Exhibit 10.1
THIRD AMENDMENT
THIRD AMENDMENT (this “Agreement‘”), dated as of July 9, 2009, by and among
RESEARCH PHARMACEUTICAL SERVICES, LLC, a Delaware limited liability company
(successor by merger to Research Pharmaceutical Services, Inc., a Pennsylvania
corporation) (“Borrower”), and PNC BANK, NATIONAL ASSOCIATION, as the sole
lender (in such capacity, “Lender”) and as agent under the Credit Agreement (as
hereinafter defined) (in such capacity, “Agent”).
WITNESSETH:
WHEREAS, Borrower, Lender and Agent are parties to a Revolving Credit and
Security Agreement dated as of November 1, 2006 (as heretofore amended, the
“Credit Agreement”);
WHEREAS, Borrower is a wholly-owned subsidiary of Research Pharmaceutical
Services, Inc., a Delaware corporation (the “Guarantor”); and
WHEREAS, Borrower, Lender and Agent have agreed to amend the Credit Agreement to
provide for (i) an increase in the Maximum Revolving Advance Amount, (ii) an
increase in the applicable interest rates and fees, (iii) an extension of the
Term, (iv) changes in financial reporting requirements and (v) certain other
modifications to the Credit Agreement, all on the terms and subject to the
conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and for other consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:
1. Defined Terms. Unless otherwise defined herein (including in the foregoing
recitals), terms defined in the Credit Agreement are used herein as therein
defined.
2. Amendments to Credit Agreement. The Credit Agreement is hereby amended and
supplemented as follows:
(a) The definitions of “Alternate Base Rate”, “Applicable Margin”, “Maximum
Revolving Advance Amount” and “Revolving Interest Rate” in Section 1.2 of the
Credit Agreement are hereby amended and restated to read in full as follows:
“Alternate Base Rate” shall mean, for any day, a rate per annum equal to the
highest of (i) the Base Rate in effect on such day, (ii) the sum of Federal
Funds Open Rate in effect on such day plus 1/2 of 1%, and (iii) the sum of the
Daily LIBOR Rate plus 1.00%.
“Applicable Margin” shall mean (i) 1.50% in respect of Domestic Rate Loans, and
(ii) 2.50% in respect of Eurodollar Rate Loans.
“Maximum Revolving Advance Amount” shall mean $30,000,000.

 

 

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“Revolving Interest Rate” shall mean an interest rate per annum equal to (a) the
sum of the Alternate Base Rate plus the Applicable Margin with respect to
Domestic Rate Loans and (b) the sum of the greater of (i) the Eurodollar Rate
and (ii) two percent (2.00%) plus the Applicable Margin with respect to any
Eurodollar Loan.
(b) The following definitions of “Daily LIBOR Rate” and “Published Rate” are
added to Section 1.2 in the appropriate alphabetical order:
“Daily LIBOR Rate”: for any day, the rate per annum determined by the Agent by
dividing (x) the Published Rate by (y) a number equal to 1.00 minus the
Eurocurrency Reserve Requirements.
“Published Rate”: the rate of interest published each Business Day in the Wall
Street Journal “Money Rates” listing under the caption “London Interbank Offered
Rates” for a one month period (or, if no such rate is published therein for any
reason, then the Published Rate shall be the eurodollar rate for a one month
period as published in another publication selected by the Agent).
(c) The following new Section 2. l(c) is added to the Credit Agreement:
“(c) For purposes of determining at any time the Formula Amount pursuant to
Section 2.1 (a), the amount of Eligible Receivables indicated on the most recent
monthly Borrowing Base Certificate delivered to and accepted by Agent in
accordance with Section 9.2 shall be used in such determination notwithstanding
the subsequent receipt of payment of any such Eligible Receivables, provided,
however, that if at the time of any such determination of the Formula Amount
Undrawn Availability is less than $5,000,000, and thereafter until such time as
Undrawn Availability has been restored to at least $5,000,000 for a period of 60
consecutive days, Eligible Receivables shall be determined based on the amount
of Eligible Receivables actually outstanding on the date of such determination
after giving effect to payments of Eligible Receivables received subsequent to
the date of the most recent Borrowing Base Certificate.”
(d) Section 3.3(b) of the Credit Agreement is amended and restated to read in
full as follows:
“(b) Facility Fee. If, for any calendar quarter during the Term, the average
daily unpaid balance of the Revolving Advances and undrawn amount of any
outstanding Letters of Credit for each day of such calendar quarter does not
equal the Maximum Revolving Advance Amount, then Borrower shall pay to Agent for
the ratable benefit of Lenders a fee at a rate equal to one half of one percent
(0.50%) per annum on the amount by which the Maximum Revolving Advance Amount
exceeds such average daily unpaid balance. Such fee shall be payable to Agent in
arrears on the first day of each calendar quarter with respect to the previous
calendar quarter.”

