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Exhibit 10.1
LOAN AGREEMENT
THIS LOAN AGREEMENT is entered into as of December 22, 1999,
by and between C. Xxxxxx Xxxxxxxx, III, an individual residing at 0000 Xxxxxxxx
Xxxxxx, XxXxxx, Xxxxxxxx 00000 ("BORROWER"), and LCC International, Inc., a
Delaware corporation having its principal office at 0000 Xxxxx Xxxxxx Xxxxx,
XxXxxx, Xxxxxxxx 00000 (the "COMPANY").
In consideration of the mutual covenants and agreements
hereinafter set forth, the parties hereby agree as follows:
1. LOAN
1.1. LOAN
On the date hereof the Company will make a loan (the "LOAN")
to Borrower in the principal amount of One Million Six Hundred Twenty Five
Thousand Dollars ($1,625,000.00), said Loan to be for a term of five (5) years
commencing on the date hereof or until the termination of Borrower's employment
as the Chairman and Chief Executive Officer of the Company, if earlier, and to
be evidenced by a promissory note of Borrower (the "NOTE"), dated the date
hereof and in substantially the form of the promissory note attached hereto as
Exhibit A (the terms and provisions of which Note are incorporated herein by
reference).
1.2. USE OF LOAN PROCEEDS
The proceeds of the Loan shall be used only for the purchase
of the Company's Class A common stock, par value $.01 per share, (the "LCC
SHARES") from the Company on the date hereof.
1.3. BONUS FOR INTEREST PAYMENTS
On each date on which interest is due and payable under the
Note, provided that Borrower is employed as Chairman and Chief Executive of the
Company on such date and no Event of Default (as defined in SECTION 4.1) all
have occurred and be continuing on such date, the Company will pay Borrower a
bonus equal to the amount necessary to net Borrower, after applicable state and
federal taxes, the amount of the interest payment due on such date.
1.4. FORGIVENESS OF INDEBTEDNESS
In the event of (a) the sale of all or substantially all of
the assets of the Company to another person or entity, (b) a merger, acquisition
or other transaction in which the Company is the surviving corporation that
results in any person or entity (other than persons or entities who are holders
of five percent (5%) more of the stock of the Company at the time the
transaction is approved by the shareholders of the company and other than any
Affiliate of the Company (as defined below)) acquiring beneficial ownership of
fifty-one percent (51%) or more of the combined voting power of all classes of
stock of the Company, excluding any change in voting control arising as a result
of the conversion of the Class B common stock, par value $.01 per share, of the
Company to Class A common stock, par value $.01 per share, of the Company or any
distribution by RF Investors, L.L.C. to any of its direct or indirect owners or
their respective Affiliates or (c) a merger, consolidation or reorganization of
the Company with one or more other persons or entities where the Company is not
the surviving entity and such transaction results in a change of beneficial
ownership of the combined voting power of all classes of stock of the Company as
described in the preceding clause (b), then all amounts outstanding under this
Agreement and the Note shall be forgiven to the extent that the forgiveness of
such amounts does not (together with all other items of compensation considered
in the applicable tax calculation) result in an excise tax imposed by Section
4999 of the Internal Revenue Code of 1986, as amended (i.e., a "golden
parachute" excise tax). For purposes of the foregoing, the term "AFFILIATE"
shall mean, with respect to any entity, any person or other entity that,
directly or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, the specified entity, where the
term "CONTROL" means the possession, directly or indirectly, of the power to
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direct or cause the direction of the management and policies of an entity,
whether through the ownership of voting securities, by contract, or otherwise.
2. REPRESENTATIONS AND WARRANTIES OF BORROWER
In order to induce the Company to enter into this Agreement
and to make the Loan and to issue the LCC Shares to be purchased by Borrower
with the proceeds of the Loan, Borrower hereby makes the following
representations and warranties to the Company, which representations and
warranties shall survive the execution and delivery hereof and of the Note and
the issuance of the LCC Shares.
2.1. AUTHORITY RELATIVE TO THIS AGREEMENT; NON-CONTRAVENTION
Borrower has the legal capacity to enter into this Agreement.
Neither the execution and delivery of this Agreement by Borrower, the
consummation by Borrower of the transactions contemplated hereby nor compliance
by Borrower with any of the provisions hereof shall (i) result in a violation or
breach of, or constitute (with or without due notice or lapse of time or both a
default (or give rise to any right of termination, cancellation or acceleration)
under any note, bond, mortgage, indenture, lease, contract, agreement or other
instrument or obligation to which Borrower is a party or by which he or any of
his properties or assets is bound; (ii) violate any order, writ, injunction,
decree, statute, rule or regulation applicable to Borrower, or (iii) require any
filing with or notice to any court, government agency or other governmental
authority; except in the case of clause (ii) or (iii), for violations, breaches,
or defaults that would not in the aggregate have a material adverse effect on
the financial condition of Borrower, and that shall not impair the effectiveness
of the transactions contemplated hereby.
