EXHIBIT 10
[EXECUTION COPY]
CREDIT AGREEMENT,
dated as of July 29, 1998,
among
THE TITAN CORPORATION,
as the Borrower,
VARIOUS FINANCIAL INSTITUTIONS FROM TIME TO TIME
PARTIES HERETO,
as the Lenders,
THE BANK OF NOVA SCOTIA,
as the Administrative Agent for the Lenders,
and
IMPERIAL BANK,
as the Documentation Agent.
CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of July 29, 1998, is among THE TITAN
CORPORATION, a Delaware corporation (the "BORROWER"), the various financial
institutions from time to time parties hereto (the "LENDERS"), THE BANK OF NOVA
SCOTIA ("SCOTIABANK"), as administrative agent (in such capacity, the
"ADMINISTRATIVE AGENT") for the Lenders, and IMPERIAL BANK ("IMPERIAL"), as
documentation agent (in such capacity, the "DOCUMENTATION AGENT").
W I T N E S S E T H:
WHEREAS, subject to the terms of this Agreement (such capitalized term, and
other capitalized terms used in these recitals, to have the meanings set forth
in SECTION 1.1), the Borrower desires to obtain Term Loan Commitments to (a)
finance the Permitted Acquisitions, and (b) pay related transaction fees and
expenses;
WHEREAS, subject to the terms of this Agreement, the Borrower desires to
obtain Revolving Loan Commitments, Letter of Credit Commitments and a Swing Line
Loan Commitment to (a) (i) refinance all of the Indebtedness and obligations
owed under the Existing Loan Agreements, and (ii) if necessary, refinance
certain Indebtedness of VisiCom assumed by the Borrower, all such Indebtedness
under this CLAUSE (a)(ii) and under CLAUSE (a)(i), together, in an amount not to
exceed $39,500,000, (b) pay fees and expenses related to the Loans and the
Commitments, and (c) provide for the general corporate and working capital needs
of the Borrower and its Restricted Subsidiaries, including any Permitted
Acquisitions; and
WHEREAS, the Lenders and the Issuers are willing, on the terms and subject
to the conditions hereinafter set forth, to extend the Commitments and make
Loans to the Borrower and issue (or participate in) Letters of Credit;
NOW, THEREFORE, the parties hereto agree as follows.
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1. DEFINED TERMS. The following terms (whether or not
underscored) when used in this Agreement, including its preamble and
recitals, shall, except where the context otherwise requires, have the
following meanings (such meanings to be equally applicable to the singular
and plural forms thereof):
"ADMINISTRATIVE AGENT" is defined in the PREAMBLE and includes each
other Person appointed as the successor Administrative Agent pursuant to
SECTION 9.4.
"AFFECTED LENDER" is defined in SECTION 4.10.
"AFFILIATE" of any Person means any other Person which, directly or
indirectly, controls, is controlled by or is under common control with such
Person. "Control" of a Person means the power, directly or indirectly,
(a) to vote 10% or more of the securities (on a fully diluted basis)
having ordinary voting power for the election of directors, managing
members or general partners (as applicable); or
(b) to direct or cause the direction of the management and policies
of such Person (whether by contract or otherwise).
"AGREEMENT" means, on any date, this Credit Agreement as originally in
effect on the Effective Date and as thereafter from time to time amended,
supplemented, amended and restated or otherwise modified and in effect on such
date.
"ALTERNATE BASE RATE" means, on any date and with respect to all Base Rate
Loans, a fluctuating rate of interest per annum (rounded upward, if necessary,
to the next highest 1/16 of 1%) equal to the higher of
(a) the Base Rate in effect on such day; and
(b) the Federal Funds Rate in effect on such day plus 1/2 of 1%.
Changes in the rate of interest on that portion of any Loans maintained as Base
Rate Loans will take effect simultaneously with each change in the Alternate
Base Rate. The Administrative Agent will give notice promptly to the Borrower
and the Lenders of changes in the Alternate Base Rate; PROVIDED, that the
failure to give such notice shall not affect the Alternate Base Rate in effect
after such change.
"APPLICABLE COMMITMENT FEE MARGIN" means at all times during the applicable
periods set forth below with respect to the fee payable to the Lenders pursuant
to SECTION 3.3.1, the applicable percentage set forth below under the column
entitled "Applicable Commitment Fee Margin":
Total Debt to Applicable Commitment
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EBITDA Ratio Fee Margin
Greater than or equal to 3.25 : 1.00 0.500%
Less than 3.25 : 1.00 0.375%
The Total Debt to EBITDA Ratio used to compute the Applicable Commitment
Fee Margin shall be that set forth in the Compliance Certificate most
recently delivered by the Borrower to the Administrative Agent; changes in
the Applicable Commitment Fee Margin resulting from a change in the Total
Debt to EBITDA Ratio shall become effective upon delivery by the Borrower to
the Administrative Agent of a new Compliance Certificate pursuant to CLAUSE
(c) of SECTION 7.1.1. Notwithstanding anything to the contrary herein, the
Applicable Commitment Fee Margin for the period commencing on the Closing
Date and ending on the date of delivery of the Compliance Certificate in
respect of the Fiscal Quarter ending on September 30, 1998, shall equal
0.375%. If the Borrower shall fail to deliver a Compliance Certificate
within 60 days after the end of any Fiscal Quarter (or within 105 days, in
the case of the last Fiscal Quarter of the Fiscal Year), the Applicable
Commitment Fee Margin from and including the 61st (or 106th, as the case may
be) day after the end of such Fiscal Quarter to but not including the date
the Borrower delivers to the Administrative Agent a Compliance Certificate
shall conclusively equal the highest Applicable Commitment Fee Margin set
forth above.
"APPLICABLE MARGIN" means at all times during the applicable periods set
forth below
(a) with respect to the unpaid principal amount of each Term Loan and
Revolving Loan maintained as a Base Rate Loan, the applicable percentage
set forth below under the column entitled "Applicable Margin for Base Rate
Loans"; and
(b) with respect to the unpaid principal amount of each Term Loan and
Revolving Loan maintained as a LIBO Rate Loan, the applicable percentage
set forth below under the column entitled "Applicable Margin for LIBO Rate
Loans":
Applicable Applicable Margin
Total Debt to Margin For For
EBITDA Ratio Base Rate Loans LIBO Rate Loans
Greater than or equal to
3.25 : 1.00 1.00% 2.00%
Greater than or equal to
2.75 : 1.00 but less than
3.25 : 1.00 0.75% 1.75%
Greater than or equal to
2.25 : 1.00 but less than
2.75 :1.00 0.50% 1.50%
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Less than 2.25:1.00 0.25% 1.25%
The Total Debt to EBITDA Ratio used to compute the Applicable Margin
following the Effective Date shall be the Total Debt to EBITDA Ratio set forth
in the Compliance Certificate most recently delivered by the Borrower to the
Administrative Agent; changes in the Applicable Margin resulting from a change
in the Total Debt to EBITDA Ratio shall become effective upon delivery by the
Borrower to the Administrative Agent of a new Compliance Certificate pursuant to
CLAUSE (c) of SECTION 7.1.1. Notwithstanding anything to the contrary herein,
the Applicable Margin for the period commencing on the Closing Date and ending
on the date of delivery of the Compliance Certificate in respect of the Fiscal
Quarter ending on September 30, 1998, shall equal 0.75% for Base Rate Loans and
1.75% for LIBO Rate Loans. If the Borrower shall fail to deliver a Compliance
Certificate within 60 days after the end of any Fiscal Quarter (or within
105 days, in the case of the last Fiscal Quarter of the Fiscal Year), the
Applicable Margin from and including the 61st (or 106th, as the case may be) day
after the end of such Fiscal Quarter to but not including the date the Borrower
delivers to the Administrative Agent a Compliance Certificate shall conclusively
equal the highest Applicable Margin set forth above.
"APPROVED FUND" means, with respect to any Lender which is a fund that
invests in bank loans, any other fund or trust or entity that invests in bank
loans and is advised or managed by the same investment advisor as such Lender or
by an Affiliate of such investment advisor.
"ASSET SALE" means any sale or other disposition by the Borrower or any of
its Restricted Subsidiaries of any of its property or assets, including the
Capital Stock of any Restricted Subsidiary, except sales and dispositions
permitted by SECTION 7.2.11.
"ASSIGNEE LENDER" is defined in SECTION 10.11.1.
"ASSIGNMENT OF CLAIMS ACT" means Xxxxx 00, Xxxxxx Xxxxxx Code Section 3727
and Title 41. United States Code Section 15, as revised or amended, and any
rules or regulations issued pursuant thereto, and also shall be deemed to
include any other laws, rules or regulations governing the assignment of
government contracts or claims against a Governmental Authority.
"AUTHORIZED OFFICER" means, relative to any Obligor, those of its officers,
general partners or managing members (as applicable) whose signatures and
incumbency shall have been certified to the Administrative Agent, the Lenders
and the Issuers pursuant to SECTION 5.1.1.
"BASE RATE" means, at any time, the rate of interest then most recently
established by the Administrative Agent in New York as its base rate for U.S.
dollars loaned in the United States. The Base Rate is not necessarily intended
to be the lowest rate of interest determined by the Administrative Agent in
connection with extensions of credit.
"BASE RATE LOAN" means a Loan bearing interest at a fluctuating rate
determined by reference to the Alternate Base Rate.
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"BORROWER" is defined in the PREAMBLE.
"BORROWER CLOSING DATE CERTIFICATE" means the closing date certificate
executed and delivered by the Borrower pursuant to SECTION 5.1.2, substantially
in the form of EXHIBIT D hereto.
"BORROWER PLEDGE AGREEMENT" means the Pledge Agreement executed and
delivered by the Borrower pursuant to ARTICLE V substantially in the form of
EXHIBIT G-1 hereto, as amended, supplemented, amended and restated or otherwise
modified.
"BORROWER SECURITY AGREEMENT" means the Security Agreement executed and
delivered by the Borrower pursuant to ARTICLE V substantially in the form of
EXHIBIT H-1 hereto, as amended, supplemented, amended and restated or otherwise
modified.
"BORROWING" means the Loans of the same type and, in the case of LIBO Rate
Loans, having the same Interest Period made by all Lenders required to make such
Loans on the same Business Day and pursuant to the same Borrowing Request in
accordance with SECTION 2.1.
"BORROWING REQUEST" means a Loan request and certificate duly executed by
an Authorized Officer of the Borrower, substantially in the form of EXHIBIT B-1
hereto.
"BUSINESS DAY" means
(a) any day which is neither a Saturday or Sunday nor a legal holiday
on which banks are authorized or required to be closed in New York,
New York; and
(b) relative to the making, continuing, prepaying or repaying of any
LIBO Rate Loans, any day which is a Business Day described in CLAUSE (a)
above and which is also a day on which dealings in Dollars are carried on
in the interbank eurodollar market of the Administrative Agent's LIBOR
Office.