 

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(e) Section 3.4 of the Credit Agreement is amended and restated to read in full
as follows:
“3.4. Collateral Evaluation Fee, Collateral Monitoring Fee and Fee Letter.
(a) Collateral Evaluation Fee, Borrower shall pay Agent a collateral evaluation
fee equal to $750 per month commencing on the first day of the month following
the Closing Date and on the first day of each month thereafter during the Term,
provided however, that such fee shall be increased to $1,000 per month during
any period when the determination of the amount of Eligible Receivables is being
made in accordance with the provisions of the proviso to Section 2. l(c). The
collateral evaluation fee shall be deemed earned in full on the date when same
is due and payable hereunder and shall not be subject to rebate or proration
upon termination of this Agreement for any reason.
(b) Collateral Monitoring Fee. Borrower shall pay to Agent on the first day of
each month following any month in which Agent performs any collateral monitoring
— namely any field examination, collateral analysis or other business analysis,
the need for which is to be determined by Agent and which monitoring is
undertaken by Agent or for Agent’s benefit — a collateral monitoring fee in an
amount equal to $850 per day for each person employed to perform such
monitoring, plus all costs and disbursements incurred by Agent in the
performance of such examination or analysis. Agent shall not conduct on-site
collateral monitoring of the nature described in this Section 3.4(b) more
frequently than four (4) times per calendar year; provided, that, if an Event of
Default shall have occurred and be continuing, there shall be no limit on the
frequency of on-site collateral monitoring of the nature described in this
Section 3.4(b).”
(f) Section 7.5 of the Credit Agreement is hereby amended and restated to read
in full as follows:
“7.5. Loans. Make or have outstanding advances, loans or extensions of credit to
or for the benefit of any Person except (a) with respect to the extension of
commercial trade credit in the Ordinary Course of Business, (b) loans to
employees of Borrower in the Ordinary Course of Business not to exceed the
aggregate amount of $100,000 at any time outstanding, (c) loans from Borrower to
a Domestic Subsidiary of Borrower, (d) loans by Borrower to its Foreign
Subsidiaries in an aggregate amount outstanding at any time not to exceed the
aggregate amount of loans or advances necessary to adequately fund the ongoing
operating expenses of such Foreign Subsidiaries and (e) loans, advances or
extensions of credit by Borrower to or for the benefit of Guarantor or any of
its Subsidiaries (which are not also Subsidiaries of Borrower) in an aggregate
amount outstanding at any time not to exceed $7,500,000 provided, however, that
from and after any day that Undrawn Availability is less than $5,000,000 no
additional loans, advances or extensions of credit may be made in reliance on
the provisions of this clause (e) until such time as Undrawn Availability has
thereafter

 

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been restored to at least $5,000,000 for a period of thirty (30) consecutive
days, and provided, further, that the transfer of $2,200,000 from Borrower to
Guarantor in December, 2008 shall not be considered a loan, advance or extension
of credit for purposes of this Section 7.5.”
(g) The following new Section 7.26 is added to the Credit Agreement:
“7.26. Net Loss. Permit either Borrower and its Subsidiaries on a consolidated
basis or Guarantor and its Subsidiaries on a consolidated basis to suffer a net
loss, determined in accordance with GAAP (but excluding for such determination
any extraordinary gains or losses and any non-recurring, non-cash gains or
losses), for any fiscal year.”
(h) Section 9.7 of the Credit Agreement is hereby amended and restated to read
as follows:
“9.7. Annual Financial Statements. Furnish Agent and Lenders within one hundred
twenty (120) days after the end of each fiscal year of Guarantor, (a) financial
statements of Guarantor and its Subsidiaries on a consolidated basis including,
but not limited to, statements of income and stockholders’ equity and cash flow
from the beginning of the current fiscal year to the end of such fiscal year and
the balance sheet as at the end of such fiscal year, all prepared in accordance
with GAAP applied on a basis consistent with prior practices, and in reasonable
detail and reported upon without qualification by an independent certified
public accounting firm selected by Guarantor and satisfactory to Agent (the
“Accountants”), (b) unaudited balance sheets as at the end of such fiscal year
and statements of income from the beginning of the current fiscal year to the
end of such fiscal year (i) for Borrower and its Subsidiaries on a consolidated
basis and (ii) for ReSearch Pharmaceutical Services Netherlands BV and its
Subsidiaries on a consolidated basis, all prepared in accordance with GAAP
applied on a basis consistent with prior practices, and complete and correct in
all material respects and (c) a Compliance Certificate.”
(i) Section 9.8 of the Credit Agreement is hereby amended and restated to read
as follows:
“9.8. Quarterly Financial Statements. Furnish Agent and Lenders within sixty
(60) days after the end of each fiscal quarter, (a) an unaudited balance sheet
of Guarantor and its Subsidiaries on a consolidated basis and unaudited
statements of income and cash flow of Guarantor and its Subsidiaries on a
consolidated basis reflecting results of operations from the beginning of the
fiscal year to the end of such quarter and for such quarter, prepared on a basis
consistent with prior practices and complete and correct in all material
respects, subject to normal and recurring year end adjustments that individually
and in the aggregate are not material to the business of Guarantor and its
Subsidiaries, (b) unaudited balance sheets and statements of income (i) for
Borrower and its Subsidiaries on a consolidated basis and (ii) for Research
Pharmaceutical Services Netherlands BV

