SECOND AMENDED AND RESTATED CREDIT AGREEMENT
BETWEEN
TOTAL RESEARCH CORPORATION, AS BORROWER,
AND
SUMMIT BANK
Dated: March 21, 2000
INDEX
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Page
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ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS......................................1
SECTION 1.01. Certain Defined Terms..................................1
SECTION 1.02. Accounting Terms......................................10
ARTICLE II
RESTRUCTURING OF OBLIGATIONS TO THE BANK
LOANS, GUARANTEES, COLLATERAL........................................10
SECTION 2.01. Facility A Loan.......................................10
SECTION 2.02. Facility B Loan.......................................13
SECTION 2.03. Letters of Credit.....................................15
SECTION 2.04. Commitment Fee........................................16
SECTION 2.05. Letter-of-Credit Fees.................................17
SECTION 2.06. Collateral............................................17
SECTION 2.07. Payments;.............................................17
SECTION 2.08. Prepayments; Termination Fee..........................18
SECTION 2.09. Computations..........................................19
SECTION 2.10. Late Charge...........................................19
ARTICLE III
CONDITIONS OF BORROWING..............................................22
SECTION 3.01. Closing Conditions....................................22
SECTION 3.02. Subsequent Advances...................................25
ARTICLE IV
REPRESENTATIONS AND WARRANTIES.......................................26
SECTION 4.01. Representations and Warranties by
the Borrower..........................................26
ARTICLE V
COVENANTS OF THE BORROWER............................................36
SECTION 5.01. Affirmative Covenants of the
Borrower Other Than Reporting
Requirements..........................................36
SECTION 5.02. Negative Covenants of the Borrower....................39
SECTION 5.03. Reporting Requirements................................44
ARTICLE VI
EVENTS OF DEFAULT....................................................47
SECTION 6.01. Events of Default.....................................47
ARTICLE VII
ADDITIONAL PROVISIONS.........................................................51
SECTION 7.01. Certain Environmental Matters.........................51
SECTION 7.02. Collateral Assignment of Accounts.....................53
SECTION 7.03. Stamp Taxes...........................................53
SECTION 7.04. Disclosure of Financial Information...................54
SECTION 7.05. Letter of Credit and Obligations
Absolute and Unconditional............................54
ARTICLE VIII
MISCELLANEOUS........................................................56
SECTION 8.01. No Waiver; Cumulative Remedies........................56
SECTION 8.02. Amendments, Etc.......................................57
SECTION 8.03. Addresses for Notices, Etc............................57
SECTION 8.04. Costs and Expenses; Indemnity.........................59
SECTION 8.05. Execution in Counterparts.............................60
SECTION 8.06. Governing Law.........................................60
SECTION 8.07. Severability of Provisions; Headings..................60
SECTION 8.08. Set-Off...............................................61
SECTION 8.09. Integration; Entire Agreement.........................61
SECTION 8.10. Survival of Agreements................................62
SECTION 8.11. Waiver of Trial By Jury...............................62
Schedule A -- Form of Request for Advance
Schedule B -- Supplementary Information with respect to Representations and
Warranties
Exhibit A -- List of Documents Constituting the Prior Agreements
Exhibit B -- Form of Facility "A" Note
SECOND AMENDED AND RESTATED CREDIT AGREEMENT dated March 21,
2000 between Total Research Corporation, a Delaware corporation (the
"Borrower"), and Summit Bank, a New Jersey bank (the "Bank").
W I T N E S S E T H:
-------------------
The Borrower and the Bank have heretofore entered into the
credit agreements and amendments thereto identified and described on Exhibit A
annexed hereto (as so amended, the "Prior Agreements"), and wish to further
amend the terms of the Prior Agreements and restate them in a single agreement.
Without limiting the generality of the foregoing, the Facility A Loans and
Facility B Loans described in this Agreement replace and supersede all credit
facilities heretofore in effect between the Borrower and the Bank. In
consideration of the foregoing, and for other valuable consideration (the
receipt and sufficiency of which are hereby acknowledged), the Bank and the
Borrower hereby agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in the Loan Documents or
in any other documents made or delivered pursuant thereto, unless the context
shall otherwise require, the following terms shall have the following meanings
(such meanings to be equally applicable to both the singular and plural forms of
the terms defined):
"Acquisition Sub. 1" shall mean a company newly
formed and organized under the laws of England as a
wholly owned subsidiary of the Borrower for the purpose
of facilitating the Romtec Acquisition.
"Acquisition Sub. 2" shall mean a company newly
formed and organized under the laws of England as a wholly
owned subsidiary of Acquisition Sub. 1 for the purpose of
facilitating the Romtec Acquisition.
"Adjusted LIBOR Rate" shall mean a rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal
to the product arrived at by multiplying the Fixed LIBOR Rate
with respect to the applicable Interest Period by a fraction
(expressed as a decimal), the numerator of which shall be the
number one and the denominator of which shall be the number
one minus the aggregate reserve percentages (expressed as a
decimal) from time to time established by the Board of
Governors of the Federal Reserve System of the United States
and any other banking authority to which Bank is now or
hereafter subject, including, but not limited to any reserve
on Eurocurrency Liabilities as defined in Regulation D of the
Board of Governors of the Federal Reserve System of the United
States at the ratios provided in such Regulation from time to
time, it being agreed that the amount of the principal balance
of any Loans bearing interest at a LIBOR Rate shall be deemed
to constitute Eurocurrency Liabilities, as defined by such
Regulation, and it being further agreed that such Eurocurrency
Liabilities shall be deemed to be subject to such reserve
requirements without benefit of or credit for prorations,
exceptions or offsets that may be available to Bank from time
to time under such Regulation and irrespective of whether Bank
actually maintains all or any portion of such reserve.
"Affiliate" of any Person means any other Person
which, directly or indirectly, controls or is controlled by or
is under common control with such Person and, without limiting
the generality of the foregoing, includes (i) any Person which
beneficially owns or holds 5% or more of any class of voting
securities of such Person or 5% or more of the equity interest
in such Person, (ii) any Person of which such Person
beneficially owns or holds 5% or more of any class of voting
securities or in which such Person beneficially owns or holds
5% or more of the equity interest, and (iii) any director,
officer or employee of such Person. For the purposes of this
definition, the term "control", as used with respect to any
Person, means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and
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policies of such Person, whether through the ownership of
voting securities or by contract or otherwise.
"Aggregate Credit Limit" means $10,000,000.
"Agreement" means this agreement, as the same may
hereafter be amended or restated from time to time.
"Bank" is defined in the first paragraph of this
Agreement.
"Bank Affiliate" means any banking institution owned
by the bank holding company that owns the Bank.
"Base Rate" means the fluctuating rate designated by
the Bank as its base rate from time to time. The Base Rate is
determined from time to time by the Bank as a means of pricing
some loans to its customers; it is neither tied to any
external rate of interest or index, nor does it necessarily
reflect the lowest rate of interest actually charged by the
Bank to any particular class or category of customers of the
Bank.
"Borrower" is defined in the first paragraph of this
Agreement.
"Borrower Loan Documents" means this Agreement, the
Notes, the Borrower Security Agreement, the Borrower Pledge
Agreement and the UCC-1 financing statements heretofore
executed and delivered by the Borrower.
"Borrower Pledge Agreement" means the first priority
charge to be given by the Borrower over its shareholdings,
present and future, in Total Research, Ltd., Acquisition
Sub. 1, Acquisition Sub. 2 and Romtec under the laws of
England and Wales.
"Borrower Security Agreement" means the Security
Agreement from the Borrower to the Bank dated December 23,
1991 and all other pledge agreements, collateral assignments,
and security instruments of every description heretofore given
by the Borrower to the Bank to secure the liabilities and
obligations of the Borrower to the Bank.
"Business Day" means any day on which commercial
banks settle payments in U.S. Dollars in New York City and
London, England.
"Closing" means the date on which this Agreement is
executed and delivered by the Bank and the Borrower and
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the Bank makes the initial advance of loan proceeds hereunder.
"Code" means the Internal Revenue Code of 1986, as
amended.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended.
"Event of Default" is defined in Section 6.01 of this
Agreement.
"Facility A Loan" is defined in Section 2.01(A) of
this Agreement.
"Facility A Note" is defined in Section 2.01(A) of
this Agreement.
"Facility B Advance" is defined in Section 2.02(A) of
this Agreement.
"Facility B Commitment Amount" is defined in Section
2.02(A) of this Agreement.
"Facility B Loan" is defined in Section 2.02(A) of
this Agreement.
"Facility B Maturity Date" is defined in Section
2.02(A) of this Agreement.
"Facility B Note" is defined in Section 2.02(B) of
this Agreement.
"Fixed LIBOR Rate" shall mean a rate per annum
(rounded to the nearest 1/16 of 1%, or if there is no nearest
of 1/100,000 of 1%, to the next highest 1/16 of 1%) equal to
the rate quoted at approximately 9:00 a.m. New York time, by
New York dealers of London interbank deposits selected by the
Bank two Business Days prior to the first day of such Interest
Period for the purchase at face value of U.S. dollar deposits
in immediately available funds for a period and in an amount
comparable to the applicable Interest Period and the Principal
Balance outstanding during such Interest Period, with respect
to which Borrower has exercised the LIBOR Rate Option.
"Floating Rate" means the floating rate per annum
obtained by applying the Floating Rate Margin to the Base Rate
in effect from time to time.
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"Floating Rate Margin" means an incremental rate
added to, or subtracted from, as the case may be, the Base
Rate, which initially shall be a positive one quarter of one
percent (1/4%), and shall be adjusted quarterly based upon the
Borrower's consolidated ratio of Total Liabilities to Tangible
Net Worth at the end of each fiscal quarter in accordance with
the following schedule:
Ratio of Total Liabilities
to Tangible Net Worth Margin
--------------------- ------
3.00 or greater - 0-
Between 1.50 to 1 and 2.99 to 1 (-1/4%)
Below 1.50 to 1 (-1/2%)
"GAAP" means generally accepted accounting principles
as from time to time in effect, including the official
interpretations thereof by the Financial Accounting Standards
Board, consistently applied.
"Guarantor" or "Guarantors" means, individually or
collectively, as the case may be, Total Research, Ltd.,
Acquisition Sub. 1, Acquisition Sub. 2 and Romtec.
"Guarantor Loan Documents" means the Guaranty and the
Guarantor Pledge Agreements.
