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FIRST AMENDMENT AND MODIFICATION AGREEMENT
by and among
DIAGNOSTIC/RETRIEVAL SYSTEMS, INC.,
as the Borrower
AND
LAUREL TECHNOLOGIES PARTNERSHIP T/A LAUREL TECHNOLOGIES,
DRS MEDICAL SYSTEMS, TECHNOLOGY APPLICATIONS & SERVICE
COMPANY, PHOTRONICS CORP., PRECISION ECHO, INC., AHEAD
TECHNOLOGY, INC., OMI ACQUISITION CORP. (ALSO DOING BUSINESS AS
OMI CORP.), DRS SYSTEMS MANAGEMENT CORPORATION, AHEAD
TECHNOLOGY ACQUISITION CORPORATION, DRS/MS, INC. AND (ALSO DOING BUSINESS AS
MEC TECHNOLOGY), DRS/MS, INC., AHEAD WISCONSIN ACQUISITION CORP.
(ALSO DOING BUSINESS AS VIKRON TECHNOLOGY), NORTRONICS ACQUISITION
CORPORATION (ALSO DOING BUSINESS AS NORTRONICS, INC.) AND
PACIFIC TECHNOLOGIES, INC.
collectively as the Guarantors
AND
MELLON BANK, N.A.,
as the Lender
Dated: As of December 6, 1996
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FIRST AMENDMENT AND MODIFICATION AGREEMENT
THIS FIRST AMENDMENT AND MODIFICATION AGREEMENT (hereinafter referred to
as the "First Amendment"), is made as of this 6th day of Octoday of December,
1996, by and among
DIAGNOSTIC/RETRIEVAL SYSTEMS, INC., a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, having
its principal office located at 0 Xxxxxx Xxx, Xxxxxxxxxx, Xxx Xxxxxx 00000
(hereinafter referred to as the "Borrower"),
AND
LAUREL TECHNOLOGIES PARTNERSHIP T/A LAUREL TECHNOLOGIES, a general
partnership duly organized, validly existing and in good standing under the laws
of the State of Delaware, having its principal office located at 000 Xxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxx 00000 (hereinafter referred to as "Laurel
Technologies Partnership"),
AND
DRS MEDICAL SYSTEMS, a general partnership duly organized, validly
existing and in good standing under the laws of the State of New Jersey, having
its principal office located at 000 Xxxxx Xxxxx, Xxxxxxx, Xxx Xxxxxx 00000
(hereinafter referred to as "DRS Medical Systems" and hereinafter Laurel
Technologies Partnership and DRS Medical Systems shall collectively be referred
to as the "Partnership Guarantors"),
AND
TECHNOLOGY APPLICATIONS & SERVICE COMPANY, a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
having its principal office located at 000 Xxxxxxxxxxxx Xxxxx, Xxxxxxxxxxxx,
Xxxxxxxx 00000 (hereinafter referred to as "Technology Applications & Service
Company"),
AND
PHOTRONICS CORP., a corporation duly organized, validly existing and in
good standing under the laws of the State of New York, having its principal
office located at 000 Xxxxx Xxxxxxx, Xxxxxxxxx, Xxx Xxxx 00000 (hereinafter
referred to as "Photronics Corp."),
AND
PRECISION ECHO, INC., a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware, having its principal
office located at 3105
0
Xxxxxxx Xxxxx Xxxxx, Xxxxx Xxxxx, Xxxxxxxxxx 00000 (hereinafter referred to as
"Precision Echo, Inc."),
AND
AHEAD TECHNOLOGY, INC., a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware, having its principal
office located at 0000 Xxx Xxx Xxx, Xxx Xxxx, Xxxxxxxxxx 00000 (hereinafter
referred to as "Ahead Technology, Inc."),
AND
OMI ACQUISITION CORP. (ALSO DOING BUSINESS AS OMI CORP.), a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware, having its principal office located at 000 Xxxxx Xxxxxxx,
Xxxxxxxxx, Xxx Xxxx 00000 (hereinafter referred to as "OMI Acquisition Corp."),
AND
DRS SYSTEMS MANAGEMENT CORPORATION, a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, having
its principal office located at 000 Xxxxx Xxxxx, Xxxxxxx, Xxx Xxxxxx 00000
(hereinafter referred to as "DRS Systems Management Corp."),
AND
AHEAD TECHNOLOGY ACQUISITION CORPORATION (ALSO DOING BUSINESS AS MEC), a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, having its principal office located at 0000 Xxxxxxx
Xxxxx Xxxxx, Xxxxx Xxxxx, Xxxxxxxxxx 00000 (hereinafter referred to as "Ahead
Technology Acquisition Corp."),
AND
DRS/MS, INC., a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware, having its principal office
located at 000 Xxxxx Xxxxx, Xxxxxxx, Xxx Xxxxxx 00000 (hereinafter referred to
as "DRS/MS, Inc." and hereinafter Technology Applications & Service Company,
Photronics Corp., Precision Echo, Inc., Ahead Technology, Inc., OMI Acquisition
Corp., DRS Systems Management Corp., Ahead Technology Acquisition Corp. and
DRS/MS shall collectively be referred to as the "Corporate Guarantors" and
hereinafter the Partnership Guarantors and the Corporate Guarantors shall
collectively be referred to as the "Original Guarantors"),
AND
2
AHEAD WISCONSIN ACQUISITION CORPORATION (ALSO DOING BUSINESS AS DRS VIKRON
TECHNOLOGY), a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware, having its principal office located at
0000 Xxxxxxx Xxxxx Xxxxx, Xxxxx Xxxxx, Xxxxxxxxxx 00000 (hereinafter referred to
as "Ahead Wisconsin Acquisition Corporation"),
AND
NORTRONICS ACQUISITION CORPORATION (ALSO DOING BUSINESS AS NORTRONICS,
INC.) a corporation duly organized, validly existing and in good standing under
the laws of the State of Delaware, having its principal office located at 000
Xxxxx Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxx 00000 (hereinafter referred to as
"Nortronics Acquisition Corporation"),
AND
PACIFIC TECHNOLOGIES, INC., a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware, having its
principal office located at 0 Xxxxxx Xxx, Xxxxxxxxxx, Xxx Xxxxxx 00000
(hereinafter referred to as "Pacific Technologies, Inc.", and hereinafter Ahead
Wisconsin Acquisition Corporation, Nortronics Acquisition Corporation, Pacific
Technologies, Inc. and the Original Guarantors shall collectively be referred to
as the "Guarantors"),
AND
MELLON BANK, N.A., a national banking association duly organized and
validly existing under the laws of the United States of America, having an
office located at Mellon Bank Center, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx,
Xxxxxxxxxxxx 00000 (hereinafter referred to as "Lender").