2.2. BINDING OBLIGATION
This Agreement has been duly and validly executed and
delivered by Borrower and constitutes a valid and binding agreement of Borrower,
enforceable against Borrower in accordance with its terms, except as such
enforcement may be limited by bankruptcy, conservatorship, receivership,
insolvency, moratorium or similar laws affecting creditors' rights generally or
the rights of creditors of individuals or by general principles of equity.
2.3. INSOLVENCY
There are no attachments, executions or assignments for the
benefit of creditors, or voluntary or involuntary proceedings in bankruptcy, or
under any other debtor relief laws, pending or, to the knowledge of Borrower,
threatened, against Borrower.
2.4. LITIGATION
There is no action, order, writ, injunction, judgment or
decree pending or outstanding or, to Borrower's knowledge, threatened, against
Borrower with respect to or against or potentially affecting any of the
transactions contemplated hereby, or which is reasonably likely to result in a
material adverse effect on the financial condition of Borrower.
2.5. TAXES
Borrower has filed all tax returns and reports required by any
governmental authority to be filed by Borrower, and such returns and reports are
true and correct. Borrower has paid all taxes, assessments and other government
charges imposed upon him or his income or properties, or upon any part thereof,
other than those presently payable without penalty or interest.
2.6. INVESTMENT REPRESENTATIONS
(a) Borrower is acquiring the LCC Shares to be purchased with
the proceeds of the Loan for his own account as principal, for investment and
not with a view to distribution within the meaning of the Securities Act of
1933, as amended (the "ACT"). Borrower acknowledges that the LCC Shares to be
purchased with the proceeds of the Loan have not been registered under the Act,
and Borrower agrees not to sell, hypothecate or otherwise dispose of such shares
unless such shares
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have been registered under the Act and applicable state securities laws or
exemptions from the registration requirements of the Act and such state laws are
available and Borrower has delivered to the Company an opinion of counsel, in
form and substance satisfactory to the Company, regarding the availability of
such exemptions.
(b) (i) Borrower is an "accredited investor" within the
meaning of Rule 501 under the Act, (ii) Borrower's overall commitment to
investments that are not readily marketable is reasonable in relation to
Borrower's net worth, and Borrower's acquisition of the LCC Shares to be
purchased with the proceeds of the Loan will not cause such overall commitment
to become excessive, (iii) Borrower has adequate net worth and means of
providing for Borrower's current needs and personal contingencies to sustain a
complete loss of its investment in the Company, and Borrower has no need for
liquidity in its investment in the LCC Shares to be purchased with the proceeds
of the Loan, (iv) Borrower alone is capable of understanding and has evaluated
the merits and risks of investing in the Company, (v) Borrower is aware that
Borrower's right to transfer the LCC Shares to be purchased with the proceeds of
the Loan is restricted by the Act and applicable state securities laws, and of
the absence of a market for such shares, and (vi) Borrower has substantial
experience in making investment decisions of this type.
(c) The Company has made available to Borrower and/or
Borrower's attorney or accountant all documents that Borrower or they have
requested relating thereto and has provided answers to all of such questions.
Borrower understands and acknowledges that the Company cannot provide assurances
with respect to any projections or predictions as to the future business or
financial performance of the Company.
(d) Borrower recognizes that an investment in the Company
involves a high degree of risk, and he has taken full cognizance of and
understands all of the risk factors related to the acquisition of the LCC Shares
to be purchased with the proceeds of the Loan.
(e) If needed, Borrower has discussed with his professional
legal, tax and/or financial advisors the suitability of an investment in the
Company for Borrower's particular tax and financial situation. All information
that Borrower has provided to the Company concerning itself and its financial
position is correct and complete as of the date set forth above.
3. AFFIRMATIVE COVENANTS OF BORROWER
Until all obligations of Borrower under this Agreement and the
Note are paid in full and performed, Borrower hereby covenants and agrees that
it shall, unless the Company otherwise consents in advance in writing:
3.1. TAXES, CHARGES, AND OBLIGATIONS
Pay and discharge all taxes, assessments, and governmental
charges or levies imposed upon him or upon his income, properties or any part
thereof, prior to the date on which penalties attach thereto, provided, that,
Borrower shall not be required to pay any such tax, assessment, charge, levy,
claim, indebtedness or obligation so long as the validity thereof is being
contested by Borrower in good faith and by proper proceedings.
