LOAN AGREEMENT
EXHIBIT 10.29
Wachovia Bank, National Association
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
(Hereinafter referred to as the “Bank”)
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
(Hereinafter referred to as the “Bank”)
eResearch Technology, Inc.
00 Xxxxx 00xx Xxxxxx
0xx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
00 Xxxxx 00xx Xxxxxx
0xx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
eRT Investment Corporation
0000 Xxxxxxxxxx Xxxx
000 Xxxxxxxx Xxxxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
0000 Xxxxxxxxxx Xxxx
000 Xxxxxxxx Xxxxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
eRT Tech Corporation
0000 Xxxxxxxxxx Xxxx
000 Xxxxxxxx Xxxxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
(Individually and collectively, “Borrower”)
0000 Xxxxxxxxxx Xxxx
000 Xxxxxxxx Xxxxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
(Individually and collectively, “Borrower”)
This Loan Agreement (“Agreement”) is entered into June 26, 2008, by and between Bank and Borrower.
This Agreement applies to the loan or loans (individually and collectively, the “Loan”) evidenced
by one or more promissory notes of even date herewith or other notes subject hereto, as modified
from time to time (whether one or more, the “Note”), the standby letters of credit issued hereunder
(each, a “Letter of Credit” and collectively, the “Letters of Credit”) and all Loan Documents. The
terms “Loan Documents” and “Obligations,” as used in this Agreement, are defined in the Note.
Relying upon the covenants, agreements, representations and warranties contained in this Agreement,
Bank is willing to extend credit to Borrower upon the terms and subject to the conditions set forth
herein, and Bank and Borrower agree as follows:
LETTERS OF CREDIT. Upon the request of Borrower, Bank shall issue standby Letters of Credit,
provided, the aggregate amount available to be drawn under all standby Letters of Credit plus the
aggregate amount of unreimbursed drawings under all standby Letters of Credit at any one time does
not exceed $3,000,000.00, and further provided, no standby Letter of Credit shall expire more than
365 days after the date it is issued. Notwithstanding anything to the contrary contained herein,
the aggregate outstanding principal balance of Advances (as defined in the line of credit
Promissory Note in the amount of $3,000,000.00, of even date herewith) plus the aggregate amount
available to be drawn under all Letters of Credit plus the aggregate amount of unreimbursed
drawings under all Letters of Credit at any one time shall not exceed $3,000,000.00. The Letters
of Credit are to be used by Borrower solely to support working capital. Bank’s obligation to issue
Letters of Credit shall terminate if Borrower is in default (however denominated) under the Note or
the other Loan Documents, or in any case, if not sooner terminated, on April 01, 2009.
LETTER OF CREDIT FEES. Borrower shall pay to Bank, at such times as Bank shall require, Bank’s
standard fees in connection with Letters of Credit, as in effect from time to time, and with
respect to standby Letters of Credit, an additional fee equal to 1.00% per annum on the face amount
of each standby Letter of Credit, payable annually, in advance, for so long as such Letter of
Credit is outstanding.
REPRESENTATIONS. Borrower represents that from the date of this Agreement and until final payment
in full of the Obligations: Accurate Information. All information now and hereafter furnished to
Bank is and will be true, correct and complete in all material respects. Any such information
relating to Borrower’s financial condition will accurately reflect Borrower’s financial condition
as of the date(s) thereof, (including all contingent liabilities of every type), and Borrower
further represents that its financial condition has not changed materially or adversely since the
date(s) of such documents. Authorization; Non-Contravention. The execution, delivery and
performance by Borrower and any guarantor, as applicable, of this Agreement and other Loan
Documents to which it is a party are within its power, have been duly authorized as may be required
and, if necessary, by making appropriate filings with any governmental agency or unit and are the
legal, binding, valid and enforceable obligations of Borrower and any guarantors; and do not (i)
contravene, or constitute (with or without the giving of notice or lapse of time or both) a
violation of any provision of applicable law, a violation of the organizational documents of
Borrower or any guarantor, or a default under any agreement, judgment, injunction, order, decree or
other instrument binding upon or affecting Borrower or any guarantor, (ii) result in the creation
or imposition of any lien (other than the lien(s) created by the Loan Documents) on any of
Borrower’s or any guarantor’s assets, or (iii) give cause for the acceleration of any obligations
of Borrower or any guarantor to any other creditor. Asset Ownership. Borrower has good and
marketable title to all of the properties and assets reflected on the balance sheets and financial
statements supplied Bank by Borrower, and all such properties and assets are free and clear of
mortgages, security deeds, pledges, liens, charges, and all other encumbrances, except as otherwise
disclosed to Bank by Borrower in writing and approved by Bank (“Permitted Liens”). To Borrower’s
knowledge, no default has occurred under any Permitted Liens and no claims or interests adverse to
Borrower’s present rights in its properties and assets have arisen. Discharge of Liens and Taxes.