"Guarantor Pledge Agreements" means the first
priority charge to be given by: (i) Acquistion Sub. 1 over
its shareholdings, present and future, in Acquisition Sub.
2; and (ii) Acquisition Sub. 2 over its shareholdings,
present and future, in Romtec and Total Research, Ltd. (to
the extent the shareholdings in the latter are transferred
to Acquisition Sub. 2 by the Borrower).
"Guaranty" shall mean, collectively, the guaranty or
guarantees to be given by Acquisition Sub. 1, Acquisition
Sub. 2, Romtec and Total Research, Ltd. guaranteeing payment
of the Obligations.
"Indebtedness" means, for any Person, (i) all
indebtedness or other obligations of such Person for borrowed
money or for the deferred purchase price of property or
services, (ii) all indebtedness or other obligations of any
other Person for borrowed money or for the deferred purchase
price of property or services the payment or collection of
which such Person has
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guaranteed (except by reason of endorsement for collection
in the ordinary course of business) or in respect of which
such Person is liable, contingently or otherwise, including,
without limitation, liability by way of agreement to purchase,
to provide funds for payment, to supply funds to or
otherwise to invest in such other Person, or otherwise to
assure a creditor against loss, (iii) all indebtedness or
other obligations of any other Person for borrowed money or
for the deferred purchase price of property or services
secured by (or for which the holder of such indebtedness has
an existing right, contingent or otherwise, to be secured
by) any mortgage, deed of trust, pledge, lien, security
interest or other charge or encumbrance upon or in property
(including, without limitation, accounts and contract
rights) owned by such Person, whether or not such Person has
assumed or become liable for the payment of such
indebtedness or obligations, and (iv) capitalized lease
obligations of such Person.
"Interest Period" means the period commencing on the
date so specified in Borrower's notice to Bank of any election
to exercise the LIBOR Rate Option and ending on a date
specified in such notice, which ending date (a) shall be
either one month, two months, or three months after the
commencement of the Interest Period, and (b) shall not be
beyond the Maturity Date. No Interest Period shall commence
other than on a Business Day. If any Interest Period shall end
on a day which is not a Business Day, such Interest Period
shall be extended to the next succeeding Business Day, unless
such next succeeding Business Day would fall in the next
calendar month, in which event, such Interest Period shall end
on the next preceding Business Day.
"ISRA" means the Industrial Site Recovery Act, as
amended (N.J.S.A. 13:1K-6 et seq.) and the regulations
promulgated pursuant thereto.
"Letter of Credit" is defined in Section 2.04(A) of
this Agreement.
"LIBOR Rate" shall mean a rate per annum obtained by
adding the LIBOR Margin to the Adjusted LIBOR Rate with
respect to the applicable Interest Period.
"LIBOR Margin" an increment added to the Adjusted
LIBOR Rate, which initially shall be 2.75% and shall be
adjusted quarterly vary based upon the Borrower's ratio of
Total Liabilities to Tangible Net Worth in accordance with the
following schedule:
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Ratio of Total Liabilities
to Tangible Net Worth Margin
--------------------- ------
3 to 1 or greater 2.50%
Between 1.50 to 1 and 2.99 to 1 2.25%
Below 1.50 to 1 2.00%
"LIBOR Rate Option" means an option of the Borrower
from time to time, upon the terms and conditions set forth in
Facility A Note and Facility B Note, respectively, to convert
the interest rate on any portion of the principal balance from
time to time bearing interest at the Floating Rate and any
Facility B Advance about to be made from the Floating Rate to
a LIBOR Rate.
"Loan Documents" means, collectively, the Borrower
Loan Documents and the Guarantor Loan Documents.
"Loans" means, collectively, all Facility A Loans and
the Facility B Loan extended by the Bank to the Borrower
pursuant to this Agreement, as the same may be amended,
modified or replaced from time to time.
"Notes" means each Facility A Note entered into from
time to time evidencing a Facility A Loan including, without
limitation, the Facility A Note dated the date hereof in the
principal amount of $3,500,000, and the Facility B Note.
"Obligations" means all indebtedness, obligations and
liabilities of the Borrower to the Bank of every kind and
description, direct or indirect, secured or unsecured, joint
or several, absolute or contingent, due or to become due,
including any overdrafts, whether for payment or performance,
now existing or hereafter arising, whether presently
contemplated or not, regardless of how the same arise, or by
what instrument, agreement or book account they may be
evidenced, or whether evidenced by any instrument, agreement
or book account, including, but not limited to al loans
(including any loan by modification, renewal or extension),
all indebtedness including any arising from any derivative
transactions, all undertakings to take or refrain from taking
any action, all indebtedness, liabilities or obligations owing
from Borrower to others which Bank may have obtained by
purchase, negotiation, discount, assignment or otherwise, and
all interest, taxes, fees, charges, expenses and attorney's
fees
7
(whether or not such attorney is a regularly salaried
employee of the Bank, any parent corporation or any
subsidiary or affiliate thereof, whether now existing or
hereafter created) chargeable to Borrower or incurred by
Bank under this Agreement or any other document or
instrument delivered in connection herewith.
"Person" means an individual, corporation,
partnership, limited partnership, joint venture, trust, or
unincorporated organization, or a government or any agency or
political subdivision thereof.
"Plan" means any pension plan which is covered by
Title IV of ERISA and in respect of which the Borrower or any
"commonly controlled entity" (within the meaning of Section
414(b) or (c) of the Code) is an "employer" as defined in
Section 3(5) of ERISA.
"Romtec" means Romtec PLC.
"Romtec Acquisition" is defined in Section 3.01
hereof.
"Romtec Acquisition Closing" means the date on which
the Romtec Acquisition closes and all conditions set forth in
Section 3.01(B) are satisfied.
"Romtec Purchase Agreement" means collectively, the
agreements and documents which evidence and govern the terms
and conditions of the Romtec Acquisition.
"Subordinated Debt" means any Indebtedness of the
Borrower for money borrowed which is subordinate in right of
payment as to principal and interest to the prior payment in
full of the Bank, pursuant to a subordination agreement
satisfactory to the Bank in form and substance executed by the
creditor to whom such Indebtedness is owing.
"Subsidiaries" means the subsidiaries of the Borrower
identified on Schedule B, Item 4.01(b).
"Tangible Net Worth" means, with respect to the
Borrower and all Subsidiaries on a consolidated basis, the
excess of total assets over Total Liabilities, excluding,
however, from the determination of total assets (i) all assets
which would be classified as intangible assets under generally
accepted accounting principles, including, without limitation,
goodwill (whether representing the excess of cost over book
value of assets acquired or otherwise), patents, trademarks,
trade names, copyrights, franchises, and deferred
8
charges (including, without limitation, unamortized debt
discount and expense, organization cost, and research and
development costs); (ii) any write-up in the book value of
any asset since the end of the fiscal year of the Borrower
immediately preceding the date of this Agreement; and (iii)
cash set apart and held in a sinking or other analogous fund
established for the purpose of redemption or other
retirement of capital stock.
"Total Liabilities" means, with respect to the
Borrower and the Subsidiaries on a consolidated basis, all
items of Indebtedness, and all other items which in accordance
with GAAP would properly be included on the liability side of
its balance sheet (other than capital stock, capital surplus,
and retained earnings), as of the date on which the amount of
Total Liabilities is to be determined, computed in accordance
with GAAP.
SECTION 1.02. Accounting Terms. All accounting terms, unless otherwise
specifically defined herein, shall be construed in accordance with GAAP, and all
financial data submitted pursuant to this Agreement shall be prepared in
accordance with GAAP.
ARTICLE II
RESTRUCTURING OF OBLIGATIONS TO THE BANK
LOANS, GUARANTEES, COLLATERAL
SECTION 2.01. Facility A Loan. (A) Subject to the terms and conditions
of this Agreement, the Bank agrees to make a series of term loans (each a
"Facility A Loan") to the Borrower on the dates and in the maximum principal
amounts set forth below:
Date of Romtec Acquisition Closing $3,500,000
First Anniversary Thereof $2,000,000
60th day after the Second
Anniversary Thereof (but not
beyond June 30, 2002) $1,000,000
9
Notwithstanding the foregoing, the principal amount of each Facility A Loan
shall not exceed the amounts of the installments due to the former shareholders
of Romtec under the Romtec Purchase Agreement at the time each Facility A Loan
is made. Further, the principal amount of the Facility A Loans, together with
the principal amount outstanding under the Facility B Loan (including the
amounts of all outstanding Letters of Credit) may not exceed the Aggregate
Credit Limit. To the extent that the principal amount of any Facility A Loan
requested to be made hereunder would cause the Aggregate Credit Limit to be
exceeded, the proceeds of such Facility A Loan shall be used first to refinance
and recast a portion of the outstanding principal amount of the Facility B Loan
sufficient to keep the total principal amount of the Borrower's liabilities to
the Bank (including the amounts of all outstanding Letters of Credit) at or
below the Aggregate Credit Limit. The Borrower shall give at least twenty (20)
days advance written notice to the Bank of its intention to enter into a
Facility A Loan. Each Facility A Loan shall be a single loan, evidenced by a
promissory note of the Borrower in appropriate principal amount in the form
attached hereto as Exhibit B (each of which, as the same may hereafter be
amended, replaced or restated from time to time, will be called a "Facility A
Note"). The purpose of the Facility A Loans is to finance the Romtec
Acquisition.
(B) Each Facility A Note shall mature and be payable
in full on the date that, at Borrower's election, is three (3), four (4) or five
(5) years after the date such Facility A
10
Loan is advanced (such date being referred to as a "Facility A Maturity Date").
It shall be payable in consecutive monthly installments of principal, each in
the amount which is the quotient obtained by dividing the principal amount of
such Facility A Note by the number of months in the term of such Facility A
Note, together with all accrued and unpaid interest, until the appropriate
Facility A Maturity Date, whereupon the remaining outstanding principal balance
and all accrued and unpaid interest thereon shall be due and payable in full.
(C) Each Facility A Note shall bear interest at the
Floating Rate; subject, however, to Borrower's right to exercise the LIBOR Rate
Option from time to time.
(D) The Bank shall have no obligation to make any
further Facility A Advances after the earlier to occur of (x) the 60th day after
second anniversary of the Closing or (y) an Event of Default (or an event which,
with notice or the passage of time or both, would constitute an Event of
Default).