4. EVENTS OF DEFAULT AND REMEDIES
4.1. EVENTS OF DEFAULT
The occurrence of any one or more of the following events
shall constitute an "EVENT OF DEFAULT" hereunder: (a) Borrower shall fail to
pay, when due, any sum payable under the Note, and such failure shall continue
for five (5) Business Days (as defined in SECTION 5.11) after the date on which
such payment is due; (b) any representation or warranty made by or on behalf of
Borrower herein shall prove to have been incorrect or misleading or breached in
any respect on or as of any date as of which made; (c) Borrower shall at any
time fail to observe, satisfy or perform any of the covenants or agreements
contained in this Agreement or the Note to be observed or performed on his part,
including without limitation, those contained in SECTION 1.2 or SECTION 3
hereof; (d) any obligation of Borrower for the payment of money in excess of
Fifty Thousand Dollars ($50,000) shall be declared to be due and payable, or
required to be prepaid (other than by a regularly scheduled prepayment), prior
to the maturity date thereof; (e) one or more judgments, decrees or orders for
the payment of money in excess of Fifty Thousand Dollars ($50,000) in the
aggregate shall be rendered against Borrower and such judgments, decrees or
orders shall continue unsatisfied and in effect for a period of thirty (30)
consecutive days without being vacated, discharged, satisfied or stayed or
bonded pending appeal; (f) if, pursuant to or within the meaning of the United
States Bankruptcy Code or any other federal or
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state law relating to insolvency or relief of debtors (a "BANKRUPTCY LAW"),
Borrower shall (i) commence a voluntary case or proceeding; (ii) consent to the
entry of an order for relief against it in an involuntary case; (iii) consent to
the appointment of a trustee, receiver, assignee, liquidator or similar
official; (iv) make an assignment for the benefit of its creditors; or (v) admit
in writing its inability to pay its debts as they become due; or (f) if a court
of competent jurisdiction enters an order or decree under any Bankruptcy Law
that (i) is for relief against Borrower in an involuntary case, or (ii) appoints
a trustee, receiver, assignee, liquidator or similar official for Borrower or
substantially all of Borrower's properties.
4.2. RIGHTS AND REMEDIES OF THE COMPANY
Upon the occurrence of any Event of Default, the Company may,
at its option, exercise any one or more of the following rights and remedies:
(a) declare the entire unpaid principal amount of the Note, all interest accrued
and unpaid thereon, and all other amounts payable under this Agreement to be
accelerated, and to be immediately due and payable, whereupon the Note, all such
accrued interest, and all such amounts shall become and be immediately due and
payable, without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by Borrower, anything contained herein or
in the Note to the contrary notwithstanding; and (b) in addition to the
foregoing, and not in substitution therefor, exercise any one or more of the
rights and remedies exercisable by the Company under other provisions of this
Agreement, under the Note or provided by applicable law (including, without
limitation, the Uniform Commercial Code as in effect in Virginia).
5. MISCELLANEOUS PROVISIONS
5.1. ADDITIONAL ACTIONS AND DOCUMENTS
Borrower shall take or cause to be taken such further actions,
shall execute, deliver, and file or cause to be executed, delivered, and filed
such further documents and instruments, and shall obtain such consents as may be
necessary or as the Company may reasonably request in order fully to effectuate
the purposes, terms, and conditions of this Agreement and the Note, whether
before, at or after the closing of transactions contemplated hereby and thereby
or the occurrence of an Event of Default hereunder.
5.2. NOTICES
All notices, demands, requests, or other communications
provided for herein or in the Note shall be in writing and shall be mailed by
first-class, registered or certified mail, return receipt requested, postage
prepaid, or transmitted by telegram or hand delivery, addressed as follows:
(a) If to Borrower:
C. Xxxxxx Xxxxxxxx
0000 Xxxxxxxx Xxxxxx
XxXxxx, XX 00000
(b) If to the Company:
LCC International, Inc.
0000 Xxxxx Xxxxxx Xxxxx
XxXxxx, XX 00000
Attn: Xxxxx X. Xxxxxx
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with a copy (which shall not constitute notice) to:
Xxxxx & Xxxxxxx L.L.P.
Columbia Square
000 00xx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000-0000
Attention: Xxxxxxxx Xxxxxxxxx
Each party may designate by notice in writing a new address to which any notice,
demand, request or communication may thereafter be so given, served or sent.
