[EXECUTION COPY]
REVOLVING CREDIT AND TERM LOAN AGREEMENT
Dated as of October 1, 1997
by and among
DYNAMICS RESEARCH CORPORATION,
DRC ENCODER, INC.,
DRC METRIGRAPHICS, INC.,
DRC SOFTWARE, INC. and
DRC TELECOM, INC.,
as the Borrowers,
and
THE LENDERS PARTY HERETO
and
▇▇▇▇▇ BROTHERS ▇▇▇▇▇▇▇▇ & CO.,
as Agent and as Swing Line Lender
DYNAMICS RESEARCH CORPORATION
CREDIT AGREEMENT
TABLE OF CONTENTS
SECTION PAGE
1. DEFINITIONS AND RULES OF INTERPRETATION 1
1.1. Definitions 1
1.2. Rules of Interpretation 10
2. THE CREDIT FACILITIES 11
2.1. Amounts and Terms 11
2.2. Fees 14
2.3. Reduction of Commitments 15
2.4. Revolving Credit Notes 16
2.5. Term Note 16
2.6. Swing Line Note 16
2.7. Interest on Loans 16
2.8. Requests for Loans 17
2.9. Conversion and Continuation 18
2.10. Funds for Loans 19
3. PREPAYMENT OF THE LOANS; RESERVES 19
3.1. Voluntary Prepayments 19
3.2. Mandatory Prepayments 20
4. CERTAIN GENERAL PROVISIONS 20
4.1. Funds for Payments 20
4.2. Computations 21
4.3. Inability to Determine Adjusted LIBOR 21
4.4. Illegality 21
4.5. Additional Costs, Etc 22
4.6. Capital Adequacy 23
4.7. Certificate 23
4.8. Indemnity 23
4.9. Interest on Overdue Amounts 24
4.10. Mitigation 24
4.11. Joint and Several Obligations 24
5. REPRESENTATIONS AND WARRANTIES 24
5.1 Organization, Standing, etc. of the Borrowers 24
5.2 Subsidiaries 25
5.3 Qualification 25
5.4 Financial Information; Disclosure, etc. 25
5.5 Licenses, etc. 25
5.6 Material Agreements 26
5.7 Tax Returns and Payments 26
5.8 Indebtedness, Liens and Investments, etc. 26
5.9 Title to Properties; Liens 26
5.10 Litigation, etc. 26
5.11 Authorization; Compliance with Other Instruments 27
5.12 Governmental Consent 27
5.13 Regulation U, etc 27
5.14 Employee Retirement Income Security Act of 1974 27
5.15 Environmental Matters 28
5.16 Use of Proceeds 28
5.17 Investment Company Act; Public Utility Holding Company
Act 29
6. AFFIRMATIVE COVENANTS OF THE BORROWERS 29
6.1 Records and Accounts 29
6.2 Financial Statements, Certificates and Information 29
6.3 Legal Existence; Compliance with Laws, etc. 31
6.4 Insurance 31
6.5 Payment of Taxes 31
6.6 Payment of Other Indebtedness, etc. 32
6.7 Further Assurances 32
6.8 Depository Account 32
6.9 Use of Proceeds 32
6.10 No Further Negative Pledges 32
6.11 Regulation U 33
7. CERTAIN NEGATIVE COVENANTS OF THE BORROWERS 33
7.1 Indebtedness 33
7.2 Mortgages, Liens, etc. 34
7.3 Loans, Guarantees and Investments 35
7.4 Leases 36
7.5 Mergers and Consolidations 37
7.6 Sale of Assets 37
7.7 Capital Expenditures 37
7.8 Distributions 38
7.9 Compliance with ERISA 38
7.10 Transactions with Affiliates 38
7.11 Observance of Subordination Provisions, etc. 38
7.12 Environmental Liabilities 38
7.13 Subsidiaries 39
7.14 Material Adverse Change 39
8. FINANCIAL COVENANTS 39
9. DEFAULTS; REMEDIES 40
9.1 Events of Default; Acceleration 40
9.2 Remedies on Default, etc. 42
10. CLOSING CONDITIONS 42
10.1. Loan Documents, etc 42
10.2. Corporate Action 42
10.3. Incumbency Certificate 42
10.4. Opinions of Counsel 42
10.5. Payment of Fees 43
10.6. Real Estate Mortgage 43
11. CONDITIONS TO ALL LOANS 43
11.1. Accuracy of Representations; No Event of Default 43
11.2. No Legal Impediment 43
11.3. Additional Conditions to Facility B Loans 43
12. THE AGENT. 44
12.1. Appointment, Powers and Immunities 44
12.2. Reliance by Agent 44
12.3. Defaults 44
12.4. Rights as a Lender 45
12.5. Indemnification 45
12.6. NonReliance on Agent and Other Lenders 45
12.7. Failure to Act 46
12.8. Resignation of Agent 46
12.9. Cooperation of Lenders 46
12.10. Amendment of 12 46
12.11. Reliance 46
13. SETOFF, ETC 47
14. EXPENSES 47
15. INDEMNIFICATION 48
16. SURVIVAL OF COVENANTS, ETC 48
17. ASSIGNMENT AND PARTICIPATION 48
17.1. Assignment by the Lenders 48
17.2. Assignment by Borrowers 49
17.3 Participations by the Lenders 49
17.4 Replacement of Lender 49
18. FOREIGN LENDER 50
19. NOTICES, ETC. 51
20. GOVERNING LAW 52
21. HEADINGS 52
22. COUNTERPARTS 52
23. ENTIRE AGREEMENT, ETC 53
24. WAIVER OF JURY TRIAL 53
25. CONSENTS, AMENDMENTS, WAIVERS, ETC 53
26. CONFIDENTIALITY 54
27. SEVERABILITY 54
28. NATURE OF LENDER'S OBLIGATIONS 54
SCHEDULES AND EXHIBITS
Schedule 5.2 Subsidiaries
Schedule 5.4 Financial Statements
Schedule 5.5 Licenses
Schedule 5.6 Material Agreements
Schedule 5.8 Existing Indebtedness
Schedule 5.10 Litigation
Schedule 5.12 Consents
Schedule 5.15 Hazardous Materials
Schedule 7.2 Encumbrances
Exhibit A Form of Swing Line Loan Participation Certificate
Exhibit B-1 Form of Facility A Revolving Credit Note
Exhibit B-2 Form of Facility B Revolving Credit Note
Exhibit B-3 Form of Term Note
Exhibit B-4 Form of Swing Line Note
Exhibit C Form of Loan Request
Exhibit D Form of Compliance Certificate
Exhibit E Form of Opinion of Borrowers' Counsel
REVOLVING CREDIT AND TERM LOAN AGREEMENT
This REVOLVING CREDIT AND TERM LOAN AGREEMENT is made as of the 1st
day of October, 1997, by and among DYNAMICS RESEARCH CORPORATION, a
Massachusetts corporation ("DRC"), DRC ENCODER, INC., a Massachusetts
corporation ("Encoder"), DRC METRIGRAPHICS, INC., a Massachusetts
corporation ("Metrigraphics"), DRC SOFTWARE, INC., a Massachusetts
corporation ("Software"), DRC TELECOM, INC., a Massachusetts corporation
("Telecom"), and ▇▇▇▇▇ BROTHERS ▇▇▇▇▇▇▇▇ & CO., a New York limited
partnership ("BBH&Co"), as a Lender (as defined below), as Agent (as
defined below) for itself and the other Lenders and as Swing Line Lender
(as defined below), BANKBOSTON, N.A., a national banking association
("BankBoston"), THE CHASE MANHATTAN BANK, a New York banking corporation
("Chase"), STATE STREET BANK AND TRUST COMPANY, a Massachusetts trust
company ("State Street"), CITIZENS BANK OF MASSACHUSETTS, a
Massachusetts financial institution ("Citizens") and the other Lenders
from time to time party hereto.
1. DEFINITIONS AND RULES OF INTERPRETATION.
1.1. Definitions. The following terms shall have the meanings
set forth in this 1 or elsewhere in the provisions of this Credit
Agreement referred to below:
ABN AMRO Loan. The meaning specified in 8(d).
Adjusted LIBOR. With respect to any LIBOR Loan for any
Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/100 of 1%) equal to (a) the LIBOR for such
Interest Period multiplied by (b) the Statutory Reserve Rate.
Affected Lender. The meaning specified in 17.4.
Affiliate. As applied to any Person, a spouse of such Person,
any relative (by blood, adoption or marriage) of such Person within the
third degree, any managing member, director or officer of such Person,
any corporation, association, firm or other entity of which such Person
is a managing member, director or officer and any other Person directly
or indirectly controlling, controlled by or under direct or indirect
common control with such Person.
Agent. BBH&Co in its capacity as agent for the Lenders
hereunder, as well as its successors and assigns in such capacity
pursuant to 12.8.
Available Facility A Commitment. The Facility A Commitment
less the sum of (i) the outstanding principal amounts advanced under
Facility A and (ii) the outstanding principal amounts advanced as Swing
Line Loans.
Available Facility B Commitment. The Facility B Commitment
less the outstanding principal amounts advanced under Facility B.
Available Total Commitment. The Available Facility A
Commitment plus the Available Facility B Commitment.
Base Rate. For any date, a rate per annum equal to the higher
of (i) the Federal Funds Effective Rate in effect on such day plus one-
half of one percent (.50%) or (ii) the annual rate of interest publicly
announced from time to time by the Agent as its "commercial base rate"
in effect on such day.
Base Rate Loans. Loans bearing interest calculated by reference
to the Base Rate.
Base Rate Margin. The meaning specified in 2.7(a).
Borrower. Each of DRC, Encoder, Metrigraphics, Software and Telecom.
Business Day. Any day on which banking institutions in
Boston, Massachusetts are open for the transaction of banking business
and, in the case of LIBOR Loans, also a day which is a LIBOR Business
Day.
Capital Expenditures. Any payment made directly or indirectly
by DRC or any of its Subsidiaries for the purpose of acquiring or
constructing fixed assets, real property or equipment which in
accordance with GAAP would be added as a debit to the Consolidated fixed
asset account of DRC and its Subsidiaries, including without limitation
amounts paid or payable under any conditional sale or other title
retention agreement or under any lease or other periodic payment
arrangement which is of such a nature that payment obligations of a
Borrower thereunder would be required by GAAP to be capitalized and
shown as liabilities on the Consolidated balance sheet of DRC and its
Subsidiaries.
Capitalization. As of the date of any determination thereof,
the sum of (a) Tangible Net Worth and (b) Indebtedness for borrowed
money of DRC and its Subsidiaries on a Consolidated basis.
Capitalized Leases. Leases under which a Person is the lessee
or obligor, the discounted future rental payment obligations under which
are required to be capitalized on the balance sheet of such Person in
accordance with GAAP.
Change in Control. Shall be deemed to have occurred if any
Person or group (within the meaning of Rule 13d-5 of the Securities and
Exchange Commission as in effect on the date hereof) shall own directly
or indirectly, beneficially or of record, shares representing more than
50%, on a fully-diluted basis, of the aggregate ordinary voting power of
DRC.
Closing Date. The first date on which the conditions set
forth in 10 and 11 have been satisfied and any Loans are made.
Code. The Internal Revenue Code of 1986, as amended.
Commitment. As to any Lender, such Lender's portion of the
Total Commitment equal to such Lender's Percentage.
Commitment Fee. The meaning specified in 2.2(b)
Consolidated. With reference to any term herein, shall mean
that term as applied to the accounts of DRC and its Subsidiaries,
consolidated in accordance with GAAP.
Conversion Date. October 1, 1999.
Credit Agreement. This Credit Agreement, including the
Schedules and Exhibits hereto.
Current Lines of Business. The lines of business conducted by
the Borrower and its Subsidiaries on the Closing Date and any business
and activities incidental thereto, including: (i) the provision of
computer systems services and other engineering and management support
services to the Department of Defense and other customers, including the
development and operation of computer-based management information
systems in which software programs are applied to collect, analyze,
store and retrieve information relating to component parts of weapons
systems; (ii) the manufacture of position and motion sensors and other
precision components, including encoders that measure movement, and
precision-patterned glass and electroformed metal products; (iii) the
telephone fraud detection and control business; and (iv) the object-
oriented development software business.
Debt Coverage Certificate. The meaning specified in 2.7(a)
Debt Coverage Ratio. The meaning specified in 2.7(a).
Dollars or $. Dollars in lawful currency of the United States
of America.
Drawdown Date. The date on which any Loan is made or is to be
made, and the date on which any Loan is converted or continued in
accordance with 2.9.
EBITDA. For any period, the Consolidated Net Income of DRC
and its Subsidiaries for such period adjusted by adding back thereto
amounts deducted in computing such Consolidated Net Income in respect of
(a) Interest Expense of DRC and its Subsidiaries, (b) taxes in respect
of income and profits of DRC and its Subsidiaries and (c) depreciation
and amortization of DRC and its Subsidiaries.
Employee Benefit Plan. Any employee benefit plan within the
meaning of Section 3(3) of ERISA maintained or contributed to by a
Borrower or any ERISA Affiliate, or with respect to which a Borrower or
any ERISA Affiliate has actual or contingent liability, in each case
other than a Multiemployer Plan.
Environmental Laws. Any and all applicable current and future
treaties, laws, rules, regulations, codes, ordinances, orders, decrees,
judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by any governmental authority, relating in
any way to the environment, preservation or reclamation of natural
resources or human exposure to or the management or Release or
threatened Release of any Hazardous Material.
ERISA. The Employee Retirement Income Security Act of 1974,
as amended.
ERISA Affiliate. Any Person which is treated as a single
employer with a Borrower under Section 414 of the Code or Section 4001
of ERISA.
ERISA Reportable Event. A reportable event with respect to a
Guaranteed Pension Plan within the meaning of 4043 of ERISA and the
regulations promulgated thereunder as to which the requirement of notice
has not been waived.
Event of Default. The meaning specified in 9.1.
Facility A. The meaning specified in 2.1.
Facility A Commitment. The meaning specified in 2.1.
Facility A Revolving Credit Note. The meaning specified in 2.4.
Facility A Maturity Date. October 1, 2000, subject to
extension pursuant to 2.4.
Facility B. The meaning specified in 2.1.
Facility B Commitment. The meaning specified in 2.1.
Facility B Revolving Credit Note. The meaning specified in 2.4.
Federal Funds Effective Rate. For any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the
rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published
on the next succeeding Business Day by the Federal Reserve Bank of New
York, or, if such rate is not so published for any day that is a
Business Day, the average (rounded upwards, if necessary, to the next
1/100 of 1%) of the quotations for such day for such transactions
received by the Agent from three Federal funds brokers of recognized
standing selected by it.
GAAP. Generally accepted accounting principles in the United
States of America.
Guaranteed Pension Plan. Any Employee Benefit Plan the
benefits of which are guaranteed on termination in full or in part by
the PBGC pursuant to Title IV of ERISA.
Hazardous Materials. All explosive or radioactive substances
or wastes, hazardous or toxic substances or wastes, pollutants, solid,
liquid or gaseous wastes, including petroleum or petroleum distillates,
asbestos or asbestos-containing materials, polychlorinated biphenyls or
materials or equipment containing polychlorinated biphenyls, radon gas,
infectious or medical wastes and all other substances or wastes of any
nature regulated pursuant to any Environmental Law.
Indebtedness. All obligations, contingent and otherwise, that
in accordance with GAAP should be classified upon a Person's balance
sheet as liabilities, including: (a) all debt and similar monetary
obligations, whether direct or indirect; (b) all liabilities secured by
any mortgage, pledge, security interest, lien, charge, or other
encumbrance existing on property owned or acquired by such Person
subject thereto, whether or not the liability secured thereby shall have
been assumed; (c) all obligations in respect of Capitalized Leases; and
(d) all guarantees, endorsements and other contingent obligations
whether direct or indirect in respect of indebtedness owed by others,
including any obligation to supply funds to or in any manner to invest
in, directly or indirectly, the debtor, to purchase indebtedness, or to
assure the owner of indebtedness against loss, through an agreement to
purchase goods, supplies, or services for the purpose of enabling the
debtor to make payment of the indebtedness held by such owner or
otherwise, and the obligations to reimburse the issuer in respect of any
letters of credit.
Interest Expense. For any period, the aggregate amount
(determined in accordance with GAAP) of interest paid or payable during
such period by any Person in respect of all Indebtedness for borrowed
money, Capitalized Leases and the deferred purchase price of property.
Interest Payment Date. (a) As to any Base Rate Loan, March 31,
June 30, September 30 and December 31 and any date on which such Base
Rate Loan is converted to a LIBOR Loan; and (b) as to any LIBOR Loan,
the last day of the Interest Period relating to such LIBOR Loan;
provided, that in the event that such Interest Period is 180 days, the
90th day and the last day of such Interest Period.
Interest Period. With respect to each LIBOR Loan, the period
of one, two, three or six months, as selected by a Borrower commencing
on the Drawdown Date of such LIBOR Loan; provided that the foregoing
provisions relating to Interest Periods are subject to the following:
(a) if any Interest Period would otherwise end on a day that
is not a LIBOR Business Day, that Interest Period shall be extended to
the next succeeding LIBOR Business Day unless the result of such
extension would be to carry such Interest Period into another calendar
month, in which event such Interest Period shall end on the immediately
preceding LIBOR Business Day; and
(b) any Interest Period that would otherwise extend beyond
the Maturity Date shall end on the Maturity Date.
Investments. All expenditures made and all liabilities
incurred (contingently or otherwise), without duplication, for the
acquisition of stock or Indebtedness of, or for loans, advances, capital
contributions or transfers of property to, or in respect of any
guaranties (or other commitments as described under Indebtedness), or
obligations of, any Person. In determining the aggregate amount of
Investments outstanding at any particular time: (a) the amount of any
Investment represented by a guaranty shall be taken at not less than the
principal amount of the obligations guaranteed and still outstanding;
(b) there shall be included as an Investment all interest accrued with
respect to Indebtedness constituting an Investment unless and until such
interest is paid; (c) there shall be deducted in respect of each such
Investment any amount received as a return of capital (but only by
repurchase, redemption, retirement, repayment, liquidating dividend or
liquidating distribution); (d) there shall not be deducted in respect of
any Investment any amounts received as earnings on such Investment,
whether as dividends, interest or otherwise, except that accrued
interest included as provided in the foregoing clause (b) may be
deducted when paid; and (e) there shall not be deducted from the
aggregate amount of Investments any decrease in the value thereof.