(E) Borrower shall have the right, but not the
obligation, subject to the Bank's credit underwriting approvals in each case, at
any time to hedge the floating interest expense on any Facility A Note for the
remaining term thereof by entering into and maintaining an interest rate swap
agreement with the Bank or other counterparty affiliated with the Bank, in a
notional amount equal to the then outstanding principal balance of the
applicable Facility A Note and providing for a notional fixed rate
11
satisfactory to Bank, and containing such other terms and conditions as shall be
reasonably acceptable to Bank. If Borrower elects to enter into an interest rate
swap agreement, then the Facility A Note shall thereafter bear interest at the
LIBOR Rate applicable to one month Interest Periods.
SECTION 2.02. Facility B Loan. (A) Subject to the terms and conditions
of this Agreement, the Bank agrees to make a loan (the "Facility B Loan") to the
Borrower, pursuant to which the Bank will, until June 30, 2002 (the "Facility B
Maturity Date"), make advances (each, a "Facility B Advance") to or for the
account of the Borrower upon the request of the Borrower from time to time.
Proceeds of the Facility B Loan shall be used to finance working capital and
other general corporate purposes. The aggregate amount of Facility B Advances
that are outstanding at any time, plus the aggregate amount of Letters of Credit
outstanding at such time, shall not exceed: (i) until the Romtec Acquisition
Closing has occurred, $6,500,000; or (ii) after the Romtec Acquisition Closing,
the difference from time to time obtained by subtracting the aggregate principal
balance of all Facility A Loans from $10,000,000 (such difference being referred
to as the "Facility B Commitment Amount"). Within such limits, the Borrower may
borrow, prepay without penalty or premium, and reborrow Facility B Advances from
time to time. Each Facility B Advance shall be in an amount not less than
$50,000. The initial Facility B Advance made concurrently with the Closing shall
be in an amount necessary to refinance and recast the outstanding
12
principal balance under the Borrower's revolving line of credit with the Bank
under the Prior Agreements. Borrower acknowledges that all prior credit
facilities shall terminate contemporaneously with the Closing.
(B) All Facility B Advances shall, collectively, be
considered a single loan, and shall be evidenced by a promissory note of the
Borrower in the maximum principal amount of $10,000,000 in form and substance
satisfactory to the Bank (which, as the same may hereafter be amended, replaced
or restated from time to time, will be called the "Facility B Note").
(C) The Facility B Note shall bear interest at the
Floating Rate; subject, however, to Borrower's right to exercise the LIBOR Rate
Option from time to time.
(D) All accrued and unpaid interest on the Facility B
Note shall be due and payable monthly until the Facility B Maturity Date,
whereupon the Facility B Note shall mature and the entire outstanding principal
balance thereof, plus all accrued and unpaid interest thereon, shall be due and
payable in full.
(E) The Bank shall have no obligation to make any
further Facility B Advances after the earlier to occur of (i) the Facility B
Maturity Date, or (ii) an Event of Default (or an event which, with notice or
the passage of time or both, would constitute an Event of Default).
SECTION 2.03. Letters of Credit. (A) Subject to the terms and
conditions of this Agreement, the Bank agrees to issue
13
letters of credit (each, a "Letter of Credit") from time to time at the request
of and for the account of the Borrower. The aggregate amount of Letters of
Credit outstanding from time to time shall not exceed the lesser of
(i) $1,000,000 less the aggregate amount of all
Letters of Credit outstanding at such time; or
(ii) the excess of (a) the Facility B Commitment
Amount, over (b) the sum of (x) the outstanding principal
amount of the Facility B Loan at such time plus (y) the
aggregate amount of all Letters of Credit outstanding at such
time.
The expiry dates, amounts, and other terms of the Letters of Credit shall be as
agreed upon between the Borrower and the Bank from time to time; provided,
however, that in no event shall the Bank be obligated to issue a Letter of
Credit whose expiry date is after the Facility B Maturity Date. The Letters of
Credit include the Bank's Standby Letter of Credit no. 20981356 in the amount of
$650,200, and its Standby Letter of Credit no. 90921023 in the amount of
$115,000, which presently are outstanding.
(B) Each request by the Borrower for the issuance of
a Letter of Credit shall automatically constitute a representation and warranty
by the Borrower that (i) all the representations and warranties contained in
this Agreement are true and complete on and as of the date of such request (as
if the same were made on and as of the date of such request) and (ii) no Event
of Default (and no event which, with notice or the passage of time or both,
would constitute an Event of Default) exists on the date of such request. The
Borrower shall, if the Bank so
14
requests, execute the Bank's then-customary form of letter of credit application
and reimbursement agreement in connection with the Letter of Credit requested.
(C) The Bank shall have no obligation to issue any
Letter of Credit after the earlier to occur of (i) the Facility B Maturity Date
or (ii) an Event of Default (or an event which, with notice or the passage of
time or both, would constitute an Event of Default).
(D) The amount of each drawing under a Letter of
Credit shall be a Facility B Advance, and the obligation of the Borrower to pay
the Bank therefor (with interest) shall be evidenced by the Note.
SECTION 2.04. Commitment Fee. The Borrower shall pay the Bank a
commitment fee at a rate (computed each day until the Facility B Maturity Date)
equal to one quarter of one percent (1/4 of 1%) per annum of the excess of (a)
the Facility B Commitment Amount, over (b) the sum of (x) the outstanding
principal balance of the Facility B Loan on such day plus (y) the aggregate
amount of all Letters of Credit outstanding on such day. Such annualized
commitment fee shall be payable in quarterly installments, in arrears, on each
January 1st, April 1st, July 1st and October 1st, commencing April 1, 2000, and
on the Facility B Maturity Date.
SECTION 2.05. Letter-of-Credit Fees. The Borrower shall pay the Bank,
upon the issuance of each Letter of Credit, a
15
fee equal to the then prevailing fee changed by the Bank for the issuance of
standby Letters of Credit.
SECTION 2.06. Collateral. The Obligations, and all other obligations
and liabilities of the Borrower to the Bank whether now existing or hereafter
arising, shall be secured by: (i) a first-priority security interest in, lien
on, and assignment of all the properties and assets of the Borrower, tangible
and intangible, real and personal, wherever located, whether now existing or
hereafter arising, whether now owned or hereafter acquired; and (ii) the
Guaranty; and (iii) the Guarator Pledge Agreements. The Borrower hereby ratifies
and confirms its obligations under the Borrower Security Agreement and the
continuing effectiveness thereof.
SECTION 2.07. Payments;. All payments and prepayments by the Borrower
of principal and interest on the Notes shall be made to the Bank at its address
referred to in Section 8.03 hereof. The Borrower hereby irrevocably authorizes
the Bank to debit (or cause to be debited) any account of the Borrower with the
Bank or with any Bank Affiliate for any payment of principal and interest or any
other amount that shall become due. If any payment becomes due on a day other
than a business day of the Bank, the due date thereof shall be extended until
the next succeeding business day, and interest shall be payable at the
applicable rate during such extension.
16
SECTION 2.08. Prepayments; Termination Fees. (A) Subject to clause (B)
below, the Borrower may prepay the Notes at any time, in whole or (in minimum
amounts of $10,000.00 each) in part, without penalty or premium; provided,
however, that prepayment of any amounts bearing interest at a LIBOR Based Rate
on any day other than the last day of an Interest Period shall be subject to
costs and damages incurred by the Bank as provided in the applicable Note.
Further, to the extent Borrower has entered into any interest rate swap
agreement, prepayment of the offsetting obligations in an applicable Note may
result in costs and penalties payable by the Borrower under the interest rate
swap agreement. Each prepayment of a Facility A Note shall be applied on account
of the installments of principal to become due in the inverse order of maturity.
(B) Notwithstanding anything to the contrary in Section 2.08(A), if
Borrower prepays the principal amounts outstanding hereunder from the proceeds
of financing from any external source on or before the first anniversary of the
date hereof, and in connection therewith terminates the Facility B Loan and any
further obligation to make Facility A Loans, Borrower shall pay to the Bank a
termination fee in the amount of $50,000.
SECTION 2.09. Computations. Interest on each Note shall be computed on
the basis of the actual number of days elapsed, over a year of 360 days. The
outstanding amount of each Note as reflected on the Bank's records from time to
time shall
17
conclusively be considered correct and binding on the Borrower, absent manifest
error.
SECTION 2.10. Late Charge. If any amount required to be paid under any
Note, this Agreement or any other Borrower Loan Document is not paid within ten
(10) days after the date on which it is due, the Borrower shall pay the Bank a
late charge equal to five percent (5%) of such overdue payment, but not in any
case less than $25.00 or more than $2,500.00. Late charges so assessed are
immediately due and payable. Payments are deemed made on the banking day payment
is received by the Bank; payments received after 3:00 p.m. will be deemed made
the next banking day.
SECTION 2.11. Default Rate. To the extent permitted by law, whenever
there is any Event of Default under this Agreement, the rate of interest on the
unpaid principal balance of the Loans shall, at the option of the Bank, be three
percent(3%) per annum in excess of rate of interest otherwise in effect. The
Borrower acknowledges that: (i) such additional rate is a material inducement to
Bank to make the loan, (ii) the Bank would not have made the loan in the absence
of the agreement of the Borrower to pay such default rate, (iii) such additional
rate represents compensation for the increased risk to the Bank that the loan
will not be repaid, and (iv) such additional rate is not a penalty and
represents a reasonable estimate of (a) the cost to Bank in allocating its
resources (both personnel and financial) to the ongoing review, monitoring,
administration and collection of the
18
loan, and (b) of compensation to Bank for losses that are difficult to
ascertain.
