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EXHIBIT 10.2
SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT
DATED FEBRUARY 10, 2000 AMONG
DYNAMICS RESEARCH CORPORATION, DRC ENCODER, INC., DRC
METRIGRAPHICS, INC., DRC SOFTWARE, INC., AND DRC TELECOM, INC.
AND
BROWN BROTHERS HARRIMAN & CO., AS ADMINISTRATIVE AGENT AND AS A
LENDER, AND FIRST MASSACHUSETTS BANK, N.A., f/k/a FAMILY BANK, FSB, AS
COLLATERAL AGENT AND AS A LENDER
This Second Amendment to Loan and Security Agreement (hereinafter, the
"Amendment") is made as of the 12th day of June, 2000 by and between Dynamics
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Research Corporation, DRC Encoder, Inc., DRC Metrigraphics, Inc., DRC Software,
Inc., and DRC Telecom, Inc., Massachusetts corporations with their principal
executive offices at 60 Frontage Road, Andover, Massachusetts (hereinafter,
individually and collectively, jointly and severally, the "Borrowers") and
Brown Brothers Harriman & Co., as administrative agent and as a lender, and
First Massachusetts Bank, N.A., f/k/a Family Bank, FSB, as collateral agent and
as a lender (hereinafter, individually and collectively, the "Lenders"), in
consideration of the mutual covenants contained herein and the benefits to be
derived herefrom. Unless otherwise specified herein, all capitalized terms shall
have the same meaning as set forth in the Loan Agreement (as defined
hereinbelow).
W I T N E S S E T H:
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WHEREAS, the Borrowers executed and delivered to the Lenders a certain Loan
and Security Agreement dated February 10, 2000,as amended by a certain Amendment
to Loan and Security Agreement dated as of March 31, 2000 (hereinbefore and
hereinafter, as amended, the "Loan Agreement") pursuant to which, among other
things, the Lenders extended in favor of the Borrowers a Revolving Credit in the
original maximum principal amount of $20,000,000.00 and a Term Loan in the
original maximum principal amount of $7,500,000.00; and
WHEREAS, the Borrowers have requested that the Lenders (i) increase the
Term Loan from $7,500,000.00 to $10,000,000.00, (ii) amend the repayment terms
and conditions of the Term Loan, and (iii) otherwise modify the Loan Agreement
as set forth herein; and
WHEREAS, the Lenders have indicated their willingness to do so, BUT ONLY on
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the terms and conditions contained in this Amendment; and
WHEREAS, the Borrowers have determined that this Amendment is in the
Borrowers' respective best interests.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. The Borrowers hereby certify to the Lenders that, to the best of the
Borrowers' knowledge and belief after due inquiry, the representations and
warranties contained in the Loan Agreement, as modified by this Amendment, are
true as of the date hereof and that no Event of Default under the Loan Agreement
or any document executed in connection therewith has occurred and is continuing.
2. The definition of "Base" set forth in Article 1 of the Loan Agreement
is hereby amended to also mean and refer to "Base Rate".
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3. The definition of "Base Margin Loan" set forth in Article 1 of the
Loan Agreement is hereby deleted in its entirety and replaced with the
following:
"Base Margin Loan": Any Revolving Credit Loan or any portion of the
Term Loan bearing interest at the Base Rate."
4. The definition of "LIBOR Loan" set forth in Article 1 of the Loan
Agreement is hereby deleted in its entirety and replaced with the following:
"LIBOR Loan": Any Revolving Credit Loan or any portion of the Term
Loan bearing interest at the LIBOR Rate"
5. The definition of "LIBOR Margin" set forth in Article 1 of the Loan
Agreement is hereby deleted in its entirety and replaced with the following:
"LIBOR Margin": (a) As to any Revolving Credit Loan, two hundred (200)
basis points; and (b) as to the Term Loan, two hundred fifty (250)
basis points."
6. Article 1 of the Loan Agreement is hereby amended to add the following
definition of "Loan" after the definition of "Line Fee Percentage".
