Exhibit 10.1
AMENDED AND RESTATED
LOAN AGREEMENT
BY AND AMONG
DYNAMICS RESEARCH CORPORATION
DRC ENCODER, INC.
DRC METRIGRAPHICS, INC.
DRC SOFTWARE, INC. and
DRC TELECOM, INC.
DYNAMICS RESEARCH INVESTMENT CORPORATION
DRC INTERNATIONAL CORPORATION and
X.X. XXXX ASSOCIATES, INC.
as the Borrowers,
and
THE LENDERS PARTY HERETO
and
XXXXX BROTHERS XXXXXXXX & CO.,
as Administrative Agent
and
BANKNORTH, N.A.
as Documentation Agent
and
KEY CORPORATE CAPITAL INC.
as Syndication Agent
TABLE OF CONTENTS
ARTICLE 1 - DEFINITIONS...................................................................................... 2
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ARTICLE 2 - AGENTED BORROWINGS............................................................................... 25
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(a). Designation of Agent Borrower............................................................... 25
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(b). Operation of Loan Arrangement............................................................... 25
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(c). Loans Directly to Borrower.................................................................. 26
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(d). Continuation of Authority of Lead Borrower.................................................. 27
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(e). Indemnification............................................................................. 27
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ARTICLE 3 - THE REVOLVING CREDIT............................................................................. 28
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(a). Establishment of Revolving Credit........................................................... 28
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(b). Reductions of Commitment.................................................................... 29
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(c). Advances.................................................................................... 29
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(d). Risks of Value of Accounts and Inventory.................................................... 29
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(e). Procedures Under Revolving Credit........................................................... 29
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(f). The Loan Account............................................................................ 32
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(g). The Revolving Credit Note................................................................... 34
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(h). Payment of Loan Account..................................................................... 34
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(i). Interest.................................................................................... 35
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(j). Duration of Interest Periods................................................................ 36
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(k). Changed Circumstances....................................................................... 37
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(l). Payments and Prepayments.................................................................... 38
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(m). Fees........................................................................................ 39
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(n). Fees For L/C's.............................................................................. 40
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(o). Effect of Honor of L/C's.................................................................... 40
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(p). Additional Provisions Relating to L/C's..................................................... 40
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(q). Indemnification............................................................................. 45
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(ii)
(r). Computation of Interest and Fees............................................................. 46
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(s). Overdue Payments............................................................................. 47
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(t). Automatic Payment............................................................................ 47
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(u). Additional Costs, Etc........................................................................ 47
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(v). Capital Adequacy............................................................................. 49
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ARTICLE 4 - THE TERM LOAN...................................................................................... 49
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(a). The Term Loan................................................................................ 49
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(b). Interest Payments on Term Loan............................................................... 49
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(c). Term Loan Advances........................................................................... 50
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ARTICLE 5 - NEGATIVE PLEDGE/GRANT OF SECURITY INTEREST......................................................... 50
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(a). Negative Pledge.............................................................................. 50
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(b). Collateral Provision......................................................................... 50
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ARTICLE 6 - CONDITIONS PRECEDENT............................................................................... 51
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(a). Corporate Due Diligence...................................................................... 52
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(b). Opinion...................................................................................... 52
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(c). Officers' Certificates....................................................................... 52
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(d). Guaranties................................................................................... 53
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(e). Security Agreement and Mortgage.............................................................. 53
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(f). Lockbox...................................................................................... 53
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(g). Additional Documents......................................................................... 53
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(h). Representations and Warranties............................................................... 53
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(i). No Event of Default.......................................................................... 53
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(j). No Adverse Change............................................................................ 53
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ARTICLE 7 - GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS................................................. 54
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(a). Payment and Performance of Liabilities....................................................... 54
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(iii)
(b). Due Organization - Corporate Authorization - No Conflicts...................................... 54
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(c). Maintain Accounts.............................................................................. 55
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(d). Trade Names.................................................................................... 56
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(e). Locations...................................................................................... 57
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(f). Title to Assets................................................................................ 57
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(g). Indebtedness................................................................................... 58
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(h). Insurance Policies............................................................................. 60
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(i). Licenses....................................................................................... 61
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(j). Leases......................................................................................... 62
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(k). Requirements of Law............................................................................ 62
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(l). Maintain Properties............................................................................ 62
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(m). Pay Taxes...................................................................................... 63
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(n). No Margin Stock................................................................................ 64
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(o). ERISA.......................................................................................... 64
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(p). Hazardous Materials............................................................................ 65
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(q). Litigation..................................................................................... 66
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(r). Dividends, etc................................................................................. 66
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(s). Guarantees and Investments..................................................................... 66
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(t). New Leases..................................................................................... 68
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(u). Mergers and Consolidations..................................................................... 69
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(v). Sale of Assets................................................................................. 69
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(w). Protection of Assets........................................................................... 70
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(x). Line of Business............................................................................... 71
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(y). Affiliate Transactions......................................................................... 71
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(z). Additional Assurances.......................................................................... 71
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(aa). Adequacy of Disclosure......................................................................... 72
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(bb). Government Contracts........................................................................... 72
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(cc). Assignment of Claims Act....................................................................... 73
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(dd). Capital Expenditures........................................................................... 73
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(ee). Other Covenants................................................................................ 73
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(iv)
ARTICLE 8 - SWINGLINE.......................................................................................... 74
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(a). Swingline Loans............................................................................... 74
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(b). Settlements Amongst Lenders................................................................... 75
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ARTICLE 9 - AMENDED AND RESTATED LOAN AGREEMENT................................................................ 75
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ARTICLE 10 - AGENTS AS BORROWER'S ATTORNEY-IN-FACT.............................................................. 76
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(a). Appointment as Attorney-In-Fact............................................................... 76
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(b). No Obligation to Act.......................................................................... 76
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ARTICLE 11 - FINANCIAL AND OTHER REPORTING REQUIREMENTS/ FINANCIAL COVENANTS.................................... 77
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(a). Maintain Records.............................................................................. 77
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(b). Access to Records............................................................................. 77
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(c). Prompt Notice to Lender....................................................................... 78
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(d). Financial Statements, Certificates and Information............................................ 79
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(e). Additional Financial Information.............................................................. 82
--------------------------------
(f). Audits and Appraisals......................................................................... 82
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(g). Consolidated Operating Cash Flow to Total Debt Service........................................ 83
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(h). Consolidated Tangible Net Worth............................................................... 83
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(i). Leverage Ratio................................................................................ 83
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ARTICLE 12 - EVENTS OF DEFAULT.................................................................................. 83
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(a). Failure to Pay................................................................................ 84
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(b). Failure to Make Other Payments................................................................ 84
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(c). Failure to Perform Certain Liabilities........................................................ 84
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(d). Failure to Perform Other Liabilities.......................................................... 84
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(e). Misrepresentation............................................................................. 84
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(f). Default of Other Debt......................................................................... 84
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(g). Default Under Other Agreements................................................................ 85
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(v)
(h). Business Failure.......................................................................... 85
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(i). Judgment.................................................................................. 86
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(j). Restraint of Business..................................................................... 86
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(k). Material Adverse Change................................................................... 86
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(l). Trustee Process........................................................................... 86
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(m). Change in Ownership....................................................................... 87
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(n). Casualty Loss............................................................................. 87
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(o). Material Agreement........................................................................ 87
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(p). Termination of Existence.................................................................. 87
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(q). Termination of Guaranty................................................................... 87
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(r). Challenge to Loan Documents............................................................... 87
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(s). Indictment - Forfeiture................................................................... 88
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ARTICLE 13 - RIGHTS AND REMEDIES UPON DEFAULT............................................................. 88
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(a). Termination of Commitments................................................................ 88
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(b). Rights and Remedies....................................................................... 89
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(c). Distribution of Asset Proceeds............................................................ 89
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ARTICLE 14 - NOTICES....................................................................................... 91
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(a). Notice Addresses.......................................................................... 91
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(b). Notice Given.............................................................................. 92
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ARTICLE 15 - TERM OF AGREEMENT............................................................................ 92
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(a). Termination of Revolving Credit........................................................... 92
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(b). Effect of Termination..................................................................... 92
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ARTICLE 16 - GENERAL...................................................................................... 93
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(a). Successors and Assigns.................................................................... 93
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(b). Severability.............................................................................. 93
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(c). Amendments. Course of Dealing............................................................ 93
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(vi)
(d). Power of Attorney............................................................................ 94
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(e). Costs and Expenses........................................................................... 94
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(f). Copies and Facsimiles........................................................................ 95
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(g). Massachusetts Law............................................................................ 95
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(h). Consent to Jurisdiction...................................................................... 95
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(i). Indemnification.............................................................................. 96
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(j). Rules of Construction........................................................................ 97
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(k). Intent....................................................................................... 98
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(l). Setoff....................................................................................... 98
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(m). Maximum Interest Rate........................................................................ 99
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(n). Waivers...................................................................................... 99
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(o). Receipt of Agreement......................................................................... 100
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ARTICLE 17 - THE AGENT....................................................................................... 100
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(a). Authorization................................................................................ 100
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(b). Employees and Agents......................................................................... 101
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(c). No Liability................................................................................. 101
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(d). No Representations........................................................................... 101
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(e). Payments..................................................................................... 102
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(f). Holders of Notes............................................................................. 104
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(g). Indemnity.................................................................................... 104
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(h). Agents as Lenders............................................................................ 105
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(i). Resignation.................................................................................. 105
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(j). Notification of Suspension Events and Events of Default...................................... 106
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(k). Duties in the Case of Enforcement............................................................ 106
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(l). Delinquent Lender............................................................................ 107
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(m). Assignment and Participation................................................................. 108
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(n). Pledge to Federal Reserve.................................................................... 112
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(o). Consent or Approval.......................................................................... 112
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(p). Disclosure................................................................................... 113
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(vii)
(q). Consents, Amendments, Waivers, etc........................................................ 113
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(viii)
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AMENDED AND RESTATED LOAN AGREEMENT
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June 28, 2002
THIS AGREEMENT is made between
Xxxxx Brothers Xxxxxxxx & Co., (hereinafter, the
"Administrative Agent"), a limited partnership organized under the laws
of the State of New York with offices at 00 Xxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000
and
Banknorth, N.A., (hereinafter, the "Documentation Agent") a
national banking association with offices at 7 New England Executive
Park, Xxxxxxxxxx, Xxxxxxxxxxxxx 00000
and
Key Corporate Capital Inc., (hereinafter, the "Syndication
Agent"), a Michigan corporation with offices at 000 Xxxxxx Xxxxxx,
Xxxxxxxxx, Xxxx 00000.
as Agents on behalf of Xxxxx Brothers Xxxxxxxx & Co., Banknorth, N.A., Key
Corporate Capital Inc. 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
DRC Encoder, Inc. ("Encoder"), a Massachusetts corporation
with its principal executive offices at 00 Xxxxxxxx Xxxx, Xxxxxxx,
Xxxxxxxxxxxxx;
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DRC Metrigraphics, Inc. ("Metrigraphics"), a Massachusetts
corporation with its principal executive offices at 00 Xxxxxxxx Xxxx,
Xxxxxxx, Xxxxxxxxxxxxx;
DRC Software, Inc. ("Software"), a Massachusetts corporation
with its principal executive offices at 00 Xxxxxxxx Xxxx, Xxxxxxx,
Xxxxxxxxxxxxx;
DRC Telecom, Inc. ("Telecom"), a Massachusetts corporation
with its principal executive offices at 00 Xxxxxxxx Xxxx, Xxxxxxx,
Xxxxxxxxxxxxx;
Dynamics Research Investment Corporation ("Investment"), a
Massachusetts corporation with its principal executive offices at 00
Xxxxxxxx Xxxx, Xxxxxxx, Xxxxxxxxxxxxx;
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, Encoder, Metrigraphics, Software,
Investment, International, X.X. Xxxx and Telecom 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.