2.12 Adjustments to Floating Rate Margin and LIBOR Margins. The LIBOR
Margin and Floating Rate Margin shall be adjusted quarterly based upon the
Borrower's consolidated ratio of Total Liabilities to Tangible Net Worth as of
the end of the most recent fiscal quarter for which Borrower's quarterly
financial statements have been furnished to the Bank. For example, if the
Borrower's financial statements for the quarter ended March 31 of a given year
are furnished on May 15, and an adjustment in the Floating Rate Margin or LIBOR
Margins is required, the adjustment shall be effective June 30. The change in
the LIBOR Margin and Floating Rate Margin, if any, as so determined shall take
effect on the first day of April, July, October and January in each year and
such LIBOR Margin shall remain in effect for the ensuing three month period. If
any Interest Period is in effect on the date the LIBOR Margin otherwise would
change pursuant to the above provisions, the LIBOR Rate(s) then in effect shall
not change, but shall remain in effect for the unexpired portion of such
Interest Period(s). If in any case the Borrower does not deliver its financial
statements to the Bank before the date the change in LIBOR Margin or Floating
Rate Margin would otherwise take effect, then the Bank may elect, at its option
either: (i) to not make the LIBOR Rate Option available to the Borrower until
such financial statements are delivered and the LIBOR Margin is adjusted; or
(ii) to retroactively change the LIBOR Margin and Floating Rate Margin
19
as of such date(s), and adjust the interest due hereon as soon as practicable
following delivery of such financial statements to the Bank. If the Bank elects
to make the adjustments described in clause (ii) and additional interest is due
to the Bank by reason of an increase in the LIBOR Margin or Floating Rate
Margin, such amount shall be due and payable upon demand. If amounts are due to
the Borrower by reason of a decrease in the LIBOR Margin or Floating Rate
Margin, such amounts shall be credited against the next monthly interest payment
due from the Borrower.
ARTICLE III
CONDITIONS OF BORROWING
SECTION 3.01. Closing Conditions. (A) Unless the Bank elects in writing
to waive any such closing condition, the obligation of the Bank to close the
transaction contemplated by this Agreement shall be subject to the condition
precedent that the Borrower shall (at its sole cost and expense)have provided to
the Bank (or shall have caused the Guarantors to provide to the Bank, as the
case may be) each of the following, duly executed (where appropriate), all of
which shall be subject to the approval of the Bank and its counsel in scope,
form and substance:
(i) the Loan Documents;
(ii) a favorable opinion of counsel for the Borrower
and Guarantors addressed to the Bank;
(iii) a secretary's certificate of the Borrower, to
which are attached certified copies of (x) the articles of
incorporation of the Borrower and all amendments
20
thereto, certified by the Secretary of State of the State of
its incorporation, (y) the By-Laws of the Borrower and all
amendments thereto, and (z) appropriate resolutions
authorizing the transactions contemplated by this Agreement;
(v) such certificates and assurances as may be
required by Bank and its counsel confirming: (x) the
organization and legal existence of the Guarantors, (y) the
authorization of the Guarantors to execute, deliver and
perform their obligations under the Guarantor Loan Documents
and the due execution of the Guarantor Loan Documents by
properly authorized agents, and (z) that the execution,
delivery and performance by the Guarantors does not conflict
with their respective charters or governing documents or
applicable law;
(vi) a good standing certificate issued by the
appropriate official of the State in which the Borrower is
incorporated; and a good standing certificate issued by the
appropriate official of the States in which the Borrower is
qualified as a foreign corporation;
(vii) insurance certificates showing the
effectiveness of property, casualty, liability and other
insurance coverage for the Borrower, which is required to be
maintained by Section 5.01 hereof and by Section 6 of the
Borrower Security Agreement;
(viii) payment of the fee and disbursements of
counsel for the Bank (including counsel in the U.S. and in the
United Kingdom); and
(ix) such other certificates, documents, opinions and
information as the Bank or its counsel may reasonably request.
(B) If the Romtec Acquisition Closing does not occur
prior to or concurrently with the Closing, then the obligation of Bank to enter
into and make the first Facility A Loan under this Agreement shall be subject to
the condition precedent that the Borrower shall (at its sole cost and expense)
have provided to the Bank (or shall have caused the Guarantors to provide to the
Bank,
21
as the case may be) each of the following, duly executed (where appropriate),
all of which shall be subject to the approval of the Bank and its counsel in
scope, form and substance:
(i) any and all of the Loan Documents which were not
heretofore signed and delivered by the Borrower and the
Guarantor;
(ii) evidence that all charges and liens upon
shareholdings are properly perfected (i.e., by delivery and
possession of share certificates, filing of documents and
instruments in public records) and constitute first priority
liens over the shares covered by the Borrower Pledge Agreement
and the Guarantor Pledge Agreements;
(iii) all documents, agreements and other writings
setting forth the terms and conditions upon which Borrower
(either directly or through Acquisition Sub. 2) propose to
acquire at least 90% of the outstanding capital shares
(including outstanding rights and options to acquire capital
shares) of Romtec (the "Romtec Acquisition"), and evidence
satisfactory to the Bank and its counsel that the Romtec
Acquisition has been completed and all conditions precedent
thereto have been satisfied except for the payment of the
purchase price due to the selling Romtec shareholders or in
the alternative, that proceeds of the Facility A Loan shall be
held in escrow pending completion of the Romtec Acquisition by
an escrow agent acceptable to the Bank under a written escrow
agreement in form and substance acceptable to the Bank;
(iv) evidence that upon payment of the purchase
price to the selling Romtec shareholders, the Bank will have a
first priority lien upon the Romtec shares acquired by
Acquisition Sub 2;
(v) evidence that all necessary legal proceedings,
approvals and consents required under the laws and regulations
of England and Wales and any governmental agency with
jurisdiction in connection with the Romtec Acquisition and
with the execution, delivery and performance of the Guarantor
Loan Documents by the Guarantors, have been obtained and any
and all conditions required in connection therewith have been
satisfied;
22
(vi) a Facility A Note, duly completed and dated the
date such Facility A Loan is made, and any and all other Loan
Documents not theretofore executed and delivered; and
(vii) certificates, documents and agreements
reasonably requested to confirm that the conditions set forth
in Section 3.02 have been satisfied; and
(viii) payment of the fees and expenses of Bank's
counsel (including counsel in the U.S. and in the United
Kingdom) in connection with the Facility A Loan.
All proceedings and matters in connection with the Closing, and all documents
incident thereto, shall (as a condition precedent to the execution and delivery
of this Agreement by the Bank) be subject to the approval as to scope, form and
substance of the Bank and its counsel.
SECTION 3.02. Subsequent Advances. The obligation of the Bank to make
any Facility A Loan or Facility B Advance or to issue any Letter of Credit after
the date hereof shall be subject to the condition precedent that:
(i) all the representations and warranties contained
in this Agreement shall be true and complete on and as of the
date such Advance is made or such Letter of Credit is issued
(with the same effect as if such representations and
warranties were made on and as of such date);
(ii) no Event of Default (and no event which, with
notice or the passage of time or both, would constitute an
Event of Default) shall exist;
(iii) the Bank shall have received a Request for
Advance (in substantially the form attached hereto as Schedule
A) from the Borrower requesting such Facility A Loan or
Facility B Advance; and
23
(iv) (as to a Letter of Credit) the Bank shall have
received a written request by the Borrower for such Letter of
Credit and the fee required upon the issuance of such Letter
of Credit, and the requested terms and conditions of such
letter of credit shall have been determined by the Bank to be
satisfactory to it.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties by the Borrower. In order
to induce the Bank to enter into this Agreement and to extend the credit
evidenced by the Notes, the Borrower represents and warrants to the Bank, upon
the understanding that insofar as the following representations and warranties
apply to Romtec, they are made to Borrower's best knowledge, that:
(a) Corporate Existence and Power. Each of the
Borrower, the Guarantors and Romtec is a corporation duly incorporated, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, and is duly qualified as a foreign corporation in all other
jurisdictions in which the conduct of its business or the ownership or lease of
its properties or assets requires such qualification. The States of the United
States and foreign countries in which the Borrower is qualified as a foreign
corporation are set forth on Schedule B to this Agreement. Each of the Borrower,
the Guarantors and Romtec has full corporate power and authority to own its
properties and assets and to conduct its business as now conducted. The Borrower
24
has complied with all filing, permit, license and other requirements of federal,
state and local laws necessary to prevent the Borrower from being precluded, by
reason of its failure so to comply with any such requirement, from continuing to
do business as now conducted in the jurisdictions in which it is now conducting
business.
(b) Subsidiaries. Except as otherwise identified on
Schedule B hereto (including the state or country of organization and states or
countries in which they are qualified to do business), the Borrower (x) has no
subsidiaries and no investment in any other corporation; and (y) has no
investment in any partnership, limited partnership, limited liability company or
joint venture; and (z) is not a member or participant in any partnership,
limited partnership, limited liability company or joint venture.
(c) Loan Documents. Each of the Borrower and the
Guarantors has all requisite power and authority to execute and deliver, and to
perform its obligations under, the Loan Documents to which it is a party. The
execution, delivery and performance by each of the Borrower and Guarantors of
the Loan Documents to which it is a party: (x) has been duly authorized by all
necessary corporate action; (y) does not violate any provision of law or
governmental regulation, or any order, decree, writ, injunction, determination,
award or judgment of any court, arbitrator or governmental authority, or the
certificate of incorporation or by-
25
laws of the Borrower or the applicable governing charter documents of the
Guarantors; and (z) does not conflict with any of the terms of, or result in a
breach of, or constitute a default under, or result in the creation or
imposition of any lien or charge upon any of its assets pursuant to, any
mortgage, indenture, contract, lease, loan or credit agreement, or other
agreement or instrument to which it is a party or by which any of its assets is
bound (except for such liens as are created by the Loan Documents). The Loan
Documents have been duly executed and delivered by the Borrower and Guarantors,
as the case may be, and constitute legal, valid and binding obligations of each
of the Borrower and Guarantors, enforceable against them in accordance with
their respective terms.
(d) No Consents. No consent of any other Person and
no consent, license, approval or authorization of, or registration, filing or
declaration with, any court or governmental authority, is or will be necessary
to the valid execution, delivery or performance by the Borrower or the
Guarantors of any of the Loan Documents.
(e) No Litigation. Except as described on Schedule B
to this Agreement, there are no actions, suits, or proceedings pending or, to
the knowledge of the Borrower, threatened against or affecting the Borrower or
the Guarantors or any of their properties or assets, or the proposed acquisition
of
26
Romtec, by or before any court, arbitrator or governmental authority.
(f) Title; No Liens. The Borrower (or Guarantors, as
the case may be) has good and marketable title to all properties and assets
reflected in the most recent year-end consolidated balance sheet referred to in
subsection (h) below or acquired since such date (except for properties and
assets sold or otherwise disposed of in the ordinary course of business since
such date). None of the properties or assets of the Borrower, Guarantors or
Romtec is subject to any mortgage, deed of trust, pledge, lien, security
interest, collateral assignment or other charge or encumbrance of any nature,
except those in favor of the Bank and the general charge on the assets of Total
Research, Ltd. in favor of Barclays Bank.