Lenders. Each Person (including the Swing Line Lender) which
may from time to time own a Percentage of the Total Commitments,
including BBH&Co in its capacity as a Lender and as the Swing Line
Lender; provided, however, that the term "Lender" shall not include any
Participant.
LIBOR. With respect to any LIBOR Loan for any Interest
Period, the rate appearing on Page 3750 of the Telerate Service (or on
any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to
those currently provided on such page of such Service, as determined by
the Agent from time to time for purposes of providing quotations of
interest rates applicable to Dollar deposits in the London interbank
market) at approximately 11:00 a.m., London time, three Business Days
prior to the commencement of such Interest Period, as the rate for U.S.
dollar deposits with a maturity comparable to such Interest Period. In
the event that such rate is not available at such time for any reason,
the "LIBOR" with respect to such LIBOR Loan for such Interest Period
shall be the rate at which dollar deposits of $5,000,000 and for a
maturity comparable to such Interest Period are offered by the principal
London office of the Agent (or, if the Agent does not have such an
office, such office of any other Lender, as selected by the Agent) in
immediately available funds in the London interbank market at
approximately 11:00 a.m., London time, three Business Days prior to the
commencement of such Interest Period.
LIBOR Business Day. Any Business Day on which commercial
banks are open for international business (including dealings in Dollar
deposits) in London, England.
LIBOR Loans. Loans bearing interest calculated by reference
to the Adjusted LIBOR.
LIBOR Margin. The meaning specified in 2.7(a).
Licenses. The meaning specified in 5.5.
Loan Documents. This Credit Agreement, the Notes and any
other document executed and delivered in connection herewith.
Loan Request. The meaning specified in 2.8.
Loans. The Swing Line Loan and the Revolving Credit Loans
made under Facility A and the Revolving Credit Loans and the Term Loans
made under Facility B.
Maturity Date. October 1, 2002.
▇▇▇▇▇'▇. ▇▇▇▇▇'▇ Investors Service, Inc.
Multiemployer Plan. Any multiemployer plan within the meaning
of Section 3(37) of ERISA maintained or contributed to by a Borrower or
any ERISA Affiliate or with respect to which a Borrower or any ERISA
Affiliate has actual or contingent liability.
Net Income. Income (or loss), excluding extraordinary items
of income (or loss), of a Person for the period in question (taken as a
cumulative whole), after deducting therefrom all operating expenses,
reserves and other proper deductions (including any minority interest
expense), all determined in accordance with GAAP. For purposes hereof,
the Consolidated Net Income of DRC and its Subsidiaries shall include
the Net Income of any other Persons acquired prior to the date that it
either becomes a Subsidiary of such Borrower, is merged into or
consolidated with such Borrower, or such other Person's assets are
assigned, directly or indirectly, to such Borrower, provided that, in
the case of each of the foregoing, (i) the Net Income of such other
Person shall only be so included to the extent that such Net Income is
attributable to such other Person or to such assets as are acquired from
such other Person for the relevant period, all to the satisfaction of
the Agent, and (ii) any discrepancies in accounting treatment between
such Borrower and such other Person are conformed so as to make the
foregoing determination, to the satisfaction of the Agent.
Notes. The Swing Line Note, the Revolving Credit Notes and
the Term Notes.
Obligations. All indebtedness, obligations and liabilities of
the Borrowers to the Lenders, individually or collectively, existing on
the date of this Credit Agreement or arising thereafter, direct or
indirect, joint or several, absolute or contingent, matured or
unmatured, liquidated or unliquidated, secured or unsecured, arising by
contract, operation of law or otherwise, arising or incurred under the
Loan Documents or in respect of any of the Loans or the Notes or other
instruments at any time evidencing any thereof.
Outstanding. With respect to the Loans, the aggregate unpaid
principal thereof as of any date of determination.
Participant. The meaning specified in 17.3.
PBGC. The Pension Benefit Guaranty Corporation created by
4002 of ERISA and any successor entity or entities having similar
responsibilities.
Percentage. The meaning specified in 2.1(a).
Permitted Liens. The meaning specified in 7.2.
Person. Any individual, corporation, partnership, limited
liability company, trust, unincorporated association, joint venture,
organization, business, or other legal entity, and any government or any
governmental agency or political subdivision thereof.
Projections. DRC's forecasted balance sheets, profit and loss
statements and cash flow statements, all prepared on a basis consistent
with DRC's historical financial statements, together with appropriate
supporting details and statements of underlying assumptions.
Qualified Plan. A pension plan (as defined in Section 3(2) of
ERISA) intended to be tax-qualified under Section 401(a) of the IRC
which a Borrower or any ERISA Affiliate sponsors, maintains, or to which
any such Person makes, is making, or is obligated to make,
contributions, or, in the case of a multiple-employer plan (as described
in Section 4064(a) of ERISA), has made contributions at any time during
the immediately preceding period covering at least five (5) plan years,
but excluding any Multiemployer Plan.
Record. The grid attached to each Revolving Credit Note, or
the continuation of such grid, or any other similar record, including
computer records, maintained by the Agent with respect to any Revolving
Credit Loan referred to in the Revolving Credit Notes.
Refunded Swing Line Loan. The meaning specified in 2.1(d).
Release. Any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping,
disposing, depositing, dispersing, emanating or migrating of any
Hazardous Material in, into, onto or through the environment.
Replacement Lender. The meaning specified in 17.4.
Required Lenders. Any two or more Lenders holding in the
aggregate at least sixty-six and two-thirds percent (66 2/3%) of the
amounts Outstanding on the Loans or, if no amounts are Outstanding under
Facility A or Facility B, of the Percentages of the Total Commitment.
Revolving Credit Loan. Any revolving credit loan (including
any Swing Line Loan) made under Facility A or any revolving credit loan
made under Facility B pursuant to 2.1(b).
Revolving Credit Notes. The meaning specified in 2.4.
S&P. Standard & Poor's Ratings Group, a division of the
McGraw Hill Companies, Inc.
Senior Debt. All Indebtedness of a Person and its
Subsidiaries (without duplication) in respect of borrowed money,
Capitalized Leases and the deferred purchase price of property, other
than Subordinated Debt.
Statutory Reserve Rate. A fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is
the number one minus the aggregate of the maximum reserve percentages
(including any marginal, special, emergency or supplemental reserves)
expressed as a decimal established by the Board of Governors of the
Federal Reserve System of the United States to which any of the Lenders
is subject for eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of such Board), as
appropriately adjusted by mutual agreement of the Agent and the Required
Lenders to the extent that any Lender is not subject to, or is subject
to different reserve requirements under, such regulations. Such reserve
percentages shall include those imposed pursuant to such Regulation D.
LIBOR Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for
proration, exemptions or offsets that may be available from time to time
to any Lender under such Regulation D or any comparable regulation. The
Statutory Reserve Rate shall be adjusted automatically on and as of the
effective date of any change in any reserve percentage.
Subordinated Debt: (a) The existing Indebtedness of the
Borrowers which is designated as "Subordinated Debt" in Schedule 5.8
attached hereto, and (b) any other Indebtedness of a Borrower which
matures in its entirety and by its terms (or by the terms of the
instrument under which it is outstanding and to which appropriate
reference is made in the instrument evidencing such Subordinated Debt)
is made subordinate and junior in right of payment to the Notes and to
each Borrower's other obligations to the Lenders hereunder by provisions
reasonably satisfactory in form and substance to the Required Lenders
and their counsel.
Subsidiary. Any partnership, corporation, association, trust,
or other business entity of which DRC shall at any time own directly or
indirectly through a Subsidiary or Subsidiaries at least a majority (by
number of votes) of the outstanding Voting Interests.
Swing Line Availability. The meaning specified in 2.1(d).
Swing Line Lender. BBH&Co.
Swing Line Loan. The meaning specified in 2.1(d).
Swing Line Note. The meaning specified in 2.6.
Tangible Net Worth. As of the date of any determination
thereof, the difference of: (a) DRC's stockholders' equity; minus (b)
the sum of: (i) all intangible assets of DRC and its Subsidiaries; and
(ii) all amounts due to DRC from any of its Affiliates (other than any
other Borrower), in each case calculated on a Consolidated basis.
Term Loans. Any term loans made under Facility B pursuant to
2.1(c).
Term Note. The meaning specified in 2.5.
Total Commitment. The meaning specified in 2.1.
Unfunded Benefit Liability means the excess of a Qualified
Plan's or a Multiemployer Plan's benefit liabilities (as defined in
Section 4001(a)(16) of ERISA) over the current value of such plan's
assets, determined in accordance with the assumptions used by the plan's
actuaries for funding the plan pursuant to Section 412 of the Code for
the applicable plan year.
Voting Interests. Stock or similar interests, of any class or
classes (however designated), the holders of which are at the time
entitled, as such holders, to vote for the election of a majority of the
directors (or persons performing similar functions) of the partnership,
corporation, association, trust or other business entity involved,
whether or not the right so to vote exists by reason of the happening of
a contingency.
1.2. Rules of Interpretation.
(a) A reference to any document or agreement shall include
such document or agreement as amended, modified or supplemented from
time to time in accordance with its terms and the terms of this Credit
Agreement.
(b) The singular includes the plural and the plural
includes the singular.
(c) A reference to any law includes any amendment or
modification to such law.
(d) A reference to any Person includes its permitted
successors and permitted assigns.
(e) Accounting terms not otherwise defined herein have the
meanings assigned to them by GAAP applied on a consistent basis by the
accounting entity to which they refer.
(f) The words "include", "includes" and "including" are
not limiting.
(g) Reference to a particular "" refers to that section
of this Credit Agreement unless otherwise indicated.
(h) The words "herein", "hereof", "hereunder" and words of
like import shall refer to this Credit Agreement as a whole and not to
any particular section or subdivision of this Credit Agreement.
(i) Except as otherwise expressly provided herein, all
terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; provided that, if
a Borrower notifies the Agent that such Borrower requests an amendment
to any provision hereof to eliminate the effect of any change occurring
after the date hereof in GAAP or in the application thereof on the
operation of such provision (or if the Agent notifies a Borrower that
the Required Lenders request an amendment to any provision hereof for
such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such
provision shall be interpreted on the basis of GAAP as in effect and
applied immediately before such change shall have become effective until
such notice shall have been withdrawn or such provision amended in
accordance herewith.
2. THE CREDIT FACILITIES.
2.1. Amounts and Terms of the Facilities.
(a) Commitments. The Borrowers wish to establish one revolving
credit facility and one standby facility with the Lenders in an
aggregate principal amount at any one time outstanding not in excess of
$45,000,000. The two credit facilities shall consist of (i) Facility A,
a revolving credit facility in an aggregate principal amount at any one
time outstanding not in excess of $30,000,000 (as such amount may be
reduced from time to time pursuant to Section 2.3, the "Facility A
Commitment") and (ii) Facility B, a standby revolving credit facility,
convertible into a term loan on the Conversion Date, in an aggregate
principal amount at any one time outstanding not in excess of
$15,000,000 (as such amount may be reduced from time to time pursuant to
Section 2.3, and on or after the Conversion Date, pursuant to Section
3.1, the "Facility B Commitment"). The Facility A Commitment and the
Facility B Commitment are collectively referred to as the "Total
Commitment". Each Lender is severally willing to establish such
revolving credit facility and such standby credit facility on behalf of
the Borrowers, subject to the terms and conditions hereafter set forth,
in the aggregate maximum amounts at any one time outstanding set forth
opposite each Lender's name and in the respective percentages set forth
opposite each Lender's name which shall be applicable to such revolving
credit facility and such standby credit facility hereunder (hereinafter
referred to as such Lender's "Percentage"):
Percentage
of Total
Lender Commitment Commitment
BBH&Co $12,000,000 26.67%
BankBoston $9,000,000 20.00%
Chase $9,000,000 20.00%
State Street $9,000,000 20.00%
Citizens $6,000,000 13.33%
TOTAL $45,000,000 100.00%
(b) Revolving Loans. Subject to the terms and conditions set
forth in this Credit Agreement, each Lender hereby severally establishes
(i) one revolving credit facility in favor of the Borrowers in the
individual principal amount of such Lender's Percentage of the
Facility A Commitment and (ii) one standby revolving credit facility in
favor of the Borrowers in the individual principal amount of such
Lender's Percentage of the Facility B Commitment, the two credit
facilities being in the aggregate principal amount of such Lender's
Percentage of the Total Commitment. Each Lender agrees to lend to any
Borrower, and any Borrower may borrow, repay, and, with respect to
Facility A, reborrow from time to time between the Closing Date and the
Facility A Maturity Date and, with respect to Facility B, reborrow from
time to time between the Closing Date and the Conversion Date, in either
case upon notice by any Borrower to the Agent given in accordance with
2.8, such sums as are requested by such Borrower up to a maximum
aggregate principal amount outstanding (after giving effect to all
amounts requested) at any one time equal to such Lender's Percentage of
the Available Total Commitment; provided, however, that the proceeds of
any and all borrowings and reborrowings under Facility A and Facility B
shall be used solely for the respective purposes described in 5.16.
All Revolving Credit Loans shall be made as LIBOR Loans or Base Rate
Loans, at a Borrower's option. LIBOR Loans may be converted to Base
Rate Loans and Base Rate Loans may be converted to LIBOR Loans. LIBOR
Loans shall be continued or converted to Base Rate Loans under the
circumstances, and subject to the conditions, specified in 2.9. Each
request for a Revolving Credit Loan hereunder shall constitute a
representation and warranty by each of the Borrowers that the conditions
set forth in 10 and 11, in the case of the initial Revolving Credit
Loans to be made on the Closing Date, and 11, in the case of all other
Revolving Credit Loans, have been satisfied on the date of such request.
(c) Term Loans. Each Lender hereby severally agrees that, at
the request of any Borrower, absent an Event of Default and subject to
the terms and conditions hereinafter set forth and upon the simultaneous
payment in full of principal of, and interest on, all Revolving Credit
Loans then outstanding under Facility B, it shall make a Term Loan to
such Borrower on the Conversion Date which shall be in a principal
amount not exceeding the then outstanding principal amounts which such
Lender has advanced under Facility B; provided, however, that such
payment in full of the Revolving Credit Loans then outstanding under
Facility B and the making of the Term Loans shall occur simultaneously
and the proceeds of such Term Loans shall be applied to such payment of
the Revolving Credit Loans under Facility B. Any request by a Borrower
for the Term Loans hereunder shall be made by written notice to the
Agent at least three (3) Business Days prior to the Conversion Date, and
shall be made pro rata from each of the Lenders in accordance with their
respective Percentages of the Total Commitment. Such notice shall
specify the principal amount of the Term Loans. Upon receipt of such
request for the Term Loans hereunder, the Agent shall promptly notify
the other Lenders, specifying the principal amount thereof. Each Lender
shall make its Term Loan hereunder on the Conversion Date by delivering
to the Agent the amount thereof in immediately available funds (except
to the extent the proceeds of such Term Loan are to be applied
simultaneously to the payment of the Revolving Credit Note payable to
such Lender as aforesaid), by not later than 1:00 p.m., Boston time, on
the Conversion Date. The Agent shall credit the amount of any such
funds provided by the Lenders to the account designated by the Borrower
requesting a Term Loan or, if such Borrower does not designate any
account, to DRC's regular deposit account with the Agent.
(d) Swing Line Loans.
(i) On any date prior to the Facility A Maturity Date on
which the Agent receives any Loan Request in respect of the Available
Facility A Commitment pursuant to 2.8, designated as a Swing Line Loan,
the Agent promptly shall notify the Swing Line Lender and, subject to
the terms and conditions hereof, the Swing Line Lender shall, on the
date the Agent receives such Loan Request, make an advance (each a
"Swing Line Loan") in accordance with any such notice. The aggregate
amount of Swing Line Loans at any time outstanding shall not exceed the
lesser of (A) $3,000,000 and (B) the Available Facility A Commitment
("Swing Line Availability"). Until the Facility A Maturity Date, any
Borrower may from time to time borrow, repay and reborrow under this
2.1(d). Each Swing Line Loan shall be made pursuant to a Loan Request
in respect of the Available Facility A Commitment pursuant to 2.8.
Each such Loan Request must be given no later than 12:00 p.m. (Boston
time) on the Business Day of the proposed Swing Line Loan.
Notwithstanding any other provision of this Agreement or the other Loan
Documents, the Swing Line Loans shall constitute Base Rate Loans. The
Borrowers shall repay the aggregate outstanding principal amount of each
Swing Line Loan upon demand therefor by the Agent, provided that (i)
absent an Event of Default or any other event which, with the giving of
notice or passage of time or both, would constitue an Event of Default,
the Agent shall not make such demand prior to the Business Day next
succeeding the date on which such Swing Line Loan is made and (ii) all
amounts of principal and accrued interest outstanding on the Facility A
Maturity Date or the earlier maturity by acceleration or otherwise shall
be paid in full on such date.
(ii) The Swing Line Lender, at any time and from time to
time in its sole and absolute discretion, may on behalf of each Borrower
(and each Borrower hereby irrevocably authorizes the Swing Line Lender
to so act on its behalf) request each Lender (including the Swing Line
Lender in its capacity as a Lender) to make a Revolving Credit Loan
under Facility A to such Borrower (which shall be a Base Rate Loan) in
an amount equal to such Lender's Percentage of the aggregate principal
amount of the Swing Line Loans made to such Borrower (the "Refunded
Swing Line Loan") outstanding on the date such notice is given. Unless
any of the events described in 9.1(f) or 9.1(g) shall have occurred (in
which event the procedures of 2.1(d)(iii) shall apply) and regardless
of whether the conditions precedent set forth in this Credit Agreement
to the making of a Revolving Credit Loan are then satisfied, each Lender
shall disburse directly to the Agent such Lender's Percentage of the
Refunded Swing Line Loan on behalf of the Swing Line Lender, prior to
1:00 p.m. (Boston time), in immediately available funds on the Business
Day next succeeding the date such notice is given. The proceeds of such
Revolving Credit Loans shall be immediately paid to the Swing Line
Lender and applied to repay the Refunded Swing Line Loan.