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,
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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.
"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.
"Agents Rights and Remedies": is defined in Section 13-7.
"Annual Fee": is defined in Section 3-13(c).
"Arrangement Fee": is defined in Section 3-13(a)
"Assets": are defined in Section 5-1.
"Availability": is defined in Section 3-1(b).
"Bankruptcy Code": Title 11, U.S.C., as amended from time to time.
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"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.
"Base Rate Margin": See Pricing Grid (as defined herein).
"Base Margin Loan": Any Revolving Credit Loan, Swingline Loan or any
portion of the Term 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
Borrowers or any of their 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
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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": June 28, 2002.
"Collateral Provision Event": is defined in Section 5.2.
"Commitment": as to each Lender the amount of the Revolving Credit and
Term Loan set forth on Exhibit 1.
"Commitment Percentage: as to each Lender the percentage of the
Revolving Credit and Term Loan set forth on Exhibit 1.
"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.
"Consolidated Tangible Net Worth" shall mean the difference between
total assets of the Lead Borrower and its Subsidiaries and total
liabilities of of the Lead
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Borrower and its Subsidiaries, plus all indebtedness
subordinated to the Liabilities on terms acceptable to the
Lenders less the sum of:
(a) the total net book value of all assets of the Lead
Borrower and its Subsidiaries properly classified as
intangible assets under GAAP, including items such as
goodwill, unamortized debt discount and expense,
trademarks, trade names, service marks, copyrights, patents
and licenses; and
(b) the value of minority equity interests of the Lead
Borrower and its Subsidiaries in unconsolidated, affiliated
entities; and
(c) 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.
"Costs of Collection" includes, without limitation, all reasonable
attorneys' fees and reasonable out-of-pocket expenses incurred
by the Agents' or the Lenders' attorneys, and all reasonable
out-of-pocket costs incurred by the Agents or any Lender 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 Agents or any Lender, which costs and expenses
are directly or indirectly related to or in respect of the
Agents' or any Lenders': negotiation, documentation, and
amendment of any Loan Document; or efforts to preserve,
protect, collect, or enforce the Liabilities, and/or the
Agents' Rights and Remedies and/or any of the Lenders' rights
and remedies against or in respect of any guarantor or other
person liable in respect of the Liabilities
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(whether or not suit is instituted in connection with such
efforts). The Costs of Collection are Liabilities and, at the
Lenders' option and after 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.
"Convert, Conversion and Converted" The conversion of a Loan from one
type to Loans of another type.
"Delinquent Lender": is defined in Section 17-12.
"Documents of Title": has the meaning given that term in the UCC.
"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) Interest
Expense of the Lead Borrower and its Subsidiaries, (b) 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; and (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.
-7-
"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.
"Equipment" includes, without limitation, "equipment" as defined in the
UCC, and also all motor vehicles, rolling stock, machinery,
office equipment, plant equipment, tools, dies, molds, store
fixtures, furniture, and other goods, property, and assets
which are used and/or were purchased for use in the operation
or furtherance of the Borrowers' business, and any and all
accessions, additions thereto, and substitutions therefor.
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"ERISA": the Employee Retirement Income Security Act of 1974, as
amended.
"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.
"Escrow Agent": Xxxxxx & Xxxxxxxxxx, LLP
"Events of Default": is defined in Article 12.
"Facility Fee": is defined in Section 3-13(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 17-12.
"GAAP": principles which are consistent with those promulgated or
adopted by the Financial Accounting Standards Board and its
predecessors (or successors) in
-9-
effect and applicable to that accounting period in respect of
which reference to GAAP is being made.
"General Intangibles" includes, without limitation, "general
intangibles" as defined in the UCC; and also all: rights to
payment for credit extended; deposits; amounts due to the
Borrowers; credit memoranda in favor of the Borrowers;
warranty claims; tax refunds and abatements; insurance refunds
and premium rebates; all means and vehicles of investment or
hedging, including, without limitation, options, warrants, and
futures contracts; records; customer lists; telephone numbers;
goodwill; causes of action; judgments; payments under any
settlement or other agreement; literary rights; rights to
performance; royalties; license and/or franchise fees; rights
of admission; licenses; franchises; license agreements,
including all rights of the Borrowers to enforce same;
permits, certificates of convenience and necessity, and
similar rights granted by any governmental authority; patents,
patent applications, patents pending, and other intellectual
property; internet addresses and domain names; developmental
ideas and concepts; proprietary processes; blueprints,
drawings, designs, diagrams, plans, reports, and charts;
catalogs; manuals; technical data; computer software programs
(including the source and object codes therefor), computer
records, computer software, rights of access to computer
record service bureaus, service bureau computer contracts, and
computer data; tapes, disks, semi-conductors chips and
printouts; trade secrets rights, copyrights, mask work rights
and interests, and derivative works and interests; user,
technical reference, and other manuals and materials; trade
names, trademarks, service marks, and all good will relating
thereto; applications for registration of the foregoing; and
all other general intangible property of the Borrowers in the
nature of intellectual property; proposals; cost estimates,
and reproductions on paper, or otherwise, of any and all
concepts or ideas, and any matter related to, or connected
with, the design,
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development, manufacture, sale, marketing, leasing, or use
of any or all property produced, sold, or leased, by the
Borrowers or credit extended or services performed, by the
Borrowers, whether intended for an individual customer or
the general business of the Borrowers, or used or useful in
connection with research by the Borrowers.
"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, 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.
"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
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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 the 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 3-17.
"Indemnified Person": is defined in Section 16-10.
"Indemnity Agreement": a certain Indemnification Agreement Regarding
Hazardous Materials dated February 10, 2000 executed by, among
others, the Lead Borrower, in favor of the Administrative Agent
and the Documentation Agent.
"Installment Amount": is defined in Section 3-17(a).
"Instruments": has the meaning given that term in the UCC.
"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
-12-
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, 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 Notice of
Borrowing or Conversion, or (2) on which the subject Base Margin
Loan is paid by the Borrowers.
Provided that:
(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 3-10, 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;
-13-
(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, 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, 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 the
Borrowers, 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.
-14-
"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.
"Investment Property": Has the meaning given that term in the UCC.
"L/C": any letter of credit, the issuance of which is procured by the
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.
-15-
"Lender" or "Lenders": are defined in Preamble.
"Leverage Ratio" is described in Section 11.9.
"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 the Borrowers to the Agents or any Lender, each of
every kind, nature, and description arising under this Agreement
or any of the Loan Documents.
(b) Each obligation to repay any loan, advance,
indebtedness, note, obligation, overdraft, or amount now or
hereafter owing by the Borrowers to any 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 the Borrowers 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 Agents or the Lenders to the Borrowers
and/or which may be due from the Borrowers 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 Agents or
the Lenders arising under this Agreement or any of the 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 the Borrowers to or with the
Agents or any Lender and any and all obligations of the Borrowers
to act or to refrain from
-16-
acting, in each case, in accordance with this Agreement or any of
the 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 or any portion of the Term
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 3-13(b).
"Line Fee Percentage": see Pricing Grid defined below.
-17-
"Loan": Any loan or advance made under the Revolving Credit, Swingline
or Term Loan
"Loan Account": is defined in Section 3-6.
"Loan Documents": this Agreement, the Revolving Credit Note, the Term
Note, the Indemnity Agreement, each instrument and document
executed and/or delivered as contemplated by Article 5 below, and
each other instrument or document from time to time executed
and/or delivered in connection with the arrangements contemplated
hereby, 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), (b) the Borrowers' ability to
pay and perform all of the Liabilities owing by them to the
Agents and the Lenders in accordance with the terms thereof,
and/or (c) the Assets (or any material portion thereof).
"Maturity Date": As to the Revolving Credit Loans, June 30, 2005; as
to the Term Loan, May 1, 2010.
"Xxxxx'x": 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
-18-
GAAP. For purposes hereof, the Consolidated Net Income of the
Lead Borrower and its Subsidiaries (a) 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, less
reasonable fees and expenses (including commissions) customarily
incurred in similar arms-length sales and transfer taxes directly
attributable to such sale less income taxes payable from such
proceeds within sixteen months after such sale.
"Note(s)": The Revolving Credit Notes, Swingline Note and Term Notes.
"Permitted Acquisition": An acquisition by any of the Borrowers of
100% of the capital stock or substantially all of the assets of
an entity provided 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
-19-
earnings within the following twelve (12) months; (iv) at the
time of the contemplated acquisition, there has not occurred a
Collateral Provision Event; and (v) 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, including, without limitation,
all consideration paid in connection with the acquisition of X.X.
Xxxx Associates, Inc.
"Permitted Liens": is defined in Section 7-6.
"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 *Level IV
--------------------------------------------------------------------------
Basis for Pricing
--------------------------------------------------------------------------
Leverage Ratio *1.50 1.51 - 2.00 **2.00 *1.00
--------------------------------------------------------------------------
Base Rate Margin -0- -0- -0- -0-
--------------------------------------------------------------------------
XXXXX Margin 2.00% 2.50% 3.00% 1.75%
--------------------------------------------------------------------------
Line Fee Percentage 0.25% 0.375% 0.50% .20%
--------------------------------------------------------------------------
* for Less Than
** for Greater Than
-20-
*Level IV pricing shall only be available if , as of December 31,
2002, Borrowers' EBITDA and Net Income are within ninety (90%) percent
of the budget previously furnished to the Agents dated as of February
27, 2002.
Changes in pricing shall be effective five (5) Business Days after
delivery by the Lead Borrower to the Agents of its quarterly
Compliance Certificate together with supporting financial information
satisfactory to the Agents.
"Real Estate": the premises located at 00 Xxxxxxxx Xxxx, Xxxxxxx,
Xxxxxxxxxxxxx.
"Reemployment Period": is defined in Section 3-17(a).
"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 3-10.
"Required Lenders": Lenders holding in the aggregate at least
fifty-one percent (51%) of the amounts outstanding on the
Revolving Credit Loans and Term Loan or, if no amounts are
outstanding, of the Commitment Percentages of the Total
-21-
Commitment (after settlement and repayment of all Swingline Loans
by the Lenders).
"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.
"Revolving Loan Ceiling": shall mean Fifty Million Dollars
($50,000,000.00).
"Revolving Credit": is defined in Section 3-1.
-22-
"Revolving Credit Note": is defined in Section 3-7.
"Security Agreement": a certain Security Agreement executed and
delivered into escrow by the Borrowers in favor of the
Documentation Agent, as agent for itself and for the benefit of
the Lenders.
"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 7-7
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 Agents and their 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,
-23-
circumstance, or state of facts were not absolutely cured within
any applicable grace period.
"Swingline": Is defined in Article 8.
"Swingline Lender": Xxxxx Brothers Xxxxxxxx & Co.
"Swingline Loan": Any loan or advance made under the Swingline.
"Swingline Note": Is defined in Article 8.
"Term Loan": Is defined in Section 4-1.
"Term Loan Fee": Is defined in Section 3-13(d).
"Term Loan Lenders": Xxxxx Brothers Xxxxxxxx & Co. and Banknorth, N.A.
"Term Note": Is defined in Section 4-1.
"Termination Date": The earliest of (a) the Maturity Date, or (b) the
occurrence of an Event of Default under Section 12-8 hereof, or
(c) the date set by the Agents 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 12-8.
"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
-24-
Expense of the Lead Borrower and its Subsidiaries, all as determined
in accordance with GAAP.
"Total Commitment" shall mean the aggregate Commitments of the Lenders as
set forth on Exhibit I annexed hereto.
"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
(a). 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.
(b). Operation of Loan Arrangement.