(g) Compliance with Legal Requirements. Neither the
Borrower nor any of the Guarantors is in default or noncompliance with respect
to any law, statute, judgment, writ, injunction, decree, rule or regulation of
any court or governmental authority.
(h) Financial Statements. (i) The consolidated
balance sheet of the Borrower as of June 30, 1999, and the related consolidated
and consolidating statements of operations, cash flows and changes in
stockholders' equity for the 12-month period ended on such date, audited by
Ernst & Young, copies of which have heretofore been provided to the Bank,
present fairly the financial
27
condition of the Borrower and its Subsidiaries as at such date, and the results
of operations and cash flows and changes in stockholders' equity for the
12-month period then ended. All such financial statements, including the related
schedules and notes thereto, have been prepared in accordance with GAAP.
(ii) The consolidated balance sheet of the
Borrower as of December 31, 1999, and the related consolidated statements of
operations, cash flows and changes in stockholders' equity for the period from
the end of the previous fiscal year through such date, certified by the chief
financial officer of the Borrower and heretofore furnished to the Bank, present
fairly, subject to normal year-end audit adjustments, the financial condition of
the Borrower and its Subsidiaries as at such date and results of operations and
cash flows and changes in stockholders' equity for such period. All such
financial statements, including the related schedules and notes thereto, have
been prepared in accordance with GAAP.
(iii) There has been no material adverse
change in the financial condition of the Borrower and its Subsidiaries from that
reflected in the financial statements referred to in paragraph (i) of this
sub-section.
(iv) Except as reflected in such balance
sheets, the Borrower and its Subsidiaries have no material liabilities, absolute
or contingent.
28
(i) Burdensome Agreements. The Borrower is not a
party to any indenture, loan or credit agreement or any other agreement,
contract or instrument, or subject to any certificate of incorporation, by-law,
or corporate restriction, which may reasonably be expected to have an adverse
effect on its business, properties, assets, operations or conditions, financial
or otherwise, or on its ability to carry out its obligations under the Loan
Documents.
(j) Margin Restrictions. The Borrower is not engaged
in the business of extending credit for the purpose of purchasing or carrying
margin stock within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System, and no part of the proceeds of the credit evidenced by
the Notes will be used to purchase or carry any such margin stock or to extend
credit to others for the purpose of purchasing or carrying any such margin stock
or to reduce or retire any Indebtedness incurred for any such purpose. No part
of the proceeds of the credit evidenced by the Notes will be used for any
purpose which violates, or which is inconsistent with, the provisions of
Regulation G, T, U or X of said Board of Governors.
(k) ERISA. The Borrower is in compliance with all
applicable provisions of ERISA. No Reportable Event (as defined in ERISA) has
occurred and is continuing with respect to any Plan, and the Borrower has not
incurred any liability to the Pension Benefit Guaranty Corporation under Section
4062 of ERISA.
29
(l) Environmental Laws. The Borrower and its
Subsidiaries have all permits, licenses and other authorizations which are
required with respect to its business, properties and assets under all
applicable laws, regulations and other requirements of any governmental
authority relating to pollution or protection of the environment (including
laws, regulations and other requirements relating to emissions, discharges,
releases or threatened releases of pollutants, contaminants, or hazardous or
toxic materials or wastes into 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, or hazardous or toxic material or wastes). The business,
properties and assets of the Borrower and its Subsidiaries are in substantial
compliance with all terms and conditions of the required permits, licenses and
authorizations, and are also in substantial compliance with all other
limitations, restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules and timetables contained in those laws or contained in
any regulation, code, plan, order, decree, judgment, notice or demand letter
issued, entered, promulgated or approved thereunder. There are no past or
present events, conditions, circumstances, activities, practices, incidents,
actions or plans which may interfere with, or prevent, continued compliance on
the part of the Borrower or its Subsidiaries, or which may give rise to any
liability on the part
30
of the Borrower or its Subsidiaries, or otherwise form the basis of any claim,
action, suit, proceeding, or investigation against the Borrower or its
Subsidiaries, based on or related to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport, or handling, or the emission,
discharge, release or threatened release into the environment, of any pollutant,
contaminant, or hazardous or toxic material or waste.
(m) Taxes. The Borrower and its Subsidiaries have
filed or caused to be filed all tax returns which are required to be filed, and
has paid all taxes shown to be due and payable on said returns or on any
assessments made against the Borrower or its Subsidiaries or against any of
their respective properties or assets, and all other taxes, fees or other
charges imposed on it or any of its property by any governmental authority; and
no tax liens have been filed and, to the knowledge of the Borrower, no claims
are being asserted against the Borrower or its Subsidiaries, or any of their
respective properties or assets and no audit is being conducted in respect
thereof, with respect to any taxes, fees or other charges by any governmental
authority.
(n) Accuracy of Statements. No representation
contained herein or in any other Loan Document, and no information,
certification, instrument, agreement, exhibit or report furnished by or on
behalf of the Borrower or its Subsidiaries to the Bank in connection with the
credit evidenced by the Notes or the negotiation of this Agreement, contains any
untrue statement
31
of material fact or omits to state any fact necessary to make the statements
contained herein or therein not misleading.
(o) Intangibles. The Borrower and its Subsidiaries
possess franchises, patents, copyrights, trademarks, tradenames, licenses and
permits adequate for the conduct of its business substantially as now conducted
without conflict with any rights of others. All the patents, patent applications
and registered trademarks of the Borrower and its Subsidiaries are identified on
Schedule B to this Agreement. No patent or patent application used by the
Borrower or its Subsidiaries in the conduct of its business is owned by any of
its officers or shareholders.
(p) Chief Executive Office. The chief executive
office of the Borrower is located in New Jersey. Also, the office in which the
Borrower keeps its records concerning its receivables is located in New Jersey.
(q) Locations of Tangible Personalty. Schedule B to
this Agreement sets forth a list of all places at which tangible personal
property (including inventory, equipment, machinery and fixtures) of the
Borrower is located.
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants of the Borrower Other Than
Reporting Requirements. Unless the Bank shall other-
32
wise consent in advance in writing, so long as any of the Obligations remains
outstanding, the Borrower shall:
(a) Payment of Indebtedness, Taxes, Etc. Pay the
Notes in accordance with their respective terms and pay and perform its other
Indebtedness and obligations in accordance with their terms; and pay and
discharge all taxes, assessments and governmental charges or levies imposed upon
it or upon its income or profits, or upon any properties belonging to it, prior
to the date on which penalties attach thereto; provided however that the
Borrower shall not be required to pay or discharge such tax, assessment,
governmental charge or levy if the validity, amount or applicability thereof is
being contested by the Borrower in good faith, by appropriate proceedings and
with diligence and continuity, provided that (a) the Borrower gives the Bank
prompt notice of its intention to contest the same, (b) such contest operates to
suspend the collection or enforcement thereof, (c) the priority of the liens and
security interests of the Bank is not impaired, (d) neither the Borrower nor the
Bank would be in danger of any penalties or criminal liability for failure to
pay the matter contested, and (e) the Borrower furnishes to the Bank such
security as may be requested by the Bank; and pay all lawful claims which, if
unpaid, might become liens or charges upon any properties of the Borrower or any
subsidiary.
(b) Maintenance of Insurance. Maintain property,
casualty and liability insurance in such form and in such amounts
33
and covering such risks as is usually carried by companies engaged in similar
businesses and owning similar properties in the same general areas in which the
Borrower and the Subsidiaries operate.
(c) Preservation of Corporate Existence and
Qualification. Preserve and maintain its corporate existence, rights, franchises
and privileges in its jurisdiction of incorporation, and qualify and remain
qualified as a foreign corporation in each jurisdiction in which such
qualification is necessary in view of its business and operations and the
ownership or lease of its properties.
(d) Compliance with Laws. Comply with the
requirements of all applicable laws, rules, regulations, ordinances, and orders
of any governmental authority (including, without limitation, ERISA and all
laws, rules, regulations, ordinances and orders relating to protection of the
environment), non-compliance with which might adversely affect its business or
credit, and comply with all provisions of its Certificate of Incorporation and
By-Laws.
(e) Visitation Rights. Upon reasonable notice, at any
reasonable time and from time to time, permit the Bank and any of its agents or
representatives, to examine and make copies of and abstracts from its records
and books of account, and to visit its properties, and to discuss its affairs,
finances and accounts with any of its officers or directors.
34
(f) Keeping of Records and Books of Account. Keep
adequate records and books of account reflecting all its financial transactions.
(g) Maintenance of Properties. Maintain and preserve
all of its properties, necessary or useful in the proper conduct of its
business, in good working order and condition, ordinary wear and tear excepted.
(h) Maintenance of Licenses. Maintain and keep in
effect licensing, know-how and similar agreements necessary in the proper
conduct of its business.
(i) Further Assurances. Do, execute, acknowledge and
deliver or cause to be done, executed, acknowledged and delivered all such
further instruments, acts, deeds, and assurances as may be reasonably requested
by the Bank for the purpose of carrying out the provisions and intent of this
Agreement or any other Loan Document.
(j) Depository Accounts. Maintain all its depository
accounts exclusively at the Bank.
(k) Compliance by Subsidiaries. Cause all of the
Subsidiaries to comply with the covenants in this Section 5.01, other than
Section 5.01(a) to the extent it requires payment of the Notes and other
obligations to the Bank, and Section 5.01(j).
SECTION 5.02. Negative Covenants of the Borrower. Unless the Bank shall
otherwise consent in advance in writing, so
35
long as any of the Obligations remain outstanding, the Borrower shall not:
(a) Liens, Etc. Create, incur, assume or suffer to
exist any mortgage, deed of trust, pledge, lien, security interest, or other
charge or encumbrance (including, without limitation, the lien or retained
security title of a conditional vendor) of any nature, whether voluntary or by
operation of law, upon or with respect to any of its properties or assets now
owned or hereafter acquired, or assign or otherwise convey any right to receive
income, except in favor of the Bank.
(b) Indebtedness. Create, incur, assume or suffer to
exist any Indebtedness, except (i) Indebtedness to the Bank, and (ii) unsecured
trade credit incurred by the Borrower in the ordinary course of business to
vendors of goods or providers of services to the Borrower in respect of the
purchase price of such goods and services.