(iii) If, prior to refunding any Swing Line Loan pursuant
to 2.1(d)(ii), one of the events described in 9.1(f) or 9.1(g) shall
have occurred, then, subject to the provisions of 1.1(d)(iv) below,
each Lender will, on the date such Revolving Credit Loan was to have
been made for the benefit of a Borrower, purchase from the Swing Line
Lender an undivided participation interest in the Swing Line Loan in an
amount equal to its Percentage of such Swing Line Loan. Upon request,
each Lender will promptly transfer to the Swing Line Lender, in
immediately available funds, the amount of its participation and upon
receipt thereof the Swing Line Lender will deliver to such Lender a
Swing Line Loan Participation Certificate, substantially in the form of
Exhibit A attached hereto, dated the date of receipt of such funds and
in such amount.
(iv) Each Lender's obligation to make Revolving Credit
Loans and to purchase participating interests in accordance with this
52.1(d) shall be absolute and unconditional and shall not be affected by
any circumstance, including (A) any setoff, counterclaim, recoupment,
defense or other right which such Lender may have against the Swing Line
Lender, the Agent, any Borrower or any other Person for any reason
whatsoever, (B) the occurrence or continuance of any Event of Default or
any event which, with the giving of notice or passage of time or both
would constitute an Event of Default, (C) any inability of a Borrower to
satisfy the conditions precedent to borrowing set forth in this Credit
Agreement on the date upon which such participating interest is to be
purchased or (D) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing. If any Lender does not
make available to the Agent or the Swing Line Lender, as applicable, the
amount required pursuant to 2.1(d)(ii) or 2.1(d)(iii), as the case may
be, the Swing Line Lender shall be entitled to recover such amount on
demand from such Lender, together with interest thereon for each day
from the date of non-payment until such amount is paid in full at a rate
equal to the Base Rate plus the Base Rate Margin.
2.2. Fees.
(a) Funding Fee. The Borrowers agree to pay to the Agent for
the ratable account of each Lender, on the date of each Revolving Credit
Loan under Facility B, a funding fee (the "Funding Fee") calculated at
the rate of 0.5% of such Revolving Credit Loan under Facility B.
(b) Commitment Fee. The Borrowers agree to pay to the Agent
for the ratable account of each Lender, on each date that DRC delivers
to the Agent a Debt Coverage Certificate pursuant to 2.7(a) and on the
Facility A Maturity Date, a commitment fee (the "Commitment Fee")
calculated at the rate per annum set forth below on (i) at any time
prior to the Conversion Date, the daily average unused portion of such
Lender's portion of the Available Total Commitment during the
immediately preceding fiscal quarter of DRC or, if applicable, the
portion thereof ending prior to the Conversion Date (adjusted as
appropriate for any reduction or termination of any portion of the Total
Commitment pursuant to 2.3 during the immediately preceding fiscal
quarter or portion thereof), and (ii) at any time on or after the
Conversion Date, the daily average unused portion of such Lender's
portion of the Available Facility A Commitment during the immediately
preceding fiscal quarter of the Borrower or, if applicable, the portion
thereof commencing on or after the Conversion Date (adjusted as
appropriate for any reduction or termination of any portion of the
Facility A Commitment pursuant to 2.3 during the immediately preceding
fiscal quarter or portion thereof). The Commitment Fee shall be
computed on the basis of the actual number of days elapsed in a year of
360 days and shall be payable in arrears.
Debt Commitment Fee
Coverage Ratio
< 1.5 .20%
> 1.5 to < 2.0 .25%
> 2.0 to < 2.5 .30%
> 2.5 .35%
Notwithstanding the foregoing, the Commitment Fee shall be .35 %
during any period when (i) an Event of Default shall have occurred and
be continuing and shall not have been waived or (ii) the Debt Coverage
Certificate in respect of the immediately preceding Fiscal quarter shall
not have been delivered when required by 2.7(a).
(c) Agent's Fees. The Borrowers agree to pay to the Agent, for
the Agent's own account, such other fees as DRC and the Agent have
heretofore agreed upon in writing.
2.3. Reduction of Commitments. Subject to the terms and
conditions of 3, each Borrower shall have the right at any time and
from time to time upon three (3) Business Days' prior written notice to
the Agent (which shall in turn give a prompt written notice to each
Lender) to reduce by $1,000,000 or a multiple of $1,000,000 in excess
thereof or terminate entirely any portion of the Facility A Commitment
and/or of the Facility B Commitment, pro rata in accordance with each
Lender's Percentage, whereupon the Facility A Commitment and/or the
Facility B Commitment, as applicable, shall be reduced accordingly or,
as the case may be, terminated. Upon the effective date of any such
reduction or termination, the Borrowers shall pay to the Agent for the
ratable account of each Lender the full amount of any Commitment Fee
payable pursuant to 2.2(b) then accrued on the amount of the reduction.
No reduction of the Facility A Commitment and/or the Facility B
Commitment, as applicable, may be reinstated. Concurrently with each
reduction of any such commitment pursuant to this 2.3, the amount
specified in 2.1(a) as the amount of the Facility A Commitment and/or
Facility B Commitment, as the case may be, for the period in which such
reduction is made and for each subsequent period shall be reduced by an
amount equal to the amount of such reduction.
2.4. Revolving Credit Notes. The Revolving Credit Loans made by
the Lenders in respect of Facility A and Facility B shall each be
evidenced by a single promissory note of the Borrowers in substantially
the form of Exhibit B-1 attached hereto (the "Facility A Revolving
Credit Note") and Exhibit B-2 attached hereto (the "Facility B Revolving
Credit Note" and, collectively with the Facility A Revolving Credit
Note, the "Revolving Credit Notes"), each dated as of the Closing Date
and completed with appropriate insertions. The Revolving Credit Notes
shall be payable to the order of the Agent for the ratable account of
each Lender in principal amounts equal to the Facility A Commitment and
the Facility B Commitment, respectively, or, if less, the aggregate
outstanding amount of all Revolving Credit Loans made by the Lenders in
respect of the applicable Facility, plus interest accrued thereon, as
set forth below. The Borrowers irrevocably authorize the Agent to make
or cause to be made, at or about the time of the Drawdown Date of any
Revolving Credit Loans under Facility A and/or Facility B or at the time
of receipt of any payment of principal or interest on any Revolving
Credit Note, an appropriate notation on its Record reflecting the making
of such Revolving Credit Loans or (as the case may be) the receipt of
such payment and the respective pro-rata allocations to each Lender in
accordance with its respective Percentage of the Total Commitment. The
Agent shall record the outstanding amount of the Revolving Credit Loans
on the Record as prima facie evidence of the principal amount thereof
owing and unpaid to the Agent for the ratable account of the Lenders,
but the failure to record, or any error in so recording, any such amount
on the Record shall not limit or otherwise affect the obligations of the
Borrowers hereunder or under the Revolving Credit Notes to make payments
of principal of or interest on the Revolving Credit Notes when due. All
Facility A Revolving Credit Notes shall be due and payable on the
Facility A Maturity Date, provided that the Facility A Maturity Date
may, with the approval of all of the Lenders, be extended annually
thereafter for each of the next two twelve-month periods following the
Facility A Maturity Date. All Facility B Revolving Credit Notes shall
be due and payable on the Conversion Date.
2.5. Term Note. The Term Loans shall be evidenced by a single
term note in the form attached hereto as Exhibit B-3 (the "Term Note"),
payable to the order of the Agent for the ratable account of each
Lender, duly executed on behalf of each Borrower, dated the Conversion
Date and in the aggregate principal amount of the Term Loan. The
principal amount of the Term Note shall be payable in equal consecutive
quarterly installments based upon a three-year amortization schedule
beginning on the Conversion Date and ending on the Maturity Date.
2.6. Swing Line Note. The Swing Line Loans shall be evidenced by
a single promissory note in the form attached hereto as Exhibit B-4 (the
"Swing Line Note"), payable to the order of the Agent for the account of
the Swing Line Lender, dated as of the Closing Date and in the aggregate
principal amount of $3,000,000 or, if less, the aggregate outstanding
amount of all Swing Line Loans.
2.7. Interest on Loans.
(a) DRC shall deliver to the Agent on the Closing Date and on
or before the 45th day immediately following the end of each fiscal
quarter of DRC a certificate duly signed by the chief financial officer
or treasurer of DRC and reasonably satisfactory in form and substance to
the Lenders (a "Debt Coverage Certificate") setting forth the ratio of
(i) the Consolidated Senior Debt of DRC and its Subsidiaries for the
immediately preceding fiscal quarter-end to (ii) Consolidated EBITDA and
its Subsidiaries for the four (4) consecutive quarters ending on such
fiscal quarter-end (the "Debt Coverage Ratio"). Loans shall bear
interest at a rate per annum equal to the Adjusted LIBOR or Base Rate,
as the case may be, plus the applicable margin set forth below based on
the Debt Coverage Ratio (which margin is referred to, in the case of
Base Rate Loans, as the "Base Rate Margin" and, in the case of LIBOR
Loans, as the "LIBOR Margin"). Subject to subparagraph (b) below, each
change in the applicable margin based on a change in the Debt Coverage
Ratio shall be effective, with respect to all Loans outstanding on or
after the date of delivery of a Debt Coverage Certificate, from and
including the date of delivery of such certificate until the date
immediately preceding the next date of delivery of a Debt Coverage
Certificate indicating another such change.
Debt Base Adjusted LIBOR
Coverage Rate Margin Margin
Ratio
<1.5 0 .50%
>1.5 to <2.0 0 .75%
>2.0 to <2.5 0 1.00%
>2.5 0 1.50%
(b) During any period when an Event of Default shall have
occurred and be continuing or in the event that DRC fails to provide the
Agent with the Debt Coverage Certificate for any fiscal quarter of DRC,
then until such Event of Default is cured or waived or such certificate
is provided, as the case may be, the applicable margin over the Base
Rate shall be zero (0) and the applicable margin over the Adjusted LIBOR
shall be one and one-half percent (1.5%).
(c) Interest on each Base Rate Loan and LIBOR Loan shall be
computed on the basis of the actual number of days elapsed in a year of
360 days, in each case without duplication of any day in successive
Interest Periods.
(d) The Borrowers agree to pay to the Agent, for the pro rata
benefit of the Lenders, interest on each Loan in arrears on each
Interest Payment Date with respect thereto.
2.8. Requests for Loans. A Borrower shall give to the Agent
written notice in the form of Exhibit C hereto (or telephonic notice
confirmed in a writing in the form of Exhibit C hereto) of the Loans
requested from the Lenders hereunder (a "Loan Request"), no later than
12:00 noon, Boston time, (i) no less than one (1) Business Day prior to
the proposed Drawdown Date of any Base Rate Loan and (ii) no less than
three (3) LIBOR Business Days prior to the proposed Drawdown Date of any
LIBOR Loans; provided, however, that a Borrower may give to the Agent a
Loan Request for a Swing Line Loan at any time prior to 12:00 noon,
Boston time on the proposed Drawdown Date of such Swing Line Loan. Each
such notice shall specify (i) the aggregate principal amount of the
Loans requested from the Lenders specifying whether such Loans are in
respect of the Available Facility A Commitment (and, if so, whether a
Swing Line Loan) and/or the Available Facility B Commitment (and in each
case not in excess of the unused portion of the Available Total
Commitment), (ii) whether such Loans are to be LIBOR Loans or Base Rate
Loans, (iii) whether such Loans are to be Revolving Credit Loans or Term
Loans (subject, however, to 2.1(b) and 2.1(c) which respectively
provide that, under Facility B, Loans made prior to the Conversion Date
shall be Revolving Credit Loans and Loans made on the Conversion Date
shall be Term Loans), (iv) the proposed Drawdown Date of such Loans, (v)
in the case of LIBOR Loans, the Interest Period for such Loans, (vi) the
purpose or purposes to which the proceeds of such Loans shall be
applied, and (vii) such other matters as are set forth on Exhibit C.
Each Loan Request shall be in a minimum aggregate amount of $1,000,000
or a higher integral multiple of $500,000; provided, however, that each
Loan Request for a Swing Line Loan shall be in a minimum aggregate
amount of $100,000 or a higher integral multiple of $50,000. The Agent
shall then promptly notify each Lender by written notice of its
respective Percentage of the Loans requested.
2.9. Conversion and Continuation.
Each Borrower shall have the right at any time upon prior
irrevocable notice to the Agent (a) not later than 12:00 noon, Boston
time, one (1) Business Day prior to the date of conversion, to convert
any LIBOR Loan into a Base Rate Loan, (b) not later than 12:00 noon,
Boston time, three (3) LIBOR Business Days prior to conversion or
continuation, to convert any Base Rate Loan into a LIBOR Loan or to
continue any LIBOR Loan as a LIBOR Loan for an additional Interest
Period, and (c) not later than 12:00 noon, Boston time, three (3)
Business Days prior to conversion, to convert the Interest Period with
respect to any LIBOR Loan to another permissible Interest Period,
subject in each case to the following:
(i) each conversion or continuation shall be made pro
rata among the Lenders in accordance with the respective principal
amounts of the Loans comprising the converted or continued Loans;
(ii) if less than all the outstanding principal amount of
any Loans shall be converted or continued, then the resulting Loans
shall satisfy the limitations specified in the penultimate sentence
of 2.8 regarding the principal amount of Loans;
(iii) each conversion shall be effected by the Agent by
recording for the account of each Lender the new Loan of such
Lender resulting from such conversion and reducing the Loan (or
portion thereof) of such Lender being converted by an equivalent
principal amount;
(iv) accrued interest on a LIBOR Loan (or portion
thereof) being converted or continued shall be paid by the
Borrowers at the time of conversion or continuation;
(v) LIBOR Loans may only be converted at a time that is
the end of the Interest Period applicable thereto;
(vi) any portion of a Loan maturing or required to be
repaid in less than one month may not be converted into or
continued as a LIBOR Loan;
(vii) any portion of a LIBOR Loan that cannot be
converted into or continued as a LIBOR Loan by reason of the
immediately preceding clause shall be automatically converted at
the end of the Interest Period in effect for such Loan into a Base
Rate Loan; and
(viii) no Event of Default and no event which, with the
giving of notice or passage of time or both, would constitute
an Event of Default has occurred and is continuing; provided,
however, that the condition set forth in this clause (viii) shall
not be applicable to the conversion of any LIBOR Loan into a Base
Rate Loan pursuant to 2.9(a).
Each notice pursuant to this 2.9 shall be irrevocable and shall
refer to this Agreement and specify (i) the identity (including whether
such Loan is a Term Loan or a Revolving Credit Loan) and amount of the
Loan that a Borrower requests be converted or continued, (ii) whether
such Loan is to be converted to or continued as a LIBOR Loan or a Base
Rate Loan, (iii) if such notice requests a conversion, the date of such
conversion (which shall be a LIBOR Business Day) and (iv) if such Loan
is to be converted to or continued as a LIBOR Loan, the Interest Period
with respect thereto. If no Interest Period is specified in any such
notice with respect to any conversion to or continuation as a LIBOR
Loan, the Borrower shall be deemed to have selected an Interest Period
of one month's duration. The Agent shall promptly advise the other
Lenders of any notice given pursuant to this 2.9 and of each Lender's
portion of any converted or continued Loans. If the Borrower shall not
have given notice in accordance with this 2.9 to continue any LIBOR
Loans into a subsequent Interest Period (and shall not otherwise have
given notice in accordance with this 2.9 to convert such LIBOR Loans),
such LIBOR Loans shall, at the end of the Interest Period applicable
thereto (unless repaid pursuant to the terms hereof), automatically be
converted into Base Rate Loans.
2.10. Funds for Loans. Subject to the satisfaction of the other
conditions set forth herein, to the extent applicable (including 2.8),
each Lender will make available to the Agent on the proposed date of any
Loan (other than a Swing Line Loan) by wire transfer of immediately
available funds not later than 1:00 P.M., Boston time, the aggregate
amount of its Percentage of such Loans requested by the Borrowers, and
the Agent shall credit the aggregate amount so received to the
respective accounts designated by the Borrowers or, if a Borrower does
not designate any account, to DRC's regular deposit account with the
Agent.
3. PREPAYMENT OF THE LOANS; RESERVES.
3.1. Voluntary Prepayments. Each Borrower shall have the right,
at its election, to prepay the outstanding amount of any Loans, as a
whole or in part, at any time without penalty or premium, except as
provided in 4.8; provided, however, that once repaid or prepaid, Term
Loans made under Facility B may not be reborrowed. A Borrower shall
give irrevocable written notice to the Agent, no later than 12:00 noon,
Boston time, one Business Day prior to any proposed prepayment of Base
Rate Loans pursuant to this 3 and no later than 11:00 a.m., Boston
time, three LIBOR Business Days prior to any proposed prepayment of
LIBOR Rate Loans pursuant to this 3, in each case specifying the
proposed date of prepayment of the Loans and the principal amount and
accrued interest to be prepaid, and the Agent shall promptly give notice
thereof to each Lender. Each such prepayment of the Base Rate Loans
shall be in a minimum amount of the lesser of (i) $1,000,000 and
(ii) the aggregate amount outstanding under the Notes being prepaid, and
shall be accompanied by the payment of accrued interest on the principal
prepaid to the date of such prepayment. Prepayments of Term Loans under
Facility B will be applied first to the principal amount of the Term
Loan which is due on the Maturity Date and then to the installments
required to be paid on the Term Loan pursuant to 2.5 in inverse order
of maturity.
3.2. Mandatory Prepayments. If at any time the outstanding
principal amount of all Loans in respect of Facility A or Facility B
exceeds (or, in the case of any notice of reduction of the Facility A
Commitment and/or the Facility B Commitment pursuant to 2.3, would
exceed) the Facility A Commitment or the Facility B Commitment,
respectively, the Borrowers will immediately prepay the applicable Note
or Notes, subject to 4.8, in an amount necessary to cause the
outstanding principal amount of all Loans in respect of Facility A or
Facility B not to exceed the Facility A Commitment or the Facility B
Commitment, as applicable.
4. CERTAIN GENERAL PROVISIONS.
4.1. Funds for Payments.
(a) All payments of principal, interest, fees and any
other amounts due hereunder or under any of the other Loan Documents
shall be made to the Agent for the ratable account of the Lenders at ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other location as
the Agent may from time to time designate, in each case in Dollars
constituting immediately available funds.