Borrower has duly filed, paid and/or discharged all taxes or other claims that may become a lien on
any of its property or assets, except to the extent that such items are being appropriately
contested in good faith and an adequate reserve for the payment thereof is being maintained.
Sufficiency of Capital. Borrower is not, and after consummation of this Agreement and after giving
effect to all indebtedness incurred and liens created by Borrower in connection with the Note and
any other Loan Documents, will not be, insolvent within the meaning of 11 U.S.C. § 101, as in
effect from time to time. Compliance with Laws. Borrower and any subsidiary and affiliate of
Borrower and any guarantor are in compliance in all material respects with all federal, state and
local laws, rules and regulations applicable to its properties, operations, business, and finances,
including, without limitation, any federal or state laws relating to liquor (including 18 U.S.C. §
3617, et seq.) or narcotics (including 21 U.S.C. § 801, et seq.) and/or any commercial crimes; all
applicable federal, state and local laws and regulations intended to protect the environment; and
the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), if applicable. None of
Borrower, or any subsidiary or affiliate of Borrower or any guarantor is a Sanctioned Person or has
any of its assets in a Sanctioned Country or does business in or with, or derives any of its
operating income from investments in or transactions with, Sanctioned Persons or Sanctioned
Countries in violation of economic sanctions administered by OFAC. The proceeds from the Loan will
not be used to fund any operations in, finance any investments or activities in, or make any
payments to, a Sanctioned Person or a Sanctioned Country. “OFAC” means the U.S. Department of the
Treasury’s Office of Foreign Assets Control. “Sanctioned Country” means a country subject to a
sanctions program identified on the list maintained by OFAC and available at
xxxx://xxx.xxxxx.xxx/xxxxxxx/xxxxxxxxxxx/xxxx/xxx/xxxxx.xxxxx, or as otherwise published from time
to time. “Sanctioned Person” means (i) a person named on the list of Specially Designated
Nationals or Blocked Persons maintained by OFAC available at
xxxx://xxx.xxxxx.xxx/xxxxxxx/xxxxxxxxxxx/xxxx/xxxxxxxx/xxxxx.xxxxx, or as otherwise published from
time to time, or (ii) (A) an agency of the government of a Sanctioned Country, (B) an organization
controlled by a Sanctioned Country, or (C) a person resident in a Sanctioned Country to the extent
subject to a sanctions program administered by OFAC. Organization and Authority. Each
corporation, partnership or limited liability company Borrower and/or guarantor, as applicable, is
duly created, validly existing and in good standing under the laws of the state of its
organization, and has all powers, governmental licenses, authorizations, consents and approvals
required to operate its business as now conducted. Each corporation, partnership or limited
liability company Borrower and/or guarantor, as applicable, is duly qualified, licensed and in good
standing in each jurisdiction where qualification or licensing is required by the nature of its
business or the character and location of its property, business or customers, and in which the
failure to so qualify or be licensed, as the case may be, in the
aggregate, could have a material adverse effect on the business, financial position, results of operations, properties or
prospects of Borrower or any such guarantor. No Litigation. There are no pending or threatened
suits, claims or demands against Borrower or any guarantor that have not been disclosed to Bank by
Borrower in writing, and approved by Bank. Indemnity. Borrower will indemnify Bank and its
affiliates from and against any losses, liabilities, claims, damages, penalties or fines imposed
upon, asserted or assessed against or incurred by Bank arising out of the inaccuracy or breach of
any of the representations contained in this Agreement or any other Loan Documents.