(c) Assumptions, Guaranties, Etc. of Indebtedness of
Other Persons. Assume, guarantee, endorse or otherwise become directly or
contingently liable (including, without limitation, liable by way of agreement,
contingent or otherwise, to purchase, to provide funds for payment, to supply
funds to or otherwise invest in any other Person or otherwise to assure any
creditor of any other Person against loss) in connection with any obligation or
indebtedness of any other Person, except for (i) guaranties in favor of the
Bank, and (ii) guaranties by endorsement of negoti-
36
able instruments for deposit or collection in the ordinary course of business.
(d) Mergers, Etc. Merge or consolidate with or into
(or permit any Subsidiary to merge with or into) any Person other than a merger
of one or more Subsidiaries into the Borrower or another Subsidiary; or acquire
(or permit any Subsidiary to acquire) all or any substantial part of the
properties or assets of any Person; or assign, transfer, sell, lease or
otherwise dispose of all or any part of its properties or assets, other than the
Romtec Acquistion, sales of inventory in the ordinary course of business at not
less than fair market value and dispositions of obsolete equipment which is no
longer useful in the conduct of its business.
(e) Investments in Other Persons. Make or suffer to
exist any loan or advance to any Person or purchase or otherwise acquire any
capital stock or obligations of or any interest in, any Person, other than
(i) readily marketable direct obligations of
the United States of America having a maturity date
not later than one year from the date of acquisition
by the Borrower;
(ii) commercial paper rated in either of the
two highest rating categories by Standard & Poor's
Corporation or Xxxxx'x Investors Service, Inc.,
having a maturity not later than 90 days from the
date of acquisition by the Borrower;
(iii) certificates of deposit issued by the
Bank or by any commercial bank organized under the
laws of the United States of America or any State
37
thereof that has a combined capital, surplus and
profits of not less than $50,000,00; and
(iv) the Romtec Acquisition (including the
capitalization of Acquisition Sub. 1 and Acquisition
Sub. 2 in connection therewith).
(f) Sale of Receivables, Etc. Discount, sell,
transfer or otherwise dispose of, with or without recourse, any of its notes
receivable or accounts receivable; or (except in the ordinary course of
business, for so long as no Event of Default exists) compromise or adjust any of
them, or grant any discounts, allowances or credits on any of them.
(g) Dividends, Etc. Declare or pay any dividends
(payable in cash, property or otherwise); or enter into any agreement to
purchase, redeem or otherwise retire, or apply any of its cash or property to
the purchase, redemption or other retirement of, or set apart any sum for the
payment of any dividends on, any of its capital stock; or make any other
distribution to its shareholders as such.
(h) Maintenance of Tangible Net Worth. Permit
consolidated Tangible Net Worth of the Borrower to be less than: (i)$4,000,000
through June 30, 2000; and (ii) an amount as of the end of each fiscal quarter
of Borrower subsequent to June 30, 2000 determined by adding $350,000 to the
amount in effect at the end of the previous fiscal quarter. To illustrate, the
minimum tangible net worth will be $4,350,000 at September 30, 2000 and
$4,700,000 at December 31, 2000 and so on. Notwithstanding
38
anything to the contrary in the foregoing, if the Romtec Acquistion does not
occur, the minimum tangible net worth shall be $8,750,000 at the end of each
fiscal quarter.
(i) Maintenance of Ratio of Total Liabilities to
Tangible Net Worth. Permit the ratio of consolidated Total Liabilities to
consolidated Tangible Net Worth of the Borrower to be more than (x) 2.50 to 1 as
of the end of any fiscal quarter until the Romtec Acquisition occurs, and (y)
assuming the Romtec Acquisition occurs, 7 to 1 as of March 31, 2000 and each
fiscal quarter thereafter through and including March 31, 2001, 5 to 1 as of
June 30, 2001 and the end of each fiscal quarter thereafter through and
including March 31, 2002, 4 to 1 as of June 30, 2002 and the end of each fiscal
quarter thereafter through and including March 31, 2003, and 3 to 1 as of June
30, 2003 and the end of each fiscal quarter thereafter.
(j) Debt Service Coverage Ratio. Permit the ratio of
(i) the sum of net income plus taxes, depreciation, amortization and interest
expense measured at the end of any fiscal quarter for the four trailing fiscal
quarters, to (ii) the sum of current maturities of long-term Indebtedness as of
the end of such fiscal quarter plus interest expense for such period to be less
than 1.35 to 1 on a consolidated basis.
(k) Current Ratio. Permit the ratio of consolidated
Current Assets to consolidated Current Liabilities as of the end of any fiscal
quarter to be less than 1.1 to 1.
39
(l) Change in Nature of Business. Make any material
change in the nature of its business.
(m) Transactions with Affiliates. Directly or
indirectly purchase, acquire or lease any property from, or sell, transfer or
lease any property to, or enter into any other material transaction with, any
director, officer, agent or other Affiliate of the Borrower or any relative
thereof, except: (i) transactions in the ordinary course of business and at
prices and on terms not less favorable to the Borrower than those which would
have been obtained in an arm's length transaction with a non-Affiliated third
party, (ii) transactions reasonably required to support the capital needs of the
Subsidiary identified on Schedule B hereto.
SECTION 5.03. Reporting Requirements. So long as any of the
Obligations remains outstanding, the Borrower shall, unless the Bank otherwise
consents in writing, furnish to the Bank:
(a) Notice of Default: as soon as possible and in any
event within five days after it becomes aware of the
occurrence of each Event of Default (or each event which, with
the giving of notice or lapse of time or both, would
constitute an Event of Default), the written statement of the
chief financial officer of the Borrower setting forth details
of such Event of Default (or such other event) and the action
which the Borrower proposes to take with respect thereto;
(b) Notice of Adverse Condition: as soon as possible,
the written statement of the chief financial officer of the
Borrower setting forth details of any action, event or
condition of any nature of which the Borrower is aware, which
may reasonably be expected to have a material adverse effect
upon the business, assets or financial condition of the
Borrower and the action
40
which the Borrower proposes to take with respect thereto;
(c) Quarterly Report: as soon as available and in any
event within 45 days after the end of each of the first three
quarters of each fiscal year of the Borrower, the consolidated
and consolidating balance sheet of the Borrower as of the end
of such quarter and the consolidated and consolidating
statements of operations, cash flows and changes in
shareholders' equity of the Borrower for the period commencing
at the end of the previous fiscal year and ending with the end
of such quarter, setting forth in comparative form the
corresponding figures for the previous fiscal year, all in
reasonable detail and duly certified (subject to year-end
audit adjustments) by the chief financial officer of the
Borrower as having been prepared in accordance with GAAP,
together with a certificate of said officer (i) stating that
such officer does not have any knowledge that an Event of
Default (or an event which, with notice or the lapse of time
or both, would constitute an Event of Default) exists or, if
an Event of Default (or such other event) does exist, a
statement as to the nature thereof and the actions which the
Borrower proposes to take with respect thereto, and (ii)
showing calculations of the Borrower's compliance at and as of
the end of each such fiscal quarter, with each financial ratio
and requirement of Section 5.02 of this Agreement;
(d) Annual Report: as soon as available and in any
event within 90 days after the end of each fiscal year of the
Borrower, an annual audit report for such year for the
Borrower, including therein the consolidated and consolidating
balance sheet of the Borrower as of the end of such fiscal
year and the consolidated and consolidating statements of
operations, cash flows and changes in stockholders' equity of
the Borrower for such fiscal year, setting forth in
comparative form the corresponding figures for the preceding
fiscal year, prepared in accordance with GAAP, all in
reasonable detail and in each case duly certified by
independent certified public accountants of recognized
standing acceptable to the Bank, and by the chief financial
officer of the Borrower, together with (i) a copy of the
management letter, if any, issued by such accounting firm to
the Borrower; and (ii) a certificate of said accounting firm
(A) stating that, in the course of auditing and reporting on
the financial statements of
41
the Borrower for such fiscal year, they did not discover
that an Event of Default (or an event which, with notice or
the lapse of time or both, would constitute an Event of
Default) had occurred at any time during such fiscal year,
or, if an Event of Default (or such other event) did occur,
the nature thereof, and (B) showing calculations of the
Borrower's compliance with each financial ratio and
requirement of Section 5.02 of this Agreement; and (iii) a
certificate of the chief financial officer of the Borrower
stating that such officer does not have any knowledge that
an Event of Default (or an event which, with notice or the
lapse of time or both, would constitute an Event of Default)
exists, or, if an Event of Default (or such other event)
does exist, a statement of the nature thereof and the
actions which the Borrower proposes to take with respect
thereto;
(e) SEC Reports: as soon as practicable, but in no
event later than ten (10) days after the same are filed with
the Securities and Exchange Commission, copies of all reports
on Form 00-X, 00-X, 0-X and definitive proxy materials, and
any exhibits to the foregoing if requested by the Bank, and
any registration statement or other filing of the Borrower if
requested by the Bank.
(h) Notice of Lawsuits or Reportable Events:
immediately after (i) it becomes aware of the commencement
thereof, notice in writing of all actions, suits and
proceedings before any court or governmental authority,
domestic or foreign, affecting the Borrower or any of its
properties, directly or contingently, which, if determined
adversely, would have a material adverse effect on the
financial condition, properties or operations of the Borrower,
and (ii) it becomes aware of the occurrence thereof, notice in
writing of any "Reportable Event" (as that term is defined in
ERISA) under any Plan; and
(i) Other Information: such other information
respecting the business, properties or the conditions or
operations, financial or otherwise, of the Borrower as the
Bank may from time to time reasonably request.