(b) All payments by the Borrowers hereunder and under any
of the other Loan Documents shall be made without setoff or counterclaim
and free and clear of and without deduction for any taxes, levies,
imposts, duties, charges, fees, deductions, withholdings, compulsory
loans, restrictions or conditions of any nature now imposed or levied by
any jurisdiction or any political subdivision thereof or taxing or other
authority therein unless a Borrower is compelled by law to make such
deduction or withholding or if the taxes are based upon or measured by
the income or profits of the Lenders, including profits or receipts with
respect to the Loans. If any such obligation is imposed upon a Borrower
with respect to any amount payable by it hereunder or under any of the
other Loan Documents, the Borrowers will pay to the Agent for the
ratable account of the Lenders on the date on which such amount is due
and payable hereunder or under such other Loan Document, such additional
amount in Dollars as shall be necessary to enable the Lenders to receive
the same net amount which the Lenders would have received on such due
date had no such obligation been imposed upon such Borrower. The
Borrowers will deliver promptly to the Agent certificates or other valid
vouchers for all taxes or other charges deducted from or paid with
respect to payments made by the Borrowers hereunder or under such other
Loan Document. In the event any Lender receives a refund of any taxes
or other amounts for which it has received payment from a Borrower
pursuant to this 4.1(b), such Lender shall, within 30 days from the
date of such receipt, pay the amount of such refund to such Borrower but
only to the extent of payments made by such Borrower pursuant to this
4.1(b) and net of all costs and expenses of the Agent and such Lender
relating thereto and without interest (other than interest, if any, paid
by the relevant government authority with respect to such refund);
provided, however, that the Borrowers upon request of the Agent or any
Lender, agree to repay the amount paid to a Borrower to the Agent or
such Lender if the Agent or such Lender is required to repay such refund
to such governmental authority.
4.2. Computations. All computations of interest on the LIBOR
Loans and the Base Rate Loans and of commitment or other fees shall be
based on a 360-day year and paid for the actual number of days elapsed.
Except as otherwise provided in the definition of the term "Interest
Period" with respect to LIBOR Loans, whenever a payment hereunder or
under any of the other Loan Documents becomes due on a day that is not a
Business Day, the due date for such payment shall be extended to the
next succeeding Business Day, and interest shall accrue during such
extension.
4.3. Inability to Determine Adjusted LIBOR. In the event, prior
to the commencement of any Interest Period relating to any LIBOR Loan,
the Agent shall determine that adequate and reasonable methods do not
exist in the marketplace for ascertaining the Adjusted LIBOR that would
otherwise determine the rate of interest to be applicable to any LIBOR
Loan during any Interest Period, the Agent shall give notice of such
determination (which shall be conclusive and binding on the Borrowers)
to the Borrowers. In such event (a) any Loan Request with respect to
LIBOR Loans shall be automatically withdrawn and shall be deemed a
request for Base Rate Loans, (b) each LIBOR Loan will automatically, on
the last day of the then current Interest Period thereof, become a Base
Rate Loan, and (c) the obligations of the Lenders to make LIBOR Loans
shall be suspended until the Agent determines that the circumstances
giving rise to such suspension no longer exist, whereupon the Agent
shall so notify the Borrowers.
4.4. Illegality. Notwithstanding any other provisions herein, if
any present or future law, regulation, treaty or directive or change in
the interpretation or application thereof shall make it unlawful for any
Lender to make or maintain LIBOR Loans, such Lender shall forthwith give
notice of such circumstances to the Agent who shall in turn notify the
Borrowers and thereupon (a) the commitment of such Lender to make LIBOR
Loans shall forthwith be suspended and (b) the Loans then outstanding as
LIBOR Loans from such Lender, if any, shall be converted automatically
to Base Rate Loans on the last day of each Interest Period applicable to
such LIBOR Loans or within such earlier period as may be required by
law. The Borrowers hereby agree promptly to pay the Agent on behalf of
such Lender, upon demand by such Lender accompanied by a certificate
setting forth in reasonable detail such costs, any additional amounts
necessary to compensate such Lender for any costs incurred by such
Lender in making any conversion in accordance with this 4.4, including
any interest or fees payable by such Lender to lenders of funds obtained
by it in order to make or maintain its LIBOR Loans hereunder; provided,
that to the extent permitted by applicable law, each Lender shall
maintain each LIBOR Loan until the last day of an Interest Period.
4.5. Additional Costs, Etc. If any change in any present
applicable law or if any future applicable law, which expression, as
used herein, includes statutes, rules and regulations thereunder and
interpretations thereof by any competent court or by any governmental or
other regulatory body with the administration or the interpretation
thereof and directives, instructions and notices at any time or from
time to time hereafter made upon or otherwise issued to any Lender by
any central bank or other fiscal, monetary or other authority (whether
or not having the force of law, but only if it is mandatory that such
Lender comply), shall:
(a) subject such Lender to any tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature with respect to this
Credit Agreement, the other Loan Documents, or the Loans (other than
taxes based upon or measured by the income or profits of such Lender,
including without limitation profits or receipts with respect to the
Loans and other than any withholding tax imposed on any payments by the
Borrowers to such Lender); or
(b) materially change the basis of taxation (except for
changes in taxes on income or profits and except for any withholding tax
imposed on any payments by the Borrowers to the Lenders) of payments to
such Lender of the principal of or the interest on any Loans or any
other amounts payable to such Lender under this Credit Agreement or the
other Loan Documents; or
(c) impose or increase or render applicable (other than to
the extent specifically provided for elsewhere in this Credit Agreement)
any special deposit, reserve, assessment, liquidity, capital adequacy or
other similar requirements (whether or not having the force of law, but
only if it is mandatory that such Lender comply) against assets held by,
or deposits in or for the account of, or loans by, or commitments of an
office of such Lender; or
(d) impose on such Lender any other conditions or
requirements with respect to this Credit Agreement, the other Loan
Documents, the Loans, or any class of loans or commitments of which any
of the Loans forms a part;
and the result of any of the foregoing is to:
(i) increase the cost to such Lender of making, funding,
issuing or maintaining any of the Loans or its Percentage of the Total
Commitment; or
(ii) reduce the amount of principal, interest or other amount
payable to such Lender hereunder on account of any of the Loans or its
Percentage of the Total Commitment; or
(iii) require such Lender to make any payment or to forego
any interest or other sum payable hereunder, the amount of which payment
or foregone interest or other sum is calculated by reference to the
gross amount of any sum receivable or deemed received by such Lender
from the Borrower hereunder;
then, and in each such case, the Borrower will, within ten (10) Business
Days following receipt of written notice from the Agent on behalf of
such Lender, which written notice shall include a description of the
relevant change in law, calculations of the amounts payable, pay to the
Agent on behalf of such Lender such additional amounts as will be
sufficient to compensate such Lender for such additional cost,
reduction, payment or foregone interest or other sum.
4.6. Capital Adequacy. If any change in any present law,
governmental rule, regulation, policy, guideline or directive or if any
future law, governmental rule, regulation, policy, guideline or
directive (in each case whether or not having the force of law, but only
if it is mandatory that the Lender comply) or the interpretation thereof
by a court or governmental authority with appropriate jurisdiction or
any change in any such law or interpretation (including, without
limitation, any change according to a prescribed schedule of increasing
requirements, whether or not known on the date of this Credit Agreement)
affects the amount of capital required or expected to be maintained by
any Lender or any corporation controlling such Lender and such Lender
determines that the amount of capital required to be maintained by it is
increased by or based upon the existence of the Commitments or Loans
made pursuant hereto, then the Agent on behalf of such Lender may notify
the Borrower of such fact. To the extent that the costs of such
increased capital requirements are not reflected in the applicable
rate(s) of interest on the Loans, the Borrower and the Agent on behalf
of such Lender shall thereafter attempt to negotiate in good faith,
within thirty (30) days of the day on which the Borrower receives such
notice, an adjustment payable hereunder that will adequately compensate
such Lender in light of these circumstances. If the Borrower and the
Agent on behalf of such Lender are unable to agree to such adjustment
within thirty (30) days of the date on which the Borrower receives such
notice, then commencing on the date Borrower received such notice (but
not earlier than the effective date of any such increased capital
requirement), from time to time the Borrower will pay to the Agent, on
behalf of such Lender after consultation with the affected Lender, such
additional amount that will, in the Agent's reasonable determination,
provide adequate compensation to such Lender. Such Lender shall
allocate such cost increases among its customers in good faith and on an
equitable basis.
4.7. Certificate. A certificate setting forth any additional
amounts payable pursuant to 4.5, 4.6 or 4.8 and a reasonably detailed
explanation of such amounts which are due, including calculation of such
amounts, submitted by the Agent on behalf of any Lender to the
Borrowers, shall be conclusive, absent manifest error, that such amounts
are due and owing.
4.8. Indemnity. The Borrowers agree to indemnify each Lender and
to hold each Lender harmless from and against any loss, cost or expense
that such Lender may sustain or incur resulting from (a) a default by a
Borrower in payment of the principal amount of or any interest on any
Loans as and when due and payable, including any such loss or expense
arising from interest or fees payable by such Lender to lenders of funds
obtained by it in order to maintain its Loans, (b) a default by a
Borrower in making a borrowing after such Borrower has given (or is
deemed to have given) a Loan Request relating thereto in accordance with
2.8 or (c) the making of any payment or prepayment of a Loan or the
conversion of any LIBOR Loan to a Base Rate Loan on a day that is not
the last day of the applicable Interest Period with respect thereto,
including interest or fees payable by such Lender to lenders of funds
obtained by it in order to maintain any such Loans.
4.9. Interest on Overdue Amounts. Overdue principal and (to the
extent permitted by applicable law) interest on the Loans and all other
overdue amounts payable hereunder or under any of the other Loan
Documents shall bear interest payable on demand at a rate per annum
equal to (i) in the case of overdue principal and interest (to the
extent permitted by law) of any Loan, 2% plus the rate otherwise
applicable to such Loan as provided in 2.7 or (ii) in the case of any
other amount, 2% plus the then prevailing Base Rate plus the then
prevailing applicable margin, in each case until such amount shall be
paid in full (after as well as before judgment).
4.10. Mitigation. Each Lender shall take commercially
reasonable efforts (which shall not require such Lender to incur an
unreimbursed loss or unreimbursed cost or expense or otherwise take any
action inconsistent with its internal policies or suffer any
disadvantage or burden deemed by it to be significant) to assign its
rights and delegate and transfer its obligations hereunder to another of
its offices to the extent that such assignment, delegation and transfer
would reduce amounts otherwise payable by the Borrowers to such Lender
pursuant to 4.1(b), 4.4, 4.5, 4.6 and 4.8 or to make or maintain LIBOR
Loans hereunder. The Borrowers agree to pay all costs and expenses
incurred by any Lender in connection with any such assignment,
delegation and transfer.
4.11. Joint and Several Obligations. Notwithstanding any
other provision of this Credit Agreement, (i) each of the covenants,
agreements and obligations of any Borrower set forth in this Credit
Agreement or in any other Loan Document shall be the joint and several
covenants, agreements and obligations of all of the Borrowers,
regardless of whether a Borrower was the actual recipient of the
proceeds of a Loan, (ii) all representations and warranties of any
Borrower contained in this Credit Agreement or in any other Loan
Document shall be deemed to be separately made by each of the Borrowers
and (iii) any notice, request, consent, report or other information or
agreement delivered by any Borrower shall be deemed for all purposes to
be consented to, ratified and delivered by each of the Borrowers. In
furtherance of the foregoing, each Borrower acknowledges and agrees that
each covenant, agreement and obligation of any or all of the Borrowers
in this Credit Agreement or any other Loan Document is enforceable
against all Borrowers, jointly, or against any Borrower, severally.
5. REPRESENTATIONS AND WARRANTIES. In order to induce the
Lenders to enter into this Credit Agreement and to make the Loans
provided for hereunder, each Borrower makes the following
representations and warranties, which shall survive the execution and
delivery hereof and of the Notes:
5.1 Organization, Standing, etc. of the Borrowers. Each
Borrower is a corporation duly organized, validly existing and in good
standing under the laws of The Commonwealth of Massachusetts and has all
requisite corporate power and authority to own and operate its
properties, to carry on its business as now conducted and proposed to be
conducted, to enter into this Agreement, the other Loan Documents and
all other documents to be executed by it in connection with the
transactions contemplated hereby, to issue the Notes and to carry out
the terms hereof and thereof.
5.2 Subsidiaries. Schedule 5.2 attached hereto correctly
sets forth as to each Subsidiary, its name, the jurisdiction of its
incorporation, the number of shares of its capital stock of each class
outstanding and the number of such outstanding shares owned by DRC and
its other Subsidiaries. Each such Subsidiary is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has all requisite corporate power
and authority to own and operate its properties and to carry on its
business as now conducted and proposed to be conducted. All of the
outstanding capital stock of each Subsidiary is validly issued,
fully-paid and nonassessable, and is owned by DRC or its Subsidiaries as
specified in Schedule 5.2, in each case free of any mortgage, pledge,
lien, security interest, charge, option or other encumbrance, other than
restrictions imposed by applicable federal and state securities laws.
5.3 Qualification. Each Borrower and its Subsidiaries are
duly qualified or licensed and in good standing as foreign corporations
duly authorized to do business in each jurisdiction in which the
character of the properties owned or the nature of the activities
conducted makes such qualification or licensing necessary.
5.4 Financial Information; Disclosure, etc. The Borrowers
have furnished the Lenders with the financial statements and other
reports listed in Schedule 5.4 attached hereto. Such financial
statements have been prepared in accordance with GAAP applied on a
consistent basis and fairly present the financial position and results
of operations of the Persons to which they purport to relate as of the
dates and for the periods indicated. Since the end of the most recent
fiscal period shown in such financial statements or in the most recent
financial statements delivered by DRC under 6.2(a), there has not been
any material adverse change in the business, operations, condition
(financial or otherwise) or properties of Borrowers and their
Subsidiaries, taken as a whole. Neither this Agreement nor any
financial statements, reports, projections or other documents or
certificates furnished to the Lenders by the Borrowers in connection
with the transactions contemplated hereby contain as of their respective
dates any untrue statement of a material fact or omit to state any
material fact necessary to make the statements herein or therein
contained not misleading. None of the Loans will render any Borrower
unable to pay its debts as they become due; no Borrower is contemplating
either the filing of a petition by it under any state or federal
bankruptcy or insolvency laws or, except as set forth on Schedule 5.4,
the liquidation of all or a major portion of its property; and no
Borrower has knowledge of any Person contemplating the filing of any
such petition against it.
5.5 Licenses, etc. Schedule 5.5 attached hereto accurately
and completely lists all authorizations, licenses, permits and
franchises of any public or governmental regulatory body which are
necessary for the conduct of the business of each Borrower and its
Subsidiaries as now conducted and the absence of which would result,
either in any case or in the aggregate, in a material adverse change in
the business, operations, affairs, condition (financial or otherwise) or
properties of (i) DRC and its Subsidiaries, taken as a whole, (ii)
Encoder and its Subsidiaries, taken as a whole, or (iii) Metrigraphics
and its Subsidiaries, taken as a whole (such authorizations, licenses,
permits and franchises, together with any extensions or renewals
thereof, being herein sometimes referred to collectively as the
"Licenses"). All of such Licenses are in full force and effect and each
Borrower and its Subsidiaries have fulfilled and performed all of their
obligations with respect thereto and have full power and authority to
operate thereunder.
5.6 Material Agreements. Schedule 5.6 attached hereto
accurately and completely lists all material agreements and contracts
which are presently in effect in connection with the conduct of the
business of any Borrower and that which was or is required to be filed
with the Securities and Exchange Commission as a "material contract"
pursuant to Item 601(b)(10) of Registration S-K promulgated by the
Securities and Exchange Commission.
5.7 Tax Returns and Payments. Each Borrower and its
Subsidiaries have filed all tax returns required by law to be filed and
have paid all material taxes, assessments and other governmental charges
levied upon any of their respective properties, assets, income or
franchises, other than those not yet delinquent and those, not material
in aggregate amount, being or about to be contested as provided in 6.7.
The charges, accruals and reserves on the books of each Borrower and its
Subsidiaries in respect of their respective taxes are adequate in the
opinion of the Borrowers, and the Borrowers know of no unpaid assessment
for additional taxes or of any basis therefor.
5.8 Indebtedness, Liens and Investments, etc. Schedule 5.8
attached hereto sets forth, as of the date hereof, (a) the amounts of
all outstanding Indebtedness of each Borrower and its Subsidiaries in
respect of borrowed money, Capitalized Leases and the deferred purchase
price of property, (b) all existing mortgages, liens and security
interests in respect of such Indebtedness, (c) all agreements which
directly or indirectly require any Borrower or its Subsidiaries to make
any material investments, loans or advances and (d) all existing
material guarantees by each Borrower and its Subsidiaries.
5.9 Title to Properties; Liens. Each Borrower and its
Subsidiaries have good and marketable title to all of their respective
properties and assets, and none of such properties or assets is subject
to any mortgage, pledge, lien, security interest, charge or encumbrance
except for (i) Permitted Liens and (ii) minor liens and encumbrances
which in the aggregate are not substantial in amount, do not in any case
materially detract from the value of the property subject thereto or
materially impair the operations of any Borrower and its Subsidiaries
and have not arisen otherwise than in the ordinary course of business.
Each Borrower and its Subsidiaries enjoy quiet possession under all
leases to which they are parties as lessees, and, to the knowledge of
each Borrower, all of such leases are valid, subsisting and in full
force and effect. None of such leases contains any provision
restricting the incurrence of indebtedness by the lessee.
5.10 Litigation, etc. Except as set forth in Schedule 5.10
attached hereto, there is no action, proceeding or investigation pending
or threatened (or any basis therefor known to any Borrower) which
questions the validity of this Credit Agreement, the Notes or the other
documents executed in connection herewith, or any action taken or to be
taken pursuant hereto, or which could reasonably be expected to result,
either in any case or in the aggregate, in any material adverse change
in the business, operations, affairs, condition (financial or otherwise)
or properties of DRC and the Subsidiaries, taken as a whole, or any of
their respective properties or in any material liability on the part of
DRC and the Subsidiaries, taken as a whole.
5.11 Authorization; Compliance with Other Instruments. The
execution, delivery and performance of this Agreement and the Notes have
been duly authorized by all necessary corporate action on the part of
each Borrower, will not result in any violation of or be in conflict
with or constitute a default under any term of the charter or by-laws of
any Borrower, or of any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to any Borrower, or
result in the creation of any mortgage, lien, charge or encumbrance upon
any of the properties or assets of any Borrower pursuant to any such
term. Neither any Borrower nor any Subsidiary is in violation of any
term of its charter or by-laws, or of any term of any material agreement
or instrument to which it is a party, or, to each Borrower's knowledge,
of any judgment, decree, order, statute, rule or governmental regulation
applicable to it.
