agent to reimburse the
Administrative Agent for payments on account of drawings under L/Cs for which it
has not been reimbursed and, to the extent not so applied, shall be held first
for the satisfaction of the reimbursement obligations of the Borrowers for the
outstanding L/Cs at such time and thereafter be applied to satisfy other
Liabilities of the Borrowers under this Agreement.
9-3. Distribution of Funds. In the event that, following the occurrence and
during the continuance of any Event of Default, the Administrative Agent or any
Lender, as the case may be, receives any monies in connection with the
enforcement of any of the Loan Documents, such monies shall be distributed for
application as follows:
(a) First, to the payment of, or (as the case may be) the reimbursement of
the Administrative Agent for or in respect of, all reasonable costs, expenses,
disbursements and losses which shall have been incurred or sustained by the
Administrative Agent in connection with the collection of such monies by the
Administrative Agent, for the exercise, protection or enforcement by the
Administrative Agent of all or any of the rights, remedies, powers and
privileges of the Administrative Agent under this Agreement or any of the other
Loan Documents or in support of any provision of adequate indemnity to the
Administrative Agent against any taxes or liens which by law shall have, or may
have, priority over the rights of the Administrative Agent to such monies;
(b) Second, pro rata to each of the Lenders to all other Liabilities;
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(c) Third, upon payment and satisfaction in full or other provisions for
payment in full satisfactory to the Lenders and the Administrative Agent of all
of the Liabilities, to the payment of any obligations required to be paid
pursuant to Section 9-615(a)(3) of the UCC, in effect from time to time; and
(d) Fourth, the excess, if any, shall be returned to the Borrowers or to
such other Persons as are entitled thereto.
ARTICLE 10 - NOTICES.
10-1. Notice Addresses. All notices, demands, and other communications made
in respect of this Agreement (other than a request for a loan or advance or
other financial accommodation under the Revolving Credit) shall be made to the
following addresses, each of which may be changed upon seven (7) days written
notice to all others given by certified mail, return receipt requested:
If to the Administrative Agent: Xxxxx Brothers Xxxxxxxx & Co.
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xx. Xxxx X. Xxxxxx
Fax: 000 000-0000
E-Mail: xxxx.xxxxxx@xxx.xxx
With a copy to: Xxxxxx & Xxxxxxxxxx LLP
Xxxxx Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esquire
Fax: 000 000-0000
E-mail: xxxxxxxx@xxxxxxxxx.xxx
If to any Borrower: Dynamics Research Corporation
00 Xxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxx, Corporate Controller
Fax: 000 000-0000
E-mail: xxxxxxx@xxx.xxx
Attention: Xxxxxxx Xxxxx, General Counsel
Fax: 000 000-0000
E-mail: xxxxxx@xxx.xxx
With a copy to: Xxxxx Xxxxxxx, LLP
000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxx, Esquire
Fax: 000 000-0000
E-mail: xxxxxx@xxxxxxxxxxxx.xxx
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10-2. Notice Given.
(a) Notices shall be deemed given at the sooner of when actually received
or (i) if by mail: three (3) days following deposit in the United States mail,
postage prepaid; (ii) By overnight express delivery: the Business Day following
the day when sent; (iii) By hand: If delivered on a Business Day after 9:00 AM
and no later than Three (3) hours prior to the close of customary business hours
of the recipient, when delivered (otherwise, at the opening of the then next
Business Day); and (iv) By facsimile or electronic transmission: If sent on a
Business Day after 9:00 AM and no later than three (3) hours prior to the close
of customary business hours of the recipient, one (1) hour after being sent
(otherwise, at the opening of the then next Business Day).
(b) Rejection or refusal to accept delivery and inability to deliver
because of a changed address or facsimile number for which no due notice was
given shall each be deemed receipt of the notice sent.
ARTICLE 11 - TERM OF AGREEMENT.
11-1. Termination of Revolving Credit. The Revolving Credit shall be
terminated upon the Termination Date.
11-2. Effect of Termination. Upon the Termination Date, the Borrowers shall
pay the Administrative Agent, for the benefit of the Lenders, the then principal
balance of the Loans, together with any and all accrued and unpaid interest
thereon (whether or not then due). Following such payment, all provisions of
this Agreement, other than those contained in Article 3, which place an
obligation on the Lenders to make any loans or advances or to provide financial
accommodations under the Revolving Credit or to issue L/Cs shall remain in full
force and effect until all Liabilities shall have been paid in full.
ARTICLE 12 - GENERAL.
12-1. Successors and Assigns. This Agreement shall be binding upon the
Borrowers and the Borrowers' representatives, successors, and assigns and shall
inure to the benefit of the Administrative Agent, the Lenders and their
respective successors and assigns; provided, however, no trustee or other
fiduciary appointed with respect to the Borrowers shall have any rights
hereunder. In the event that any Lender assigns or transfers its rights under
this Agreement, subject to Article 13 below, the assignee shall thereupon
succeed such Lender to and become vested with all rights, powers, privileges,
and duties of such Lender hereunder and such Lender shall thereupon be
discharged and relieved from its duties and obligations hereunder.
12-2. Severability. Any determination that any provision of this Agreement
or any application thereof is invalid, illegal, or unenforceable in any respect
in any instance shall not affect the validity, legality, or enforceability of
such provision in any other instance, or the validity, legality, or
enforceability of any other provision of this Agreement.
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12-3. Amendments; Course of Dealing.
(a) This Agreement and the other Loan Documents incorporate all discussions
and negotiations among the Borrowers, Agents and the Lenders, either express or
implied, concerning the matters included herein and in such other instruments,
any custom, usage, or course of dealings to the contrary notwithstanding. No
such discussions, negotiations, custom, usage, or course of dealings shall
limit, modify, or otherwise affect the provisions thereof. No failure by the
Administrative Agent to give notice to any Borrower of such Borrower's having
failed to observe and comply with any warranty or covenant included in any Loan
Document shall constitute a waiver of such warranty or covenant or the amendment
of the subject Loan Document. No change made by the Administrative Agent in the
manner by which Availability is determined shall obligate the Administrative
Agent to continue to determine Availability in that manner. The Borrowers may
undertake any action otherwise prohibited hereby, and may omit to take any
action otherwise required hereby, upon and with the express prior written
consent of the Required Lenders or such other Persons' consent as may be
required by Section 13-17. No consent, modification, amendment, or waiver of any
provision of any Loan Document shall be effective unless executed in writing by
or on behalf of the party to be charged with such modification, amendment, or
waiver (and if such party is a Lender, then by a duly authorized officer
thereof). Any modification, amendment, or waiver provided by the Required
Lenders shall be in reliance upon all representations and warranties theretofore
made to the Lenders by or on behalf of the Borrowers (and any guarantor,
endorser, or surety of the Liabilities) and consequently may be rescinded by the
Lenders in the event that any of such representations or warranties was not true
and complete in all material respects when given.