W I T N E S S E T H :
WHEREAS, on May 31, 1996, pursuant to a certain Revolving Line of Credit
Loan Agreement dated May 31,1996 (hereinafter referred to as the "Loan
Agreement"), executed by and between the Borrower, as the borrower, and the
Lender, as the lender, the Lender agreed to make to the Borrower an unsecured
recourse revolving line of credit loan in the aggregate principal amount of up
to Fifteen Million and 00/100 ($15,000,000.00) Dollars for the purposes of (i)
refinancing existing indebtedness of the Borrower and its "Subsidiaries" and
"Affiliates" (as such terms are defined in the Loan Agreement) and (ii)
financing a portion of the Borrower's working capital and standby letters of
credit requirements (hereinafter referred to as the "Revolving Credit
Facility"), subject to the terms and conditions of the Loan Agreement; and
WHEREAS, on May 31,1996, the Borrower, as the maker, executed and
delivered to the Lender, as the payee, a certain Revolving Line of Credit Note
dated May 31, 1996 (hereinafter
3
referred to as the "Note"), in the original aggregate principal amount of Seven
Million Five Hundred Thousand and 00/100 ($7,500,000.00) Dollars, which Note
evidenced the "Revolving Credit Loan Sublimit" (as such term is defined in the
Loan Agreement); and
WHEREAS, on May 31, 1996 pursuant to a certain Agreement of Guaranty dated
May 31, 1996 (hereinafter referred to as the "Agreement of Guaranty"), executed
by and between the Original Guarantors, on a joint and several basis, the
Original Guarantors unconditionally agreed to guaranty the "Liabilities of the
Borrower" (as such term is defined in the Agreement of Guaranty); and
WHEREAS, pursuant to a certain First Allonge to Revolving Line of Credit
Note dated as of even date herewith (hereinafter referred to as the "First
Allonge"), executed by and between the Borrower, as the maker, and the Lender,
as the payee, the parties agreed to amend and modify the Note for the purpose of
increasing the principal amount of the Note from the existing principal amount
of "$7,500,000.00" to a new increased principal amount of "$10,000,000.00"; and
WHEREAS, the Loan Agreement, the Note, the Agreement of Guaranty, the
First Allonge, this First Amendment and any and all other documents, agreements,
instruments or certificates executed in connection with the Loan shall
hereinafter collectively be referred to as the "Loan Documents"; and
WHEREAS, Ahead Wisconsin Acquisition Corporation was formed on May 9,
1996; and
WHEREAS, Pacific Technologies, Inc. was formed on August 8, 1996; and
WHEREAS, Nortronics Acquisition Corporation was formed on September 5,
1996; and
WHEREAS, all words, terms, definitions and provisions not otherwise
defined herein shall have their respective meanings and be construed as provided
for in the Loan Agreement. All words, terms definitions and provisions of the
Loan Agreement are incorporated herein by reference, as if set forth in their
entirety; and
4
WHEREAS, the Borrower, the Guarantors and the Lender now desire to amend
and modify the Loan Agreement, the Agreement of Guaranty and the other Loan
Documents for the purposes of (i) in Article I, Section 1.01 of the Loan
Agreement, amending and modifying the definition of "Corporate Guarantors" to
provide for Ahead Wisconsin Acquisition Corporation, Nortronics Acquisition
Corporation and Pacific Technologies, Inc. to be added as guarantors; (ii) in
Article I, Section 1.01 of the Loan Agreement, amending and modifying the
definition of "Maximum Amount of Revolving Credit Loans" by deleting the
existing principal amount of "$7,500,000.00" and inserting a new increased
principal amount of "$10,000,00.00" in its place and stead; (iii) in Article I,
Section 1.01 of the Loan Agreement, amending and modifying the amount of the
Revolving Credit Loan Sublimit from the existing principal amount of
"$7,500,000.00" to a new increased principal amount of "$10,000,000.00"; (iv) in
Article I, Section 1.01 of the Loan Agreement, providing for a new definition of
"Consolidated Cash Flow Leverage Ratio" (as such term is defined herein); (v) in
Article I, Section 1.01 of Loan Agreement, providing for a new definition of
"Consolidated EBITDA" (as such term is defined herein); (vi) in Article I,
Section 1.01 of the Loan Agreement, providing for a new definition of
"Consolidated Senior Bank Debt" (as such term is defined herein); (vii) in
Article II, Section 2.01(vi)(a), deleting the reference to the existing
principal amount of "$7,500,000.00" and inserting a new increased principal
amount of "$10,000,000.00" in its place and stead; (viii) in Article IV, Section
4.01 (iii), of the Loan Agreement, amending and modifying the number of
Subsidiaries of the Borrower from the existing number of "eight (8)" to a new
increased number of "eleven (11)";(ix) in Article VI, Section 6.12 of the Loan
Agreement, providing for a form of additional Agreement of Guaranty which is to
be signed by all new guarantors, which form shall be as set forth in the Exhibit
"A" attached to this First Amendment, and which form shall be a new Exhibit "H"
to be attached to the Loan Agreement, (x) in Article VII, Section 7.01(vi) of
the Loan Agreement, adding the words "created or" immediately before the words
"acquired by" in the second line of said paragraph; (xi) in Article VIII of the
Loan Agreement, providing for a new Section 8.04 which provides for a
Consolidated Cash Flow Leverage Ratio; (ixii) in Exhibit "F" of the Loan
Agreement deleting the existing Exhibit "F-1" and providing for a new Exhibit
"F-1" in the form attached hereto, and (x; (xiii) in the Agreement of Guaranty,
providing for a new Paragraph 28 which provides for the addition from time to
time of future guarantors without affecting the liabilities of the existing
Guarantors; and (xiv) in the Loan Documents, providing that any and all
references to the "Corporate Guarantors" and/or the "Guarantors" shall be deemed
to include a reference to Ahead Wisconsin Acquisition Corporation, Nortronics
Acquisition Corporation and Pacific Technologies, Inc. as new guarantors.
NOW, THEREFORE, intending to be legally bound hereby, the Borrower, the
Guarantors and the Lender hereby promise, covenant and agree as follows:
1. Principal Balance of the Revolving Credit Facility. There was, as of
October 31, 1996, presently due and owing on the Revolving Credit Facility, the
principal sum of $7,646,662.14 without offset, defense or counterclaim, all of
which are hereby expressly waived by the Borrower and the Guarantors as of the
date hereof. The foregoing principal balance is allocated as follows: (i)
$6,133,762.14 for Revolving Credit Loans; and (ii) $1,512,900.00 for Letter of
Credit Obligations.
5
2. Loan Agreement. The Loan Agreement is hereby amended and modified as
follows:
(i) Article I, Section 1.01 is hereby amended and modified as
follows:
(a) The definition of "Corporate Guarantors" shall be amended
and modified by deleting the existing clause (ix) and inserting the following
new clauses (ix) and (x, (x), (xi) and (xii) in its place and stead:
"(ix) Ahead Wisconsin Acquisition Corporation (also
doing business as DRS Vikron Technology), a corporation
duly organized, validly existing and in good standing
under the laws of the State of Delaware, having its
principal office located at 0000 Xxxxxxx Xxxxx Xxxxx,
Xxxxx Xxxxx, Xxxxxxxxxx 00000; (x) Nortronics
Acquisition Corporation (also doing business as
Nortronics, Inc.) a corporation duly organized, validly
existing and in good standing under the laws of the
State of Delaware, having its principal office located
at 000 Xxxxx Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxx 00000; (xi)
Pacific Technologies, Inc., a corporation duly
organized, validly existing and in good standing under
the laws of the State of Delaware, having its principal
office located at 0000 Xxxxxx Xxx Xxx, Xxxxx 000, Xxx
Xxxxx, Xxxxxxxxxx 00000; and (xii) any new or additional
Subsidiaries of the Borrower which are purchased,
acquired or created during the term of the Revolving
Credit Facility."
(b) The definition of "Maximum Amount of Revolving Credit
Loans" shall be amended and modified by deleting the existing principal amount
of "$7,500,000.00" and inserting a new increased principal amount of
"$10,000,000.00" in its place and stead.
(c) The definition of "Revolving Credit Loan Sublimit" shall
be amended and modified by deleting the existing principal amount of
"$7,500,000.00" and inserting a new increased principal amount of
"$10,000,000.00."
(d) The following new definitions shall be inserted:
"Consolidated Cash Flow Leverage Ratio" shall mean as
at any date of determination, the ratio of (i) the sum
of (a) Consolidated Senior Bank Debt plus (b)
Consolidated Subordinated Debt plus (c) issued and
outstanding letters of credit -to- (ii) Consolidated
EBITDA."