"CAPITAL EXPENDITURES" means, for any period, the aggregate amount of all
expenditures of the Borrower and its Restricted Subsidiaries for fixed or
capital assets made during such period which, in accordance with GAAP, would be
classified as capital expenditures.
"CAPITAL STOCK" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person's capital, whether now outstanding or
issued after the Effective Date.
"CAPITALIZED LEASE LIABILITIES" means all monetary obligations of the
Borrower or any of its Restricted Subsidiaries under any leasing or similar
arrangement which have been (or, in accordance with GAAP, should be) classified
as capitalized leases, and for purposes of each Loan Document the amount of such
obligations shall be the capitalized amount thereof, determined in accordance
with GAAP, and the stated maturity thereof shall be the date of the last
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payment of rent or any other amount due under such lease prior to the first
date upon which such lease may be terminated by the lessee without payment of
a premium or a penalty.
"CASH EQUIVALENTS" means (a) marketable direct obligations issued or
unconditionally guaranteed by the United States government and backed by the
full faith and credit of the United States government; (b) domestic and
Eurodollar certificates of deposit and time deposits, bankers' acceptances and
floating rate certificates of deposit issued by any commercial bank organized
under the laws of the United States, any state thereof, the District of
Columbia, any foreign bank, or its branches or agencies (fully protected against
currency fluctuations), which, at the time of acquisition, are rated A-1 (or
better) by S&P or P-1 (or better) by Xxxxx'x; (c) commercial paper of United
States and foreign banks and bank holding companies and their Subsidiaries and
United States and foreign finance, commercial industrial or utility companies
which, at the time of acquisition, are rated A-1 (or better) by S&P or P-1 (or
better) by Xxxxx'x; (d) marketable direct obligations of any State of the United
States of America or any political subdivision of any such State given on the
date of such investment the highest credit rating by Xxxxx'x and S&P; PROVIDED,
that the maturities of all obligations of the type specified in CLAUSES (a)
through (d) above shall not exceed one hundred eighty (180) days; and (e)
reverse purchase agreements covering obligations of the type specified in CLAUSE
(a) above.
"CASH EQUIVALENT INVESTMENT" means, at any time:
(a) any direct obligation of (or unconditionally guaranteed by) the
United States of America or a State thereof (or any agency or political
subdivision thereof, to the extent such obligations are supported by the
full faith and credit of the United States of America or a State thereof)
maturing not more than one year after such time;
(b) commercial paper maturing not more than 365 days from the date of
issue, which is issued by
(i) a corporation (other than an Affiliate of any Obligor)
organized under the laws of any State of the United States or of the
District of Columbia and rated A-1 or higher by S&P or P-1 or higher
by Xxxxx'x, or
(ii) any Lender (or its holding company);
(c) any certificate of deposit, time deposit or bankers acceptance,
maturing not more than one year after its date of issuance, which is issued
by either
(i) any bank organized under the laws of the United States (or
any State thereof) and which has (x) a credit rating of A2 or higher
from Xxxxx'x or A or higher from S&P and (y) a combined capital and
surplus greater than $500,000,000, or
(ii) any Lender; or
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(d) any repurchase agreement having a term of 30 days or less entered
into with any Lender or any commercial banking institution satisfying the
criteria set forth in CLAUSE (c)(i) which
(i) is secured by a fully perfected security interest in any
obligation of the type described in CLAUSE (a), and
(ii) has a market value at the time such repurchase agreement is
entered into of not less than 100% of the repurchase obligation of
such commercial banking institution thereunder.
"CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended.
"CERCLIS" means the Comprehensive Environmental Response Compensation
Liability Information System List.
"CHANGE IN CONTROL" means (i) the acquisition by any person, entity or
"group", within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act,
(excluding, for this purpose, the Borrower or its Restricted Subsidiaries, or
any employee benefit plan of the Borrower or its Restricted Subsidiaries which
acquires beneficial ownership of voting securities of the Borrower) of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 25% or more of either the then outstanding shares of common
stock of the Borrower or the combined voting power of the Borrower's then
outstanding voting securities entitled to vote generally in the election of
directors; or (ii) individuals who, as of the date of the Prospectus, constitute
the Board of Directors (as of the date hereof the "INCUMBENT BOARD") cease for
any reason to constitute at least a majority of the Board of Directors, provided
that any person becoming a director subsequent to the date hereof whose
election, or nomination for election by the Borrower's stockholders, was
approved by a vote of at least a majority of the directors then comprising the
Incumbent Board shall be considered as though such person were a member of the
Incumbent Board; or (iii) approval by the stockholders of the Borrower of a
reorganization, merger or consolidation, in each case with respect to which
persons who were the stockholders of the Borrower immediately prior to such
reorganization, merger or consolidation do not, immediately thereafter, own more
than 10% of the combined voting power entitled to vote generally in the election
of directors of the reorganized, merged or consolidated company's then
outstanding voting securities or (iv) any "Change of Control" (or substantially
similar provision) under (and as defined in) any Sub Debt Document.
"CLOSING DATE" means the first date on which all of the conditions
precedent set forth in Section 5.1 have been satisfied, but in no event shall
such date be later than August 17, 1998.
"CODE" means the Internal Revenue Code of 1986, and the regulations
thereunder, in each case as amended, reformed or otherwise modified from time to
time.
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"COLLATERAL DOCUMENTS" means the Borrower Pledge Agreement, the Borrower
Security Agreement, the Subsidiary Pledge Agreements and the Subsidiary Security
Agreements.
"COMMITMENT" means, as the context may require, a Lender's Term Loan
Commitment, Revolving Loan Commitment or Letter of Credit Commitment, or
Scotiabank's Swing Line Loan Commitment.
"COMMITMENT AMOUNT" means, as the context may require, the Term Loan
Commitment Amount, the Revolving Loan Commitment Amount, the Letter of Credit
Commitment Amount or the Swing Line Loan Commitment Amount.
"COMMITMENT TERMINATION DATE" means, as the context may require, the
Term Loan Commitment Termination Date or the Revolving Loan Commitment
Termination Date.
"COMMITMENT TERMINATION EVENT" means
(a) the occurrence of any Event of Default described in CLAUSES (a)
through (d) of SECTION 8.1.9; or
(b) the occurrence and continuance of any other Event of Default and
either
(i) the declaration of all or any portion of the Loans to be due
and payable pursuant to SECTION 8.3, or
(ii) the giving of notice by the Administrative Agent, acting at
the direction of the Required Lenders, to the Borrower that the
Commitments have been terminated.
"COMPLIANCE CERTIFICATE" means a certificate duly completed and executed by
an Authorized Officer of the Borrower, substantially in the form of EXHIBIT E
hereto, together with such changes thereto as the Administrative Agent may from
time to time request for the purpose of monitoring the Borrower's compliance
with the financial covenants contained herein.
"CONTINGENT LIABILITY" means any agreement, undertaking or arrangement by
which any Person guarantees, endorses or otherwise becomes or is contingently
liable upon (by direct or indirect agreement, contingent or otherwise, to
provide funds for payment, to supply funds to, or otherwise to invest in, a
debtor, or otherwise to assure a creditor against loss) the Indebtedness of any
other Person (other than by endorsements of instruments in the course of
collection), or guarantees the payment of dividends or other distributions upon
the shares of any other Person. The amount of any Person's obligation under any
Contingent Liability shall (subject to any limitation set forth therein) be
deemed to be the outstanding principal amount of the debt, obligation or other
liability guaranteed thereby.
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"CONTINUATION/CONVERSION NOTICE" means a notice of continuation or
conversion and certificate duly executed by an Authorized Officer of the
Borrower, substantially in the form of EXHIBIT C hereto.
"CONTROLLED GROUP" means all members of a controlled group of corporations
and all members of a controlled group of trades or businesses (whether or not
incorporated) under common control which, together with the Borrower, are
treated as a single employer under Section 414(b) or 414(c) of the Code or
Section 4001 of ERISA.
"CONVERSION AMOUNT" means the aggregate outstanding principal amount of all
Term Loans advanced pursuant to SECTION 2.1.3, prior to the Conversion Date.
"CONVERSION DATE" means the date which is one year from the Closing Date.
"COPYRIGHT SECURITY AGREEMENT" means any Copyright Security Agreement
executed and delivered by any Obligor in substantially the form of Exhibit C to
any Security Agreement, as amended, supplemented, amended and restated or
otherwise modified.
"CREDIT AGENTS" means, collectively, the Administrative Agent, the
Documentation Agent, and Scotiabank in its capacity as Agent (as defined in each
of the Collateral Documents) for each of the Secured Parties under the
Collateral Documents.
"CREDIT EXTENSION" means, as the context may require,
(a) the making of a Loan by a Lender; or
(b) the issuance of any Letter of Credit, or the extension of any
Stated Expiry Date of any existing Letter of Credit, by an Issuer.
"CREDIT EXTENSION REQUEST" means, as the context may require, any Borrowing
Request or Issuance Request.
"DEFAULT" means any Event of Default or any condition, occurrence or event
which, after notice or lapse of time or both, would constitute an Event of
Default.
"DISBURSEMENT" is defined in SECTION 2.6.2.
"DISBURSEMENT DATE" is defined in SECTION 2.6.2.
"DISCLOSURE SCHEDULE" means the Disclosure Schedule attached hereto as
SCHEDULE I, as it may be amended, supplemented, amended and restated or
otherwise modified from time to time by the Borrower with the written consent of
the Required Lenders.
"DOCUMENTATION AGENT" is defined in the PREAMBLE.
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"DOLLAR" and the sign "$" mean lawful money of the United States.
"DOMESTIC OFFICE" means, relative to any Lender, the office of such Lender
designated as such Lender's "Domestic Office" set forth opposite its name on
SCHEDULE II hereto or in a Lender Assignment Agreement, or such other office of
a Lender (or any successor or assign of such Lender) within the United States as
may be designated from time to time by notice from such Lender, as the case may
be, to each other Person party hereto.
"EBITDA" means, for the Borrower and its Restricted Subsidiaries, for any
applicable period, the sum (without duplication) of
(a) Net Income,
PLUS
(b) the amount deducted by the Borrower and its Restricted
Subsidiaries, in determining Net Income, representing amortization,
PLUS
(c) the amount deducted, in determining Net Income, of all federal,
state and local income taxes (whether paid in cash or deferred) of the
Borrower and its Restricted Subsidiaries,
PLUS
(d) Interest Expense of the Borrower and its Restricted Subsidiaries,
PLUS
(e) the amount deducted, in determining Net Income, representing
depreciation of assets of the Borrower and its Restricted Subsidiaries.