12-4. Costs and Expenses. The Borrowers shall pay on demand all Costs of
Collection and all reasonable expenses of the Administrative Agent in connection
with the preparation, execution, and delivery of this Agreement and of any other
Loan Documents, whether now existing or hereafter arising, including, without
limitation, all appraisal, inspection and other reports conducted in connection
with the underwriting of this Agreement and the loans contemplated hereby, and
all other reasonable expenses which may be incurred by the Administrative Agent
in preparing or amending this Agreement and all other agreements, instruments,
and documents related thereto, or otherwise incurred with respect to the
Liabilities.
12-5. Copies and Facsimiles. This Agreement and all documents which relate
thereto, which have been or may be hereinafter furnished to the Lenders may be
reproduced by the Lenders by any photographic, microfilm, xerographic, digital
imaging, or other process, and the Lenders may destroy any document so
reproduced. Any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding (whether or not the
original is in existence and whether or not such reproduction was made in the
regular course of business). Any facsimile which bears proof of transmission
shall be binding on the party which or on whose behalf such transmission was
initiated and likewise shall be so admissible in evidence as if the original of
such facsimile had been delivered to the party which or on whose behalf such
transmission was received.
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12-6. Massachusetts Law. This Agreement and all rights and obligations
hereunder, including matters of construction, validity, and performance, shall
be governed by the laws of The Commonwealth of Massachusetts.
12-7. Consent to Jurisdiction.
(a) The Borrowers agree that any legal action, proceeding, case, or
controversy against the Borrowers with respect to any Loan Document may be
brought in the Superior Court of Suffolk County Massachusetts or in the United
States District Court, District of Massachusetts, sitting in Boston,
Massachusetts, as the Administrative Agent may elect in its sole discretion. By
execution and delivery of this Agreement, each Borrower, for itself and in
respect of its property, accepts, submits, and consents generally and
unconditionally, to the jurisdiction of the aforesaid courts.
(b) Each Borrower WAIVES personal service of any and all process upon it,
and irrevocably consents to the service of process out of any of the
aforementioned courts in any such action or proceeding by the mailing of copies
thereof by certified mail, postage prepaid, to the Lead Borrower at the Lead
Borrower's address for notices as specified herein, such service to become
effective five (5) Business Days after such mailing.
(c) Each Borrower WAIVES, at the option of the Administrative Agent, any
objection based on forum non conveniens and any objection to venue of any action
or proceeding instituted under any of the Loan Documents and consents to the
granting of such legal or equitable remedy as is deemed appropriate by the
Court.
(d) Nothing herein shall affect the right of the Administrative Agent to
bring legal actions or proceedings in any other competent jurisdiction.
(e) Each Borrower agrees that any action commenced by any Borrower
asserting any claim or counterclaim arising under or in connection with this
Agreement or any other Loan Document shall be brought in the Superior Court of
Suffolk County Massachusetts or in the United States District Court, District of
Massachusetts, sitting in Boston, Massachusetts, and that such Courts shall have
exclusive jurisdiction with respect to any such action, with the exception of
any counterclaim brought in action commenced by the Administrative Agent or any
Lender in a different forum, which counterclaim may be brought in such alternate
forum.
12-8. Indemnification. Each Borrower shall jointly and severally indemnify,
defend, and hold the Administrative Agent and each Lender and any employee,
officer, or agent of the Administrative Agent and any Lender (each, an
"INDEMNIFIED PERSON") harmless of and from any claim brought or threatened
against any Indemnified Person by any Borrower, any guarantor or endorser of the
Liabilities, or any other Person (as well as from attorneys' reasonable fees and
expenses in connection therewith) on account of the Administrative Agent's and
such Lender's relationship with the Borrowers or any other guarantor or endorser
of the Liabilities (each of which may be defended, compromised, settled, or
pursued by the Indemnified Person with counsel of the Administrative Agent'
selection, but at the expense of the Borrowers) other than any claim as to which
a final determination is made in a judicial proceeding (in which the
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Administrative Agent and any other Indemnified Person has had an opportunity to
be heard), which determination includes a specific finding that the Indemnified
Person seeking indemnification had acted in a grossly negligent manner, with
willful misconduct or in actual bad faith. This indemnification shall survive
payment of the Liabilities and/or any termination, release, or discharge
executed by the Administrative Agent in favor of the Borrowers.
12-9. Rules of Construction.
(a) The following rules of construction shall be applied in the
interpretation, construction, and enforcement of this Agreement and of the other
Loan Documents:
(i) Words in the singular include the plural and words in the plural
include the singular.
(ii) Headings (indicated by being underlined) and the Table of
Contents are solely for convenience of reference and do not constitute a
part of the instrument in which included and do not affect such
instrument's meaning, construction, or effect.
(iii) The words "includes" and "including" are not limiting.
(iv) The words "may not" are prohibitive and not permissive.
(v) The word "or" is not exclusive.
(vi) Terms which are defined in one section of an instrument are used
with such definition throughout the instrument in which so defined.
(vii) The symbol "$" refers to United States Dollars.
(viii) References to "herein", "hereof", and "within" are to this
entire Loan Agreement and not merely the provision in which such reference
is included.
(ix) Except as otherwise specifically provided, all references to time
are to Boston time.
(x) In the determination of any notice, grace, or other period of time
prescribed or allowed hereunder, unless otherwise provided (A) the day of
the act, event, or default from which the designated period of time begins
to run shall not be included and the last day of the period so computed
shall be included unless such last day is not a Business Day, in which
event the last day of the relevant period shall be the then next Business
Day and (B) the period so computed shall end at 5:00 PM on the relevant
Business Day.
(xi) References to "this Agreement" or to any other Loan Document is
to the subject instrument as amended to the date on which application of
such reference is being made.
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(b) The Loan Documents shall be construed and interpreted in a harmonious
manner and in keeping the intentions set forth in Section 12-10 hereof;
provided, however, in the event of any inconsistency between the provisions of
this Agreement and any other Loan Document, the provisions of this Agreement
shall govern and control.
12-10. Intent. It is intended that
(a) This Agreement take effect as a sealed instrument.
(b) The Administrative Agent's or the Required Lenders' consent or the
Lenders' consent to any action of the Borrowers which is prohibited unless such
consent is given may be given or refused by the applicable parties in its sole
discretion.