"Consolidated EBITDA" shall mean, with respect to the
Borrower, its Subsidiaries and/or its Affiliates as at
any date of determination for the period of four (4)
consecutive Fiscal Quarters immediately preceding said
date of determination taken together as
6
one accounting period, the amount equal to the sum of
(i) the Consoldiidated Net Income for such test period
plus (ii) all interest expense on all Consolidated Debt
for such test period plus (iii) all charges against
income of the Borrower, its Subsidiaries and/or its
Affiliates for federal, state and local taxes for such
test period plus (iv) all depreciation expense for such
test period plus (v) all amortization expense for such
test period plus (vi) all other non-cash charges for
such test period, after eliminating therefrom any (a)
extraordinary items, (b) gains and losses from the sale
of assets in connection with any sale/leaseback
transaction or arrangement and (c) results of
discontinued operations, all as determined in accordance
with Generally Accepted Accounting Principles."
"Consolidated Senior Bank Debt" shall mean as at any
date of determination, all Consolidated Debt which is
due and owing to the Lender, any other financial
institutions or any other Person, excluding, however,
(i) Consolidated Subordinated Debt", (ii) trade and
account payables, (iii) all current obligations in
respect of any unfunded vested benefit under any Plan
covered by Title IV of ERISA and (iv) all guaranties,
endorsements and other contingent obligations to
purchase, to provide funds for payments, to supply funds
to invest in the Borrower, its Subsidiaries and/or its
Affiliates or otherwise to assure a creditor against
loss (including endorsements of negotiable instruments
for deposit or collection in the ordinary course of
business).
"First Allonge" shall mean that certain First Allonge
to Revolving Line of Credit Loan Note, dated as of
December 6, 1996, executed by and between the Borrower
and the Lender for the purpose of amending and modifying
the Revolving Credit Note to increase the aggregate
principal amount thereof from $7,500,000.00 to
$10,000,000.00"
"First Amendment" shall mean that certain First
Modification and Amendment Agreement, dated as of
December 6, 1996, executed by and among the Borrower,
the Lender, the Partnership Guarantors and the Corporate
Guarantors for the purpose of amending and modifying
this Loan Agreement."
(ii) Article II, Section 2.01(vi)(a) is hereby amended and modified
by deleting any and all references to the existing principal amount of
"$7,500,000.00" and inserting the new increased principal amount of
"$10,000,000,.00" in its place and stead.
7
(iii) Article IV, Section 4.01, Subsection (iii) is hereby amended
and modified by deleting any and all references to the existing number of
Subsidiaries of the Borrower as being "eight (8)" and inserting a new increased
number of "eleven (11)" in its place and stead.
(iv) Article VI, Section 6.12 is hereby amended and modified by
adding the following additional language at the end of the paragraph: ", which
execution shall be accomplished by the signing of the form of Agreement of
Guaranty which is attached to the First Amendment as Exhibit "A".
(v) Article VII, Section 7.01(vi) of the Loan Agreement is hereby
amended and modified by adding the words "created or" immediately before the
words "acquired by" in the second line of said paragraph.
(vi) Article VIII is hereby amended and modified by inserting the
following new Section 8.04:
"Section 8.04 Maximum Consolidated Cash Flow Leverage
Ratio. The Borrower shall have on the last day of each
Fiscal Quarter and each Fiscal Year (which covenant
shall be tested at the end of the periods covered by the
quarterly and annual consolidated and consolidating
financial statements which are to be provided to the
Lender pursuant to Section 5.02 of the Loan Agreement) a
Consolidated Cash Flow Leverage Ratio equal to or less
than 3.5 to 1.0."
(vii) Exhibit "F" is hereby amended and modified by deleting the
existing Exhibit "F-1" and inserting the new Exhibit "F-1" attached hereto and
made a part hereof, in its place and stead.
3. Agreement of Guaranty. The Agreement of Guaranty is hereby amended and
modified as follows:
(i) The following new Paragraph 28 shall be inserted:
"28. The Guarantors hereby acknowledge and agree that in
accordance with and as provided for in Article VI,
Section 6.12 of the Loan Agreement additional guarantors
will agree to guaranty, on a joint and several basis,
with the Guarantors, all of the Liabilities of the
Borrower. The Guarantors hereby confirm and reaffirm
that the addition hereinafter from time to time of any
new guarantor(s) shall not affect the enforceability and
validity of this Agreement of Guaranty, as amended and
modified against the Guarantors. This Agreement of
Guaranty, as amended and modified, shall remain in full
force and effect and binding against the Guarantors as a
continuing guaranty of the Liabilities of the Borrower
subject to the termination provisions therein, without
any
8
additional act(s) or documentation by the Guarantors at
the time of the addition of said new guarantor(s)."
(ii) Any and all references to the "Corporate Guarantors" and/or the
"Guarantors" shall be deemed to include a reference to Ahead Wisconsin
Acquisition Corporation, as a new guarantoration Nortronics Acquisition
Corporation and Pacific Technologies, Inc. as new guarantors.
4. Loan Documents. The Loan Documents are hereby amended and modified
as follows:
Any and all references to the "Corporate Guarantors" and/or
the "Guarantors" shall be deemed to include a reference to Ahead Wisconsin
Acquisition Corporation as a new guarantor, Nortronics Acquisition Corporation
and Pacific Technologies, Inc. as new guarantors.
5. Further Agreements and Representations. The Borrower and the
Guarantors do hereby:
(i) ratify, confirm and acknowledge that, as amended and modified,
the Loan Agreement, the Note, the Agreement of Guaranty and all other Loan
Documents continue to be valid, binding and in full force and effect;
(ii) covenant and agree to perform all of their respective
obligations contained herein and under the Loan Agreement, the Note, the
Agreement of Guaranty and all other Loan Documents, as amended and modified;
(iii) acknowledge and agree that as of the date hereof, the Borrower
and the Guarantors have no defense, set-off, counterclaim or challenge against
the payment of any sums due and owing to the Lender or the enforcement of any of
the terms of the Loan Agreement, Note, the Agreement of Guaranty and/or the
other Loan Documents, all as amended and modified;
(iv) acknowledge and agree that, except as previously disclosed by
the Borrower and/or the Guarantors to the Lender, all representations and
warranties of the Borrower and/or the Guarantors contained in the Loan
Agreement, the Note, the Agreement of Guaranty and/or the other Loan Documents,
are true, accurate and correct in all material respects as of the date hereof as
if made on and as of the date hereof;
(v) represent and warrant that, after giving effect to the
transactions contemplated by this First Amendment, no "Event of Default" (as
such term is defined in the Loan Agreement), exists or will exist upon the
delivery of notice, passage of time, or both, and all information described in
the recitals is true and accurate;
9
(vi) acknowledge and agree that nothing contained herein and no
actions taken pursuant to the terms hereof are intended to constitute a novation
of the Note, and the Revolving Credit Facility, or any waiver of the other Loan
Documents, and do not constitute a release, termination or waiver of any of the
rights and/or remedies granted to the Lender under the Loan Documents, all of
which rights and/or remedies are hereby ratified and confirmed; and
(vii) acknowledge and agree that the failure by the Borrower and/or
the Guarantors to comply with or perform any of their respective covenants,
agreements or obligations contained herein shall constitute an Event of Default
under the Loan Agreement and each of the Loan Documents, as amended and
modified.
6. Additional Documents; Further Assurances. The Borrower and the
Guarantors further covenant and agree to execute and deliver to the Lender or to
use their respective reasonable efforts to cause to be executed and delivered to
the Lender at the sole cost and expense of the Borrower and/or the Guarantors,
from time to time, any and all other documents, agreements, statements,
certificates and information as the Lender shall reasonably request to evidence
or effect the terms of this First Amendment.
7. Fees, Costs, Expenses and Expenditures. The Borrower shall pay all of
the Lender's reasonable expenses in connection with the review, preparation,
negotiation, documentation and closing of this First Amendment and the
consummation of the transactions contemplated hereunder, including, without
limitation, fees, expenses and disbursements of legal counsel retained by the
Lender and all fees related to filings, recordings of documents and searches,
whether or not the transactions contemplated hereunder are consummated.