 

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and its Subsidiaries on a consolidated basis, in each case reflecting results of
operations from the beginning of the fiscal year to the end of such quarter and
for such quarter, all prepared on a basis consistent with past practices and
complete and correct in all material respects, subject to normal and recurring
year end adjustments that individually and in the aggregate are not material to
the business of the Borrower and its Subsidiaries or the business of ReSearch
Pharmaceutical Services Netherlands BV and its Subsidiaries, as the case may be
and (c) a Compliance Certificate.”
(j) Section 9.9 of the Credit Agreement is hereby amended and restated to read
as follows:
“9.9 Monthly Financial Statements. Furnish Agent and Lenders within forty-five
(45) days after the end of each month (or in the case of any month ending on the
last day of any fiscal quarter, sixty (60) days after the end of such month), an
unaudited balance sheet of Borrower and its Subsidiaries on a consolidated basis
and unaudited statement of income of Borrower and its Subsidiaries on a
consolidated basis reflecting results of operations from the beginning of the
fiscal year to the end of such month and for such month, prepared on a basis
consistent with prior practices and complete and correct in all material
respects, subject to normal and recurring year end adjustments that individually
and in the aggregate are not material to the business of Borrower and its
Subsidiaries.”
(k) Section 13.1 of the Credit Agreement is hereby amended and restated to read
in full as follows:
“13.1 Term. This Agreement, which shall inure to the benefit of and shall be
binding upon the respective successors and permitted assigns of Borrower, Agent
and each Lender, shall become effective on the date hereof and shall continue in
full force and effect until October 31, 2012 (the “Term”) unless sooner
terminated as herein provided. Borrower may terminate this Agreement at any time
upon ninety (90) days’ prior written notice upon payment in full of the
Obligations. In the event the Obligations are prepaid in full prior to the last
day of the Term (the date of such prepayment hereinafter referred to as the
“Early Termination Date”), Borrower shall pay to Agent for the benefit of
Lenders an early termination fee in an amount equal to (x) $300,000 if the Early
Termination Date occurs on or before October 31, 2011, and(y) $150,000 if the
Early Termination Date occurs after October 31, 2011 and before October 31,
2012.”
3. Replacement Revolving Credit Note. Concurrently with the execution and
delivery of this Amendment, the Borrower shall execute and deliver to Lender a
replacement Revolving Credit Note in the face amount of its Commitment
Percentage of the Maximum Revolving Advance Amount (the “Replacement Revolving
Credit Note”) in substitution for its existing Revolving Credit Note, which
shall be returned to the Agent for delivery to the Borrower. The outstanding
Revolving Advances of Lender shall be evidenced by its Replacement Revolving
Credit Note.

 