12-11. Setoff. Regardless of the adequacy of any collateral (if any),
during the continuance of any Event of Default, any deposits (general or
specific, time or demand, provisional or final, regardless of currency,
maturity, or the branch of where such deposits are held) or other sums credited
by or due from any of the Lenders to the Borrowers and any securities or other
property of the Borrowers in the possession of such Lender may be applied to or
set off against the payment of Liabilities and any and all other liabilities,
direct, or indirect, absolute or contingent, due or to become due, now existing
or hereafter arising, of the Borrowers to such Lender. Each of the Lenders
agrees with each other Lender that if such Lender shall receive from the
Borrowers, whether by voluntary payment, exercise of the right of setoff,
counterclaim, cross action, enforcement of the claim evidenced by the Notes held
by such Lender by proceedings against the Borrowers at law or in equity or by
proof thereof in bankruptcy, reorganization, liquidation, receivership or
similar proceedings, or otherwise, and shall retain and apply to the payment of
the Note or Notes held by such Lender any amount in excess of its ratable
portion of the payments received by all of the Lenders with respect to the Notes
held by all of the Lenders, such Lender will make such disposition and
arrangements with the other Lenders with respect to such excess, either by way
of distribution, pro tanto assignment of claims, subrogation or otherwise as
shall result in each Lender receiving in respect of the Notes held by it its
proportionate payment as contemplated by this Agreement; provided that if all or
any part of such excess payment is thereafter recovered from such Lender, such
disposition and arrangements shall be rescinded and the amount restored to the
extent of such recovery, but without interest.
12-12. Maximum Interest Rate. Regardless of any provision of any Loan
Document, the Lenders shall never be entitled to contract for, charge, receive,
collect, or apply as interest on any Liability, any amount in excess of the
maximum rate imposed by applicable law. Any payment which is made which, if
treated as interest on a Liability would result in such interest's exceeding
such maximum rate shall be held, to the extent of such excess, as collateral for
the Liabilities.
12-13. Waivers.
(a) Each Borrower (and all guarantors, endorsers, and sureties of the
Liabilities) make each of the waivers included in subsection (b), below,
knowingly, voluntarily, and
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intentionally, and understands that the Administrative Agent and each Lender, in
entering into the financial arrangements contemplated hereby and in providing
loans and other financial accommodations to or for the account of each Borrower
as provided herein, whether not or in the future, is relying on such waivers.
(b) TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH BORROWER, AND EACH SUCH
GUARANTOR, ENDORSER, AND SURETY RESPECTIVELY WAIVES THE FOLLOWING:
(i) Except as otherwise specifically required hereby, notice of
non-payment, demand, presentment, protest and all forms of demand and
notice.
(ii) Except as otherwise specifically required hereby, the right to
notice and/or hearing prior to the Administrative Agent' exercising of the
Administrative Agent' rights upon default.
(iii) THE RIGHT TO A JURY IN ANY TRIAL OF ANY CASE OR CONTROVERSY IN
WHICH ANY AGENT OR ANY LENDER IS OR BECOMES A PARTY (WHETHER SUCH CASE OR
CONTROVERSY IS INITIATED BY OR AGAINST, ANY AGENT, ANY LENDER OR IN WHICH
ANY AGENT OR ANY LENDER IS JOINED AS A PARTY LITIGANT), WHICH CASE OR
CONTROVERSY ARISES OUT OF OR IS IN RESPECT OF, ANY RELATIONSHIP AMONGST OR
BETWEEN ANY BORROWER OR ANY OTHER PERSON, ANY AGENT AND/OR ANY LENDER (AND
EACH AGENT AND EACH LENDER LIKEWISE WAIVES THE RIGHT TO A JURY IN ANY TRIAL
OF ANY SUCH CASE OR CONTROVERSY).
(iv) Any defense, counterclaim, set-off, recoupment, or other basis on
which the amount of any Liability, as stated on the books and records of
the Administrative Agent, could be reduced or claimed to be paid otherwise
than in accordance with the tenor of and written terms of such Liability.
(v) Any claim to consequential, special, or punitive damages.
12-14. Payments; Application. All payments made by or on behalf of the
Borrowers hereunder or under any other Loan Document shall be paid by such
Person to the Administrative Agent in United States currency at the
Administrative Agent's address specified in Section 10-1 (or at such other
address as the Administrative Agent shall specify), in immediately available
funds, on), in immediately available funds, on or before 2:00 p.m. (Boston,
Massachusetts time) on the due date thereof. Payments received by the
Administrative Agent prior to the occurrence of an Event of Default will be
applied first to fees, expenses and other amounts due hereunder (excluding
principal and interest); second, to accrued interest; and third to outstanding
principal. After the occurrence of an Event of Default, payments will be applied
to the Liabilities as provided for in Section 9-3.
12-15. Receipt of Agreement. Each Borrower acknowledges receipt of a
completed copy of this Agreement.
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12-16. Counterparts; Integration; Effectiveness. This Agreement may be
executed in counterparts (and by different parties hereto in different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement and the other
Loan Documents constitute the entire contract among the parties relating to the
subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. Except
as provided in ARTICLE 4, this Agreement shall become effective when it shall
have been executed by the Administrative Agent and when the Administrative Agent
shall have received counterparts hereof that, when taken together, bear the
signatures of each of the other parties hereto. Delivery of an executed
counterpart of a signature page of this Agreement by telecopy shall be as
effective as delivery of a manually executed counterpart of this Agreement.
ARTICLE 13 - THE AGENT.
13-1. Authorization; Non-Reliance by Lenders; Reliance by Administrative
Agent; Dispute Resolution.
(a) Each Lender appoints and designates Xxxxx Brothers Xxxxxxxx & Co., as
the "Administrative Agent" hereunder and under the Loan Documents. Each Lender
hereby authorizes the Administrative Agent (i) to execute those Loan Documents
and all other instruments relating thereto to which the Administrative Agent is
a party, and (ii) to take such action on behalf of each of the Lenders and to
exercise all such powers as are hereunder and under any of the other Loan
Documents and any related documents delegated to the Administrative Agent,
together with such powers as are reasonably incident thereto, provided that no
duties or responsibilities not expressly assumed herein or therein shall be
implied to have been assumed by the Administrative Agent. The relationship
between the Administrative Agent and the Lenders is and shall be that of agent
and principal only, and nothing contained in this Agreement or any of the other
Loan Documents shall be construed to constitute Administrative Agent as a
trustee or fiduciary for any Lender. The Administrative Agent shall not have any
duties or responsibilities to, or any fiduciary relationship with, any Lender
except for those expressly set forth in this Agreement. The Borrowers
acknowledge that in certain instances any action to be taken by the
Administrative Agent may only be taken upon approval of the Required Lenders or
all the Lenders.
(b) Each Lender represents to all other Lenders and to the Administrative
Agent that such Lender:
(i) Independently and without reliance on any representation or act by
the Administrative Agent or by any other Lender, and based on such
documents and information as that Lender has deemed appropriate, has made
that Lender's own appraisal of the financial condition and affairs of the
Borrowers and decision to enter into this Agreement.