5.12 Governmental Consent. Except as specified in
Schedule 5.12 attached hereto, no order, consent, approval or
authorization of, or declaration to or filing with, any governmental
authority (collectively, "Consents") is required to be obtained or made
by any Borrower or by any Subsidiary in connection with the execution
and delivery of this Agreement and the issuance and delivery of the
Notes pursuant hereto. Except as set forth in Schedule 5.12, all of the
Consents have been obtained and are in full force and effect.
5.13 Regulation U, etc. Neither any Borrower nor any
Subsidiary owns or has any present intention of acquiring any "margin
stock" within the meaning of Regulation U (12 CFR Part 221) of the Board
of Governors of the Federal Reserve System (herein called "margin
stock"). None of the proceeds of the Loans will be used, directly or
indirectly, by any Borrower or any Subsidiary for the purpose of
purchasing or carrying, or for the purpose of reducing or retiring any
indebtedness which was originally incurred to purchase or carry, any
margin stock or for any other purpose which might constitute the
transactions contemplated hereby a "purpose credit" within the meaning
of said Regulation U, or cause this Agreement to violate Regulation U,
Regulation T, Regulation X, or any other regulation of the Board of
Governors of the Federal Reserve System or the Securities Exchange Act
of 1934.
5.14 Employee Retirement Income Security Act of 1974. Each
Employee Benefit Plan and, to each Borrower's knowledge, each
Multiemployer Plan, is in material compliance with applicable provisions
of ERISA and the Code. No ERISA Reportable Event has occurred or, to
each Borrower's knowledge, is imminent or likely to occur. No Borrower
or ERISA Affiliate has incurred any material liability to the PBGC or
any Employee Benefit Plan or Multiemployer Plan on account of any
failure to meet the contribution requirements of any such plan, minimum
funding requirements or prohibited transactions under ERISA or the Code,
termination of a single employer plan, partial or complete withdrawal
from a Multiemployer Plan, or the insolvency, reorganization or
termination of any Multiemployer Plan, and no event has occurred or
conditions exist which present a material risk that any Borrower or
ERISA Affiliate will incur any material liability on account of any of
the foregoing circumstances. The consummation of the transactions
contemplated by this Agreement will not result in any prohibited
transaction under ERISA or the Code for which an exemption is not
available.
5.15 Environmental Matters. Except as set forth in
Schedule 5.15 attached hereto, neither any Borrower nor any Subsidiary
nor, to each Borrower's knowledge, any other Person has ever caused or
permitted any Hazardous Material to be disposed of on or under any real
property owned, leased or operated by any Borrower or any Subsidiary or
in which any Borrower or any Subsidiary has ever held, directly or
indirectly, any legal or beneficial interest or estate, and no such real
property has ever been used (either by any Borrower or any Subsidiary
or, to each Borrower's knowledge, by any other Person) as (i) a disposal
site or permanent storage site for any Hazardous Material or (ii) a
temporary storage site for any Hazardous Material. Each Borrower and
each of its Subsidiaries have been issued and are in compliance with all
material permits, certificates, licenses, approvals and other
authorizations relating to environmental matters and necessary or
desirable for their respective businesses, and have filed all
notifications and reports relating to chemical substances, air
emissions, underground storage tanks, effluent discharges and Hazardous
Material waste storage, treatment and disposal required in connection
with the operation of their respective businesses, the failure to have
or comply with which would, individually or in the aggregate, have a
material adverse effect on any Borrower or any Subsidiary. All
Hazardous Materials used or generated by any Borrower or any Subsidiary
or any business merged into or otherwise acquired by any Borrower or any
Subsidiary have been generated, accumulated, stored, transported,
treated, recycled and disposed of in compliance with all applicable laws
and regulations, the violation of which has any reasonable likelihood of
having a material adverse effect on any Borrower or any Subsidiary.
Neither any Borrower nor any Subsidiary has any liabilities with respect
to Hazardous Materials and no facts or circumstances exist which could
give rise to liabilities with respect to Hazardous Materials, which in
either case, individually or in the aggregate, could have any reasonable
likelihood of having a material adverse effect on any Borrower or any
Subsidiary.
5.16 Use of Proceeds. Each Borrower will use the proceeds of the
Loans solely for the following purposes: (i) with respect to Loans made
under Facility A, for working capital and other general corporate
purposes of the Borrowers; and (ii) with respect to Loans made under
Facility B, for (a) acquisitions and other business combinations
involving the acquisition by a Borrower or one of its Subsidiaries of
all or substantially all of the stock, assets or business or line of
business of any other Person and/or (b) the assumption of, participation
in or subcontracting under revenue-generating government contracts
and/or (c) for capital expenditures of a Borrower or any of its
Subsidiaries, in each case within the Current Lines of Business and as
permitted by the terms and conditions of this Credit Agreement;
provided, however, that no proceeds of the Loans may be used for the
purpose of or in connection with a hostile acquisition by a Borrower or
any of its Subsidiaries.
5.17 Investment Company Act; Public Utility Holding Company Act.
Neither any Borrower nor any Subsidiary is (a) an "investment company"
as defined in, or subject to regulation under, the Investment Company
Act of 1940 or (b) a "holding company" as defined in, or subject to
regulation under, the Public Utility Holding Company Act of 1935.
6. AFFIRMATIVE COVENANTS OF THE BORROWERS. Each Borrower
covenants and agrees that, so long as any Loan or Note is outstanding or
the Lenders have any Available Total Commitment:
6.1 Records and Accounts. Each Borrower will (a) keep true and
accurate records and books of account in which full, true and correct
entries will be made in accordance with GAAP and (b) maintain adequate
accounts and reserves for all taxes (including income taxes),
depreciation, depletion, obsolescence and amortization of its
properties, contingencies, and other reserves, all in accordance with
GAAP.
6.2 Financial Statements, Certificates and Information. Each
Borrower will furnish or cause to be furnished to each Lender:
(a) Within 90 days after the end of each fiscal year of DRC,
(i) the consolidated and consolidating balance sheets of DRC and its
Subsidiaries as at the end of such year and (ii) the related
consolidated and consolidating statements of income and surplus and cash
flows for such year, setting forth in comparative form with respect to
such consolidated financial statements figures for the previous fiscal
year, all in reasonable detail, together with the opinion thereon of
independent public accountants selected by DRC and satisfactory to the
Lenders, which opinion shall be in a form generally recognized as
unqualified and shall state that the financial statements have been
prepared in accordance with generally accepted accounting principles
applied on a basis consistent with that of the preceding fiscal year
(except for changes, if any, which shall be specified and approved in
such opinion) and that the audit by such accountants in connection with
such financial statements has been made in accordance with generally
accepted auditing standards related to reporting; provided, however,
that the Borrowers shall be required to furnish the consolidating
financial statements referred to above only to the extent that the same
are required to be prepared by GAAP or by the Securities and Exchange
Commission or by any other applicable regulatory authority;
(b) Within 45 days after the end of each of the first three
quarterly accounting periods in each fiscal year of DRC, (i) the
unaudited consolidated and consolidating balance sheets of DRC and its
Subsidiaries as at the end of such period, and (ii) the related
unaudited consolidated and consolidating statements of income and
surplus and cash flows for such period and for the period from the
beginning of the current fiscal year to the end of such period, all in
reasonable detail and signed by the chief financial officer or treasurer
of DRC; provided, however, that the Borrowers shall be required to
furnish the consolidating financial statements only to the extent that
the same are required to be prepared by GAAP or by the Securities and
Exchange Commission or by any other applicable regulatory authority;
(c) Together with the financial statements delivered pursuant
to subparagraph (a) above, a statement signed by the accountants who
have reported on the same to the effect that in connection with their
examination of such financial statements they have reviewed the
provisions of this Agreement and have no knowledge of any event or
condition which constitutes an Event of Default or which, after notice
or expiration of any applicable grace period or both, would constitute
such an Event of Default or, if they have such knowledge, specifying the
nature and period of existence thereof; provided, however, that in
issuing such statement, such independent accountants shall not be
required to go beyond normal auditing procedures conducted in connection
with their opinion referred to above;
(d) Together with the financial statements delivered pursuant
to subparagraph (a) above, a detailed list of each Borrower's backlog of
revenue-generating government contracts showing services to be provided
by each Borrower in connection therewith as of the date of such
financial statements;
(e) Together with the financial statements delivered pursuant
to subparagraph (a) above, DRC's Projections for the next succeeding
three (3) fiscal years, year by year, and for the next succeeding fiscal
year, quarter by quarter;
(f) Together with the financial statements delivered pursuant
to subparagraphs (a) and (b) above, a compliance certificate
substantially in the form of Exhibit D attached hereto signed by the
chief financial officer or treasurer of DRC;
(g) Promptly after the same become publicly available, copies
of all periodic and other reports, proxy statements and other materials
filed by DRC with the Securities and Exchange Commission, or any
governmental authority succeeding to any of or all of the functions of
said Commission, or with any national securities exchange, or
distributed to its shareholders generally, as the case may be (with the
exhibits relating thereto to be provided, at DRC's expense, upon the
request of the Agent or any Lender);
(h) Promptly upon their becoming available, copies of any
periodic or special reports filed by any Borrower or any Subsidiary with
any federal, state or local governmental agency or authority, if such
reports indicate any material change in the business, operations,
affairs or condition (financial or otherwise) of the Borrowers and the
Subsidiaries, taken as a whole, or if copies thereof are requested by
any Lender, and copies of any materially adverse notices and
communications from any federal, state or local governmental agency or
authority which specifically relate to a Borrower or any Subsidiary;
(i) Forthwith upon any officer of any Borrower obtaining
knowledge of any condition or event which constitutes an Event of
Default or which, after notice or lapse of time or both, would
constitute an Event of Default, a certificate signed by such officer
specifying in reasonable detail the nature and period of existence
thereof and what action any Borrower has taken or proposes to take with
respect thereto; and
(j) Such other information regarding the business, affairs and
condition of the Borrowers and their respective Subsidiaries as such
Lender may from time to time reasonably request. Each Borrower will
permit each Lender to inspect the books and any of the properties or
assets of such Borrower and its Subsidiaries at such reasonable times as
such Lender may from time to time request. All costs and expenses of
any Lender in connection with or relating to any request made under this
6.2(j) shall, if no Event of Default has occurred and is continuing, be
paid by the Lender making such request and, upon the occurrence and
during the continuance of an Event of Default, be paid by the Borrowers.
6.3 Legal Existence; Compliance with Laws, etc. Except as
otherwise permitted under this Credit Agreement, each Borrower will, and
will cause each Subsidiary to: maintain its corporate existence and
business; maintain all properties which are reasonably necessary for the
conduct of such business, now or hereafter owned, in good repair,
working order and condition; take all actions necessary to maintain and
keep in full force and effect its Licenses; in the case of DRC, take all
steps necessary to maintain its status as a public company and to
maintain its status as a company listed on the NASDAQ National Market or
a national stock exchange; and, except as otherwise provided herein,
comply with all applicable statutes, rules, regulations and orders of,
and all applicable restrictions imposed by, all governmental authorities
in respect of the conduct of its business and the ownership of its
properties; in each case except to the extent that the failure to comply
would not, individually or in the aggregate, have a material adverse
effect on the business, operations, affairs or condition (financial or
otherwise) of the Borrowers and their Subsidiaries, taken as a whole; or
any Subsidiary; provided that neither any Borrower nor any Subsidiary
shall be required by reason of this 6.3 to comply therewith at any time
while such Borrower or such Subsidiary shall be contesting its
obligations to do so in good faith by appropriate proceedings promptly
initiated and diligently conducted, and if it shall have set aside on
its books such reserves, if any, with respect thereto as are required by
GAAP and deemed adequate by such Borrower and its independent public
accountants. Neither any Borrower nor any Subsidiary will, without the
prior written consent of the Lenders, engage in any business other than
the Current Lines of Business.
6.4 Insurance. Each Borrower will maintain or cause to be
maintained on all insurable properties now or hereafter owned by such
Borrower or any Subsidiary insurance against loss or damage by fire or
other casualty to the extent customary with respect to like properties
of companies conducting similar businesses and will maintain or cause to
be maintained public liability and workmen's compensation insurance
insuring such Borrower and its Subsidiaries to the extent customary with
respect to companies conducting similar businesses and, upon request,
will furnish to the Lenders satisfactory evidence of the same.
6.5 Payment of Taxes. Each Borrower will, and will cause
each Subsidiary to, pay and discharge promptly as they become due and
payable all taxes, assessments and other governmental charges or levies
imposed upon it or its income or upon any of its properties or assets,
or upon any part thereof, as well as all lawful claims of any kind
(including claims for labor, materials and supplies) which, if unpaid,
might by law become a lien or a charge upon its property; provided that
neither any Borrower nor any Subsidiary shall be required to pay any
such tax, assessment, charge, levy or claim if the amount, applicability
or validity thereof shall currently be contested in good faith by
appropriate proceedings promptly initiated and diligently conducted and
if such Borrower or such Subsidiary, as the case may be, shall have set
aside on its books such reserves, if any, with respect thereto as are
required by GAAP and deemed appropriate by such Borrower and its
independent public accountants.
6.6 Payment of Other Indebtedness, etc. Except as to matters
being contested in good faith and by appropriate proceedings, each
Borrower will, and will cause each Subsidiary to, pay promptly when due,
or in conformance with customary trade terms, all other Indebtedness and
obligations incident to the conduct of its business.
6.7 Further Assurances. From time to time hereafter, each
Borrower will execute and deliver, or will cause to be executed and
delivered, such additional instruments, certificates or documents, and
will take all such actions, as the Lenders may reasonably request, for
the purposes of implementing or effectuating the provisions of this
Agreement or the other Loan Documents. Upon the exercise by the Lenders
(or the Agent on their behalf) of any power, right, privilege or remedy
pursuant to this Agreement or the other Loan Documents which requires
any consent, approval, registration, qualification or authorization of
any governmental authority or instrumentality, each Borrower will
execute and deliver, or will cause the execution and delivery of, all
applications, certifications, instruments and other documents and papers
that the Lenders may be required to obtain for such governmental
consent, approval, registration, qualification or authorization.
6.8 Depository Account. Each Borrower will maintain its
principal operating accounts with one or more of the Lenders (including
BBH&Co).
6.9 Use of Proceeds. Each Borrower will use the proceeds of
the Loans only for the purposes not prohibited by, and subject to the
terms and conditions of, 5.13 and 5.16.
6.10 No Further Negative Pledges. Each Borrower hereby
covenants and agrees, at all times while any Loans remain outstanding or
while there is any Available Total Commitment, not to enter into any
agreement prohibiting the creation or assumption of any mortgage, deed
of trust, lien, pledge, hypothecation, encumbrance, charge or security
interest in favor of the Lenders in assets or properties owned by any
Borrower, except for purchase money agreements which contain such
provisions, provided that (i) such provisions relate only to the assets
being purchased thereunder and (ii) such agreements are entered into by
any Borrower in the ordinary course of its business.
6.11 Regulation U. If requested by any Lender, each Borrower
will promptly furnish such Lender with a statement in conformity with
the requirements of Federal Reserve Form U-1 referred to in said
Regulation U.
7. CERTAIN NEGATIVE COVENANTS OF THE BORROWERS. Each Borrower
covenants and agrees that, so long as any Loan or Note is outstanding or
the Lenders have any Available Total Commitment:
7.1 Indebtedness. None of the Borrowers will, nor will any
Borrower permit any Subsidiary to, create, incur, assume or become or
remain liable in respect of any Indebtedness, except:
(a) Indebtedness to the Lenders hereunder;
(b) Indebtedness of any wholly-owned Subsidiary to a Borrower
or any other wholly-owned Subsidiary and of a Borrower to any wholly-
owned Subsidiary; provided, however, that (i) all moneys due from a
Borrower to any Subsidiary which is not a Borrower will be expressly
constituted as Subordinated Debt and (ii) no Borrower shall repay any
such moneys due to any Subsidiary at any time unless no Event of Default
exists and no event which, with the giving of notice or lapse of time or
both, would constitute an Event of Default exists or will exist after
such repayment;
(c) Current liabilities of a Borrower or any Subsidiary (other
than for borrowed money) incurred in the ordinary course of its business
and in accordance with customary trade practices;
(d) Existing Indebtedness of a Borrower or any Subsidiary
referred to in Schedule 5.8 attached hereto, and renewals and extensions
thereof, provided that (i) the aggregate principal amount of such
Indebtedness is not at any time increased, (ii) no material terms
applicable to such Indebtedness shall be more favorable to the renewal
or extension lenders than the terms that are applicable to the holders
of such Indebtedness on the date hereof and (iii) the interest rate
applicable to such Indebtedness shall be a market interest rate as of
the time of such renewal or extension;
(e) Indebtedness of a Borrower or any Subsidiary secured by
Permitted Liens;
(f) Indebtedness of a Borrower or any Subsidiary in respect of
guarantees to the extent the underlying Indebtedness is permitted by
this 7.1; and
(g) Subordinated Debt;
(h) Unfunded Benefit Liabilities so long as each Borrower is in
compliance with 7.9, provided that the aggregate amount thereof at any
one time shall not exceed $5,000,000;
(i) To the extent payment thereof shall not at the time be
required by 6.5, Indebtedness in respect of taxes, assessments,
governmental changes and claims for labor, material and supplies;
(j) Indebtedness in respect of judgments or awards (i) which
have been in force for less than the applicable appeal period or (ii) in
respect to which any Borrower or any Subsidiary shall at the time in
good faith be prosecuting an appeal or proceedings for review, and in
each case such Borrower or such Subsidiary shall have taken appropriate
reserves therefor in accordance with GAAP;
(k) Indebtedness in respect of deferred taxes arising in the
ordinary course of business; and
(l) Indebtedness of the Borrowers and their respective
Subsidiaries (other than for borrowed money) in addition to the
foregoing; provided, however, that the aggregate amount of all such
Indebtedness at any one time outstanding shall not exceed $750,000.
