EXHIBIT 10.04(a)
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
THIS AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT ("Agreement")
is made this 20th day of June, 1997, by and among THE HUNTER GROUP, INC., a
Maryland corporation ("THG"), THG CONSULTING INC., a corporation organized under
the laws of Canada ("THG Canada"), THE HUNTER GROUP (SINGAPORE) PTE LTD, a
corporation incorporated under The Companies Act of the Republic of Singapore
("THG Singapore"), HUNTER CONSULTING ASSOCIATES, PTY. LIMITED, a corporation
organized under the laws of New South Wales, Australia ("THG Australia"), HUNTER
CONSULTING ASSOCIATES, LIMITED, a corporation organized under the laws of Great
Britain ("THG England"), and THE HUNTER GROUP INTERNATIONAL, INC., a Delaware
corporation ("THG International," and THG Canada, THG Singapore, THG Australia,
THG England and THG International collectively, "Affiliate Borrowers" and each
individually an "Affiliate Borrower," and THG and Affiliate Borrowers
collectively, "Borrowers," and each individually a "Borrower"), and SIGNET BANK,
a Virginia banking corporation ("Bank").
RECITALS
WHEREAS, THG and Bank are parties to a certain Loan Agreement dated
November 17, 1995 (as heretofore amended, the "Original Loan Agreement"),
pursuant to which, on the terms and conditions therein contained, Bank has
agreed to extend credit to THG in the principal amount of $6,000,000.00; and
WHEREAS, THG and each of Affiliate Borrowers are engaged as an
integrated and intertwined group of entities in the business of integrating
enterprise-wide software systems; and
WHEREAS, Borrowers have requested Bank to extend credit to
Borrowers, jointly and severally, in the aggregate principal amount of Eight
Million Dollars ($8,000,000.00); and
WHEREAS, Borrowers acknowledge that Bank would not have entered into
this Agreement but for the joint and several obligations of all of Borrowers
with respect to the loans to be extended and the security interests to be
granted by each Borrower to collateralize all of such credit; and
WHEREAS, in order to give effect to the increase in credit
availability under the Original Loan Agreement, the addition of the Affiliate
Borrowers as borrowers under the Loan Agreement and to reflect the revised terms
and conditions with respect the borrowings thereunder, Borrowers and Bank have
agreed to amend and restate the Loan Agreement and the Security Agreement (as
therein defined) in their entireties as set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, Borrowers and Bank do hereby amend and restate the Loan Agreement and
the Security Agreement (as therein defined) in their entireties, and do hereby
agree, as follows:
1. CONSTRUCTION AND DEFINITION OF TERMS
All terms used herein without definition which are defined by the
Maryland Uniform Commercial Code shall have the meanings assigned to them by the
Maryland Uniform Commercial Code unless and to the extent varied by this
Agreement. Unless the context otherwise requires, all of the accounting terms
used herein without definition shall have the meanings assigned to them as
determined by GAAP except to the extent varied by this Agreement. Unless
otherwise specifically indicated, whenever the phrase "satisfactory to Bank" is
used in this Agreement such phrase shall mean "satisfactory to Bank in its sole
but reasonable discretion." The use of any gender or the neuter herein shall
also refer to the other gender or the neuter and the use of the plural shall
also refer to the singular, and vice versa. In addition to the terms defined
elsewhere in this Agreement, unless the context otherwise requires, when used
herein, the following terms shall have the following meanings:
"Acceptable Receivables" shall mean, as of any time, such billed
Receivables of THG as are, but only in the amount such Receivables are,
acceptable to Bank from time to time, in its discretion exercised reasonably and
in good faith, as a basis for advances to Borrowers hereunder. Without
limitation of the foregoing, except as otherwise agreed by Bank from time to
time, Acceptable Receivables shall not include (a) any Receivable which is not
lawfully owned by THG, which is subject to any Lien except for Permitted Liens,
or in which Bank does not have a perfected first priority security interest; (b)
any Receivable which is not valid or enforceable or does not represent a bona
fide, undisputed indebtedness to THG of the obligor thereon; (c) any Receivables
to the extent that the Receivable is subject to any defense, setoff,
counterclaim, retainage, holdback, credit, discount, allowance, adjustment,
deduction or reduction of any kind; (d) any Receivable which remains unpaid on
the ninety-first (91st) day after its billing by THG; (e) all Receivables due
from any obligor of THG if a Receivable or Receivables due from such obliger in
an amount equal to fifty percent (50%) or more than the aggregate amount of all
Receivables payable by such obliger remain unpaid on the ninety-first (91st) day
after its (or their) billing by THG; (f) any Receivable to the extent that any
goods, the sale of which gave rise to the Receivable, have been returned,
rejected, lost or damaged prior to acceptance thereof by the buyer or lessee;
(g) any Receivable which arose from the sale of goods by THG, if such goods have
not been delivered by THG and accepted, or if such sale was not an absolute sale
or was a
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sale on consignment, on approval or on a sale-or-return basis, or if such sale
is subject to any repurchase or return agreement, or if such sale is subject to
any other term by reason of which the obligation of the obligor thereon is
contingent or conditional; (h) any Receivable arising in connection with the
performance of services, if such services have not been performed; (i) any
Receivable which did not arise in the ordinary course of the business of THG;
(j) any Receivables which are due from a person to the extent THG is or becomes
an account debtor or obligor of such person by virtue of any obligation of THG
to such person not relating to such Receivables; (k) any Government Receivable
to the extent that sums due or to become due to THG in connection therewith
which are required to be assigned to Bank in accordance with the provisions of
Subsection 3.02(k) hereof have not been so assigned; (l) any Receivable with
respect to which the obligor thereon is insolvent, is unable to pay its debts as
they mature, or is the subject of any pending, imminent or threatened
bankruptcy, reorganization, insolvency, readjustment of debt, trusteeship,
receivership, dissolution or liquidation law, statute or proceeding; (m) any
Receivable with respect to which the obligor thereon is an Affiliate; (n) any
Receivable with respect to which the obligor thereon is not an individual if the
obligor's principal place of business is not located in the United States of
America; or (o) any Receivable with respect to which the obligor thereon is an
individual, if the obligor's residence is not located in the United States of
America. Bank may determine from time to time, in its discretion exercised in
good faith and notwithstanding any previous contrary determinations made by
Bank, to exclude from Acceptable Receivables specific Receivables, categories or
types of Receivables, or specific components of Receivables. Such determinations
may be based upon evaluations of risk or any other factors deemed relevant by
Bank reasonably and in good faith, whether or not such factors have theretofore
been used, contemplated or foreseen as a basis for limiting Acceptable
Receivables. Borrowers shall be provided with prior written notice of any such
determination, which shall be deemed effective as of the effective date of the
next Borrowing Base Certificate to be delivered by Borrowers pursuant to
Subsection 3.03(g) which is not lees than ten (10) days following the giving of
such notice.
"Adjustment Date" shall mean each day which is the later of (a) the
first day of the first month to commence following the delivery to Bank of the
financial Statements of Borrowers as required under Subsection 6.01(a) hereof
for any month which is the last month in any quarterly accounting period of
Borrowers, commencing with the quarterly accounting period ending June 30, 1997,
or (b) the fifth (5th) Banking Day following the delivery to Bank of such
financial statements.
"Advance" shall mean each advance under the Loan.
"Affiliate" shall mean: (a) any person in which a Borrower legally
or beneficially owns or holds, directly or indirectly, any capital stock, member
interest, partnership interest or other equity interest; (b) any person that is
a partner in or of a Borrower, a partnership in which a Borrower is a partner, a
joint venture in
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which a Borrower is a joint venturer, or a joint venturer in or of a Borrower;
(c) any person that is a director, officer, employee, stockholder. member,
partner (legally or beneficially) or other affiliate of any of the foregoing or
of a Borrower; and (d) any person that directly or indirectly controls, is under
the control of, or is under common control with, a Borrower, including, without
limitation, any person that directly or indirectly has the right or power to
direct the management or policies of a Borrower and any person whose management
or policies a Borrower directly or indirectly has the right or power to direct.
"Applicable LIBOR Margin" shall mean two and one-half percent
(2.50%); provided, however, that the Applicable LIBOR Margin is subject to
periodic adjustment in the manner further described in this paragraph. If on any
Adjustment Date on which the Monthly LIBOR Option is in effect (the "Applicable
LIBOR Margin Adjustment Date") (a) no Event of Default, shall have occurred and
be continuing, and (b) Borrowers' financial statements delivered in accordance
with Subsection 6.01(a) hereof indicate that at the conclusion of the Applicable
Measurement Period the ratio of Consolidated Liabilities to Consolidated
Tangible Net Worth was (i) less than or equal to 1.5 to 1.0, the Applicable
LIBOR Margin shall be adjusted effective as of such Applicable LIBOR Margin
Adjustment Date to be one and three-quarters percent (1.75%), (ii) greater than
1.5 to 1.0, but less than or equal to 2.5 to 1.0, the Applicable LIBOR Margin
shall be adjusted effective as of such Applicable LIBOR Margin Adjustment Date
to be two percent (2.0%), (iii) greater than 2.5 to 1.0, but less than or equal
to 3.0 to 1.0, the Applicable LIBOR Margin shall be adjusted effective as of
such Applicable LIBOR Margin Adjustment Date to be two and one-quarter percent
(2.25%), and (iv) greater than 3.0 to 1.0, the Applicable LIBOR Margin shall be
adjusted effective as of such Applicable LIBOR Margin Adjustment Date to be two
and one-half percent (2.50%). Notwithstanding the foregoing, the Applicable
LIBOR Margin from Closing until the initial Applicable LIBOR Margin Adjustment
Date shall be two and one-half percent (2.50%).
"Applicable Measurement Period" shall mean, with respect to any
Adjustment Date, the quarterly accounting period of Borrowers immediately
preceding such Adjustment Date for which Borrowers shall have provided the
monthly financial statements required pursuant to Subsection 6.01(a) hereof.
"Applicable Prime Rate Margin" shall mean one-quarter of one percent
(0.25%); provided, however, that the Applicable Prime Rate Margin is subject to
periodic adjustment in the manner further described in this paragraph. If on any
Adjustment Date on which the Prime Rate Option is in effect (the "Applicable
Prime Rate Margin Adjustment Date") (a) no Event of Default, shall have occurred
and be continuing, and (b) Borrowers' financial statements delivered in
accordance with Subsection 6.01(a) hereof indicate that at the conclusion of the
Applicable Measurement Period the ratio of Consolidated Liabilities to
Consolidated Tangible Net Worth was (i) less than or equal to 3.0 to 1.01, the
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Applicable Prime Rate Margin shall be adjusted effective as of such Applicable
Prime Rate Margin Adjustment Date to be zero percent (0.00%), and (ii) greater
than 3.0 to 1.0, the Applicable Prime Rate Margin shall be adjusted effective as
of such Applicable Prime Rate Margin Adjustment Date to be one-quarter of one
percent (0.25%).
"Available Funds" shall mean the gross balance in the Management
Account, less Instruments presented for payment and less the aggregate amount of
all deposited items which Bank has not credited to the Management Account as
available.
"Banking Day" shall mean any day that banks in the State of Maryland
are not required or permitted to be closed.
"Borrowing Base Certificate" shall mean a Certified written schedule
and aging of Receivables in such form and containing such information as may
from time to time be required by Bank.
"Business Premises" shall mean 000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000,
Xxxxxxxxx, Xxxxxxxx 00000, and each of the premises identified in Schedule 4.09
attached hereto and incorporated by reference herein.
"Certified" shall mean that the information, statement, schedule,
report or other document required to be "Certified" contains a representation by
a Borrower, that to such Borrower's knowledge and belief after diligent inquiry,
such information, statement, schedule, report or other document is true and
complete in all material respects.
"Closing" shall mean the first date on which funds are advanced to
Borrowers hereunder.
"Closing Agreement" shall mean that certain Closing Agreement of
even date herewith by and among Borrowers and Bank.
"Code" shall mean the Internal Revenue Code of 1986, as the same may
be amended from time to time.
"Collateral" shall mean: (a) all Receivables, and Inventory and
Equipment and, in addition, all other property of each Borrower in which Bank
has, or may in the future acquire or be granted, a Lien hereunder or under any
of the Other Agreements; (b) all amounts now or in the future owed by Bank to
any Borrower and all property and funds of each Borrower (including deposit
accounts, certificates of deposit, and investments made or managed by Bank on
behalf of such Borrower), now owned or hereafter acquired by each Borrower and
now or hereafter in Bank's possession or control; (c) all present and future
substitutions, replacements, appurtenances, accessories, accessions and
materials and supplies
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relating to any of the foregoing; (d) all of each Borrower's present and future
books and records in any form, in or on any media, including data processing
materials in any form (including software, tapes, discs and the like), whether
in the possession of such Borrower or any other person; and (e) all present and
future proceeds and products of all of the foregoing in any form whatsoever and
all rights, including rights to the payment of money for any reason, arising on
account of any sale, assignment, lease, rental, license, exchange, liquidation,
condemnation, taking, theft or any disposition of any nature of, or any damage
or casualty to, or any loss with respect to, any of the foregoing or any rights
or interests of any Borrower in any of the foregoing, including, without
limitation, cash proceeds (including all payments under any indemnities,
warranties or guaranties payable with respect to any of the foregoing), noncash
proceeds and proceeds acquired with cash proceeds, whether any such proceeds
constitute consumer goods, farm products, equipment, inventory, documents of
title, chattel paper, accounts, instruments or general intangibles, and all
proceeds of insurance policies insuring any of the foregoing or any risks to any
Borrower associated with any of the foregoing.
"Consolidated Cash Flow" shall mean the consolidated net income of
Borrowers and Subsidiaries after tax plus depreciation less dividends paid on
account of capital stock of Borrowers and Subsidiaries.
"Consolidated Liabilities" shall mean the aggregate liabilities of
Borrowers and Subsidiaries.
"Consolidated Net Income" shall mean, with respect to Borrowers for
any measurement period, the consolidated net income (or net deficit) of
Borrowers for such period, which, for purposes of this Agreement, shall be equal
to aggregate revenues and other income of Borrowers for such period less the
aggregate for Borrowers during such period of (a) cost of goods sold, (b)
interest expense, (c) operating expenses, (d) selling, general and
administrative expenses, (e) taxes, (f) depreciation, depletion and amortizing
of properties, and (g) any other items that are treated as expenses under GAAP,
but excluding from the definition of Net Income, (i) extraordinary gains and
losses in accordance with GAAP, and (ii) any nonrecurring write-up or write-down
in the value of inventory in accordance with GAAP.
"Consolidated Tangible Net Worth" shall mean the aggregate assets of
Borrowers and Subsidiaries, exclusive of goodwill, trademarks, tradenames,
licenses and such other assets as are properly classified as intangible assets
according to generally accepted accounting principles, less Consolidated
Liabilities.
"Default" shall mean any event which, with the giving of notice or
passage of time (or both), would constitute an Event of Default.
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"Default Rate of Interest" shall mean a fixed per annum rate of
interest, adjusted as of the first day of each month, equal to the applicable
Monthly LIBO Rate plus four and one-half percent (4.5%). The Default Rate of
Interest shall become payable upon the giving of notice by Bank to Borrower as
further provided in Subsection 2.02(a)(i) hereof, and shall initially be
determined as of the first day of the calendar month in which such notice is
given.
"Domestic Borrower" shall mean a Borrower which is organized under
the laws of any State.
"Environmental Laws" shall mean all federal, state, local and
foreign laws relating to pollution or protection of the environment, including
laws relating to emissions, discharges, releases or threatened releases of
pollutants, contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes into the environment (including, without limitation,
ambient air, surface water, ground water, or land), or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling of pollutants, contaminants, chemicals, or industrial,
toxic or hazardous substances or wastes, and any and all regulations, codes,
plans, orders, decrees, judgments, injunctions, notices or demand letters
issued, entered, promulgated or approved thereunder.
"Equipment" shall mean: (a) all equipment of each Borrower of every
type and description, now owned and hereafter acquired and wherever located,
including, without limitation, all machinery, vehicles and other rolling stock,
furniture, furnishings, tools, dies, leasehold improvements, fixtures, and
materials and supplies relating to any of the foregoing; (b) all present and
future documents of title and trust receipts relating to any of the foregoing;
(c) all present and future rights, claims and causes of action of each Borrower
in connection with purchases by such Borrower of (or contracts for the purchase
by such Borrower of), or warranties relating to, or damages to, goods held or to
be held by such Borrower as equipment; (d) all present and future warranties,
manuals and other written materials (and packaging thereof or relating thereto)
relating to any of the foregoing; (e) all present and future rights, claims and
causes of action of each Borrower in connection with any agreements pursuant to
which any suppliers, manufacturers or other persons have agreed or may agree,
conditionally or otherwise, to purchase or repurchase from such Borrower, in
bulk or otherwise, any goods held or to be held by such Borrower as equipment;
and (f) all present and future general intangibles of each Borrower in any way
relating to any of the foregoing.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor legislation, and all
regulations, codes, plans, orders, decrees, judgments, injunctions, notices or
demand letters issued, entered, promulgated or approved thereunder.
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Event of Default" shall mean any of the events described in Section
8 hereof.
"Excess Funds" shall mean the amount by which Available Funds
exceeds the Target Balance.
"Foreign Borrower" shall mean a Borrower which is not a Domestic
Borrower.
"GAAP" shall mean generally accepted accounting principles in the
United States of America in effect from time to time. In the event of a change
in GAAP affecting the covenants contained in Subsections 6.15 or 6.16 of this
Agreement or definitions contained in this Section 1 relating to such covenants,
such covenants and definitions shall continue to be applied as though such
change in GAAP had not occurred unless and until Bank and Borrowers shall agree
in writing to amend or adjust such covenants or definitions as deemed necessary
as a result of such change in GAAP.
"good faith" shall mean, with respect to a determination to be made
by Bank "in good faith," that Bank shall make such determination honestly and
not maliciously.
"Government Receivable" shall mean any Receivable which arises out
of a contract with the United States of America or any State, county,
municipality or any department, agency or instrumentality thereof.
"Hazardous Substance" shall mean any flammable explosives, radon,
radioactive materials, asbestos, urea formaldehyde foam insulation,
polychlorinated biphenyls, petroleum and petroleum-based products, methane and
all other pollutants, contaminates, chemicals, industrial substances, industrial
wastes, toxic substances, toxic wastes, toxic materials, hazardous substances,
hazardous wastes and hazardous materials. The meaning of each term used in this
definition shall include, without limitation, the meaning or meanings assigned
to such term by any Environmental Laws.
"Indebtedness" shall include all items which would properly be
included in the liability section of a balance sheet in accordance with GAAP,
and shall also include all contingent liabilities. Without limitation of the
foregoing, operating leases of Borrower shall not be considered to be
Indebtedness hereunder.
"Instrument" shall mean any item for the payment of money drawn
upon, or any charge against, the Management Account.
"Inventory" shall mean: (a) all inventory of each Borrower of every
type and description, now owned and hereafter acquired and wherever located,
including, without limitation, raw materials, work in process, finished goods,
goods
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returned or repossessed, and goods held for demonstration, marketing or similar
purposes; (b) all present and future materials and supplies of each Borrower
used, usable or consumed in the course of such Borrower's business, whether
relating to the manufacture, assembly, installation, repair, packaging, packing
or shipment of goods by such Borrower, or relating to advertising or any other
aspect of such Borrower's business; (c) all present and future property of each
Borrower in or on which any of the foregoing is stored or maintained; (d) all
present and future warranties, manuals and other written materials (and
packaging thereof or relating thereto) relating to any of the foregoing; (e) all
present and future documents of title and trust receipts relating to any of the
foregoing; (f) all present and future customer lists of each Borrower; (g) all
present and future rights of each Borrower in connection with goods consigned to
or by such Borrower; (h) all present and future rights of each Borrower as an
unpaid seller of goods, including rights of stoppage in transit, detinue and
reclamation; (i) all present and future rights, claims and causes of action of
each Borrower in connection with purchases by such Borrower of (or contracts for
the purchase by such Borrower of), or warranties relating to, or damages to,
goods held or to be held by such Borrower as inventory; (i) all present and
future rights, claims and causes of action of each Borrower in connection with
any agreements pursuant to which any suppliers, manufacturers or other persons
have agreed or may agree, conditionally or otherwise, to purchase or repurchase
from such Borrower, in bulk or otherwise, any goods held or to be held by such
Borrower as inventory; and (k) all present and future general intangibles of
each Borrower in any way relating to any of the foregoing.
"Lien" shall mean any statutory or common law consensual or
nonconsensual mortgage, pledge, security interest, encumbrance, lien, right of
setoff, claim or charge of any kind, including, without limitation, any
conditional sale or other title retention transaction, any lease transaction in
the nature thereof and any secured transaction under the Uniform Commercial Code
of any jurisdiction.
"Loan" shall mean the revolving loan made by Bank to Borrowers
pursuant to Subsection 2.01 hereof.
"Management Account" shall mean deposit account number 4400397313
maintained by THG at Bank.
"Material Adverse Effect" shall mean a material adverse effect upon
or change in (a) the business, assets, operations, business prospects or
financial condition of (i) Borrowers and Subsidiaries measured as a whole, or
(ii) THG or any other Borrower or Subsidiary which, together with any other
Borrower or Subsidiary suffering or affected by the same material adverse effect
or change, has 20% or more of the Consolidated Tangible Net Worth of, or
contributed, during any of the four previous four quarterly accounting periods
of Borrowers, 20% or more of the Consolidated Cash Flow of, Borrowers and
Subsidiaries taken as a whole (THG
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and each such other Borrower or Subsidiary, a "Material Borrower or
Subsidiary"), (b) the ability of any Material Borrower or Subsidiary to conduct
its business, (c) the ability of any Borrower or any Other Obligor to perform
its respective obligations under this Agreement or under any of the Other
Agreements to which it is a party, (d) the binding nature, validity or
enforceability of this Agreement or any of the Other Agreements, (e) the
validity, perfection, priority or enforceability of the Liens in favor of Bank
securing the Obligations, (f) the prospect for the full and punctual payment and
performance of all of the Obligations, or (g) the rights and remedies of Bank
under this Agreement or any of the Other Agreements.
"Maximum Loan Amount" shall mean, subject to the terms of the
Closing Agreement (a) at any given time up to (and including) June 30, 1997, the
lesser of (i) the Receivables Loan Percentage multiplied by Acceptable
Receivables as disclosed in the most recent Borrowing Base Certificate provided
to Bank (subject to the provisions of Subsection 3.03(f) hereof), or (ii)
$6,000,000.00, and (b) at any given time after June 30, 1997, the lesser of (i)
the Receivables Loan Percentage multiplied by Acceptable Receivables as
disclosed in the most recent Borrowing Base Certificate provided to Bank
(subject to the provisions of Subsection 3.03(f) hereof), or (ii) $8,000,000.00.
Notwithstanding the foregoing, but subject to the terms of the Closing
Agreement, upon the giving to Bank of not less than ten (10) days written notice
prior to the first day of any calendar month commencing on or after July 1,
1997, Borrowers may elect to limit the Maximum Loan Amount during such month to
the lesser of (x) the amount determined under clause (b)(i), or (y)
$6,000,000.00 or $7,000,000.00 (as indicated by Borrowers in such notice).
"Monthly LIBO Rate" shall mean the rate per annum, as determined by
Bank in its sole discretion at Closing and on the first day of each month
thereafter, equal to the London Interbank Offered Rate (adjusted to reflect the
cost of insurance premiums and reserve requirements as they exist from time to
time) published by Bloomberg or Xxx-Xxxxx Telerate, as BBA LIBOR on page 3750
(or Reuters Monitor Money Rates Service (LIBO page), if Bloomberg or Dow
Xxxxx-Telerate is not available), or such other page as may replace that page on
that service for the purpose of displaying rates or prices comparable to that
rate (rounded upwards, if necessary, to the next higher 1/100%), for deposits in
Dollars on day, for a period of one month; provided, however, that if the first
day of any month is not a day on which such rate is available, such rate shall
be determined on the immediately preceding day on which such rate is available.
If more than one such rate appears on such page or its replacement, the Monthly
LIBO Rate shall be the arithmetic mean of such rates. The Monthly LIBO Rate
shall be adjusted as of the first day of each month.