"EFFECTIVE DATE" means the date this Agreement becomes effective pursuant
to SECTION 10.8.
"ENVIRONMENTAL LAWS" means all applicable federal, state or local statutes,
laws, ordinances, codes, rules, regulations and guidelines (including consent
decrees and administrative orders) relating to public health and safety and
protection of the environment.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute thereto of similar import, together with the
regulations thereunder, in each case as in effect from time to time. References
to sections of ERISA also refer to any successor sections thereto.
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"EVENT OF DEFAULT" is defined in SECTION 8.1.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXEMPTION CERTIFICATE" is defined in CLAUSE (e) OF SECTION 4.6.
"EXISTING LOAN AGREEMENTS" means, together, the Sumitomo Loan Agreement and
the Imperial Loan Agreement.
"EXISTING SUBORDINATED DEBT" means the 81/4% Convertible Subordinated
Debentures described more specifically in the Prospectus.
"FEDERAL FUNDS RATE" means, for any period, a fluctuating interest rate per
annum equal for each day during such period to
(a) the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by federal
funds brokers, as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal Reserve Bank of
New York; or
(b) if such rate is not so published for any day which is a Business
Day, the average of the quotations for such day on such transactions
received by Scotiabank from three federal funds brokers of recognized
standing selected by it.
"FEE LETTER" means the confidential letter, dated June 8, 1998, from
Scotiabank to the Borrower.
"FISCAL QUARTER" means a quarter ending on the last day of each March,
June, September or December.
"FISCAL YEAR" means any period of twelve consecutive calendar months ending
on December 31 of each year; references to a Fiscal Year with a number
corresponding to any calendar year (E.G., the "1998 Fiscal Year") refer to the
Fiscal Year ending on December 31 of such calendar year.
"FIXED CHARGE COVERAGE RATIO" means, as of the close of any Fiscal Quarter,
the ratio computed for the period consisting of such Fiscal Quarter and each of
the three immediately preceding Fiscal Quarters with respect to the Borrower and
its Restricted Subsidiaries on a consolidated basis of:
(a) EBITDA (for all such Fiscal Quarters) minus Capital Expenditures
made during such Fiscal Quarters;
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TO
(b) the sum (for all such Fiscal Quarters) of
(i) Interest Expense paid in cash;
PLUS
(ii) scheduled principal payments of the Term Loans pursuant to
the provisions of CLAUSE (d) of SECTION 3.1.1 after giving effect to
any reductions in such scheduled principal repayments attributable to
any optional or mandatory prepayments of the Term Loans;
PLUS
(iii) Restricted Payments;
PLUS
(iv) all federal, state and foreign income taxes actually paid
in cash by the Borrower and its Restricted Subsidiaries.
"FOREIGN SUBSIDIARY" means any Subsidiary that is not a U.S. Subsidiary.
"F.R.S. BOARD" means the Board of Governors of the Federal Reserve System
or any successor thereto.
"GAAP" is defined in SECTION 1.4.
"GOVERNMENTAL AUTHORITY" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"GUARANTOR" means each wholly owned Restricted Subsidiary which has
executed and delivered to the Administrative Agent a Subsidiary Guaranty.
"HAZARDOUS MATERIAL" means
(a) any "hazardous substance", as defined by CERCLA;
(b) any "hazardous waste", as defined by the Resource Conservation
and Recovery Act, as amended; or
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(c) any pollutant or contaminant or hazardous, dangerous or toxic
chemical, material or substance (including any petroleum product) within
the meaning of any other applicable federal, state or local law,
regulation, ordinance or requirement (including consent decrees and
administrative orders) relating to or imposing liability or standards of
conduct concerning any hazardous, toxic or dangerous waste, substance or
material, all as amended.
"HEDGING OBLIGATIONS" means, with respect to any Person, all liabilities of
such Person under currency exchange agreements, interest rate swap agreements,
interest rate cap agreements and interest rate collar agreements, and all other
agreements or arrangements designed to protect such Person against fluctuations
in interest rates or currency exchange rates.
"HEREIN", "HEREOF", "HERETO", "HEREUNDER" and similar terms contained in
this Agreement or any other Loan Document refer to this Agreement or such other
Loan Document, as the case may be, as a whole and not to any particular Section,
paragraph or provision of this Agreement or such other Loan Document.
"IMPERIAL" is defined in the PREAMBLE.
"IMPERIAL LOAN AGREEMENT" means the Amended and Restated Commercial Loan
Agreement, dated as of May 15, 1997 by and among Imperial Bank, The Sumitomo
Bank of California and the Borrower.
"IMPERMISSIBLE QUALIFICATION" means, relative to the opinion or
certification of any independent public accountant as to any financial statement
of the Borrower, any qualification or exception to such opinion or certification
(a) which is of a "going concern" or similar nature;
(b) which relates to the limited scope of examination of matters
relevant to such financial statement; or
(c) which relates to the treatment or classification of any item in
such financial statement and which, as a condition to its removal, would
require an adjustment to such item the effect of which would be to cause
the Borrower to be in default of any of its obligations under SECTION
7.2.4.
"INCLUDING" and "INCLUDE" means including without limiting the generality
of any description preceding such term, and, for purposes of this Agreement and
each other Loan Document, the parties hereto agree that the rule of ejusdem
generis shall not be applicable to limit a general statement, which is followed
by or referable to an enumeration of specific matters, to matters similar to the
matters specifically mentioned.
"INCUMBENT BOARD" is defined in the definition of "Change in Control."
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"INDEBTEDNESS" of any Person means, without duplication:
(a) all obligations of such Person for borrowed money or advances and
all obligations of such Person evidenced by bonds, debentures, notes or
similar instruments;
(b) all obligations, contingent or otherwise, relative to the face
amount of all letters of credit, whether or not drawn, and banker's
acceptances issued for the account of such Person;
(c) all Capitalized Lease Liabilities of such Person;
(d) for purposes of SECTION 8.1.5 only, all other items which, in
accordance with GAAP, would be included as liabilities on the liability
side of the balance sheet of such Person as of the date at which
Indebtedness is to be determined;
(e) net liabilities of such Person under all Hedging Obligations;
(f) whether or not so included as liabilities in accordance with
GAAP, all obligations of such Person to pay the deferred purchase price of
property or services excluding trade accounts payable in the ordinary
course of business which are not overdue for a period of more than 90 days
or, if overdue for more than 90 days, as to which a dispute exists and
adequate reserves in conformity with GAAP have been established on the
books of such Person, and indebtedness secured by (or for which the holder
of such indebtedness has an existing right, contingent or otherwise, to be
secured by) a Lien on property owned or being acquired by such Person
(including indebtedness arising under conditional sales or other title
retention agreements), whether or not such indebtedness shall have been
assumed by such Person or is limited in recourse; and
(g) all Contingent Liabilities of such Person in respect of any of
the foregoing.
For all purposes of this Agreement, the Indebtedness of any Person shall include
the Indebtedness of any other entity (including any partnership in which such
Person is a general partner) to the extent such Person is liable therefor as a
result of such Person's ownership interest in or other relationship with such
entity, except to the extent the terms of such Indebtedness provide that such
Person is not liable therefor.
"INDEMNIFIED LIABILITIES" is defined in SECTION 10.4.
"INDEMNIFIED PARTIES" is defined in SECTION 10.4.
"INTERCO SUBORDINATION AGREEMENT" means the Subordination Agreement,
substantially in the form of EXHIBIT K hereto.
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"INTEREST EXPENSE" means, for any Fiscal Quarter, the aggregate interest
expense of the Borrower and its Restricted Subsidiaries for such Fiscal Quarter,
as determined in accordance with GAAP, including the portion of any payments
made in respect of Capitalized Lease Liabilities allocable to interest expense.
"INTEREST PERIOD" means, relative to any LIBO Rate Loan, the period
beginning on (and including) the date on which such LIBO Rate Loan is made or
continued as, or converted into, a LIBO Rate Loan pursuant to SECTION 2.3 or 2.4
and shall end on (but exclude) the day which numerically corresponds to such
date one, two, three or six months thereafter (or, if such month has no
numerically corresponding day, on the last Business Day of such month), as the
Borrower may select in its relevant notice pursuant to SECTION 2.3 or 2.4;
PROVIDED, HOWEVER, that
(a) the Borrower shall not be permitted to select Interest Periods to
be in effect at any one time which have expiration dates occurring on more
than five different dates;
(b) if such Interest Period would otherwise end on a day which is not
a Business Day, such Interest Period shall end on the next following
Business Day (unless such next following Business Day is the first Business
Day of a calendar month, in which case such Interest Period shall end on
the Business Day next preceding such numerically corresponding day); and
(c) no Interest Period for any Loan may end later than the Stated
Maturity Date for such Loan.
"INVESTMENT" means, relative to any Person,
(a) any loan or advance made by such Person to any other Person
(excluding commission, travel, xxxxx cash and similar advances to officers
and employees made in the ordinary course of business);
(b) any Contingent Liability of such Person incurred in connection
with loans or advances described in CLAUSE (a); and
(c) any ownership or similar interest held by such Person in any
other Person.
The amount of any Investment shall be the original principal or capital amount
thereof less all returns of principal or equity thereon and shall, if made by
the transfer or exchange of property other than cash, be deemed to have been
made in an original principal or capital amount equal to the fair market value
of such property at the time of such Investment.
"ISSUANCE REQUEST" means a Letter of Credit request and certificate duly
executed by an Authorized Officer of the Borrower, substantially in the form of
EXHIBIT B-2 hereto.
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"ISSUER" means Scotiabank or Imperial in its capacity as Issuer of the
Letters of Credit. At the request of Scotiabank and with the Borrower's consent
(not to be unreasonably withheld), another Lender or an Affiliate of Scotiabank
may issue one or more Letters of Credit hereunder.
"LENDER ASSIGNMENT AGREEMENT" means an assignment agreement substantially
in the form of EXHIBIT L hereto.
"LENDERS" is defined in the PREAMBLE and, in addition, shall include any
commercial bank or other financial institution that becomes a Lender pursuant to
SECTION 10.11.1.