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AFFIRMATIVE COVENANTS. Borrower agrees that from the date hereof and until final payment in full
of the Obligations, unless Bank shall otherwise consent in writing, Borrower will: Access to Books
and Records. Allow Bank, or its agents, during normal business hours, access to the books, records
and such other documents of Borrower as Bank shall reasonably require, and allow Bank, at
Borrower’s expense, to inspect, audit and examine the same and to make extracts therefrom and to
make copies thereof; provided that, absent a Default, the Bank will not conduct any such audit more
than once in any calendar year. Business Continuity. Conduct its business in substantially the
same manner and locations as such business is now and has previously been conducted. Certificate
of Full Compliance From Accountant. Deliver to Bank, with the financial statements required
herein, a certification by Borrower’s independent certified public accountant that Borrower is in
full compliance with the Loan Documents. Compliance with Other Agreements. Comply with all terms
and conditions contained in this Agreement, and any other Loan Documents, and swap agreements, if
applicable, as defined in 11 U.S.C. § 101, as in effect from time to time. Estoppel Certificate.
Furnish, within 15 days after request by Bank, a written statement duly acknowledged of the amount
due under the Loan and identifying each outstanding Letter of Credit, if any, and whether offsets
or defenses exist against the Obligations. Insurance. Maintain adequate insurance coverage with
respect to its properties and business against loss or damage of the kinds and in the amounts
customarily insured against by companies of established reputation engaged in the same or similar
businesses including, without limitation, commercial general liability insurance, workers
compensation insurance, and business interruption insurance; all acquired in such amounts and from
such companies as Bank may reasonably require. Maintain Properties. Maintain, preserve and keep
its property in good repair, working order and condition, making all replacements, additions and
improvements thereto necessary for the proper conduct of its business, unless prohibited by the
Loan Documents. Notice of Default and Other Notices. (a) Notice of Default. Furnish to Bank
immediately upon becoming aware of the existence of any condition or event which constitutes a
Default (as defined in the Loan Documents) or any event which, upon the giving of notice or lapse
of time or both, would become a Default, written notice specifying the nature and period of
existence thereof and the action which Borrower is taking or proposes to take with respect thereto.
(b) Other Notices. Promptly notify Bank in writing of (i) any material adverse change in its
financial condition or its business; (ii) any default under any material agreement, contract or
other instrument to which it is a party or by which any of its properties are bound, or any
acceleration of the maturity of any indebtedness owing by Borrower; (iii) any material adverse
claim against or affecting Borrower or any part of its properties; (iv) the commencement of, and
any material determination in, any litigation with any third party or any proceeding before any
governmental agency or unit that could have a material adverse effect on Borrower; and (v) at least
30 days prior thereto, any change in Borrower’s name or address as shown above, and/or any change
in Borrower’s structure. Other Financial Information. Deliver promptly such other information
regarding the operation, business affairs, and financial condition of Borrower which Bank may
reasonably request. Payment of Debts. Pay and discharge when due, and before subject to penalty
or further charge, and otherwise satisfy before maturity or delinquency, all obligations, debts,
taxes, and liabilities of whatever nature or amount, except those which Borrower in good faith
disputes. Reports and Proxies. Deliver to Bank, promptly, a copy of all financial statements,
reports, notices, and proxy statements, sent by Borrower to stockholders, and all regular or
periodic reports required to be filed by Borrower with any governmental agency or authority.
NEGATIVE COVENANTS. Borrower agrees that from the date hereof and until final payment in full of
the Obligations, unless Bank shall otherwise consent in writing, Borrower will not: Default on
Other Contracts or Obligations. Default on any material contract with or obligation when due to a
third party or default in the performance of any obligation to a third party incurred for money
borrowed. Government Intervention. Permit the assertion or making of any seizure, vesting or
intervention by or under authority of any governmental entity, as a result of which the management of Borrower or any
guarantor is displaced of its authority in the conduct of its respective business or such business
is curtailed or materially impaired. Judgment Entered. Permit the entry of any monetary judgment
or the assessment against, the filing of any tax lien against, or the issuance of any writ of
garnishment or attachment against any property of or debts due that is not stayed, discharged or
otherwise satisfied within thirty (30) days following the entry thereof, or the issuance of any
writ of garnishment or attachment against any such property or debts that is not discharged or
otherwise satisfied within fifteen (15) days following the service thereof on Bank. Retire or
Repurchase Capital Stock. Retire or otherwise acquire any of its capital stock. Notwithstanding
the foregoing Borrower may repurchase stock through its existing stock repurchase program.