"Monthly LIBOR Option" shall have the meaning given to such term in
Subsection 2.02(b) hereof.
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"Non-Default Rate of Interest" shall mean (a) at all times when the
Monthly LIBOR Option is in effect, a fixed per annum rate equal to the
applicable Monthly LIBO Rate plus the Applicable LIBOR Margin, and (b) at all
times when the Prime Rate Option is in effect, a fluctuating per annum rate
equal to the Prime Rate plus the Applicable Prime Rate Margin.
"Note" shall mean a promissory note of Borrowers in the form
attached hereto as Exhibit A, and all renewals, replacements and extensions
thereof.
"Obligations" shall mean, as the same may be amended, modified,
extended, renewed, supplemented, increased, refinanced, consolidated or replaced
from time to time, all present and future obligations, indebtedness and
liabilities of each Borrower to Bank of every kind and nature, whether arising
under this Agreement, the Other Agreements or otherwise (including, without
limitation, all principal amounts, including future advances, interest charges,
service charges, late charges, fees and all other charges and sums, as well as
all reasonable costs and reasonable expenses, including reasonable attorneys'
fees and expenses, payable or reimbursable by any Borrower under or pursuant to
this Agreement, the Other Agreements and otherwise), whether direct or indirect,
joint or several, contingent or non-contingent, matured or unmatured, accrued or
not accrued, liquidated or unliquidated, secured or unsecured, related or
unrelated to this Agreement, whether or not now contemplated, whether arising in
contract, tort or otherwise, whether or not any instrument or agreement relating
thereto specifically refers to this Agreement, and whether or not of the same
character or class as any Borrower's obligations under this Agreement,
including, without limitation, reimbursement obligations of each Borrower in
connection with letters of credit issued by Bank, obligations of each Borrower
in connection with overdrafts in any checking or other account of such Borrower
at Bank, all claims against each Borrower acquired by assignment to Bank, and
all claims of Bank against each Borrower arising or re-arising on account of or
as a result of any payment made by such Borrower or any Other Obligor with
respect to any obligations included in this definition which is rescinded or
recovered from or restored or returned by Bank under authority of any law, rule,
regulation, order of court or governmental agency, or in connection with any
compromise or settlement relating thereto or relating to any pending or
threatened action, suit or proceeding relating thereto, whether arising out of
any proceedings under the United States Bankruptcy Code or otherwise.
"Other Agreements" shall mean, as the same may be amended, modified,
extended, renewed, supplemented or replaced from time to time, any and all
agreements, contracts, promissory notes and other instruments (including the
Note), drafts, checks, bankers acceptances, security agreements, assignments,
pledge agreements, hypothecation agreements, indemnification agreements, letters
of credit and applications and agreements relating thereto, subordination
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agreements, mortgages, deeds of trust, leases, guaranties and other documents
(a) now and hereafter existing between Bank and any Borrower, (b) executed
and/or delivered in connection with this Agreement or any of the Obligations, or
(c) evidencing, guaranteeing, securing (directly or indirectly), subordinating
other obligations of any Borrower or any Other Obligor to, containing any
warranties, covenants, agreements or representations of any person relating to,
or in any other manner relating to, any of the Obligations or any obligation of
any Other Obligor in connection with any of the Obligations. The Other
Agreements shall include, without limitation, the instruments and documents
referred to in Subsection 5.01 hereof.
"Other Obligor" shall mean any person that is now or hereafter primarily
or secondarily, or contingently or non-contingently, liable for or obligated
upon or in connection with any of the Obligations, or, whether or not so liable,
that has granted any Lien to or for the benefit of Bank as security for any of
the Obligations or any obligations of any Other Obligor in connection with any
of the Obligations.
"Permitted Liens" shall mean; (a) Liens of Bank; (b) Liens for taxes not
delinquent or for taxes being diligently contested in good faith by a Borrower
by appropriate proceedings, subject to the conditions set forth in Subsection
6.02 hereof and provided such Lien is subordinate to any security interest of
Bank in the property encumbered by such Lien or if not subordinate (and pending
the outcome of such proceedings) Borrower has established appropriate reserves
in accordance with GAAP for the payment of the amount necessary for the release
of such Liens; (c) mechanic's, artisan's, materialman's, landlord's, carrier's
or other like Liens arising in the ordinary course of business with respect to
obligations which are not due or with respect to obligations which are being
diligently contested in good faith by a Borrower by appropriate proceedings,
provided appropriate reserves therefor are established by such Borrower in
accordance with GAAP; (d) Liens arising out of a judgment, order or award with
respect to which a Borrower shall in good faith be prosecuting diligently an
appeal or proceeding for review and with respect to which there shall be in
effect a subsisting stay of execution pending such appeal or proceeding for
review, provided appropriate reserves therefor are established by such Borrower
in accordance with GAAP and provided such Liens are subordinate to Bank's
security interest in the property encumbered by such Lien; (e) any deposit of
funds made in the ordinary course of business to secure obligations of a
Borrower under worker's compensation laws, unemployment insurance laws or
similar legislation, to secure public or statutory obligations of such Borrower,
to secure surety, appeal or customs bonds in proceedings to which such Borrower
is a party, or to secure such Borrower's performance in connection with bids,
tenders, contracts (other than contracts for the payment of money), leases or
subleases made by such Borrower in the ordinary course of business; (f) Purchase
Money Liens provided the expenditure related to any such Lien is permitted by
the provisions of Subsection 7.17 hereof; (g) the rights and interests of
lessors under operating leases pursuant
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to which a Borrower, as lessee, leases assets used in a Borrower's business; (h)
Liens specifically consented to by Bank in writing (including, without
limitation, those Liens described in the Schedule 4.08 attached hereto and made
a part hereof); and (i) other Liens not permitted within the scope of the
preceding clauses of this definition, provided that (i) the aggregate amount of
Indebtedness secured by such other Liens shall not exceed One Hundred and Fifty
Thousand Dollars ($150,000.00) at any time outstanding, and (ii) such Liens are
subordinate to the Liens of Bank in the property which is encumbered thereby.
"person" shall mean any individual, corporation, partnership, joint
venture, association, trust, government (or subdivision, agency or department
thereof) or any other entity of any kind.
"Preferred Stock Sale" shall have the meaning assigned to such term in
Subsection 6.17(a) hereof.
"Prime Rate" shall mean the rate of interest publicly announced by Bank
from time to time as its prime rate. The Prime Rate is not necessarily intended
to be the lowest rate of interest charged by Bank in connection with extensions
of credit to debtors, and Bank may price loans at, above or less than the Prime
Rate.
"Prime Rate Option" shall have the meaning given to such term in
Subsection 2.02(b) hereof.
"Purchase Money Liens" shall mean Liens on property acquired by a Borrower
or placed on any property of a Borrower in order to finance the acquisition
thereof, provided that (a) any such Lien is created within 90 days of the
acquisition of the property encumbered thereby, (b) the Indebtedness secured by
any Lien so created does not exceed 100% of the lesser of cost or fair market
value of the property covered thereby at the time of acquisition, and (c) such
Lien shall only attach to the property acquired with the proceeds of the
Indebtedness secured thereby.
"Receivables" shall mean: (a) all of each Borrower's present and future
accounts, contract rights, receivables, promissory notes and other instruments,
chattel paper, general intangibles and investment property; (b) all present and
future tax refunds of each Borrower and all present and future rights of each
Borrower to refunds or returns of prepaid expenses, including unearned insurance
premiums; (c) all present and future cash of each Borrower; (d) all deposit
accounts now or hereafter maintained or established by, for or on behalf of each
Borrower with any bank or other institution, and all balances of funds now or
hereafter on deposit in all such accounts, including, without limitation, all
checking accounts, collection accounts, lockbox accounts, disbursement accounts,
concentration accounts and all other deposit accounts of every kind and nature;
(e) all present and future judgments, orders, awards and decrees in favor of
each
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Borrower and causes of action in favor of each Borrower; (f) all present and
future claims, rights of indemnification and other rights of each Borrower under
or in connection with any contracts or agreements to which such Borrower is or
becomes a party or third party beneficiary; (g) all rights and claims of each
Borrower with respect to any deposits of money or other property made with any
lessors of any property, insurers, bonding agents or any other persons; (h) all
present and future rights and claims which each Borrower may now or hereafter
have under any insurance policies, contracts or coverages now or hereafter in
effect; (i) all goods previously or hereafter returned, repossessed or stopped
in transit, the sale, lease or other disposition of which contributed to the
creation of any account, instrument or chattel paper of a Borrower; (j) all
present and future rights of each Borrower as an unpaid seller of goods,
including rights of stoppage in transit, detinue and reclamation; (k) all rights
which each Borrower may now or at any time hereafter have, by law or agreement,
against any account debtor or other obligor of such Borrower, and all rights and
Liens which each Borrower may now or at any time hereafter have, by law or
agreement, against any property of any account debtor or other obligor of such
Borrower; (l) all present and future interests and rights of each Borrower,
including rights to the payment of money, under or in connection with all
present and future leases and subleases of real or personal property to which
such Borrower is a party, as lessor, sublessor, lessee or sublessee; (m) all
present and future customer lists of each Borrower; (n) all present and future
contingent and non-contingent rights of each Borrower to the payment of money
for any reason whatsoever, whether arising in contract, tort or otherwise,
whether or not such rights are otherwise included in this definition; and (o)
all present and future rights of each Borrower with respect to licenses,
patents, copyrights, franchises, trade names and trademarks.
"Receivables Loan Percentage" shall mean 80%.
"Review Date" shall mean April 30, 1999, or such other date as Bank may
agree in conformity with the requirements of Subsection 2.01(a) hereof.
"State" shall mean any State of the United States and the District of
Columbia.
"Subsidiary" shall include any person at least a majority of the
outstanding Voting Stock of which, now or in the future, is owned or controlled
by a Borrower, directly or indirectly through one or more Subsidiaries.
"Target Balance" shall mean $25,000.00.
"Voting Stock" shall mean (a) the shares of any class of capital stock of
a corporation having ordinary voting power to elect the directors, officers or
trustees thereof, including such shares that shall or might have voting power by
reason of the occurrence of one or more conditions or contingencies, (b) any
limited liability company interests, membership interests or other equivalent
interests or
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participations (however designated) of any limited liability company, and (c)
any general or limited partnership interests or other interests or
participations in any partnership, joint venture, trust or similar entity, in
each case whether or not evidenced by stock certificates or similar instruments.
2. THE LOANS
2.01 Revolving Loan. (a) Bank agrees to make advances to Borrowers from
time to time until the Review Date, subject to all of the terms and conditions
of this Agreement (the "Loan"). All requests by Borrowers for advances shall be
made in such manner and form and with such prior notice to Bank as Bank may
reasonably require from time to time. Each such request (other than a request
made under Subsection 2.01(d)) shall contain or be accompanied by such
information and documents (which shall be Certified if required by Bank)
concerning the Collateral, Borrowers' financial condition, use of the proceeds
of such advance and of advances previously made and/or any other matters as Bank
may from time to time require. In no event shall Bank be obligated to make any
advance hereunder if a Default or an Event of Default shall have occurred or if
such advance would cause the total principal amount of advances made and
outstanding hereunder to exceed the Maximum Loan Amount. Even if the total
principal amount of advances outstanding shall at any time and for any reason
exceed the Maximum Loan Amount, Borrowers and all guarantors shall nonetheless
be liable for the entire principal amount outstanding, with interest thereon at
the rate and calculated in the manner provided herein and in the Note, in
accordance with and subject to this Agreement, the Note and the guaranties of
such guarantors. If the total principal amount of advances outstanding under the
Loan shall at any time exceed the Maximum Loan Amount, Borrowers shall pay to
Bank within one (1) Banking Day after demand the amount of such excess, with
interest thereon at the rate and calculated in the manner provided herein and in
the Note. Borrowers agree that Borrowers shall be jointly and severally liable
for, and the Collateral shall secure, the repayment of each advance made by Bank
to or for any Borrower hereunder, with interest at the rate and calculated in
the manner provided herein and in the Note, whether or not such advance was duly
requested or authorized by any Borrower and whether or not any person requesting
such advance was duly authorized to make such request. Subject to all of the
terms and conditions of this Agreement and the Other Agreements, Borrowers may
borrow, repay and reborrow hereunder until the Review Date. All principal, all
accrued and unpaid interest and all other sums and charges owing to Bank
hereunder shall be due and payable on the Review Date without demand. Bank may,
in its sole discretion, agree, but only in writing, to extend the Review Date
for such time and upon such terms and conditions as Bank shall determine in its
sole discretion.
(b) Borrowers' joint and several obligation to repay the Loan with
interest shall be evidenced by, and the Loan shall be repaid with interest in
accordance with, the Note.
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(c) Borrowers jointly and severally agree to pay to Bank, in
consideration of Bank's making credit available to Borrowers under the Loan, a
monthly facility fee payable, for the prior calendar month or portion thereof,
on the first (1st) of each month after the date hereof. The facility fee shall
be calculated on the average daily unborrowed amount of the Maximum Loan Amount
during each calendar month or portion thereof at a rate per annum (based on a
year of 360 days for the actual number of days elapsed) re-established effective
as of each Adjustment Date which shall equal (i) thirty one-hundredths of one
percent (0.30%) if the ratio of Consolidated Liabilities to Consolidated
Tangible Net Worth at the conclusion of the Applicable Measurement Period is
greater than 3.0 to 1.0, and (ii) one-quarter of one percent (0.25%) if the
ratio of Consolidated Liabilities to Consolidated Tangible Net Worth at the
conclusion of the Applicable Measurement Period is equal to or less than 3.0 to
1.0; provided, however, that (x) from Closing until the first Adjustment Date
occurring after the delivery of the financial statements of Borrowers for the
monthly period ending March 31, 1997, the applicable rate shall be thirty one-
hundredths of one percent (0.30%), and (y) upon the occurrence and during the
continuance of any Event of Default, the facility fee shall accrue at the rate
of thirty one-hundredths of one percent (0.30%).
(d) In order to accommodate Borrowers' desire to manage their cash
by initiating borrowings and payments under Bank's target balance management
program, borrowings and payments under the Loan may be requested and made as
follows. Until termination of Bank's target balance management program,
presentment of any Instrument on the Management Account at a time when Excess
Funds in the Management Account are not sufficient to cover the Instrument fully
shall constitute a request by Borrowers for an advance. Bank may, in its sole
discretion, honor any such Instrument and make an advance to Borrowers under the
Loan in an amount at least equal to the face amount of the Instrument; provided,
however, that if (i) it would be appropriate for Bank to honor an Instrument but
for an insufficiency of funds in the Management Account, (ii) the Loan advance
necessary to provide sufficient funds in the Management Account to honor the
instrument would not cause the total principal amount of advances made and
outstanding hereunder to exceed or to further exceed the Maximum Loan Amount,
and (iii) no Default or Event of Default has occurred and is continuing, Bank
shall make an advance to Borrowers under the Loan in the amount necessary to
provide sufficient funds in the Management Account to honor the Instrument. Bank
will monitor the Management Account on each Banking Day to determine the amount
of Excess Funds, if any, in the Management Account, and Borrowers authorize Bank
to transfer Excess Funds from the Management Account and apply the same in
payment of the advances outstanding under the Loan. Borrowers further authorize
Bank to make advances to Borrowers from time to time under the Loan in the
amounts necessary to cause Available Funds to equal the Target Balance.
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(e) Borrowers shall pay to Bank a monthly service charge for the
services to be performed by Bank under its target balance management program,
which charge shall be determined according to the schedule of such charges as
the same may be established from time to time by Bank. Borrowers acknowledge
that the services to be performed by Bank under its target balance management
program are provided as a service accommodation to Borrowers and do not and
shall not constitute conditions to or consideration for the Obligations and,
therefore, Bank shall have no liability to Borrowers and Borrowers shall not be
entitled to any reduction in interest charged to Borrowers under the Loan on
account of any failure of Bank to cause any reduction to be made in the
principal amount outstanding under the Loan.
(f) At any time Bank may terminate the operation of the target
balance management program without prior notice to Borrowers; provided, however,
that unless a Default or Event of Default shall have occurred and be continuing,
Bank agrees to provide not less than two (2) Banking Days' written notice of any
such termination to Borrowers. Borrowers may terminate the operation of the
target balance management program upon two (2) Banking Days' written notice to
Bank of such termination. After termination of the target balance management
program, advances under the Loan shall be requested by Borrowers in such manner
and form and with such prior notice as Bank may from time to time require. Each
such request shall contain or be accompanied by such information and documents
(which shall be Certified if required by Bank) concerning the Collateral, the
financial condition of Borrowers, the use of the proceeds of such advance and of
advances previously made and/or any other matters as Bank may from time to time
require.
2.02 Interest. (a) Until the occurrence of an Event of Default, all
principal sums outstanding under the Loan and/or the Note shall bear interest at
the Non-Default Rate of Interest. After the occurrence of an Event of Default,
all principal sums outstanding under the Loan and/or the Note shall bear
interest until paid at the Default Rate of Interest; provided, however, that (i)
interest shall not be payable at the Default Rate of Interest until Bank shall
have notified Borrowers of Bank's election to charge the Default Rate of
Interest, and (ii) if the Event of Default on which the charging of the Default
Rate of Interest is based shall be cured or waived or otherwise discontinued,
then and thereafter (until the occurrence of a subsequent Event of Default)
interest shall be payable at the Non-Default Rate of Interest.
(b) Subject to the provisions of Subsection 2.02(a) above, Borrowers
may, at their option, elect to have interest on the Advances accrue at (a) a
fixed monthly rate equal to the Monthly LIBO Rate plus the Applicable LIBOR
Margin (the "Monthly LIBOR Option"), or (ii) a fluctuating rate equal to the
Prime Rate plus the Applicable Prime Rate Margin (the "Prime Rate Option"). At
Closing, the Monthly LIBOR Option shall be in effect. Borrowers may change from
the
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Prime Rate Option to the Monthly LIBOR Option (and vice versa) on two Banking
Days prior written notice to Bank; provided, however, that (i) any such change
shall only become effective on the first day of the month which is not less then
two Banking Days following the giving of such notice, and (ii) all Advances
shall be subject to the same Option selected by Borrowers (i.e., the Prime Rate
Option and the Monthly LIBOR Option may not exist simultaneously).
(c) Accrued interest on the Advances shall be payable monthly as
provided in the Note and shall be calculated on a year of 360 days based on the
actual number of days elapsed. The rate of interest on the Advances may
fluctuate and vary from time to time depending on changes in the Prime Rate or
in the Monthly LIBO Rate, as applicable. If the Prime Rate or the Monthly LIBO
Rate (as applicable) shall increase or decrease, then such rate of interest
shall automatically and contemporaneously increase or decrease (as the case may
be) so as to reflect such increase or decrease in the Prime Rate or the Monthly
LIBO Rate, as applicable.
2.03 Prepayment. Borrowers may at their option prepay any or all of the
Loan in whole at any time or in part from time to time without penalty or
premium. All prepayments shall be accompanied by the payment of accrued and
unpaid interest on the Loan to the date of payment. All payments may, in Bank's
discretion, be applied first to the payment of outstanding late charges (if
any), then to accrued and unpaid interest and then to the unpaid principal
balance.
2.05 Late Charge. If any payment required to be made by Borrowers
hereunder or under the Note (excluding in each case any accelerated payments and
payments due on the Review Date) is not paid within 15 days after the date on
which such payment is due, Borrowers shall pay to Bank on demand a late charge
equal to 5% of the amount of such payment.
3. SECURITY
3.01 Security Interest. As security for the payment and performance of all
of the Obligations, whether or not any instrument or agreement relating to any
Obligation specifically refers to this Agreement or the security interest
created hereunder, each Borrower hereby grants to Bank a lien and continuing
security interest in, and pledges and assigns to Bank, the Collateral. Bank's
security interest shall continually exist until (a) all Obligations have been
paid in full, and (b) there exits no commitment by Bank which could give rise to
any Obligations, whether or not all Obligations shall at any time or from time
to time be reduced to zero. Each Borrower shall make notations, satisfactory to
Bank, on its books and records disclosing the existence of Bank's security
interest in the Collateral. Bank shall have no liability or duty, either before
or after the occurrence of an Event of Default hereunder, on account of loss of
or damage to, or to collect or enforce any of its rights against, the
Collateral, or to preserve any
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rights against account debtors or other parties with prior interests in the
Collateral, the sole duty of Bank in this regard being to exercise reasonable
care with respect to tangible Collateral in its actual possession.
3.02 Covenants and Representations Concerning Collateral. With respect to
all of the Collateral, each Borrower covenants, warrants and represents that:
(a) No financing statement covering any of the Collateral is on file
in any public office or land or financing records except for financing
statements in favor of Bank and financing statements with respect to any
Permitted Liens described in Schedule 4.08 hereto and Borrowers are the legal
and beneficial owner of all of the Collateral, free and clear of all Liens,
except for Permitted Liens.
(b) The security interest in the Collateral granted Bank hereunder
shall be subject only to Permitted Liens which are entitled to priority under
applicable law and are not required to be subordinate to Bank's Liens under the
provisions of the "Permitted Liens" definition. No Borrower will, except in the
ordinary course of business, transfer, discount, sell, grant or assign any
interest in the Collateral nor, without Bank's prior written consent, permit any
other Lien to be created or remain thereon except for Permitted Liens. Upon the
filing of the financing statements identified in Subsection 5.01(e) with the
appropriate filing offices in each of jurisdictions in which a Business Premises
of THG is located, Bank will have a perfected Lien in all of the Collateral
owned by THG in which a Lien may be perfected by the filing a financing
statement.
(c) Borrowers will maintain the Collateral in good order and
condition, ordinary wear and tear excepted, and will use, operate and maintain
the Collateral in compliance in all material respects with all laws, regulations
and ordinances and in compliance in all material respects with all applicable
insurance requirements and regulations. Borrowers will promptly notify Bank in
writing of any litigation involving or affecting the Collateral which any
Borrower knows or has reason to believe is pending or threatened. Borrowers will
promptly pay when due all taxes and all transportation, storage, warehousing and
other such charges and fees affecting or arising out of or relating to the
Collateral and shall defend the Collateral, at Borrowers' expense, against all
claims and demands of any persons claiming any interest in the Collateral
adverse to any Borrower or Bank.
(d) At all reasonable times Bank and its agents and designees may
enter the Business Premises and any other premises of Borrowers and inspect the
Collateral and all books and records of Borrowers (in whatever form).
(e) Borrowers will maintain comprehensive casualty insurance on the
Collateral against such risks, in such amounts, with such loss
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deductible amounts and with such companies as may be satisfactory to Bank, and
each such policy shall contain a clause or endorsement satisfactory to Bank
naming Bank as mortgagee and a clause or endorsement satisfactory to Bank that
such policy may not be cancelled or altered and Bank may not be removed as
mortgagee without at least 30 days prior written notice to Bank. In all events,
the amounts of such insurance coverages shall conform to prudent business
practices and shall be in such minimum amounts that no Borrower will be deemed a
coinsurer under applicable insurance laws, regulations, policies or practices.
Each Borrower hereby assigns to Bank and grants to Bank a security interest in
any and all proceeds of such policies and authorizes and empowers Bank to adjust
or compromise any loss under such policies and to collect and receive all such
proceeds. Each Borrower hereby authorizes and directs each insurance company to
pay all such proceeds directly and solely to Bank and not to any Borrower and
Bank jointly. Each Borrower authorizes and empowers Bank to execute and endorse
in such Borrower's name all proof of loss, drafts, checks and any other
documents or instruments necessary to accomplish such collection, and any
persons making payments to Bank under the terms of this paragraph are hereby
relieved absolutely from any obligation or responsibility to see to the
application of any sums so paid. After deduction from any such proceeds of all
reasonable costs and reasonable expenses (including reasonable attorney's fees)
incurred by Bank in the collection and handling of such proceeds, the net
proceeds may be applied, at Bank's option, either toward replacing or restoring
the Collateral, in a manner and on terms satisfactory to Bank, or as a credit
against such of the Obligations, whether matured or unmatured, as Bank shall
determine in Bank's sole discretion.
(f) All books and records pertaining to the Collateral are located
at the Business Premises and no Borrower will change the location of such books
and records without the prior written consent of Bank, which consent shall not
be unreasonably withheld or delayed provided Borrowers shall have undertaken all
acts required to ensure the continued perfection and priority of Bank's Lien
therein and in any other Collateral affected by such change in location.