"LENDER'S ENVIRONMENTAL LIABILITY" means any and all losses, liabilities,
obligations, penalties, claims, litigation, demands, defenses, costs, judgments,
suits, proceedings, damages (including consequential damages), disbursements or
expenses of any kind or nature whatsoever (including reasonable attorneys' fees
at trial and appellate levels and experts' fees and disbursements and expenses
incurred in investigating, defending against or prosecuting any litigation,
claim or proceeding) which may at any time be imposed upon, incurred by or
asserted or awarded against the Administrative Agent, any Lender or any Issuer
or any of such Person's Affiliates, shareholders, directors, officers,
employees, and agents in connection with or arising from:
(a) any Hazardous Material on, in, under or affecting all or any
portion of any property of the Borrower or any of its Subsidiaries, the
groundwater thereunder, or any surrounding areas thereof to the extent
caused by Releases from the Borrower's or any of its Subsidiaries' or any
of their respective predecessors' properties;
(b) any misrepresentation, inaccuracy or breach of any warranty,
contained or referred to in SECTION 6.12;
(c) any violation or claim of violation by the Borrower or any of its
Subsidiaries of any Environmental Laws; or
(d) the imposition of any lien for damages caused by or the recovery
of any costs for the cleanup, release or threatened release of Hazardous
Material by the Borrower or any of its Subsidiaries, or in connection with
any property owned or formerly owned by the Borrower or any of its
Subsidiaries.
"LETTER OF CREDIT" is defined in SECTION 2.1.2.
"LETTER OF CREDIT COMMITMENT" means, with respect to an Issuer, such
Issuer's obligation to issue Letters of Credit pursuant to SECTION 2.1.2 and,
with respect to each Revolving Loan Lender, the obligations of each such Lender
to participate in such Letters of Credit pursuant to SECTION 2.6.1.
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"LETTER OF CREDIT COMMITMENT AMOUNT" means, on any date, a maximum amount
of $10,000,000, as such amount may be permanently reduced from time to time
pursuant to SECTION 2.2.
"LETTER OF CREDIT OUTSTANDINGS" means, on any date, an amount equal to the
sum of
(a) the then aggregate amount which is undrawn and available under
all issued and outstanding Letters of Credit,
PLUS
(b) the then aggregate amount of all unpaid and outstanding
Reimbursement Obligations.
"LIBO RATE" means, relative to any Interest Period for LIBO Rate Loans, the
rate of interest equal to the average (rounded upwards, if necessary, to the
nearest 1/16 of 1%) of the rates per annum at which Dollar deposits in
immediately available funds are offered to the Administrative Agent's LIBOR
Office in the London interbank market as at or about 11:00 a.m. London, England
time two Business Days prior to the beginning of such Interest Period for
delivery on the first day of such Interest Period, and in an amount
approximately equal to the amount of the Administrative Agent's LIBO Rate Loan
and for a period approximately equal to such Interest Period.
"LIBO RATE LOAN" means a Loan bearing interest, at all times during an
Interest Period applicable to such Loan, at a rate of interest determined by
reference to the LIBO Rate (Reserve Adjusted).
"LIBO RATE (RESERVE ADJUSTED)" means, relative to any Loan to be made,
continued or maintained as, or converted into, a LIBO Rate Loan for any Interest
Period, a rate per annum (rounded upwards, if necessary, to the nearest 1/16 of
1%) determined pursuant to the following formula:
LIBO Rate = LIBO Rate
-------------------------------
(Reserve Adjusted) 1.00 - LIBOR Reserve Percentage
The LIBO Rate (Reserve Adjusted) for any Interest Period for LIBO Rate Loans
will be determined by the Administrative Agent on the basis of the LIBOR Reserve
Percentage in effect two Business Days before the first day of such Interest
Period.
"LIBOR OFFICE" means, relative to any Lender, the office of such Lender
designated as such Lender's "LIBOR Office" set forth opposite its name on
SCHEDULE II hereto or in a Lender Assignment Agreement, or such other office of
a Lender as designated from time to time by notice from such Lender to the
Borrower and the Administrative Agent, whether or not outside
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the United States, which shall be making or maintaining LIBO Rate Loans of
such Lender hereunder.
"LIBOR RESERVE PERCENTAGE" means, relative to any Interest Period for LIBO
Rate Loans, the reserve percentage (expressed as a decimal) equal to the maximum
aggregate reserve requirements (including all basic, emergency, supplemental,
marginal and other reserves and taking into account any transitional adjustments
or other scheduled changes in reserve requirements) specified under regulations
issued from time to time by the F.R.S. Board and then applicable to assets or
liabilities consisting of or including "Eurocurrency Liabilities", as currently
defined in Regulation D of the F.R.S. Board, having a term approximately equal
or comparable to such Interest Period.
"LIEN" means any security interest, mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or otherwise),
charge against or interest in property, or other priority or preferential
arrangement of any kind or nature whatsoever, to secure payment of a debt or
performance of an obligation.
"LINKABIT" means Linkabit Wireless, Inc., a Delaware corporation.
"LOAN DOCUMENTS" collectively means this Agreement, the Letters of Credit,
the Fee Letter, the Collateral Documents, each Subsidiary Guarantee, each
agreement pursuant to which the Administrative Agent is granted a Lien to secure
the Obligations and each other agreement, certificate, document or instrument
delivered in connection with this Agreement or such other Loan Documents,
whether or not specifically mentioned herein or therein.
"LOANS" means, as the context may require, a Revolving Loan, a Term Loan,
or a Swing Line Loan, of any type.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (i) the
business, condition (financial or otherwise), operations, assets, properties or
prospects of the Borrower or the Borrower and its Subsidiaries taken as a whole,
(ii) the rights and remedies of the Administrative Agent, any Lender or any
Issuer under any Loan Document or (iii) the ability of any Obligor to perform
its Obligations under any Loan Document.
"MOODY'S" means Xxxxx'x Investors Service, Inc.
"NET INCOME" means (exclusive of all amounts, in accordance with GAAP, in
respect of any non-cash and non-recurring gains or non-cash and non-recurring
losses, including fees, costs, charges and other expenses incurred by the
Borrower and its Restricted Subsidiaries in connection with any discontinued
operation, reorganization, consolidation or restructuring) for any period, the
aggregate of all amounts which would be included as net income on the
consolidated financial statements of the Borrower and its Restricted
Subsidiaries for such period.
"NET PROCEEDS" means (a) with respect to the issuance of any equity
securities (other than the issuance or exercise of stock options in connection
with employee incentive programs or
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employee benefit programs) of the Borrower the EXCESS of (i) the proceeds
received by the Borrower from the sale or issuance to any Person of any
stock, warrants or options or the exercise of any such warrants or options,
OVER (ii) all reasonable and customary underwriting commissions and legal,
investment banking, brokerage and accounting and other professional fees,
sales commissions and disbursements actually incurred in connection with such
sale or issuance; (b) with respect to any Asset Sale the EXCESS of (i) the
proceeds received from any Asset Sale OVER (ii) the reasonable cash costs of
such Asset Sale, taxes paid or payable as a result thereof, and all
reasonable and customary legal, investment banking, accounting, and other
professional fees, sales commissions or disbursements actually incurred in
connection with such Asset Sale which have not been paid to Affiliates of the
Borrower in connection therewith; (c) with respect to the incurrence or
issuance of Indebtedness the EXCESS of (i) the proceeds received from the
incurrence or issuance of any Indebtedness (except for Indebtedness permitted
by SECTION 7.2.2), of the Borrower or any of its Restricted Subsidiaries
OVER (ii) the reasonable costs incurred in such transaction, and all
reasonable and customary legal, investment banking, accounting, and other
professional fees, sales commissions or disbursements actually incurred in
connection with such transaction; and (d) the proceeds received from
repayment of intercompany Indebtedness upon completion of the initial public
offering with respect to Linkabit.
The amount of the proceeds described in CLAUSES (a), (b), and (d) which, at
the option of the Borrower and so long as no Default shall have occurred and be
continuing, the Borrower uses or causes any Subsidiary to use such proceeds to
purchase (x) substantially similar assets useful in the business of the Borrower
or such Subsidiary, or (y) Capital Stock of Persons which, immediately after
giving effect to such purchase, become a Restricted Subsidiary (with such assets
or interests described in CLAUSES (x) and (y), collectively, referred to as
"QUALIFIED ASSETS" within 180 days (with respect to the proceeds described in
clauses (a) and (d)), and 270 days (with respect to the proceeds described in
CLAUSE (b)), after the consummation (and with the proceeds) of such sale,
conveyance or disposition, and in the event the Borrower or such Subsidiary
elects to exercise its right to purchase Qualified Assets with the Net Proceeds
pursuant to this provision, the Borrower shall deliver a certificate of an
Authorized Officer to the Administrative Agent within 90 days following the
receipt of Net Proceeds setting forth the amount of the Net Proceeds which the
Borrower or such Subsidiary expects to use to purchase Qualified Assets during
such 180-day or 270-day period, as applicable.
If and to the extent that the Borrower or such Subsidiary has elected to
reinvest Net Proceeds as permitted above, then on the date which is 180 days or
270 days, as appropriate, after the relevant sale, conveyance or disposition,
the Borrower shall deliver a certificate of an Authorized Officer to the
Administrative Agent certifying as to the amount and use of such Net Proceeds
actually used to purchase Qualified Assets. To the extent such Net Proceeds are
not so used to purchase Qualified Assets then the Term Loan Commitment Amount or
the Revolving Loan Commitment Amount, as appropriate pursuant to SECTION 2.2.2,
shall be automatically reduced by an amount equal to the aggregate amount of
such proceeds not so used to purchase Qualified Assets. Notwithstanding the
foregoing, Net Proceeds shall not include proceeds described in CLAUSE (b) of
the first paragraph of this definition to the extent such proceeds are utilized
to acquire Capital Stock pursuant to SECTION 7.2.6 (c).
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"NON-EXCLUDED TAXES" means any Taxes other than net income and franchise
taxes imposed with respect to the Administrative Agent or any Lender by the
Governmental Authority under the laws of which the Administrative Agent or such
Lender, as applicable, is organized or in which it maintains its applicable
lending office.
"NON-U.S. LENDER" means any Lender that is not a "United States person", as
defined under section 7701(a)(30) of the Code.
"NOTE" means, as the context may require, a Revolving Note, a Term Note, or
a Swing Line Note.
"OBLIGATIONS" means all obligations (monetary or otherwise, whether
absolute or contingent, matured or unmatured) of the Borrower and each other
Obligor arising under or in connection with this Agreement and each other Loan
Document.
"OBLIGOR" means, as the context may require, the Borrower and each other
Person (other than a Secured Party) obligated under any Loan Document.
"ORGANIC DOCUMENT" means, relative to any Obligor, as applicable, its
certificate of incorporation, by-laws, certificate of partnership, partnership
agreement, certificate of formation, limited liability agreement and all
shareholder agreements, voting trusts and similar arrangements applicable to any
of such Obligor's partnership interests, limited liability company interests or
authorized shares of capital stock.
"OTHER TAXES" means any and all stamp, documentary or similar taxes, or any
other excise or property taxes or similar levies that arise on account of any
payment being or being required to be made hereunder or under any Note or from
the execution, delivery, registration, recording or enforcement of this
Agreement or any other Loan Document.
"PARTICIPANT" is defined in SECTION 10.11.2.