(a) Except as otherwise provided in this Article, loans and
advances under the Revolving Credit shall be requested solely by the
Lead Borrower as agent for each Borrower.
(b) Any advance which may be made by the Lenders under the
Revolving Credit and which is directed to the Lead Borrower is
received by the Lead Borrower in
-25-
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 advance 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 Agents and the Lenders shall have no responsibility to inquire
as to the distribution of loans and advances made through the Lead
Borrower as described herein.
(c). Loans Directly to Borrower. If, for any reason, and at any time during
the term of the within Agreement,
(i) 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 Agents in the
Agents' sole and absolute discretion); or
(ii) the Administrative Agent deems it inexpedient (in the
Administrative Agent's sole and absolute discretion) to continue making
loans and advances to or for the account of any particular Borrower, or to
channel such loans and advances through the Lead Borrower,
then the Lenders may make loans and advances directly to such of the Borrowers
as the Administrative Agent determines to be expedient, which loans or advances
may be made without regard to the procedures otherwise included in this Article
2.
(a) In the event that the Administrative Agent determines to forgo the
procedures included herein pursuant to which loans and advances are to
be channeled through
-26-
the Lead Borrower, then the Administrative Agent may designate one or
more of the Borrowers to fulfill the financial and other reporting
requirements otherwise imposed herein upon the Lead Borrower. Each of
the Borrowers shall remain liable to the Lenders for the payment and
performance of all Liabilities notwithstanding any determination by
the Administrative Agent to cease making loans or advances to or for
the benefit of any Borrower.
(d). Continuation of Authority of Lead Borrower. The authority of the Lead
Borrower to request Loans on behalf of, and to bind, the Borrowers, shall
continue unless and until the Administrative Agent acts as provided in Section
2-4, 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 Presidents of each Borrower (other than
the President of the Lead Borrower being replaced) then eligible for
borrowing under the within 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 Presidents of such Borrowers
eligible for borrowing under the within 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.
(e). Indemnification. The Lead Borrower and each Borrower respectively
shall indemnify, defend, and save and hold the Agents and each Lender harmless
from and against any liabilities, claims, demands, expenses, or losses made
against or suffered by the Agents or any Lender on account of, or arising out
of, the Revolving Credit or the Term Loan, the Agents and
-27-
each Lenders' reliance upon loan requests made by the Lead Borrower, or any
other action taken by the Agents 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 Agents and each Lender has had an
opportunity to be heard) that an Agent or any Lender had acted in a grossly
negligent manner, in actual bad faith or with willful misfeasance.
ARTICLE 3 - THE REVOLVING CREDIT/LIBOR PROVISIONS
(a). Establishment of Revolving Credit. 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 loans and advances 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.
(a) As used herein, the term "Availability" refers at any time to up
to:
(B) the Revolving Loan Ceiling
Minus
(C) The then unpaid principal balance of the Loan Account
Minus
(D) 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.
-28-
(a) The proceeds of borrowings under the Revolving Credit shall be
utilized solely to pay transaction costs, for working capital
purposes, for repayment of draws under any L/C, for Permitted
Acquisitions, and for general corporate purposes. Advances under the
Revolving Credit may not be utilized to repay the Term Loan.
(b). Reductions of Commitment. The Total Commitment 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.
(c). Advances. [Intentionally omitted].
(d). Risks of Value of Accounts and Inventory. [Intentionally omitted].
(e). Procedures Under Revolving Credit.
(a) The Lead Borrower may request Loans and advances under the
Revolving Credit from time to time under, in each instance in
accordance with such procedures as may from time to time be acceptable
to the Lenders, 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 Loans.
(b) Subject to the provisions of the within Agreement, a Loan or
advance under the Revolving Credit duly and timely requested by the
Lead Borrower shall be made pursuant hereto, provided that:
(ii) The Availability will not be exceeded; and
(iii) The Revolving Credit has not been suspended as provided in
Section 3-5(h).
-29-
(a)(B) A Loan or advance shall be deemed to have been made under the
Revolving Credit upon the charging of the amount of such Loan to the
Loan Account.
(i) There shall not be any recourse to, nor liability of, the
Agents or the Lenders on account of any of the following:
(C) (1) Any reasonable delay in the Lenders' making of any
loan or advance requested under the Revolving Credit,
and/or (2) any decline by the Lenders to make, any loan
or advance requested under the Revolving Credit while
any Suspension Event or Event of Default has occurred
and is continuing.
(D) Any delay in the proceeds of any such loan or advance
constituting collected funds.
(E) Any delay in the receipt, and/or any loss, of funds
which constitute a loan or advance under the Revolving
Credit, 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.
(i) The Administrative Agent may rely on any request for a loan
or advance 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
loan or advance 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.
(a) 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
-30-
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:
(ii) 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.
(iii) 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.
(a) The Borrowers shall immediately become indebted to the Lenders
for the amount of each loan under or pursuant to this Agreement when
such loan is deemed to have been made.
(b) (F) 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.
(i) 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 the aggregate Stated Amount, following the
requested issuance thereof, would not exceed the Availability and provided
that the L/C (if so issued) is in form satisfactory to the Administrative
Agent.
(ii) 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 (other than the requirement of
security prior to the occurrence of a Collateral Provision Event).
-31-
(a) 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 and 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 of the
Lender's rights under Section 3-6(e), below.
(h) Upon the occurrence from time to time of any Suspension
Event:
(iii) The Lenders may suspend the Revolving Credit
immediately.
(iv) The Lenders shall not be obligated, during such
suspension, to make any loans or advance, or to provide any financial
accommodation hereunder or to issue any L/C.
(v) The Lenders may suspend the right of the Lead
Borrower to request any LIBOR Loan or to convert any Base Margin Loan
to a LIBOR Loan.
(i) 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 loan requested by the Lead Borrower, and the
Administrative Agent shall advance such amounts to the Lead Borrower in
accordance with the terms hereof.
(f). The Loan Account. 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 loans made by the Lenders to the Borrowers under or
pursuant to the Revolving Credit (and the Swingline) and of all payments
thereon.
(a) 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
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interest, fees, service charges, costs, expenses, and other
debits owed the Agents and each Lender on account of the
Liabilities under the Revolving Credit (and the Swingline) and
of all credits against such amounts so owed.
(b) 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.
(c) 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.
(d) 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 the
Administrative Agent is entitled from any Borrower pursuant
hereto (including, without limitation, any payment of
principal and/or interest with respect to the Term Loan) 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.
(e) Any statement rendered by the Administrative Agent to the
Lead Borrower concerning the Liabilities shall be considered
correct and accepted by the
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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.
(g). The Revolving Credit Note. The obligation to repay loans and
advances under the Revolving Credit, with interest as provided herein, shall be
evidenced by certain notes (hereinafter, collectively, the "Revolving Credit
Note") in the form of EXHIBIT 3-7, annexed hereto, executed by each Borrower in
favor of each Lender in the amount of each Lender's respective Commitment.
Neither the original nor a copy of the Revolving Credit Note shall be required,
however, to establish or prove any Liability. 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.
(h). Payment of Loan Account. The Borrowers shall repay the
principal balance of the Loan Account on the Termination Date (as to which, see
Article 15, below).
(a) 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.
(b) After the occurrence of a Collateral Provision Event, the
Borrowers shall pay the Administrative Agent the net proceeds
of (i) sales of assets not in the ordinary course of business,
less reasonable fees and commissions and, as long as no Event
of Default then exists, capital gains or other income taxes
paid or payable as a result of any such sale or disposition
(after taking into account any
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available tax credits or deductions), (ii) 50 % (100% if an
Event of Default then exists) of any equity offerings, (iii)
debt issuances (other than, if no Event of Default then
exists, in connection with any indebtedness permitted by
Section 7-7 or refinancing thereof pursuant to Section
7-7(d)), and (iv) casualty and condemnation proceeds (except
to the extent utilized to replace or repair the property
subject to the casualty as long as no Event of Default then
exists). Such net proceeds will be applied first to any
interest due and then principal due under Term Loan in inverse
order of maturity until the Term Loan is paid in full, and
thereafter, to all accrued interest and then principal due
under the Revolving Credit.
(c) The Borrowers shall repay the then entire unpaid balance
of the Loan Account upon the Termination Date.
(i). Interest. 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.
(a) The Borrowers shall pay interest on each Revolving Credit
Loan in arrears on the applicable Interest Payment Date for
that Loan.
(b) 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
Administrative Agent to the Lead Borrower, all loans and
advances made under the Revolving Credit shall bear interest
at the aggregate of the Base Rate plus two percent (2%) per
annum.
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(j). Duration of Interest Periods. 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 or any portion of the Term Loan by
giving notice of such election (a "Renewal / Conversion Notice") in the form of
EXHIBIT 3-10, 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 Suspension Event or Event of Default has occurred and is continuing.
Each such Conversion Request shall be by telephone, telecopy, 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.
(a) 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.
(b) The Lead Borrower shall not select, renew, or convert any
Revolving Credit Loan or any portion of the Term Loan such that there
are more than six (6) interest rates applicable to the Revolving
Credit Loans and Term Loan in the aggregate which are LIBOR Loans at
any one time.
(c) 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.
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(e) If after giving a Conversion Request, the Lead Borrower
fails to borrow or Convert any LIBOR Loan, the Lead Borrower shall indemnify the
Agents and each Lender against any loss or expense incurred by the Agents 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 3-18, herein.
(k). Changed Circumstances. In the event that:
(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 the Administrative Agent shall have determined
in good faith (which determination shall be final and
conclusive) that:
(ii) the continuation of or conversion of any Revolving
Credit Loan or any portion of the Term 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
(iii) 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
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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 or any portion of the Term Loan
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.
(l). 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 3-17, herein, including any interest or fees payable by the Lenders to
lenders of funds obtained by then in order to make 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
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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.
(m). Fees. 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 $60,000.00 (to be shared
by the Lenders as agreed among the Lenders) plus an arrangement fee (the
"Arrangement Fee") payable to the Administrative Agent in the amount of
$15,000.00 for its own account.
(a) 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.
(b) 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 $15,000.00
payable upon the Closing Date and each anniversary hereof.
(d) The Term Loan Fee has been previously paid by the Borrowers to
the Term Loan Lenders.
(e) The Borrower shall not be entitled to any credit, rebate or
repayment of any Facility Fee, Arrangement Fee, Annual Fee, Term Loan Fee, or
Line (Unused) Fee previously earned by the Agents or the Lenders pursuant to
this Section notwithstanding any termination of
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this Agreement or suspension or termination of the Lender's obligation to make
loans and advances hereunder.
(n). Fees For L/C's. 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.
(a) 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.
(o). 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.
(p). Additional Provisions Relating to L/C's. 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 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.
(a) The Borrowers will
(ii) promptly examine the copy of any L/C (and any amendments
thereof) sent to it by the Administrative Agent;
(iii) promptly examine all instruments and documents delivered
to it from time to time by the Administrative Agent; and
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(iv) 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.
(a) The Borrowers will
(v) 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;
(vi) comply with all foreign and domestic governmental
requirements relating to the shipment or financing of such property;
and
(vii) furnish such evidence that the above requirements have
been fulfilled as the Administrative Agent reasonably may require.
(a) The Borrowers will jointly and severally indemnify the Agents
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.