(g) Except for (i) any vehicles of a Borrower, (ii) Collateral in
transit to a Borrower or to customers of a Borrower, and (iii) mobile goods of a
type normally used in more than one jurisdiction, all of the Collateral is, and,
unless Bank shall consent otherwise in writing, shall remain located at the
Business Premises.
(h) Each Borrower shall do, make, execute and deliver all such
additional and further acts, things, deeds, assurances, instruments and
documents as Bank may reasonably request to vest in and assure to Bank its
rights hereunder or in any of the Collateral, including, without limitation, the
execution and delivery of financing statements, financing statement amendments
and/or continuation statements, assignments of trademarks and powers of attorney
in connection therewith, and Borrowers jointly and severally agree to pay all
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applicable taxes, filing fees and other reasonable costs (including reasonable
attorney's fees) paid or incurred by Bank in connection with the preparation and
filing or recordation thereof.
(i) A carbon, photographic or other reproduction of any financing
statement signed by a Borrower in connection with this Agreement shall be
sufficient as a financing statement.
(j) Whenever required by Bank, each Borrower shall promptly deliver
to Bank, with all endorsements and/or assignments required by Bank, all
instruments, chattel paper, guaranties and the like received by such Borrower
constituting, evidencing or relating to any of the Collateral or proceeds of any
of the Collateral.
(k) Borrowers shall identify in the information accompanying each
Borrowing Base Certificate any Government Receivable which causes all
outstanding Government Receivables (other than Governmental Receivables that
have been assigned to Bank in accordance with the Federal Assignment of Claims
Act and/or any other applicable federal, State and local laws and regulations
relating to the assignment of governmental obligations) to exceed (or to further
exceed) $100,000.00 and, if required by Bank, shall execute and deliver any
agreements, notices and/or assignments and do such other things as may be
satisfactory to Bank in order that all sums due and to become due to the
applicable Borrower with respect to such Receivable shall be duly assigned to
Bank in accordance with the Federal Assignment of Claims Act (31 United States
Code Section 1203; 41 United States Code Section 15) and/or any other applicable
federal, State and local laws and regulations relating to the assignment of
governmental obligations.
(l) Each Borrower agrees that until the Obligations shall have been
satisfied in full and this Agreement shall have been terminated, no Borrower
will, without Bank's prior written consent, (i) consign any Collateral to any
consignee, (ii) store or place any Collateral with any warehouseman, artisan,
processor, contractor or bailee, or (iii) enter into any agreement (for example,
a license agreement) which is inconsistent with any Borrower's obligations under
this Agreement. Each Borrower further agrees that it will not take any action,
or permit any action to be taken by others subject to its control, including
licensees, or to take any action, which would materially adversely affect the
validity or enforcement of the rights transferred to Bank under this Agreement.
3.03 Covenants and Representations Concerning Receivables. Each Borrower
covenants, warrants and represents that:
(a) Immediately upon learning thereof, Borrowers shall notify Bank
of any event or circumstance which disqualifies any account as an Acceptable
Receivable in whole or in part if (i) the amount of such disqualified account
(or disqualified portion of such account) exceeds $100,000.00. or (ii) as a
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result of the disqualification of such account (or portion of such account) the
amount of advances outstanding under the Loan would exceed (or further exceed)
the Maximum Loan Amount.
(b) Without Bank's prior written consent, no Borrower shall permit
or agree to any payment extension with respect to any Receivable other than in
the ordinary course of business nor permit or agree to any modification or
compromise with respect to any Receivable other than in the ordinary course of
business.
(c) If required by Bank, each Borrower shall keep segregated from
all other property of such Borrower and hold in trust for Bank and subject to
Bank's instructions, all goods rejected or returned by any account debtor and
all goods repossessed from or stopped in transit to any account debtor.
(d) Each account reported to Bank as an Acceptable Receivable is
genuine, valid, enforceable and in all respects what it purports to be and
represents a bona fide transaction completed and performed in accordance with
the contract(s), purchase order(s), invoice(s) and other documentation relating
thereto.
(e) All accounts shown on each Borrower's books and records and on
all invoices, purchase orders, reports, statements and schedules provided to
Bank are actually and unconditionally owing to such Borrower.
(f) No account has been or will be reported or scheduled to Bank as
an Acceptable Receivable which a Borrower knows or should know is not an
Acceptable Receivable and Borrowers shall pay to Bank upon demand the amount
advanced by Bank with respect to any account reported or scheduled to Bank as an
Acceptable Receivable which is not an Acceptable Receivable or which
subsequently becomes unacceptable; provided, however, that (i) Borrower shall
not be required to make any such payment if the exclusion of such account from
the Acceptable Receivables would not cause the total principal amount of
advances made and outstanding under the Loan to exceed the Maximum Loan Amount
(giving effect to the exclusion of such account), and (ii) if such account shall
have become unacceptable as a result of a change in Bank's criteria for
determining Acceptable Receivables, then such payment shall not be due until the
scheduled delivery date of the first Borrowing Base Certificate reflecting that
such account is no longer an Acceptable Receivable.
(g) Borrowers shall deliver to Bank within 25 days after the end of
each monthly accounting period of Borrowers, a Borrowing Base Certificate
effective as of the end of such accounting period accompanied by such documents
as may from time to time be required by Bank, and accompanied by such evidence
as may from time to time be required by Bank of the existence, date of creation
and amount of, and the names and addresses of account debtors and other obligors
with
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respect to, Receivables, including, without limitation, contracts, invoices,
purchase orders, acceptances and evidences of delivery or other performance by
Borrowers.
3.04 Collateral Collections. Bank shall have the right at any and all
times: (a) following the occurrence and during the continuance of an Event of
Default, to notify and/or require Borrowers to notify any or all account debtors
and other obligors on Receivables to make payments thereon directly to Bank or
in care of a post office lock box under the sole control of Bank established at
Borrowers' expense subject to Bank's customary arrangements and charges
therefor, and to take any or all action with respect to Receivables as Bank
shall determine in its sole discretion, including, without limitation, the right
to demand, collect, xxx for and receive any money or property at any time due,
payable or receivable on account thereof, compromise and settle with any person
liable thereon, and extend the time of payment or otherwise change the terms
thereof, without incurring liability or responsibility to any Borrower or any
guarantor therefor; (b) following the occurrence and during the continuance of a
Default or an Event of Default, to require each Borrower to segregate and hold
in trust for Bank and, on the day of Borrower's receipt thereof, transmit to
Bank in the exact form received by such Borrower (except for such assignments
and endorsements as may be required by Bank), all cash, checks, drafts, money
orders and other items of payment constituting Collateral or proceeds of
Collateral for application, upon collection when applicable, against such of the
Obligations, whether matured or unmatured, as Bank shall determine in its sole
discretion; and/or (c) following the occurrence and during the continuance of a
Default or an Event of Default, to establish and maintain at Bank a "Repayment
Account," which shall be under the exclusive control of and subject to the sole
order of Bank and which shall be subject to the imposition of such customary
charges as are imposed by Bank from time to time upon such accounts, for the
deposit, as a tender of payment of the Obligations, of cash, checks, drafts,
money orders and other items of payment constituting Collateral or proceeds of
Collateral coming into Bank's possession pursuant to the terms of this Agreement
and from which Bank may, in its sole discretion, at any time and from time to
time, withdraw all or any part of the balance for application against such of
the Obligations, whether matured or unmatured, as Bank shall determine in its
sole discretion.
4. REPRESENTATIONS AND WARRANTIES
To induce Bank to enter into this Agreement, each Borrower represents and
warrants to Bank that:
4.01 Good Standing. Each Borrower and each Subsidiary is a corporation
duly organized, legally existing and in good standing under the laws of the
jurisdiction of its incorporation, has the power to own its property and to
carry on its business and is duly qualified to do business and is in good
standing in each
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jurisdiction in which the character of the properties owned by it therein or in
which the transaction of its business makes such qualification necessary.
4.02 Authority. Each Borrower has, and each Other Obligor which has
executed any Other Agreements in connection with this Agreement has, full power
and authority to enter into this Agreement and all Other Agreements executed by
it in connection with this Agreement, to execute and deliver all documents and
instruments required hereunder and thereunder, and to incur and perform the
obligations provided for herein and therein, all of which have been duly
authorized by all necessary corporate, limited liability company, partnership
and other action, and no consent or approval of any person, including, without
limitation, its stockholders, members, member representatives or partners, and
any governmental authority, which has not been obtained, is required as a
condition to the validity or enforceability hereof or thereof.
4.03 Binding Agreements. This Agreement and all Other Agreements executed
by any Borrower and/or Other Obligors in connection with this Agreement have
been duly executed and delivered by each Borrower and each such Other Obligor,
and constitute, and will continue to constitute, the valid and legally binding
obligations of each Borrower and each such Other Obligor, and are, and will
continue to be, fully enforceable against each Borrower and each such Other
Obligor in accordance with their terms, subject to bankruptcy and other laws
affecting the rights of creditors generally.
4.04 No Conflicting Agreements. The execution, delivery and performance by
each Borrower, and by each Other Obligor which has executed any Other Agreements
in connection with this Agreement, of this Agreement and all Other Agreements
executed by any Borrower and/or Other Obligors in connection with this
Agreement, and the borrowings hereunder, will not violate (i) any provision of
law or any order, rule or regulation of any court or governmental authority,
(ii) the corporate charter or bylaws of any Borrower, any Subsidiary or any
Other Obligor that is a corporation, the certificate of formation or limited
liability company agreement of any Subsidiary or any Other Obligor that is a
limited liability company, or the partnership agreement of any Subsidiary or
Other Obligor that is a partnership, or (iii) any instrument, contract,
agreement, indenture, mortgage, deed of trust or other document or obligation to
which any Borrower, any Subsidiary or any Other Obligor is a party or by which
any one or more of them, or any of their property, is bound.
4.05 Litigation. Except as provided in Schedule 4.05 attached hereto and
made a part hereof, there are no judgments, injunctions or similar orders or
decrees, claims, actions, suits or proceedings pending or, to the knowledge of
any Borrower, threatened against or affecting any Borrower, any Subsidiary or
any Other Obligor, or any property of any Borrower, any Subsidiary or any Other
Obligor, at law or in equity, by or before any court or any federal, State,
county,
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municipal or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, which could result in any material adverse
change in the business, operations, prospects, properties or in the condition,
financial or otherwise, of any Borrower, and no Borrower or any Subsidiary is,
to the knowledge of any Borrower, in default with respect to any judgment,
order, writ, injunction, decree, rule or regulation of any court or any federal,
State, county, municipal or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, which could have a
material adverse effect on any Borrower.
4.06 Financial Condition. (a) No Borrower, Subsidiary or Other Obligors is
insolvent (as defined in Section 101 of the United States Bankruptcy Code),
unable to pay its debts as they mature or engaged in business for which its
property is an unreasonably small capital.
(b) No Borrower, Subsidiary or Other Obligors is or has been the
subject of any bankruptcy, reorganization, insolvency, readjustment of debt,
trusteeship, receivership, dissolution or liquidation law, statute or
proceeding.
(c) The financial statements of Borrowers for the fiscal year ending
December 31, 1996, and for the three-month period ending March 31, 1997, and
heretofore delivered to Bank are true and complete, fairly present the financial
condition of Borrowers as at such dates and the results of their operations for
the periods then ended and were prepared in accordance with GAAP applied on a
consistent basis for prior periods. There is no Indebtedness of any Borrower as
of the date of such statements which is not reflected therein and no material
adverse change in the operations or financial condition of any Borrower has
occurred since the date of such statements. The pro forma quarterly financial
statements of Borrowers for the fiscal years ending December 31, 1997, and
December 31,1998, heretofore delivered to Bank, are complete and fairly present
Borrowers' projections for such periods; provided, however, that Bank
acknowledges that the projections for the fiscal year ending December 31, 1997,
are being revised to reduce projected operating income to a figure not less than
$3,000,000.00.
4.07 Taxes. Each Borrower, each Subsidiary and each Other Obligor has paid
or caused to be paid all federal, State, local and foreign taxes to the extent
that such taxes have become due and has filed or caused to be filed all federal,
State, local and foreign tax returns which are required to be filed by each
Borrower, each Subsidiary and each Other Obligor.
4.08 Title to Properties. Each Borrower has good and marketable title to
all of its properties and assets (including the Collateral) and all of the
properties and assets of each Borrower are free and clear of Liens, except for
Permitted Liens (including those liens disclosed in Schedule 4.08 attached
hereto and made a part hereof).
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4.09 Place of Business. Borrowers' only places of business are located at
the Business Premises and the chief executive office of THG is located at 000
Xxxx Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxx, Xxxxxxxx 00000. Borrowers will not
change such location(s) or have or maintain any other place of business without
Bank's prior written consent.
4.10 Financial Information. All financial statements, schedules, reports
and other information supplied to Bank by or on behalf of Borrowers (or any of
them) heretofore and hereafter are and will be true and complete.
4.11 Subsidiaries. Except for Subsidiaries of THG which are Borrowers and
Subsidiaries hereafter formed or acquired with Bank's prior written consent,
there are and will be no Subsidiaries.
4.12 Licenses and Permits. Each Borrower, each Subsidiary and each Other
Obligor that is not an individual has duly obtained and now holds all licenses,
permits, certifications, approvals and the like required by federal, State and
local laws of the jurisdictions in which such Borrower, such Subsidiary and such
Other Obligor conducts its business and each remains valid and in full force and
effect.
4.13 Certain Indebtedness. Except as identified in Schedule 7.01 attached
hereto and made a part hereof there is no Indebtedness of any Borrower owing to
any employee, officer, stockholder or director of any Borrower other than
accrued salaries, commissions and the like.
4.14 Broker's or Finder's Commissions. No broker's or finder's fee or
commission is or will be payable in connection with this Agreement or the
transactions contemplated hereby, and Borrowers jointly and severally agree to
save harmless and indemnify Bank from and against any claim, demand, action,
suit, proceeding or liability for any such fee or commission, including any
costs and expenses (including attorney's fees) incurred by Bank in connection
therewith. The provisions of this Subsection shall survive the termination of
this Agreement and Bank's security interest hereunder and the payment of all
other Obligations.
4.15 Outstanding Indebtedness: Defaults. No Borrower has any outstanding
Indebtedness except as permitted by Subsection 7.01 hereof. No Borrower,
Subsidiary or Other Obligor is in default under any instrument, contract,
agreement, indenture, mortgage, deed of trust or other document or obligation to
which such Borrower, Subsidiary or Other Obligor is a party or by which any one
or more of them, or any of their property, is bound.
4.16 Capital Stock. All of the issued and outstanding capital stock of
each Borrower is owned by those persons and in those amounts indicated in
Schedule 4.16 attached hereto and made a part hereof.
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4.17 Regulation U. No Borrower or Subsidiary owns or presently intends to
acquire any "margin stock" as defined in Regulation U (12 CFR Part 221) of the
Board of Governors of the Federal Reserve System. None of the proceeds of any
advances hereunder will be used, directly or indirectly, for the purpose of
purchasing or carrying any margin stock or for the purpose of reducing or
retiring any indebtedness which was originally incurred to purchase or carry a
margin stock or for any other purpose which might constitute this transaction a
"purpose credit" within the meaning of Regulation U. No Borrower or any agent
acting on such Borrower's behalf has taken or will take any action which might
cause this Agreement to violate Regulation U or any other regulation of the
Board of Governors of the Federal Reserve System or to violate the Securities
Exchange Act of 1934, in each case as in effect now or as the same may hereafter
be in effect.
4.18 Employee Matters. (a) With respect to each employee pension benefit
plan, as defined in Section 3(2) of the ERISA (a "Retirement Plan"), established
or maintained or to which contributions have been made by or for any Borrower,
or any Subsidiary (including, for purposes of this Section, any other entity,
whether or not incorporated, which is part of a controlled group including any
Borrower or which is under common control with any Borrower, as defined in
Sections 414(b) and (c) of the Code): (i) the Retirement Plan, including all
amendments, is the subject of a favorable determination letter from the Internal
Revenue Service (or an application for such a letter is presently pending); (ii)
the Retirement Plan is and has at all times been qualified, in form and
operation, under Section 401(a) of the Code; (iii) the Retirement Plan is and
has at all times been administered, maintained and operated in compliance with
its terms and with all applicable provisions of the Code, ERISA and all other
applicable federal, state and local laws (and all rules and regulations
promulgated thereunder); (iv) no Borrower or any Subsidiary, nor, to the
knowledge of any director or officer of any Borrower or any Subsidiary, any
other person or entity who or which is a party in interest as defined in Section
3(14) of ERISA, or a disqualified person as defined in Section 4975(e)(2) of the
Code, has acted or failed to act with respect to the Retirement Plan in any
manner which constitutes a breach of fiduciary responsibility within the meaning
of Title I, Part 4 of ERISA, a prohibited transaction within the meaning of
Section 4975 of the Code or Sections 406 through 408 of ERISA, or any other
violation of ERISA; (v) no contributions to the Retirement Plan are past due;
(vi) no proceedings, investigations, filings or other matters are pending before
the Internal Revenue Service, the Department of Labor or any court with respect
to the Retirement Plan or the operation thereof; (vii) if the Retirement Plan is
a multiemployer plan, as defined in Sections 3(37) or 4001(a)(3) of ERISA, no
Borrower or any Subsidiary has incurred, and no Borrower or any Subsidiary
expects to incur, any withdrawal liability which has not been satisfied in
connection with any complete or partial withdrawal from the Retirement Plan
occurring on or before the date hereof; and (viii) if subject thereto, the
Retirement Plan has been funded in accordance with the minimum funding standards
described in Section 412 of the Code and Title I, Subtitle B, Part 3 of ERISA
(for which
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purpose there is no "accumulated funding deficiency"), and in accordance with
principles that are actuarially sound for such Retirement Plan.
(b) With respect to each Retirement Plan which is a defined benefit
plan, as defined in Section 3(35) of ERISA: (i) no event has occurred within the
12 month period preceding the date hereof, or, to the knowledge of any director
or officer of any Borrower or any Subsidiary is threatened or about to occur,
which would materially adversely affect the actuarial status of the Retirement
Plan; (ii) no fact exists in connection with the Retirement Plan (or with
respect to any other defined benefit plan maintained by any Borrower or any
Subsidiary at any time after September 2, 1974) which constitutes a reportable
event (other than those for which notice has been waived by the Pension Benefit
Guaranty Corporation (the "PBGC")) under Section 4043(b) of ERISA or which
constitutes grounds for termination by, or other liability to, the PBGC pursuant
to Title IV of ERISA; (iii) all premiums due the PBGC have been timely paid; and
(iv) if the Retirement Plan were terminated, the termination would qualify under
the standard termination procedure, as described in Section 4041(b) of ERISA
(and Part 2617 of the PBGC regulations), without payment of any additional
contributions by any Borrower or any Subsidiary.
(c) With respect to each employee welfare benefit plan, as defined
in Section 3(1) of ERISA (a "Welfare Plan"), established or maintained or to
which contributions have been made by or for any Borrower or any Subsidiary: (i)
the Welfare Plan is and has at all times been administered, maintained and
operated in compliance with its terms and with all applicable provisions of
ERISA and the Code (including the continuation coverage requirements for group
health plans, commonly known as "COBRA requirements," under Sections 106(b),
162(i)(2) & (3), and 162(k) of the Code and Sections 601-607 of ERISA) and all
other applicable federal, state and local laws (and all rules and regulations
promulgated thereunder); (ii) no Borrower or any Subsidiary nor to the knowledge
of any director or officer of any Borrower or any Subsidiary, any other person
or entity who or which is a party in interest as defined in Section 3(14) of
ERISA, has acted or failed to act with respect to the Welfare Plan in any manner
which constitutes a breach of fiduciary responsibility within the meaning of
Title I, Part 4 of ERISA, a prohibited transaction within the meaning of
Sections 406 through 408 of ERISA, or any other violation of ERISA; (iii) no
contributions to the Welfare Plan are past due; (iv) no proceedings,
investigations, filings or other matters are pending before the Department of
Labor or any court, with respect to the Welfare Plan or the operation thereof;
and (v) the Welfare Plan is either unfunded or is funded solely through
insurance contracts.
(d) All Retirement Plans and Welfare plans (jointly "Benefit Plans")
are in substantial compliance with all applicable reporting, disclosure and
other requirements of the Code and ERISA.
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(e) There are no actions, suits or claims pending or, to the best
knowledge of any Borrower or any Subsidiary, threatened with respect to any
Benefit Plan, or any administrator or fiduciary thereof.
(f) There are no strikes, work stoppages, material grievance
proceedings or other material controversies pending, imminent or, to any
Borrower's knowledge and belief, threatened between any Borrower and any
employees of any Borrower or between any Borrower and any union or other
collective bargaining unit representing employees of any Borrower.
4.19 Compliance With Laws. No Borrower, Subsidiary or Other Obligor is in
violation of, or under investigation with respect to or threatened to be charged
or given notice of a violation of, any applicable law, rule, regulation, order
or judgment relating to any of its businesses, properties or operations,
including, without limitation, ERISA, any law, rule, regulation or order
regarding the collection, payment and deposit of employees' income, unemployment
and social security taxes or of sales, use or excise taxes, any Environmental
Laws, any laws pertaining to occupational safety and health or any laws relating
to public health.
4.20 Representations. All representations and information heretofore made
or supplied to Bank by or on behalf of any Borrower, any Subsidiary or any Other
Obligor, including, without limitation, all representations and information
heretofore made or supplied to Bank pursuant to or in connection with this
Agreement or any of the Other Agreements or any transaction involving or
affecting any Borrower, any Subsidiary or any other Obligor, were, at the time
made or supplied to Bank, true and complete in all material respects, and all
representations and information hereafter made or supplied to Bank by or on
behalf of any Borrower, any Subsidiary or any Other Obligor, including, without
limitation, all representations and information hereafter made or supplied to
Bank pursuant to or in connection with this Agreement or any of the Other
Agreements or any transaction involving or affecting any Borrower, any
Subsidiary or any Other Obligor, will be, at the time made or supplied to Bank,
true and complete in all material respects.
4.21 Solvency. Each Borrower has received, or has the right hereunder to
receive by way of subrogation, contribution or otherwise, consideration which is
the reasonable equivalent value of the obligations and liabilities that such
Borrower has incurred to Bank hereunder, under the Note and under the Other
Agreements. No Borrower is insolvent as defined in Section 101 of Title 11 of
the United States Code or any applicable state insolvency statute, nor, after
giving effect to the consummation of the transactions contemplated herein, will
any Borrower be rendered insolvent by the execution and delivery of this
Agreement, the Note or the Other Agreements to Bank No Borrower is engaged or
about to engage in any business or transaction for which the assets retained by
it shall be an unreasonably small capital, taking into consideration the
obligations to Bank
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incurred hereunder, under the Note and under the Other Agreements and its rights
to contribution against the other Borrowers. No Borrower intends to, nor does it
believe that it will, incur debts beyond the ability of Borrowers, taken as a
whole, to pay them as they mature.
4.22 Operations of Affiliate Borrowers. THG and each of Affiliate
Borrowers are engaged as an integrated and intertwined group of entities in the
business of integrating enterprise-wide software Systems.
5. CONDITIONS OF LENDING
Unless Bank shall otherwise agree, Bank shall have no obligation to
advance any funds to Borrowers hereunder unless each of the following conditions
precedent shall he satisfied as provided below:
5.01 Documents. There shall have been delivered to Bank, appropriately
completed and duly executed (when applicable), the following, each in form and
substance satisfactory to Bank: (a) the Note; (b) certificates of the
Secretaries of Borrowers (i) to the effect that resolutions in form and content
satisfactory to Bank authorizing the transactions contemplated hereby have been
duly adopted and remain in full force and effect, (ii) certifying the incumbency
and signatures of the officers of Borrowers authorized to execute this Agreement
and the Other Agreements, and (iii) certifying the Articles of Incorporation and
By-Laws of each of Borrowers as being true and complete; (c) evidence
satisfactory to Bank that all insurance coverages and all insurance clauses or
endorsements required pursuant to this Agreement and the Other Agreements are in
effect, together with copies of all insurance policies and endorsements; (d) a
written opinion of counsel to Borrowers, dated as of Closing and addressed to
Bank, relating to such matters in connection with the transactions contemplated
hereby as may be required by Bank; and (e) such financing statements as may be
required by Bank.