"PATENT SECURITY AGREEMENT" means any Patent Security Agreement executed
and delivered by any Obligor in substantially the form of Exhibit A to any
Security Agreement, as amended, supplemented, amended and restated or otherwise
modified.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"PENSION PLAN" means a "pension plan", as such term is defined in
Section 3(2) of ERISA, which is subject to Title IV of ERISA (other than a
multiemployer plan as defined in Section 4001(a)(3) of ERISA), and to which the
Borrower or any corporation, trade or business that is, along with the Borrower,
a member of a Controlled Group, may have liability, including any liability by
reason of having been a substantial employer within the meaning of Section 4063
of
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ERISA at any time during the preceding five years, or by reason of being
deemed to be a contributing sponsor under Section 4069 of ERISA.
"PERCENTAGE" means, relative to any Lender, the applicable percentage
relating to Revolving Loans or Term Loans, set forth opposite its name on
SCHEDULE II hereto under the applicable column heading or set forth in a Lender
Assignment Agreement under the applicable column heading, as such percentage may
be adjusted from time to time pursuant to Lender Assignment Agreement(s)
executed by such Lender and its Assignee Lender(s) and delivered pursuant to
SECTION 10.11.1. A Lender shall not have any Commitment to make Revolving Loans
or Term Loans if its percentage under the respective column heading is zero
(0%).
"PERMITTED ACQUISITION" means an acquisition (whether pursuant to an
acquisition of stock, assets or otherwise) by the Borrower or any Restricted
Subsidiary of any Person or the assets of any Person which meets all of the
following conditions (a) such Person is primarily engaged in a similar line of
business as the Borrower or such Restricted Subsidiary as of the Closing Date;
(b) with respect to any single acquisition, or a series of related acquisitions
with a single or aggregate net purchase price of greater than $10,000,000 (with
any non-cash consideration being valued in good faith by senior management of
the Borrower as set forth in an Officer's Certificate delivered to the
Administrative Agent), the Borrower has obtained the prior consent of the
Required Lenders and (c) (i) immediately before and after giving effect to such
acquisition, no Default shall have occurred and be continuing or would result
therefrom (including under SECTION 7.2.1);
(ii) the Borrower shall have delivered to the Administrative Agent a
Compliance Certificate for the period of four full Fiscal Quarters immediately
preceding such acquisition (prepared in good faith and in a manner and using
such methodology which is consistent with the most recent financial statements
delivered pursuant to SECTION 7.1.1) giving PRO FORMA effect in accordance with
this Agreement to the consummation of such acquisition and evidencing compliance
with the covenants set forth in SECTION 7.2.4;
(iii) if such Person becomes a Restricted Subsidiary as a result of
such acquisition, such Person and the Borrower shall have complied with SECTION
7.1. 7.; or
(iv) the Administrative Agent shall have received a certificate,
dated a date reasonably acceptable to the Administrative Agent, of an Authorized
Officer of the Borrower certifying as to a true and complete copy of each
purchase agreement, and all other documents and instruments delivered in
connection with the consummation of any Permitted Acquisitions which occur on
the Effective Date and that are required to be delivered pursuant to the terms
of the relevant purchase agreement. The Administrative Agent shall be satisfied
with all amendments, waivers or other modifications of, or other forbearance to
exercise any rights with respect to, any of the terms or provisions of such
purchase agreements and the exhibits and schedules thereto.
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"PERSON" means any natural person, corporation, limited liability company,
partnership, joint venture, association, trust or unincorporated organization,
Governmental Authority or any other legal entity, whether acting in an
individual, fiduciary or other capacity.
"PLAN" means any Pension Plan or Welfare Plan.
"PLEDGE AGREEMENT" means, as the context may require, the Borrower Pledge
Agreement or the Subsidiary Pledge Agreement.
"PLEDGED SUBSIDIARY" means, at any time, each Subsidiary in respect of
which the Administrative Agent has been granted, at such time, a security
interest in and to, or a pledge of, (i) any of the issued and outstanding shares
of capital stock of such Subsidiary, or (ii) any intercompany notes of such
Subsidiary owing to the Borrower or another Subsidiary of the Borrower.
"PRO FORMA BALANCE SHEET" is defined in CLAUSE (b) of SECTION 5.1.8.
"PROSPECTUS" means the prospectus of the Borrower, dated October 29, 1996,
in connection with the issuance of 8 1/4% convertible subordinated debentures.
"QUALIFIED ASSETS" is defined in the definition of "Net Proceeds".
"QUARTERLY PAYMENT DATE" means the last day of March, June, September and
December, or, if any such day is not a Business Day, the next succeeding
Business Day.
"QUICK RATIO" means, as of the date of determination, on a consolidated
basis for the Borrower and the Restricted Subsidiaries, the ratio of (a) the sum
of (i) cash and Cash Equivalents PLUS (ii) the net amount of accounts receivable
at such time to (b) current liabilities (other than non-cash current
liabilities) of the Borrower and the Restricted Subsidiaries (including the
aggregate principal amount of outstanding Revolving Loans and the current
portion of the Term Loan then outstanding and the current portion of any other
long term debt ).
"REFUNDED SWING LINE LOANS" is defined in CLAUSE (b) of SECTION 2.3.2.
"REIMBURSEMENT OBLIGATION" is defined in SECTION 2.6.3.
"RELEASE" means a "RELEASE", as such term is defined in CERCLA.
"REPLACEMENT LENDER" is defined in of SECTION 4.10.
"REQUIRED LENDERS" means, at any time,
(a) prior to the date of the making of the initial Credit Extension
hereunder, Lenders having at least 51% of the Term Loan Commitments and the
Revolving Loan Commitments; and
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(b) on and after the date of the initial Credit Extension, Lenders
holding at least 51% of the Total Exposure Amount.
"RESOURCE CONSERVATION AND RECOVERY ACT" means the Resource Conservation
and Recovery Act, 42 U.S.C. Section 6901, ET SEQ., as amended.
"RESTRICTED PAYMENT" means the declaration or payment of any dividend
(other than dividends payable solely in common stock of the Borrower) on, or the
making of any payment or distribution on account of, or setting apart assets for
a sinking or other analogous fund for, the purchase, redemption, defeasance,
retirement or other acquisition of any class of Capital Stock of the Borrower or
any Subsidiary or any warrants or options to purchase any such Capital Stock,
whether now or hereafter outstanding, or the making of any other distribution in
respect thereof, either directly or indirectly, whether in cash or property,
obligations of the Borrower or any Subsidiary or otherwise.
"RESTRICTED SUBSIDIARIES" means all direct and indirect, wholly owned U.S.
Subsidiaries of the Borrower; PROVIDED, HOWEVER, that Linkabit shall, at the
Borrower's option, cease to be a Restricted Subsidiary upon satisfaction of the
following conditions precedent: (a) from and after the date of completion of
its initial public offering on terms and conditions reasonably satisfactory to
the Administrative Agent, (b) from and after the date the Borrower receives
payment of no less than $12,000,000 from Linkabit as repayment of intercompany
notes owed to the Borrower, and (c) upon satisfaction by the Administrative
Agent that no Default shall have occurred, then be continuing or would result
from the initial public offering.
"REVOLVING LOAN" is defined in SECTION 2.1.1.
"REVOLVING LOAN COMMITMENT" means, relative to any Lender, such Lender's
obligation (if any) to make Revolving Loans pursuant to CLAUSE (a) of SECTION
2.1.1.
"REVOLVING LOAN COMMITMENT AMOUNT" means, on any date, $55,000,000, as such
amount may be reduced from time to time pursuant to SECTION 2.2.
"REVOLVING LOAN COMMITMENT TERMINATION DATE" means the earliest of:
(a) August 17, 1998 (if the Closing Date has not occurred on or prior
to such date);
(b) the fifth anniversary of the Closing Date;
(c) the date on which the Revolving Loan Commitment Amount is
terminated in full or reduced to zero pursuant to SECTION 2.2; and
(d) the date on which any Commitment Termination Event occurs.
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Upon the occurrence of any event described in the preceding CLAUSES (c) or (d),
the Revolving Loan Commitments shall terminate automatically and without any
further action.
"REVOLVING LOAN LENDER" is defined in CLAUSE (a) of SECTION 2.1.1.
"REVOLVING NOTE" means a promissory note of the Borrower payable to any
Revolving Loan Lender, in the form of EXHIBIT A-1 hereto (as such promissory
note may be amended, endorsed or otherwise modified from time to time),
evidencing the aggregate Indebtedness of the Borrower to such Revolving Loan
Lender resulting from outstanding Revolving Loans, and also means all other
promissory notes accepted from time to time in substitution therefor or renewal
thereof.
"S&P" means Standard & Poor's Rating Services.
"SCOTIABANK" is defined in the PREAMBLE.
"SEC" means the Securities and Exchange Commission.
"SECURED PARTIES" means the Lenders, the Issuers, the Administrative Agent,
and (in each case), each of their respective successors, transferees and
assigns.
"SECURITY AGREEMENT" means, as the context may require, the Borrower
Security Agreement and the Subsidiary Security Agreement, in each case as
amended, supplemented, amended and restated or otherwise modified.
"STATED AMOUNT", means on any date and with respect to a particular Letter
of Credit, the total amount then available to be drawn under such Letter of
Credit.
"STATED EXPIRY DATE" is defined in SECTION 2.6.
"STATED MATURITY DATE" means with respect to all Loans, the fifth
anniversary of the Closing Date.
"SUB DEBT DOCUMENTS" means, collectively, the loan agreements, indentures,
note purchase agreements, promissory notes, guarantees, and other instruments
and agreements evidencing the terms of Subordinated Debt, as amended,
supplemented, amended and restated in accordance with SECTION 7.2.12.
"SUBORDINATED DEBT" means (i) the Existing Subordinated Debt, and (ii)
unsecured Indebtedness of the Borrower subordinated in right of payment to the
Obligations pursuant to documentation containing maturities, amortization
schedules, covenants, defaults, remedies, subordination provisions and other
terms reasonably satisfactory to the Required Lenders.
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"SUBORDINATED NOTES" means, collectively, any promissory notes evidencing
Subordinated Debt, as such notes or instruments may be amended, supplemented or
otherwise modified from time to time in accordance with SECTION 7.2.12.
"SUBSIDIARY" means, with respect to any Person, any corporation, limited
liability company, partnership or other entity of which more than 50% of the
outstanding securities (or other ownership interest) having ordinary voting
power to elect the board of directors, managers or other voting members of the
governing body of such corporation, limited liability company, partnership or
other entity (irrespective of whether at the time securities (or other ownership
interest) of any other class or classes of such corporation, limited liability
company, partnership or other entity shall or might have voting power upon the
occurrence of any contingency) is at the time directly or indirectly owned or
controlled by such Person, by such Person and one or more other Subsidiaries of
such Person, or by one or more other Subsidiaries of such Person. Unless the
context otherwise specifically requires, the term "Subsidiary" shall be a
reference to a Subsidiary of the Borrower.