(ii) Has relied upon that such Lender's review of the Loan Documents
by that Lender and by counsel to that Lender as that Lender deemed
appropriate under the circumstances.
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(c) Each Lender agrees that such Lender, independently and without reliance
upon the Administrative Agent or any other Lender, and based upon such documents
and information as such Lender shall deem appropriate at the time, will continue
to make such Lender's own appraisals of the financial condition and affairs of
the Borrowers when determining whether to take or not to take any discretionary
action under this Agreement.
(d) The Administrative Agent, in the discharge of its duties hereunder,
shall not be required to make inquiry of, or to inspect the properties or books
of, any Person.
(e) Except for notices, reports, and other documents and information
expressly required to be furnished to the Lenders by the Administrative Agent
hereunder (as to which, see Section 13-10), the Administrative Agent shall not
have any affirmative duty or responsibility to provide any Lender with any
credit or other information concerning any Person, which information may come
into the possession of the Administrative Agent or any Affiliate of the
Administrative Agent.
(f) Each Lender, at such Lender's request, shall have reasonable access to
all nonprivileged documents in the possession of the Administrative Agent, which
documents relate to the Administrative Agent's performance of its duties
hereunder.
(g) The Administrative Agent shall be entitled to rely upon any
certificate, notice or other document (including any cable, telegram, telex, or
facsimile) reasonably believed by the Administrative Agent to be genuine and
correct and to have been signed or sent by or on behalf of the proper person or
persons, and upon advice and statements of attorneys, accountants and other
experts selected by the Administrative Agent. As to any matters not expressly
provided for in this Agreement, any Loan Document, or in any other document
referred to therein, the Administrative Agent shall in all events be fully
protected in acting, or in refraining from acting, in accordance with the
applicable consent required by this Agreement. Instructions given with the
requisite consent shall be binding on all Lenders.
(h) Any dispute among the Lenders and/or the Administrative Agent
concerning the interpretation, administration, or enforcement of the financing
arrangements contemplated by this or any other Loan Document or the
interpretation or administration of this or any other Loan Document which cannot
be resolved amicably shall be resolved in the United States District Court for
the District of Massachusetts, sitting in Boston or in the Superior Court of
Suffolk County, Massachusetts, to the jurisdiction of which courts each Lender
hereto hereby submits.
13-2. Employees and Agents. The Administrative Agent may exercise its
powers and execute its duties by or through employees or agents and shall be
entitled to take, and to rely on, advice of counsel concerning all matters
pertaining to its rights and duties under this Agreement and the other Loan
Documents. The Administrative Agent may utilize the services of such Persons as
said Administrative Agent in its sole discretion may reasonably determine, and
all reasonable fees and expenses of any such Persons shall be paid by the
Borrowers.
13-3. No Liability. Neither the Administrative Agent nor any of its
shareholders, directors, officers or employees nor any other Person assisting
them in their duties nor any agent
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or employee thereof, shall be liable for any waiver, consent or approval given
or any action taken, or omitted to be taken, in good faith by them hereunder or
under any of the other Loan Documents, or in connection herewith or therewith,
or be responsible for the consequences of any oversight or error of judgment
whatsoever, except that the Administrative Agent or such other Person, as the
case may be, may be liable for losses due to its willful misconduct or gross
negligence.
13-4. No Representations. The Administrative Agent shall not be responsible
for the execution or validity or enforceability of this Agreement, the Notes,
any of the other Loan Documents or any instrument at any time constituting, or
intended to constitute, collateral security for the Notes, or for the value of
any such collateral security or for the validity, enforceability or
collectibility of any such amounts owing with respect to the Notes, or for any
recitals or statements, warranties or representations made herein or in any of
the other Loan Documents or in any certificate or instrument hereafter furnished
to it by or on behalf of the Borrowers or any of their Subsidiaries, or be bound
to ascertain or inquire as to the performance or observance of any of the terms,
conditions, covenants or agreements herein or in any instrument at any time
constituting, or intended to constitute, collateral security for the Notes. The
Administrative Agent shall not be bound to ascertain whether any notice,
consent, waiver or request delivered to it by the Borrowers or any holder of any
of the Notes shall have been duly authorized or is true, accurate and complete.
The Administrative Agent has not made nor does it now make any representations
or warranties, express or implied, nor do they assume any liability to the
Lenders, with respect to the credit worthiness or financial condition of the
Borrowers or any Subsidiaries. Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agents or any other
Lender, and based upon such information and documents as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement.
13-5. Funding Procedures; Payments.
(a) The Administrative Agent shall advise each Lender, no later than 2:00PM
(Boston Time) (A) on a date on which any Revolving Credit Loan is to be made to
the Lead Borrower on that date, and (B) on the date of any request for the
making, Conversion or continuation of a LIBOR Loan. Such advice, in each
instance, may be by telephone or facsimile transmission, provided that if such
advice is by telephone, it shall be confirmed in writing. Advice of a Revolving
Credit Loan shall include the amount of and interest rate applicable to the
subject Revolving Credit Loan. Subject to that Lender's Commitment of the
Revolving Credit, each Lender, by not later than the end of business on the day
on which the subject Revolving Credit Loan is to be made, shall transfer that
Revolving Credit Lender's Revolving Credit Commitment Percentage of the subject
Revolving Credit Loan to the Administrative Agent.
(b) Each Revolving Credit Lender shall make available to the Administrative
Agent, as applicable, as provided herein, that Lender's Revolving Credit
Commitment Percentage of the following:
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(i) Each Revolving Credit Loan, up to the maximum amount of that
Revolving Credit Lender's Revolving Credit Commitment of the Revolving
Credit Loans.
(ii) Up to the maximum amount of that Lender's Revolving Credit
Commitment of each drawing on a L/C (to the extent that such L/C Drawing is
not "covered" by a Revolving Credit Loan as provided herein).
(c) In all circumstances, the Administrative Agent may:
(i) Assume that each Lender, subject to Section 13-5(a), timely shall
make available to the Administrative Agent that Lender's Revolving Credit
Commitment Percentage of each Revolving Credit Loan, notice of which is
provided pursuant to Section (a).
(ii) In reliance upon such assumption, make available the
corresponding amount to the applicable Borrowers.
(iii) Assume that each Lender timely shall pay, and shall make
available, to the Administrative Agent all other amounts which that Lender
is obligated to so pay and/or make available hereunder or under any of the
Loan Documents.