(b) As further security for the payment or performance of any and
all other obligations and liabilities hereunder, certain or
contingent, and also for the payment or performance of any and all
other obligations and liabilities, certain or contingent, due or
to become due, now existing or hereafter arising, which are now,
or may at any time or times hereafter be owing by the Borrowers to
the Lenders, the Borrowers hereby
(viii) recognize and admit the Documentation Agent's security
interest in, and, after the occurrence and during the continuance of an
Event of Default, unqualified right to the possession and disposal of,
any and all shipping documents, warehouse
-41-
receipts, policies or certificates of insurance, and other documents
accompanying or relative to any L/C (whether or not such documents,
goods, or other property have been released to or upon the order of the
Lead Borrower under a security agreement or trust or bailee receipt)
and in and to the proceeds of each and all of the foregoing; and
(ix) if any third party shall have joined in the application
for the L/C, assigns and transfers to the Documentation Agent all
right, title and interest of the Borrowers in and to all property and
interests which any Borrower may now or hereafter obtain from such
third party arising in connection with the transaction to which the L/C
relates, to the extent that same can be lawfully assigned.
(a) Following the occurrence and during the continuance of any
Event of Default, the Documentation Agent or the Administrative
Agent, with power of substitution and revocation, may:
(x) sign, in the name of the Documentation Agent or the
Administrative Agent, and/or the name of any Borrower, any document
called for from any Borrower and/or endorse, in the name of any
Borrower, any and all notes, checks, drafts, Documents of Title, or
other instruments or documents in which the Documentation Agent or the
Administrative Agent may at any time have any interest in connection
with any L/C; and
(xi) perform any obligation or agreement in connection with
any L/C which any Agent deems necessary or desirable to protect any
Agent's right, powers and remedies under this Agreement.
(a) None of the Agents, 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:
(xii) performance by any beneficiary under any L/C of that
beneficiary's or payee's obligations to any Borrower; or
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(xiii) 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.
(a) 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.
(b) 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.
(c) 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.
(d) 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.
(e) 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
-00-
Xxxxxxx xx Xxxxxxxx, Publication No. 500, and any subsequent
revisions thereof.
(f) 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:
(xiv) 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 with respect to
which the Administrative Agent has an obligation to lend to fund
drawings thereunder; or
(xv) impose on 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 Lender of issuing or maintaining any L/C, then,
upon demand by such Lender and delivery by such Lender to the Borrowers of a
certificate of an officer of such Lender describing such change in law,
executive order, regulation, directive, or interpretation thereof, its effect on
the Lender, 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 Lender, from time to time as specified by the Lender,
such amounts as shall be sufficient to compensate the Lender for such increased
cost. The Lender's determination of costs incurred under clause (m) (i) or (ii)
above, shall be conclusive and binding on the Borrowers in the absence of
manifest error.
(a) 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:
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(xvi) Any lack of validity or enforceability or restriction,
restraint, or stay in the enforcement of the within Agreement, any L/C,
or any other agreement or instrument relating thereto.
(xvii) Any amendment or waiver of, or consent to the
departure from, all or any of the above.
(xviii) 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.
(q). Indemnification. Each Borrower jointly and severally agrees to
indemnify the Agents and each Lender and to hold the Agents 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 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
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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.
(r). Computation of Interest and Fees. Interest and all fees
payable hereunder 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 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.
-46-
(s). Overdue Payments. Overdue amounts payable hereunder shall bear
interest from and including the due date thereof until paid, payable on demand,
at a rate per annum equal to the Base Rate plus 2% per annum.
(t). 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 interest, fees, costs, commissions, service charges and expenses due to
the Lenders.
(u). 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:
(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
-47-
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 Administration 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.
-48-
(v). Capital Adequacy. If the Administrative Agent 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 the Lenders with any of the foregoing
imposes or increases a requirement by any 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 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 the Administrative Agent 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.
ARTICLE 4 - THE TERM LOAN.
(a). The Term Loan. The Term Loan Lenders have provided a term loan
facility in the aggregate original principal sum of $10,000,000.00 (the "Term
Loan") to the Borrowers pursuant to the Borrowers' Amended and Restated Term
Notes of even date (hereinafter, collectively, the "Term Note") in the form of
EXHIBIT 4-1, annexed hereto, and repayable with interest as provided herein.
(b). Interest Payments on Term Loan. (a) At the Lead Borrower's option and
in accordance with the terms of this Agreement, the Term Loan shall bear
interest at the Base Rate or the LIBOR Rate, as specified from time to time by
the Lead Borrower in the
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Renewal/Conversion Notice with respect to any portion of the Term Loan or as
otherwise provided in this Agreement; and
(b) Interest on the Term Loan shall be payable in arrears on the applicable
Interest Payment Date for that Loan.
(c). Term Loan Advances. No further advances shall be made under the
Term Loan.
ARTICLE 5 - NEGATIVE PLEDGE/GRANT OF SECURITY INTEREST.
(a). Negative Pledge. (a) The Borrowers warrant and represent to the
Lenders that all of the assets of each of Borrowers (collectively, the
"Assets"), including, without limitation, each Borrower's Accounts, Equipment,
Inventory, Goods, General Intangibles, Investment Property, cash are owned
solely by the Borrower and are presently free and clear of all liens and
Encumbrances, except for Permitted Liens.
(b) Until such time as all Liabilities of the Borrower to the Lenders
have been paid in full, the Borrower shall not (other than in connection with
Permitted Liens) directly or indirectly pledge, assign, grant a security
interest in, mortgage and or otherwise encumber all or any portion of the Assets
or any interest therein and shall not provide any agreement of similar tenor to
the provisions of this Section 5-1(b).
(b). Collateral Provision. Upon (a) the occurrence of an Event of Default
which has occurred and continued beyond any applicable grace or cure period or
(b) the occurrence of any of the following (each of (a) and (b) a " Collateral
Provision Event"), and the delivery of written notice by the Administrative
Agent to the Escrow Agent (with a copy to the Lead Borrower) of the occurrence
of a Collateral Provision Event, the Security Agreement shall be released from
escrow and will become effective without further action on the part of the
Agents, the Lenders or the Borrowers:
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(i) At any time, (x) the Borrowers permit their ratio of
funded Indebtedness to the Borrowers' consolidated trailing four quarter EBITDA
(tested on a pro forma basis in connection with contemplated acquisitions) to be
greater than 2.00 to 1.00 for any consecutive three month period (which three
month period shall commence upon the date of any such breach) (the "Shelf
Registration Filing Window"), and (y) the Borrowers fail to file a shelf
registration with the Securities and Exchange Commission during the Shelf
Registration Filing Window.
(ii) At any time, the Borrowers permit their ratio of funded
Indebtedness to the Borrowers' consolidated trailing four quarter EBITDA (tested
on a pro forma basis in connection with contemplated acquisitions) to be greater
than 2.00 to 1.00 for a period of three months after a shelf registration has
been filed with the Securities and Exchange Commission.
(iii) At any time, the ratio of the Borrowers' consolidated
operating cash flow to total debt service is less than 2.00 to 1.00 as of the
end of any quarter, calculated on a rolling four (4) quarter basis.
Upon the occurrence of any Collateral Provision Event, the Agents are
hereby authorized to file all necessary UCC-1 Financing Statements without
further direction or authorization from the Borrowers. In addition, the
Borrowers shall execute and deliver to the Agents such additional documents,
instruments or agreements as the Agents may reasonably require. The failure to
provide to the Agents any such additional documents, instruments or agreements
within thirty (30) days after the Agents request shall constitute an immediate
Event of Default hereunder.
ARTICLE 6 - CONDITIONS PRECEDENT.
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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 and the continuation of the Term Loan, the documents
respectively described in Sections 6-1 through and including 6-9 each in form
and substance satisfactory to the Agents shall have been delivered to the
Agents, and the conditions respectively described in Sections 6-10 through and
including 6-12, shall have been satisfied:
(a). Corporate Due Diligence. Certificates of corporate good standing
issued by the respective Secretary of State of the Borrowers' state of
incorporation.
(a) Certificates of due qualification, and good standing, issued
by the Secretary of State of each State in which the nature of
the Borrowers' business conducted or assets owned could require
such qualification, unless the failure to so qualify and/or
remain in good standing would not result in a Material Adverse
Change.
(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.
(b). Opinion. An opinion of counsel to the Borrowers in form and
substance satisfactory to the Agents.
(c). Officers' Certificates. A Certificate executed by the President
and the Treasurer of each Borrower and stating that the representations and
warranties made by such Borrower to the Lender in the Loan Documents are true
and complete as of the date of such Certificate, and 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.
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(d). 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 Agents and each Lender.
(e). Security Agreement and Mortgage. The Administrative Agent shall have
received a copy of the Security Agreement and an amendment to the Mortgage,
Security Agreement and Assignment securing the Liabilities encumbering the Real
Estate, together with all appropriate real estate due diligence as requested by
the Agents, in form and substance satisfactory to the Agents.
(f). Lockbox. The lockbox and account control agreements required under
Section 7-3 below.
(g) Additional Documents. Such additional instruments and documents as
the Agents or their counsel reasonably may require or request.
(h). 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.
(i). No Event of Default. No event shall have occurred, or failed to
occur, which occurrence or which failure constitutes, or which, solely with the
passage of time or the giving of notice (or both) would constitute, an Event of
Default.
(j). No Adverse Change. Except as noted on EXHIBIT 6-10, no event shall
have occurred or failed to occur, which occurrence or failure had or could
reasonably be expected to
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have a materially adverse effect upon the Borrowers' financial condition,
operating results, or cash flows from the Borrowers' financial condition at
March 31, 2002.
ARTICLE 7 - GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS.
To induce the Lenders to establish the loan arrangement contemplated
herein and to make loans and advances and to provide financial accommodations
under the Revolving Credit and the Swingline (each of which loans shall be
deemed to have been made in reliance thereupon), and to maintain the Term Loan,
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.
(a). Payment and Performance of Liabilities. The Borrowers shall pay each
Liability when due (or when demanded if payable on demand) and shall promptly,
punctually, and faithfully perform each other Liability.
(b). Due Organization - Corporate Authorization - No Conflicts. Other
than Investment, 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.
(a) Each Related Entity is listed on EXHIBIT 7-2, annexed hereto.
Each Related Entity 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 that
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.
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The Borrowers shall provide the Administrative Agent with prior
written notice of any entity's becoming or ceasing to be a Related
Entity.
(b) 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.
(c) 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 (including, without
limitation, the creation of security and mortgage interests by such
Borrower as contemplated hereby); 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:
(ii) Have been duly authorized by all necessary corporate
action.
(iii) Do not, and will not, contravene in any material respect
any provision of any Requirement of Law or obligation of such Borrower.
(iv) Will not result in the creation or imposition of, or the
obligation to create or impose, any Encumbrance upon any assets of any
Borrower pursuant to any Requirement of Law or obligation, except
pursuant to the Loan Documents.
(a) 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.
(c). Maintain Accounts. To permit the Lenders to monitor the Borrowers'
financial performance and condition, each Borrower shall maintain all of such
Borrower's depository accounts with any of the Agents or other depository
institutions disclosed to, and acceptable to the Agents, with all significant
deposits to be maintained with the Agents. Upon the occurrence
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of a Collateral Provision Event, all third party depository accounts shall be
transferred to, maintained with, and controlled by the Documentation Agent. Any
amounts not deposited directly with the Agents and received by any third party
institution during any transition shall be subject to account control agreements
satisfactory to the Agents and transferred on a daily basis to an account
established and controlled by the Administrative Agent.
(d). Trade Names. EXHIBIT 7-4, annexed hereto, is a listing of:
(i) All names under which each Borrower conducted its
business within the last five (5) years.
(ii) All Persons with whom any Borrower ever consolidated
or merged, or from whom any Borrower ever acquired in a single
transaction or in a series of related transactions substantially all of
such Person's assets.
(a) Except (i) upon not less than twenty-one (21) days prior
written notice given the Administrative Agent, and (ii) in
compliance with all other provisions of this Agreement, no
Borrower will undertake or commit to undertake any action such
that the results of that action, if undertaken prior to the date
of this Agreement, would have been reflected on EXHIBIT 7-4.
(b) 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.
(c) 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.
