AMENDMENT NO. 3 TO LOAN AND SECURITY AGREEMENT
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This AMENDMENT NO. 3 TO LOAN AND SECURITY AGREEMENT (this "Amendment")
is made as of this 18th day of July, 2003, by and among LASALLE BUSINESS CREDIT,
LLC, a Delaware limited liability company (successor-by-merger to LaSalle
Business Credit, Inc.), as agent for Standard Federal Bank National Association
(the "Lender"), AM COMMUNICATIONS, INC., a Delaware corporation ("AM
Communications"), AM BROADBAND SERVICES, INC., a Delaware corporation ("AM
Broadband"), SRS COMMUNICATIONS CORPORATION, a Connecticut corporation ("SRS
Communications"), AMC SERVICES, INC., a Delaware corporation ("AMC Services"),
AM NEX-LINK COMMUNICATIONS, INC., a Delaware corporation ("AM Nex-Link"), and AM
TRAINING SERVICES, INC., a Delaware corporation ("AM Training"). AM
Communications, AM Broadbank, SRS Communications, AMC Services, AM Nex-Link and
AM Training are referred to herein individually each as a "Borrower" and
collectively as the "Borrowers."
RECITALS
WHEREAS, the Borrowers and the Lender are parties to a certain Loan and
Security Agreement, dated as of August 14, 2002 (as amended, modified or
supplemented from time to time, the "Loan Agreement") pursuant to which the
Lender established certain credit facilities on behalf of the Borrowers subject
to the terms and conditions contained therein;
WHEREAS, the Borrowers have requested that the Lender amend certain
terms and provisions of the Loan Agreement; and
WHEREAS, the Lender is willing to amend certain terms and provisions of
the Loan Agreement on the terms and expressly subject to the conditions set
forth herein.
NOW, THEREFORE, based on these premises (which are incorporated
hereinafter by this reference), and in consideration of the mutual promises,
representations and warranties, covenants and conditions contained herein and
other good and valuable consideration, the receipt and adequacy of which is
hereby acknowledged, and intending to be legally bound, the parties hereto
hereby agree as follows:
1. Definitions. Capitalized terms used herein, and not otherwise
defined herein, shall have the meanings assigned to them in the Loan Agreement.
2. Acknowledgement of Obligations.
(a) Each Borrower acknowledges and agrees that: (i) as of the Third
Amendment Effective Date, the Borrowers are unconditionally liable to the Lender
on a joint and several basis under the Loan Agreement, the Notes and each of the
Other Agreements, for the payment of the principal amount of the Loans (as
described in clause (ii) hereof), plus all accrued and unpaid interest through
the Third Amendment Effective Date, plus all expenses incurred by the Lender
through the Third Amendment Effective Date, including, without limitation
reasonable attorney's fees and expenses, and that, as of the Third Amendment
Effective Date, the Borrowers have no defenses, counterclaims, deductions,
credits, claims or rights of setoff or recoupment with respect to such
obligations, and (ii) as of July 17, 2003, the aggregate outstanding principal
balance of (A) the Revolving Credit Loan is $6,096,664.05, (B) the Special
Advance is $1,250,000, (C) the Consolidated Term Loan is $2,379,722.24 and (D)
Term Loan C is $2,374,999.99.
(b) Each Borrower hereby ratifies and confirms its obligations under
the Loan Agreement, the Notes and each of the Other Agreements and hereby
acknowledges and agrees that, except as expressly set forth herein, the Loan
Agreement, the Notes and each of the Other Agreements remain in full force and
effect.
3. Amendments and Modifications. All of the following amendments to the
Loan Agreement are effective as of and after the Third Amendment Effective Date;
(a) Section 1 of the Loan Agreement is amended to add the following
new definition (in alphabetical order):
"'Pledged Cash Collateral' shall mean, collectively, the cash pledged
to Lender to secure the Liabilities by one or both of Xxx Xxxxxx and
Xxxxx Xxxxxxx pursuant to one or more pledge agreements executed and
delivered by such pledgor(s) to Lender.'"