5.02 No Default. At Closing and at the time of every subsequent advance
under this Agreement, Bank shall be fully satisfied that (a) all of the
covenants, conditions, warranties and representations set forth herein and in
the Other Agreements have been complied with and are true and complete on and as
of such time with the same effect as though such covenants, conditions,
warranties and representations had been made on and as of such time (unless
stated to relate solely to an earlier date, in which case such representations
and warranties shall be true and correct as of such earlier date), (b) no
Default and no Event of Default shall have occurred, and (c) the documents and
matters required to be executed, delivered, opined and/or Certified pursuant to
Subsection 5.01 hereof shall be in full force and effect and/or true and
complete, as the case may be.
5.03 Deemed Representations. Each request for an advance hereunder and
acceptance by Borrowers of the proceeds thereof shall constitute a
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representation and warranty by Borrowers that the statements contained in
clauses (a), (b) and (c) of Subsection 5.02 above are true and correct both on
the date of such request and, unless Borrowers otherwise notify Bank prior to
the making of such advance, on the date of the making of such advance.
5.04 Legal Matters. At Closing, all legal matters in connection therewith
or incidental thereto shall be fully satisfactory to Bank's counsel.
5.05 Financial Condition at Closing. The financial condition of each
Borrower shall be satisfactory to Bank and there shall have been delivered to
Bank such written statements, schedules or reports in such form, containing such
information and accompanied by such documents as may be satisfactory to Bank
concerning the financial condition of any Borrower, any of the Collateral or any
other matter or matters as Bank may require.
5.06 Closing Fee. Pay to Bank the Closing Fee (as defined in Subsection
6.17 hereof.
6. AFFIRMATIVE COVENANTS
Each Borrower covenants and agrees with Bank that, until (a) all
Obligations have been paid in full and (b) there exists no commitment by Bank
which could give rise to any Obligations, each Borrower will:
6.01 Financial Statements. Furnish to Bank in writing: (a) as soon as
available but in no event more than 45 days after the end of each monthly
accounting period of Borrowers, a consolidated and consolidating statement of
income and retained earnings of Borrowers and any Subsidiaries for such period
and for the period from the beginning of the current fiscal year of Borrowers to
the end of each period, and a consolidated and consolidating statement of cash
flows of Borrowers and any Subsidiaries for such period and for the period from
the beginning of the current fiscal year of Borrowers to the end of each period,
and a consolidated and consolidating balance sheet of Borrowers and any
Subsidiaries as at the end of such period, setting forth in each case in
comparative form figures for the budgeted results for such period and figures
for the corresponding periods in the preceding fiscal year of Borrowers, all in
detail and scope satisfactory to Bank, prepared in accordance with GAAP
consistently applied, Certified by the chief financial officer of THG and
accompanied by a certificate of that officer or of the chief executive officer
of THG stating whether any Default or Event of Default has occurred and, if so,
stating the facts with respect thereto: provided, further, that the financial
statements of Borrowers described in clause (a) which are provided for the last
calendar month of each quarterly accounting period of Borrowers shall also be
accompanied by a financial covenant compliance worksheet Certified by the chief
financial officer of THG or by the chief executive officer of THG and otherwise
in form and substance acceptable to Bank demonstrating Borrowers' compliance
with
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the provisions of Subsections 6.15 and 6.16 hereof; (b) as soon as available but
in no event more than 120 days after the end of each fiscal year of Borrowers, a
consolidated and consolidating statement of income and retained earnings of
Borrowers and any Subsidiaries for such year, and a consolidated and
consolidating statement of cash flows of Borrowers and any Subsidiaries for such
year, and a consolidated and consolidating balance sheet of Borrowers and any
Subsidiaries as at the end of such year, setting forth in each case in
comparative form corresponding figures for the preceding fiscal year of
Borrowers, all in detail and scope satisfactory to Bank, prepared in accordance
with GAAP consistently applied and examined and audited by independent certified
public accountants satisfactory to Bank, accompanied by a report of such
independent certified public accountants with respect to such financial
statements which is satisfactory to Bank, and accompanied by (i) a certificate
of the chief financial officer or the chief executive officer of THG stating
whether any Default or Event of Default has occurred and, if so, stating the
facts with respect thereto, and (ii) a financial covenant compliance worksheet
Certified by such officer or by the chief executive officer of THG and otherwise
in form and substance acceptable to Bank demonstrating Borrowers' compliance
with the provisions of Subsections 6.15 and 6.16 hereof; and (c) promptly upon
transmission thereof, copies of any financial statements, proxy statements,
reports and the like which any Borrower or any Subsidiary sends to its
shareholders, members or partners and copies of all registration statements
(with exhibits) and all regular, special or periodic reports which any Borrower
or any Subsidiary files with the United States Securities and Exchange
Commission (or any governmental body or agency succeeding to the functions of
the United States Securities and Exchange Commission) or with any national stock
exchange on which any Borrower's or Subsidiary's securities are listed and
copies of all press releases and other statements made available by any Borrower
or any Subsidiary to the public concerning material developments in the business
of any Borrower and/or any Subsidiary.
6.02 Taxes. Pay and discharge, and cause each Subsidiary to pay and
discharge, all taxes, assessments and governmental charges upon each Borrower
and each Subsidiary, its income and properties, prior to the date on which
penalties attach thereto unless and to the extent only that the same are being
diligently contested by a Borrower or a Subsidiary, as the case may be, in good
faith by appropriate proceedings, provided, however, that (a) Bank shall have
been given reasonable prior written notice of intention to contest, (b)
nonpayment of the same will not, in Bank's sole discretion, materially impair
any of the Collateral or Bank's rights or remedies with respect thereto or the
prospect for full and punctual payment of all of the Obligations, (c) such
Borrower or such Subsidiary at all times effectively stays or prevents any
official or judicial sale of or action against any of the Collateral by reason
of nonpayment of the same, and (d) such Borrower or such Subsidiary establishes
reasonable reserves for any liabilities being contested and for expenses arising
out of such contest in accordance with GAAP.
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6.03 Corporate Existence, Continuation of Business and Compliance with
Laws. Maintain, and cause each Subsidiary to maintain, its corporate existence
in good standing; maintain, and cause each Subsidiary to maintain, in good
standing its qualification to do business in each jurisdiction in which such
qualification is required by law; continue, and cause each Subsidiary to
continue, its business operations as now being conducted; and comply with, and
cause each Subsidiary to comply with, all applicable federal, State and local
laws, rules, ordinances, regulations and orders (including, without limitation,
ERISA and all Environmental Laws) in all material respects.
6.04 Litigation. Promptly notify Bank in writing of any action, suit or
proceeding at law or in equity by or before any court, governmental agency or
instrumentality which could result in any material adverse change in the
business, operations, prospects, properties or assets or in the condition,
financial or otherwise, of any Borrower or any Subsidiary.
6.05 Extraordinary Loss; Change in Condition. Promptly notify Bank in
writing of (a) any event causing extraordinary loss or depreciation of the value
of any Borrower's or any Subsidiary's assets (whether or not insured) and the
facts with respect thereto, and (b) the occurrence of any material adverse
change in any Borrower's, any Subsidiary's or any Other Obligor's business,
assets, operations, business prospects or financial condition.
6.06 Books and Records. Keep and maintain, and cause each Subsidiary to
keep and maintain, proper and current books and records in accordance with GAAP
consistently applied and permit access by Bank to, reproduction by Bank of,
copying by Bank from, and verification (by such means, including audits, as Bank
may determine) by Bank of any information contained in, such books and records.
6.07 Maintenance of Properties. Maintain, and cause each Subsidiary to
maintain, all properties and improvements necessary to the conduct of its
business in good working order and condition, ordinary wear and tear excepted,
and cause replacements and repairs to be made when necessary for the proper
conduct of its business.
6.08 Patents, Franchises, etc. Maintain, preserve and protect all
licenses, patents, franchises, trademarks and trade names of each Borrower and
each Subsidiary or licensed by any Borrower or any Subsidiary which are
necessary to the conduct of the business of any Borrower or any Subsidiary as
now conducted, free of any conflict with the rights of any other person.
6.09 Insurance. (a) Maintain or cause to be maintained (i) comprehensive
casualty insurance policies insuring the Collateral, all other property of each
Borrower and all property of each Subsidiary against loss by fire, theft,
explosion, collision and such other risks, in such amounts, subject to such loss
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deductible amounts and with such responsible insurance companies as may be
satisfactory to Bank, in Bank's discretion exercised in good faith, and, in all
events, against such risks, in such amounts and subject to such loss deductible
amounts as are customary in such Borrower's or such Subsidiary's industry, as
applicable, and in such minimum amounts that no Borrower or Subsidiary will be
deemed a coinsurer under applicable insurance laws, regulations, policies or
practices, and (ii) endorsements to such insurance policies satisfactory to
Bank, in Bank's discretion exercised in good faith, naming Bank as loss payee
with respect to all Collateral insured thereunder; (b) maintain or cause to be
maintained (i) in the maximum amount available, flood insurance policies
insuring all property of each Borrower and each Subsidiary which is located in
an area that has been, or subsequently is, identified as having special flood or
mudslide hazards and in which the sale of flood insurance has been made
available under the National Flood Insurance Act of 1968, as amended from time
to time, and (ii) endorsements to such insurance policies satisfactory to Bank,
in Bank's discretion exercised in good faith, naming Bank as loss payee with
respect to all Collateral insured thereunder; (c) maintain, and cause each
Subsidiary to maintain, in amounts and with responsible insurance companies
satisfactory to Bank, in Bank's reasonable discretion, such additional insurance
against such risks and subject to such loss deductible amounts as may be
satisfactory to Bank, in Bank's reasonable discretion, including, without
limitation, personal injury and property damage liability insurance, automobile
liability insurance, professional liability insurance, product liability
insurance, worker's compensation insurance, business interruption insurance,
employee dishonesty insurance, and directors' and officers' liability insurance,
all such insurance in all events to insure against such risks, in such amounts
and subject to such loss deductible amounts as are customary in such Borrower's
or such Subsidiary's industry, as applicable; (d) maintain endorsements to all
insurance policies of Borrowers and Subsidiaries naming Bank as additional
insured, which endorsements shall be satisfactory to Bank, in Bank's discretion
exercised in good faith, and endorsements to such policies satisfactory to Bank,
in Bank's discretion exercised in good faith, providing that such policies may
not be cancelled or materially altered, and that Bank may not be removed as loss
payee or additional insured, without at least 30 days prior written notice to
Bank; and (e) deliver to Bank from time to time, and periodically if Bank shall
so require, evidence satisfactory to Bank that all insurance and policy
endorsements required pursuant to this Agreement and the Other Agreements are in
effect.
6.10 Information. (a) Deliver to Bank promptly upon Bank's request, and
periodically if Bank shall so require, such written statements, schedules or
reports (which shall be Certified if required by Bank) in such form, containing
such information and accompanied by such documents as may be satisfactory to
Bank from time to time concerning the Collateral, any Borrower's or any
Subsidiary's business, assets, operations, business prospects or financial
condition or any other matter or matters, including, without limitation, copies
of federal, State and local tax returns of Borrowers and Subsidiaries, and
permit
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Bank, its agents and designees, to discuss any Borrower's or any Subsidiary's
business, assets, operations, business prospects or financial condition with any
Borrower's or any Subsidiary's directors, officers, employees or agents; and (b)
promptly notify Bank in writing if any financial statement, schedule, report,
certificate or information previously or hereafter supplied to Bank by or on
behalf of any Borrower, any Subsidiary or any Other Obligor, including, without
limitation, any of the same previously or hereafter supplied to Bank pursuant to
or in connection with this Agreement or any of the Other Agreements or any
transaction involving or affecting any Borrower, any Subsidiary or any Other
Obligor, shall, to any Borrower's knowledge or belief, subsequently become
inaccurate or misleading in any material respect.
6.11 Use of Proceeds. Use the proceeds of advances made under the Loan
only for working capital and general corporate purposes (including, without
limitation, the payment of the costs, expenses and fees payable by Borrowers
under this Agreement and the Other Agreements).
6.12 Notice of Event of Default. Promptly notify Bank of the occurrence of
any Default or Event of Default and the facts with respect thereto.
6.13 Employee Benefit Plans. (a) At all times administer, maintain and
operate, and cause each Subsidiary at all times to administer, maintain and
operate, each of its Benefit Plans in conformity with all applicable provisions
of ERISA and other federal and state statutes relating to employee benefit plans
(including the continuation coverage requirements of ERISA and the Code for
group health plans under Sections 106(b), 162(i)(2) & (3), and 162(k) of the
Code and Sections 601-607 of ERISA); (b) at all times make, and cause each
Subsidiary at all times to make, all required contributions and premium payments
under each Benefit Plan for all periods after the date hereof; (c) comply with,
and cause each Subsidiary to comply with, all applicable reporting, disclosure
and other requirements of ERISA and the Code as they relate to Benefit Plans,
and furnish Bank with copies of all reports filed in connection therewith
promptly after the filing thereof; (d) notify Bank immediately of any fact,
including, without limitation, any reportable event under Section 4043(b) of
ERISA, arising in connection with any Retirement Plan which might constitute
grounds for the termination thereof by the PBGC; and (e) furnish to Bank,
promptly upon its request therefor, such additional information concerning any
Benefit Plan as Bank may request.
6.14 Environmental Laws. (a) At all reasonable times, permit Bank, and its
agents and designees, to enter upon and inspect all business premises owned,
leased, subleased, occupied, operated or used by any Borrower or any Subsidiary,
and to conduct thereon, at Borrowers' expense, such audit tests and
examinations, including subsurface exploration and testing, as Bank may deem
reasonably necessary to determine whether such Borrower's or such Subsidiary's
ownership, tenancy, occupation, operation and/or use of the premises, as the
case
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may be, and the conduct of the activities engaged in thereon, are in compliance
with Environmental Laws; (b) maintain, and cause all operators, tenants,
subtenants, licensees and occupants of all property owned, leased, subleased,
occupied, used or operated by any Borrower or any Subsidiary to maintain, all
such property free of all Hazardous Substances, and prevent all such property
from being used for the manufacture, generation, production, processing,
distribution, use, treatment, storage, disposal, transport or handling of any
Hazardous Substances; (c) promptly upon its receipt thereof, provide Bank with
copies of all reports prepared by governmental and regulatory agencies, and all
environmental auditors, engineers and others relating to or in connection with
each Borrower's compliance with Environmental Laws; and (d) notify Bank in
writing, promptly upon learning thereof, of (i) any notice that any Borrower is
not in compliance in any material respect with all terms and conditions of all
permits, licenses and authorizations which are required under Environmental
Laws, or that any Borrower is not in compliance in any material respect with all
other limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables contained in the
Environmental Laws, and (ii) any notice or claim of any civil, criminal or
administrative action, suit, demand, claim, hearing, notice or demand letter,
notice of violation, investigation, or proceeding pending or threatened against
any Borrower relating in any way to Environmental Laws.
6.15 Tangible Net Worth. (a) Maintain Consolidated Tangible Net Worth of
not less than (i) $1,150,000.00 as of September 30, 1997; and (b) $2,500,000.00
commencing December 31, 1997, and at all times thereafter. Compliance with the
provisions of this Subsection 6.15(a) shall be measured as of the end of each
quarterly accounting period of Borrowers, commencing with the quarterly
accounting period ending September 30, 1997.
(b) Maintain a ratio of Consolidated Liabilities to Consolidated
Tangible Net Worth of not greater than (i) 6.0 to 1 from (and including)
December 31, 1997, through September 30, 1998, and (ii) 5.0 to 1 commencing
December 31, 1998, and at all times thereafter. Compliance with the provisions
of this Subsection 6.15(b) shall be measured as of the end of each quarterly
accounting period of Borrowers.
6.16 Net Income. Realize positive Consolidated Net Income for each
quarterly accounting period of Borrowers, commencing with the quarterly
accounting period ending September 30, 1997.
6.17 Additional Fees. (a) Pay to Bank (i) at Closing a fee (the "Closing
Fee") in the amount of $60,000.00, and (ii) on the first Banking Day of each
calendar month thereafter, a fee (the "Commitment Fee") in the amount of three-
quarters of one percent (0.75%) of the Maximum Loan Amount on such date
(determined with reference to the applicable fixed dollar amount expressed in
the "Maximum Loan Amount" definition and not the product of Acceptable
Receivables
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times the Receivables Loan Percentage). Payment of the Closing Fee and the
Commitment Fees shall be in addition to the payment of all other fees and
expenses payable under this Agreement, including, without limitation, those fees
and expenses payable pursuant to Subsections 2.01(c) and 10.02 hereof. Subject
to the provisions of Subsection 6.17(b), Subsection 6.17(c) and Subsection 6.18
below, the Closing Fee and Commitment Fees shall be deemed to have been earned
by Bank on the date of payment and shall not be subject to refund or rebate by
Bank.
(b) Notwithstanding the provisions of Subsection 6.17(a) above, in
the event the Obligations are paid in full and any Bank commitment which could
give rise to any future Obligations has been terminated, provided the source of
funding for such payment is not a borrowing from another bank or other financial
institution, (i) Borrowers shall be entitled to a ratable refund of the
Commitment Fee paid for the month in which such payment and termination occur
based upon the remaining portion of such month remaining after such payment and
termination, and (ii) any obligation to pay future Commitment Fees shall
terminate.
(c) Notwithstanding the provisions of Subsection 6.17(a) above, if
Borrowers do not elect the Warrant Option (as defined in Subsection 6.18 below)
Borrowers' obligation to pay certain Commitment Fees shall be suspended under
the circumstances described in this Subsection 6.17(c). If Borrowers certify to
Bank at any time, that Consolidated Tangible Net Worth is equal to or greater
than $6,000,000.00, Borrowers' obligation to pay additional Commitment Fees
shall be suspended; provided, however, that if the monthly financial statements
of Borrowers delivered to Bank in accordance with the provisions of Subsection
6.01(a) hereof for the last month of the quarterly accounting period during
which such certification has been delivered to Bank indicate that as of the last
day of such monthly accounting period (A) Consolidated Tangible Net Worth was
less than $6,000,000.00, or (B) the ratio of Consolidated Liabilities to
Consolidated Tangible Net Worth was greater than 2.5 to 1.0, Borrowers shall
upon the demand of Bank pay to Bank the Commitment Fees which would have been
payable but for such suspension, and the obligation of Borrowers to pay future
Commitment Fees shall resume. Further, if the financial statements of Borrowers
for the last month of any quarterly accounting period thereafter (a "Subsequent
Calendar Quarter") indicate that as of the last day of such monthly accounting
period (A) Consolidated Tangible Net Worth was less than $6,000,000.00, or (B)
the ratio of Consolidated Liabilities to Consolidated Tangible Net Worth was
greater than 2.5 to 1.0, Borrowers shall pay to Bank upon demand the Commitment
Fees which would otherwise have been payable during such calendar quarter.
6.18 Warrants. Issue or cause to be issued and delivered to Bank warrants
under the circumstances and in the manner provided in this Subsection. In lieu
of the payment of the Closing Fee and the Commitment Fees, on or before
September 30,1997, Borrowers shall have the option (the "Warrant Option") of
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electing to partially compensate Bank for extending credit to Borrower by
issuing warrants in accordance with the provisions of this Subsection 6.18.
(a) Borrowers shall elect the Warrant Option by providing Bank with
written notice of such election on or before September 30, 1997, together with a
warrant (the "Initial Warrant") to purchase 1% of the "Applicable Shares" as
hereinafter defined. Concurrently with the delivery of the Initial Warrant
pursuant to this Subsection, Bank shall refund to Borrowers the Closing Fee and
any Commitment Fees paid prior thereto. No other fees and expenses payable by
Borrowers under this Agreement (including, without limitation, those fees and
expenses payable pursuant to Subsections 2.01(c) and 10.02 hereof shall be
refundable by Bank, in whole or in part.
(b) In addition to the Initial Warrant issued pursuant to Subsection
6.18(a) above, if the Warrant Option has been elected by Borrowers, THG shall
issue and deliver to Bank a warrant to purchase 1% of the Applicable Shares in
the event Consolidated Tangible Net Worth is not equal to or greater than
$6,000,000.00 as of September 30, 1997, and shall issue and deliver to Bank a
warrant to purchase another 1% of the Applicable Shares in the event
Consolidated Tangible Net Worth is not equal to or greater than $6,000,000.00 as
of December 31, 1997. Borrowers shall cause the warrants which Bank is entitled
to receive under this Subsection 6.17(b) to be delivered to Bank concurrently
with the delivery of Borrowers' financial statements for the monthly periods
ending September 30, 1997, and December 31, 1997, as applicable.
(c) Notwithstanding the provisions of Subsections 6.18(a) and 6.18(b)
above, but subject to the provisions of Subsection 6.18(e) below, if the Warrant
Option has been elected by Borrowers and (i) as of the last day of any quarterly
accounting period of Borrowers, Consolidated Tangible Net Worth is equal to or
less than $6,000,000.00, or (ii) as of the last day of such or any subsequent
quarterly accounting period of Borrowers (the "Applicable Accounting Period"),
the ratio of Consolidated Liabilities to Consolidated Tangible Net Worth is
equal to or greater than 2.5 to 1.0, concurrently with the delivery to Bank of
the monthly financial statements of Borrowers for the last month of such
Applicable Accounting Period, THG shall issue and deliver to Bank a warrant to
purchase another 1% of the Applicable Shares.
(d) If the Warrant Option has been elected by Borrowers and (i) as of
the last day of any quarterly accounting period of Borrowers, Consolidated
Tangible Net Worth is equal to or greater than $6,000,000.00, and (ii) THG
requests Bank to approve an acquisition which, based upon pro forma projections
provided to Bank, would cause the ratio of Consolidated Liabilities to
Consolidated Tangible Net Worth to exceed (or to further exceed) 2.5 to 1.0,
concurrently with the consummation of such acquisition, but subject to the
provisions of Subsection 6.18(e) below, THG shall issue and deliver to Bank a
warrant to purchase another
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1% of the Applicable Shares; provided, however, that nothing in this Subsection
6.18(d) shall require Bank to approve any acquisition other than in accordance
with the provisions of this Agreement.
(e) Notwithstanding any other provision of this Subsection 6.18, (i)
Bank shall in no event be entitled to receive more than three (3) warrants
Pursuant to the terms of this Subsection, and (ii) in the event (A) all of the
Obligations shall be satisfied in full, and (B) no further commitment by Bank
which could give rise to any Obligations shall exist, the obligation of THG to
issue any additional warrants to Bank shall terminate; provided, however, that
the obligation of THG to issue additional warrants shall continue with respect
to those warrants for which the financial conditions precedent set forth in
Subsections 6.18(b), 6.18(c) or 6.18(d) above have been satisfied at the time
the events described in clauses (A) and (B) above have occurred, even if not yet
reflected in the financial statements theretofore delivered to Bank.
(f) THG agrees that it will obtain such shareholder consents and
amendments to its articles of incorporation as may be necessary from time to
time to authorize not less than the number of shares required in connection with
the exercise of the warrants described in this Subsection 6.18.
(g) The warrants shall be issued without additional consideration
payable by Bank and shall be in form and substance acceptable to both Bank and
THG and agreed to prior to THG's election hereunder. Without limitation of the
foregoing, each warrant shall be for a face amount of shares which would equal
one percent (1%) of the Applicable Shares (which number of shares shall be
subject to adjustment as provided in such warrant) and shall provide for a
purchase price per share equal to $84,000,000.00 divided by the number of
Applicable Shares on the date of such issuance.
(h) For purposes of this Section 6.18, "Applicable Shares" shall
equal, on the date of issuance of any warrant hereunder, the sum of (i) the
number of shares of THG issued and outstanding on the date of Closing; (ii) the
number of shares of THG issued to directors, officers and employees after the
date of Closing and on or prior to the date of issuance of such warrant; and
(iii) the product of (x) the number of shares of THG sold at a total valuation
of THG of less than $84,000,000 (excluding any shares sold to directors,
officers and employees and covered by (ii) above), after the date of Closing and
on or prior to the date of issuance of such warrant and (y) one (1) minus the
fraction determined by dividing the total valuation of THG at which such shares
are issued by $84,000,000; provided, however, that the number of Applicable
Shares shall in all cases be subject to adjustment for stock splits, dividends
and other matters affecting stockholders generally. The warrants and the shares
issuable upon the exercise of such warrants shall be subject to the terms of a
shareholders agreement in form and substance acceptable to both Bank and THG.