"Loan": Any loan or advance made under the Revolving Credit or the
Term Loan"."
7. The definition of "Loan Documents" set forth in Article 1 of the Loan
Agreement is hereby deleted in its entirety and replaced with the following:
"This Agreement, the Revolving Credit Note, the Term Note, and each
instrument and document executed and/or delivered as contemplated by
Article 6 below, and each other instrument or document from time to
time executed and/or delivered in connection with the arrangements
contemplated hereby, as each may be amended from time to time."
8. The definition of "Maturity Date" set forth in Article 1 of the Loan
Agreement is hereby deleted in its entirety and replaced with the following:
"Maturity Date": (a) As to the Revolving Credit Loans, February 10,
2003; and (b) as to the Term Loan, May 1, 2010."
9. Section 3-10(a) of the Loan Agreement is hereby amended by deleting
the following text:
"(a) Subject to the limitation described herein, and provided the
LIBOR Condition has been satisfied, the Lead Borrower shall have the
option to elect an Interest Period applicable to a Revolving Credit
Loan by giving notice of such election (a "Renewal/Conversion Notice")
in the form of EXHIBIT 3-10,",
and the following substituted therefor:
"(a) Subject to the limitations described herein, the Lead Borrower
shall have the option to elect an Interest Period to be applicable to
a
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Revolving Credit Loan or any portion of the Term Loan by giving
notice of such election (a "Renewal/Conversion Notice") in the form of
EXHIBIT 3-10,"
10. Section 3-10 (c) of the Loan Agreement is hereby deleted in its
entirety and replaced with the following:
"(c) The Lead Borrower shall not select, renew, or convert any
Revolving Credit Loan or any portion of the Term Loan such that there
are more than six (6) interest rates applicable to the Revolving
Credit Loans and Term Loan in the aggregate which are LIBOR Loans at
any one time."
11. Section 3-11(b)(i) of the Loan Agreement is hereby amended to add the
following text after the words "Revolving Credit Loan":
"or any portion of the Term Loan".
12. Section 3-11(b)(ii) of the Loan Agreement is hereby deleted in its
entirety and replaced with the following:
"(ii) the indices on which the interest rates for LIBOR Loans shall no
longer represent the effective cost to the Lenders for U.S. dollar
deposits in the interbank market for deposits in which they regularly
participate:
then, in any such event, the Administrative Agent shall forthwith so notify the
Lead Borrower thereof. Until the Administrative Agent notifies the Lead
Borrower that the circumstances giving rise to such notice no longer apply, the
obligation of the Lenders to make LIBOR Loans of the type affected by such
changed circumstances or to permit the Lead Borrower to select the affected
interest rate as otherwise applicable to any Revolving Credit Loans or any
portion of the Term Loan shall be suspended. If at any time the Administrative
Agent so notifies the Lead Borrower, the Lead Borrower has previously given the
Administrative Agent a Renewal/Conversion Notice with respect to one or more
LIBOR Loans, but such LIBOR Loans have not gone into effect, such notification
shall be deemed to be void and the Lead Borrower may only borrow Base Margin
Loans and shall furnish a substitute Renewal/Conversion Notice in connection
therewith. Upon the expiration of the Interest Period for any LIBOR Loan which
is outstanding on the date of such notification, the amount of such LIBOR Loan
shall thereafter constitute a Base Margin Loan."
13. Section 3-13(d) of the Loan Agreement is hereby amended by adding the
following clause at the end of Section 3-13 (d):
", plus on or before June 12, 2000, an additional fee of $20,000.00 to
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be shared pro rata by the Lenders."
14. Article 4 of the Loan Agreement is hereby deleted in its entirety and
replaced with the following:
"4-1. The Term Loan Subject to, and in accordance with this Agreement,
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and upon satisfaction of all conditions precedent set forth in Article
6, below, the Lender shall provide a term loan facility in the
aggregate maximum principal sum of $10,000,000.00 (the "Term Loan") to
the Borrowers in exchange for, and repayable with interest
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as provided herein and in the Borrowers' Amended and Restated Term
Notes (hereinafter, collectively, the "Term Note") substantially in
the form of EXHIBIT 4-1, annexed hereto.