42
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01 Events of Default. If any of the following events (each,
an "Event of Default") shall occur, that is to say:
(a) If the Borrower shall default in the payment of
any principal of any Note, or interest on any Note, on the
date on which such payment shall become due; or
(b) If any representation or warranty made by the
Borrower in any of the Loan Documents or in any certificate,
agreement, instrument or statement contemplated by or made or
delivered pursuant to or in connection with this Agreement,
shall prove to have been incorrect in any material respect
when made; or
(c) If the Borrower shall fail to perform or observe
any term, covenant or agreement contained in Section 5.02 of
this Agreement; or
(d) If the Borrower shall fail to perform or observe
any term, covenant or agreement contained in Section 5.01 or
5.03 or Article VII of this Agreement, or the Borrower shall
fail to observe or perform any other term, covenant or
agreement contained in any of the Loan Documents on its part
to be performed or observed, and any such failure is not cured
within 30 days; or
(e) If any default or event of default shall occur
under any instrument or agreement (other than the Loan
Documents) now or hereafter existing between the Borrower or
any of the Subsidiaries and the Bank, irrespective of whether
or not such agreement or instrument relates to the financing
contemplated by this Agreement; or
(f) If the Borrower or any of its Subsidiaries shall
fail to pay any Indebtedness (other than as evidenced by any
Note) owing by it to any other creditor, or any interest or
premium thereon, when due, whether such Indebtedness shall
become due in installments, by scheduled maturity, by required
prepayment, by acceleration, by demand or otherwise; or any
43
event of default or event which, with the giving of notice or
lapse of time or both, would constitute an event of default
shall occur under any agreement or instrument (other than this
Agreement) evidencing or securing or relating to any
Indebtedness owing by the Borrower or any of its Subsidiaries,
if the effect of such event is to permit the holder(s) of such
other Indebtedness to accelerate the maturity of such
Indebtedness; or
(g) If any of the Loan Documents at any time after
execution and delivery and for any reason, shall cease to be
in full force and effect or shall be declared to be null and
void, or the validity or enforceability thereof shall be
contested by any party thereto; or
(h) If a decree or order for relief shall be entered
by a court having jurisdiction in the premises in respect of
the Borrower or any Subsidiary in an involuntary case under
the federal bankruptcy code, as now or hereafter constituted,
or any other applicable federal, state or foreign bankruptcy,
insolvency or other similar law, or a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official
shall be appointed for the Borrower or any of its Subsidiaries
or for any substantial part of their respective properties, or
the windingup or liquidation of their respective affairs shall
be ordered, and any such decree, order or appointment shall
continue unstayed and in effect for a period of 60 consecutive
days; or
(i) If the Borrower or any of its Subsidiaries shall
commence a voluntary case under the federal bankruptcy code,
as now or hereafter constituted, or any other applicable
federal, state or foreign bankruptcy, insolvency or other
similar law, or any of them shall consent to the appointment
of or taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of
the Borrower or any of its Subsidiaries, or for any
substantial part of their respective properties, or any of
them shall make any assignment for the benefit of creditors,
or the Borrower or any of its Subsidiaries shall fail
generally to pay their respective debts as such debts become
due, or the Borrower or any of its Subsidiaries shall take
corporate action in furtherance of any of the foregoing; or
44
(j) If either (i) any person shall engage or has
engaged in any "prohibited transaction" (as defined in Section
406 of ERISA or Section 4975 of the Code) involving any Plan,
(ii) any "accumulated funding deficiency" (as defined in
Section 302 of ERISA), whether or not waived, shall exist with
respect to any Plan, (iii) a Reportable Event (as defined in
ERISA) shall occur with respect to, or proceedings shall
commence to have a trustee appointed, or a trustee shall be
appointed, to administer or to terminate, any Plan, which
Reportable Event or institution or proceeding is, in the
reasonable opinion of Bank, likely to result in the
termination of such Plan for purposes of Title IV of ERISA, or
(iv) any Plan shall terminate for purposes of Title IV of
ERISA, and in each case in clauses (i) through (iv) of this
paragraph (i), such event or condition, together with all
other such events or conditions, if any, are likely in the
reasonable opinion of Bank to subject the Borrower to any tax,
penalty or other liabilities in the aggregate material in
relation to the business, operations, property or financial or
other condition of the Borrower taken as a whole; or
(k) If one or more judgments or decrees shall be
entered against the Borrower or any of its Subsidiaries
involving in the aggregate a liability (not fully covered by
insurance) of $250,000 or more and all such judgments and
decrees shall not have been vacated, discharged or stayed or
bonded pending appeal within 120 days from the entry thereof;
or
(l) If the financial condition of the Borrower and
its Subsidiaries materially deteriorates (in the judgment of
the Bank) or an event occurs which (in the judgment of the
Bank) materially impairs the financial responsibility of the
Borrower;
then, and in any such event, the Bank may do any or all of the following: (X)
declare the entire unpaid principal amount of any or all the Notes, all interest
accrued and unpaid thereon and all other amounts payable under this Agreement to
be immediately due and payable, whereupon the same shall become and be
immediately due and payable, without presentment, demand, protest or notice of
45
any kind, all of which are hereby expressly waived by the Borrower (provided
however that upon the occurrence of any Event of Default described in paragraphs
(h) or (i) with respect to the Borrower, all the foregoing shall automatically
become immediately due and payable); (Y) cease making any further Advances and
cease issuing any further Letters of Credit; and (Z) exercise any and all
remedies allowed to it by any document executed in connection with this
Agreement or otherwise available at law or in equity.
ARTICLE VII
ADDITIONAL PROVISIONS
SECTION 7.01 Certain Environmental Matters. (A) In the event that there
shall be filed a lien against any of the property of the Borrower by any
governmental jurisdiction or any instrumentality thereof arising from an
intentional or unintentional action or omission of the Borrower, resulting in
the releasing, spilling, pumping, emitting, emptying or dumping of hazardous
substances into the waters of such State or onto lands from which it might flow
or drain into said waters, then, within thirty (30) days from the date that
Borrower is given notice that the lien has been placed against such property or
within such shorter period of time in the event that such State has commenced
steps to cause such property to be sold pursuant to the lien, the Borrower shall
either (i) pay the claim and remove the lien from the applicable property, or
(ii) furnish (a) a bond satisfactory
46
to the State agency that imposed the lien in the amount of the claim out of
which the lien arises, (b) a cash deposit in the amount of the claim out of
which the lien arises, or (c) other security reasonably satisfactory to such
agency in an amount sufficient to discharge the claim out of which the lien
arises.
(B) Should the Borrower cause or permit any
intentional or unintentional action or omission resulting in the releasing,
spilling, leaking, pumping, pouring, emitting emptying or dumping of hazardous
substances into the waters or onto the lands of any State, or into the waters
outside the jurisdiction of any State resulting in damage to the lands, waters,
fish, shellfish, wildlife, biota, air and other resources owned, managed, held
in trust or otherwise controlled by any State, without having obtained a permit
issued by the appropriate governmental authorities, the Borrower shall promptly
clean up the same in accordance with all applicable federal, state and/or local
statutes, laws, ordinances, rules and regulations.
SECTION 7.02. Collateral Assignment of Accounts. As collateral security
for the payment of the Obligations and of all other obligations and liabilities
of the Borrower to the Bank, whether now existing or hereafter arising, absolute
or contingent, foreseen or unforeseen, of every kind or nature whatsoever, the
Borrower hereby grants to the Bank a security interest in and lien upon, and
hereby assigns to the Bank, all funds, balances and other property of every kind
of the Borrower, or in which the
47
Borrower has an interest, now or hereafter in the possession, custody or control
of the Bank or any Bank Affiliate. For purposes of the perfection of said
security interest and assignment only, possession of said funds, balances or
other property of the Borrower by any Bank Affiliate shall be deemed to be, and
the Borrower hereby agrees, is, possession of said funds, balances or other
property of the Borrower by the Bank.
SECTION 7.03. Stamp Taxes. The Borrower shall pay any stamp taxes or
any taxes in the nature thereof which may be payable in connection with the
execution and delivery of any Note. The Borrower hereby forever indemnifies and
saves the Bank harmless against any and all liability which the Bank may incur
or which may be assessed against the Bank with respect to such tax.
SECTION 7.04. Disclosure of Financial Information. The Borrower
authorizes the Bank to respond to credit inquiries from trade creditors,
financial institutions, financial information distribution organizations and
others. These responses may include, but are not limited to, loan amounts, terms
and balances, deposit balances and history, payment history and return item
history. The Borrower agrees to indemnify, defend, release and hold the Bank
harmless, at the Borrower's cost and expense, from and against any and all
lawsuits, claims, actions, proceedings, suits, damages, judgments, penalties,
costs and expenses, including but not limited to attorney's fees and court costs
or suits based on or arising out of the Bank's reporting or
48
disclosure of such information. The Bank is hereby authorized to disclose any
financial or other information about the Borrower to any regulatory body or
agency having jurisdiction over the Bank or to any present, future or
prospective participant or successor in interest in any loan or other financial
accommodation made by the Bank to the Borrower.
SECTION 7.05. Letter of Credit. Neither the Bank nor any of its
officers or directors shall be liable or responsible for (i) the use which may
be made of any Letter of Credit or for any acts or omissions of the beneficiary
or any transferee in connection therewith; (ii) the validity, sufficiency or
genuineness of documents presented under any Letter of Credit, or of any
endorsements thereon, even if such documents should in fact prove to be in any
or all respects invalid, insufficient, fraudulent or forged; (iii) payment by
the Bank against presentation of documents which do not comply with the terms of
any Letter of Credit (including, without limitation, failure of any documents to
bear any reference or adequate reference to a Letter of Credit) or any other
circumstances whatsoever in making or failing to make payment under any Letter
of Credit, except only that the Bank shall be liable to the Borrower to the
extent, but only to the extent, of any direct, as opposed to consequential,
damages suffered by the Borrower which the Borrower proves were caused by the
Bank's willful misconduct or gross negligence in determining whether
49
documents presented under a Letter of Credit comply with the terms of such
Letter of Credit. In furtherance and not in limitation of the foregoing, the
Bank may accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary.
(B) The Bank shall not be liable or responsible in
any respect for (i) any error, omission, interruption or delay in transmission,
dispatch or delivery of any message or advice, however transmitted, in
connection with any Letter of Credit, or (ii) any action, inaction or omission
which may be taken by it in good faith, absent willful misconduct or gross
negligence (in either of which events the extent of the Bank's potential
liability to the Borrower shall be limited as set forth in the immediately
preceding paragraph), in connection with any Letter of Credit. The Borrower
further agrees that any action taken or omitted by the Bank under or in
connection with a Letter of Credit or the related draft or documents, if done
without willful misconduct or gross negligence, shall be effective against the
Borrower as to the rights, duties and obligations of the Bank and shall not
place the Bank under any liability to the Borrower.
50
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. No Waiver; Cumulative Remedies. No failure or delay on
the part of the Bank in exercising any right, power or remedy hereunder or under
any other Loan Document and no course of dealing between the Bank and the
Borrower, shall operate as a waiver of any such right, power or remedy; nor
shall any single or partial exercise of any right, power or remedy preclude any
other or further exercise thereof or the exercise of any other right, power or
remedy hereunder or under any other Loan Document. The remedies herein and in
the other Loan Documents provided are cumulative and not exclusive of each other
or of any other remedies allowed by law or equity.