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(e). Locations. The Assets, 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 7-5, 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. Except (i) to
accomplish sales of Inventory in the ordinary course of business or (ii) to
utilize such of the Assets as is removed from such locations in the ordinary
course of business (such as motor vehicles), the Borrower shall not remove any
Assets from said chief executive offices or those locations listed on EXHIBIT
7-5.
(f). 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 7-6 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 7-13; liens in
connection with workmen's compensation, unemployment insurance or
other social security obligations; liens securing the performance
of bids, 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
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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 7-7(j).
(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; 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
(a) Liens and security interests granted to the Agents and
the Lenders under the Loan Documents.
(g). Indebtedness. The Borrowers do not and shall not hereafter
have any Indebtedness with the exceptions of:
(a) Indebtedness to the Agents and the Lenders hereunder;
(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
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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 7-7 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;
(f) Indebtedness of a Borrower or any Subsidiary in respect
of guarantees to the extent the underlying Indebtedness is
permitted by this Section 7-7; and
(g) Subordinated Debt;
(h) Unfunded pension and benefit Liabilities so long as each
Borrower is in compliance with Section 7-15, provided that the
Lead Borrower's excess of the present value of accrued pension
benefits over the value of plan assets shall not exceed
$10,000,000 as determined under the plan's assumptions for
funding purposes.
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(i) To the extent payment thereof shall not at the time be
required by Section 7-13, 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; and
(l) Any other unsecured Indebtedness in an amount not to exceed
$ 1,000,000, in the aggregate at any time outstanding.
(h). Insurance Policies. EXHIBIT 7-8, 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.
(a) 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 Documentation Agent satisfactory evidence
of the same. After the occurrence of a Collateral Provision
Event, all insurance carried by any Borrower shall name the
Documentation Agent as additional insured and as additional
loss
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payee and shall provide for a minimum of thirty (30) days' written
notice of cancellation to the Documentation Agent. In the event of the
failure by any Borrower to maintain insurance as required herein, the
Documentation Agent, at its option, may obtain such insurance at the
cost and expense of the Borrowers. Each Borrower shall furnish to the
Documentation Agent certificates or other evidence reasonably
satisfactory to the Documentation Agent regarding compliance by such
Borrower with the foregoing insurance provisions.
(b) After the occurrence of a Collateral Provision Event, each
Borrower shall advise the Documentation Agent of each material claim
made by such Borrower under any policy of insurance which covers the
Assets and will permit the Documentation Agent, at the Documentation
Agent's option in each instance, to the exclusion of such Borrower, to
conduct the adjustment of each such claim while any Event of Default
is then in existence. Each Borrower hereby appoints the Documentation
Agent as such Borrower's attorney in fact, exercisable after the
occurrence of an Event of Default, to obtain, adjust, settle, and
cancel any insurance described in this section and to endorse in favor
of the Documentation Agent any and all drafts and other instruments
with respect to such insurance, in each case during the continuance of
any Event of Default. Such appointment, being coupled with an
interest, is irrevocable until this Agreement is terminated by a
written instrument executed by a duly authorized officer of the
Documentation Agent. The Documentation Agent shall not be liable on
account of any exercise pursuant to said power except for any exercise
in actual willful misconduct, gross negligence or bad faith. The
Documentation Agent may apply any proceeds of such insurance against
the Liabilities, whether or not such have matured, in such order of
application as the Documentation Agent may determine.
(i) . Licenses. EXHIBIT 7-9, annexed hereto, is a schedule of all material
license, distributor, franchise, and similar agreements issued to, or to which
any Borrower is a party.
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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.
(j). Leases. EXHIBIT 7-10, annexed hereto, is a schedule of all presently
effective Leases and Capital Leases having an outstanding amount due in excess
of $100,000. 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
of a Collateral Provision Event 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 7-10 does not exceed $500,000.
(k). Requirements of Law. Except as set forth on EXHIBIT 7-11, 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.
(l). Maintain Properties. Each Borrower shall:
(a) Keep the Assets in good order and repair (ordinary reasonable
wear and tear and insured casualty excepted).
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(b) Not suffer or cause the waste or destruction of any material part
of the Assets.
(c) Not use any of the Assets in violation of any policy of insurance
thereon.
(d) Not sell, lease, or otherwise dispose of any of the Assets, other
than as set forth in Section 7-22.
(m). Pay Taxes. Except as set forth in EXHIBIT 7-13, to the best of the
Borrower's 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.
(a) Except as set forth in EXHIBIT 7-13 and except as would not be
material, each Borrower has, and hereafter shall: pay, as they become
due and payable, all taxes and unemployment contributions and other
charges of any kind or nature levied, assessed or claimed against
such Borrower or the 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.
(b) Except as set forth in EXHIBIT 7-13, subject to the Borrowers'
rights under subsection (b) above, in the event of the failure by any
Borrower to comply with
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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 the 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, preserve, collect, or realize upon
any or all of the Assets 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..
(n). 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 the 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.
(o). 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 7-7(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.
(p). Hazardous Materials. Except as set forth on EXHIBIT 7-16, no Borrower
has: (A) been legally responsible for any release or threat of release of any
Hazardous Material or (B) 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.
(a) Each Borrower shall: (C) dispose of any Hazardous Material only
in compliance with all Environmental Laws and (D) 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.
(a) 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
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assessment, containment, or removal of any Hazardous Material, for
which expense or loss any Borrower may be liable.
(q). Litigation. Except as set forth on EXHIBIT 7-17, 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.
(r). Dividends, etc. None of the Borrowers will 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 and, provided no Event of Default is then existing, the
periodic redemption of stock consistent with past practices and in no event to
exceed the lesser of (i) 25% of EBITDA in any fiscal year, or (ii) the
difference between Consolidated Operating Cash Flow and Total Debt Service in
any fiscal year.
(s). 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 7-19
attached hereto and any renewal, extension
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or refunding thereof, provided that (i) the aggregate principal
amount thereof is not at any time increased, (ii) no material terms
applicable thereto shall be more favorable to the renewal or
extension borrower or recipient, as the case may be, than the terms
that are applicable to the borrower or recipient, as the case may be,
on the date hereof and (iii) the interest rate (if any) applicable
thereto shall be a market interest rate as of the time of such
renewal or extension;
(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) Revolving Credit Loans and Term Loan;
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(i) Guarantees by a Borrower of Indebtedness and other obligations
incurred by Subsidiaries to the extent permitted by Section 7-7;
(j) Capital Expenditures to the extent permitted by Section 7-31;
(k) Guarantees by any Borrower of the Liabilities;
(l) Any new Capital Leases permitted under Section 7-20;
(m) Mergers or consolidations permitted under Section 7-21:
(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.
(t). 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 7-7 and 7-8. Each Borrower will not, and will
not permit any Subsidiary to, enter into any new lease (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 for the period from the Closing Date through the
June 30, 2005 under all such leases entered into in any fiscal year after the
Closing Date shall exceed $2,000,000 in the aggregate in such fiscal year after
the Closing Date; 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 Agents, the Lead Borrower will obtain a landlord's waiver
reasonably acceptable to the Agents on any existing or new leased location
occupied by any Borrower.
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(u). 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:
(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 7-19(g) 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.
(v). Sale of Assets. Except as expressly permitted under Section 7-21,
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 the following, each of which may be effected with
the prior written consent of the Agents, such consent not to be unreasonably
withheld:
(a) Each Borrower and its Subsidiaries may sell or otherwise dispose
of (i) inventory in the ordinary course of business; (ii) assets that
are no longer used or useful in the Business of the applicable
Borrower or Subsidiary, (iii) other sales and dispositions for fair
market value that, when aggregated with all other sales and
dispositions pursuant to this clause (iii), is in exchange for (a)
prior to the occurrence Collateral Provision Event, up to $2,000,000
of gross sales proceeds received by a Borrower or (b) after the
occurrence of a Collateral Provision Event, up to $100,000 of gross
sales proceeds received by a Borrower, provided that in either event
no Borrower shall dispose of any portion of its books and records,
regardless of whether a particular asset of property constitutes
Assets, without the prior consent of the Agents, and (iv) capital
stock of Software and Telecom;
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provided, however, that, in the case each of the foregoing clauses,
immediately before and after giving effect thereto no Event of
Default exists and no event exists which, with the giving of notice
or passage of time or both, would constitute an Event of Default. The
Agents' consent shall be requested no less than ten (10) days prior
to the scheduled closing date of a proposed sale. After the
occurrence of a Collateral Provision Event, the Net Proceeds of any
sale shall be used solely to reduce the outstanding 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), (ii) such
transfers relate solely to a transfer by the Lead Borrower of its
encoder line of business to Encoder, its metrigraphics line of
business to Metrigraphics, and (iii) 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.
(w). 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 Assets, or take any other action
that the Administrative Agent may deem necessary or desirable to repair, insure,
maintain, preserve, collect, or realize upon any of the Assets. The
Administrative Agent shall not have any obligation to 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
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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.
(x). 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.
(y). Affiliate Transactions. Except as expressly permitted under Section
7-21, 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.
(z). Additional Assurances. Each Borrower shall execute and deliver to the
Agents such instruments, documents, and papers, and shall do all such things
from time to time hereafter as the Agents may request to carry into effect the
provisions and intent of this Agreement; and to comply with all applicable
statutes and laws. Each Borrower shall execute all such instruments as may be
required by the Agents with respect to the recordation and/or perfection of the
security interests created herein. A carbon, photographic, or other reproduction
of this Agreement or of any financing statement or other instrument executed
pursuant to this Section shall be sufficient for filing to perfect the security
interests granted herein.
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(aa). Adequacy of Disclosure. 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, 2001 have been prepared in accordance
with GAAP consistently applied and present fairly the condition of the Borrower
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.
(a) 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 the within Agreement.
(b) 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 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 the
within 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 6-10, 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.
(bb). Government Contracts. Each Government Contract is valid, binding and
in full force and effect, and, other than as set forth on EXHIBITS 6-10 or 7-28,
there is no event which has occurred or exists, which constitutes or which with
notice, the happening of any event and/or
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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 6-10 or 7-28, the Borrowers have no reason to believe that the
parties to the Government Contracts will not fulfill their obligations
thereunder in all material respects.
(cc). Assignment of Claims Act. Upon the occurrence of a Collateral
Provision Event, the Borrowers jointly and severally agree to take any action
and to execute and deliver all documentation reasonably requested by the Agents
in order to allow the Agents to (i) provide notice of its security interest in
and right to payment under all Government Contracts (other than Government
Contracts which are classified or otherwise prohibit assignment), and (ii)
otherwise comply in all respects with the requirements of the Assignment of
Claims Act. In connection therewith, the Borrowers shall promptly notify the
Agents of any Government Contract entered into by the Borrower and provide a
detailed description of such contractual arrangement sufficient to allow the
Agents to comply in all respects with the requirements of the Assignment of
Claims Act.
(dd). 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 $6,000,000.00 (exclusive of
Capital Expenditures in an amount not to exceed $2,300,000.00 in the aggregate
in fiscal years 2002 and 2003 related to the refurbishment of the Lead
Borrower's premises located at 00 Xxxxxxxx Xxxx, Xxxxxxx, Xxxxxxxxxxxxx).
(ee). 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.
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ARTICLE 8 - SWINGLINE
(a). Swingline Loans
(a) The Swingline Lender is authorized by the Lenders and shall,
subject to the provisions of this Section, make Swingline Loans up to $5,000,000
("the Swingline") in the aggregate outstanding at any time evidenced by a
certain note (the "Note") in the form of Exhibit 8-1, annexed hereto, executed
by the Borrowers in favor of the Swingline Lender, consisting only of Base
Margin Loans, upon a notice of a requested Swingline Loan received by the
Administrative Agent and the Swingline Lender (which notice, at the Swingline
Lender's discretion, must be submitted prior to 11:00 a.m., Boston time, on the
Business Day on which such Swingline Loan is requested). Swingline Loans shall
be subject to periodic settlement with the Lenders under Section 8.2 below.