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6.19 Warrant Documents. Borrowers and Bank each covenant and agree to use
their best efforts to agree on the forms of warrant and shareholders agreement
referenced in Subsection 6.18 above as soon as possible after Closing.
7. NEGATIVE COVENANTS
Each Borrower covenants and agrees with Bank that, until (a) all
Obligations have been paid in full, and (b) there exists no commitment by Bank
which could give rise to any Obligations, no Borrower will, directly or
indirectly, without Bank's prior written consent:
7.01 Indebtedness. Create, incur, assume or permit to exist any
Indebtedness except (a) Indebtedness to Bank, (b) current Indebtedness incurred
in the ordinary course of business, (c) existing Indebtedness disclosed in
Schedule 7.01 attached hereto and made a part hereof, (d) Indebtedness secured
by Purchase Money Liens which are Permitted Liens, (e) Indebtedness of any
Borrower to any other Borrower which does not violate the provisions of
Subsection 7.05 hereof, (f) other Indebtedness not permitted within the scope of
the preceding clauses of this Subsection 7.01 in an amount not to exceed
$150,000.00 in the aggregate outstanding at any time, and (g) Indebtedness which
shall be consented to by Bank in writing in advance, in Bank's sole discretion
and, if required by Bank, subordinated to the Obligations by a written agreement
in form and substance satisfactory to Bank in its sole and absolute discretion.
Notwithstanding the foregoing, without the prior written consent of Bank THG
shall be permitted to repurchase stock of THG and/or stock options for the
purchase of stock of THG held by officers of THG whose employment has been
terminated and to issue promissory notes or other evidences of Indebtedness in
connection with such repurchase obligations provided (x) no Default or Event of
Default shall then exist and be continuing or would exist after giving effect
thereto, (y) the aggregate amount of Indebtedness incurred in connection with
the termination of any one officer does not exceed $200,000.00, and (z) the
aggregate amount of Indebtedness incurred in connection with all such
terminations does not exceed $600,000.00 at any time outstanding.
7.02 Liens. Create, incur, assume or permit to exist, directly or
indirectly, any Lien upon any of any Borrower's properties or assets, now owned
or hereafter acquired by any Borrower, other than Permitted Liens.
7.03 Merger, Sale of Assets, etc. (a) Enter into or be a party to any
merger, consolidation or share exchange, or suffer or permit to occur any
merger, consolidation or member interest or share exchange to which any
Borrower, any Subsidiary or any Other Obligor is a party, or suffer or permit
any of Borrower's or any Subsidiary's business, assets, operations or books and
records to be merged, consolidated or commingled with any business, assets,
operations or books and records of any other person; provided, however, that the
foregoing covenant shall not
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apply to any merger, consolidation or share exchange which is solely between
Borrowers, provided, that in any such merger, consolidation or share exchange to
which THG is a party, THG shall be the continuing or surviving entity; (b) sell,
assign, transfer, convey or lease any interest in all or any substantial part of
its property except in the ordinary course of a Borrower's business as now being
conducted; (c) purchase or otherwise acquire, or suffer or permit the purchase
or acquisition by any Subsidiary or any Other Obligor of, all or substantially
all of the assets of any other person, any assets of any other person in a
transaction which is subject to the Bulk Transfers Title of the Uniform
Commercial Code of any jurisdiction, or any shares of stock, member interests or
partnership interests of, or similar interest in, any other person; or (d) enter
into any transaction with any Affiliate except for transactions with Affiliates
entered into in the ordinary course of a Borrower's business on terms no less
favorable to a Borrower than would apply in a comparable arm's length
transaction with a person that is not an Affiliate.
7.04 Guaranties. Except as may be otherwise disclosed in Schedule 7.01 or
permitted pursuant to the provisions of this Subsection 7.04 or Subsection 7.07
below, guarantee or otherwise in any way become or be responsible for
obligations or Indebtedness of any other person, whether by agreement to
purchase the obligations or Indebtedness of any other person, by agreement for
the furnishing of funds to any other person for the purchase of goods, supplies
or services, or by way of stock purchase, capital contribution, advance or loan
for the purpose of paying or discharging obligations or Indebtedness of any
other person, or otherwise, except that a Borrower may endorse negotiable drafts
for collection in the ordinary course of business. Notwithstanding the
foregoing, THG shall be permitted to guaranty lease obligations of any other
Borrower arising in the ordinary course of such Borrower's business provided (a)
Borrowers shall notify Bank prior to incurring any lease obligation to be
guaranteed by THG which requires the payment of more than $100,000.00 in any
twelve-month period, and (b) Bank's consent shall be required with respect to
any proposed guaranty by THG which would cause the aggregate amount of
guaranteed lease payments payable by all Borrowers in any twelve-month period to
exceed (or to further exceed) $250,000.00.
7.05 Investments. Make any capital contribution to any other person or
purchase or acquire a beneficial interest in any stock, securities or evidences
of Indebtedness of, or make any investment or acquire any interest in, any other
person, except investments (a) in federally insured certificates of deposit or
in direct obligations of the United States of America maturing within one year
from the date of acquisition, or (b) in direct obligations of the Federal
National Mortgage Association, the Government National Mortgage Association or
other similar corporation created by act of the United States Congress which
mature within one year from the date of acquisition and which at the time of
acquisition have the highest rating obtainable from either Standard & Poor's
Corporation or Xxxxx'x Investors Service, Inc. Notwithstanding the foregoing,
without Bank's
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prior written consent THG shall be permitted in any twelve month period to make
capital contributions to any other Borrowers in an aggregate amount which, when
added to the amount of permitted redemptions of Borrower stock during such
period under Subsection 7.14 hereof, does not exceed $250,000.00.
7.06 Fiscal Year. Change its fiscal year.
7.07 Loans. Make or permit to exist any loan to any person, not including
advances for travel and the like made to officers and employees in the ordinary
course of business; provided, however, that without Bank's prior written consent
THG shall be permitted to make loans to other Borrowers in the ordinary course
of business. For purposes of this Subsection 7.07 and Subsection 7.05 hereof, a
loan from THG to a Borrower which is subordinate to or does not otherwise rank
pari passu with other unsecured Indebtedness of such Borrower (other than
Indebtedness which is entitled to priority under applicable law and not as a
result of any consensual act on the part of Borrower) shall be treated as a
capital contribution or investment by THG and not as a loan.
7.08 Subsidiaries. Form or acquire any Subsidiary. Without limitation of
the foregoing, Bank may condition its consent to the formation or acquisition of
any Subsidiary on such Subsidiary (a) becoming a party to this Agreement as a
Borrower hereunder by the execution by Borrowers and such Subsidiary and the
delivery to Bank of an amendment to this Agreement substantially in the form of
Exhibit B hereto (the "Amendment") and the satisfaction of the conditions
precedent to the effectiveness thereof contained therein, (b) becoming a party
to the Note as one of Makers thereunder by the execution by such Subsidiary and
delivery to Bank of an endorsement to the Note substantially in the form of
Exhibit A to the Amendment, and (c) becoming a party to each of the Other
Agreements pursuant to such documentation as Bank may require. Nothing in this
Subsection 7.08 shall require that Bank consent to the formation or acquisition
of any Subsidiary.
7.09 Change of Name. Change the name of any Borrower or permit any
Subsidiary to change such Subsidiary's name without (a) having provided Bank
with not less than thirty (30) days prior written notice of such change, and (b)
having executed and delivered to Bank such financing statements, financing
statement amendments and other documents which Bank may reasonably require in
order to protect and preserve the Liens of Bank in the Collateral and/or any of
Bank's rights and remedies hereunder or under any of the Other Agreements.
7.10 Trade Names. Except for the use by THG of "Hunter Consulting
Associates" in the States of Colorado and Texas, use any trade name other than
the applicable Borrower's true corporate name or permit any Subsidiary to use
any trade name other than such Subsidiary's true corporate name.
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7.11 Issuances. Issue any shares of its capital stock or permit any
Subsidiary to issue any shares of capital stock, member interests or partnership
interests of such Subsidiary; provided, however, that (a) Bank's consent shall
not be required with respect to the issuance of stock of THG, or options to
purchase stock of THG, to any officer or employee of THG, as part of such
officer's or employee's compensation, and (b) Bank's consent to the Preferred
Stock Sale shall not unreasonably be withheld if prior to the consummation of
such transaction Borrowers and Bank shall have amended this Agreement to
incorporate revised financial covenants satisfactory to Bank in its sole and
absolute discretion.
7.12 Employee Pension Plans. With respect to any Retirement Plan: (a)
engage, or knowingly permit any party in interest (as defined in Section 3(14)
of ERISA) or any disqualified person (as defined in Section 4975(e)(2) of the
Code) to engage, in any prohibited transaction; (b) knowingly incur, or permit
any Subsidiary to knowingly incur, any accumulated funding deficiency under
Section 302 of ERISA or Section 412 of the Code, whether or not waived; (c)
terminate, or permit any Subsidiary to terminate, any Retirement Plan in a
manner which could result in the imposition of a Lien on any property of any
Borrower or any Subsidiary pursuant to Section 4068 of ERISA; or (d) take, or
permit any Subsidiary to take, any action which would adversely affect the
qualification of any Retirement Plan.
7.13 Sale-Leaseback. Become or be, or suffer or permit any Subsidiary or
any Other Obligor to become or be, liable as lessee with respect to any lease of
any property (real, personal or mixed) which has been or is to be sold or
transferred by a Borrower, a Subsidiary or an Other Obligor to any person or
which a Borrower, Subsidiary or Other Obligor intends to use for substantially
the same purpose as any other property which has been or is to be sold or
transferred by a Borrower to any person in connection with such lease; provided,
however, that the provisions of this Subsection 7.13 shall not apply to (a)
transactions between Domestic Borrowers provided Bank at all times has and
retains a perfected first priority Lien on the property which is the subject of
such transaction, or (b) transactions which are solely between Foreign
Borrowers.
7.14 Stock Redemptions. Except as may be otherwise permitted without the
Bank's prior written consent in accordance with the provisions of Subsection
7.01 hereof, purchase, redeem, retire or otherwise acquire for value any shares
of any Borrower's capital stock or any other equity interest in any Borrower, or
suffer or permit any Subsidiary to purchase, redeem or otherwise acquire or
retire for value any shares of such Subsidiary's capital stock, or any member
interests, partnership interests or any other equity interest in such
Subsidiary; provided, however, that without Bank's prior written consent any
Affiliate Borrower shall be permitted to purchase, redeem, retire or otherwise
acquire for value any of its shares held by THG.
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7.15 Compensation, Bonuses. Pay to any officers or directors of Borrowers
or to any employees of Borrowers performing management or executive functions
(collectively, "Executive Management") compensation (including bonuses) in any
form for employment services (which shall not include pension benefits,
customary fringe benefits approved by Bank, benefits under incentive plans
approved by Bank or compensation payable in stock and/or stock options of THG)
in the fiscal year of Borrowers ending December 31, 1997, which exceeds, in the
aggregate, the amount determined in accordance with a plan presented to and
approved by Bank in writing prior to Closing. Borrowers shall not increase the
aggregate amount of such compensation to Executive Management for any fiscal
year of Borrowers subsequent to December 31, 1997, without Bank's prior written
consent; provided, however, that if no Default or Event of Default shall have
occurred and be continuing (a) such consent shall not unreasonably be withheld
or delayed (provided, however, that a period of ten (10) Banking Days from the
time Bank receives all information it requires to evaluate Borrowers' increased
compensation request to the conclusion of such evaluation shall not be deemed an
unreasonable delay), and (b) Bank shall not request Borrowers to decrease
compensation payable to Executive Management from the amount paid in the prior
fiscal year. Borrowers and Bank agree that at Closing the following individuals
(and their successors in office) comprise Executive Management: Xxxxx X. Xxxxxx
(President and Chief Executive Officer); Xxxxx Xxxxxxx (Senior Vice President
and Chief Financial Officer); Xxxx Xxxxxxx (Senior Vice President and Chief
Operating Officer); Xxxx Xxxxxx (Senior Vice President); Xxxxxx Xxxxxxxxx
(Senior Vice President); Xxxxx Xxxxxx (Senior Vice President); and Xxxx
Xxxxxxxxxx (Senior Vice President).
7.16 Dividends. Directly or indirectly declare or pay any dividend on, or
make any other distribution with respect to (whether by reduction of capital or
otherwise), any shares of its capital stock; provided, however, that any
Affiliate Borrower shall be permitted to declare and pay dividends to THG.
7.17 Asset Investments. Make any investment(s) in noncurrent assets (which
shall include fixed assets and capitalized value of leased equipment and leased
real property but shall exclude investments permitted under Subsection 7.05
hereof) during any calendar year which exceeds $1,500,000.00.
7.18 Funded Debt. Redeem, call for redemption, purchase or otherwise
acquire or retire, directly or indirectly, or make any optional prepayment of
principal on, any Funded Debt (other than Funded Debt owed to another Borrower),
or amend, alter or otherwise modify the provisions relating to any Funded Debt,
if the effect of such amendment, alteration or other modification would or might
be to accelerate such Funded Debt. For purposes of this Subsection, "Funded
Debt" shall include any obligation of a Borrower to any person other than Bank
payable more than one year from the date of its creation which, under GAAP, is
shown on the balance sheet as a liability (excluding reserves for deferred
income
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taxes and other reserves to the extent that such reserves do not constitute an
obligation).
8. EVENTS OF DEFAULT
The occurrence of any one or more of the following events shall constitute
an "Event of Default":
(a) Any representation or information previously or hereafter made or
supplied to Bank by or on behalf of any Borrower, any Subsidiary or any Other
Obligor, including, without limitation, any representation or information
previously or hereafter made or supplied to Bank pursuant to or in connection
with this Agreement or any of the Other Agreements or any transaction involving
or affecting any Borrower, any Subsidiary or any Other Obligor, shall prove to
have been, when made or supplied, false or misleading in any respect deemed
material by Bank in good faith.
(b) Failure of any Borrower to pay (i) any scheduled payment of
principal or interest under the Note within five (5) days after the due date
thereof, or (ii) any other of the Obligations, including, without limitation,
any other sum due Bank under this Agreement or any of the Other Agreements, when
and as the same shall become due, whether at the due date thereof, by demand, by
acceleration or otherwise.
(c) Occurrence of a default or event of default by any Borrower, any
Subsidiary or any Other Obligor with respect to, or acceleration or demand for
payment prior to maturity of, any Indebtedness of any Borrower, any Subsidiary
or any Other Obligor to any person which is deemed material by Bank in good
faith, or with respect to any Lien securing any Indebtedness of any Borrower,
any Subsidiary or any Other Obligor to any person which is deemed material by
Bank in good faith.
(d) Any Borrower, any Subsidiary or any Other Obligor shall (i) fail
to observe or perform any warranty, covenant, condition or agreement to be
observed or performed by such Borrower or such other person under Section 7 or
under Subsections 6.03, 6.06, 6.11, 6.12, 6.15 or 6.16 this Agreement; (ii) fail
to observe or perform any warranty, covenant, condition or agreement to be
observed or performed by such Borrower or such other person under Subsection
6.10 of this Agreement and such failure shall continue and not be cured for ten
(10) Banking Days, or (iii) fail to observe or perform any other warranty,
covenant, condition or agreement to be observed or performed by such Borrower or
such other person (other than the obligations specifically referred to elsewhere
in this Section 8) under this Agreement or any of the Other Agreements and,
provided that such failure is of a type which can be cured, such failure shall
continue and not be cured for 30 days after the earlier of (A) the date written
notice thereof is given from Bank to
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Borrowers, or (B) the date Bank is notified thereof (or should have been
notified thereof) pursuant to the provisions of Subsection 6.12 hereof.
(e) Any Borrower, any Subsidiary or any other Obligor shall (i) admit
in writing its insolvency or its inability to pay its debts as they mature, (ii)
make a general assignment for the benefit of creditors, whether conditional or
unconditional and whether or not such assignment is filed in court and whether
or not any court assumes jurisdiction thereof, (iii) commence a case under or
otherwise seek to take advantage of any bankruptcy, reorganization,, insolvency,
readjustment of debt, dissolution or liquidation law, statute or proceeding, or
(iv) by any act indicate its consent to, approval of or acquiescence in any such
proceeding or the appointment of any receiver of or trustee for any Borrower,
any Subsidiary or any such Other Obligor or a substantial part of its property,
or suffer any such receivership, trusteeship or proceeding to continue
undismissed for a period of 60 days.
(f) Any Borrower, any Subsidiary or any Other Obligor shall become a
debtor in any case under any chapter of the United States Bankruptcy Code and,
in the case of any involuntary proceeding, such proceeding shall continue
undismissed for a period of 60 days.
(g) Dissolution of, or entry of any order, judgment, award or decree
for the dissolution of, any Borrower, any Subsidiary or any Other Obligor that
is not a natural person.
(h) Entry of any unstayed judgment, order, award or decree against
any Borrower, any Subsidiary or any Other Obligor which is uninsured to an
extent deemed material by Bank in good faith, or which Bank determines in good
faith, when aggregated with all other judgments, orders, awards and decrees
outstanding against Borrowers, Subsidiaries and Other Obligors, could have a
Material Adverse Effect.
(i) Injunction or restraint of any Borrower, any Subsidiary or any
Other Obligor in any manner from conducting its business in whole or in part
deemed material by Bank in good faith if such injunction or restraint could have
a Material Adverse Effect.
(j) Any assets of any Borrower, any Subsidiary or any Other Obligor
shall be attached, levied upon, seized or repossessed or come into the
possession of a trustee, receiver or other custodian if such attachment, levy,
seizure or repossession could have a Material Adverse Effect.
(k) An adverse change deemed material by Rank in good faith (whether
or not such adverse change otherwise constitutes an Event of Default) shall
occur with respect to (i) the business, assets, operations, business prospects
or financial condition of (A) any Material Borrower or Subsidiary, or (B) the
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Borrowers, Subsidiaries and Other Obligors, taken as a whole, or (ii) the risks
to Bank attending the Collateral, (iii) any commitments of Bank which could give
rise to any Obligations, or (iv) the prospect for payment in full of the
Obligations.
(l) The death of any other Obligor that is an individual.
(m) Any Borrower, any Subsidiary or any Other Obligor shall be or
become insolvent (as defined in Section 101(31) of the United States Bankruptcy
Code) or unable to pay its debts as they mature.
(n) Termination of any contract, franchise, license, permit,
authorization, certificate or right of any Borrower, any Subsidiary or any Other
Obligor if such termination could have a Material Adverse Effect.
(o) Suspension or revocation of any license, permit, certification,
approval or the like required to be held by any Borrower, any Subsidiary or any
Other Obligor that is not an individual by federal, State, local or foreign laws
if such suspension or revocation could have a Material Adverse Effect.
(p) Occurrence of any change in any Borrower's management personnel
which Bank determines in good faith could have a Material Adverse Effect.
(q) Xxxxx X. Xxxxxx shall for any reason (including death) cease to
be the chief executive officer of THG, unless, within 60 days thereafter, THG
shall have engaged a replacement chief executive officer who is satisfactory to
Bank.
(r) Occurrence of any default or event of default under or as defined
in any of the Other Agreements which remains uncured beyond any applicable cure
period; provided that if such default or event of default is based on
circumstances within the scope of any other provision of this Section 8, then
such default or event of default shall not constitute an Event of Default under
this Agreement unless such facts or circumstances constitute an Event of Default
under such other provisions of this Section 8.
(s) Any Borrower, any Other Obligor or any other person shall revoke
or terminate, or attempt to revoke or terminate, or notify Bank of revocation or
termination of, any continuing obligations or agreements of such Borrower, such
Other Obligor or such other person relating in any way to any of the
Obligations, including, without limitation, any continuing obligations or
agreements of such Borrower, such Other Obligor or such other person under any
guaranty or subordination agreement.
(t) THG shall for any reason cease to own all of the issued and
outstanding capital stock of any Affiliate Borrower (excluding stock of THG
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Singapore currently owned by Xxxxx X Xxxxxx and Xxxxxx X. Postal as reflected in
Schedule 4.16 attached hereto).
9. RIGHT AND REMEDIES
9.01 Rights and Remedies of Bank. Upon the occurrence of an Event of
Default described in Subsections 8(e), 8(f) or 8(g) of this Agreement, all of
the Obligations shall automatically and immediately be due and payable. Upon and
during the continuance of an Event of Default, Bank may, without notice or
demand, exercise in any jurisdiction in which enforcement hereof is sought, the
following rights and remedies, in addition to the rights and remedies available
to Bank under the Other Agreements, the rights and remedies of a secured party
under the Uniform Commercial Code and all other rights and remedies available to
Bank under applicable law, all such rights and remedies being cumulative and
enforceable alternatively, successively or concurrently:
(a) Declare the Note, all interest accrued and unpaid thereon and all
other Obligations to be immediately due and payable and the same shall thereupon
become immediately due and payable without presentment, demand payment, protest
or notice of any kind, all of which are hereby expressly waived.
(b) Enforce the Liens granted to Bank hereunder and under the Other
Agreements by collecting or liquidating all or any part of the Collateral or
selling, assigning, leasing, renting, licensing or otherwise disposing of all or
any part of the Collateral or any interest therein, in one or more parcels, at
the same or different times, at public or private sale or disposition, or
otherwise.
(c) Establish and maintain at Bank, subject to Bank's customary
arrangements and charges therefor as established by Bank from time to time, a
repayment account, which shall be under the exclusive control of and subject to
the sole order of Bank, and require each Borrower to deposit in the repayment
account, not later than the first Banking Day following the day on which the
same are received by such Borrower, as a tender of payment of the Obligations or
as security for any contingent or future Obligations, all cash, checks, drafts,
money orders and other items of payment constituting Collateral, or collections
or other proceeds of Collateral.
(d) Institute any proceeding or proceedings to enforce the
Obligations and any Liens of Bank.
(e) Notify postal authorities to change the address for delivery of
mail addressed to any Borrower to such address as Bank may designate and
receive, open and dispose of all mail addressed to any Borrower.
(f) Indorse any Borrower's name on any promissory notes or other
instruments, acceptances, checks, drafts, money orders or other items of
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payment constituting Collateral, or collections or other proceeds of Collateral,
that may come into Bank's possession or control from time to time.
(g) Sign any Borrower's name on any invoices to, drafts against and
other notices and documents to account debtors or other obligors of such
Borrower and requests for verification of accounts and other amounts which may
he due to such Borrower.
(h) Execute proof of claim and loss on behalf of any Borrower.
(i) Apply all Collateral and proceeds of Collateral delivered to Bank
or coming into Bank's possession or control from time to time to any of the
Obligations, or hold the same as security for any contingent or future
Obligations.
(j) At Borrowers' expense, continue or complete) or cause to be
continued or completed, performance of any Borrower's obligations under any
contracts of any Borrower.
(k) Use, Operate, manage, control and exercise all rights of any
Borrower relating to, the Collateral and any other assets of any Borrower, and
collect all income and revenues therefrom.
(l) Terminate, or cease extending credit under, any or all
outstanding commitments or credit accommodations of Bank to any Borrower, any
Subsidiary or any Other Obligor.
(m) At any time and from time to time reduce the Maximum Loan Amount
and/or reduce the Receivables Loan Percentage.
(n) Take exclusive possession of any or all of the Collateral from
time to time and/or place a custodian in exclusive possession of any or all of
the Collateral from time to time and, so far as each Borrower may give authority
therefor, enter upon any premises on which any of the Collateral may be situated
and remove the same therefrom, each Borrower hereby waiving any and all rights
to prior notice and to judicial hearing with respect to repossession of
Collateral, and/or require any Borrower, at Borrowers' expense, to assemble and
deliver any or all of the Collateral to such place or places as Bank may
reasonably request.