(b) Section 1 of the Loan Agreement is further amended to delete the
definition of Borrowing Base therein and replace it with the following:
"'Borrowing Base' shall mean (i) the lesser of (x) the Maximum
Revolving Loan Limit and (y) the sum of (1) the Revolving Loan Limit
and (2) so long as the pledge thereof has not been terminated and its
continued existence or enforceability has not been denied or disputed,
the Pledged Cash Collateral, minus in each case (ii) the reserves, if
any, established by Lender as set forth in Subsection 2(a) below.'"
(c) Borrowers acknowledge that if the Pledged Cash Collateral is
returned (for any reason whatsoever) to the pledgors thereof or liquidated
following an acceleration of the Liabilities, the pledges pertaining thereto
have been terminated (pursuant to the terms of the applicable pledge agreements
or otherwise), or the existence or enforceability thereof is denied or disputed,
clause (i)(y)(2) in the definition of Borrowing Base shall be deemed removed and
no longer applicable (to the extent of such return, termination, denial or
dispute).
4. Effectiveness; Conditions Precedent.
(a) The effectiveness of the amendments and other provisions hereof
are expressly subject to the following conditions precedent (all such documents
and other items must be in form and substance satisfactory to the Lender):
(i) This Amendment duly executed by the Borrowers and the Lender
and delivered to each other; and
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(ii) Pledge Agreements duly executed by the pledgers identified
in paragraph 3(a) above and delivered to Lender, accompanied by receipt by
Lender of the Pledged Cash Collateral.
(b) The date on which all of the conditions precedent set forth in
Section 4(a) hereof shall have been satisfied or waived is referred to herein as
the "Third Amendment Effective Date."
5. Representations and Warranties; Additional Covenants.
(a) In order to induce the Lender to enter into this Amendment, each
Borrower represents and warrants to the Lender that: (i) the execution, delivery
and performance by the Borrower of this Amendment and the transactions
contemplated hereby (A) are and will be within the corporate powers of the
Borrowers, (B) have been authorized by all necessary corporate action on behalf
of the Borrowers, (C) are not in contravention of any order or decree of any
court or governmental unit, or of any law, rule or regulation to which any
Borrower or any of its property is bound, (D) are not and will not be in
conflict with, or result in a breach of or constitute (with due notice and/or
lapse of time) a default under (x) any Borrower's articles of incorporation or
bylaws or (y) any indenture, agreement, contract or undertaking to which any
Borrower is a party or by which any Borrower or any Borrower's property is
bound, and (E) will not result in the imposition of any lien, security interest
or other encumbrance on any of the properties of any Borrower; and (ii) this
Amendment and the Notes and Other Agreements executed in connection with this
Amendment shall be valid, binding and enforceable against the Borrowers in
accordance with their respective terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and other laws affecting creditors'
rights generally and subject to general principles of equity, regardless of
whether considered in a proceeding in equity or at law.
(b) On and as of the Third Amendment Effective Date, each Borrower
confirms, reaffirms and restates to the Lender the representations and
warranties set forth in the Loan Agreement and each of the Other Agreements,
except to the extent that such representations and warranties solely and
expressly relate to a specific earlier date in which case such Borrower
confirms, reaffirms and restates such representations and warranties as of such
earlier date.
(c) Lender expressly reserves its rights and options to the extent
any Event(s) of Default are presently outstanding. Neither the execution of nor
any actions of Lender in respect of this Amendment is intended to constitute or
signify a waiver or forbearance or an agreement to waive or forbear from any
action concerning any existing Event of Default or any Event of Default which
may hereafter occur.