(b) Swingline Loans may be made only for administrative convenience,
in which case the Swingline Lender shall, at the Lead Borrower's request, make
Swingline Loans in reliance upon the Borrowers' actual or deemed representations
under Article 7, that the applicable conditions for borrowing are satisfied. If
the conditions for borrowing under Article 7 cannot be fulfilled, the Lead
Borrower shall give immediate notice thereof to the Administrative Agent and the
Swingline Lender (a "Noncompliance Notice"), and the Administrative Agent shall
promptly provide each Lender with a copy of the Noncompliance Notice. If the
conditions for borrowing under Article 7 cannot be fulfilled, the Required
Lenders may direct the Swingline Lender to, and the Swingline Lender thereupon
shall, cease making Swingline Loans until such conditions can be satisfied or
are waived. Unless the Required Lenders so direct the Swingline Lender, the
Swingline Lender may, but is not obligated to, continue to make Swingline Loans
beginning one Business Day after the Non-Compliance Notice is furnished to the
Lenders. Notwithstanding the foregoing, no Swingline Loans shall be made
pursuant to this subsection (b)
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if the aggregate outstanding amount of the Revolving Credit and Swingline Loans
would exceed $50,000,000 or any lesser amount to which the Revolving Loan
Ceiling has then been reduced.
(b). Settlements Amongst Lenders
The Swingline Lender may (but shall not be obligated to), at any
time, on behalf of the Borrowers (which hereby authorize the Swingline Lender to
act on their behalf in that regard) request the Administrative Agent to cause
the Lenders to make a Revolving Credit Loan (which shall be a Base Margin Loan)
in an amount equal to such Lender's Commitment Percentage of the outstanding
amount of Swingline Loans made in accordance with Section 8.1, which request the
Swingline Lender shall make within seven (7) days of any Swingline Loan and
which request may be made regardless of whether the conditions set forth in
Article 7 have been satisfied. Upon such request, each Lender shall make
available to the Administrative Agent the proceeds of such Revolving Credit Loan
for the account of the Swingline Lender. If the Swingline Lender requires a
Revolving Credit Loan to be made by the Lenders and the request therefor is
received prior to 11:00 a.m., Boston time, on a Business Day, such transfers
shall be made in immediately available funds no later than 3:00 p.m., Boston
time, that day; and, if the request therefor is 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 or the Swingline
Lender. 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.
ARTICLE 9 - AMENDED AND RESTATED LOAN AGREEMENT.
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This Agreement amends and restates in its entirety a certain Loan and
Security Agreement dated as of February 10, 2000 between the Borrowers, the
Administrative Agent and the Documentation Agent.
ARTICLE 10 - AGENTS AS BORROWER'S ATTORNEY-IN-FACT.
(a). Appointment as Attorney-In-Fact. Upon the occurrence and during the
continuance of any Event of Default (or after the occurrence of a Collateral
Provision Event for the purposes of subsection (d), below), each Borrower hereby
irrevocably constitutes and appoints each Agent as each Borrower's true and
lawful attorney, with full power of substitution. The rights and powers granted
the Agents by the within appointment include but are not limited to the right
and power to:
(a) Sign change of address forms to change the address to which each
Borrower's mail is to be sent to such address as either Agent shall
designate; receive and open each Borrower's mail;
(b) Endorse the name of any Borrower in favor of the Agents upon any
and all checks, drafts, notes, acceptances, or other items or
instruments;
(c) Take all such action as may be necessary to obtain the payment
of any letter of credit and/or banker's acceptance of which any
Borrower is a beneficiary; and
(d) after the occurrence of a Collateral Provision Event, and
whether or not an Event of Default shall have occurred, (i) sign and
file or record any financing or other statements in order to perfect
or protect the Documentation Agent's security interest in the Assets
and (ii) exercise any additional rights and powers granted to Agents
pursuant to the Security Agreement.
(b). No Obligation to Act. The Agents shall not be obligated to do any of
the acts or to exercise any of the powers authorized by Section 10-1 herein, but
if either Agent elects to do any
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such act or to exercise any of such powers, it shall not be accountable for more
than it actually receives as a result of such exercise of power, and shall not
be responsible to any Borrower for any act or omission consistent with its
rights and powers under the Loan Documents, to act except for any act or
omission to act as to which there is a final determination made in a judicial
proceeding (in which proceeding the Agents have had an opportunity to be heard)
which determination includes a specific finding that the subject act or omission
to act had been grossly negligent or in actual bad faith.
ARTICLE 11 - FINANCIAL AND OTHER REPORTING REQUIREMENTS/ FINANCIAL COVENANTS.
(a). 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 the Assets in accordance
with such Borrower's normal business practices.
(c) Retain independent certified public accountants who are
reasonably satisfactory to the Agents and instruct such
accountants to fully cooperate with, and be available to, the
Agents 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 Agents.
(d) Not change such Borrower's fiscal year.
(e) Not change such Borrower's taxpayer identification number.
(b). Access to Records. (a) Each Borrower shall, upon reasonable
advance notice, accord the Agents and the Agents' representatives with access
from time to time as the Lender
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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 Agents, and the Agents' representatives, shall have the right, and each
Borrower will permit the Agents and such representatives from time to time as
the Agents 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 Agents for reasonable copying of documents.
(b) Each Borrower hereby authorizes the Agents and the Agents'
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 Agents and the Agents' representatives
with respect thereto.
(c). 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 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 or
directors.
(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) The occurrence of any Collateral Provision Event.
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(e) Any litigation which, if determined adversely to any
Borrower, might result in a Material Adverse Change on the
financial condition of any Borrower.
(f) The distribution of any materials to the shareholders of any
Borrower (qua such shareholders), which notice shall be
accompanied by a copy of such filings.
(d). 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 and
consolidating balance sheets of the Lead Borrower and its
Subsidiaries as at the end of such year and (ii) the related
consolidated and consolidating 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 generally accepted accounting
principals 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) and that the audit by
such accountants in connection with such financial statements
referred to above only to the extent that the same are required
to be prepared by GAAP or by the Securities and Exchange
Commission or by any other applicable regulatory authority;
(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 and
consolidating balance sheets of the Lead Borrower and its
Subsidiaries as at the end of such period, (ii) the related
unaudited consolidated and consolidating statements of income
and surplus and cash flows for such
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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; provided, however, that the Borrowers shall be
required to furnish the consolidating financial statements only
to the extent that the same are required to be prepared by GAAP
or by the Securities and Exchange Commission or by any other
applicable regulatory authority,
(c) Upon furnishing any financial statement required pursuant to
Sections 11-4(a) or 11-4 (b) (and monthly upon the failure of
the Borrowers to comply with any covenant set forth in Section
5-2 for the purpose of determining the occurrence of a
Collateral Provision Event), a compliance certificate
substantially in the form of EXHIBIT 11-4CC 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 detailed list of each Borrower's
backlog of revenue-generating government contracts showing
services to be provided by each Borrower in connection therewith
as of the date of such financial statements;
(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 is 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 Agents);
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(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 Lenders, 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 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 such Lender
may from time to time reasonably request. To the extent not
prohibited by applicable law, each Borrower will permit each
Lender to inspect the books and any of the properties or
assets of such Borrower and its Subsidiaries at such
reasonable times as such Lender may from time to time request.
All costs and expenses of any Lender in connection with or
relating to any request made under this Section 11-4 shall, if
no Event of Default has occurred and is continuing, be paid by
the Lender making such request and, upon the occurrence and
during the continuance of an Event of Default, be paid by the
Borrowers.
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(e). Additional Financial Information. In addition to the foregoing, the
Borrowers shall promptly, but in no event later than ten (10) days, provide the
Agents with such other and additional information (except to the extent such
information is classified) concerning the Borrowers, the Assets, the operation
of the Borrowers' business, and the Borrowers' financial condition, including
original counterparts of financial reports and statements, as either Agent may
from time to time reasonably request from any Borrower, including, without
limitation, such information with respect to the status of the pending United
States government audit of the Borrowers' Government Contracts.
(f). Audits and Appraisals. The Agents may, after the occurrence of a
Collateral Provision Event, from time to time conduct commercial finance audits
of the Borrower's books and records (in each event, at the Borrowers' expense,
but not to exceed $5,000.00 per exam), such exams to be conducted (i) quarterly,
or (ii) at the discretion of the Agents at any time while an Event of Default is
existing.
(a) (B) The Agents, at the expense of the Borrowers, may
participate in and/or observe each physical count and/or inventory of
so much of the Assets as consists of Inventory which is undertaken on
behalf of the Borrowers.
(i) Upon the Agent's reasonable request from time to time, but
no more frequently than annually unless an Event of Default is existing,
the Borrower's shall permit the Agents to obtain appraisals of the
Borrowers' assets (in all events, at the Borrowers' expense) conducted by
such appraisers as are satisfactory to the Agents.
(a) The Agents, at the expense of the Borrowers, may order
environmental assessments of the Real Estate at such times as the
Agents may reasonably determine, provided that no more than one such
assessment be conducted at Borrowers' expense in any calendar year
prior to the occurrence of an Event of Default.
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(g). Consolidated Operating Cash Flow to Total Debt Service. The Borrowers
shall at all times maintain a ratio of Consolidated Operating Cash Flow to Total
Debt Service of greater than 1.50 to 1.0 for each quarter end, calculated on a
rolling four (4) quarter basis.
(h). Consolidated Tangible Net Worth. The Borrowers shall not at any time
during the term of the Revolving Credit permit their Consolidated Tangible Net
Worth to be less than $29,000,000.00, which shall be tested as of the end of
each fiscal quarter of the Lead Borrower.
(i). Leverage Ratio. The Borrowers will not at any time permit their ratio
of funded Indebtedness to the Borrowers' consolidated trailing four quarter
EBITDA (tested on a pro forma basis in connection with contemplated
acquisitions) to be greater than (a) 3.00 to 1.00 from the Closing Date through
December 31, 2003, and (b) 2.50 to 1.00 from January 1, 2004 and thereafter,
which ratio shall be tested as of the end of each quarter.
11-10. Net Profit. The Borrowers shall earn a consolidated minimum net
profit, as determined in accordance with GAAP, of at least $1.00, measured
monthly, on a cumulative basis.
ARTICLE 12 - EVENTS OF DEFAULT.
Upon the occurrence and during the continuance of any one or more of the
following events (herein, "Events of Default"), any and all Liabilities of the
Borrowers to the Agent and the Lenders shall become immediately due and payable,
at the option of the Agents, and without demand or notice expect as expressly
set forth in this Agreement or required by applicable law. Upon the occurrence
of any Event of Default described in Section 12-8 any and all Liabilities shall
become due and payable without any further act on the part of the Agents. The
occurrence and continuance of any Event of Default shall also constitute,
without notice or demand, a default under all other agreements between any
Agent, any Lender and any Borrower related to or in connection with the
Liabilities.
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(a). Failure to Pay. The failure by the Borrowers to pay any principal
and/or interest amount under the Revolving Credit or the Term Loan within three
(3) days of when due.
(b). Failure to Make Other Payments. The failure by the Borrowers to pay
when due any other Liabilities within three (3) Business Days of when due.
(c). 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 7-2, 7-6 (other than non-consensual liens
which shall be included within the scope of Section 12-4), 7-7, 7-8, 7-12(b),
7-12(d), 7-18, 7-19, 7-20, 7-21, 7-22, 11-7, 11-8, 11-9 and 11-10.