(o) With respect to any accounts, notes, instruments, chattel paper,
tax refunds, contract rights, general intangibles or other debts or liabilities
payable to any Borrower securing the Obligations, notify any account debtors and
other obligors thereon to make payments thereon directly to Bank, take control
of the cash and noncash proceeds thereof, demand, collect, xxx for and receive
any money or property at any time due, payable or receivable on account thereof,
compromise and settle with any person liable thereon, and extend the time of
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payment or otherwise change the terms thereof, without incurring liability or
responsibility therefor to any Borrower or any Other Obligor.
9.02 Disposition of Collateral. Each Borrower agrees that commercial
reasonableness and good faith require Bank to give Borrowers no more than ten
days prior written notice of the time and place of any public disposition of
Collateral or of the time after which any private disposition or any other
intended disposition is to be made. All sales or other dispositions of
Collateral may be made for cash, upon credit or for future delivery. In no event
shall Borrowers be credited with any part of the proceeds of liquidation, sale
or other disposition of any Collateral until final payment thereon has been
received by Bank in immediately available funds, and Bank shall have no
obligation to delay any liquidation, sale or other disposition because the same
may result in the imposition of any forfeiture, premium or penalty.
9.03 Costs and Expenses. Each Borrower jointly and severally agree to pay
to Bank, upon written demand by Bank from time to time, the amount of all
reasonable expenses, including reasonable attorneys' fees and expenses, paid or
incurred by Bank (a) in exercising or enforcing or consulting with counsel
concerning any of its rights hereunder, under the Other Agreements or under law,
or (b) in defending any and all non-meritorious or previously waived demands,
claims, counterclaims, cross-claims, causes of action, litigation and
proceedings of every kind and nature asserted, commenced or instituted against
Bank, or any of Bank's officers, directors or employees, by any Borrower, any
Subsidiary or any Other Obligor on account of, as a result of or relating to,
any action taken or not taken by Bank in connection with the Loan, any other of
the Obligations, the Collateral or enforcement or exercise by Bank of any rights
or remedies of Bank under this Agreement, under any of the Other Agreements or
under law. Each Borrower also jointly and severally agrees to pay to Bank, upon
written demand by Bank from time to time, interest on the outstanding amount of
such reasonable expenses paid by Bank, from the date of Bank's demand for
payment of such reasonable expenses until the same are paid in full, at the
highest rate and calculated in the manner provided in the Note.
10. MISCELLANEOUS
10.01 Performance for Borrowers. Each Borrower agrees and hereby
authorizes that Bank may, in Bank's sole discretion, but Bank shall not be
obligated to, whether or not an Event of Default shall have occurred, and
regardless of the Maximum Loan Amount, advance funds on behalf of any Borrower
without prior notice to any Borrower, in order to insure such Borrower's
compliance with any covenant, warranty, representation or agreement of such
Borrower made in or pursuant to this Agreement or any of the Other Agreements,
to continue or complete, or cause to be continued or completed, performance of
such Borrower's obligations under any contracts of such Borrower, to cover
overdrafts in any
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checking or other accounts of such Borrower at Bank or to preserve or protect
any right or interest of Bank in the Collateral or under or pursuant to this
Agreement or any of the Other Agreements, including, without limitation, the
payment of any insurance premiums or taxes and the satisfaction or discharge of
any judgment or any Lien upon the Collateral or other property or assets of such
Borrower and compliance by such Borrower with Environmental Laws; provided,
however, that (a) Bank agrees not to make any advance otherwise authorized under
this Subsection 10.01 without giving Borrowers at least ten (10) days prior
written notice of Bank's intention to do so, unless Bank shall determine in good
faith that any delay in making such advance could impair the Collateral, the
rights and remedies of Bank with respect to the Collateral, the rights and
remedies of Bank under this Agreement or any of the Other Agreements, or the
prospect for the full and punctual payment and performance of the Obligations,
and (b) the making of any such advance by Bank shall not constitute a waiver by
Bank of any Event of Default with respect to which such advance is made nor
relieve Borrowers of any such Event of Default. Any cost, expense or liability
incurred by Bank or imposed upon Bank arising out of or in connection with the
noncompliance by any Borrower with the provisions of any Environmental Laws
shall be treated as an advance of funds on behalf of Borrowers under this
Subsection 10.01, and Borrowers shall jointly and severally indemnify, defend
and save harmless Bank from and against any such cost, expense or liability.
Borrowers jointly and severally agree pay to Bank upon demand all advances made
by Bank under this Subsection 10.01 with interest thereon at the highest rate
and calculated in the manner provided in the Note. All such advances shall be
deemed to be included in the Obligations and secured by the security interest
granted Bank hereunder; provided, however, that the provisions of this
Subsection shall survive the termination of this Agreement and Bank's security
interest hereunder and the payment of all other Obligations.
10.02 Expenses. Whether or not any of the transactions contemplated hereby
shall be consummated, Borrowers jointly and severally agree to pay to Bank, upon
written demand by Bank from time to time, the amount of all reasonable expenses,
including reasonable attorneys' fees and expenses, paid or incurred by Bank in
connection with the preparation, or the amendment, modification, extension,
renewal, refinancing, supplementation, replacement, waiver, release or
termination, of this Agreement or any of the Other Agreements or any terms or
conditions hereof or thereof or any rights or interests of Bank, any Borrower or
any other person relating to any of the foregoing, or otherwise in connection
with the extension of credit hereunder and preparing for the extension of credit
hereunder. Borrowers jointly and severally agree to pay all reasonable expenses
in connection with the filing or recordation of all financing statements and
other documents as may be required by Bank at the time of, or subsequent to, the
execution of this Agreement, including, without limitation, all documentary
stamps, recordation and transfer taxes, filing fees and other reasonable costs
and taxes incident to recordation of any document in connection herewith, and,
if any such reasonable expenses shall be paid or incurred by Bank, to pay to
Bank upon written
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demand the amount of such reasonable expenses. Borrowers also jointly and
severally agree to pay to Bank, upon written demand by Bank from time to time,
interest on the outstanding amount of all reasonable expenses paid by Bank
referred to in this Subsection, from the date of Bank's demand for payment of
such reasonable expenses until the same are paid in full, at the highest rate
and calculated in the manner provided in the Note. Borrowers also jointly and
severally agree to indemnify, protect and defend Bank, and save Bank harmless,
from and against any and all claims, demands, damages, losses, liabilities,
obligations, penalties, litigation, defenses, judgments, suits, actions,
proceedings, reasonable costs and expenses (including, without limitation,
reasonable attorneys' fees and expenses and reasonable experts' fees and
expenses) of any kind or nature whatsoever which may at any time be imposed
upon, paid or incurred by or asserted or awarded against Bank relating to,
resulting from or arising out of (a) the use of any property owned, leased,
subleased, occupied, used or operated by any Borrower or any Subsidiary for the
manufacture, generation, production, processing, distribution, use, treatment,
storage, disposal, transport or handling of any Hazardous Substances, (b) the
presence of any Hazardous Substances in or upon any such property, or (c) any
violation of any Environmental Law.
10.03 Applications of Collateral. Except as may be otherwise specifically
provided in this Agreement, all Collateral and proceeds of Collateral coming
into Bank's possession may be applied by Bank to any of the Obligations, whether
matured or unmatured, as Bank shall determine in its sole discretion.
10.04 Further Assurances, Power of Attorney. Each Borrower agrees promptly
to do, make, execute and deliver all such additional and further acts, things,
deeds, assurances, instruments and documents as Bank may request in good faith
to vest in and assure to Bank its rights hereunder or under any of the Other
Agreements or in any of the Collateral. Effective upon and during the
continuance of any Event of Default, each Borrower hereby appoints Bank and its
designees as attorney-in-fact of such Borrower, irrevocably and with power of
substitution, with authority to execute and deliver from time to time, in the
name and stead of such Borrower, all documents which such Borrower is required
to, but has failed or refused to, execute and deliver to Bank pursuant to this
Agreement or any of the Other Agreements, and with authority to take all of the
actions from time to time on behalf of such Borrower, and in the name and stead
of such Borrower, which Bank is authorized to take under this Agreement and the
Other Agreements or which Bank in its good faith discretion deems necessary or
advisable in order to cause such Borrower to be in compliance with any of the
terms of this Agreement or any of the Other Agreements or in order to carry out
and enforce this Agreement and the Other Agreements. Said attorney or designee
shall not be liable for any acts of commission or omission nor for any error of
judgment or mistake of fact or law which does not arise from its gross
negligence or willful misconduct. This power of attorney is coupled with an
interest and is irrevocable so long as any of the
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Obligations remain unpaid or unperformed or there exists any commitment by Bank
which could give rise to any Obligations.
10.05 Waiver of Trial by Jury. Each Borrower and Bank agrees that any
action, suit or proceeding involving any claim, counterclaim or cross-claim
arising out of or in any way relating, directly or indirectly, to this Agreement
or the Other Agreements, or any liabilities, rights or interests of any
Borrower, Bank or any other person arising out of or in any way relating,
directly or indirectly, to any of the foregoing, shall be tried by a court and
not by a jury. Each Borrower and Bank hereby waives any right to trial by jury
in any such action, suit or proceeding, with the understanding and agreement
that this waiver constitutes a waiver of trial by jury of all claims,
counterclaims and cross-claims against all parties to such actions, suits or
proceedings, including claims, counterclaims and cross-claims against parties
who are not parties to this Agreement or the Other Agreements. This waiver is
knowingly, willingly and voluntarily made by each Borrower and Bank, and each
Borrower and Bank acknowledges and agrees that this waiver of trial by jury is a
material aspect of the agreements between Borrowers and Bank and that no
representations of fact or opinion have been made by any person to induce this
waiver of trial by jury or to modify, limit or nullify its effect.
10.06 Additional Waivers by Borrowers. Each Borrower hereby waives, to the
extent the same may be waived under applicable law: (a) notice of acceptance by
Bank of this Agreement; (b) all claims, causes of action and rights of such
Borrower against Bank on account of actions taken or not taken by Bank in the
exercise of Bank's rights or remedies hereunder or under any of the Other
Agreements, or under law, provided that the same did not arise from Bank's gross
negligence or willful misconduct; (c) all claims and causes of action of such
Borrower against Bank for punitive, exemplary or other non-compensatory damages;
(d) all rights of redemption of such Borrower with respect to any of the
Collateral; (e) in the event Bank seeks to repossess any or all of the
Collateral by judicial proceedings, any bonds or demands for possession which
otherwise may be required; (f) all rights of such Borrower to have marshalled
the Collateral or any other security for any of the Obligations; (g)
presentment, protest, notice of protest and notice of nonpayment with respect to
all of the Obligations; (h) settlement, compromise or release of the obligations
of any Other Obligor or any other person primarily or secondarily liable upon or
obligated with respect to any of the Obligations; (i) substitution, impairment,
exchange or release of any direct or indirect security for any of the
Obligations; and (j) any duty or obligation of Bank to disclose to such Borrower
any information concerning any other customer or client, or prospective customer
or client, of Bank. Each Borrower agrees that Bank may exercise any or all of
its rights and/or remedies hereunder, under the Other Agreements and under law
without resorting to, without regard to, and regardless of the adequacy of, any
security or other sources of liability with respect to any of the Obligations.
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10.07 Waivers by Bank. Neither any failure nor any delay on the part of
Bank in exercising any right, power or remedy hereunder, under any of the Other
Agreements or under applicable law shall operate as a waiver thereof, nor shall
a single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. Without limitation
of the foregoing, the failure or delay of Bank to accrue interest on the Loan at
the Default Rate of Interest following the occurrence of an Event of Default
shall not operate as a waiver of such Event of Default or of Bank's right at any
time thereafter to accrue interest on the Loan at the Default Rate of Interest.
10.08 Payments, Setoff. All payments required to be made by any Borrower
hereunder shall be made by such Borrower without setoff, counterclaim or
deduction and shall be made to Bank in lawful money of the United States of
America at Bank's principal office (or at such other address as Bank may specify
to Borrowers in writing from time to time). If any payment required to be made
by any Borrower hereunder shall be due on any day that is not a Banking Day,
such payment may be made by such Borrower without default on the next succeeding
Banking Day but any interest-bearing portions of such payment shall continue to
accrue interest during such extension of time. Bank shall have the right from
time to time to charge and deduct from any deposit accounts of any Borrower at
Bank any amounts credited to such accounts and apply the same in order to pay
principal amounts, interest charges, service charges, fees, expenses or any
other sums or charges due and unpaid under this Agreement or any of the Other
Agreements. Bank shall have the right, in addition to all other rights and
remedies available to it, to set off against any Obligations due and unpaid any
sums or property owing to any Borrower by Bank or held or controlled by Bank for
any Borrower. Each Borrower hereby confirms Bank's right to banker's lien and
setoff, and nothing in this Agreement or any of the Other Agreements shall be
deemed to replace, supersede, limit, waive or prohibit Bank's right of banker's
lien and setoff.
10.09 Confession of Judgment. Each Borrower hereby authorizes any clerk of
court or any attorney-at-law to appear for such Borrower before any court,
having jurisdiction, within the United States or elsewhere, and, after one or
more complaints flied, confess judgment against such Borrower as of any time
after any of the Obligations are due (whether by demand, stated maturity,
acceleration or otherwise) for the unpaid balance of the Obligations, including
principal, interest, fees, court costs, late charges and expenses, together with
attorneys' fees equal to fifteen percent (15%) of the amount of such
Obligations, for collection and release of all errors, and without stay of
execution, and inquisition and extension upon any levy on real estate is hereby
waived and condemnation agreed to, and the exemption of personal property from
levy and sale is also hereby expressly waived, and no benefit of exemption shall
be claimed under any exemption law now in force or which may be hereafter
adopted. The foregoing authorities and powers to confess judgment shall not be
exhausted by one or more exercises of any of them or by any imperfect exercise
of any of them, shall not be extinguished by any judgment
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entered because of any of them and may be exercised before, during or after
sale, liquidation or other disposition by Bank of any property directly or
indirectly securing any of the Obligations or exercise or enforcement by Bank of
any other right or remedy of Bank with respect to the Obligations. Bank and
Borrowers agree that any agreements of Borrowers contained in this Agreement or
any of the Other Agreements to pay any costs or expenses, including attorneys'
fees and expenses, paid or incurred by Bank shall not be merged into, or
otherwise impaired by, any such judgment by confession, but Bank shall not be
entitled to recover on account of such costs or expenses any amount in excess of
the greater of (a) such costs or expenses included in any judgments by
confession (without duplication), or (b) such costs or expenses actually paid or
incurred by Bank. Notwithstanding the foregoing, Bank agrees that to the extent
Bank recovers an amount under this Subsection 10.09 (or under the confession of
judgment provisions of the Note) for application to its attorney's fees which
exceeds the actual and reasonable attorney's fees incurred in connection
therewith, following the satisfaction of all other Obligations such excess
amount shall be refunded to Borrowers.
10.10 Modifications. No modification or waiver of any provision of this
Agreement or any of the Other Agreements, and no consent by Bank to any failure
of any Borrower or any other person to comply with any provision of this
Agreement or any of the Other Agreements, shall in any event be effective unless
the same shall be in writing signed by the person against whom enforcement is
sought, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. No notice to or demand upon
Borrowers in any case shall entitle Borrowers to any other or further notice or
demand in the same, similar or other circumstances.
10.11 Notices. Any notice or other communication in connection with this
Agreement, including demands for payment by Bank, shall be deemed to have been
given when hand delivered to the party to whom directed, or, if transmitted by
telex, facsimile transmission or by mail (whether or not registered or
certified), when telexed, transmitted by facsimile transmission or deposited in
the mail postage prepaid, respectively, provided that any such notice or
communication shall be hand delivered or transmitted to a party hereto as
provided below (or at such other address as such party shall specify in writing
to the other parties hereto):
(a) if to Borrowers, c/o The Hunter Group, Inc. at 000 Xxxx Xxxxx
Xxxxxx, Xxxxx 0000, Xxxxxxxxx, Xxxxxxxx 00000 [Fax No.: 410/000-0000] Attention:
Chief Financial Officer; and
(b) if to Bank, at Signet Bank, Xxxx Xxxxxx Xxx 0000, Xxxxxxxxx,
Xxxxxxxx 00000 [Fax No.: 410/000-0000].
10.12 Disclosure of Information. Each Borrower consents and agrees that
Bank may issue press releases concerning, and otherwise publicly
-55-
announce or publicize, financings provided by Bank to Borrowers or Subsidiaries.
Each Borrower hereby authorizes Bank to disclose to any subsidiary or affiliate
of Bank, to any fiduciary institution (as "fiduciary institution" is defined in
Subtitle 3 of Title 1 of the Financial Institutions Article of the Annotated
Code of Maryland, or any successor legislation) or to any banking institution,
credit union or savings and loan association organized under the laws of any
State, and hereby authorizes all subsidiaries and affiliates of Bank, all
fiduciary institutions (as defined as above provided) and all banking
institutions, credit unions and savings and loan associations organized under
the laws of any State to disclose to Bank, the financial record of any Borrower
(as "financial record" is defined in Subtitle 3 of Title 1 of the Financial
Institutions Article of the Annotated Code of Maryland, or any successor
legislation).
10.13 Law, Jurisdiction, Transfers of Interests and Unenforceability. The
performance and construction of this Agreement and the Other Agreements shall be
governed by the internal laws of the State of Maryland (exclusive of principles
of conflicts of laws). Each Borrower agrees that any suit, action or proceeding
instituted by Bank with respect to any of the Obligations, the Collateral, this
Agreement or any of the Other Agreements may be brought in any State or federal
court located in the State of Maryland (in addition to such other courts in
which jurisdiction and venue may be appropriate), and each Borrower consents to
the in personam jurisdiction of such courts. Each Borrower irrevocably waives
any objection to, and any right of immunity from, the jurisdiction of such
courts or the execution of judgments resulting therefrom, on the grounds of
venue or the convenience of the forum. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns, and each reference in this Agreement to any of the parties hereto shall
be deemed to include the successors and assigns of such party, including, in the
case of any Borrower, the debtor in possession or trustee in any case under any
chapter of the United States Bankruptcy Code in which any Borrower is debtor. No
Borrower may assign this Agreement or any of its rights hereunder without Bank's
prior written consent. Bank may at any time, in its discretion, assign, transfer
or pledge to any person, or grant to any person a Lien in, this Agreement, any
of the Other Agreements or any of its rights hereunder or thereunder. In
addition, Bank may sell, in such amounts, upon such terms and to such persons as
Bank may determine, participations in its interests under this Agreement and/or
any of the Other Agreements. In the case of each such assignment, transfer,
pledge, grant or sale (or offer to assign, transfer, pledge, grant or sell),
Bank may from time to time provide to the assignee, transferee, pledgee, secured
party or participant (or to any potential or prospective assignee, transferee,
pledgee, secured party or participant), any information and documents (or copies
thereof) relating to this Agreement and the Other Agreements and related
transactions, and relating to the business, assets, operations, business
prospects or financial condition of Borrowers, Subsidiaries and Other Obligors.
If any term, provision or condition, or any part thereof, of this Agreement or
any of the Other Agreements shall for any reason be
- 56-
found or held invalid or unenforceable by any court or governmental agency, such
invalidity or unenforceability shall not affect the remainder of such term,
provision or condition, nor any other term, provision or condition, and this
Agreement and the Other Agreements shall survive and be construed as if such
invalid or unenforceable term, provision or condition had not been contained
herein or therein; provided, however, that if any rate of interest provided
under this Agreement does or shall exceed the maximum interest rate which
Borrowers are permitted by law to contract or agree to pay, then such rate of
interest shall immediately be deemed to be reduced to such maximum rate and all
previous payments of interest in excess of the maximum rate shall be deemed to
have been payments in reduction of principal and not of interest. All books and
records of Bank and statements of account rendered by Bank to Borrowers relating
to the Obligations shall be presumed to be accurate, absent manifest error.
10.14 Changes in Laws. In the event that, at any time or from time to time
after the date of this Agreement, the implementation of, or any change in, any
law or regulation, or any guideline or directive (whether or not having the
force of law), or the interpretation or administration thereof by any central
bank or other authority charged with the administration thereof, imposes,
modifies or deems applicable any capital adequacy, reserve or similar
requirement (including, without limitation, a request or requirement which
affects the manner in which Bank allocates capital resources to its commitments
and extensions of credit, including, without limitation, its extensions of
credit hereunder), and, as a result thereof, in the sole opinion of Bank, the
rate of return on Bank's capital as a consequence of its extensions of credit
hereunder, is reduced to a level below that which Bank could have achieved but
for such circumstances, then, in each such case, within 10 days after written
demand by Bank from time to time, Borrowers shall pay to Bank such additional
amount or amounts as shall compensate Bank for such reduction in rate of return.
A certificate of Bank as to any such additional amount or amounts, in the
absence of manifest error, shall be final and conclusive. In determining such
amount or amounts, Bank may use any reasonable averaging and attribution
methods.
10.15 LIBOR Unavailability; Illegality. (a) If Bank determines that, on
any date on which the Monthly LIBO Rate is to be determined such Rate cannot be
determined or does not reflect the cost of funds to Bank of making or funding
the Advances or any portion thereof, or (b) any change in applicable law or
regulations or in the interpretation thereof by any governmental authority
charged with the administration thereof shall make it unlawful for Bank to
continue to offer the Monthly LIBOR Option, Bank shall forthwith give notice of
such fact to Borrowers. In such event, and until such time as the conditions
specified in clauses (a) and/or (b) above (as applicable) shall no longer exist
the availability of the Monthly LIBOR Option shall be suspended and interest
shall accrue on the Advances in accordance with the Prime Rate Option.
-57 -
10.16 No Novation. Borrowers and Bank intend that neither this Amended and
Restated Loan and Security Agreement, nor the execution and delivery of this
Amended and Restated Loan and Security Agreement or any other document executed
and delivered pursuant to or in connection with this Amended and Restated Loan
and Security Agreement, shall constitute or be construed to operate as a
novation of the Original Loan Agreement, the indebtedness THG pursuant to the
Original Loan Agreement or any lien or security interest heretofore created
pursuant to the Original Loan Agreement, the Security Agreement (as therein
defined) or any other document creating or granting a lien or security interest
to Agent to secure any Obligations of THG or any other person under or in
connection with the credit accommodations extended pursuant to the Original Loan
Agreement. Borrowers and Bank intend that by the execution and delivery of this
Amended and Restated Loan and Security Agreement the terms of such credit
accommodations shall be modified, restated and replaced in their entireties, but
the indebtedness with respect thereto and such liens and security interests
heretofore created shall not be extinguished or satisfied. Accrued and unpaid
interest on the Advances under the Original Loan Agreement shall be due and
payable with the first payment of interest due on the Advances hereunder.
10.17 Joint and Several Liability; Limited Recourse. Each of Borrowers
agrees that it is jointly and severally liable with each other Borrower to Bank
for the payment and performance of the Obligations.
10.18 Survival. All covenants, conditions, agreements, representations and
warranties made herein and in the Other Agreements shall survive the execution
and delivery hereof and thereof, shall survive Closing and shall continue in
full force and effect until all Obligations have been paid in full and there
exists no commitment by Bank which could give rise to any Obligations.
10.19 Merger and Integration. This Agreement and the attached Schedules
and Exhibits contain the entire agreement of the parties hereto with respect to
the matters covered and the transactions contemplated hereby, and no other
agreement, statement or promise made by any party hereto, or by any employee,
officer, agent or attorney of any party hereto, which is not contained herein,
shall be valid or binding.
10.20 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto on separate counterparts, each of
which, when so executed and delivered, shall be an original, but all such
counterparts shall together constitute one and the same instrument.
10.21 Headings. The headings and subheadings contained in the titling of
this Agreement are intended to be used for convenience only and shall not be
used or deemed to limit or diminish any of the provisions hereof.
-58-
10.22 Recitals. The Recitals hereto are hereby incorporated into and made
a part of this Agreement.
[SIGNATURES CONTAINED ON THE FOLLOWING PAGE]
-59-
IN WITNESS WHEREOF, the parties hereto have executed or caused to be
executed this Agreement under seal as of the date first above written.
ATTEST/WITNESS: THE HUNTER GROUP, INC.
/s/ A. Xxxxx Xxxxxxx By: /s/ Xxxxx X. Xxxxxx (SEAL)
---------------------- ----------------------
Name: Xxxxx X. Xxxxxx
Title: President
THG CONSULTING INC.