8. No Waiver. Nothing contained herein constitutes an agreement or
obligation by the Lender to grant any further amendments to any of the Loan
Documents and nothing contained herein constitutes a waiver or release by the
Lender of any rights or remedies available to the Lender under the Loan
Documents, at law or in equity, provided that the foregoing is not intended to
revoke the Lender's previous consent to the requested actions by the Borrower
and/or the Guarantors where such consent was delivered by the Lender in writing.
9. Additional Guarantor. Ahead Wisconsin Acquisition Corporation,
Nortronics Acquisition Corporation and Pacific Technologies, Inc. hereby agrees
to guaranty, on a joint and several basis with the Original Guarantors, the
"Liabilities of the Borrower" (as such term is defined in the Agreement of
Guaranty) pursuant to the terms and conditions of the Agreement of Guaranty, as
amended and modified. The Original Guarantors hereby expressly confirm and
reaffirm that the addition of Ahead Wisconsin Acquisition Corporation,
Nortronics Acquisition Corporation and Pacific Technologies, Inc. does not
affect the enforceability and validity of the Agreement of Guaranty, as amended
and modified with respect to the Original Guarantors, and the Agreement of
Guaranty, as amended and modified remains in full force and effect and binding
against the Original Guarantors as a continuing guaranty of the "Liabilities of
the Borrower" (as such term is defined in the Agreement of Guaranty).
10
10. Inconsistencies. To the extent of any inconsistency between the terms
and conditions of this First Amendment and the terms and conditions of the Loan
Agreement or the Loan Documents, the terms and conditions of this First
Amendment shall prevail. All terms and conditions of the Loan Agreement and the
Loan Documents not inconsistent herewith shall remain in full force and effect
and are hereby ratified and confirmed by the Borrower and/or the Guarantors.
11. Construction. Any capitalized terms used in this First Amendment not
otherwise defined shall have the meaning as set forth in the Loan Agreement. All
references to the Loan Agreement therein or in any of the other Loan Documents
shall be deemed to be a reference to the Loan Agreement, as amended and modified
hereby.
12. Binding Effect. This First Amendment shall be binding upon and inure
to the benefit of the parties hereto and their successors and assigns.
13. Counterparts. This First Amendment may be executed by one or more of
the parties to this First Amendment on any number of separate counterparts and
all of said counterparts taken together shall be deemed to constitute one and
the same instrument.
11
IN WITNESS WHEREOF, the Borrower, the Guarantors and the Lender have
caused this First Amendment to be executed and delivered by their duly
authorized corporate officers, all as of the day and year first written above.
[SEAL] DIAGNOSTIC/RETRIEVAL SYSTEMS, INC.,
ATTEST: a Delaware corporation, as the Borrower
/s/ XXXXX X. XXXXX By: /s/ XXXX X. XXXXXX
------------------- -------------------------
Xxxxx X. Xxxxx Xxxx X. Xxxxxx
Secretary President & CEO
WITNESS: LAUREL TECHNOLOGIES PARTNERSHIP
T/A LAUREL TECHNOLOGIES,
a Delaware general partnership, as a Guarantor
[SEAL] BY: DRS SYSTEMS MANAGEMENT CORPORATION,
ATTEST: as the General Partner
/s/ XXXXX X. XXXXX By: /s/ XXXX X. XXXXXX
------------------- -------------------------
Xxxxx X. Xxxxx Xxxx X. Xxxxxx
Secretary President
WITNESS: DRS MEDICAL SYSTEMS, a New Jersey
general partnership, as a Guarantor
[SEAL] BY: DRS/MS, INC., as the General Partner
ATTEST:
/s/ XXXXX X. XXXXX By: /s/ XXXX X. XXXXXX
------------------- -------------------------
Xxxxx X. Xxxxx Xxxx X. Xxxxxx
Secretary President
12
[SEAL] TECHNOLOGY APPLICATIONS &
ATTEST: SERVICE COMPANY, a Delaware corporation,
as a Guarantor
/s/ XXXXXXXX X. XXXXXX By: /s/ XXXX X. XXXXXX, XX.
---------------------- -------------------------
Xxxxxxxx X. XxXxxx Xxxx X. Xxxxxx, Xx.
Secretary President
[SEAL] PHOTRONICS CORP., a New York corporation,
ATTEST: as a Guarantor
/s/ XXXXX XXXXXXX By: /s/ XXXXXXX XXXX
------------------- -------------------------
Xxxxx Xxxxxxx Xxxxxxx Xxxx
Secretary President
[SEAL] PRECISION ECHO, INC., a Delaware
ATTEST: corporation, as a Guarantor
/s/ XXXXX XXXXXXX By: /s/ XXXXXX X. XXXXX
------------------- -------------------------
Xxxxx Xxxxxxx Xxxxxx X. Xxxxx
Secretary President
[SEAL] AHEAD TECHNOLOGY, INC.
ATTEST: a Delaware corporation, as a Guarantor
/s/ XXXXX XXXXXXX By: /s/ XXXXXX XXXXXXXX
------------------- -------------------------
Xxxxx Xxxxxxx Xxxxxx Xxxxxxxx
Secretary President
13
[SEAL] OMI ACQUISITION CORP. (ALSO DOING
ATTEST: BUSINESS AS OMI CORP.), a Delaware
corporation, as a Guarantor
/s/ XXXXXX XXXXX By: /s/ XXXXXXX XXXX
------------------- -------------------------
Xxxxxx Xxxxx Xxxxxxx Xxxx
Secretary President
[SEAL] DRS SYSTEMS MANAGEMENT
ATTEST: CORPORATION, a Delaware corporation,
as a Guarantor
/s/ XXXXX X. XXXXX By: /s/ XXXX X. XXXXXX
------------------- -------------------------
Xxxxx X. Xxxxx Xxxx X. Xxxxxx
Secretary President
[SEAL] AHEAD TECHNOLOGY ACQUISITION
ATTEST: CORPORATION (ALSO DOING BUSINESS AS
MEC TECHNOLOGY), a Delaware corporation,
as a Guarantor
/s/ XXXXX XXXXXXX By: /s/ XXXXXX X. XXXXX
------------------- -------------------------
Xxxxx Xxxxxxx Xxxxxx X. Xxxxx
Secretary President
[SEAL] DRS/MS, INC., a Delaware corporation,
ATTEST: as a Guarantor
/s/ XXXXX X. XXXXX By: /s/ XXXX X. XXXXXX
------------------- -------------------------
Xxxxx X. Xxxxx Xxxx X. Xxxxxx
Secretary President
14
[SEAL] AHEAD WISCONSIN ACQUISITION
ATTEST: CORPORATION (ALSO DOING BUSINESS AS
VIKRON TECHNOLOGY),
a Delaware corporation, as a Guarantor
/s/ XXXXX XXXXXXX By: /s/ XXXXXX X. XXXX
------------------- -------------------------
Xxxxx Xxxxxxx Xxxxxx X. Xxxx
Secretary President
[SEAL] NORTRONICS ACQUISITION CORPORATION
ATTEST: (ALSO D/B/A/ NORTRONICS, INC.),
a Delaware corporation, as a Guarantor
/s/ XXXXX XXXXXXX By: /s/ XXXXXX X. XXXXX
------------------- -------------------------
Xxxxx Xxxxxxx Xxxxxx X. Xxxxx
Secretary President
[SEAL] PACIFIC TECHNOLOGIES, INC.,
ATTEST: a Delaware corporation, as a Guarantor
/s/ XXXXXXXX X. XXXXXX By: /s/ XXXX X. XXXXXX, XX.
---------------------- -------------------------
Xxxxxxxx X. XxXxxx Xxxx X. Xxxxxx, Xx.