(d). Failure to Perform Other Liabilities. Any Borrower shall default in
the performance of or compliance with any term, condition, covenant or agreement
(other than those listed in Section 12-3) to be performed or observed by it
under this Agreement or under any other Loan Document and such default shall
continue for a period of thirty (30) days or more.
(e). Misrepresentation. The determination by the Agents that any
representation or warranty now, or hereafter made by any Borrower to the Agents,
in any document, instrument, agreement, or paper was not true or accurate in all
material respects when given or when deemed to have been given.
(f). 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.
(g). Default Under Other Agreements. The occurrence of any event of
default under any Loan Document, whether such Loan Document now exists or
hereafter arises (notwithstanding that the Lender may not have exercised its
rights upon default under any such Loan Document).
(h). 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 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
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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.
(i). Judgment. A final judgment which, with other outstanding final
judgments against any or all of the Borrowers and its Subsidiaries, exceeds an
aggregate of $500,000 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 Agents 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.
(j). 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.
(k). Material Adverse Change. There shall have occurred a Material Adverse
Change (other than an event or condition to the extent disclosed on Exhibit 6-10
or 7-28) that, to the extent curable, is not cured within thirty (30) days
following the date on which any Borrower has notice (actual or constructive)
thereof.
(l). Trustee Process. The service of any process upon any Lender seeking
to attach by trustee process any funds in excess of $250,000 of any Borrower on
deposit with any Lender.
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(m). Change in Ownership. (a) Any change in the identity of any person
currently acting as chief financial officer or chief executive officer of any
Borrower, unless the subject Borrower shall engage a replacement officer
reasonably acceptable to the Agents 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.
(n). Casualty Loss. The occurrence of any uninsured loss, theft, damage or
destruction to or of any of the Assets in excess of $500,000.00.
(o). 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 results in a Material Adverse Change.
(p). Termination of Existence. Except as expressly permitted hereunder,
the termination of existence, dissolution, winding up, or liquidation of the
Lead Borrower.
(q). Termination of Guaranty. The termination, or attempted termination,
of any guaranty by any guarantor of the Liabilities.
(r). 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 security interest created by or in any Loan Document or any payment
made pursuant thereto.
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(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 security interest created by any Loan Document or any
payment made pursuant thereto.
(s). Indictment - Forfeiture. Except as set forth on EXHIBITS 6-10 and
7-28, 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 could result in a Material Adverse Change.
ARTICLE 13 - RIGHTS AND REMEDIES UPON DEFAULT
In addition to all of the rights, remedies, powers, privileges, and
discretions which the Agent and/or the Lenders are provided prior to the
occurrence of an Event of Default, the Agents shall have the following rights
and remedies upon the occurrence and during the continuance of any Event of
Default.
(a). Termination of Commitments. The Agents may, and if directed by the
Required Lenders, shall, 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
hereunder shall forthwith terminate without any other notice of any kind; and
with respect to any event described in Section 12-8 above, the Commitments shall
automatically terminate and the principal of the Liabilities then
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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.
(b). Rights and Remedies. The rights, remedies, powers, privileges, and
discretions of the Agents hereunder (herein, the "Agents' 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 Agents in exercising or enforcing
any of the Agents' Rights and Remedies shall operate as, or constitute, a waiver
thereof. No waiver by the Agents 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 Agents'
Rights or Remedies, and no express or implied agreement or transaction of
whatever nature entered into between the Agents and any person, at any time,
shall preclude the other or further exercise of the Agents' Rights and Remedies.
No waiver by the Agents of any of the Agents' 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 Agents' Rights and Remedies and all of
the Agents' 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 Agents at such time or times and in such order of
preference as the Agents in their sole discretion may determine. The Agents'
Rights and Remedies may be exercised without resort or regard to any other
source of satisfaction of the Liabilities.
(c). Distribution of Asset Proceeds. In the event that, following the
occurrence and during the continuance of any Event of Default, the Agents or any
Lender, as the case may be, receives any monies in connection with the
enforcement of any the Loan Documents, or
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otherwise with respect to the realization upon any of the Assets, 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 Agents for or in respect of, all reasonable
costs, expenses, disbursements and losses which shall have been
incurred or sustained by the Agents in connection with the collection
of such monies by the Agents, for the exercise, protection or
enforcement by the Agents of all or any of the rights, remedies,
powers and privileges of the Agents under this Agreement or any of
the other Loan Documents or in respect of the Assets or in support of
any provision of adequate indemnity to the Agents against any taxes
or liens which by law shall have, or may have, priority over the
rights of the Agents to such monies;
(b) Second, to the Swingline Lender to be applied to the Swingline Loans;
(c) Third, pro rata to each of the Lenders to all other Liabilities,
provided, however, proceeds from the liquidation of the Real Estate shall be
first paid to the Term Loan Lenders to be first applied to the Term Loans, pro
rata, with the remaining balance, if any, to be applied to all other Liabilities
on a pro rata basis;
(d) Fourth, upon payment and satisfaction in full or other provisions for
payment in full satisfactory to the Lenders and the Agents of all of the
Liabilities, to the payment of any obligations required to be paid pursuant to
(S)9-504(1)(c) of the Uniform Commercial Code of the Commonwealth of
Massachusetts; and
(e) Fifth, the excess, if any, shall be returned to the Borrowers or to
such other Persons as are entitled thereto.
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ARTICLE 14 - NOTICES.
(a). 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
If to the Documentation Agent: Banknorth, N.A.
Seven New England Executive Park
Xxxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Mr. C. Xxx Xxxxxxxxxx
Fax : 000 000-0000
With a copy to: Xxxxxx & Xxxxxxxxxx LLP
Xxxxx Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esquire
Fax : 000 000-0000
If to Syndication Agent: Key Corporate Capital Inc.
MC-OH-01-27-0402
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xx. Xxxxxxx X. Xxxxxxxxxx
Fax: : 000-000-0000
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If to any Borrower: Dynamics Research Corporation
00 Xxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Chief Financial Officer
Fax : 000-000-0000
With a copy to: Xxxxx Peabody, LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxx, Esquire
Fax : 000 000-0000
(b). Notice Given. Notices shall be deemed given at the sooner of
when actually received or (A) if by mail: Three (3) days following deposit in
the United States mail, postage prepaid; (B) By overnight express delivery: the
Business Day following the day when sent; (C) 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 (D) By Facsimile 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).
(a) 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 15 - TERM OF AGREEMENT.
(a). Termination of Revolving Credit. The Revolving Credit shall be
terminated upon the Termination Date.
(b). Effect of Termination. Upon the Termination Date, the Borrower
shall pay the Administrative Agent the then principal balance of the Loan
Account and all accrued and unpaid interest thereon (whether or not then due).
Following such payment, all provisions of this Agree-
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ment, 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 (including the Revolving Credit and the Term Loan)
shall have been paid in full.
ARTICLE 16 - GENERAL.
(a). 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 Agents, 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
17 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.
(b). 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.
(c). Amendments. Course of Dealing. 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 Agents to give notice to any Borrower
of the Borrowers' 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
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subject Loan Document. No change made by the Agents in the manner by which
Availability is determined (any of which changes may be made by the Agents in
their discretion) shall obligate the Agents to continue to determine
Availability in that manner.
(a) 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. 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.
(d). Power of Attorney. In connection with all powers of attorney
included in this Agreement, the Borrowers hereby grant unto the Agents full
power to do any and all things necessary or appropriate in connection with the
exercise of such powers as fully and effectually as the Borrowers might or could
do, hereby ratifying all that said attorney shall do or cause to be done by
virtue of this Agreement. No power of attorney set forth in this Agreement shall
be affected by any disability or incapacity suffered by the Borrowers and each
shall survive the same. All powers conferred upon the Agents by this Agreement,
being coupled with an interest, shall be irrevocable until this Agreement is
terminated by a written instrument executed by a duly authorized officer of the
Agents.
(e). Costs and Expenses. The Borrowers shall pay on demand all
Costs of Collection and all reasonable expenses of the Agents and Lenders in
connection with the preparation,
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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 Lenders in preparing or
amending this Agreement and all other agreements, instruments, and documents
related thereto, or otherwise incurred with respect to the Liabilities. The
Borrowers specifically authorize the Administrative Agent to pay all such fees
and expenses and in the Lenders' discretion, to add such fees and expenses to
the Loan Account.
(f). 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.
(g). 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.
(h). Consent to Jurisdiction. 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 Agents may elect in the
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Agents' 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.
(a) 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.
(b) Each Borrower WAIVES, at the option of the Agents, 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.
(c) Nothing herein shall affect the right of the Agents to
bring legal actions or proceedings in any other competent
jurisdiction.
(d) 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 Agents or any Lender in a
different forum, which counterclaim may be brought in such
alternate forum.
(i). Indemnification. Each Borrower shall jointly and severally
indemnify, defend, and hold the Lender and any employee, officer, or agent of
the Agents and the Lenders (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
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Person (as well as from attorneys' reasonable fees and expenses in connection
therewith) on account of the 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
Agents' 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
Lender 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
Agents in favor of the Borrowers.
(j). Rules of Construction. 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.
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(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.
(a) The Loan Documents shall be construed and interpreted in a harmonious
manner, provided, however, in the event of any inconsistency between the
provisions of the within Agreement and any other Loan Document, the
provisions of the within Agreement shall govern and control.
(k). Intent. It is intended that
(a) This Agreement take effect as a sealed instrument.
(b) The Agents' 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.
(l). Setoff. Regardless of the adequacy of any collateral, 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
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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.
(m). 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.
(n). Waivers. Each Borrower (and all guarantors, endorsers, and sureties
of the Liabilities) make each of the waivers included in subsection (b), below,
knowingly, voluntarily, and intentionally, and understands that the Agents 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.
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(a) EACH BORROWER, AND EACH SUCH GUARANTOR, ENDORSER, AND SURETY
RESPECTIVELY WAIVES THE FOLLOWING:
(ii) Except as otherwise specifically required hereby,
notice of non-payment, demand, presentment, protest and all forms of
demand and notice.
(iii) Except as otherwise specifically required hereby, the
right to notice and/or hearing prior to the Agents' exercising of the
Agents' rights upon default.
(iv) THE RIGHT TO A JURY IN ANY TRIAL OF ANY CASE OR
CONTROVERSY IN WHICH THE LENDER IS OR BECOMES A PARTY (WHETHER SUCH
CASE OR CONTROVERSY IS INITIATED BY OR AGAINST, THE AGENTS, THE LENDERS
OR IN WHICH ANY AGENT OR 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, THE AGENTS AND THE
LENDER (AND THE AGENTS AND EACH LENDER LIKEWISE WAIVES THE RIGHT TO A
JURY IN ANY TRIAL OF ANY SUCH CASE OR CONTROVERSY).
(v) 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.
(vi) Any claim to consequential, special, or punitive
damages.
(o). Receipt of Agreement. Each Borrower acknowledges receipt of a
completed copy of this Agreement.
ARTICLE 17 - THE AGENT.
(a). Authorization. The Agents are authorized 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 Agents, together with such powers as are
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reasonably incident thereto, provided that no duties or responsibilities not
expressly assumed herein or therein shall be implied to have been assumed by the
Agents. The relationship between the Agents 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 either Agent as a
trustee or fiduciary for any Lender. The Borrowers acknowledge that in certain
instances any action to be taken by the Agents may only be taken upon approval
of the Required Lenders or all the Lenders. Any rights and powers granted to
both Agents may be exercised by either Agent, acting singly, with the consent of
the other Agent. Further, any rights and powers granted to either Agent may be
exercised by the other Agent, with the consent of the Agent to whom such rights
and/or powers were initially granted.
(b). Employees and Agents. Each 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. Each Agent may
utilize the services of such Persons as said Agent in its sole discretion may
reasonably determine, and all reasonable fees and expenses of any such Persons
shall be paid by the Borrower.