/s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxx X. Xxxxxx (SEAL)
---------------------- ----------------------
Name: Xxxxx X. Xxxxxx
Title: President
THE HUNTER GROUP (SINGAPORE)
PTE LTD
/s/ A. Xxxxx Xxxxxxx By: /s/ Xxxxx X. Xxxxxx (SEAL)
---------------------- ----------------------
Name: Xxxxx X. Xxxxxx
Title: President
HUNTER CONSULTING ASSOCIATES,
PTY. LIMITED
/s/ A. Xxxxx Xxxxxxx By: /s/ Xxxxx X. Xxxxxx (SEAL)
---------------------- ----------------------
Name: Xxxxx X. Xxxxxx
Title: President
-60-
HUNTER CONSULTING ASSOCIATES,
LIMITED
/s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxx X. Xxxxxx (SEAL)
---------------------- -----------------------
Name: Xxxxx X. Xxxxxx
Title: President
THE HUNTER GROUP
INTERNATIONAL, INC.
/s/ A. Xxxxx Xxxxxxx By: /s/ Xxxxx X. Xxxxxx (SEAL)
---------------------- -----------------------
Name: Xxxxx X. Xxxxxx
Title: President
BORROWERS
SIGNET BANK
/s/ ILLEGIBLE By: /s/ Xxxxxx X. Xxxxxxxxx (SEAL)
---------------------- -----------------------
Xxxxxx X. Xxxxxxxxx
Vice President
BANK
-61-
STATE OF MARYLAND, TO WIT:
I HEREBY CERTIFY that on this 20th day of June, 1997, before me, the
subscriber, a Notary Public of the State of Maryland, personally appeared Xxxxx
X. Xxxxxx, who acknowledged himself/herself to be the President of The Hunter
Group, Inc., and that he/she, as such President, being authorized so to do,
executed the foregoing instrument for the purposes therein contained, by
signing in my presence the name of the corporation by himself/herself as Xxxxx
X. Xxxxxx.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ Xxxx X. Xxxxx
----------------------
Notary Public
My Commission expires:
XXXX X. XXXXX
NOTARY PUBLIC STATE OF MARYLAND
MY COMMISSION EXPIRES: AUGUST 1, 1999.
STATE OF MARYLAND, TO WIT:
I HEREBY CERTIFY that on this 20th day of June, 1997, before me, the
subscriber, a Notary Public of the State of Maryland, personally appeared Xxxxx
X. Xxxxxx, who acknowledged himself/herself to be the President of THG
Consulting Inc., and that he/she, as such President, being authorized so to do,
executed the foregoing instrument for the purposes therein contained, by signing
in my presence the name of the corporation by himself/herself as Xxxxx X.
Xxxxxx.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ Xxxx X. Xxxxx
----------------------
Notary Public
My Commission expires:
XXXX X. XXXXX
NOTARY PUBLIC STATE OF MARYLAND
MY COMMISSION EXPIRES: AUGUST 1, 1999.
-62-
STATE OF MARYLAND, TO WIT:
I HEREBY CERTIFY that on this 20th day of June, 1997, before me, the
subscriber, a Notary Public of the State of Maryland, personally appeared Xxxxx
X. Xxxxxx, who acknowledged himself/herself to be the President of The Hunter
Group (Singapore) Pte Ltd, and that he/she, as such President, being authorized
so to do, executed the foregoing instrument for the purposes therein contained,
by signing in my presence the name of the corporation by himself/herself as
Xxxxx X. Xxxxxx.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ Xxxx X. Xxxxx
----------------------
Notary Public
My Commission expires:
XXXX X. XXXXX
NOTARY PUBLIC STATE OF MARYLAND
MY COMMISSION EXPIRES: AUGUST 1,1999.
STATE OF MARYLAND, TO WIT:
I HEREBY CERTIFY that on this 20th day of June, 1997, before me, the
subscriber, a Notary Public of the State of Maryland, personally appeared Xxxxx
X. Xxxxxx, who acknowledged himself/herself to be the President of Hunter
Consulting Associates, PTY., Limited, and that he/she, as such President, being
authorized so to do, executed the foregoing instrument for the purposes therein
contained, by signing in my presence the name of the corporation by
himself/herself as Xxxxx X. Xxxxxx.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ Xxxx X. Xxxxx
----------------------
Notary Public
My Commission expires:
XXXX X. XXXXX
NOTARY PUBLIC STATE OF MARYLAND
MY COMMISSION EXPIRES: AUGUST 1,1997.
-00-
XXXXX XX XXXXXXXX, TO WIT:
I HEREBY CERTIFY that on this 20th day of June, 1997, before me, the
subscriber, a Notary Public of the State of Maryland, personally appeared Xxxxx
X. Xxxxxx, who acknowledged himself/herself to be the President of Hunter
Consulting Associates, Limited, and that he/she, as such President, being
authorized so to do, executed the foregoing instrument for the purposes therein
contained, by signing in my presence the name of the corporation by
himself/herself as Xxxxx X. Xxxxxx.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ Xxxx X. Xxxxx
----------------------
Notary Public
My Commission expires:
XXXX X. XXXXX
NOTARY PUBLIC STATE OF MARYLAND
MY COMMISSION EXPIRES: AUGUST 1,1999.
STATE OF MARYLAND, TO WIT:
I HEREBY CERTIFY that on this 20th day of June, 1997, before me, the
subscriber, a Notary Public of the State of Maryland, personally appeared Xxxxx
X. Xxxxxx, who acknowledged himself/herself to be the President of The Hunter
Group International, Inc., and that he/she, as such President, being authorized
so to do, executed the foregoing instrument for the purposes therein contained,
by signing in my presence the name of the corporation by himself/herself as
Xxxxx X. Xxxxxx.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ Xxxx X. Xxxxx
----------------------
Notary Public
My Commission expires:
XXXX X. XXXXX
NOTARY PUBLIC STATE OF MARYLAND
MY COMMISSION EXPIRES: AUGUST 1,1999.
-00-
XXXXX XX XXXXXXXX, TO WIT:
I HEREBY CERTIFY that on this 20th day of June, 1997, before me, the
subscriber, a Notary Public of the State of Maryland, personally appeared Xxxxxx
X. Xxxxxxxxx, who acknowledged himself to be the Vice President of Signet Bank,
and that he, as such, being authorized so to do, executed the foregoing
instrument for the purposes therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ Xxxx X. Xxxxx
----------------------
Notary Public
My Commission expires:
10-1-98
----------------------
-65-
EXHIBIT A
AMENDED AND RESTATED NOTE
$8,000,000.00 Baltimore, Maryland
__________________, 1997
FOR VALUE RECEIVED, THE HUNTER GROUP, INC., a Maryland corporation, THG
CONSULTING INC., a corporation incorporated under the laws of Canada, THE HUNTER
GROUP (SINGAPORE) PTE LTD, a corporation incorporated under The Companies Act of
the Republic of Singapore, HUNTER CONSULTING ASSOCIATES, PTY. LIMITED, a
corporation organized under the laws of New South Wales, Australia, HUNTER
CONSULTING ASSOCIATES LIMITED, a corporation organized under the laws of Great
Britain, and THE HUNTER GROUP INTERNATIONAL, INC., a Delaware corporation (each
individually a "Maker" and collectively, "Makers"), jointly and severally
promise to pay to the order of SIGNET BANK, a Virginia banking corporation
("Bank"), the lesser of (i) the principal sum of $8,000,000.00, or (ii) the
aggregate principal amount advanced and outstanding under the "Loan" as defined
in that certain Amended and Restated Loan and Security Agreement of even date
herewith among Makers and Bank (the "Agreement"), together with interest on the
unpaid principal balance outstanding from time to time, all as hereinafter set
forth. Capitalized terms used in this Note which are not defined shall have the
meanings assigned to such terms in the Agreement.
Interest from the date hereof on the principal amount outstanding from
time to time until the occurrence of an Event of Default shall be payable at the
Non-Default Rate of Interest. At Bank's election after the occurrence of an
Event of Default until this Note is paid in full, interest on the principal
amount outstanding from time to time shall be payable at the Default Rate of
Interest; provided, however, that (a) interest shall not be payable at the
Default Rate of Interest until Bank shall have notified Makers of Bank's
election to charge the Default Rate of Interest, and (b) if the Event of Default
on which the charging of the Default Rate of Interest is based Shall be cured or
waived or otherwise discontinued, then and thereafter (until the occurrence of a
subsequent Event of Default) interest shall be payable at the Non-Default Rate
of Interest. From the date hereof, interest accrued shall be paid by Makers to
Bank on or before the first (1st) day of each month, commencing July 1, 1997.
Interest shall be calculated on a year of 360 days based upon the actual number
of days elapsed.
Principal shall be repaid from time to time as may be necessary to bring
the principal amount outstanding into conformity with Subsection 2.01 of the
Agreement. The entire amount of the unpaid principal balance, together with all
accrued and unpaid interest thereon, shall be due and payable on the Review
Date.
Payments of both principal and interest shall be paid in lawful money of
the United States of America in immediately available funds at the principal
office of Bank or at such other place as Bank may from time to time designate.
If any payment of principal and/or interest due hereunder (excluding any
accelerated payments and payments due on the Review Date) is not paid within 15
days after its due date, Makers shall pay to Bank on demand a late charge equal
to 5% of the amount of such payment.
This Note may be prepaid in whole at any time or in part from time to time
without premium or penalty.
If any payment of principal or interest shall be due on a Saturday, Sunday
or any other day on which banking institutions in the State of Maryland are
required or permitted to be closed, such payment shall be made on the next
succeeding business day and such extension of time shall be included in
computing interest hereunder. All payments hereunder may, in Bank's sole
discretion, be applied first to the payment of outstanding late charges (if
any), then to accrued and unpaid interest and the balance to the payment of
principal.
If any payment of principal and/or interest due hereunder is not paid
within five (5) days after its due date then, and at any time thereafter, Bank
may declare the entire unpaid principal balance hereof, together with all
accrued and unpaid interest thereon, to be immediately due and payable. This
Note is given in replacement of that certain Promissory Note dated November 17,
1995, as amended, made by The Hunter Group, Inc. to the order of Bank (the
"Original Note"), and is given pursuant to the terms of the Agreement. The
execution of this Note and the replacement of the Original Note hereby shall not
constitute or act as a novation, satisfaction or extinguishment of the
indebtedness evidenced by the Original Note, and accrued and unpaid interest
under the Original Note shall be due and payable with the first payment of
interest due hereunder. The Agreement contains, among others, provisions for
securing this Note, for accelerating the maturity hereof upon the happening of
certain specified events and for the addition of additional Makers hereof by
endorsement hereof.
Makers jointly and severally agree to pay to Bank and reimburse Bank for
any and all reasonable costs and expenses, including reasonable attorney's fees
and court costs, if any, incurred by Bank in connection with the enforcement or
collection hereof, both before and after the commencement of any action to
enforce or collect this Note, but whether or not any such action is commenced by
Bank. Each Maker waives presentment, protest and demand, notice of protest,
notice of dishonor and nonpayment of this Note and expressly agrees that this
Note or any payment hereunder may be extended from time to time without in any
way affecting the liability of any Maker hereunder.
-2-
Each Maker acknowledges and warrants that the debt evidenced hereby is a
"commercial loan" within the meaning of Title 12 of the Commercial Law Article
of the Annotated Code of Maryland (1990 ed.). Each Maker warrants that all loan
proceeds will be used solely to carry on a business or commercial enterprise,
and for such purposes as may be permitted under the Agreement.
The rights and remedies of Bank hereunder and under the Agreement shall be
cumulative and concurrent and may be pursued singularly, successively or
together at the sole discretion of Bank, and may be exercised as often as
occasion therefor shall occur, and the failure to exercise any such right or
remedy shall in no event be construed as a waiver or release of the same or any
other right or remedy.
Each Maker hereby authorizes any clerk of court or any attorney-at-law to
appear for such Maker before any court, having jurisdiction, within the United
States or elsewhere, upon and during the continuance of an Event of Default,
and, after one or more complaints filed, confess judgment against such Maker as
of any time after any sum is due hereunder (whether by demand, stated maturity,
acceleration or otherwise) for the unpaid balance of this Note and all sums due
in connection herewith, including principal, interest, fees, court costs, late
charges and expenses, together with attorneys' fees equal to fifteen percent
(15%) of the total amount then due, for collection and release of all errors,
and without stay of execution, and inquisition and extension upon any levy on
real estate is hereby waived and condemnation agreed to, and the exemption of
personal property from levy and sale is also hereby expressly waived, and no
benefit of exemption shall be claimed under any exemption law now in force or
which may be hereafter adopted. The foregoing authorities and powers to confess
judgment shall not be exhausted by one or more exercises of any of them or by
any imperfect exercise of any of them, shall not be extinguished by any judgment
entered because of any of them and may be exercised before, during or after
sale, liquidation or other disposition by Bank of any property directly or
indirectly securing this Note or exercise or enforcement by Bank of any other
right or remedy of Bank with respect hereto. Bank and Makers agree that any
agreement of such Maker contained in this Note to pay any costs or expenses,
including attorneys' fees and expenses, paid or incurred by Bank shall not be
merged into, or otherwise impaired by, any such judgment by confession, but Bank
shall not be entitled to recover on account of such costs or expenses any amount
in excess of the greater of (a) such costs or expenses included in any judgments
by confession (without duplication), or (b) such costs or expenses actually paid
or incurred by Bank. Notwithstanding the foregoing, Bank agrees that to the
extent Bank recovers an amount under this paragraph (or under Subsection 10.09
of the Agreement) for application to its attorney's fees which exceeds the
actual and reasonable attorney's fees incurred in connection therewith,
following the satisfaction of all other Obligations such excess amount shall be
refunded to Makers.
-3-
This Note, having been executed and delivered under seal in the State of
Maryland, is to be governed by, construed under and enforced in all respects
according to the internal laws of the State of Maryland.
ATTEST/WITNESS: THE HUNTER GROUP, INC.
By: (SEAL)
----------------------- -----------------------
Name:
------------------
Title:
-----------------
THG CONSULTING INC.
By: (SEAL)
----------------------- -----------------------
Name:
------------------
Title:
-----------------
THE HUNTER GROUP (SINGAPORE)
PTE LTD
By: (SEAL)
----------------------- -----------------------
Name:
------------------
Title:
-----------------
HUNTER CONSULTING ASSOCIATES
PTY. LIMITED
By: (SEAL)
----------------------- -----------------------
Name:
------------------
Title:
-----------------
-4-
HUNTER CONSULTING ASSOCIATES
LIMITED
By: (SEAL)
----------------------- -----------------------
Name:
------------------
Title:
-----------------
THE HUNTER GROUP
INTERNATIONAL, INC.
By: (SEAL)
----------------------- -----------------------
Name:
------------------
Title:
-----------------
STATE OF MARYLAND, TO WIT:
I HEREBY CERTIFY that on this ___ day of ______________, 1997, before me,
the subscriber, a Notary Public of the State of Maryland, personally appeared
____________________, who acknowledged himself/herself to be the _______________
of The Hunter Group, Inc., and that he/she, as such _______________, being
authorized so to do, executed the foregoing instrument for the purposes therein
contained, by signing in my presence the name of the corporation by
himself/herself as ____________________.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
----------------------
Notary Public
My Commission expires:
----------------------
-5-
STATE OF MARYLAND, TO WIT:
I HEREBY CERTIFY that on this __ day of __________________, 1997, before
me, the subscriber, a Notary Public of the State of Maryland, personally
appeared _______________________, who acknowledged himself/herself to be the
_______________ of THG Consulting Inc., and that he/she, as such
______________________, being authorized so to do, executed the foregoing
instrument for the purposes therein contained, by signing in my presence the
name of the corporation by himself/herself as ___________________.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
----------------------
Notary Public
My Commission expires:
----------------------
STATE OF MARYLAND, TO WIT:
I HEREBY CERTIFY that on this ___ day of ____________, 1997, before me,
the subscriber, a Notary Public of the State of Maryland, personally appeared
__________________, who acknowledged himself/herself to be the _____________ of
The Hunter Group (Singapore) Pte Ltd, and that he/she, as such _______________,
being authorized so to do, executed the foregoing instrument for the purposes
therein contained, by signing in my presence the name of the corporation by
himself/herself as ________________________.
IN WITNESS WHEREOF, I hereunto set my hand and official seal
----------------------
Notary Public
My Commission expires:
----------------------
-6-
STATE OF MARYLAND, TO WIT:
I HEREBY CERTIFY that on this ____ day of _________________, 1997, before
me, the subscriber, a Notary Public of the State of Maryland, personally
appeared ______________________, who acknowledged himself/herself to be the
________________of Hunter Consulting Associates, PTY., Limited, and that he/she,
as such ______________, being authorized so to do, executed the foregoing
instrument for the purposes therein contained, by signing in my presence the
name of the corporation by himself/herself as _________________________.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
----------------------
Notary Public
My Commission expires:
----------------------
STATE OF MARYLAND, TO WIT:
I HEREBY CERTIFY that on this __ day of _____________, 1997, before me,
the subscriber, a Notary Public of the State of Maryland, personally appeared
___________________, who acknowledged himself/herself to be the _____________of
Hunter Consulting Associates, Limited, and that he/she, as such
__________________, being authorized so to do, executed the foregoing instrument
for the purposes therein contained, by signing in my presence the name of the
corporation by himself/herself as ________________________.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
----------------------
Notary Public
My Commission expires:
----------------------
-7-
STATE OF MARYLAND, TO WIT:
I HEREBY CERTIFY that on this ___ day of ______________, 1997, before me,
the subscriber, a Notary Public of the State of Maryland, personally appeared
____________________, who acknowledged himself/herself to be the _____________
of The Hunter Group International, Inc., and that he/she, as such
________________, being authorized so to do, executed the foregoing instrument
for the purposes therein contained, by signing in my presence the name of the
corporation by himself/herself as ___________________________.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
----------------------
Notary Public
My Commission expires:
----------------------
-8-
EXHIBIT B
AMENDMENT NO. [_] TO
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
THIS AMENDMENT NO. [_] TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
is dated as of the ___ day of _________, 199__, by and among THE HUNTER GROUP,
INC., a Maryland corporation ("THG"), THG CONSULTING INC., a corporation
incorporated under the laws of Canada ("THG Canada"), THE HUNTER GROUP
(SINGAPORE) PTE LTD, a corporation incorporated under The Companies Act of the
Republic of Singapore ("THG Singapore"). HUNTER CONSULTING ASSOCIATES PTY.
LIMITED, a corporation organized under the laws of New South Wales, Australia
("THG Australia"), HUNTER CONSULTING ASSOCIATES LIMITED, a corporation organized
under the laws of Great Britain ("THG England"), and THE HUNTER GROUP
INTERNATIONAL, INC., a Delaware corporation ("THG International"), [(other
existing Borrowers) [("________" and THG Canada, THG Singapore, THG Australia,
THG England, THG International and [__________], collectively, the "Existing
Borrowers"), [____________] ("Additional Borrower"), and SIGNET BANK, a Virginia
banking corporation ("Bank").
RECITALS
Reference is made to that certain Amended and Restated Loan and Security
Agreement made as of [___________], 1997, as the same has been or may have been
heretofore amended, by and among Existing Borrowers and Bank (the "Loan
Agreement"), pursuant to which Bank extended credit to Existing Borrowers in the
aggregate principal amount of Eight Million Dollars ($8,000,000.00). Existing
Borrowers and Additional Borrower have requested that Additional Borrower be
added to the Loan Agreement as an additional Borrower, to the Note (as defined
in the Loan Agreement) as an additional maker, and to such of the Other
Agreements as an additional party as Bank may require.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
set forth herein, and such other consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as follows:
1. All capitalized terms not otherwise defined herein which are defined in
the Loan Agreement shall have the same meanings assigned to them in the Loan
Agreement.
2. All references herein, in the Loan Agreement and in the Note to "this
Loan Agreement", "this Agreement", "the Loan Agreement" and "the Agreement"
shall mean and include the Loan Agreement as amended by this Amendment.
3. Schedule 4.16 to the Loan Agreement is hereby amended and restated in
its entirety in the form of Schedule 4.16 attached hereto.
4. For all purposes of the Loan Agreement, Additional Borrower shall be a
Borrower and "Borrowers" shall mean and include, jointly and severally,
individually and collectively, Existing Borrowers and Additional Borrower. By
the execution hereof, Additional Borrower hereby acknowledges and agrees that it
shall be bound (a) to pay and perform all of the obligations of a Borrower under
the Loan Agreement, the Note and the Other Agreements, and (b) by all
representations and warranties, covenants and other terms of the Loan Agreement,
the Note and the Other Agreements made by or binding upon a Borrower, each of
which Additional Borrower shall be deemed to make and/or assume as of the date
hereof. Without limitation of the foregoing, Additional Borrower hereby grants
to Bank a lien and continuing security interest in, and pledges and assigns to
Bank, the Collateral. Additional Borrower further agrees to execute such
financing statements, such other instruments and agreements as Bank may require
to further evidence or confirm the matters addressed in this Amendment.
5. Without limitation of the provisions of Paragraph 4 above, the
Additional Borrower hereby specifically represents and warrants to Bank that (a)
its only places of business are located at [_________________________] and its
chief executive office is located at [__________________], (b) it has not filed
any petition seeking or acquiescing in any reorganization arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any
law relating to bankruptcy or insolvency, nor has any such petition been filed
against it, (c) no general assignment of its property has been made for the
benefit of creditors, and no receiver, master, liquidator or trustee has been
appointed for it or any of its property, (d) it is not insolvent, and the
consummation of the transactions contemplated by this Amendment shall not render
it insolvent, and (e) it has sufficient capital or net worth to meet its
obligations. The locations listed in clause (a) above are hereby include within
the meaning of "Business Premises."
6. WITHOUT LIMITATION OF THE WAIVERS MADE BY ALL AMENDMENTS TO AND/OR
ENDORSEMENTS OF THE NOTE AS PROVIDED THEREIN (EACH OF WHICH SHALL BE BINDING ON
ADDITIONAL BORROWER), Additional Borrower hereby waives notice of each and every
one of the following acts, events and/or conditions and agrees that, without
necessity for any express reservation of rights against Additional Borrower,
neither the occurrence or existence of any such act, event or condition, nor
Bank's commission
of or omission to do any such act, event or condition, in any number of
instances shall in any way release, discharge, impair or diminish any
obligations or liability of Additional Borrower under the Note: (a) the
amendment, modification, renewal, extension or refinancing of, or the granting
by Bank of any indulgence of any nature with respect to, or the invalidity,
voidability, unenforceability, compromise, settlement, release, waiver,
discharge or impairment in whole or in part, of, the Note, the Loan Agreement or
any of the Other Agreements, any of the Obligations or any obligation of any
maker, guarantor, surety, endorser, indemnitor or other person primarily or
secondarily liable for or obligated upon any of the Obligations; (b) any defense
of any other Borrower to payment of the Obligations or any defense to payment of
the Obligations of any maker, guarantor, surety, endorser, indemnitor or other
person primarily or secondarily liable for or obligated upon any of the
Obligations; (c) the addition of any maker, guarantor, surety, endorser,
indemnitor or other person primarily or secondarily liable for or obligated upon
any of the Obligations; (d) assumption of any of the Obligations by any other
person, whether by assignment, sale, merger, consolidation, sublease, conveyance
or otherwise; (e) the institution of any suit, the obtaining of any judgment or
the exercise of any other right or remedy against any other Borrower or any
maker, guarantor, surety, endorser, indemnitor or other person primarily or
secondarily liable for or obligated upon any of the Obligations, Additional
Borrower hereby agreeing that if any of the Obligations are not paid when due
(whether by demand, stated maturity, acceleration or otherwise) or if a default
or an Event of Default under or as defined in the Loan Agreement or any of the
Other Agreements shall occur, legal proceedings to enforce payment under the
Note may be instituted and prosecuted against Additional Borrower without first
having recourse to any other available security or other available right or
remedy; (f) the sale, exchange, pledge, release, disposition, surrender, loss,
destruction, damage to or impairment of, any property now or hereafter directly
or indirectly securing any of the Obligations; (g) the creation, perfection,
continuation, amendment, modification, invalidity, voidability,
unenforceability, compromise, settlement, subordination, release, waiver,
discharge, impairment or loss of priority, in whole or in part, of, any security
interest, lien or assignment directly or indirectly securing any of the
Obligations; and (h) any other event, circumstance or condition other than
complete and irrevocable payment in full of the Obligations.