6. Release. Each Borrower hereby releases, waives and forever
relinquishes all claims, demands, obligations, liabilities and causes of action
of whatever kind or nature, whether known or unknown, including, without
limitation, any so-called "lender liability" claims or defenses which it has,
may have, or might assert now or in the future against the Lender and/or its
participants, officers, directors, employees, agents, attorneys, accountants,
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consultants, successors and assigns (individually, a "Releasee" and
collectively, the "Releasees"), directly or indirectly, arising out of, based
upon, or in any manner connected with: (i) any transaction, event, circumstance,
action, failure to act or occurrence of any sort of type, whether known or
unknown, which occurred, existed, or was taken or permitted prior to the
execution of this Amendment with respect the Liabilities, the Loan Agreement,
the Notes, the Other Agreements or the administration thereof or the obligations
created thereby; (ii) any discussions, commitments, negotiations, conversations
or communications prior to the execution of this Amendment with respect to the
refinancing, restructuring or collection of any of the Liabilities; or (iii) any
thing or matter related to any of the foregoing prior to the execution of this
Amendment. The inclusion of this paragraph in this Amendment, and the execution
of this Amendment by the Lender, does not constitute an acknowledgement or
admission by the Lender of liability for any matter, or a precedent upon which
any liability may be asserted. If any Borrower asserts or commences any claim,
counter-claim, demand, obligation, liability or cause of action in derogation of
the foregoing release or challenges the enforceability of the foregoing release
(in each case, a "Violation"), then the Borrowers jointly and severally agree to
pay, in addition to such other damages as any Releasee may sustain as a result
of such Violation, all attorneys' fees and costs incurred by such Release as a
result of such Violation.
7. Miscellaneous.
(a) The Borrowers shall pay on demand all out-of-pocket expenses
(including, without limitation, fees, expenses and disbursements of counsel to
the Lender) incurred by the Lender in connection with (a) the negotiation and
preparation of this Amendment, the Notes and the Other Agreements referred to
herein, and all due diligence and analysis performed by or on behalf of the
Lender in connection therewith, including, without limitation, field
examinations and audit and appraisal fees and expenses, (b) the negotiation and
preparation of any and all amendments, consents and waivers in connection with
this Amendment, the Loan Agreement and Other Agreements, and (c) enforcement and
protection of their rights and interests hereunder. Borrowers' obligations to
Lender and under this Section shall constitute part of the Liabilities.
(b) Each of the Borrowers shall indemnify the Lender and Chatham and
each of their respective officers, directors, agents, employees, attorneys,
accountants, consultants, and controlling persons (each, an "Indemnitee"), and
hold them harmless, from and against any and all liabilities, obligations,
losses, taxes, damages, penalties, claims, actions, judgments, costs, expenses
or disbursements of whatsoever kind or nature which may be imposed on, asserted
against or incurred by any Indemnitee in connection with or in any way relating
to or arising out of the Loan Agreement (as amended hereby), the Notes, the
Other Agreements, the Proposal Letter or the transaction contemplated hereby or
thereby (including, without limitation, fees, expenses and disbursements of
counsel, which may include allocated fees, expenses and disbursements of
in-house counsel); provided that no Borrower shall be liable to any Indemnitee
for any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements to the extent solely
resulting from the gross negligence or willful misconduct of such Indemnitee as
determined by a final nonappealable judgment of a court of competent
jurisdiction. The obligations of each Borrower under this Section shall survive
any termination of the Loan Agreement. Borrowers' obligations to Lender and
Chatham under this Section shall constitute part of the Liabilities.
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(c) This Amendment shall be deemed incorporated into and made part
of the Loan Agreement. Except as expressly modified or provided herein or in any
other instruments or documents executed in connection herewith, (i) all terms
and conditions of the Loan Agreement, the Notes and the Other Agreements shall
remain in effect in accordance with their original tenor; and (ii) nothing
contained herein shall constitute a waiver by the Lender of any of its rights
and remedies (including, without limitation, any of its rights or remedies as
to, or any obligations owing to the Lender of, any person who may be liable to
the Lender on account of any of the Liabilities, whether or not such person is a
party hereto), all of which rights and remedies are expressly reserved and not
waived. Except as otherwise provided herein, each agreement, covenant,
representation and warranty of the Borrowers hereunder shall be deemed to be in
addition to, and not in substitution for, the agreements, covenants,
representations and warranties previously made by the Borrowers and shall be
expressly deemed to have been made under the Loan Agreement.
(d) Each Borrower hereby agrees to take all such actions and to
execute and/or deliver to the Lender all such agreements and documents as the
Lender (and its assignees) may require from time to time to effectuate and
implement the purposes of this Amendment, the Loan Agreement (as amended
hereby), the Notes and the Other Agreements.