Secretary President
MELLON BANK, N.A.,
as the Lender
By: /s/ G. XXXXXXX XXXXXXXX
-------------------------
G. Xxxxxxx Xxxxxxxx
Senior Vice President
15
EXHIBIT "A"
ATTACHED TO AND MADE A PART OF THAT CERTAIN FIRST AMENDMENT
AND MODIFICATION AGREEMENT EXECUTED BY AND BETWEEN,
AMONGST OTHERS, DIAGNOSTIC/RETRIEVAL SYSTEMS, INC., AS
THE BORROWER, AND MELLON BANK, N.A., AS THE LENDER
DATED AS OF DECEMBER 6, 1996
AGREEMENT OF GUARANTY
THIS AGREEMENT OF GUARANTY (including all amendments, modifications
and supplements is hereinafter referred to as the "Agreement of Guaranty"), made
this ______ day of __________, 19____ by
___________________________________________________________________
_________, a [GENERAL PARTNERSHIP] [LIMITED PARTNERSHIP] [OTHER] duly organized,
validly existing and in good standing under the laws of the State of __________
_____________________, having its principal office located at _________________
__________________________________ (hereinafter referred to as the "Guarantor")
IN FAVOR OF
MELLON BANK, N.A., a national banking association duly organized and
validly existing under the laws of the United States of America, having an
office located at Mellon Bank Center, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx,
Xxxxxxxxxxxx 00000 (hereinafter referred to as the "Lender").
W I T N E S S E T H:
WHEREAS, pursuant to a certain Revolving Line of Credit Loan
Agreement dated May 31, 1996, executed by and between Diagnostic/Retrieval
Systems, Inc., a Delaware corporation (hereinafter referred to as the
"Borrower"), as the borrower, and the Lender, as the lender (hereinafter said
Revolving Line of Credit Loan Agreement, as it may be amended, modified,
extended, renewed and/or supplemented shall be referred to as the "Original Loan
Agreement"), the Lender agreed to make to the Borrower an unsecured recourse
revolving line of credit loan in the aggregate principal amount of up to Fifteen
Million and 00/100 ($15,000,000.00) Dollars for the purpose of financing a
portion of the Borrower's working capital and standby letters of credit
requirements (hereinafter referred to as the "Loan"), which "Revolving Credit
Sublimit" (as such term is defined in the Original Loan Agreement) is evidenced
by a certain Revolving Line of Credit Loan Note dated May 31, 1996, in the
aggregate principal amount of the Loan (hereinafter said Revolving Line of
Credit Note, as it may be
1
amended, modified, extended, renewed and/or supplemented shall be referred to as
the "Original Note"); and
WHEREAS, pursuant to a certain First Amendment and Modification
Agreement dated as of December 6, 1996, executed by and between, amongst others,
the Borrower, as the borrower, and the Lender, as the lender, agreed to amend
and modify the Original Loan Agreement and the other Loan Documents for the
purposes of, amongst other things, increasing the Revolving Credit Sublimit from
the existing principal amount of "$7,500,000.00" to a new increased principal
amount of "$10,000,000.00" (hereinafter referred to as the "First Amendment" and
hereinafter the First Amendment and the Original Loan Agreement shall
collectively be referred to as the "Loan Agreement"); and
WHEREAS, pursuant to a certain First Allonge to Revolving Credit
Note dated as of December 6, 1996, executed by and between the Borrower, as the
maker, and the Lender, as the payee, the parties agreed to amend and modify the
Original Note for the purpose of increasing the principal amount of the Note
from the existing principal amount of "$7,500,000.00" to a new increased
principal amount of "$10,000,000.00" (hereinafter referred to as the "First
Allonge" and hereinafter the First Allonge and the Original Note shall
collectively be referred to as the "Note"); and
WHEREAS, the Guarantor is [A SUBSIDIARY] [AN AFFILIATE] of the
Borrower and therefore the Guarantor has a common ownership interest with the
Borrower; and
WHEREAS, all words and terms not defined herein shall have the
respective meanings and be construed herein as provided for in the Note and the
Loan Agreement; and
WHEREAS, as an inducement to the Lender to make the Loan to the
Borrower, the Lender has required that the Guarantor, which Guarantor is
affiliated with the Borrower and thus will directly or indirectly benefit from
the Loan, personally and unconditionally enter into and execute this Agreement
of Guaranty, hereby guarantying the full, prompt and unconditional payment when
due of any "Liabilities of the Borrower" (as said term is defined in Paragraph 1
hereof) due and owing to the Lender in connection with the Loan, and the full
and complete performance of all other obligations of the Borrower with respect
to the Loan.
NOW, THEREFORE, IN CONSIDERATION OF THE LOAN MADE TO THE BORROWER
AND WITH KNOWLEDGE THAT THE LENDER WOULD NOT MAKE THE LOAN BUT FOR THE PROMISES
OF THE GUARANTOR HEREUNDER, THE GUARANTOR HEREBY ABSOLUTELY AND UNCONDITIONALLY,
REPRESENTS, WARRANTS AND COVENANTS AS FOLLOWS:
1. The Guarantor hereby irrevocably guaranties, on a joint and
several basis with all other existing and all future guarantors that now or
hereafter have or may enter into
2
guaranties of the Loan with the Lender, the full, prompt and unconditional
payment when due, of each and every Liability of the Borrower owing to the
Lender, when and as the same shall become due, whether at the stated maturity
date, by acceleration or otherwise, and the full, prompt, and unconditional
performance of each and every term and condition of any transaction to be kept
and performed by the Borrower under the Note and under the Loan Agreement. This
Agreement of Guaranty is a primary obligation of the Guarantor and shall be a
continuing inexhaustible Agreement of Guaranty. In the event any of the
Liabilities of the Borrower shall not be paid according to their terms, then,
upon the written request of the Lender, the Guarantor shall immediately pay the
same, this Agreement of Guaranty being a guaranty of full payment and not
collectibility.
The term "Liability of the Borrower" or "Liabilities of the
Borrower" shall include all liabilities of the Borrower owed to the Lender in
connection with the Loan, whether direct or indirect, absolute or contingent,
joint or several, now or hereafter existing, due or to become due, to, and all
liabilities of any successor of the Borrower owed to the Lender in connection
with the Loan, whether direct or indirect, absolute or contingent, joint or
several, now or hereafter existing, due or to become due, to, or held by, the
Lender.
2. The Guarantor represents and warrants that the representations
and warranties set forth in Article IV of the Loan Agreement, with respect to
the Guarantor are true, correct and complete, and the Guarantor hereby expressly
confirms and affirms each representation and warranty concerning itself, as set
forth in Article IV, Section 4.01 and 4.02 of the Loan Agreement, as if restated
in full herein.
* CHOOSE THE CORRECT P. #3 BELOW AND DELETE THE OTHER CHOICE
[3. (i) The Guarantor represents and warrants that (a) it is a
corporation duly organized, validly existing and in good standing under the laws
of the State of its incorporation, (b) is duly qualified to conduct business as
a foreign corporation and in good standing under the laws of each jurisdiction
in which it owns or leases real property or in which the nature of its business
requires it to be so qualified and (c) it has all requisite power and authority
to own, operate and encumber its properties and assets and conduct its business
as presently conducted or proposed to be conducted in connection with and
following the consummation of the transactions contemplated by this Agreement of
Guaranty.
(ii)(a) The Guarantor has the requisite corporate authority (1) to
execute, deliver and perform this Agreement of Guaranty and (2) to file any
documents required to be filed by it, if any, under this Agreement of Guaranty
with the appropriate Governmental Authority.
(b) The execution, delivery and performance under (or filing as the
case may be) of this Agreement of Guaranty and any other Loan Document to which
it is a party and the consummation of the transactions contemplated herein, have
been duly authorized by the Board
3
of Directors of the Guarantor and no further corporate proceedings on the part
of the Corporate Guarantor are necessary to consummate such transactions.