(d) (i) A payment by the Borrowers to the Administrative Agent hereunder or
any of the other Loan Documents for the account of any Lender shall constitute a
payment to such Lender. The Administrative Agent agrees promptly to distribute
to each Lender such Lender's Commitment Percentage of payments received by the
Administrative Agent for the account of the Lenders except as otherwise
expressly provided herein or in any of the other Loan Documents;
(ii) the amount of each Lender's Commitment Percentage of outstanding
Revolving Credit Loans shall be computed weekly (or more frequently in the
Administrative Agent's discretion) and shall be adjusted upward or downward
based on all Revolving Credit Loans and repayments of Revolving Credit
Loans received by the Administrative Agent as of 3:00 p.m., Boston time, on
the first Business Day following the end of the period specified by the
Administrative Agent (such date, the "SETTLEMENT DATE");
(iii) the Administrative Agent shall deliver to each of the Lenders
promptly after the Settlement Date a summary statement of the amount of
outstanding Revolving Credit Loans for the period and the amount of
repayments received for the period. As reflected on the summary statement:
(x) the Administrative Agent shall transfer to each Lender its applicable
Commitment Percentage of repayments, and (y) each Lender shall transfer to
the Administrative Agent (as provided below), or the Administrative Agent
shall transfer to each Lender, such amounts as are necessary to insure
that, after giving effect to all such transfers, the amount of Revolving
Credit Loans made by each Lender with respect to Revolving Credit Loans
shall be equal to such Lender's applicable Commitment Percentage of
Revolving Loans outstanding as of such Settlement Date. If
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the summary statement requires transfers to be made to the Administrative
Agent by the Lenders and is received prior to 12:00 Noon, Boston time, on a
Business Day, such transfers shall be made in immediately available funds
no later than 11:00 a.m., Boston time, that day; and, if received after
11:00 a.m., Boston time, then no later than 3:00 p.m., Boston time, on the
next Business Day. The obligation of each Lender to transfer such funds is
irrevocable, unconditional and without recourse to or warranty by the
Administrative Agent. If and to the extent any Lender shall not have so
made its transfer to the Administrative Agent, such Lender agrees to pay to
the Administrative Agent, forthwith on demand such amount, together with
interest thereon, for each day from such date until the date such amount is
paid to the Administrative Agent at the Federal Funds Effective Rate.
(e) The Borrowers acknowledge that each Lender's responsibilities hereunder
are several and that each Lender shall only be responsible to fund up to each
Lender's Commitment Percentage. The Borrowers agree to release and hold harmless
any nondelinquent Lenders from any claims, damages or costs arising on account
of any failure of a Delinquent Lender to comply with the requirements of this
Agreement.
(f) If in the opinion of the Administrative Agent the distribution of any
amount received by it in such capacity hereunder, under the Notes or under any
of the other Loan Documents might involve it in liability, it may refrain from
making distribution until its right to make distribution shall have been
adjudicated by a court of competent jurisdiction (provided that such action by
the Administrative Agent shall not create an independent default by the
Borrowers). If a court of competent jurisdiction shall adjudge that any amount
received and distributed by the Administrative Agent is to be repaid, each
Person to whom any such distribution shall have been made shall either repay to
the Administrative Agent its proportionate share of the amount so adjudged to be
repaid or shall pay over the same in such manner and to such Persons as shall be
determined by such court.
13-6. Holders of Notes. The Administrative Agent may deem and treat the
payee of any Note as the absolute owner or purchaser thereof for all purposes
hereof until it shall have been furnished in writing with a different name by
such payee or by a subsequent holder, assignee or transferee.
13-7. Indemnity. The Lenders ratably agree hereby to indemnify and hold
harmless the Administrative Agent from and against any and all claims, actions
and suits (whether groundless or otherwise), losses, damages, costs, out of
pocket expenses (including any expenses for which the Administrative Agent has
not been reimbursed by the Borrowers as required by Section 12-4), and
liabilities of every nature and character arising out of or related to this
Agreement, the Notes, or any of the other Loan Documents or the transactions
contemplated or evidenced hereby or thereby, or the Administrative Agent's
actions taken hereunder or thereunder, except to the extent that any of the same
shall be directly caused by the Administrative Agents' willful misconduct or
gross negligence.
13-8. Administrative Agent as Lender; Limitation on other Agents'
Liability. In its individual capacity, Xxxxx Brothers Xxxxxxxx & Co. shall have
the same obligations and the
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same rights, powers and privileges in respect to its Commitments and the Loans
made by it, and as the holder of any of the Notes as it would have were it not
also the Administrative Agent. None of the Documentation Agent or the
Syndication Agent, in such capacities, shall have any right, power, obligation,
liability, responsibility or duty under this Agreement or any other Loan
Document.
13-9. Resignation. The Administrative Agent may resign at any time by
giving sixty (60) days' prior written notice thereof to the Lenders and the
Borrowers. Upon any such resignation, the Required Lenders shall have the right
to appoint a successor to Administrative Agent. Unless an Event of Default shall
have occurred and be continuing, such successor Administrative Agent shall be
reasonably acceptable to the Borrowers in their reasonable discretion. If no
successor Administrative Agent shall have been so appointed by the Required
Lenders and shall have accepted such appointment within thirty (30) days after
the retiring Administrative Agent's giving of notice of resignation, then the
retiring Administrative Agent may, on behalf of the Lenders, after consultation
with the Lenders, appoint a successor Administrative Agent, which shall be a
Lender or which meets the requirements of subjection (a) of the definition of an
Eligible Assignee, and unless an Event of Default shall have occurred and be
continuing, such successor Administrative Agent being reasonably acceptable to
the Borrowers in its reasonable discretion. Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations hereunder. After any retiring Administrative
Agent's resignation, the provisions of this Agreement and the other Loan
Documents shall continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as Administrative Agent.
In addition, if at any time Administrative Agent shall no longer act as a Lender
hereunder (subject to the provisions of Section 13-13 below), unless same
results from a merger or other consolidation of the Administrative Agent with a
Lender, the Required Lenders shall have the right to appoint a successor
Administrative Agent subject to the provisions of this Section 13-9.
13-10. Notification of Suspension Events and Events of Default;
Distributions of Notices and Documents by Administrative Agent. (a) Each Lender
hereby agrees that, upon learning of the existence of a Suspension Event or an
Event of Default, it shall promptly notify the Administrative Agent thereof. The
Administrative Agent hereby agrees that upon receipt of any notice under this
Section 13-10 it shall promptly notify in writing the other Lenders of the
existence of such Suspension Event or Event of Default.
(b) The Administrative Agent, to the extent that the Administrative Agent
has not done so, will forward to each Lender, promptly after the Administrative
Agent's receipt thereof, a copy of each notice or other document furnished to
the Administrative Agent pursuant to this Agreement, including quarterly and
annual financial statements received from the Borrowers pursuant to ARTICLE 7 of
this Agreement, other than any of the following:
(i) Routine communications associated with requests for Revolving
Credit Loans and/or the issuance of L/C's.
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(ii) Routine or nonmaterial communications.
(iii) Any notice or document required by any of the Loan Documents to
be furnished to the Lenders by the Borrowers.