7.2 Mortgages, Liens, etc. None of the Borrowers will, nor will
any Borrower permit any Subsidiary to, directly or indirectly, create,
incur, assume or suffer to exist, any mortgage, lien, charge or
encumbrance on, or security interest in, or pledge of, or conditional
sale or other title retention agreement (including any Capitalized
Lease) with respect to, any property or asset now owned or hereafter
acquired by any Borrower or any Subsidiary, except for the following
(collectively, "Permitted Liens"):
(a) Subject to 7.1(b), any lien on property of (i) a
Subsidiary securing Indebtedness of such Subsidiary to a Borrower and
(ii) a Borrower securing Indebtedness to any other Borrower;
(b) The existing mortgages and security interests referred to
in Schedule 7.2 attached hereto, or any renewal, extension or refunding
of any such mortgage or security interest in an amount not exceeding the
amount thereof remaining unpaid immediately prior to such renewal,
extension or refunding;
(c) Purchase money mortgages, liens and other security
interests, including Capitalized Leases, created in respect of property
acquired by a Borrower or any Subsidiary after the date hereof or
existing in respect of property so acquired at the time of acquisition
thereof, provided that (i) each such lien shall at all times be confined
solely to the item or items of property so acquired, and (ii) the
aggregate principal amount of Indebtedness secured by all such liens
shall at no time exceed $500,000;
(d) Liens for taxes and other amounts not yet delinquent or
being contested in good faith as provided in 6.5; liens in connection
with workmen's compensation, unemployment insurance or other social
security obligations; liens securing the performance of bids, tenders,
contracts, leases, statutory obligations, surety and appeal bonds, liens
to secure progress or partial payments and other liens of like nature
arising in the ordinary course of business; mechanics', workmen's,
materialmen's or other like liens arising in the ordinary course of
business in respect of obligations which are not yet due or which are
being contested in good faith; and other liens or encumbrances
incidental to the conduct of the business of any Borrower or any
Subsidiary or to the ownership of their respective properties or assets,
which were not incurred in connection with the borrowing of money or the
obtaining of credit and which do not, individually or in the aggregate,
materially detract from the value of the properties or assets of the
Borrowers and their Subsidiaries or materially affect the use thereof in
the operation of their business;
(e) Encumbrances in the nature of (i) zoning restrictions, (ii)
easements, (iii) restrictions of record on the use of real property,
(iv) landlords' and lessors' Liens on rented premises and (v)
restrictions on transfers or assignments of leases, which in each case
do not, individually or in the aggregate, materially detract from the
value of the encumbered property or impair the use thereof in the
business of any Borrower or any Subsidiary;
(f) Liens in respect of judgments or awards, to the extent that
such judgments or awards are permitted by 7.1(j);
(g) Restrictions under federal and state securities laws on the
transfer of securities; and
(h) Restrictions under foreign trade regulations on the
transfer or licensing of certain assets of the Borrowers and their
Subsidiaries.
7.3 Loans, Guarantees and Investments. None of the Borrowers
will, nor will any Borrower permit any Subsidiary to, make or permit to
remain outstanding any loan or advance to, or guarantee or endorse
(except as a result of endorsing negotiable instruments for deposit or
collection in the ordinary course of business) or otherwise assume or
remain liable with respect to any obligation of, or make or own any
investment in, or acquire (except in the ordinary course of business)
the properties or assets of, any Person, except:
(a) Extensions of credit by a Borrower or any Subsidiary in the
ordinary course of business in accordance with customary trade
practices;
(b) The presently outstanding investments, loans and advances,
if any, and the presently existing guarantees, if any, of any Borrower
and its Subsidiaries all to the extent set forth on Schedule 5.8
attached hereto and any renewal, extension or refunding thereof,
provided that (i) the aggregate principal amount thereof is not at any
time increased, (ii) no material terms applicable thereto shall be more
favorable to the renewal or extension borrower or recipient, as the case
may be, than the terms that are applicable to the borrower or
recipient, as the case may be, on the date hereof and (iii) the interest
rate (if any) applicable thereto shall be a market interest rate as of
the time of such renewal or extension;
(c) Direct obligations of the United States of America or any
department or agency thereof maturing not more than one year from the
date of acquisition thereof;
(d) Certificates of deposit, repurchase agreements, time
deposits (including sweep accounts), demand deposits, bankers'
acceptances, money market deposits or other similar types of investments
maturing not more than one year from the date of acquisition thereof and
evidencing direct obligations of any Lender or any lender within the
United States of America having capital surplus and undivided profits in
excess of $50,000,000;
(e) Investments in commercial paper maturing within ninety (90)
days from the date of acquisition thereof and having, at such date of
acquisition, the highest credit rating obtainable from ▇▇▇▇▇'▇ or S&P;
(f) Any mutual fund or other pooled investment vehicle which
invests principally in obligations described in subparagraphs (c), (d)
or (e) above and having, at the date of investment in such fund or
vehicle, one of the two highest credit ratings from ▇▇▇▇▇'▇ or S&P;
(g) Equity investments by any Borrower's wholly-owned
Subsidiaries in any other wholly-owned Subsidiary and of a Borrower in
any of its wholly-owned Subsidiaries;
(h) Loans to the extent permitted by 7.1(b);
(i) Acquisitions by a Borrower and its Subsidiaries of all or
substantially all of the capital stock or assets of other Persons,
provided that without the consent of the Required Lenders (i) the
aggregate amount of cash consideration paid by the Borrower and the
Subsidiaries in such acquisitions shall not exceed $15,000,000 and
(ii) the proceeds of any Loans used in connection with each such
acquisition are used as provided in 5.16;
(j) Guarantees by a Borrower of Indebtedness and other
obligations incurred by Subsidiaries to the extent permitted by 7.1;
and
(k) Capital Expenditures to the extent permitted by 7.7.
7.4 Leases. None of the Borrowers will, nor will any Borrower
permit any Subsidiary to, enter into any Capitalized Lease, except as
otherwise permitted under 7.1 and 7.2. Each Borrower will not, and
will not permit any Subsidiary to, enter into any lease (other than
Capitalized Leases) as lessee if, immediately after giving effect
thereto, the aggregate rental obligations (excluding payments required
to be made by the lessee in respect of taxes and insurance whether or
not denominated as rent) of all of the Borrowers and their respective
Subsidiaries for any succeeding 12-month period under all such leases
then in effect shall exceed $3,500,000 in the aggregate.
7.5 Mergers and Consolidations. None of the Borrowers will,
nor will any Borrower permit any Subsidiary to, enter into any merger
or consolidation, except the following:
(a) Any wholly-owned Subsidiary of a Borrower may merge or be
liquidated into a Borrower or any other wholly-owned Subsidiary of a
Borrower so long as after giving effect to any such merger to which a
Borrower is a party such Borrower shall be the surviving or resulting
Person; and
(b) Mergers constituting investments permitted by 7.3(i) so
long as after giving effect to any such merger to which a Borrower is a
party such Borrower shall be the surviving or resulting Person;.
7.6 Sale of Assets. None of the Borrowers will, nor will any
Borrower permit any Subsidiary to, sell, lease or otherwise dispose of
all or any substantial part of its properties or assets, except the
following:
(a) Each Borrower and its Subsidiaries may sell or otherwise
dispose of (i) inventory in the ordinary course of business, (ii) assets
that are no longer used or useful in the Business of the applicable
Borrower or Subsidiary, (iii) the properties and assets constituting the
▇▇▇▇▇▇ ▇▇▇▇▇ software business, (iv) the properties and assets
constituting the telephone fraud detection and control business and (v)
capital stock of Software and Telecom provided, however, that, in the
case of the foregoing clauses (iii), (iv) and (v), immediately before
and after giving effect thereto no Event of Default exists and no event
exists which, with the giving of notice or passage of time or both,
would constitue an Event of Default;
(b) DRC may sell, lease or otherwise transfer any of its
properties or assets to any other Borrower, provided that (i) the
Borrowers provide a notice thereof to the Agent prior to each such
transfer (which notice shall include a description and a good faith
estimate of the fair market value of the property or assets being so
transferred and, to the extent applicable, the revenues that were
generated by such property or assets in the immediately preceding fiscal
year of DRC, (ii) such transfers relate solely to a transfer by DRC of
its encoder line of business to Encoder, its metrigraphics line of
business to Metrigraphics, its ▇▇▇▇▇▇ ▇▇▇▇▇ software line of business to
Software and/or its telephone fraud control line of business to Telecom
and (iii) immediately before and after giving effect thereto no Event of
Default exists;
(c) Each Borrower and its Subsidiaries may license products and
intangible assets for fair market value in the ordinary course of
business; and
(d) In addition to the foregoing, so long as immediately before
and after giving effect thereto no Event of Default and no event exists
which, with the giving of notice or passage of time or both, would
constitute an Event of Default, each Borrower and its Subsidiaries may
sell assets (other than inventory) having a fair market value not
exceeding, and yielding an aggregate amount of sale proceeds not
exceeding, $250,000 in any fiscal year of DRC.
7.7 Capital Expenditures. None of the Borrowers will, nor
will any Borrower permit any Subsidiary to, make any Capital
Expenditures during any fiscal year of DRC unless the aggregate amount
of all Capital Expenditures made by all Borrowers and their respective
Subsidiaries in such fiscal year does not exceed $6,250,000; provided,
however, that the amount of permitted Capital Expenditures in respect of
any fiscal year shall be increased by 50% of the unused permitted
Capital Expenditures for the immediately preceding fiscal year (less an
amount equal to any unused Capital Expenditures carried forward to such
preceding fiscal year).
7.8 Distributions. DRC will not make any distribution or
declare or pay any cash dividends on, or purchase, acquire or redeem or
retire any of its capital stock, of any class, whether now or hereafter
outstanding, except that so long as immediately before and after giving
effect thereto no Event of Default exists, DRC may make cash
distributions to its stockholders and repurchase shares of its common
stock at a price not to exceed the then-current market value for such
stock, in an aggregate amount which shall not exceed in any fiscal year
of DRC fifty percent (50%) of the Consolidated Net Income of DRC and its
Subsidiaries (if positive) for the immediately preceding fiscal year of
DRC, provided that such amount shall not include shares of capital stock
surrendered upon the exercise of any stock options or other convertible
securities.
7.9 Compliance with ERISA. Each Borrower will make, and will
cause all ERISA Affiliates to make, all payments or contributions to
Employee Benefit Plans and Multiemployer Plans required under the terms
thereof and in accordance with applicable minimum funding requirements
of ERISA and the Code and applicable collective bargaining agreements.
Each Borrower will cause all Employee Benefit Plans sponsored by it or
any ERISA Affiliates to be maintained in material compliance with ERISA
and the Code. None of the Borrowers will engage, and will not permit or
suffer any ERISA Affiliate or any Person entitled to indemnification or
reimbursement from a Borrower or any ERISA Affiliate to engage, in any
prohibited transaction under ERISA or the Code for which an exemption is
not available. No Borrower or ERISA Affiliate will terminate, or permit
the PBGC to terminate, any Employee Benefit Plan or withdraw from any
Multiemployer Plan, in any manner which could result in material
liability of a Borrower or any ERISA Affiliate.
7.10 Transactions with Affiliates. No Borrower will, nor will
any Borrower permit any Subsidiary to, directly or indirectly, enter
into any lease or other transaction with any Affiliate of such Borrower
or such Subsidiary (other than any other Borrower) on terms that are
less favorable to such Borrower or such Subsidiary than those which
could reasonably be obtained at the time from a non-Affiliate.
7.11 Observance of Subordination Provisions, etc. No Borrower
will make, nor will any Borrower cause or permit to be made, any
payments in respect of any Subordinated Debt, in contravention of the
subordination provisions contained in the evidence of such Subordinated
Debt or in contravention of any written agreement pertaining thereto,
nor will any Borrower (a) amend, modify or change in any manner any of
such subordination provisions or (b) amend, modify or change in any
manner adverse to the interests of the Lenders any of the other
provisions set forth in the agreements under which such Subordinated
Debt is outstanding or contained in the evidence of such Subordinated
Debt.
7.12 Environmental Liabilities. No Borrower will, nor will
any Borrower permit any Subsidiary to, violate any requirement of any
material law, rule or regulation regarding Hazardous Materials; and,
without limiting the foregoing, no Borrower will, nor will any Borrower
permit any Subsidiary or any other Person to, dispose of any Hazardous
Material into or onto, or (except in accordance with applicable law)
from, any real property owned, leased or operated by any Borrower or any
Subsidiary or in which any Borrower or any Subsidiary holds, directly or
indirectly, any legal or beneficial interest or estate, nor allow any
lien imposed pursuant to any law, regulation or order relating to
Hazardous Materials or the disposal thereof to be imposed or to remain
on such real property, except for liens being contested in good faith by
appropriate proceedings and for which adequate reserves have been
established and are being maintained on the books of a Borrower and its
Subsidiaries.
7.13 Subsidiaries. No Borrower will create any new
Subsidiaries.
7.14 Material Adverse Change. None of the Borrowers will take
nor fail to take any action that could reasonably be expected to result
in a material adverse change in a Borrower's business, assets or
condition (financial or otherwise).
8. FINANCIAL COVENANTS. Each Borrower covenants and agrees that,
so long as any Loan or Note is outstanding or the Lenders have any
Available Total Commitment, DRC and its Subsidiaries shall maintain at
all times, on a Consolidated basis, each of the following:
(a) Tangible Net Worth. Tangible Net Worth, measured on a
fiscal quarter-end basis, of (i) for the fiscal quarter in which the
Closing Date occurs, $25,000,000 and (ii) for each fiscal quarter
thereafter, the sum of (x) $25,000,000 plus (y) fifty percent (50%) of
the Net Income of DRC and its Subsidiaries (if positive) for each fiscal
quarter from and including the first full fiscal quarter following the
Closing Date to and including the most recent fiscal quarter-end;
(b) Maximum Leverage. A ratio of Indebtedness of DRC and its
Subsidiaries to Capitalization of DRC and its Subsidiaries of less than
or equal to one to two (1.0:2.0), measured on a fiscal quarter-end
basis;
(c) Debt Coverage. A ratio of Senior Debt of DRC and its
Subsidiaries to EBITDA of DRC and its Subsidiaries not to exceed three
to one (3.0:1.0), measured on a fiscal quarter-end basis, but with
EBITDA of DRC and its Subsidiaries for the period of four (4)
consecutive fiscal quarters ending on such fiscal quarter-end; and
(d) Cash Flow Coverage. A ratio of (i) EBITDA of DRC and its
Subsidiaries less Capital Expenditures of DRC and its Subsidiaries not
funded by Indebtedness for borrowed money less taxes on income and
profits paid in cash by DRC and its Subsidiaries to (ii) required
interest and principal payments made by DRC and its Subsidiaries on all
Indebtedness of at least two and one-half to one (2.5:1.0), measured at
the end of each fiscal quarter, with each such measurement based on the
period of four (4) consecutive fiscal quarters ending on such fiscal
quarter-end, provided that the cash flow coverage measurement on
December 31, 1997, March 31, 1998 and June 30, 1998 will exclude all
payments of principal made under the $6,000,000 promissory note, dated
February 5, 1993, issued by DRC to ABN AMRO Bank, N.Y., Boston Branch
(the "ABN AMRO Loan") during DRC's 1997 fiscal year.
9. DEFAULTS; REMEDIES.
9.1 Events of Default; Acceleration. If any of the following
events (each an "Event of Default") shall occur:
(a) Any Borrower shall default in the payment of principal of
or interest on any Note or any other fee due hereunder, whether at
maturity or at a date fixed for the payment of any installment or
prepayment thereof or otherwise, and in the case of any such fee payment
default, such default shall continue for a period of three (3) Business
Days following the date of such default; or
(b) Any Borrower shall default in the performance of or
compliance with any term contained in 6.2(g), 6.2(h), 6.2(i), 6.3,
6.9, 6.10 and 7.1 to and including 7.14, and 8; or
(c) Any Borrower shall default in the performance of or
compliance with any term, condition, covenant or agreement (other than
those listed in 9.1(b)) to be performed or observed by it under this
Credit Agreement or under any other Loan Document and such default shall
continue for a period of thirty (30) days or more; or
(d) Any representation or warranty made by any Borrower herein
or pursuant hereto shall prove to have been false or incorrect in any
material respect when made or when deemed to have been made; or
(e) Any Borrower or any Subsidiary shall default in (i) the
payment of any Indebtedness in respect of borrowed money (other than the
Loans), any Capitalized Lease or the deferred purchase price of any
property and such default (A) shall continue after giving effect to any
applicable grace periods and (B) shall be in respect of an aggregate
amount of principal (whether or not due) and accrued interest exceeding
$250,000; or (ii) the performance or compliance with any term of any
agreement or instrument relating to such Indebtedness and such default
(A) shall continue, without having been duly cured, waived or consented
to, beyond the period of grace, if any, specified in such agreement or
instrument, and (B) shall permit the acceleration of such Indebtedness
prior to its stated maturity; or
(f) Except as permitted by 7.5, any Borrower or any Subsidiary
shall discontinue its business or shall make an assignment for the
benefit of creditors, or shall fail generally to pay its debts as such
debts become due, or shall apply for or consent to the appointment of or
taking possession by a trustee, receiver or liquidator (or other similar
official) of any Borrower or such Subsidiary or any substantial part of
the property of any Borrower or such Subsidiary, or shall commence a
case or have an order for relief entered against it under the federal
bankruptcy laws, as now or hereafter constituted, or any other
applicable federal or state bankruptcy, insolvency or other similar law,
or if any Borrower or any Subsidiary shall take any action to dissolve
or liquidate any Borrower or such Subsidiary; or
(g) If, within sixty (60) days after the commencement against
any Borrower or any Subsidiary of a case under the federal bankruptcy
laws, as now or hereafter constituted, or any other applicable federal
or state bankruptcy, insolvency or other similar law, such case shall
have been consented to or shall not have been dismissed or all orders or
proceedings thereunder affecting the operations or the business of any
Borrower and such Subsidiary stayed, or if the stay of any such order or
proceeding shall thereafter be set aside, or if within sixty (60) days
after the entry of a decree appointing a trustee, receiver or liquidator
(or other similar official) of any Borrower or any Subsidiary or any
substantial part of the property of any Borrower or such Subsidiary,
such appointment shall not have been vacated; or
(h) A final judgment which, with other outstanding final
judgments against any or all of the Borrowers and its Subsidiaries,
exceeds an aggregate of $250,000 shall be rendered against any Borrower
or any Subsidiary and if, within sixty (60) days after entry thereof,
such judgment shall not have been discharged or execution thereof stayed
pending appeal, or if, within sixty (60) days after the expiration of
any such stay, such judgment shall not have been discharged, or if any
such judgment shall not be discharged forthwith upon the commencement of
proceedings to foreclose any lien, attachment or charge which may attach
as security therefor and before any of the property or assets of any
Borrower or any Subsidiary shall have been seized in satisfaction
thereof; or
(i) Any Borrower or any Subsidiary loses, fails to keep in
force, suffers the termination or revocation of or terminates, forfeits
or suffers an amendment to any License which would have a material
adverse effect on the operations of such Borrower or such Subsidiary; or
(j) There shall have occurred a Change in Control; or
(k) If with respect to any Employee Benefit Plans or
Multiemployer Plans, there shall occur any of the following which could
reasonably be expected to have a material adverse effect on the
financial condition of any Borrower: (i) the violation of any of the
provisions of ERISA; (ii) the loss by such a plan intended to be a
Qualified Plan of its qualification under Section 401(a) of the Code;
(iii) the incurrence of liability under Title IV of ERISA; (iv) a
failure to make full payment when due of all amounts which, under the
provisions of any such plan or applicable law, any Borrower or any ERISA
Affiliate is required to make; (v) the filing of a notice of intent to
terminate such a plan under Sections 4041 or 4041A of ERISA; (vi) a
complete or partial withdrawal of a Borrower or an ERISA Affiliate from
any such plan; (vii) the receipt of a notice by the plan administrator
of such a plan that the PBGC has instituted proceedings to terminate
such plan or appoint a trustee to administer such plan; (viii) a
commencement or increase of contributions to, or the adoption of or the
amendment of, such a plan; and (ix) the assessment against a Borrower or
any ERISA Affiliate of a tax under Section 4980B of the Code;
then, and in any such event, and at any time thereafter, if any Event of
Default (other than an event described in 9(f) or 9(g) shall then be
continuing, the Required Lenders may direct the Agent to, by written
notice to any Borrower, (i) declare the principal of and accrued
interest in respect of the Notes to be forthwith due and payable,
whereupon the principal of and accrued interest in respect of the Notes,
and all other amounts then due hereunder, shall become forthwith due and
payable without presentment, demand, protest or other notice of any
kind, all of which are hereby expressly waived by each Borrower, and/or
(ii) terminate the Total Commitment, whereupon the Total Commitment of
the Lenders (and the Commitment of each individual Lender) to make Loans
hereunder shall forthwith terminate without any other notice of any
kind; and with respect to any event described in 9(f) or 9(g) above,
the Commitments shall automatically terminate and the principal of the
Notes then outstanding, together with accrued interest thereon and all
other amounts then due hereunder, shall automatically become due and
payable, without presentment, demand, protest or any other notice of any
kind, all of which are hereby expressly waived by each of the Borrowers,
anything contained herein or in any other Loan Document to the contrary
notwithstanding.