(c) This Agreement of Guaranty has been duly executed and delivered
by the Guarantor and constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms.]
[3. (i) The Guarantor represents and warrants that (a) it is a
[general] [limited] partnership duly organized, validly existing and in good
standing under the laws of the State of its formation, (b) is duly qualified to
do business and in good standing under the laws of each jurisdiction in which it
owns or leases real property or in which the nature of its business requires it
to be so qualified and (c) it has all requisite power and authority to own,
operate and encumber its properties and assets and to conduct its business as
presently conducted or proposed to be conducted in connection with and following
the consummation of the transactions contemplated by this Agreement of Guaranty.
(ii)(a) The Guarantor has the requisite partnership authority (1) to
execute, deliver and perform this Agreement of Guaranty and (2) to file any
documents required to be filed by it, if any, under this Agreement of Guaranty
with the appropriate Governmental Authority.
(b) The execution, delivery and performance under (or filing as the
case may be) of this Agreement of Guaranty and any other Loan Document to which
it is a party and the consummation of the transactions contemplated herein, have
been duly authorized in accordance with the partnership agreement of the
Guarantor and no further proceedings on the part of the Guarantor are necessary
to consummate such transactions.
(c) This Agreement of Guaranty has been duly executed and delivered
by the Guarantor and constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms.]
4. The Guarantor represents and warrants that (i) the assumption by
it of its obligations hereunder will result in material benefits to it and (ii)
this Agreement of Guaranty when executed and delivered by it will constitute a
legal, valid and binding obligation on its part, enforceable against it in
accordance with its terms, subject, as to enforcement of remedies only, to any
applicable bankruptcy, insolvency, reorganization, moratorium, similar laws of
general application at the time in effect and general principles of equity.
5. The Guarantor waives notice of acceptance of this Agreement of
Guaranty and notice of any Liability of the Borrower to which it may apply, and
waives notice of default, non-payment, partial payment, presentment, demand,
protest, notice of protest or dishonor and all
4
other notices to which Guarantor might otherwise be entitled, or which might be
required by law and required to be given by the Lender.
6. The Guarantor's liability hereunder shall be in no way affected,
diminished or released by (i) any amendment, change or modification of the
provisions of the Note, the Loan Agreement or any other Loan Document made to or
with the Lender by the Borrower, (ii) any extensions of time for performance
required thereby, (iii) the release of the Borrower from performance or
observation of any of the agreements, covenants, terms or conditions contained
in any of said instruments by the Lender or by operation of law, whether made
with or without notice to the Guarantor, (iv) acceptance by the Lender of
additional security or any increase, substitution or changes therein or (v) the
release by the Lender of any security or any withdrawal thereof or decrease
therein.
7. Without incurring responsibility to the Guarantor and without
impairing or releasing the obligations of the Guarantor hereunder, the Lender
may at any time and from time to time without the consent of, or notice to the
Guarantor, upon any terms or conditions and in whole or in part:
(i) change the manner, place or terms of payment and/or change
or extend the time for payment or renew or alter, any Liability of the Borrower
or any security therefor, and the guaranty herein made shall apply to the
Liabilities of the Borrower as so changed, extended, renewed or altered;
(ii) sell, exchange, release, surrender, realize upon or
otherwise deal with in any manner and in any order any property by whomsoever at
any time pledged, mortgaged or in which a security interest is given to secure,
or howsoever securing, the Liabilities of the Borrower;
(iii) exercise or refrain from exercising any rights against
the Borrower or others (including the Guarantor) or against the security, or
otherwise act or refrain from acting;
(iv) settle or compromise any Liability of the Borrower,
dispose of any security therefor, with or without consideration, or any
liability incurred directly or indirectly in respect thereof or hereof, and may
subordinate the payment of all or any part thereof to the payment of any
Liability of the Borrower (whether due or not) to creditors of the Borrower
other than the Lender and the Guarantor; and
(v) apply any sums by whomsoever paid or howsoever realized
to any Liability of the Borrower.
8. No invalidity, irregularity or unenforceability of all or any
part of any Liability of the Borrower or the impairment or loss of any security
therefor, that is not caused by
5
any actions or inactions of the Lender, shall affect, impair or be a defense to
this Agreement of Guaranty. The lack of enforceability of this Agreement of
Guaranty against the Guarantor shall not relieve the Guarantor of its
obligations hereunder.
9. Upon the occurrence of an "Event of Default" as such term is
defined in the Loan Agreement, the Lender shall be immediately entitled (i) to
enforce the obligation of the Guarantor hereunder and (ii) to set-off any money
owed by the Lender in any capacity to the Guarantor or any property of the
Guarantor in the possession of the Lender against any of the monetary
obligations of the Guarantor to the Lender under this Agreement of Guaranty,
without first giving prior notice to the Guarantor (any such notice being
expressly waived by the Guarantor; however, the Lender shall give the Guarantor
notice within three (3) days after the Lender has set off any amounts), and the
Lender shall be deemed to have exercised such right of set-off and to have made
a charge against any such money or property immediately upon the occurrence of
such Event of Default, even through the actual book entries may be made at some
time subsequent thereof. Upon any default by the Guarantor with respect to any
of its covenants and agreements under this Agreement of Guaranty, the Lender may
(but shall not be so obligated), without waiving or releasing the Guarantor from
any of its obligations hereunder, and without prejudice to any other right or
remedy of the Lender hereunder, whether or not expressly set forth herein,
perform such covenant or agreement in respect of which there shall be a default
hereunder and in that regard pay such money as may be required or as the Lender
may reasonably deem expedient. Any such monies paid by the Lender as aforesaid,
together with interest thereon at the rate then applicable (or which would then
have been applicable) under the Note and/or the Loan Agreement shall be
obligations of the Borrower under the Note and/or the Loan Agreement which shall
be due and payable by the Guarantor to the Lender for the account of the
Borrower on demand.
l0. The Guarantor hereby waives any right or claim of right to cause
a marshaling of the Borrower's assets or to cause the Lender to proceed against
any of the security or collateral held by the Lender before proceeding against
the Guarantor, and the Guarantor hereby waives any and all legal requirement
that the Lender shall institute any action at law or in equity against the
Borrower, or anyone else, with respect to the Note, the Loan Agreement or with
respect to any other Loan Documents or with respect to any security held by the
Lender, as a condition precedent to bringing any action against the Guarantor
upon this Agreement of Guaranty.
11. The Guarantor hereby irrevocably and unconditionally waives and
relinquishes any and all statutory, contractual, common law, equitable or other
claims and rights (i) to seek reimbursement, contribution, indemnification,
set-off or other recourse from or against the Borrower in connection with any
payments made by the Guarantor under this Agreement of Guaranty and (ii) to be
subrogated to the Lender's rights under the Loan Documents upon the Guarantor's
performance under this Agreement of Guaranty.
6
12. Until termination, this Agreement of Guaranty is made and shall
continue as to any Liability of the Borrower to the Lender without regard to the
existence of other collateral or security or guaranties, if any, or to the
validity or effectiveness of any or all thereof; and any or all such collateral
and security and guaranties may, from time to time, without notice to or consent
of the Guarantor, be sold, released, surrendered, exchanged, settled,
compromised, waived, subordinated or modified, with or without consideration, on
such terms and conditions as may be acceptable to Lender without in any manner
affecting or impairing the liability of the Guarantor. The Guarantor's
obligations under this Agreement of Guaranty shall extend to any and all monies
advanced by the Lender pursuant to the Note and/or the Loan Agreement.