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4. Representations and Warranties. Borrower hereby represents and warrants to
Lender and Agent that:
(a) There exists no Default or Event of Default under the Credit Agreement as
amended hereby;
(b) The representations and warranties made by Borrower in the Credit Agreement
are true and correct in all material respects on and as of the date hereof as if
made on and as of the date hereof;
(c) The execution and delivery of this Agreement and the Replacement Revolving
Credit Note by and on behalf of Borrower have been duly authorized by all
requisite action on behalf of Borrower, and this Agreement and the Replacement
Revolving Credit Note constitute the legal, valid and binding obligations of
Borrower, enforceable against Borrower in accordance with their respective
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or similar laws
affecting the enforcement of creditors’ rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law);
(d) The execution, delivery and performance of this Agreement will not violate
any applicable provision of law or judgment, order or regulation of any court or
of any public or governmental agency or authority nor conflict with or
constitute a breach of or a default under any instrument to which Borrower is a
party or by which Borrower or any of its properties is bound; and
(e) No approval, consent or authorization of, or registration, declaration or
filing with, any governmental or public body or authority, or any trustee or
holder of any indebtedness, is required in connection with the valid execution,
delivery and performance by Borrower of this Agreement and the Replacement
Revolving Credit Note, except such as have been obtained.
5. Conditions Precedent. The effectiveness of the waiver and amendments set
forth herein is subject to the fulfillment, to the satisfaction of the Agent and
its counsel, of the following conditions precedent:
(a) Borrower shall have delivered to the Agent the following, all of which shall
be in form and substance satisfactory to the Agent and shall be duly completed
and executed by all parties:
(i) this Agreement, including the Consent of Guarantor attached hereto;
(ii) the Replacement Revolving Credit Note;
(iii) A certificate of the Secretary or Assistant Secretary of Borrower
certifying (i) as to the resolutions or other limited liability company action
authorizing the execution, delivery and performance of this Amendment, the
Replacement Revolving Credit Note, and any other document contemplated hereby,
(ii) as to the incumbency and specimen

 

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signatures of each [officer] [member] of Borrower executing this Amendment and
the Replacement Revolving Credit Note and (iii) that there have been no changes
to the organizational documents of Borrower since the most recent date true and
correct copies thereof were delivered to the Agent; and
(iv) such additional documents, certificates and information as Agent may
require pursuant to the terms hereof or otherwise reasonably request.
(b) The representations and warranties set forth in the Credit Agreement shall
be true and correct in all material respects on and as of the date hereof.
(c) The Borrower shall have paid to the Agent for the pro rata benefit of the
Lenders an amendment fee of $50,000.
6. Ratification; References; No Waiver. Except as expressly amended by this
Agreement, the Credit Agreement shall continue to be, and shall remain,
unaltered and in full force and effect in accordance with its terms. All
references in the Credit Agreement to “this Agreement,” “hereof,” “hereto” and
“hereunder” shall be deemed to be references to the Credit Agreement as amended
hereby, and all references in any of the Other Documents to the Credit Agreement
shall be deemed to be to the Credit Agreement as amended hereby. Except as
expressly provided in Section 2 hereof, this Agreement does not and shall not be
deemed to constitute a waiver by Agent or Lenders of any Default or Event of
Default or of any of Agent’s or Lenders’ other rights or remedies.
7. Release. In consideration of the execution of this Agreement by Agent and
Lender, Borrower hereby releases Agent and Lender and their respective officers,
attorneys, agents and employees from any liability, suit, damage, claim, loss or
expense of any kind or nature whatsoever and howsoever arising that Borrower
ever had, now have, or may have against Agent or Lender arising out of or
relating to the Credit Agreement or Agent’s or Lender’s acts or omissions with
respect thereto occurring prior to the date hereof. Borrower further states that
it has carefully read the foregoing release, knows the contents thereof and
grants the same as its own free act and deed.
8. Miscellaneous.
(a) Expenses. Borrower agrees to pay all of Agent’s reasonable out-of-pocket
expenses incurred in connection with the preparation, negotiation and execution
of this Agreement, including, without limitation, the reasonable fees and
expenses of Ballard Spahr Andrews & Ingersoll, LLP.
(b) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
(c) Successors and Assigns. The terms and provisions of this Agreement shall be
binding upon and shall inure to the benefit of Borrower, Agent and Lender and
their respective successors and assigns.

 

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(d) Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original, and all of which shall
constitute one and the same instrument.
(e) Headings. The headings of any paragraph of this Agreement are for
convenience only and shall not be used to interpret any provision hereof.
(f) Modifications. No modification hereof or any agreement referred to herein
shall be binding or enforceable unless in writing and signed on behalf of the
party against whom enforcement is sought.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their proper and duly authorized officers or members,
as the case may be, as of the day and year first above written.

            RESEARCH PHARMACEUTICAL
SERVICES, LLC
      By:   /s/ Steven Bell         Name:   STEVEN BELL        Title:   CFO     
  PNC BANK, NATIONAL ASSOCIATION,
as Lender and as Agent
      By:   /s/ Craig T. Sheetz         Name:   CRAIG T. SHEETZ        Title:  
V/P     

 

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CONSENT OF GUARANTOR
The undersigned guarantor (the “Guarantor”) consents to the provisions of the
foregoing Second Amendment and Waiver (the “Amendment”) and confirms and agrees
that: (a) such Guarantor’s obligations under its Guaranty dated as of August 29,
2007 (as amended, the “Guaranty”), relating to the Obligations (as defined in
the Credit Agreement referred to in the Amendment) shall be unimpaired by the
Amendment; (b) such Guarantor has no defenses, setoffs, counterclaims, discounts
or charges of any kind against the Agent or any Lender, its officers, directors,
employees, agents or attorneys with respect to the Guaranty; and (c) all of the
terms, conditions and covenants in the Guaranty remain unaltered and in full
force and effect and are hereby ratified and confirmed and apply to the
Obligations, as increased and modified by the Amendment. The Guarantor certifies
that all representations and warranties made in the Guaranty are true and
correct in all material respects as of the date of the amendment.
WITNESS the due execution of this Consent as of the date of the Amendment,
intending to be legally bound hereby.