7. Except as amended hereby, the Loan Agreement shall remain unchanged,
and the Loan Agreement, as so amended, shall continue in full force and effect
in accordance with its terms.
8. The effectiveness of this Amendment shall be subject to the
satisfaction of the condition that there shall have been delivered to Bank,
appropriately completed and duly executed (when applicable), the following, each
in form and substance satisfactory to Bank: (a) an Endorsement to Amended and
Restated Note substantially in the form of Exhibit A hereto, appropriately
completed and duly executed by Borrowers; (b) a certificate of the Secretary of
Additional Borrower (i) to the effect that resolutions in form and content
satisfactory to Bank authorizing the transactions contemplated hereby have been
duly adopted and remain in full force and effect, and (ii) certifying the names
and titles of the officers of Additional Borrower and their signatures; (c)
evidence satisfactory to Bank that all insurance coverages of Additional
Borrower and all insurance clauses or endorsements required pursuant to the Loan
Agreement and the Other Agreements in connection therewith are in effect,
together with copies of all insurance policies and endorsements; (d) a written
opinion of counsel to Borrowers, dated as of the effective date hereof and
addressed to Bank, relating to such matters in connection with the transactions
contemplated hereby as may be required by Bank; (e) such financing statements
and/or amendments to existing financing statements as may be required by Bank;
and (f) a written agreement of the owner and landlord of each business premises
of Additional Borrower and each storage location maintained by Additional
Borrower which is not owned by Additional Borrower consenting to Bank's security
interest and enforcement of Bank's rights in connection therewith.
9. By its execution hereof, Borrowers jointly and severally agree to pay
to Bank upon its demand all expenses, including reasonable attorneys' fees and
expenses, paid or incurred by Bank in connection with the preparation of this
Amendment and each and every one of the other documents and instruments required
by Bank in connection herewith. Borrowers further jointly and severally agree to
pay all expenses in connection with the filing or recordation of all financing
statements and other documents as may be required by Bank at the time of, or
subsequent to, the execution of this Amendment, including, without limitation,
all documentary stamps, recordation and transfer taxes, filing fees and other
costs and taxes incident to recordation of any document in connection herewith,
and, if any such expenses shall be paid or incurred by Bank, to pay to Bank upon
written demand the amount of such expenses.
10. This Amendment may be executed in any number of counterparts and by
the different parties hereto on separate counterparts, each of which, when so
executed and delivered, shall be an original, but all such counterparts shall
together constitute one and the same instrument.
11. The Recitals hereto and all of the terms of the Loan Agreement are
hereby incorporated into and made a part hereof as though fully set forth
herein.
IN WITNESS WHEREOF, the parties have caused this Amendment No. [__] to
Loan and Security Agreement to be duly executed under seal by their duly
authorized respective officers as of the day and year first above written.
ATTEST/WITNESS: THE HUNTER GROUP, INC.
By: (SEAL)
----------------------- -----------------------
Name:
------------------
Title:
-----------------
THG CONSULTING INC.
By: (SEAL)
----------------------- -----------------------
Name:
------------------
Title:
-----------------
THE HUNTER GROUP (SINGAPORE)
PTE LTD
By: (SEAL)
----------------------- -----------------------
Name:
------------------
Title:
-----------------
HUNTER CONSULTING ASSOCIATES
PTY LIMITED
By: (SEAL)
----------------------- -----------------------
Name:
------------------
Title:
-----------------
HUNTER CONSULTING ASSOCIATES
LIMITED
By: (SEAL)
----------------------- -----------------------
Name:
------------------
Title:
-----------------
THE HUNTER GROUP
INTERNATIONAL, INC.
By: (SEAL)
----------------------- -----------------------
Name:
------------------
Title:
-----------------
(OTHER "EXISTING BORROWERS")
By: (SEAL)
----------------------- -----------------------
Name:
------------------
Title:
-----------------
("ADDITIONAL BORROWER")
By: (SEAL)
----------------------- -----------------------
Name:
------------------
Title:
-----------------
BORROWERS
SIGNET BANK
By: (SEAL)
----------------------- -----------------------
Name:
------------------
Title:
-----------------
BANK
STATE OF MARYLAND, TO WIT:
I HEREBY CERTIFY that on this ____ day of _____________, 199_, before me,
the subscriber, a Notary Public of the State of Maryland, personally appeared
[______________], who acknowledged himself/herself to be the [______________] of
The Hunter Group, Inc., and that (s)he, as such [_____________], being
authorized so to do, executed the foregoing instrument for the purposes therein
contained, by signing in my presence the name of the corporation by
himself/herself as [_______________________].
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
-------------------------
Notary Public
My Commission expires:
----------------------
STATE OF MARYLAND, TO WIT:
I HEREBY CERTIFY that on this ____ day of _________________, 199_, before
me, the subscriber, a Notary Public of the State of Maryland, personally
appeared [ ____________], who acknowledged himself/herself to be the
[____________] of THG Consulting Inc., and that he/she, as such [____________],
being authorized so to do, executed the foregoing instrument for the purposes
therein contained, by signing in my presence the name of the corporation by
himself/herself as [_______________].
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
-----------------------
Notary Public
My Commission expires:
----------------------
STATE OF MARYLAND, TO WIT:
I HEREBY CERTIFY that on this __ day of _______________, 199__, before me,
the subscriber, a Notary Public of the State of Maryland, personally appeared
[___________], who acknowledged himself/herself to be the [__________] of The
Hunter Group (Singapore) Pte Limited, and that he/she, as such [_____________],
being authorized so to do, executed the foregoing instrument for the purposes
therein contained, by signing in my presence the name of the corporation by
himself/herself as [____________].
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
------------------------
Notary Public
My Commission expires:
----------------------
STATE OF MARYLAND, TO WIT:
I HEREBY CERTIFY that on this ____ day of _________________, 199_, before
me, the subscriber, a Notary Public of the State of Maryland, personally
appeared [___________], who acknowledged himself/herself to be the [__________]
of Hunter Consulting Associates PTY. Limited, and that he/she, as such
[_____________], being authorized so to do, executed the foregoing instrument
for the purposes therein contained, by signing in my presence the name of the
corporation by himself/herself as [_____________].
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
------------------------
Notary Public
My Commission expires:
----------------------
STATE OF MARYLAND, TO WIT:
I HEREBY CERTIFY that on this __ day of ______________, 199__, before me,
the subscriber, a Notary Public of the State of Maryland, personally appeared
[____________], who acknowledged himself/herself to be the [_____________] of
Hunter Consulting Associates Limited, and that he/she, as such [__________],
being authorized so to do, executed the foregoing instrument for the purposes
therein contained, by signing in my presence the name of the corporation by
himself/herself as [__________________].
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
---------------------
Notary Public
My Commission expires:
----------------------
STATE OF MARYLAND, TO WIT:
I HEREBY CERTIFY that on this ____ day of _____________, 199__, before me,
the subscriber, a Notary Public of the State of Maryland, personally appeared
[____________________], who acknowledged himself/herself to be the
[______________________] of The Hunter Group International, Inc., and that
he/she, as such [______________], being authorized so to do, executed the
foregoing instrument for the purposes therein contained, by signing in my
presence the name of the corporation by himself/herself as [_________________].
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
----------------------
Notary Public
My Commission expires:
----------------------
[INSERT ADDITIONAL NOTARY FORMS FOR OTHER "EXISTING BORROWERS']
STATE OF MARYLAND, TO WIT:
I HEREBY CERTIFY that on this ____ day of _____________, 199__, before me,
the subscriber, a Notary Public of the State of Maryland, personally appeared
[______________], who acknowledged himself/herself to be the [________________]
of [Additional Borrower], and that he/she, as such [________________], being
authorized so to do, executed the foregoing instrument for the purposes therein
contained, by signing in my presence the name of the corporation by
himself/herself as [_______________].
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
------------------------
Notary Public
My Commission expires:
----------------------
STATE OF MARYLAND, TO WIT:
I HEREBY CERTIFY that on this ___ day of ______________, 199__, before me,
the subscriber, a Notary Public of the State of Maryland, personally appeared
[_____________], who acknowledged himself/herself to be the [_________________]
of Signet Bank, and that (s)he, as such, being authorized so to do, executed the
foregoing instrument for the purposes therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
-----------------------
Notary Public
My Commission expires:
----------------------
EXHIBIT A
ENDORSEMENT OF PROMISSORY NOTE
(ALLONGE)
THIS ENDORSEMENT OF PROMISSORY NOTE ("Endorsement") is made as of
__________________, 199__, and is executed and delivered by
[____________________________], a [___________________] ("Additional Maker"), to
the order and for the benefit of SIGNET BANK ("Bank").
WITNESSETH:
WHEREAS, by certain Amended and Restated Note dated ____________________,
1997 (as the same has been and may hereafter be modified, renewed or extended,
and including all endorsements, substitutions and replacements thereof, the
"Note"), THE HUNTER GROUP, INC., a Maryland corporation, THG CONSULTING, INC., a
Canadian corporation, THE HUNTER GROUP, PTE LTD, a Singapore corporation, HUNTER
CONSULTING ASSOC., PTY, LTD, an Australian corporation, HUNTER CONSULTING
ASSOC., LTD, an English corporation, and THE HUNTER GROUP INTERNATIONAL, INC.],
a Delaware corporation, and [(other existing Borrowers)] (collectively,
"Existing Makers"), jointly and severally promised to pay to the order of Bank
the principal sum of Eight Million Dollars ($8,000,000.00), together with
interest on the unpaid principal balance outstanding from time to time at the
rate or rates set forth therein; and
WHEREAS, the Note was given pursuant to the terms of that certain Amended
and Restated Loan and Security Agreement of even date therewith (as the same has
been and hereafter may be amended, modified, extended, renewed or supplemented
from time to time, the "Agreement"), by and among Existing Makers and Bank; and
WHEREAS, by a certain Amendment No. [__] to Loan and Security Agreement of
even date herewith (the "Agreement Amendment"), Additional Maker has joined in
the execution of the Agreement as one of "Borrowers" thereunder; and
WHEREAS, pursuant to the Agreement Amendment, Additional Maker is required
to execute and deliver this Endorsement to Bank for attachment to the Note.
NOW, THEREFORE, in consideration of the premises Additional Maker hereby
joins in the execution of the Note and assumes joint and several liability for
the repayment thereof as a "Maker" thereunder.
Capitalized terms not otherwise defined herein shall have the meanings
ascribed to such terms in the Agreement.
IN WITNESS WHEREOF, Additional Maker has caused this Endorsement to be duly
executed by its duly authorized officer as of the day and year first above
written.
WITNESS/ATTEST: [_________________________]
By:
------------------------ ----------------------- (SEAL)
Name:
------------------
Title:
-----------------
-2-
AMENDED AND RESTATED NOTE
$8,000,000.00 Baltimore, Maryland
June 20, 1997
FOR VALUE RECEIVED, THE HUNTER GROUP, INC., a Maryland corporation, THG
CONSULTING INC., a corporation incorporated under the laws of Canada, THE HUNTER
GROUP (SINGAPORE) PTE LTD, a corporation incorporated under The Companies Act of
the Republic of Singapore, HUNTER CONSULTING ASSOCIATES, PTY. LIMITED, a
corporation organized under the laws of New South Wales, Australia, HUNTER
CONSULTING ASSOCIATES LIMITED, a corporation organized under the laws of Great
Britain, and THE HUNTER GROUP INTERNATIONAL, INC., a Delaware corporation (each
individually a "Maker" and collectively, "Makers"), jointly and severally
promise to pay to the order of SIGNET BANK, a Virginia banking corporation
("Bank"), the lesser of (i) the principal sum of $8,000,000.00, or (ii) the
aggregate principal amount advanced and outstanding under the "Loan" as defined
in that certain Amended and Restated Loan and Security Agreement of even date
herewith among Makers and Bank (the "Agreement"), together with interest on the
unpaid principal balance outstanding from time to time, all as hereinafter set
forth. Capitalized terms used in this Note which are not defined shall have the
meanings assigned to such terms in the Agreement.
Interest from the date hereof on the principal amount outstanding from time
to time until the occurrence of an Event of Default shall be payable at the
Non-Default Rate of Interest. At Bank's election after the occurrence of an
Event of Default until this Note is paid in full, interest on the principal
amount outstanding from time to time shall be payable at the Default Rate of
Interest; provided, however, that (a) interest shall not be payable at the
Default Rate of Interest until Bank shall have notified Makers of Bank's
election to charge the Default Rate of Interest, and (b) if the Event of Default
on which the charging of the Default Rate of Interest is based shall be cured or
waived or otherwise discontinued, then and thereafter (until the occurrence of a
subsequent Event of Default) interest shall be payable at the Non-Default Rate
of Interest. From the date hereof, interest accrued shall be paid by Makers to
Bank on or before the first (1st) day of each month, commencing July 1, 1997.
Interest shall be calculated on a year of 360 days based upon the actual number
of days elapsed.
Principal shall be repaid from time to time as may be necessary to bring
the principal amount outstanding into conformity with Subsection 2.01 of the
Agreement. The entire amount of the unpaid principal balance, together with all
accrued and unpaid interest thereon, shall be due and payable on the Review
Date.
Payments of both principal and interest shall be paid in lawful money of
the United States of America in immediately available funds at the principal
office of Bank or at such other place as Bank may from time to time designate.
If any payment of principal and/or interest due hereunder (excluding any
accelerated payments and payments due on the Review Date) is not paid within 15
days after its due date. Makers shall pay to Bank on demand a late charge equal
to 5% of the amount of such payment.
This Note may be prepaid in whole at any time or in part from time to time
without premium or penalty.
If any payment of principal or interest shall be due on a Saturday, Sunday
or any other day on which banking institutions in the State of Maryland are
required or permitted to be closed, such payment shall be made on the next
succeeding business day and such extension of time shall be included in
computing interest hereunder. All payments hereunder may, in Bank's sole
discretion, be applied first to the payment of outstanding late charges (if
any), then to accrued and unpaid interest and the balance to the payment of
principal.
If any payment of principal and/or interest due hereunder is not paid
within five (5) days after its due date then, and at any time thereafter, Bank
may declare the entire unpaid principal balance hereof, together with all
accrued and unpaid interest thereon, to be immediately due and payable. This
Note is given in replacement of that certain Promissory Note dated November 17,
1995, as amended, made by The Hunter Group, Inc. to the order of Bank (the
"Original Note"), and is given pursuant to the terms of the Agreement. The
execution of this Note and the replacement of the Original Note hereby shall not
constitute or act as a novation, satisfaction or extinguishment of the
indebtedness evidenced by the Original Note, and accrued and unpaid interest
under the Original Note shall be due and payable with the first payment of
interest due hereunder. The Agreement contains, among others, provisions for
securing this Note, for accelerating the maturity hereof upon the happening of
certain specified events and for the addition of additional Makers hereof by
endorsement hereof.
Makers jointly and severally agree to pay to Bank and reimburse Bank for
any and all reasonable costs and expenses, including reasonable attorney's fees
and court costs, if any, incurred by Bank in connection with the enforcement or
collection hereof, both before and after the commencement of any action to
enforce or collect this Note, but whether or not any such action is commenced by
Bank. Each Maker waives presentment, protest and demand, notice of protest,
notice of dishonor and nonpayment of this Note and expressly agrees that this
Note or any payment hereunder may be extended from time to time without in any
way affecting the liability of any Maker hereunder.
-2-
Each Maker acknowledges and warrants that the debt evidenced hereby is a
"commercial loan" within the meaning of Title 12 of the Commercial Law Article
of the Annotated Code of Maryland (1990 ed.). Each Maker warrants that all loan
proceeds will be used solely to carry on a business or commercial enterprise,
and for such purposes as may be permitted under the Agreement.
The rights and remedies of Bank hereunder and under the Agreement shall be
cumulative and concurrent and may be pursued singularly, successively or
together at the sole discretion of Bank, and may be exercised as often as
occasion therefor shall occur, and the failure to exercise any such right or
remedy shall in no event be construed as a waiver or release of the same or any
other right or remedy.
Each Maker hereby authorizes any clerk of court or any attorney-at-law to
appear for such Maker before any court, having jurisdiction, within the United
States or elsewhere, upon and during the continuance of an Event of Default,
and, after one or more complaints filed, confess judgment against such Maker as
of any time after any sum is due hereunder (whether by demand, stated maturity,
acceleration or otherwise) for the unpaid balance of this Note and all sums due
in connection herewith, including principal, interest, fees, court costs, late
charges and expenses, together with attorneys' fees equal to fifteen percent
(15%) of the total amount then due, for collection and release of all errors,
and without stay of execution, and inquisition and extension upon any levy on
real estate is hereby waived and condemnation agreed to, and the exemption of
personal property from levy and sale is also hereby expressly waived, and no
benefit of exemption shall be claimed under any exemption law now in force or
which may be hereafter adopted. The foregoing authorities and powers to confess
judgment shall not be exhausted by one or more exercises of any of them or by
any imperfect exercise of any of them, shall not be extinguished by any judgment
entered because of any of them and may be exercised before, during or after
sale, liquidation or other disposition by Bank any property directly or
indirectly securing this Note or exercise or enforcement by Bank of any other
right or remedy of Bank with respect hereto. Bank and Makers agree that any
agreement of such Maker contained in this Note to pay any costs or expenses,
including attorneys' fees and expenses, paid or incurred by Bank shall not be
merged into, or otherwise impaired by, any such judgment by confession, but Bank
shall not be entitled to recover on account of such costs or expenses any amount
in excess of the greater of (a) such costs or expenses included in any judgments
by confession (without duplication), or (b) such costs or expenses actually paid
or incurred by Bank. Notwithstanding the foregoing, Bank agrees that to the
extent Bank recovers an amount under this paragraph (or under Subsection 10.09
of the Agreement) for application to its attorney's fees which exceeds the
actual and reasonable attorney's fees incurred in connection therewith,
following the satisfaction of all other Obligations such excess amount shall be
refunded to Makers.
-3-
This Note, having been executed and delivered under seal in the State of
Maryland, is to be governed by, construed under and enforced in all respects
according to the internal laws of the State of Maryland.
ATTEST/WITNESS: THE HUNTER GROUP, INC.
/s/ A. Xxxxx Xxxxxxx By: /s/ Xxxxx X. Xxxxxx (SEAL)
---------------------- ----------------------
Name: Xxxxx X. Xxxxxx
Title: President
THG CONSULTING INC.
/s/ A. Xxxxx Xxxxxxx By: /s/ Xxxxx X. Xxxxxx (SEAL)
---------------------- ----------------------
Name: Xxxxx X. Xxxxxx
Title: President
THE HUNTER GROUP (SINGAPORE)
PTE LTD
/s/ A. Xxxxx Xxxxxxx By: /s/ Xxxxx X. Xxxxxx (SEAL)
---------------------- ----------------------
Name: Xxxxx X. Xxxxxx
Title: President
HUNTER CONSULTING ASSOCIATES
PTY. LIMITED
/s/ A. Xxxxx Xxxxxxx By: /s/ Xxxxx X. Xxxxxx (SEAL)
---------------------- ----------------------
Name: Xxxxx X. Xxxxxx
Title: President
-4-
HUNTER CONSULTING ASSOCIATES
LIMITED
/s/ A. Xxxxx Xxxxxxx By: /s/ Xxxxx X. Xxxxxx (SEAL)
---------------------- ----------------------
Name: Xxxxx X. Xxxxxx
Title: President
THE HUNTER GROUP
INTERNATIONAL, INC.
/s/ A. Xxxxx Xxxxxxx By: /s/ Xxxxx X. Xxxxxx (SEAL)
---------------------- ----------------------
Name: Xxxxx X. Xxxxxx
Title: President
STATE OF MARYLAND, TO WIT:
I HEREBY CERTIFY that on this 20th day of June, 1997, before me, the
subscriber, a Notary Public of the State of Maryland, personally appeared Xxxxx
X. Xxxxxx, who acknowledged himself/herself to be the President of The Hunter
Group, Inc., and that he/she, as such President, being authorized so to do,
executed the foregoing instrument for the purposes therein contained, by
signing in my presence the name of the corporation by himself/herself as Xxxxx
X. Xxxxxx.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ Xxxx X. Xxxxx
----------------------
Notary Public
My Commission expires:
XXXX X. XXXXX
NOTARY PUBLIC STATE OF MARYLAND
MY COMMISSION EXPIRES: AUGUST 1, 0000
-0-
XXXXX XX XXXXXXXX, TO WIT:
I HEREBY CERTIFY that on this 20th day of June, 1997, before me, the
subscriber, a Notary Public of the State of Maryland, personally appeared Xxxxx
X. Xxxxxx, who acknowledged himself/herself to be the President of THG
Consulting Inc., and that he/she, as such President, being authorized so to do,
executed the foregoing instrument for the purposes therein contained, by signing
in my presence the name of the corporation by himself/herself as Xxxxx Xxxxxx.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ Xxxx X. Xxxxx
----------------------
Notary Public
My Commission expires:
XXXX X. XXXXX
NOTARY PUBLIC STATE OF MARYLAND
MY COMMISSION EXPIRES: AUGUST 1, 1999
STATE OF MARYLAND, TO WIT:
I HEREBY CERTIFY that on this 20th day of June, 1997, before me, the
subscriber, a Notary Public of the State of Maryland, personally appeared Xxxxx
X. Xxxxxx, who acknowledged himself/herself to be the President of The Hunter
Group (Singapore) Pte Ltd, and that he/she, as such President, being authorized
so to do, executed the foregoing instrument for the purposes therein contained,
by signing in my presence the name of the corporation by himself/herself as
Xxxxx X. Xxxxxx.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ Xxxx X. Xxxxx
----------------------
Notary Public
My Commission expires:
XXXX X. XXXXX
NOTARY PUBLIC STATE OF MARYLAND
MY COMMISSION EXPIRES: AUGUST 1, 0000
-0-
XXXXX XX XXXXXXXX, TO WIT:
I HEREBY CERTIFY that on this 20th day of June, 1997, before me, the
subscriber, a Notary Public of the State of Maryland, personally appeared Xxxxx
X. Xxxxxx, who acknowledged himself/herself to be the President of Hunter
Consulting Associates, PTY., Limited, and that he/she, as such President, being
authorized so to do, executed the foregoing instrument for the purposes therein
contained, by signing in my presence the name of the corporation by
himself/herself as Xxxxx X. Xxxxxx.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ Xxxx X. Xxxxx
----------------------
Notary Public
My Commission expires:
XXXX X. XXXXX
NOTARY PUBLIC STATE OF MARYLAND
MY COMMISSION EXPIRES: AUGUST 1, 1999
STATE OF MARYLAND, TO WIT:
I HEREBY CERTIFY that on this 20th day of June, 1997, before me, the
subscriber, a Notary Public of the State of Maryland, personally appeared Xxxxx
X. Xxxxxx, who acknowledged himself/herself to be the President of Hunter
Consulting Associates, Limited, and that he/she, as such President, being
authorized so to do, executed the foregoing instrument for the purposes therein
contained, by signing in my presence the name of the corporation by
himself/herself as Xxxxx Xxxxxx.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ Xxxx X. Xxxxx
----------------------
Notary Public
My Commission expires:
XXXX X. XXXXX
NOTARY PUBLIC STATE OF MARYLAND
MY COMMISSION EXPIRES: AUGUST 1, 0000
-0-
XXXXX XX XXXXXXXX, TO WIT:
I HEREBY CERTIFY that on this 20th day of June, 1997, before me, the
subscriber, a Notary Public of the State of Maryland, personally appeared Xxxxx
X. Xxxxxx, who acknowledged himself/herself to be the President of The Hunter
Group International, Inc., and that he/she, as such President, being authorized
so to do, executed the foregoing instrument for the purposes therein contained,
by signing in my presence the name of the corporation by himself/herself as
Xxxxx X. Xxxxxx.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ Xxxx X. Xxxxx
----------------------
Notary Public
My Commission expires:
XXXX X. XXXXX
NOTARY PUBLIC STATE OF MARYLAND
MY COMMISSION EXPIRES: AUGUST 1, 1999
-8-