13. The Guarantor covenants and agrees that the covenants set forth
in Articles VI and VII of the Loan Agreement are true, correct and complete and
the Guarantor hereby expressly confirms and affirms each covenant in Article VI,
Sections 6.01 through 6.12 and Article VII, Sections 7.01 through 7.13 of the
Loan Agreement as if restated in full herein.
14. The Guarantor covenants and agrees that it shall indemnify,
protect, defend and hold harmless the Lender as well as the Lender's directors,
officers, employees, agents, attorneys and shareholders (hereinafter referred to
collectively as the "Indemnified Parties" and individually as an "Indemnified
Party") from and against any and all losses, damages, expenses or liabilities of
any kind or nature and from any suits, claims, or demands, including reasonable
counsel fees incurred in investigating or defending such claim, suffered by any
of them and caused by, relating to, arising out of, resulting from, or in any
way connected or in any manner relating to the conduct of the business of the
Borrower and/or the Guarantor or the use or intended use of the proceeds of the
Loans provided, however, the Guarantor shall not be obligated to indemnify,
protect, defend and save harmless an Indemnified Party, if the loss, damage,
expense or liability was caused by or resulted from said Indemnified Party's own
gross negligence or willful misconduct. In case any action shall be brought
against an Indemnified Party based upon any of the above and in respect to which
indemnity may be sought against the Guarantor, said Indemnified Party against
whom such action was brought, shall promptly notify the Guarantor in writing,
and the Guarantor shall assume the defense thereof, including the employment of
counsel selected by the Guarantor and reasonably satisfactory to said
Indemnified Party, the payment of all costs and expenses and the right to
negotiate and consent to any settlement. Upon reasonable determination made by
said Indemnified Party against whom such action was brought, said Indemnified
Party, shall have the right to employ separate counsel in any such action and to
participate in the defense thereof; provided, however, that said Indemnified
Party shall pay the costs and expenses incurred in connection with the
employment of separate counsel. The Guarantor shall not be liable for any
settlement of any such action effected without their consent, but if settled
with the Guarantor's consent, or if there is a final judgment for the claimant
in any such action, the Guarantor agrees to indemnify and save harmless said
Indemnified Party against whom such action was brought, from and against any
loss or liability by reason of such settlement or judgment. The provisions of
this Paragraph 14
7
shall survive the termination of the Loan and the repayment of the indebtedness
evidenced by the Note.
15. If claim is ever made upon the Lender for repayment or recovery
of any amount or amounts received by the Lender in payment for, or on account
of, any of the Liabilities of the Borrower, and the Lender repays all or part of
said amount by reason of (i) any judgment, decree or order of any court or
administrative body having jurisdiction over the Lender or any of its property
or (ii) any settlement or compromise of any such claim affected by the Lender
with any such claimant (including the Borrower), then, and in such event, the
Guarantor agrees that any such judgment, decree, order, settlement or compromise
shall be binding upon the Guarantor, notwithstanding the cancellation of any
note or any other instrument evidencing any Liability of the Borrower, and the
Guarantor shall be and remain liable to the Lender hereunder for the amount so
repaid or recovered to the same extent as if such amount had never originally
been received by the Lender.
16. Settlement of any claim by the Lender against the Borrower,
whether in any proceeding or not, and whether voluntary or involuntary, shall
not reduce the amount due under the terms of this Agreement of Guaranty except
to the extent of the amount paid by the Borrower in connection with the
settlement.
17. No delay on the part of the Lender in exercising any of its
rights, powers or privileges or partial or single exercise thereof under the
Note, this Agreement of Guaranty or any other document made to or with the
Lender by the Borrower shall operate as a waiver of any such privileges, powers
or rights. No waiver of any of its rights hereunder, and no modification or
amendment of this Agreement of Guaranty, shall be deemed to be made by the
Lender unless the same shall be in writing, duly signed on behalf of the Lender,
by a duly authorized officer, and each such waiver, if any, shall apply only
with respect to the specific instance involved, and shall in no way impair the
rights of the Lender or the obligations of the Guarantor to the Lender in any
other respect at any other time.
18. All rights, powers and remedies afforded to the Lender by reason
of this Agreement of Guaranty are separate and cumulative remedies and no one of
such remedies whether or not exercised by the Lender shall be deemed to exclude
any of the other remedies available to the Lender nor prejudice availability of
any other legal or equitable remedy which the Lender may have with respect to
the Loan.
19. This Agreement of Guaranty shall be governed by and construed
and interpreted in accordance with, the laws of the Commonwealth of Pennsylvania
and no defense given or allowed by the laws of any other state or country shall
be interposed in any action or proceeding hereon unless such defense is also
given or allowed by the laws of the Commonwealth of Pennsylvania. The Lender may
bring any action or proceeding to enforce or arising out of this Agreement of
Guaranty in any state or federal court of competent jurisdiction
8
in the Commonwealth of Pennsylvania. If the Lender commences such an action in a
court located in the Commonwealth of Pennsylvania, or any United States District
Court in Pennsylvania, the Guarantor hereby agrees that it will submit to the
personal jurisdiction of such courts and will not attempt to have such action
dismissed, abated or transferred on the ground of forum non conveniens, and in
furtherance of such agreement the Guarantor hereby agrees and consents that
without limiting other methods of obtaining jurisdiction, personal jurisdiction
over it in any such action or proceeding may be obtained within or without the
jurisdiction of any court located in Pennsylvania and that any process or notice
of motion or other application to any such court in connection with any such
action or proceeding may be served upon the Guarantor by registered mail to or
by personal service at the last known address of the Guarantor; provided,
however, that nothing contained herein shall prohibit the Guarantor from
seeking, by appropriate motion, to remove an action brought in Pennsylvania
state court to the United States District Court for the Eastern District of
Pennsylvania. If such action is so removed, however, the Guarantor shall not
seek to transfer such action to any other district, nor shall the Guarantor seek
to transfer to any other district any action which the Lender originally
commences in such federal court. Any action or proceeding brought by the
Guarantor arising out of this Agreement of Guaranty shall be brought solely in a
court of competent jurisdiction located in the Commonwealth of Pennsylvania, or
in a United States District Court for the Eastern District of Pennsylvania. The
Guarantor hereby waives any right to seek removal of any action or proceeding
other than as permitted according to this Paragraph 19.
20. This Agreement of Guaranty shall be binding upon and inure to
the benefit of and be enforceable by the parties hereto and their respective
successors and assigns.
21. This Agreement of Guaranty shall terminate upon the termination
of the Note in accordance with its terms. The Borrower or the Guarantor may
terminate this Agreement of Guaranty and the Note and all other obligations of
the Borrower or the Guarantor to the Lender under the Note or this Agreement of
Guaranty, by paying to the Lender all sums due and owing to the Lender hereunder
and under the Note or this Agreement of Guaranty.
22. Unless otherwise specifically provided herein, any notice or
other communication herein required or permitted to be given shall be in writing
and may be personally served, telecopied or sent by overnight courier service or
United States mail and shall be deemed to have been given when delivered in
person or by overnight courier service, upon receipt of a confirmed telecopy
transmission during normal business hours or four (4) Business Days after
deposit in the United States mail (registered or certified, with postage prepaid
and properly addressed). Notices to the Lender shall not be effective until
received by the Lender. For the purposes hereof, the addresses of the parties
hereto (until notice of a change thereof is delivered shall be as set forth
below, or, as to each party, at such other address as may be designated by such
party in a written notice to the other party.
9
If to the Guarantor: _______________________
_______________________
_______________________
Attn: _________________
_________________
With a copy to: Xxxxxxx Xxxxxxx
A Professional Corporation
0 Xxxxxx Xxxx Xxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxx Xxxxxxxx Xxxx, Esq.
If to the Lender: Mellon Bank, N.A.