            RESEARCH PHARMACEUTICAL
SERVICES, INC.
      By:   /s/ Steven Bell         Name:   STEVEN BELL        Title:   CFO     

 

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AMENDED AND RESTATED REVOLVING CREDIT NOTE

$30,000,000   Date: July 9, 2009     Philadelphia, PA

This Revolving Credit Note is executed and delivered under and pursuant to the
terms of that certain Revolving Credit and Security Agreement dated as of
November 1, 2006 (as amended, restated, supplemented or modified from time to
time, the “Loan Agreement”) by and among RESEARCH PHARMACEUTICAL SERVICES, LLC,
a Delaware limited liability company (successor by merger to ReSearch
Pharmaceutical Services, Inc.) (“Borrower”), with a place of business at 610
West Germantown Pike, Plymouth Meeting, PA 19462 and PNC BANK, NATIONAL
ASSOCIATION (“PNC”), the various financial institutions named therein or which
hereafter become a party thereto, (together with PNC collectively, “Lenders”)
and PNC as agent for Lenders (in such capacity, “Agent”). Capitalized terms not
otherwise defined herein shall have the meanings provided in the Loan Agreement.
FOR VALUE RECEIVED, Borrower hereby promises to pay to the order of PNC, at the
office of Agent located at PNC Bank Center, 1600 Market Street, Philadelphia,
Pennsylvania 19103 or at such other place as Agent may from time to time
designate to Borrower in writing:
(i) the principal sum of Thirty Million Dollars ($30,000,000) or, if different,
from such amount, the unpaid principal balance of PNC’s Commitment Percentage of
the Revolving Advances as may be due and owing under the Loan Agreement, payable
in accordance with the provisions of the Loan Agreement, subject to acceleration
upon the occurrence of an Event of Default under the Loan Agreement or earlier
termination of the Loan Agreement pursuant to the terms thereof; and
(ii) interest on the principal amount of this Note from time to time outstanding
until such principal amount is paid in full at the applicable Revolving Interest
Rate in accordance with the provisions of the Loan Agreement. In no event,
however, shall interest exceed the maximum interest rate permitted by law. Upon
and after the occurrence of an Event of Default, and during the continuation
thereof, interest shall be payable at the Default Rate.
This Note is the Revolving Credit Note referred to in the Loan Agreement and is
secured by the liens granted pursuant to the Loan Agreement and the Other
Documents, is entitled to the benefits of the Loan Agreement and the Other
Documents and is subject to all of the agreements, terms and conditions therein
contained. This Note amends and restates, and is in substitution for a Revolving
Credit Note from the Borrowers in the principal amount of $15,000,000 dated
November 1, 2006 payable to PNC (the “Original Note”). However, without
duplication, this Note shall in no way extinguish the Borrower’s unconditional
obligation to repay all indebtedness evidenced by the Original Note.
This Note is subject to mandatory prepayment and may be voluntarily prepaid, in
whole or in part, on the terms and conditions set forth in the Loan Agreement.

 

 

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If an Event of Default under Section 10.7 of the Loan Agreement shall occur,
then this Note shall immediately become due and payable, without notice,
together with reasonable attorneys’ fees if the collection hereof is placed in
the hands of an attorney to obtain or enforce payment hereof. If any other Event
of Default shall occur under the Loan Agreement or any of the Loan Documents,
which is not cured within any applicable grace period, then this Note may, as
provided in the Loan Agreement, be declared to be immediately due and payable,
without notice, together with reasonable attorneys’ fees, if the collection
hereof is placed in the hands of an attorney to obtain or enforce payment
hereof.
This Note shall be construed and enforced in accordance with the laws of the
Commonwealth of Pennsylvania.
Borrower expressly waives any presentment, demand, protest, notice of protest,
or notice of any kind except as expressly provided in the Loan Agreement.

            RESEARCH PHARMACEUTICAL SERVICES,
LLC
      By:   /s/ Steven Bell         Name:   STEVEN BELL        Title:   CFO     

 

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