4-2 Interest Payments on Term Loan.
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(a) At the Lead Borrower's option and in accordance with the terms of
this Agreement, the Term Loan shall bear interest at the Base Rate or
the LIBOR Rate, as specified from time to time by the Lead Borrower in
the Renewal/ Conversion Notice with respect to any portion of the Term
Loan or as otherwise provided in this Agreement;
(b) Interest on the Term Loan shall be payable in arrears on the
applicable Interest Payment Date for that Loan; and
(c) All of the terms and conditions relating to LIBOR Loans set forth
in this Agreement, including, without limitation, the provisions of
Section 3-10, 3-11 and 3-12 shall be applicable to any portion of the
Term Loan bearing interest at the LIBOR Rate."
15. Exhibit 1 of the Loan Agreement is hereby deleted in its entirety and
replaced with Exhibit 1 annexed hereto and specifically incorporated by
reference herein.
16. Exhibit 4-1 is hereby deleted in its entirety and replaced with
Exhibit 4-1 annexed hereto and specifically incorporated by reference herein.
17. This Amendment and all other documents, instruments or agreements
executed in connection herewith incorporate all discussions and negotiations
between the Borrowers and the Lenders, either expressed or implied, concerning
the matters included herein, any statute, custom, or usage to the contrary
notwithstanding. No such discussions or negotiations shall limit, modify or
otherwise affect the provisions hereof. No modification, amendment, or waiver of
any provision of this Amendment or the Loan Agreement or any provision under any
other agreement, document or instrument between the Borrowers and the Lenders
shall be effective unless executed in writing by the party to be charged with
such modification, amendment or waiver, and if such party be the Lenders, then
by a duly authorized officer of each Lender.
18. Except as specifically modified herein, the Loan Agreement shall
remain in full force and effect as originally written and the Borrowers hereby
ratify and confirm all terms and conditions contained therein and further ratify
and reaffirm all representations and warranties made therein as of the date
hereof.
19. This Amendment shall be construed in accordance with and governed by
the laws of the Commonwealth of Massachusetts and shall take effect as a sealed
instrument.
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IN WITNESS WHEREOF, the parties have hereunto set their hands and seals as
of the date first written above.
DYNAMICS RESEARCH CORPORATION
By: /s/ David Keleher
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Title: Chief Financial Officer
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DRC ENCODER, INC.
By: /s/ David Keleher
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Title: Chief Financial Officer
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DRC METRIGRAPHICS, INC.
By: /s/ David Keleher
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Title: Chief Financial Officer
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DRC SOFTWARE, INC.
By: /s/ David Keleher
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Title: Chief Financial Officer
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DRC TELECOM, INC.
By: /s/ David Keleher
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Title: Chief Financial Officer
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ACKNOWLEDGED AND AGREED:
BROWN BROTHERS HARRIMAN & CO.,
as administrative agent and as a lender
By: /s/ Timothy T. Telman
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Name: Timothy T. Telman
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Title: Vice President
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FIRST MASSACHUSETTS BANK, f/k/a
FAMILY BANK, FSB,
as collateral agent and as a lender
By: /s/ C. Lee Willingham
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Name: C. Lee Willingham
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Title: Vice President
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EXHIBIT 10.2
EXHIBIT 1
LENDER REVOLVING COMMITMENT TERM COMMITMENT
/PERCENTAGE /PERCENTAGE
BROWN BROTHERS $10,000,000.00/ 50% $5,000,000.00/ 50%
HARRIMAN & CO.
FIRST MASSACHUSETTS $10,000,000.00/ 50% $5,000,000.00/ 50%
BANK, N.A., formerly known as
FAMILY BANK, FSB