Each notice, demand, request or communication which shall be mailed, delivered
or transmitted in the manner described above shall be deemed sufficiently given,
served, sent or received for all purposes at such time as it is delivered to the
addressee (with the return receipt, the delivery receipt, or affidavit of
messenger being deemed conclusive evidence of such delivery) or at such time as
delivery is refused by the addressee upon presentation.
5.3. SEVERABILITY
If fulfillment of any provision of this Agreement or the Note
or performance of any transaction related thereto, at the time such fulfillment
or performance shall be due, shall involve transcending the limit of validity
prescribed by law, then the obligation to be fulfilled or performed shall be
reduced to the limit of such validity; and if any clause or provision contained
in this Agreement or the Note operates or would operate prospectively to
invalidate this Agreement or the Note, in whole or in part, then such clause or
provision only shall be held ineffective, as though not herein or therein
contained, and the remainder of this Agreement or the Note shall remain
operative and in full force and effect.
5.4. SURVIVAL
It is the express intention and agreement of the parties
hereto that all covenants, agreements, statements, representations, warranties,
and indemnities made by Borrower in this Agreement and the Note shall survive
the execution and delivery thereof and the making of all advances and extensions
of credit thereunder.
5.5. WAIVERS
No waiver by the Company of, or consent by the Company to, a
variation from the requirements of any provision of this Agreement or the Note
shall be effective unless made in a written instrument duly executed on behalf
of the Company by its duly authorized officer, and any such waiver shall be
limited solely to those rights or conditions expressly waived.
5.6. RIGHTS CUMULATIVE
The rights and remedies of the Company described in this
Agreement and the Note are cumulative and not exclusive of any other rights or
remedies which the Company or the then holder of the Note otherwise would have
at law or in equity or otherwise. No notice to or demand on Borrower in any case
shall entitle Borrower to any other notice or demand in similar or other
circumstances.
5.7. ENTIRE AGREEMENT; MODIFICATION; BENEFIT
This Agreement, the exhibits hereto, and the Note constitute
the entire agreement of the parties hereto with respect to the matters
contemplated herein, supersede all prior oral and written agreements with
respect to the matters contemplated herein, and may not be modified, deleted or
amended except by written instrument executed by the parties. All terms of this
Agreement and of the Note shall be binding upon, and shall inure to the benefit
of and be enforceable by, the parties hereto and their respective successors and
assigns; provided, however, that Borrower may not assign or transfer any of its
rights or obligations hereunder without the prior written consent of the
Company.
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5.8. TERMINATION
This Agreement shall terminate upon payment in full of all
amounts payable and performance of all other obligations owed by Borrower to the
Company under this Agreement and under the Note.
5.9. CONSTRUCTION
This Agreement and the Note, the rights and obligations of the
parties hereto, and any claims or disputes relating thereto shall be governed by
and construed in accordance with the laws of the Commonwealth of Virginia
(excluding the choice of law rules thereof).
5.10. HEADINGS
Section and subsection headings contained in this Agreement
are inserted for convenience of reference only, shall not be deemed to be a part
of this Agreement for any purpose, and shall not in any way define or affect the
meaning, construction or scope of any of the provisions hereof.
5.11. PAYMENTS
If any payment or performance of the Note or of any of the
other obligations under this Agreement becomes due on a day other than a
Business Day, the due date shall be extended to the next succeeding Business
Day, and interest thereon (if applicable) shall be payable at the then
applicable rate during such extension. For the purposes of this Agreement,
"BUSINESS DAY" means a day other than a Saturday, Sunday or other day on which
commercial banks in the Commonwealth of Virginia are authorized by law to close.
5.12. EXECUTION
To facilitate execution, this Agreement may be executed in as
many counterparts as may be required; and it shall not be necessary that the
signatures of, or on behalf of, each party, or the signatures of all persons
required to bind any party, appear on each counterpart; but it shall be
sufficient that the signature of, or on behalf of, each party, or the signatures
of the persons required to bind any party, appear on one or more of the
counterparts. All counterparts shall collectively constitute a single agreement.
It shall not be necessary in making proof of this Agreement to produce or
account for any particular number of counterparts; but rather any number of
counterparts shall be sufficient so long as those counterparts contain the
respective signatures of, or on behalf of, all of the parties hereto.
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IN WITNESS WHEREOF, the undersigned have duly executed this
Agreement, or have caused this Agreement to be duly executed on their behalf, as
of the day and year first hereinabove set forth.
BORROWER:
/s/C. XXXXXX XXXXXXXX, III
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C. Xxxxxx Xxxxxxxx, III
LENDER:
LCC INTERNATIONAL, INC.
By: /s/ XXXXXX X. XXXXXXX
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Name: Xxxxxx X. Xxxxxxx
Title: Chair, Comp. & S.O. Committee
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