"SUBSIDIARY GUARANTY" means the subsidiary guaranty executed and delivered
by each Restricted Subsidiary pursuant to the terms of this Agreement,
substantially in the form of EXHIBIT J hereto, as amended, supplemented, amended
and restated or otherwise modified.
"SUBSIDIARY PLEDGE AGREEMENT" means the Pledge Agreement executed and
delivered by each Restricted Subsidiary that in turn has any Subsidiaries,
substantially in the form of EXHIBIT G-2 hereto, in each case as amended,
supplemented, amended and restated or otherwise modified.
"SUBSIDIARY SECURITY AGREEMENT" means, collectively, each Security
Agreement executed and delivered by any Restricted Subsidiary in favor of the
Administrative Agent for the benefit of the Secured Parties pursuant to the
terms of this Agreement, in substantially the form of EXHIBIT H-2, in each case,
as amended, supplemented, amended and restated or otherwise modified.
"SUMITOMO LOAN AGREEMENT" means the Amended and Restated Commercial Loan
Agreement dated as of May 15, 1997, as amended, between the Borrower and
Sumitomo Bank of California.
"SWING LINE LENDER" means, subject to the terms of this Agreement,
Scotiabank.
"SWING LINE LOAN" is defined in CLAUSE (b) of SECTION 2.1.1.
"SWING LINE LOAN COMMITMENT" is defined in CLAUSE (b) of SECTION 2.1.1.
"SWING LINE LOAN COMMITMENT AMOUNT" means, on any date, $5,000,000, as such
amount may be reduced from time to time pursuant to SECTION 2.2.
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"SWING LINE NOTE" means a promissory note of the Borrower payable to
Scotiabank, in the form of EXHIBIT A-3 hereto (as such promissory note may be
amended, endorsed or otherwise modified from time to time), evidencing the
aggregate Indebtedness of the Borrower to Scotiabank resulting from outstanding
Swing Line Loans, and also means all other promissory notes accepted from time
to time in substitution therefor or renewal thereof.
"TANGIBLE NET WORTH" means, with respect to the Borrower on any date of
determination, on a consolidated basis for the Borrower and its Restricted
Subsidiaries, the excess of:
(a) the sum of Capital Stock taken at par value, capital surplus and
retained earnings (or accumulated deficit) of the Borrower at such date;
PLUS
(b) an amount equal to the sum of all non-cash and non-recurring
charges, including fees, costs, charges and other expenses incurred by the
Borrower and its Restricted Subsidiaries in connection with any
discontinued operation, reorganization, consolidation, or restructuring.
OVER
(c) the sum of (i) treasury stock of the Borrower and, to the extent
included in the preceding CLAUSE (a), minority interests in Restricted
Subsidiaries of the Borrower at such date.
PLUS
(ii) the value of all intangible assets of the Borrower and its
Restricted Subsidiaries.
"TAXES" means any and all income, stamp or other taxes, duties, levies,
imposts, charges, fees, deductions or withholdings, now or hereafter imposed,
levied, collected, withheld or assessed by any Governmental Authority, and all
interest, penalties or similar liabilities with respect thereto.
"TERM LOAN" is defined in SECTION 2.1.3.
"TERM LOAN COMMITMENT" means, relative to any Lender, such Lender's
obligation (if any) to make Term Loans pursuant to SECTION 2.1.3.
"TERM LOAN COMMITMENT AMOUNT" means, on any date, $25,000,000, as such
amount may be reduced from time to time pursuant to SECTION 2.2.
"TERM LOAN COMMITMENT TERMINATION DATE" means the earliest of:
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(a) August 17, 1998 (if the initial Credit Extension has not occurred
on or prior to such date);
(b) the Conversion Date;
(c) the date on which the Term Loan Commitment Amount is terminated
in full or reduced to zero pursuant to SECTION 2.2; and
(d) the date on which any Commitment Termination Event occurs.
Upon the occurrence of any event described in CLAUSES (b), (c) or (d), the
Term Loan Commitments shall terminate automatically and without any further
action.
"TERM LOAN LENDER" is defined in SECTION 2.1.3.
"TERM NOTE" means a promissory note of the Borrower payable to any Lender,
in the form of EXHIBIT A-2 hereto (as such promissory note may be amended,
endorsed or otherwise modified from time to time), evidencing the aggregate
Indebtedness of the Borrower to such Lender resulting from outstanding Term
Loans, and also means all other promissory notes accepted from time to time in
substitution therefor or renewal thereof.
"TOTAL DEBT" means, on any date of determination, the outstanding principal
amount of all Indebtedness of the Borrower and its Restricted Subsidiaries of
the type referred to in CLAUSE (a) (which, in the case of the Loans, shall be
deemed to equal the aggregate amount of Loans outstanding on such date), CLAUSE
(b) (which, in the case of Letter of Credit Outstandings shall be deemed to
equal the aggregate amount of Letter of Credit Outstandings on such date), and
CLAUSE (c), in each case of the definition of "Indebtedness" (exclusive of
intercompany Indebtedness between the Borrower and any of its Subsidiaries) and
(without duplication) any Contingent Liability in respect of any of the
foregoing.
"TOTAL DEBT TO EBITDA RATIO" means, as of the last day of any Fiscal
Quarter, the ratio of:
(a) Total Debt outstanding on the last day of such Fiscal Quarter
TO
(b) EBITDA computed for the period consisting of such Fiscal Quarter
and each of the three immediately preceding Fiscal Quarters.
"TOTAL EXPOSURE AMOUNT" means, on any date of determination (and without
duplication), the outstanding principal amount of all Loans, the aggregate
amount of all Letter of Credit Outstandings and the unfunded amount of the
Commitments.
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"TRADEMARK SECURITY AGREEMENT" means any Trademark Security Agreement
executed and delivered by any Obligor substantially in the form of Exhibit B to
any Security Agreement, as amended, supplemented, amended and restated or
otherwise modified.
.
"TRANSACTION DOCUMENTS" means, collectively, each purchase agreement and
each other document required in connection with any Permitted Acquisition.
"TYPE" means, relative to any Loan, the portion thereof, if any, being
maintained as a Base Rate Loan or a LIBO Rate Loan.
"U.C.C." means the Uniform Commercial Code as from time to time in effect
in the State of New York.
"UNITED STATES" or "U.S." means the United States of America, its fifty
states and the District of Columbia.
"U.S. SUBSIDIARY" means any Subsidiary that is incorporated or organized
under the laws of the United States or a state thereof or the District of
Columbia.
"VISICOM" means VisiCom Laboratories, Inc., a California corporation.
"VOTING STOCK" means, with respect to any Person, Capital Stock of any
class or kind ordinarily having the power to vote for the election of directors,
managers or other voting members of the governing body of such Person.
"WELFARE PLAN" means a "WELFARE PLAN", as such term is defined in
section 3(1) of ERISA.
"WHOLLY OWNED" means any Subsidiary all of the outstanding common stock (or
similar equity interest) of which (other than any director's qualifying shares
or investments by foreign nationals mandated by applicable laws) is owned
directly or indirectly by the Borrower.
SECTION 1.2. USE OF DEFINED TERMS. Unless otherwise defined or the
context otherwise requires, terms for which meanings are provided in this
Agreement shall have such meanings when used in each other Loan Document and the
Disclosure Schedule.
SECTION 1.3. CROSS-REFERENCES. Unless otherwise specified, references in
this Agreement and in each other Loan Document to any Article or Section are
references to such Article or Section of this Agreement or such other Loan
Document, as the case may be, and, unless otherwise specified, references in any
Article, Section or definition to any clause are references to such clause of
such Article, Section or definition.
SECTION 1.4. ACCOUNTING AND FINANCIAL DETERMINATIONS. (a) Unless
otherwise specified, all accounting terms used herein or in any other Loan
Document shall be interpreted, and all accounting determinations and
computations hereunder or thereunder (including under
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SECTION 7.2.4) shall be made, in accordance with, those generally accepted
accounting principles ("GAAP") applied in the preparation of the financial
statements referred to in CLAUSE (a) of SECTION 5.1.8. Unless otherwise
expressly provided, all financial covenants and defined financial terms shall
be computed on a consolidated basis for the Borrower and its Subsidiaries, in
each case without duplication.
ARTICLE II
COMMITMENTS, BORROWING AND ISSUANCE
PROCEDURES, NOTES AND LETTERS OF CREDIT
SECTION 2.1. COMMITMENTS. On the terms and subject to the conditions of
this Agreement,
(a) each Lender severally agrees to make Loans (other than Swing Line
Loans) pursuant to the Commitments and Scotiabank agrees to make Swing Line
Loans pursuant to the Swing Line Loan Commitment, in each case as described
in this SECTION 2.1; and
(b)each Issuer severally agrees that it will issue Letters of Credit
pursuant to SECTION 2.1.2, and each Revolving Loan Lender severally agrees
that it will purchase participation interests in such Letters of Credit
pursuant to SECTION 2.6.1.
SECTION 2.1.1. REVOLVING LOAN COMMITMENT AND SWING LINE LOAN COMMITMENT.
(a) From time to time on any Business Day occurring from and after the
Effective Date but prior to the Revolving Loan Commitment Termination Date, each
Lender that has a Revolving Loan Commitment (referred to as a "REVOLVING LOAN
LENDER") will make loans (relative to such Lender, its "REVOLVING LOANS") to the
Borrower equal to such Lender's Percentage of the aggregate amount of each
Borrowing of the Revolving Loans requested by the Borrower to be made on such
day. On the terms and subject to the conditions hereof, the Borrower may from
time to time borrow, prepay and reborrow the Revolving Loans.
(b) From time to time on any Business Day occurring from and after the
Effective Date but prior to the Revolving Loan Commitment Termination Date,
Scotiabank will make loans (relative to Scotiabank, its "SWING LINE LOAN") to
the Borrower equal to the principal amount of the Swing Line Loan requested by
the Borrower to be made on such day. The Commitment of Scotiabank described in
this CLAUSE (b) is herein referred to as its "SWING LINE LOAN COMMITMENT". On
the terms and subject to the conditions hereof, the Borrower may from time to
time borrow, prepay and reborrow Swing Line Loans.
SECTION 2.1.2. LETTER OF CREDIT COMMITMENT. From time to time on any
Business Day occurring from and after the Effective Date but prior to the
Revolving Loan Commitment Termination Date, the Issuer will:
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(a) issue one or more standby letters of credit (relative to such
Issuer, its "LETTER OF CREDIT") for the account of the Borrower or any
Guarantor in the Stated Amount requested by the Borrower on such day; or
(b) extend the Stated Expiry Date of an existing standby Letter of
Credit previously issued hereunder to a date not later than the earlier of
(x) the Revolving Loan Commitment Termination Date and (y) two years from
the date of such extension.