SECTION 8.02. Amendments, Etc. No amendment, modification, termination,
or waiver of any provision of this Agreement or of any other Loan Document, and
no consent to any departure therefrom by the Borrower or any other party
thereto, shall in any event be effective unless the same shall be in writing and
signed by the Bank, and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given. No notice to
or demand on the Borrower in any case shall entitle the Borrower to any other or
further notice or demand in similar or other circumstances.
SECTION 8.03. Addresses for Notices, Etc. All notices, requests,
demands, directions and other communications
51
provided for hereunder or under any other Borrower Loan Document and shall be
sufficient if delivered personally (including by Federal Express or other
recognized courier) or if mailed by certified mail, return receipt requested, to
the applicable party at the addresses indicated below:
If to the Borrower:
-------------------
Total Research Corporation
0 Xxxxxxxxxxxx Xxx
Xxxxxxxxx, Xxx Xxxxxx 00000-0000
If to the Bank:
---------------
Summit Bank
000 Xxxxxxxx Xxxxxx
XX 0000
Xxxxxxxxx, Xxx Xxxxxx 00000-0000
Attn: Xxxxxx Xxxxxxx
- with a duplicate copy to -
Xxxxxx, XxXxxxxxxx & Xxxxxx
721 Xxxxx 000/000
X. X. Xxx 0000
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
or, as to each party, at such other address as shall be designated by such party
in a written notice to each other party complying as to delivery with the terms
of this Section. No failure to provide a duplicate copy as aforesaid shall
nullify or otherwise impair the effectiveness of a notice, request, demand,
direction or other communication given to the Borrower or the Bank. All notices,
requests, demands, directions and other communications shall (if delivered
personally) be effective when delivered or (if mailed)
52
two days after having been deposited in the mail, addressed as aforesaid.
SECTION 8.04. Costs and Expenses; Indemnity. (a) The Borrower agrees
to pay on demand all costs and expenses of the Bank in connection with the
preparation, execution, delivery, administration, modification and enforcement
of any and all of this Agreement and the other Loan Documents (including,
without limitation the fees and disbursements of both United States and United
Kingdom counsel for the Bank).
(b) The Borrower agrees to indemnify, save, and hold
harmless the Bank and its directors, officers, agents, and employees
(collectively the "indemnitees") from and against:
(i) any and all claims, demands, actions, or
causes of action that are asserted against any indemnitee by
any Person if the claim, demand, action, or cause of action
directly or indirectly relates to a claim, demand, action, or
cause of action that the Person has or asserts against the
Borrower or any Subsidiary; and
(ii) any and all liabilities, losses, costs,
or expenses (including attorneys' fees) that any indemnitee
suffers or incurs as a result of the assertion of any claim,
demand, action, or cause of action specified in the
immediately preceding subparagraph (i).
The covenants and agreements of this Section shall survive the repayment of the
Obligations and the cancellation of the Notes.
SECTION 8.05. Execution in Counterparts. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which shall
53
be deemed to be an original and all of which (taken together) shall constitute
one and the same agreement.
SECTION 8.06. Governing Law. This Agreement and the other Loan
Documents shall be governed by, and construed in accordance with, the internal
laws of the State of New Jersey (without giving effect to principles of
conflicts of law), except to the extent that the grant, perfection and
enforcement of any charge or lien are required to be governed by the law of
England and Wales or where the State in which the property subject to such lien
is located.
SECTION 8.07. Severability of Provisions; Headings. Any provision of
this Agreement or of any other Loan Document which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof or thereof or affecting the validity or
enforceability of such provision in any other jurisdiction. Article and Section
headings in this Agreement are included herein for convenience of reference only
and shall not constitute a part of this Agreement for any other purpose.
SECTION 8.08. Set-Off. In addition to all other rights it may have at
law or otherwise, upon the occurrence and during the continuance of any Event of
Default, the Bank is hereby authorized at any time and from time to time,
without notice, to apply (and cause to be applied) any and all deposits (general
and
54
special and whether matured or unmatured), account balances and credits of or in
favor of the Borrower at any time existing in any branch or office of the Bank
or any Bank Affiliate, against all obligations of the Borrower to the Bank
arising under this Agreement or any other Borrower Loan Document, and the
Borrower shall continue to be liable to the Bank for any deficiency.
SECTION 8.09 Integration; Entire Agreement. This Agreement restates,
replaces and supersedes, the Original Agreement. Nothing in this Agreement shall
be construed, however, as a termination of or a novation with respect to, any
liabilities or obligations outstanding from the Borrower to the Bank under the
Original Agreement or otherwise, or to adversely affect the existence or
priority of any security interest, lien or encumbrance heretofore granted by the
Borrower to the Bank to secure such liabilities and obligations or the
effectiveness of the security agreements, collateral assignments, pledge
agreements or other agreements and instruments creating such security interests,
liens and encumbrances, all of which shall continue in full force and effect.
This Agreement, and the other Loan Documents and other instruments and documents
to be delivered hereunder and thereunder, are intended by the parties hereto and
thereto to be an integrated contract, which together contain the entire
understandings of the parties with respect to the subject matter contained
herein and therein; this Agreement and the other Loan Documents supersede all
prior agreements and understandings
55
between the parties with respect to such subject matter, whether written or
oral.
SECTION 8.10. Survival of Agreements. All agreements, covenants,
representations and warranties made herein shall survive the delivery of the
Notes.
SECTION 8.11. Waiver of Trial By Jury. IN ANY LITIGATION ARISING OUT OF
OR RELATING TO ANY OF THE MATTERS CONTAINED IN THIS AGREEMENT OR ANY OF THE
DOCUMENTS DELIVERED IN CONNECTION HEREWITH IN WHICH THE BORROWER AND THE BANK
ARE ADVERSE PARTIES, THE BORROWER AND THE BANK HEREBY WAIVE TRIAL BY JURY.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
TOTAL RESEARCH CORPORATION
By:/s/ Xxxxxx Xxxxxxxxx
---------------------------
Xxxxxx Xxxxxxxxx, President
SUMMIT BANK
By:/s/ Xxxxxxx X. XxXxxxx
---------------------------
Xxxxxxx X. XxXxxxx,
Vice President
56
Exhibit A: Identification of Original Agreement and Superseded
Notes
Exhibit B: Form of Facility A Note
Schedule A: Form of Request for Advance
Schedule B: Supplementary Information with respect to
Representations and Warranties in Article IV
57
EXHIBIT A
List of Prior Agreements
1. Credit Agreement dated as of December 23, 1991 , as the same
subsequently was amended by
(a) the Amendment to Credit Agreement dated June 30, 1993;
(b) the Second Amendment to Credit Agreement dated as of February 29,
1994;
(c) the Third Amendment to Credit Agreement dated as of June 29, 1994;
(d) the Fourth Amendment to Credit Agreement dated as of September 14,
1994;
(e) the Fifth Amendment to Credit Agreement dated as of January 1,
1995;
(f) the Sixth Amendment to Credit Agreement dated as of May 3, 1995;
and
(g) the Seventh Amendment to Credit Agreement dated June 20, 1995.
2. Amended and Restated Credit Agreement dated as of December 28, 1995, as
the same subsequently was amended by
(a) the Amendment to Amended and Restated Credit Agreement dated as of
October 10, 1996;
(b) the Second Amendment to Amended and Restated Credit Agreement
dated as of February 10, 1998
(c) the Third Amendment to Amended and Restated Credit Agreement dated
as of July 17, 1998;
(d) the Fourth Amendment to Amended and Restated Credit Agreement
dated as of August 18, 1998
(e) The Fifth Amendment to Amended and Restated Credit Agreement
dated as of September 18, 1998;
(f) the Sixth Amendment to Amended and Restated Credit Agreement dated
as of January 1, 1999;
58
(g) the Seventh Amendment to Amended and Restated Credit Agreement
dated as of September 30, 1999;
(h) the Eighth Amendment to Amended and Restated Credit Agreement
dated as of December 1, 1999
59
SCHEDULE A
Form of Request for Advance
THIS REQUISITION is being delivered pursuant to the Second
Amended and Restated Credit Agreement dated March _____, 2000 (as the same may
be Second Amended and Restated amended or restated from time to time) between
TOTAL RESEARCH CORPORATION (the "Borrower") and SUMMIT BANK (the "Bank") (the
"Credit Agreement"). All capitalized terms used in this Request shall have the
respective meanings ascribed to them in the Credit Agreement.
1. The Borrower hereby requests a Facility A Loan in the
amount of $____________.
2. The Borrower hereby requests a Facility B Advance in the
amount of $____________.
3. To induce the Bank to make such Advances, the Borrower
hereby represents and warrants to the Bank that:
(i) all the representations and warranties contained
in the Credit Agreement are true and complete on and as of the
date hereof (with the same effect as if made on and as of the
date hereof); and
(ii) no Event of Default (and no event which, with
notice or the passage of time or both, would constitute an
Event of Default) exists; and
(iii) the Borrower has no offset, defense or
counterclaim with respect to any of its obligations under the
Credit Agreement or any of the other Loan Documents;
TOTAL RESEARCH CORPORATION
By:
------------------------
Dated: ________________, 2000
SCHEDULE B
Supplementary Information with respect to
Representations and Warranties in Article IV
--------------------------------------------
ss.4.01(a) - Names of all States in which the Borrower is qualified
to do business as a foreign corporation:
------------------------------------------------------
Borrower: New Jersey, Minnesota
[CONFIRM]
ss.4.01(b) - Names of corporations, partnerships, limited
partnerships and joint ventures in which the Borrower is
an investor, member or participant:
----------------------------------------------------------
Total Research, Ltd - 100% owned by Borrower Acquisition
Sub 1 - 100% owned by Borrower Acquistion Sub 2 - 100%
owned by Acquisition Sub 1
Romtec, a UK corporation to be owned by Acquisition
Sub 2
ss.4.01(e) - Description of actions, suits and proceedings:
----------------------------------------------
ss.4.01(p) - Identification of all patents, patent applications and
registered trademarks of the Borrower:
------------------------------------------------------
Description Owner Identifying Number Date Filed
----------- ----- ------------------ ----------
ss.4.01(r) - Names of all jurisdictions (State and County) in which
any tangible personal property of the Borrower is
located:
------------------------------------------------------
Borrower: Minnesota (Hennepin County)
New Jersey (Xxxxxx County)
Tampa, Florida
Poughkeepsie, New York
Chicago, Illinois