(iv) Any notice or document of which the Administrative Agent has
knowledge that such notice or document had been forwarded to the Lenders
other than by the Administrative Agent.
13-11. Duties in the Case of Enforcement. In case that one or more Events
of Default have occurred and shall be continuing, and whether or not
acceleration of the Liabilities shall have occurred, the Administrative Agent
shall, if (a) so requested by the Required Lenders and (b) the Required Lenders
have provided to the Administrative Agent such additional indemnities and
assurances against expenses and liabilities as the Administrative Agent may
reasonably request, proceed to enforce the provisions of the Loan Documents and
exercise all or any such legal and equitable and other rights or remedies as it
may have in respect of the Loan Documents. The Required Lenders may direct the
Administrative Agent in writing as to the method and the extent of any such
rights or remedies, the Lenders hereby agreeing to indemnify and hold the
Administrative Agent harmless from all liabilities incurred in respect of all
actions taken or omitted in accordance with such directions, provided that the
Administrative Agent need not comply with any such direction to the extent that
the Administrative Agent reasonably believes its compliance with such direction
to be unlawful or, upon the advice of counsel, would be found to be commercially
unreasonable in any applicable jurisdiction. The Administrative Agent may, in
its discretion but without obligation, in the absence of direction from the
Required Lenders, take such interim actions as they believe necessary to
preserve the rights of the Lenders hereunder, including but not limited to
petitioning a court for injunctive relief or appointment of a receiver. Each of
the Lenders acknowledges and agrees that no individual Lender may separately
enforce or exercise any of the provisions of any of the Loan Documents,
including without limitation the Notes, other than through the Administrative
Agent.
13-12. Delinquent Lender. If for any reason any Lender shall fail or refuse
to abide by its obligations under the Agreement, including without limitation
its obligation to make available to the Administrative Agent its pro rata share
of any Loan, expenses or setoff (a "DELINQUENT LENDER") and such failure is not
cured within ten (10) days of receipt from the Administrative Agent of written
notice thereof, then, in addition to the rights and remedies that may be
available to Administrative Agent, other Lenders, the Borrowers or any other
party at law or in equity, and not at limitation thereof, (i) such Delinquent
Lender's right to participate in the administration of, or decision-making
rights related to, any Loan, this Agreement or the other Loan Documents shall be
suspended during the pendency of such failure or refusal, and (ii) a Delinquent
Lender shall be deemed to have assigned any and all payments due to it from the
Borrowers, whether on account of the outstanding Loans, interest, fees or
otherwise, to the remaining non-delinquent Lenders for application to, and
reduction of, their proportionate shares of the outstanding Loans until, as a
result of application of such assigned payments the Lenders' respective pro rata
shares of the outstanding Loans shall have returned to those in effect
immediately prior to such delinquency and without giving effect to the
nonpayment causing such delinquency. The Delinquent Lender's decision-making and
participation rights to payments as set forth in clauses
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(i) and (ii) hereinabove shall be restored only upon the payment by the
Delinquent Lender of its pro rata share of the Loans or expenses as to which it
is delinquent, together with interest thereon at the Default Rate from the date
when originally due until the date upon which any such amounts are actually
paid.
The non-delinquent Lenders shall also have the right, but not the
obligation, in their respective, sole and absolute discretion, to acquire for no
cash consideration, (pro rata, based on the respective Commitments of those
Lenders electing to exercise such right) the Delinquent Lender's Commitment to
fund any future Loan (the "FUTURE COMMITMENT"). Upon any such purchase of the
pro rata share of any Delinquent Lender's Future Commitment, the Delinquent
Lender's share in any future Loans and its rights under the Loan Documents with
respect thereto shall terminate on the date of purchase, and the Delinquent
Lender shall promptly execute all documents reasonably requested to surrender
and transfer such interest, including, if so requested, an Assignment and
Acceptance. Each Delinquent Lender shall indemnify Administrative Agent and each
non-delinquent Lender from and against any and all loss, damage or expenses,
including but not limited to reasonable attorneys' fees and funds advanced by
Administrative Agent or by any non-delinquent Lender, on account of an
Delinquent Lender's failure to timely fund its pro rata share of a Loan or to
otherwise perform its obligations under the Loan Documents.
13-13. Assignment and Participation.
(a) Conditions to Assignment by Lenders. Except as provided herein, each
Lender may assign to one or more Eligible Assignees (or to any third party after
the occurrence of an Event of Default and while same is continuing) all or a
portion of its interests, rights and obligations under this Agreement (including
all or a portion of its Commitment Percentage and Commitment and the same
portion of the Loans at the time owing to it and the Notes held by it), upon
satisfaction of the following conditions: (a) each of the Administrative Agent
and the Borrowers shall have given its prior written consent to such assignment
(provided that, in the case of the Borrowers, such consent will not be
unreasonably withheld and shall not be required if an Event of Default shall
have occurred and be continuing), (b) each such assignment shall be of a
constant, and not a varying, percentage of all the assigning Lender's rights and
obligations under this Agreement, (c) prior to the occurrence of an Event of
Default, each assignment shall be in an amount that is at least Ten Million
Dollars ($10,000,000.00) and is a whole multiple of Two Million Dollars
($2,000,000.00), and (d) the parties to such assignment shall execute and
deliver to the Administrative Agent, for recording in the Register, an
Assignment and Acceptance, substantially in the form of Exhibit AA hereto (an
"ASSIGNMENT AND ACCEPTANCE"), together with any Notes subject to such
assignment. Upon such execution, delivery, acceptance and recording, from and
after the effective date specified in each Assignment and Acceptance, which
effective date shall be at least five (5) Business Days after the execution
thereof, (x) the assignee thereunder shall be a party hereto and, to the extent
provided in such Assignment and Acceptance, have the rights and obligations of a
Lender hereunder, and (y) the assigning Lender shall, to the extent provided in
such assignment and upon payment to the Administrative Agent of the registration
fee referred to in Section 13-13(c), be released from its obligations under this
Agreement.