9.2 Remedies on Default, etc. In case any one or more Events
of Default shall occur and be continuing, the Lenders may proceed to
protect and enforce their rights by an action at law, suit in equity or
other appropriate proceeding, whether for the specific performance of
any agreement contained herein or in any other Loan Document, or for an
injunction against a violation of any of the terms hereof or thereof, or
in aid of the exercise of any power granted hereby or thereby or by law.
In case of a default in the payment of any principal of or interest on
any Note, or in the payment of any fee due hereunder, each Borrower will
pay to the Lenders such further amount as shall be sufficient to cover
the cost and expense of collection, including the Lenders' attorneys'
fees, expenses and disbursements. No course of dealing and no delay on
the part of the Lenders in exercising any right shall operate as a
waiver thereof or otherwise prejudice the Lenders' rights. No right
conferred hereby or by any other Loan Document upon the Lenders shall be
exclusive of any other right referred to herein or therein or now or
hereafter available at law, in equity, by statute or otherwise.
10. CLOSING CONDITIONS. The obligations of the Lenders to make
the initial Loans shall be subject to the satisfaction of the following
conditions precedent:
10.1. Loan Documents, etc. Each of the Loan Documents shall have
been duly executed and delivered by each of the Borrowers, shall be in
full force and effect and shall be in form and substance reasonably
satisfactory to the Lenders. The Agent and each Lender shall have
received a fully executed copy of each such document.
10.2. Corporate Action. All corporate action necessary for the
valid execution, delivery and performance by each Borrower of this
Credit Agreement and the other Loan Documents shall have been duly and
effectively taken, and evidence thereof reasonably satisfactory to the
Agent shall have been provided to the Agent.
10.3. Incumbency Certificate. The Agent shall have received from
each Borrower an incumbency certificate, dated as of the Closing Date,
signed by a duly authorized officer of such Borrower and giving the name
and bearing a specimen signature of each individual who shall be
authorized in the name and on behalf of such Borrower, (a) to sign each
of the Loan Documents; (b) to make Loan Requests; and (c) to give
notices and to take other action under the Loan Documents.
10.4. Opinions of Counsel. The Agent shall have received a
favorable opinion addressed to the Lenders, dated as of the Closing
Date, in the form of Exhibit E attached hereto, from Ropes & ▇▇▇▇ as
counsel for the Borrowers.
10.5. Payment of Fees. The Borrowers shall have paid to the
Agent (i) the fees and expenses of the Agent's counsel in connection
with the documentation of the transactions described in this Credit
Agreement and (ii) all fees then due and payable pursuant to 2.2(c).
10.6. Real Estate Mortgage. The Agent shall have received
evidence satisfactory to the Agent that, as to the ABN AMRO Loan, (i) no
indebtedness or other obligations are owed thereunder by Borrower and
(ii) such agreement and all mortgages, liens and encumbrances relating
thereto have been terminated in full.
11. CONDITIONS TO ALL LOANS. The obligations of the Lenders to
make any Loan whether on or after the Closing Date, shall also be
subject to the satisfaction of the following conditions precedent:
11.1. Accuracy of Representations; No Event of Default. After
giving effect to the Loans proposed to be made on such Drawdown Date,
(i) all representations and warranties of each Borrower contained in
this Credit Agreement, the other Loan Documents or in any document or
instrument delivered pursuant to or in connection with this Credit
Agreement shall be true and correct as of the date as of which they were
made and shall also be true and correct at and as of the time of the
making of such Loan, with the same effect as if made at and as of that
time (except to the extent of changes resulting from transactions
contemplated or permitted by this Credit Agreement and the other Loan
Documents, or to the extent that such representations and warranties
relate expressly to an earlier date) and (ii) no Event of Default or
other event which, with the giving of notice or passage of time, would
constitute an Event of Default shall have occurred and be continuing.
On or before the date of the Loans, the Agent, on behalf of the Lenders,
shall have received a certificate of DRC signed by the chief financial
officer or treasurer of DRC to such effect.
11.2. No Legal Impediment. No change shall have occurred in any
law or regulations thereunder or interpretations thereof that in the
reasonable opinion of any Lender would make it illegal for such Lender
to make such Loan.
11.3. Additional Conditions to Facility B Loans. The
following conditions are applicable to all Revolving Credit Loans made
under Facility B:
(a) if all or any part of the proceeds of such Revolving Credit
Loans are to be used for any of the purposes set forth in clause (ii) of
5.16, then the chief executive officer, chief financial officer or
president of DRC shall deliver a certificate to the Agent and the
Lenders certifying (i) each target Person involved in such acquisition
has a positive EBITDA for the year ending on the immediately preceding
fiscal quarter-end of such Person, and (ii) the Borrowers will, after
giving effect to such transaction, be in compliance with the terms and
obligations of this Agreement and no Event of Default would be triggered
thereby; and
(b) if the aggregate outstanding principal under Facility B is
(or, after giving effect to any Loan Request(s), would be) more than
$10,000,000, then no Lender shall be required to make any Revolving
Credit Loan under Facility B unless and until the Required Lenders have
consented thereto.
12. THE AGENT.
12.1. Appointment, Powers and Immunities. Each Lender hereby
irrevocably appoints and authorizes the Agent to act as its agent
hereunder and under each of the Loan Documents with such powers as are
specifically delegated to the Agent by the terms of this Credit
Agreement and the Loan Documents, together with such other powers as are
reasonably incidental thereto. The Agent (which term as used in this
sentence and in 12.5 and the first sentence of 12.6 shall include
reference to its Affiliates and the respective officers, directors,
employees and agents of the Agent and its Affiliates): (a) shall have
no duties or responsibilities except those expressly set forth in this
Credit Agreement to be a trustee for any Lender; (b) shall not be
responsible to the Lenders for any recitals, statements, representations
or warranties contained in this Credit Agreement, or in any certificate
or other document referred to or provided for in, or received by any of
them under, this Credit Agreement, or for the value, validity,
effectiveness, genuineness, enforceability, perfection or sufficiency of
this Credit Agreement, any Note or any other document referred to or
provided for herein or for any failure by any Borrower or any other
Person to perform any of its obligations hereunder or thereunder; (c)
shall not be required to initiate or conduct any litigation or
collection proceedings hereunder except to the extent requested by or
consented to by the Required Lenders; and (d) shall not be responsible
for any action taken or omitted to be taken by it hereunder or under any
other document or instrument referred to or provided for herein or in
connection herewith, except for its own gross negligence or willful
misconduct. The Agent may employ agents and attorneys-in-fact and shall
not be responsible for the negligence or misconduct of any such agents
or attorneys-in-fact selected by it with reasonable care. Subject to
the foregoing, the Agent shall, on behalf of the Lenders, exercise any
and all rights, powers and remedies of the Lenders under this Credit
Agreement and any other Loan Documents, including the giving of any
consent or waiver or the entering into of any amendment, subject to the
provisions of 25.
12.2. Reliance by Agent. The Agent shall be entitled to rely
upon any certifications, notices or communications (including any
communications by telephone, telex, telegram or cable) believed by it to
be genuine and correct and to have been signed or sent by or on behalf
of the proper Person or Persons, and upon advice and statements of legal
counsel, independent accountants and other experts selected by the
Agent. As to any matters not expressly provided for by this Credit
Agreement, the Agent shall in all cases be fully protected in acting, or
in refraining from acting, hereunder in accordance with the instructions
of the Lenders, and any action taken or failure to act pursuant thereto
shall be binding on all of the Lenders.
12.3. Defaults. The Agent shall not be deemed to have knowledge
of the occurrence of an Event of Default (other than the nonpayment of
principal of or interest on the Notes) unless the Agent has received
written notice from a Lender a Borrower specifying such Event of
Default. In the event that the Agent receives such a notice of the
occurrence of an Event of Default, the Agent shall give notice thereof
to the Lenders (and shall give each Lender prompt notice of each such
nonpayment). The Agent shall (subject to the provisions of 24 and
12.7) take such action with respect to such Event of Default as shall be
directed by the Lenders, provided that, unless and until the Agent shall
have received such directions, the Agent may (but shall not be obligated
to) take such action, or refrain from taking such action, with respect
to such Event of Default as it shall deem advisable and in the best
interests of the Required Lenders.
12.4. Rights as a Lender. With respect to its Percentage of the
Total Commitment and the Loans made by it, BBH&Co, in its capacity as a
Lender hereunder shall have the same rights and powers hereunder as any
other Lender and may exercise the same as though it were not acting as
the Agent, and the term "Lender" or "Lenders" shall, unless the context
otherwise indicates, include the Agent in its individual capacity. The
Agent and its Affiliates may (without having to account therefor to any
Lender) accept deposits from, lend money to and generally engage in any
kind of banking, trust or other business with any Borrower or any of its
Affiliates, as if the Agent were not acting as the agent hereunder, and
the Agent may accept fees and other consideration from any of such
Persons for services as the Agent or otherwise without having to account
for the same to the Lenders.
12.5. Indemnification. The Lenders agree to indemnify the Agent
ratably in accordance with the aggregate principal amount of the Notes
held by the Lenders (or, if no such principal is at the time
outstanding, ratably in accordance with their respective Percentages),
for any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
and nature whatsoever which may be imposed on, incurred by or asserted
against the Agent in any way relating to or arising out of this Credit
Agreement or referred to herein or the transactions contemplated by or
referred to herein or therein (including the costs and expenses which
any Borrower is obligated to pay but excluding, unless an Event of
Default has occurred and is continuing, normal administrative costs and
expenses incident to the performance of its agency duties hereunder) or
the enforcement of any of the terms of this Credit Agreement or of any
such other documents, provided that no Lender shall be liable for any of
the foregoing to the extent they arise from the gross negligence or
willful misconduct of the Agent.
12.6. Non-Reliance on Agent and Other Lenders. Each Lender
agrees that it has, independently and without reliance on the Agent or
any other Lender, and based on such documents and information as it has
deemed appropriate, made its own credit analysis of the Borrowers and
its own decision to enter into this Credit Agreement and that it will,
independently and without reliance upon the Agent or any other Lender,
and based on such documents and information as it shall deem appropriate
at the time, continue to make its own analysis and decisions in taking
or not taking action under this Credit Agreement. The Agent shall not
be required to keep itself informed as to the performance or observance
by the Borrowers of this Credit Agreement or any other document referred
to or provided for herein or to inspect the properties or books of the
Borrowers. Except for notices, reports and other documents and
information expressly required to be furnished to the Lenders by the
Agent hereunder, the Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the
affairs, financial condition or business of the Borrowers which may come
into the possession of the Agent or any of its Affiliates.
Notwithstanding the foregoing, the Agent will use its best efforts to
provide to the Lenders any and all information reasonably requested by
them and reasonably available to the Agent promptly upon such request.
12.7. Failure to Act. Except for action expressly required of
the Agent hereunder, the Agent shall in all cases be fully justified in
failing or refusing to act hereunder unless it shall be indemnified to
its satisfaction by the Lenders against any and all liability and
expense which may be incurred by it by reason of taking or continuing to
take any such action.
12.8. Resignation of Agent. Subject to the appointment and
acceptance of a successor Agent as provided below, the Agent may resign
at any time by giving notice thereof to the Lenders and DRC. Upon any
such resignation, the Lenders shall appoint a successor Agent which
shall be reasonably satisfactory to DRC. If no successor Agent shall
have been so appointed by the Lenders and shall have accepted such
appointment within 30 days after the retiring Agent's giving of notice
of resignation, then the retiring Agent may, on behalf of the Lenders,
appoint a successor Agent which shall be a Lender which has a combined
capital and surplus of at least $500,000,000 and which shall be
reasonably satisfactory to DRC. Upon the acceptance of any appointment
as Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent
shall be discharged from its duties and obligations hereunder. After
the retiring Agent's resignation hereunder as Agent, the provisions of
this 12 shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as the
Agent.
12.9. Cooperation of Lenders. Each Lender shall (a) endeavor to
and shall not be liable for any failure to promptly notify the other
Lenders and the Agent of any Events of Default known to such Lender
under this Credit Agreement and not reasonably believed to have been
previously disclosed to the other Lenders; and (b) provide the other
Lenders and the Agent with such information and documentation as such
other Lender or the Agent shall reasonably request in the performance of
their respective duties hereunder, including all information relative to
the outstanding balance of principal, interest and other sums owed to
such Lender.
12.10. Amendment of 12. Each Borrower hereby agrees that the
provisions of this 12 (other than 12.8 and 12.11) generally
constitute an agreement among the Agent and the Lenders and that any and
all of the provisions of this 12 (other than 12.8 and 12.11) may be
amended at any time by the Lenders without the consent or approval of,
or notice to, any Borrower (other than the requirement of notice to DRC
of the resignation of the Agent and other than any provision in addition
to 12.8 and 12.11 which directly affects the Borrowers).
12.11. Reliance. As to any consent that is granted or any other
action that is taken by the Agent hereunder, or under the Loan
Documents, the Borrowers shall be entitled to rely upon any of the
foregoing granted, delivered or taken by the Agent and the Lenders shall
be bound thereby, without the necessity of inquiring or confirming the
Agent's authority.
13. SETOFF, ETC. Regardless of the adequacy of any collateral,
during the continuance of any Event of Default, any deposits or other
sums credited by or due from any Lender to any Borrower and any
securities or other property of any Borrower in the possession of any
Lender may be applied to or set off against the pro rata payment of
Obligations and any and all other liabilities, direct, or indirect,
absolute or contingent, due or to become due, now existing or hereafter
arising, of the Borrowers to the Lenders. The Lenders agree among
themselves that, with respect to all sums received by the Lenders
applicable to the payment of principal of or interest on the Notes,
equitable adjustment will be made among the Lenders so that, in effect,
all such sums shall be shared ratably by each of the Lenders whether
received by voluntary payment, by the exercise of the right of setoff or
banker's lien, by counterclaim or crossclaim or by the enforcement of
any or all of the Notes. If any Lender receives any payment on its
Notes of a sum or sums in excess of its pro rata portion, then such
Lender receiving such excess payment shall purchase for cash from the
other Lenders an interest in their Notes in such amounts as shall result
in a ratable participation by each of the Lenders in the aggregate
unpaid amount of the Notes then outstanding; provided, however, that if
all or any portion of such excess payment is thereafter recovered from
such Lender, the purchase shall be rescinded and the purchase price
restored to the extent of such recovery, but without interest.
14. EXPENSES. Whether or not the transactions contemplated
hereby shall be consummated, each Borrower agrees to pay (a) the
reasonable direct, out-of-pocket costs of reproducing this Credit
Agreement, the other Loan Documents and the other agreements at and
instruments mentioned herein, (b) any taxes (including any interest and
penalties in respect thereto) payable by the Lenders (other than taxes
based upon the Lender's net income) on or with respect to the
transactions contemplated by this Credit Agreement (the Borrowers hereby
agreeing to indemnify the Lenders with respect thereto), (c) the fees,
expenses and disbursements of the Agent's counsel incurred in connection
with the preparation of the Loan Documents and other instruments
mentioned herein and the reasonable fees, expenses and disbursements of
the Agent's counsel and any local counsel to the Lenders in connection
with any amendments, modifications, approvals, consents, waivers or
Replacement Lenders hereto or hereunder and (d) all reasonable
out-of-pocket expenses (including attorney fees and costs for external
counsel to the Lenders and the allocated costs and disbursements of
internal counsel of the Lenders) incurred by the Lenders in connection
with (i) the enforcement of or preservation of rights under any of the
Loan Documents against the Borrowers or the administration thereof after
the occurrence of an Event of Default or any event which, with the
giving of notice or passage of time or both, would constitute an Event
of Default, (ii) any replacement of a Lender pursuant to 17.4 and (iii)
any litigation, proceeding or dispute arising hereunder; provided,
however, that the Borrowers shall have no obligation to pay for the
expenses of the Agent or the Lenders to the extent such expenses result
from the Agent's or any Lender's gross negligence, fraud or willful
misconduct.