(e) Each Borrower covenants, confirms and agrees that, as security
for the repayment of the Liabilities (as such Liabilities have been increased
pursuant to this Amendment), the Lender has, and shall continue to have, a
continuing first priority, perfected lien on and security interest in the
Collateral, all whether now owned or hereafter acquired, created or arising,
together with all proceeds, including insurance proceeds thereof, as set forth
in the Loan Agreement, the Notes and the Other Agreements, as applicable,
subject to no liens, security interests or other encumbrances other than
Permitted Liens. Each Borrower acknowledges and agrees that nothing herein
contained in any way impairs the Lender's existing rights and priority in the
Collateral.
(f) This Amendment contains the entire agreement among the parties
with respect to the transactions contemplated hereby, and supersedes all
negotiations, presentations, warranties, commitments, offers, contracts and
writing prior to the date hereof relating to the subject matters hereof. This
Amendment may be amended, modified, waived, discharged or terminated only in
accordance with the terms of the Loan Agreement, the Notes and the Other
Agreements, as applicable.
(g) No failure to exercise nor any delay in exercising, on the part
of the Lender, of any right, remedy, power or privilege under this Amendment,
the Loan Agreement, the Notes or the Other Agreements shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power,
or privilege operate as a waiver of any further or complete exercise thereof. No
waiver shall be effective unless in writing. No waiver or condonation of any
breach on one occasion shall be deemed a waiver or condonation on any other
occasion.
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(h) THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW.
(i) This Amendment may be executed in any number of counterparts,
each of which when so executed and delivered shall be deemed an original, but
all of which counterparts together shall constitute but one and the same
instrument. Execution and delivery by facsimile shall bind each of the parties.
(j) This Amendment shall be binding upon and inure to the benefit of
the Borrowers and the Lender and their respective successors and assigns, except
that no Borrower may assign or transfer its rights or obligations hereunder
without the prior written consent of the Lender. All references herein to
Chatham shall apply to Chatham and its successors and assigns.
(k) Any provision hereof that is prohibited or unenforceable in any
jurisdiction shall be, as to such jurisdiction, ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
(l) No rights are intended to be created hereunder for the benefit
of any third party donee, creditor or incidental beneficiary, except that
Chatham shall constitute a third party beneficiary of Sections 7(a), (b) and (d)
hereof.
(m) The headings of any section or paragraph of this Amendment are
for convenience only and shall not be used to interpret any provision of this
Amendment.
(n) EACH PARTY TO THIS AMENDMENT KNOWINGLY AND INTENTIONALLY WAIVES
THE RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF
ANY KIND ARISING OUT OF THIS AMENDMENT.
[Signatures begin on following page]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first above written.
AM COMMUNICATIONS, INC., as a Borrower
By: H. Xxxxxxx Xxxxxx, III
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Name: H. Xxxxxxx Xxxxxx, III
Title: Corporate Controller
AM BROADBAND SERVICES, INC., as a
Borrower
By: H. Xxxxxxx Xxxxxx, III
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Name: H. Xxxxxxx Xxxxxx, III
Title: Corporate Controller
SRS COMMUNICATIONS CORPORATION, as a
Borrower
By: H. Xxxxxxx Xxxxxx, III
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Name: H. Xxxxxxx Xxxxxx, III
Title: Corporate Controller
AMC SERVICES, INC., as a Borrower
By: H. Xxxxxxx Xxxxxx, III
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Name: H. Xxxxxxx Xxxxxx, III
Title: Corporate Controller
AM NEX-LINK COMMUNICATIONS, INC., as a
Borrower
By: H. Xxxxxxx Xxxxxx, III
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Name: H. Xxxxxxx Xxxxxx, III
Title: Corporate Controller
[Signature Page to Amendment No. 3 to Loan and Security Agreement]
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AM TRAINING SERVICES, INC., as a Borrower
By: H. Xxxxxxx Xxxxxx, III
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Name: H. Xxxxxxx Xxxxxx, III
Title: Corporate Controller
LASALLE BUSINESS CREDIT, LLC, as the
Lender
By: Xxxxx X. Xxxxxxxxxxx
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Name: Xxxxx X. Xxxxxxxxxxx
Title: First Vice President
[Signature Page to Amendment No. 3 to Loan and Security Agreement]
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