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(b) Certain Representations and Warranties: Limitations, Covenants. By
executing and delivering an Assignment and Acceptance, the parties to the
assignment thereunder confirm to and agree with each other and the other parties
hereto as follows:
(i) other than the representation and warranty that it is the legal
and beneficial owner of the interest being assigned thereby free and clear
of any adverse claim, the assigning Lender makes no representation or
warranty, express or implied, and assumes no responsibility with respect to
any statements, warranties or representations made in or in connection with
this Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement, the other Loan
Documents or any other instrument or document furnished pursuant hereto or
the attachment, perfection or priority of any security interest or
mortgage;
(ii) the assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrowers and its affiliates, related entities or subsidiaries or any other
person primarily or secondarily liable in respect of any of the
Liabilities, or the performance or observance by the Borrowers or any other
person primarily secondarily liable in respect of any of the Liabilities or
any of their obligations under this Agreement or any of the other Loan
Documents or any other instrument or document furnished pursuant hereto or
thereto;
(iii) such assignee confirms that it has received a copy of this
Agreement, together with copies of the most recent financial statement
provided by the Borrowers as required by the terms of this Agreement,
together with such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance;
(iv) such assignee will, independently and without reliance upon the
assigning Lender, the Administrative Agent or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action
under this Agreement;
(v) such assignee represents and warrants that (to the extent required
herein) it is an Eligible Assignee;
(vi) such assignee appoints and authorizes the Administrative Agent to
take such action as agent on its behalf and to exercise such powers under
this Agreement and the other Loan Documents as are delegated to the
Administrative Agent by the terms hereof or thereof, together with such
powers as are reasonably incidental thereto;
(vii) such assignee agrees that it will perform in accordance with
their terms all of the obligations that by the terms of this Agreement are
required to be performed by it as a Lender; and
(viii) such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Acceptance.
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(c) Register. The Administrative Agent shall maintain a copy of each
Assignment and Acceptance delivered to it and a register or similar list (the
"REGISTER") for the recordation of the names and addresses of the Lenders and
the Commitment Percentage of, and principal amount of the Loans owing to the
Lenders from time to time. The entries in the Register shall be conclusive, in
the absence of manifest error, and the Borrowers, the Administrative Agent and
the Lenders may treat each person whose name is recorded in the Register as a
Lender hereunder for all purposes of this Agreement. The Register shall be
available for inspection by the Borrowers and the Lenders at any reasonable time
and from time to time upon reasonable prior notice. Upon each such recordation,
the assigning Lender agrees to pay to the Administrative Agent a registration
fee in the sum of Three Thousand Five Hundred Dollars ($3,500.00).
(d) New Notes. Upon its receipt of an Assignment and Acceptance executed by
the parties to such assignment, together with each Note subject to such
assignment, the Administrative Agent shall (a) record the information contained
therein in the Register, and (b) give prompt notice thereof to the Borrowers and
the Lenders (other than the assigning Lender). Within five (5) Business Days
after receipt of such notice, the Borrowers, at their own expense, shall execute
and deliver to the Administrative Agent, in exchange for each surrendered Note,
a new Note to the order of such assignee in an amount equal to the amount
assumed by such assignee pursuant to such Assignment and Acceptance and, if the
assigning Lender has retained some portion of its obligations hereunder, a new
Note to the order of the assigning Lender in an amount equal to the amount
retained by it hereunder. Such new Notes shall provide that they are
replacements for the surrendered Notes, shall be in an aggregate principal
amount equal to the aggregate principal amount of the surrendered Notes, shall
be dated the effective date of such Assignment and Acceptance and shall
otherwise be substantially in the form of the assigned Notes.
(e) Participations. Each Lender may sell participations to one or more
banks or other financial institutions in all or a portion of such Lender's
rights and obligations under this Agreement and the other Loan Documents;
provided that (a) each such participation shall be in a minimum amount of Five
Million Dollars ($5,000,000.00), (b) prior to the occurrence of an Event of
Default, each participant shall meet the requirements of an Eligible Assignee,
(c) any such sale or participation shall not affect the rights and duties of the
selling Lender hereunder to the Borrowers, and (d) the only rights granted to
the participant pursuant to such participation shall be rights against the
assigning Lender, and neither the Administrative Agent nor any other Lender
shall have any obligation, duty or liability to any such participant of any
other Lender.
13-14. Pledge to Federal Reserve. Any Lender may at any time pledge all or
any portion of its rights under the Loan Documents including any portion of the
Notes to any of the twelve (12) Federal Reserve Banks organized under Section 4
of the Federal Reserve Act, 12 U.S.C. Section 341. No such pledge or enforcement
thereof shall release such Lender from its obligations under any of the Loan
Documents.
13-15. Consent or Approval. With respect to any requested amendment,
waiver, consent or other action which requires the approval of the Required
Lenders or all of the Lenders, as the case may be, in accordance with the terms
of this Agreement, or if Administrative Agent is required hereunder to seek, or
desires to seek, the approval of the Required Lenders or all of the
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Lenders, as the case may be, prior to undertaking a particular action or course
of conduct, the Administrative Agent in each such case shall provide each Lender
with written notice of any such request for amendment, waiver or consent or any
other requested or proposed action or course of conduct, accompanied by such
detailed background information and explanations as may be reasonably necessary
to determine whether to approve or disapprove such amendment, waiver, consent or
other action or course of conduct. Each Lender shall endeavor to promptly
respond to any such request.
13-16. Treatment of Confidential Information. Each of the Lenders and the
Agents agrees to maintain the confidentiality of the Confidential Information
(as defined below), except that Confidential Information may be disclosed:
(a) to its officers, directors, employees and representatives and only on a
"need to know" basis (it being understood that the Persons to whom such
disclosure is made will be informed of the confidential nature of such
Confidential Information and instructed to keep such Confidential Information
confidential);
(b) to the extent requested by any regulatory authority purporting to have
jurisdiction over it;
(c) to the extent required by applicable laws or regulations or by any
subpoena or similar legal process;
(d) in connection with the exercise of any remedies hereunder or under any
other Loan Document or any action or proceeding relating to this Agreement or
any other Loan Document or the enforcement of rights hereunder or thereunder;
(e) subject to an agreement containing provisions substantially the same as
those of this Section, to (i) any assignee of or participant in, or any
prospective assignee of or participant in, any of its rights or obligations
under this Agreement or (ii) any actual or prospective counterparty (or its
advisors) to any swap or derivative transaction relating to the any Borrower and
its obligations;
(f) with the prior written consent of the Lead Borrower; or
(g) to the extent such Information (i) becomes publicly available other
than as a result of a breach of this Section or (ii) becomes available to the
Administrative Agent or any Lender on a non-confidential basis from a source
other than the Borrowers.
For purposes of this Section, "Confidential Information" means all
information received from any of Borrowers or any subsidiary relating to any
Borrower or any Subsidiary or any of their respective businesses, other than any
such information that is available to Administrative Agent or any Lender on a
non-confidential basis prior to disclosure by any Borrower or any Subsidiary,
provided, however, that, in the case of Confidential Information received from
any Borrower or any Subsidiary after the date hereof, such Confidential
Information is clearly identified at the time of delivery as confidential. Any
Person required to maintain the confidentiality of any Confidential Information
as provided in this Section shall be considered to
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have complied with its obligation to do so if such Person has exercised the same
degree of care to maintain the confidentiality of such Confidential Information
as such Person would accord to its own confidential information but no less than
a reasonable standard of care.
13-17. Consents, Amendments, Waivers, etc..