15. INDEMNIFICATION. Each Borrower agrees to indemnify and hold
harmless each Lender from and against any and all claims, actions and
suits whether groundless or otherwise, and from and against any and all
liabilities, losses, damages and expenses of every nature and character
arising out of this Credit Agreement or any of the other Loan Documents
or the transactions contemplated hereby or thereby, including (a) any
actual or proposed use by any Borrower of the proceeds of any of the
Loans, (b) any Borrower entering into or performing this Credit
Agreement or any of the other Loan Documents or (c) with respect to any
Borrower and its properties and assets, the violation of any
Environmental Law, the presence, disposal, escape, seepage, leakage,
spillage, discharge, emission, release or threatened release of any
Hazardous Substances or any action, suit, proceeding or investigation
brought or threatened with respect to any Hazardous Substances
(including, but not limited to claims with respect to wrongful death,
personal injury or damage to property), in each case including the
reasonable fees and disbursements of counsel for the Agent, incurred in
connection with any such investigation, litigation or other proceeding;
provided, however, that no Borrower shall have any obligation to
indemnify the Agent or the Lenders for any liabilities, losses, damages
or other expenses (I) incurred in connection with any litigation
commenced by any Borrower against the Agent or any Lender, or by the
Agent or any Lender against any Borrower, which seeks enforcement of any
rights hereunder or under any other Loan Document and is determined
adversely to the Agent or the Lenders in a final nonappealable judgment
or (II) to the extent such liabilities, losses, damages or other
expenses result from the Agent's or any Lender's gross negligence, fraud
or willful misconduct. If, and to the extent that the obligations of
any Borrower under this 15 are unenforceable for any reason, each
Borrower hereby agrees to make the maximum contribution to the payment
in satisfaction of such obligations which is permissible under
applicable law.
16. SURVIVAL OF COVENANTS, ETC. All covenants, agreements,
representations and warranties made herein in any of the other Loan
Documents or in any documents or other papers delivered by or on behalf
of each Borrower pursuant hereto shall be deemed to have been relied
upon by each Lender, notwithstanding any investigation heretofore or
hereafter made by it, and shall survive the making by the Lenders of the
Loans, as herein contemplated, and shall continue in full force and
effect so long as any amount due under this Credit Agreement or any of
the other Loan Documents remains outstanding or the Lenders have any
obligation to make any Loans. All statements contained in any
certificate or other paper delivered to the Lenders at any time by or on
behalf of any Borrower pursuant hereto shall constitute representations
and warranties as of the date thereof by the Borrowers hereunder.
17. ASSIGNMENT AND PARTICIPATION.
17.1. Assignment by the Lenders. No Lender shall assign or
transfer any of its rights or obligations under any of the Loan
Documents (i) without the prior written consent of DRC, which shall not
be unreasonably withheld or delayed, and (ii) in amounts of less than
$5,000,000 unless such Lender assigns its entire remaining interest
under the Loan Documents; provided, however, that any Lender may, at any
time and from time to time, sell, transfer, assign or otherwise grant an
interest in any Loan to a Subsidiary or any Affiliate of such Lender or
to a Federal Reserve Bank of the United States; and provided, further,
that upon the occurrence and during the continuance of an Event of
Default, no consent of DRC shall be required to any assignment.
17.2. Assignment by Borrowers. No Borrower shall assign or
transfer any of its rights or obligations under any of the Loan
Documents without the prior written consent of the Lenders.
17.3 Participations by the Lenders. Any Lender may, without
the consent of any Borrower, the Agent or any other Lender, sell
participations to one or more banks or other entities (each a
"Participant") in all or a portion of such Lender's rights and
obligations under this Credit Agreement (including all or a portion of
its Commitment and the Loans owing to it); provided that (i) such
Lender's obligations under this Credit Agreement shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations, (iii) each Borrower, the
Agent, and the other Lenders shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and obligations
under this Credit Agreement and (iv) such participation shall be in an
amount of not less than $5,000,000. Any agreement or instrument
pursuant to which a Lender sells such a participation shall provide that
such Lender shall retain the sole right to enforce this Credit Agreement
and to approve any amendment, modification or waiver of any provision of
this Credit Agreement. Each Borrower agrees that each Participant shall
be entitled to the benefits of 4.5 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to 17.1.
17.4 Replacement of Lender. In the event that any Lender (other
than the Agent in its capacity as a Lender) or, to the extent
applicable, any Participant (the "Affected Lender"):
(a) fails to perform its obligations to fund any portion
of any Loan on or after the Closing Date when required to do so by
the terms of this Credit Agreement, or fails to provide its portion
of any LIBOR Loan pursuant to 2 or on account of any legal
requirement as contemplated by 4.4;
(b) refuses to consent to a proposed extension of the
Maturity Date that is consented to by all of the other Lenders; or
(c) refuses to consent to a proposed amendment,
modification, waiver or other action requiring consent of all of
the Lenders under 25 that is consented to by Lenders owning at
least 75% of the Percentages of the Total Commitment;
then, so long as no Event of Default exists, DRC shall have the right to
seek, at its own cost and expense, a replacement lender which is
reasonably satisfactory to the Agent and the Required Lenders (the
"Replacement Lender"). The Replacement Lender shall purchase the
interests of the Affected Lender in the Loans and its Commitment and
shall assume the obligations of the Affected Lender hereunder and under
the other Loan Documents upon execution by the Replacement Lender of an
assignment agreement in form and substance reasonably satisfactory to
the Replacement Lender and Affected Lender, and the tender by the
Replacement Lender to the Affected Lender of a purchase price agreed
between the Replacement Lender and the Affected Lender. Such assignment
by any Affected Lender who has performed its obligations hereunder shall
be deemed an early termination of any Loans to the extent of such
Affected Lender's portion thereof, and the Borrowers will pay to such
Affected Lender any resulting amounts due under 4.8. Upon consummation
of such assignment, (i) the Replacement Lender shall become party to
this Credit Agreement as a signatory hereto and shall have all the
rights and obligations of the Affected Lender under this Credit
Agreement and the other Loan Documents with a Percentage equal to the
Percentage of the Affected Lender, (ii) the Affected Lender shall be
released from its obligations hereunder and under the other Loan
Documents and (iii) no further consent or action by any party shall be
required. The Borrowers shall sign such documents and take such other
actions reasonably requested by the Replacement Lender to enable it to
share in the benefits of the rights created by the Loan Documents.
Until the consummation of an assignment in accordance with the foregoing
provisions of this 17.4, the Borrowers shall continue to pay to the
Affected Lender any Obligations as they become due and payable.
18. FOREIGN LENDER. If any Lender is not incorporated or
organized under the laws of the United States of America or a state
thereof, such Lender shall deliver to DRC and the Agent the following:
(a) Two duly completed copies of United States Internal
Revenue Service Form 1001 or 4224 or successor form, as the case
may be, certifying in each case that such Lender is entitled to
receive payments under this Credit Agreement and the Notes without
deduction or withholding of any United States federal income taxes;
provided, however, that if such Lender is not a "bank" within the
meaning of Section 881(c)(3)(A) of the Code and cannot deliver Form
1001 or 4224, such Lender shall deliver to DRC and the Agent a
certificate to such effect; and
(b) A duly completed Internal Revenue Service Form W-8 or
W-9 or successor form, as the case may be, to establish an
exemption from United States backup withholding tax.
Each such Lender that delivers to DRC and the Agent a Form 1001 or
4224 and Form W-8 or W-9 pursuant to this 18 further undertakes to
deliver to DRC and the Agent two further copies of Form 1001 or 4224 and
Form W-8 or W-9, or successor applicable form, or other manner of
certification, as the case may be, on or before the date that any such
form expires or becomes obsolete or after the occurrence of any event
requiring a change in the most recent form previously delivered by it to
DRC and the Agent. Such Forms 1001 or 4224 shall certify that such
Lender is entitled to receive payments under this Credit Agreement
without deduction or withholding of any United States federal income
taxes. The foregoing documents need not be delivered in the event any
change in treaty, law or regulation or official interpretation thereof
has occurred which renders all such forms inapplicable or which would
prevent such Lender from delivering any such form with respect to it, or
such Lender advises DRC that it is not capable of receiving payments
without any deduction or withholding of United States federal income tax
and, in the case of a Form W-8 or W-9, establishing an exemption from
United States backup withholding tax. Until such time as DRC and the
Agent have received such forms indicating that payments hereunder are
not subject to United States withholding tax or are subject to such tax
at a rate reduced by an applicable tax treaty, the Borrowers shall
withhold taxes from such payments at the applicable statutory rate
without regard to 4.1(b).
19. NOTICES, ETC. Except as otherwise expressly provided in this
Credit Agreement, all notices and other communications made or required
to be given pursuant to this Credit Agreement or the other Loan
Documents shall be in writing and shall be delivered in hand, mailed by
United States registered or certified first class mail, postage prepaid,
sent by overnight courier, or sent by telecopy, and confirmed by
delivery via courier or registered or certified first class mail,
postage prepaid, addressed as follows:
(a) if to any Borrower, to such Borrower c/o Dynamics
Research Corporation, ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention:
Chief Financial Officer (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇), or at such other
address for notice as such Borrower shall last have furnished in writing
to the Person giving the notice;
with a copy to:
Ropes & ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
(b) if to the Agent or BBH&Co in its capacity as a Lender,
at ▇▇▇▇▇ Brothers ▇▇▇▇▇▇▇▇ & Co., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Deputy Manager (Telecopy No. (617) 589-
3178) or such other address for notice as BBH&Co shall last have
furnished in writing to the Person giving the notice;
with a copy to:
▇▇▇▇▇▇, Hall & ▇▇▇▇▇▇▇
Exchange Place
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., Esq.
(c) if to BankBoston, at BankBoston, N.A., ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Vice President
(Mail Stop: MA BOS 01-07-04) (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇), or such
other address for notice as BankBoston shall last have furnished in
writing to the Person giving the notice;
(d) if to State Street, at State Street Bank and Trust
Company, High Technology Group, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇ ▇▇▇▇▇▇, Vice President (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇), or
such other address as State Street shall last have furnished in writing
to the Person giving the notice;
(e) if to Chase, at The Chase Manhattan Bank, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: A. ▇▇▇▇ ▇▇▇▇▇▇, Vice President
(Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇), or such other address as Chase shall last
have furnished in writing to the Person giving the notice; and
(f) if to Citizens, at Citizens Bank of Massachusetts,
Edgewater Office Park, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇, Attention: R.E. ▇▇▇▇▇ ▇▇▇▇▇▇, Vice President (Telecopy No. (781)
224-2435), or such other address as Citizens shall last have furnished
in writing to the Person giving the notice.
Any such notice or demand shall be deemed to have been duly given
or made and to have become effective (i) if delivered by hand, overnight
courier or facsimile (so long as a confirmation receipt is received) to
a responsible officer of the party to which it is directed, at the time
of the receipt thereof by such officer or the sending of such facsimile
and (ii) if sent by registered or certified first-class mail, postage
prepaid, on the third Business Day following the mailing thereof.
20. GOVERNING LAW. THIS CREDIT AGREEMENT AND EACH OF THE OTHER
LOAN DOCUMENTS ARE CONTRACTS UNDER THE LAWS OF THE COMMONWEALTH OF
MASSACHUSETTS AND SHALL FOR ALL PURPOSES BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF SAID COMMONWEALTH OF MASSACHUSETTS
(EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). EACH OF
THE BORROWERS, THE AGENT AND THE LENDERS AGREES THAT ANY SUIT FOR THE
ENFORCEMENT OF THIS CREDIT AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS
MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS OR ANY
FEDERAL COURT SITTING THEREIN AND CONSENTS TO THE NONEXCLUSIVE
JURISDICTION OF SUCH COURTS AND THE SERVICE OF PROCESS IN ANY SUCH SUIT
BEING MADE UPON SUCH PERSON BY MAIL AT ITS ADDRESS SPECIFIED IN 19.
EACH OF THE BORROWERS, THE AGENT AND THE LENDERS HEREBY WAIVES ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH
SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT
COURT.
21. HEADINGS. The captions in this Credit Agreement are for
convenience of reference only and shall not define or limit the
provisions hereof.
22. COUNTERPARTS. This Credit Agreement and any amendment hereof
may be executed in several counterparts and by each party on a separate
counterpart, each of which when so executed and delivered shall be an
original, and all of which together shall constitute one instrument. In
proving this Credit Agreement it shall not be necessary to produce or
account for more than one such counterpart signed by the party against
whom enforcement is sought.
23. ENTIRE AGREEMENT, ETC. The Loan Documents and any other
documents executed in connection herewith or therewith express the
entire understanding of the parties with respect to the transactions
contemplated hereby and thereby. Neither this Credit Agreement nor any
term hereof may be changed, waived, discharged or terminated, except as
provided in 25.
24. WAIVER OF JURY TRIAL. EACH OF THE BORROWERS, THE AGENT AND
THE LENDERS HEREBY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY
ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS
CREDIT AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, ANY RIGHTS OR
OBLIGATIONS HEREUNDER OR THEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS
AND OBLIGATIONS. EXCEPT AS PROHIBITED BY LAW, AND, EXCEPT IN THE CASE
OF THE GROSS NEGLIGENCE, FRAUD, BAD FAITH OR WILLFUL MISCONDUCT OF THE
AGENT OR ANY LENDER. EACH BORROWER HEREBY WAIVES ANY RIGHT IT MAY HAVE
TO CLAIM OR RECOVER IN ANY LITIGATION REFERRED TO IN THE PRECEDING
SENTENCE ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR
ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. EACH
BORROWER (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE
AGENT OR THE LENDERS HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT EACH
OF THE AGENT AND THE LENDERS WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVERS AND (B) ACKNOWLEDGES THAT EACH OF THE
LENDERS HAVE BEEN INDUCED TO ENTER INTO THIS CREDIT AGREEMENT AND THE
OTHER LOAN DOCUMENTS TO WHICH IT IS A PARTY BY, AMONG OTHER THINGS, THE
WAIVERS AND CERTIFICATIONS CONTAINED HEREIN.
25. CONSENTS, AMENDMENTS, WAIVERS, ETC. Except as otherwise
expressly provided in this Credit Agreement, any consent or approval
required or permitted by this Credit Agreement to be given by the
Lenders or the Agent may be given, and any term of this Credit Agreement
or of any other instrument related hereto or mentioned herein may be
amended, and the performance or observance by any Borrower of any terms
of this Credit Agreement or such other instrument or the continuance of
any Default or Event of Default may be waived (either generally or in a
particular instance and either retroactively or prospectively) with, but
only with, the written consent of DRC and the written consent of the
Required Lenders. Notwithstanding the foregoing, no amendment or waiver
shall, without the prior written consent of the Agent and all of the
Lenders, (a) extend the fixed maturity or reduce the principal amount
of, or reduce the rate or extend the time of payment of interest on, or
reduce the amount or extend the time of payment of any principal or
interest of, any Note (including any extensions of the Facility A
Revolving Credit Note pursuant to 2.4); (b) change or waive the Total
Commitment or any Commitment (other than reductions in Commitments
pursuant to 2.3) or Percentage; (c) amend or waive this 25 or amend or
waive the definition of Required Lenders; (d) change or waive the amount
or payment terms of any fees due hereunder; or (e) amend or waive 8(c)
or 9.1(a), (f) or (g) or 11. No waiver shall extend to or affect any
obligation not expressly waived nor impair any right consequent thereon.
No course of dealing or delay or omission on the part of the Lenders in
exercising any right shall operate as a waiver thereof or otherwise be
prejudicial thereto. No notice to or demand upon a Borrower shall
entitle a Borrower to other or further notice or demand in similar or
other circumstances.
26. CONFIDENTIALITY. No Lender will make any disclosure of
confidential information furnished to it any Borrower or any of its
Subsidiaries unless such information shall have become public, except:
(a) in connection with operations under or the enforcement
of or the protection of a Lender's interest in this Credit
Agreement or any other Loan Document to Persons who have a
reasonable need to be furnished such information;
(b) pursuant to any law, rule or statutory or regulatory
requirement or any court order, subpoena or other legal process;
(c) to any parent or corporate Affiliate of such Lender or
to any Participant, proposed Participant, assignee, proposed
assignee, Replacement Lender or proposed Replacement Lender;
provided, however, that any such Person shall agree to comply with
the restrictions set forth in this 26 with respect to such
information;
(d) to its directors, officers, employees, agents,
independent counsel, auditors and other professional advisors and
consultants with an instruction to such Person to keep such
information confidential;
(e) to any other Lender and to the Agent and any successor
Agent or prospective successor Agent; and
(f) with the prior written consent of the Borrower, to any
other Person.
27. SEVERABILITY. The provisions of this Credit Agreement are
severable and if any one clause or provision hereof shall be held
invalid or unenforceable in whole or in part in any jurisdiction, then
such invalidity or unenforceability shall affect only such clause or
provision, or part thereof, in such jurisdiction, and shall not in any
manner affect such clause or provision in any other jurisdiction, or any
other clause or provision of this Credit Agreement in any jurisdiction.
28. NATURE OF LENDER'S OBLIGATIONS. The Lenders obligations to
make their respective Loans are several and not joint or joint and
several. Any Lender which is not in default in the performance of its
obligations may, in its discretion, assume the obligations of any other
Lender which is in default.
IN WITNESS WHEREOF, the undersigned have duly executed this Credit
Agreement as a sealed instrument as of the date first set forth above.
DYNAMICS RESEARCH CORPORATION
By:
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President of Finance
and Chief Financial Officer
DRC ENCODER, INC.
By:
Name:
Title:
DRC METRIGRAPHICS, INC.
By:
Name:
Title:
DRC SOFTWARE, INC.
By:
Name:
Title:
DRC TELECOM, INC.
By:
Name:
Title:
per pro ▇▇▇▇▇ BROTHERS
▇▇▇▇▇▇▇▇ & CO.
By:
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Manager
BANKBOSTON, N.A.
By:
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
THE CHASE MANHATTAN BANK
By:
Name: A. ▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
STATE STREET BANK AND TRUST COMPANY
By:
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
CITIZENS BANK OF MASSACHUSETTS
By:
Name: R. E. ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President