SECTION 2.1.3. TERM LOAN COMMITMENT. From time to time on any Business
Day occurring from and after the Effective Date but prior to the Conversion
Date, each Lender that has a Term Loan Commitment (referred to as a "TERM LOAN
LENDER") will make loans (relative to such Lender, its "TERM LOANS") to the
Borrower equal to such Lender's Percentage of the aggregate amount of each
Borrowing of the Term Loans requested by the Borrower to be made on such day.
No amounts paid or prepaid with respect to Term Loans may be reborrowed.
SECTION 2.1.4. LENDERS NOT PERMITTED OR REQUIRED TO MAKE LOANS. No Lender
shall be permitted or required to make any Loan if, after giving effect thereto,
the aggregate outstanding principal amount of:
(a) all Revolving Loans
(i) of all Revolving Loan Lenders and the outstanding principal
amount of all Swing Line Loans, together with the aggregate amount of
all Letter of Credit Outstandings, would exceed the then existing
Revolving Loan Commitment Amount; or
(ii) of such Revolving Loan Lender, together with such Lender's
Percentage of the aggregate amount of all Swing Line Loans and Letter
of Credit Outstandings, would exceed such Lender's Percentage of the
then existing Revolving Loan Commitment Amount;
(b) all Term Loans
(i) of all Lenders made prior to the Conversion Date would exceed
the Term Loan Commitment Amount; or
(ii) of such Lender with a Term Loan Commitment made prior to the
Conversion Date would exceed such Lender's Percentage of the Term Loan
Commitment Amount; or
(c) (i) all Swing Line Loans would exceed the then existing Swing Line
Loan Commitment Amount or (ii) unless otherwise agreed to by the Swing Line
Lender, in its sole discretion, the sum of all Swing Line Loans and
Revolving Loans made by Scotiabank plus Scotiabank's Percentage multiplied
by the aggregate amount of Letter of
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Credit Outstandings would exceed the amount determined by multiplying
Scotiabank's Percentage by the then existing Revolving Loan Commitment
Amount.
SECTION 2.1.5. ISSUER NOT PERMITTED OR REQUIRED TO ISSUE LETTERS OF
CREDIT. No Issuer shall be permitted or required to issue any Letter of Credit
if, after giving effect thereto, (a) the aggregate amount of all Letter of
Credit Outstandings would exceed the Letter of Credit Commitment Amount or
(b) the sum of the aggregate amount of all Letter of Credit Outstandings plus
the aggregate principal amount of all Revolving Loans and Swing Line Loans then
outstanding would exceed the Revolving Loan Commitment Amount.
SECTION 2.2. REDUCTION OF THE COMMITMENT AMOUNTS. The Commitment Amounts
are subject to reduction from time to time pursuant to this SECTION 2.2.
SECTION 2.2.1. OPTIONAL. The Borrower may, from time to time on any
Business Day occurring after the Effective Date, voluntarily reduce the amount
of the Revolving Loan Commitment Amount, the Term Loan Commitment Amount (on any
date before the Conversion Date), the Swing Line Loan Commitment Amount or the
Letter of Credit Commitment Amount on the Business Day so specified by the
Borrower; PROVIDED, HOWEVER, that all such reductions shall require at least one
Business Day's prior notice to the Administrative Agent and be permanent, and
any partial reduction of any Commitment Amount shall be in a minimum amount of
$1,000,000 and in an integral multiple of $500,000. Any reduction of the
Revolving Loan Commitment Amount which reduces the Revolving Loan Commitment
Amount below the then current amount of the Swing Line Loan Commitment Amount
shall result in an automatic and corresponding reduction of the Swing Line Loan
Commitment Amount to the amount of the Revolving Loan Commitment Amount, as so
reduced, without any further action on the part of Scotiabank or otherwise.
SECTION 2.2.2. MANDATORY. (a) on the Conversion Date, the Term Loan
Commitment Amount shall automatically and without the requirement of any action
on the part of any Person be permanently reduced to zero, and (b) on the date
the Borrower or any of its Restricted Subsidiaries receives any Net Proceeds and
after the expiration of any period designated for the purchase of Qualified
Assets, if appropriate, the amounts outstanding under the Term Loans and the
Term Loan Commitment Amount (before the Conversion Date), the Conversion Amount
(on and after the Conversion Date), and the Revolving Loan Commitment Amount (on
the date all Term Loans have been paid in full), shall be reduced by an amount
equal to 100% of Net Proceeds with respect to Net Proceeds described in CLAUSES
(b), (c), and (d) of the definition thereof and 50% of such Net Proceeds with
respect to the Net Proceeds described in CLAUSE (a) of the definition thereof;
provided, however, that the Revolving Loan Commitment Amount shall only be
reduced by the Net Proceeds described in CLAUSE (b) of the definition thereof.
SECTION 2.3. BORROWING PROCEDURES. Loans (other than Swing Line Loans)
shall be made by the Lenders in accordance with SECTION 2.3.1, and Swing Line
Loans shall be made by Scotiabank in accordance with SECTION 2.3.2.
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SECTION 2.3.1. BORROWING PROCEDURE. In the case of other than Swing Line
Loans, by delivering a Borrowing Request to the Administrative Agent on or
before 12:00 noon, New York time, on a Business Day, the Borrower may from time
to time irrevocably request, on not less than one Business Day's notice in the
case of Base Rate Loans, or three Business Days' notice in the case of LIBO Rate
Loans, and in either case not more than five Business Days' notice, that a
Borrowing be made, in the case of LIBO Rate Loans, in a minimum amount of
$500,000 and an integral multiple of $500,000, in the case of Base Rate Loans,
in a minimum amount of $500,000 and an integral multiple of $100,000 or, in
either case, in the unused amount of the applicable Commitment; PROVIDED,
HOWEVER, that all initial Loans shall be made as Base Rate Loans. On the terms
and subject to the conditions of this Agreement, each Borrowing shall be
comprised of the type of Loans, and shall be made on the Business Day, specified
in such Borrowing Request. In the case of other than Swing Line Loans, on or
before 1:00 p.m. (New York City time) on such Business Day each Lender that has
a Commitment to make the Loans being requested shall deposit with the
Administrative Agent same day funds in an amount equal to such Lender's
Percentage of the requested Borrowing. Such deposit will be made to an account
which the Administrative Agent shall specify from time to time by notice to the
Lenders. To the extent funds are received from the Lenders, the Administrative
Agent shall make such funds available to the Borrower by wire transfer to the
accounts the Borrower shall have specified in its Borrowing Request. No
Lender's obligation to make any Loan shall be affected by any other Lender's
failure to make any Loan.
SECTION 2.3.2. SWING LINE LOANS. (a) By telephonic notice, promptly
followed (within one Business Day) by the delivery of a confirming Borrowing
Request, to Scotiabank on or before 12:00 noon, New York time, on the Business
Day the proposed Swing Line Loan is to be made, the Borrower may from time to
time irrevocably request that Swing Line Loans be made by Scotiabank in an
aggregate minimum principal amount of $500,000 and an integral multiple of
$100,000. All Swing Line Loans shall be made as Base Rate Loans and shall not
be entitled to be converted into LIBO Rate Loans. The proceeds of each Swing
Line Loan shall be made available by Scotiabank, by its close of business on the
Business Day telephonic notice is received by it as provided in this clause to
the Borrower by wire transfer to the account the Borrower shall have specified
in its notice therefor.
(b) If
(i) any Swing Line Loan shall be outstanding for more than four
Business Days;
(ii) any Swing Line Loan is or will be outstanding on a date when the
Borrower requests that a Revolving Loan be made; or
(iii) any Default shall occur and be continuing,
each Revolving Loan Lender (other than Scotiabank) irrevocably agrees that it
will, at the request of Scotiabank, make a Revolving Loan (which shall initially
be funded as a Base Rate Loan) in an amount equal to such Lender's Percentage of
the aggregate principal amount of all such Swing
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Line Loans then outstanding (such outstanding Swing Line Loans hereinafter
referred to as the "REFUNDED SWING LINE LOANS"). On or before 1:00 p.m. (New
York time) on the first Business Day following receipt by each Lender of a
request to make Revolving Loans as provided in the preceding sentence, each
Revolving Loan Lender shall deposit in an account specified by Scotiabank the
amount so requested in same day funds and such funds shall be applied by
Scotiabank to repay the Refunded Swing Line Loans. At the time the
aforementioned Lenders make the above referenced Revolving Loans, Scotiabank
shall be deemed to have made, (in consideration of the making of the Refunded
Swing Line Loans), Revolving Loans in an amount equal to Scotiabank's
Percentage of the aggregate principal amount of the Refunded Swing Line
Loans. Upon the making (or deemed making, in the case of Scotiabank) of any
Revolving Loans pursuant to this clause, the amount so funded shall become
outstanding under such Revolving Loan Lender's Revolving Note and shall no
longer be owed under the Swing Line Note. All interest payable with respect
to any Revolving Loans made (or deemed made, in the case of Scotiabank)
pursuant to this clause shall be appropriately adjusted to reflect the period
of time during which Scotiabank had outstanding Swing Line Loans in respect
of which such Revolving Loans were made. Each Revolving Loan Lender's
obligation to make the Revolving Loans referred to in this clause shall be
absolute and unconditional and shall not be affected by any circumstance,
including (i) any set-off, counterclaim, recoupment, defense or other right
which such Lender may have against Scotiabank, any Obligor or any Person for
any reason whatsoever; (ii) the occurrence or continuance of any Default;
(iii) any adverse change in the condition (financial or otherwise) of any
Obligor; (iv) the acceleration or maturity of any Obligations or the
termination of any Commitment after the making of any Swing Line Loan; (v)
any breach of this Agreement or any other Loan Document by any Person; or
(vi) any other circumstance, happening or event whatsoever, whether or not
similar to any of the foregoing.
SECTION 2.4. CONTINUATION AND CONVERSION ELECTIONS. By delivering a
Continuation/Conversion Notice to the Administrative Agent on or before
12:00 noon, New York time, on a Business Day, the Borrower may from time to time
irrevocably elect, on not less than one Business Days' notice in the case of
Base Rate Loans, or three Business Days' notice in the case of LIBO Rate Loans,
and in either case not more than five Business Days' notice, that all, or any
portion in an aggregate minimum amount of $1,000,000 and an integral multiple of
$1,000,000 be, in the case of Base Rate Loans, converted into LIBO Rate Loans or
be, in the case of LIBO Rate Loans, converted into Base Rate Loans or continued
as LIBO Rate Loans (in the absence of delivery of a Continuation/Conversion
Notice with respect to any LIBO Rate Loan at least three Business Days (but not
more than five Business Days) before the last day of the then current Interest
Period with respect thereto, such LIBO Rate Loan shall, on such last day,
automatically convert to a Base Rate Loan); PROVIDED, HOWEVER, that (x) each
such conversion or continuation shall be pro rated among the applicable
outstanding Loans of all Lenders that have made such Loans, and (y) no portion
of the outstanding principal amount of any Loans may be continued as, or be
converted into, LIBO Rate Loans when any Default has occurred and is continuing.