(a) Except as otherwise expressly set forth in any particular provision of
this Agreement, any consent or approval required or permitted by this Agreement
to be given by the Administrative Agent or the Lenders may be given, and any
term of this Agreement or of any other instrument related hereto or mentioned
herein may be amended, and the performance or observance by the Borrowers of any
terms of this Agreement or such other instrument or the continuance of any Event
of Default may be waived (either generally or in a particular instance and
either retroactively or prospectively) by the Administrative Agent or the
Required Lenders, as applicable, in their discretion. Each such consent,
amendment or waiver shall be in writing. No waiver shall extend to or affect any
obligation not expressly waived or impair any right consequent thereon. No
course of dealing or delay or omission on the part of the Administrative Agent
or any Lender in exercising any right shall operate as a waiver thereof or
otherwise be prejudicial thereto. No Loan made by the Administrative Agent
hereunder during the continuance of any Suspension Event or Event of Default
shall constitute a waiver thereof. No notice to or demand upon the Borrowers
shall entitle the Borrower to other or further notice or demand in similar or
other circumstances.
(b) Notwithstanding anything to the contrary contained in this Agreement,
any provisions of this Agreement pertaining to the administration of the Loans
by the Lenders may be amended by an instrument in writing signed by the
Administrative Agent and the Required Lenders with no additional consent
required from the Borrowers.
(c) Notwithstanding the foregoing, the unanimous written approval of all
the Lenders (other than a Delinquent Lender) shall be required with respect to
any proposed amendment, waiver, discharge, termination, or consent which:
(i) has the effect of, except as provided herein, (a) extending any
Maturity Date or the date of any amortization payment of any Note, (b)
reducing the interest rate, extending the time of payment, or changing the
manner of calculation, of interest or fees thereon, (c) increasing or
reducing the principal amount thereof, or (d) otherwise postponing or
forgiving any Indebtedness thereunder;
(ii) changes the definition of Required Lenders or reduces the
percentages specified in the definition of Required Lenders;
(iii) except as otherwise provided in this Agreement, change the
amount of any Lender's Commitment or Commitment Percentage;
(iv) releases or waives any guaranty of the Liabilities or
indemnifications provided in the Loan Documents;
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(v) changes to the definition of Consolidated Operating Cash Flow,
Consolidated Total Net Worth, Consolidated Total Funded Indebtedness, EBIT,
EBITDA, Net Income, Permitted Acquisition or Total Debt Service;
(vi) amends, modifies or waives any provisions of this paragraph; or
(vii) amends, modifies or waives any term or condition of Sections
5-6, 5-19(o), 5-21(c),5-22, 5-29, 7-7, 7-8, 7-9 or 7-10.
(d) Without the consent of the subject Agent, no such action shall amend,
modify or waive any provision of any Loan Document which relates to the rights
or obligations of the specific Agent.
13-18. U.S. Patriot Act. Each Lender hereby notifies the Borrowers that
pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)) (the "ACT"), it is required to obtain,
verify and record information that identifies the Borrowers, which information
includes the name and address of each Borrower and other information that will
allow such Lender to identify such Borrower in accordance with the Act.
13-19. Foreign Asset Control Regulations. Neither of the advance of the
Revolving Credit Loans nor the use of the proceeds of any thereof (or any other
Loan) will violate the Trading With the Enemy Act (50 U.S.C. Section 1 et seq.,
as amended) (the "Trading With the Enemy Act") or any of the foreign assets
control regulations of the United States Treasury Department (31 CFR, Subtitle
B, Chapter V, as amended) (the "Foreign Assets Control Regulations") or any
enabling legislation or executive order relating thereto (which for the
avoidance of doubt shall include, but shall not be limited to (a) Executive
Order 13224 of September 21, 2001 Blocking Property and Prohibiting Transactions
With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg.
49079 (2001)) (the "Executive Order") and (b) the Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001 (Public Law 107-56)). Furthermore, none of the Borrowers
or their Affiliates (a) is or will become a "blocked person" as described in the
Executive Order, the Trading With the Enemy Act or the Foreign Assets Control
Regulations or (b) engages or will engage in any dealings or transactions, or be
otherwise associated, with any such "blocked person".
(REMAINDER OF PAGE LEFT INTENTIONALLY BLANK)
-75-
IN WITNESS WHEREOF, THE PARTIES HAVE EXECUTED THIS LOAN AGREEMENT AS AN
INSTRUMENT UNDER SEAL AS OF THE DATE FIRST WRITTEN ABOVE.
DYNAMICS RESEARCH CORPORATION
("LEAD BORROWER AND BORROWER")
By:
------------------------------------
Name: Xxxxx Xxxxxxx
Title: Senior Vice President - Finance,
CFO and Treasurer
DRC INTERNATIONAL CORPORATION
("BORROWER")
By:
------------------------------------
Name: Xxxxx Xxxxxxx
Title: Vice President - Finance and CFO
X.X. XXXX ASSOCIATES, INC.
("BORROWER")
By:
------------------------------------
Name: Xxxxx Xxxxxxx
Title: Treasurer, CFO and Assistant
Secretary
-S-1-
XXXXX BROTHERS XXXXXXXX & CO.
("ADMINISTRATIVE AGENT AND LENDER")
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
TD BANKNORTH, N.A.
("DOCUMENTATION AGENT AND LENDER")
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
BANK OF AMERICA, N.A.
("SYNDICATION AGENT AND LENDER")
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
-S-2-
EXHIBITS
The following Exhibits to this Amended and Restated Loan Agreement are
respectively described in the section indicated.
EXHIBIT 1 Commitments/Commitment Percentages ARTICLE 1
EXHIBIT 3-5: Revolving Credit Note Section 3-5
EXHIBIT 3-8: Renewal/Conversion Notice Section 3-8
EXHIBIT 4-14: Material Changes Section 4-14
EXHIBIT 5-2: Related Entity Section 5-2(b)
EXHIBIT 5-5: Locations Section 5-5
EXHIBIT 5-6: Permitted Liens Section 5-6
EXHIBIT 5-7: Indebtedness Section 5-7
EXHIBIT 5-8 Insurance Policies Section 5-8
EXHIBIT 5-9: Licenses, Distributor Franchise Agreement Section 5-9
EXHIBIT 5-10: Leases Section 5-10
EXHIBIT 5-11: Legal Requirements Section 5-11
EXHIBIT 5-13: Taxes Section 5-13
EXHIBIT 5-16: Hazardous Materials Section 5-16
EXHIBIT 5-17: Litigation Section 5-17
EXHIBIT 5-19: Guaranties and Investments Section 5-19
EXHIBIT 5-28: Government Contracts Section 5-28
EXHIBIT 7-4(c): Compliance Certificate Section 7-4
EXHIBIT AA: Assignment and Acceptance Section 13-13
EXHIBIT BB: Existing L/Cs ARTICLE 1
-Exhibits-