Raritan Xxxxx Xxx
Xxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
Attn: Xx. Xxxxx Xxxxxx
Vice President
With a copy to: Xxxx Xxxxx Xxxx & XxXxxx
Princeton Xxxxxxxxx Village
000 Xxxx Xxxxxx, Xxxxx 000
X.X. Xxx 0000
Xxxxxxxxx, Xxx Xxxxxx 00000-0000
Attn: Xxxxxx X. Xxxx, Xx., Esq.
All notices, payments, requests, reports, information or demands so given shall
be deemed effective upon receipt or, if mailed, upon receipt or the expiration
of the fourth (4th) Business Day following the date of mailing, whichever occurs
first, except that any notice of change in address shall be effective only upon
receipt by the party to whom said notice is addressed. A failure to send the
requisite copies does not invalidate an otherwise properly sent notice to the
Guarantor and/or the Lender.
23. In case of any proceedings to collect any liabilities of the
Guarantor owed to the Lender hereunder, the Guarantor shall pay all costs and
expenses of every kind for collection, sale or delivery of any collateral or
assets or properties of the Guarantor, including reasonable attorneys' fees, and
after deducting such costs and expenses from the proceeds of sale or collection,
the Lender may apply any residue to the liabilities of the Guarantor who shall
10
continue liable for any deficiency, with interest at the rate provided for in
the Note and/or the Loan Agreement.
24. In all references herein to any parties, persons, entities or
corporations, the use of any particular gender or the plural or singular number
is intended to include the appropriate gender or number as the text of the
within instrument may require.
25. The Guarantor hereby acknowledges and agrees that they shall
have the sole responsibility for obtaining from the Borrower such information
concerning the Borrower's financial condition and business operations as the
Guarantor may require, and that the Lender has no duty at any time to disclose
to the Guarantor any information relating to the business operations or
financial condition of the Borrower.
26. This Agreement of Guaranty may be executed in counterparts, each
of which when so executed and delivered shall be deemed an original, but all
such counterparts together shall constitute but one and the same instrument.
27. The Guarantor hereby acknowledges and agrees that in accordance
with and as provided for in Article VI, Section 6.12 of the Loan Agreement
additional guarantors will agree to guaranty, on a joint and several basis, with
the Guarantor, all of the Liabilities of the Borrower. The Guarantor hereby
confirms and reaffirms that the addition hereinafter from time to time of any
new guarantor(s) shall not affect the enforceability and validity of this
Agreement of Guaranty against the Guarantor. This Agreement of Guaranty shall
remain in full force and effect and binding against the Guarantor as a
continuing guaranty of the liabilities of the Borrower subject to the
termination provisions herein, without any additional act(s) or documentation by
the Guarantor at the time of the addition of said new guarantor(s).
11
IN WITNESS WHEREOF, the Guarantor has caused this Agreement of
Guaranty to be duly executed and delivered by its appropriate authorized
[GENERAL PARTNER(S)] [CORPORATE OFFICERS], [AND, IF APPLICABLE, ITS CORPORATE
SEAL TO BE HEREUNTO AFFIXED AND ATTESTED, PURSUANT TO THE RESOLUTION OF ITS
BOARD OF DIRECTORS,] officers, and, if applicable, its corporate seal to be
hereunto affixed and attested, pursuant to the resolution of its Board of
Directors, all as of the day and year first above written.
WITNESS/ATTEST: ____________________________,
a ___________________, as the Guarantor
___________________ By: _________________________
Name: Name:
Title: Title:
12
EXHIBIT "F-1"
ATTACHED TO AND MADE A PART OF THAT CERTAIN FIRST AMENDMENT
AND MODIFICATION AGREEMENT EXECUTED BY AND BETWEEN,
AMONGST OTHERS, DIAGNOSTIC/RETRIEVAL SYSTEMS, INC., AS
THE BORROWER, AND MELLON BANK, N.A., AS THE LENDER
DATED AS OF OCTOBER ___DECEMBER 6, 1996
FORM OF COMPLIANCE CERTIFICATE
----------------------
This Officer's Certificate of Diagnostic/Retrieval Systems, Inc.
(hereinafter referred to as the "Certificate") is delivered to you pursuant to
Section 5.02(iv) of the Revolving Line of Credit Loan Agreement dated May 31,
1996 (as may be amended from time to time, hereinafter referred to as the "Loan
Agreement") by and between Diagnostic/Retrieval Systems, Inc. (hereinafter
referred to as the "Borrower"), and Mellon Bank, N.A., (hereinafter referred to
as the "Lender"). Terms defined in the Loan Agreement and not otherwise defined
herein are used herein as therein defined. The Borrower hereby delivers to the
Lender, together with the financial statements being delivered pursuant to
Section 5.02(i) and (iii) of the Loan Agreement, this Certificate for the
accounting period from ____________, 19__ to ____________, 19__*. For purposes
hereof, section and subsection references herein relate to sections and
subsections, respectively, of the Loan Agreement, and amounts or ratios refer to
the maximum or minimum amounts or ratios required under the relevant sections of
the Loan Agreement.
I. NEGATIVE COVENANTS
A. CONSOLIDATED DEBT (Section 7.01(vi))
B. LIENS (Section 7.02(ii)(e))
Amount of Purchase Money Liens $_______________________
Permitted Amount $1,000,000.00 at anytime outstanding
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* Insert dates representing the fiscal period covered by this Certificate.
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C. LOANS, ADVANCES AND INVESTMENTS (Section 7.03)
1. Subsection 7.03(iv)
Aggregate demand advances to officers and employees
outstanding at any time during the period covered by this Certificate:
Outstanding $[ ]
Aggregated maximum $250,000.00 at any
permitted to time outstanding
officers/employees
D. RESTRICTED JUNIOR PAYMENTS (Section 7.04)
Actual Amount $____________________
Permitted Amount [$___________________]
II. FINANCIAL COVENANTS
A. MINIMUM CONSOLIDATED QUICK RATIO (Section 8.01)
Consolidated Quick Ratio, as determined at the end of the period covered by
this Certificate:
Actual Consolidated Quick Ratio _____ to 1.0
Minimum Required Current Ratio 1.0 to 1.0
B. MAXIMUM CONSOLIDATED LEVERAGE RATIO (Section 8.02)
Consolidated Leverage Ratio, as determined at the end of the period covered by
this Certificate:
Actual Consolidated Senior Liabilities (exclusive of
contingent liabilities) $___________
Actual Consolidated Tangible Net Worth $___________
Actual Consolidated Subordinated Debt $___________
Actual Consolidated Leverage Ratio _____ to 1.0
Maximum Permitted Consolidated Leverage Ratio 1.0 to 1.0
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C. MINIMUM CONSOLIDATED INTEREST COVERAGE RATIO (Section 8.03)
Consolidated Interest Coverage Ratio, as determined at the end of
the period covered by this Certificate:
Actual Consolidated Net Income $___________
Actual Interest Expense $___________
Actual Prepaid Subordinated Debt $___________
Actual Consolidated Interest Coverage Ratio _____ to 1.0
Minimum Required Consolidated Interest
Ratio 1.75 to 1.0
D. MAXIMUM CONSOLIDATED CASH FLOW LEVERAGE RATIO (Section 8.03)
Consolidated Cash Flow Leverage Ratio, as determined at the end of
the period covered by this Certificate:
Actual Consolidated Senior Bank Debt $___________
Actual Consolidated Subordinated Debt $___________
Actual EBITDA $___________
Actual Consolidated Cash Flow Leverage Ratio _____ to 1.0
Maximum Required Consolidated
Cash Flow Leverage Ratio 3.5 to 1.0
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I hereby certify, in my capacity as an Authorized Officer of
the Borrower, that the information set forth above is accurate as of , 19 , to
the best of my knowledge after diligent inquiry.
Dated: ______________, 19
DIAGNOSTIC/RETRIEVAL SYSTEMS, INC.
a Delaware corporation
By:_______________________________________
Name:
Title:
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