(c). No Liability. Neither the Agents nor any of their shareholders,
directors, officers or employees nor any other Person assisting them in their
duties nor any agent 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 Agents or such other
Person, as the case may be, may be liable for losses due to its willful
misconduct or gross negligence.
(d). No Representations. The Agents shall not be responsible for the
execution or validity or enforceability of this Agreement, the Notes, any of the
other Loan Documents or any
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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 Agents 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 Agents have not made nor do they 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 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.
(e). Payments.
(a) (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
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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 (excluding Swingline 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 (excluding
Swingline Loans) shall be equal to such Lender's applicable Commitment
Percentage of Revolving Loans (excluding Swingline Loans) outstanding as of such
Settlement Date. If 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.
(b) 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
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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.
(c) 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.
(f). Holders of Notes. Each 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.
(g). Indemnity. The Lenders ratably agree hereby to indemnify and hold
harmless the Agents 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 Agent has not been reimbursed by
the Borrowers as required by Section 16-6), 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 Agent's
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actions taken hereunder or thereunder, except to the extent that any of the same
shall be directly caused by the Agents' willful misconduct or gross negligence.
(h). Agents as Lenders. In their individual capacity, Banknorth, N.A. and
Xxxxx Brothers Xxxxxxxx & Co. shall have the same obligations and the same
rights, powers and privileges in respect to their respective Commitments and the
Loans made by them, and as the holder of any of the Notes as they would have
were they not also an Agent.
(i). Resignation. Either 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 Agent. Unless an Event of Default shall have occurred and be
continuing, such successor Agent shall be reasonably acceptable to the Borrowers
in their reasonable discretion (with the remaining Agent being hereby approved
by the Borrowers as a successor Agent). If no successor Agent shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within thirty (30) days after the retiring Agent's giving of notice of
resignation, then the retiring Agent may, on behalf of the Lenders, after
consultation with the Lenders, appoint a successor 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 Agent being reasonably acceptable to the Borrowers in
its reasonable discretion. Upon the acceptance of any appointment as Agent
hereunder by a successor Agent, such successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations hereunder. After any retiring 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 Agent. In addition, if at any time either Agent shall no longer
act as a Lender hereunder (subject to the provisions of Section 17-13 below),
unless same results
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from a merger or other consolidation of the two Agents, the Required Lenders
shall have the right to appoint a successor Agent subject to the provisions of
this Section 17-9.
(j). Notification of Suspension Events and Events of Default. 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
Section17-10 it shall promptly notify in writing the other Lenders of the
existence of such Suspension Event or Event of Default.
(k). 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 Agents shall, if (a) so requested by
the Required Lenders and (b) the Required Lenders have provided to the Agents
such additional indemnities and assurances against expenses and liabilities as
the Agents may reasonably request, proceed to enforce the provisions of the Loan
Documents authorizing the sale or other disposition of all or any part of the
Assets and exercise all or any such other legal and equitable and other rights
or remedies as it may have in respect of such Assets. The Required Lenders may
direct the Agents in writing as to the method and the extent of any such sale or
other disposition, the Lenders hereby agreeing to indemnify and hold the Agents
harmless from all liabilities incurred in respect of all actions taken or
omitted in accordance with such directions, provided that the Agents need not
comply with any such direction to the extent that the Agents reasonably believe
their 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 Agents may, in their 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 and in
and to any Assets securing the Liabilities, including but not limited to
petitioning a court for injunctive relief, appointment of a receiver or
preservation of the proceeds of any Assets. Each of the Lenders acknowledges and
agrees that no individual Lender may separately enforce or exercise any of the
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provisions of any of the Loan Documents, including without limitation the Notes,
other than through the Agents.
(l). 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 the 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, the 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 Loan, interest, fees or
otherwise, to the remaining non-delinquent Lenders for application to, and
reduction of, their proportionate shares of the outstanding Loan until, as a
result of application of such assigned payments the Lenders' respective pro rata
shares of the outstanding Loan 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 (i) and (ii)
hereinabove shall be restored only upon the payment by the Delinquent Lender of
its pro rata share of the Loan 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
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purchase of the pro rata share of any Delinquent Lender's Future Commitment, the
Delinquent Lender's share in any future Loan 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 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 Advance
or to otherwise perform its obligations under the Loan Documents.
(m). 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 Agents 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 Five Million Dollars ($5,000,000.00) and is a
whole multiple of One Million Dollars ($1,000,000.00), and (d) the
parties of such assignment shall execute and deliver to the
Administrative Agent, for recording in the Register, an
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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 17-13(c), be released from its
obligations under this Agreement.
(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:
(ii) 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;
(iii) the assigning Lender makes no representation or warranty
and assumes no responsibility with respect to the financial condition of the
Borrowers and its
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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;
(iv) 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;
(v) such assignee will, independently and without reliance upon the
assigning Lender, the Agents 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;
(vi) such assignee represents and warrants that (to the extent required
herein) it is an Eligible Assignee;
(vii) such assignee appoints and authorizes the Agents 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 Agents by the terms hereof or
thereof, together with such powers as are reasonably incidental thereto;
(viii) 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
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(ix) such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Acceptance.
(a) 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 Agents 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).
(b) 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
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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.
(c) 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 Agents nor any other
Lender shall have any obligation, duty or liability to any such
participant of any other Lender.
(d) Foreign Lender. [intentionally omitted).
(n). 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.
(o). 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
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case may be, in accordance with the terms of this Agreement, or if either Agent
is required hereunder to seek, or desires to seek, the approval of the Required
Lenders or all of the Lenders, as the case may be, prior to undertaking a
particular action or course of conduct, the 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
(p). Disclosure. The Borrowers agree that in addition to disclosures made
in accordance with standard banking practices and orders issued by a court of
law any Lender may disclose information obtained by such Lender pursuant to this
Agreement including, without limitation, all budgets and financial statements to
assignees or participants hereunder without any notice to the Borrowers and
other potential assignees or participants after prior notice to the Borrowers.
The Agents and the Lenders shall use their best efforts to maintain the
confidentiality of any financial information or records furnished to the Agents
and the Lenders provided, however, such information and records may be disclosed
(i) to the Agents' and the Lenders' directors, officers, employees and
representatives, (ii) to the Agents' and the Lenders' independent third party
auditors and its directors, officers, employees and representatives, (iii) to
all federal and state bank examiners and to all parties to whom the Agents and
the Lenders are required to disclose such information and records under any
present or future federal and/or state banking law or regulation, as determined
by the Agents and the Lenders, (iv) in accordance with any subpoena or court
order which the Agents and the Lenders in good faith believe requires such
disclosure, and (v) as the Agents and Lenders deem necessary in connection with
any exercise of the Agents' and/or Lenders' rights and remedies under the Loan
Documents.
(q). 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
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this Agreement to be given by the Agents 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
Suspension Event or Event of Default may be waived (either generally or in a
particular instance and either retroactively or prospectively) by the Agents 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 Agents or any Lender
in exercising any right shall operate as a waiver thereof or otherwise be
prejudicial thereto. No Advance made by the Agents 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 Loan by
the Lenders may be amended by an instrument in writing signed by the Agents 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 the
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,
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(ii) releases or discharges any material portion of any collateral
now existing or hereafter granted in accordance with the Security
Agreement,other than in accordance with the express provisions of the Loan
Documents,
(iii) changes the definition of Required Lenders or reduces the
percentages specified in the definition of Required Lenders,
(iv) except as otherwise provided in this Agreement, change the
amount of any Lender's Commitment or Commitment Percentage,
(v) releases or waives any guaranty of the Liabilities or
indemnifications provided in the Loan Documents,
(vi) changes to the definition of Collateral Provision Event,
Consolidated Operating Cash Flow, Consolidated Tangible Net Worth, EBITDA,
Net Income, Permitted Acquisition or Total Debt Service;
(vii) amends, modifies or waives any provisions of this paragraph, or
(viii) amends, modifies or waives any term or condition of Sections
5-1, 5-2, 7-6, 7-19(o), 7-21(c), 7-30, 8-1, 8-2, 11-7, 11-8, 11-9 or 11-10.
(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.
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{REMAINDER OF PAGE LEFT INTENTIONALLY BLANK}
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IN WITNESS WHEREOF, THE PARTIES HAVE EXECUTED THIS LOAN AND SECURITY
AGREEMENT AS AN INSTRUMENT UNDER SEAL AS OF THE DATE FIRST WRITTEN ABOVE.
DYNAMICS RESEARCH CORPORATION
("Lead Borrower")
By /s/ Xxxxx Xxxxxxx
Name: Xxxxx Xxxxxxx
Title: Vice President
DRC ENCODER, INC.
("Borrower")
By /s/ Xxxxx Xxxxxxx
Name: Xxxxx Xxxxxxx
Title: Vice President
DRC METRIGRAPHICS, INC.
("Borrower")
By /s/ Xxxxx Xxxxxxx
Name: Xxxxx Xxxxxxx
Title: Vice President
DRC SOFTWARE, INC.
("Borrower")
By /s/ Xxxxx Xxxxxxx
Name: Xxxxx Xxxxxxx
Title: Vice President
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DRC TELECOM, INC.
("Borrower")
By /S/ Xxxxx Xxxxxxx
Name: Xxxxx Xxxxxxx
Title: Vice President
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DYNAMICS RESEARCH INVESTMENT CORPORATION
("Borrower")
By /s/ Xxxxx Xxxxxxx
Name: Xxxxx Xxxxxxx
Title: Vice President
DRC INTERNATIONAL CORPORATION
("Borrower")
By /s/ Xxxxx Xxxxxxx
Name: Xxxxx Xxxxxxx
Title: Vice President
X.X. XXXX ASSOCIATES, INC.
("Borrower")
By /s/ Xxxxx Xxxxxxx
Name: Xxxxx Xxxxxxx
Title: Vice President
XXXXX BROTHERS XXXXXXXX & CO.
("Administrative Agent, Term Lender, Swingline Lender
and Lender")
By /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Vice President
BANKNORTH, N.A.
("Documentation Agent, Term Loan Lender and Lender")
By /s/ C. Xxx Xxxxxxxxxx
Name: C. Xxx Xxxxxxxxxx
Title: Vice President
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KEY CORPORATE CAPITAL INC.
("Syndication Agent and Lender")
By /s/ Xxxx Xxxxxxxxxx
Name: Xxxx Xxxxxxxxxx
Title: Vice President
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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 3-7: Revolving Credit Note (S).3-7
EXHIBIT 3-10: Renewal/Conversion Notice (S).3-10
EXHIBIT 4-1: Term Note (S).4-1
EXHIBIT 6-10: Material Changes (S).6-10
EXHIBIT 7-2: Related Entity (S).7-2(b)
EXHIBIT 7-4: Trade Names; legal status; etc. (S).7-4
EXHIBIT 7-5: Locations (S).7-5
EXHIBIT 7-6: Permitted Liens (S).7-6
EXHIBIT 7-7: Indebtedne(S) (S).7-7
EXHIBIT 7-8: Insurance Policies (S).7-8
EXHIBIT 7-9: Licenses, Distributor Franchise Agreement (S).7-9
EXHIBIT 7-10: Leases (S).7-10
EXHIBIT 7-11 Legal Requirements (S).7-11
EXHIBIT 7-13 Taxes (S).7-13
EXHIBIT 7-16 Hazardous Materials (S).7-16
EXHIBIT 7-17 Litigation (S).7-17
EXHIBIT 7-19 Guaranties and Investments (S).7-19
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EXHIBIT 7-28 Government Contracts (S).7-28
EXHIBIT 8-1 Swingline Note (S).8-1
EXHIBIT 11-4CC: Compliance Certificate (S).11-4
EXHIBIT AA: A(S)ignment and Acceptance (S).17-13
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