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ANNUAL FINANCIAL STATEMENTS. Borrower shall deliver to Bank, within 90 days after the close of
each fiscal year, audited financial statements reflecting its operations during such fiscal year,
including, without limitation, a balance sheet, profit and loss statement and statement of cash
flows, with supporting schedules and in reasonable detail, prepared in conformity with generally
accepted accounting principles, applied on a basis consistent with that of the preceding year. If
audited statements are required, all such statements shall be examined by an independent certified
public accountant acceptable to Bank. The opinion of such independent certified public accountant
shall not be acceptable to Bank if qualified due to any limitations in scope imposed by Borrower or
any other person or entity. Any other qualification of the opinion by the accountant shall render
the acceptability of the financial statements subject to Bank’s approval.
PERIODIC FINANCIAL STATEMENTS. Borrower shall deliver to Bank, within 45 days after the end of
each fiscal quarter, unaudited management-prepared quarterly financial statements including,
without limitation, a balance sheet, profit and loss statement and statement of cash flows, with
supporting schedules; all in reasonable detail and prepared in conformity with generally accepted
accounting principles, applied on a basis consistent with that of the preceding year. Such
statements shall be certified as to their correctness by a principal financial officer of Borrower
and in each case, if audited statements are required, subject to audit and year-end adjustments.
FINANCIAL COVENANTS. Borrower agrees to the following provisions from the date hereof until final
payment in full of the Obligations, unless Bank shall otherwise consent in writing, using the
financial information for Borrower, its subsidiaries, affiliates and its holding or parent company,
as applicable: Total Liabilities to Tangible Net Worth Ratio. Borrower shall, at all times,
maintain a ratio of Total Liabilities to Tangible Net Worth of not more than 0.50 to 1.00. “Total
Liabilities” shall mean all liabilities of Borrower, including capitalized leases and all reserves
for deferred taxes, debt fully subordinated to Bank on terms and conditions acceptable to Bank, and
other deferred sums appearing on the liabilities side of a balance sheet and all obligations as
lessee under off-balance sheet synthetic leases of Borrower, all in accordance with generally
accepted accounting principles applied on a consistent basis. “Tangible Net Worth” shall mean total
assets minus Total Liabilities. For purposes of this computation, the aggregate amount of any
intangible assets of Borrower including, without limitation, goodwill, franchises, licenses,
patents, trademarks, trade names, copyrights, service marks, and brand names, shall be subtracted
from total assets. Current Ratio. Borrower shall, at all times, maintain a Current Ratio of not
less than 2.00 to 1.00. “Current Ratio” shall mean the ratio of Current Assets to Current
Liabilities. “Current Assets” shall mean all assets which are so classified in accordance with
generally accepted accounting principles. “Current Liabilities” shall mean all liabilities which
are so classified in accordance with generally accepted accounting principles.
CONDITIONS PRECEDENT. The obligations of Bank to make the loan and any advances and to issue any
Letters of Credit pursuant to this Agreement are subject to the following conditions precedent:
Letter of Credit Documents. Receipt by Bank of all documents required by Bank in connection with
Letters of Credit, including without limitation, applications therefor, all in form satisfactory to
Bank. Additional Documents. Receipt by Bank of such additional supporting documents as Bank or
its counsel may reasonably request.
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IN WITNESS WHEREOF, Borrower and Bank, on the day and year first written above, have caused this
Agreement to be duly executed under seal.
| eResearch Technology, Inc. | ||||||
| By: | /s/ Xxxxxx X. Xxxxxxxxxx | (SEAL) | ||||
| eRT Investment Corporation | ||||||
| By: | /s/ Xxxxxx X. Xxxxxxxxxx | (SEAL) | ||||
| eRT Tech Corporation | ||||||
| By: | /s/ Xxxxxx X. Xxxxxxxxxx | (SEAL) | ||||
| Wachovia Bank, National Association | ||||||
| By: | /s/ Xxxxx X. Xxxxx | (SEAL) | ||||
Tracking #: 469318
CAT — Deal # 818530 Facility ID 635162
CAT — Deal # 818530 Facility ID 635162
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