SECTION 2.5. FUNDING. Each Lender may, if it so elects, fulfill its
obligation to make, continue or convert LIBO Rate Loans hereunder by causing one
of its foreign branches or
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Affiliates (or an international banking facility created by such Lender) to
make or maintain such LIBO Rate Loan; PROVIDED, HOWEVER, that such LIBO Rate
Loan shall nonetheless be deemed to have been made and to be held by such
Lender, and the obligation of the Borrower to repay such LIBO Rate Loan shall
nevertheless be to such Lender for the account of such foreign branch,
Affiliate or international banking facility. In addition, the Borrower
hereby consents and agrees that, for purposes of any determination to be made
for purposes of SECTION 4.1, 4.2, 4.3 or 4.4, it shall be conclusively
assumed that each Lender elected to fund all LIBO Rate Loans by purchasing
Dollar deposits in its LIBOR Office's interbank eurodollar market.
SECTION 2.6. ISSUANCE PROCEDURES. By delivering to the Administrative
Agent an Issuance Request on or before 12:00 noon, New York time, on a Business
Day, the Borrower may from time to time irrevocably request on not less than
three nor more than ten Business Days' notice, in the case of an initial
issuance of a Letter of Credit and not less than three Business Days' prior
notice, in the case of a request for the extension of the Stated Expiry Date of
a standby Letter of Credit, that an Issuer issue, or extend the Stated Expiry
Date of, as the case may be, an irrevocable Letter of Credit in such form as may
be requested by the Borrower and approved by such Issuer, solely for the
purposes described in SECTION 7.1.8. Each Letter of Credit shall by its terms
be stated to expire on a date (its "STATED EXPIRY DATE") no later than the
earlier to occur of (i) the Revolving Loan Commitment Termination Date and (ii)
(unless otherwise agreed to by an Issuer, in its sole discretion) two years from
the date of its issuance. Each Issuer will make available to the beneficiary
thereof the original of the Letter of Credit which it issues hereunder.
SECTION 2.6.1. OTHER LENDERS' PARTICIPATION. Upon the issuance of each
Letter of Credit issued by an Issuer pursuant hereto, and without further
action, each Revolving Loan Lender (other than such Issuer) shall be deemed to
have irrevocably purchased, to the extent of its Percentage to make Revolving
Loans, a participation interest in such Letter of Credit (including the
Contingent Liability and any Reimbursement Obligation with respect thereto), and
such Revolving Loan Lender shall, to the extent of its Percentage to make
Revolving Loans, be responsible for reimbursing promptly (and in any event
within one Business Day) the Issuer for Reimbursement Obligations which have not
been reimbursed by the Borrower in accordance with SECTION 2.6.3. In addition,
such Revolving Loan Lender shall, to the extent of its Percentage to make
Revolving Loans, be entitled to receive a ratable portion of the Letter of
Credit fees payable pursuant to SECTION 3.3.3 with respect to each Letter of
Credit (other than the issuance fees payable to an Issuer of such Letter of
Credit pursuant to the last sentence of SECTION 3.3.3) and of interest payable
pursuant to SECTION 3.2 with respect to any Reimbursement Obligation. To the
extent that any Revolving Loan Lender has reimbursed any Issuer for a
Disbursement, such Lender shall be entitled to receive its ratable portion of
any amounts subsequently received (from the Borrower or otherwise) in respect of
such Disbursement.
SECTION 2.6.2. DISBURSEMENTS. An Issuer will notify the Borrower and the
Administrative Agent promptly of the presentment for payment of any Letter of
Credit issued by such Issuer, together with notice of the date (the
"DISBURSEMENT DATE") such payment shall be made (each such payment, a
"DISBURSEMENT"). Subject to the terms and provisions of such Letter
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of Credit and this Agreement, the applicable Issuer shall make such payment
to the beneficiary (or its designee) of such Letter of Credit. Prior to 1:00
p.m., New York time, on the first Business Day following the Disbursement
Date, the Borrower will reimburse the Administrative Agent, for the account
of the applicable Issuer, for all amounts which such Issuer has disbursed
under such Letter of Credit, together with interest thereon at a rate per
annum equal to the rate per annum then in effect for Base Rate Loans (with
the then Applicable Margin for Revolving Loans accruing on such amount)
pursuant to SECTION 3.2 for the period from the Disbursement Date through the
date of such reimbursement. Without limiting in any way the foregoing and
notwithstanding anything to the contrary contained herein or in any separate
application for any Letter of Credit, the Borrower hereby acknowledges and
agrees that it shall be obligated to reimburse the applicable Issuer upon
each Disbursement of a Letter of Credit, and it shall be deemed to be the
obligor for purposes of each such Letter of Credit issued hereunder (whether
the account party on such Letter of Credit is the Borrower or a Subsidiary).
SECTION 2.6.3. REIMBURSEMENT. The obligation (a "REIMBURSEMENT
OBLIGATION") of the Borrower under SECTION 2.6.2 to reimburse an Issuer with
respect to each Disbursement (including interest thereon), and, upon the failure
of the Borrower to reimburse an Issuer, each Revolving Loan Lender's obligation
under SECTION 2.6.1 to reimburse an Issuer, shall be absolute and unconditional
under any and all circumstances and irrespective of any setoff, counterclaim or
defense to payment which the Borrower or such Revolving Loan Lender, as the case
may be, may have or have had against such Issuer or any Lender, including any
defense based upon the failure of any Disbursement to conform to the terms of
the applicable Letter of Credit (if, in such Issuer's good faith opinion, such
Disbursement is determined to be appropriate) or any non-application or
misapplication by the beneficiary of the proceeds of such Letter of Credit;
PROVIDED, HOWEVER, that after paying in full its Reimbursement Obligation
hereunder, nothing herein shall adversely affect the right of the Borrower or
such Lender, as the case may be, to commence any proceeding against an Issuer
for any wrongful Disbursement made by such Issuer under a Letter of Credit as a
result of acts or omissions constituting gross negligence or wilful misconduct
on the part of such Issuer.
SECTION 2.6.4. DEEMED DISBURSEMENTS. Upon the occurrence and during the
continuation of any Default under SECTION 8.1.9 or upon notification by the
Administrative Agent (acting at the direction of the Required Lenders) to the
Borrower of its obligations under this Section, following the occurrence and
during the continuation of any other Event of Default,
(a) the aggregate Stated Amount of all Letters of Credit shall,
without demand upon or notice to the Borrower or any other Person, be
deemed to have been paid or disbursed by the Issuers of such Letters of
Credit (notwithstanding that such amount may not in fact have been paid or
disbursed); and
(b) the Borrower shall be immediately obligated to reimburse the
Issuers for the amount deemed to have been so paid or disbursed by such
Issuers.
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Amounts payable by the Borrower pursuant to this Section shall be deposited in
immediately available funds with the Administrative Agent and held as collateral
security for the Reimbursement Obligations. When all Defaults giving rise to
the deemed disbursements under this Section have been cured or waived the
Administrative Agent shall return to the Borrower all amounts then on deposit
with the Administrative Agent pursuant to this Section which have not been
applied to the satisfaction of the Reimbursement Obligations.
SECTION 2.6.5. NATURE OF REIMBURSEMENT OBLIGATIONS. The Borrower, each
other Obligor and, to the extent set forth in SECTION 2.6.1, each Revolving Loan
Lender shall assume all risks of the acts, omissions or misuse of any Letter of
Credit by the beneficiary thereof. No Issuer (except to the extent of its own
gross negligence or wilful misconduct) shall be responsible for:
(a) the form, validity, sufficiency, accuracy, genuineness or legal
effect of any Letter of Credit or any document submitted by any party in
connection with the application for and issuance of a Letter of Credit,
even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged;
(b) the form, validity, sufficiency, accuracy, genuineness or legal
effect of any instrument transferring or assigning or purporting to
transfer or assign a Letter of Credit or the rights or benefits thereunder
or the proceeds thereof in whole or in part, which may prove to be invalid
or ineffective for any reason;
(c) failure of the beneficiary to comply fully with conditions
required in order to demand payment under a Letter of Credit;
(d) errors, omissions, interruptions or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex or otherwise; or
(e) any loss or delay in the transmission or otherwise of any document
or draft required in order to make a Disbursement under a Letter of Credit.
None of the foregoing shall affect, impair or prevent the vesting of any of the
rights or powers granted to any Issuer or any Revolving Loan Lender hereunder.
In furtherance and not in limitation or derogation of any of the foregoing, any
action taken or omitted to be taken by an Issuer in good faith (and not
constituting gross negligence or willful misconduct) shall be binding upon each
Obligor and each such Secured Party, and shall not put such Issuer under any
resulting liability to any Obligor or any Secured Party, as the case may be.
SECTION 2.7. NOTES. Each Lender's Loans under a Commitment shall be
evidenced by a Note payable to the order of such Lender in a maximum principal
amount equal to such Lender's Percentage of the original applicable Commitment
Amount. The Borrower hereby irrevocably authorizes each Lender to make (or
cause to be made) appropriate notations on the grid attached to such Lender's
Note (or on any continuation of such grid), which notations, if
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made, shall evidence, INTER ALIA, the date of, the outstanding principal of,
and the interest rate and Interest Period applicable to the Loans evidenced
thereby. Such notations shall be rebuttably presumptive evidence of the
accuracy of the information so set forth; PROVIDED, HOWEVER, that the failure
of any Lender to make any such notations shall not limit or otherwise affect
any Obligations of any Obligor.
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
SECTION 3.1. REPAYMENTS AND PREPAYMENTS; APPLICATION.
SECTION 3.1.1. REPAYMENTS AND PREPAYMENTS. The Borrower shall repay in
full the unpaid principal amount of each Loan upon the applicable Stated
Maturity Date therefor. Prior thereto, payments and prepayments of Loans shall
or may be made as set forth below.
(a) From time to time on any Business Day, the Borrower may make a
voluntary prepayment, in whole or in part, of the outstanding principal
amount of any:
(i) Loans (other than Swing Line Loans), PROVIDED, HOWEVER, that
(A) any such prepayment of the Term Loan shall be applied
to the remaining amortization payments, for the Term Loan as
provided for in SECTION 3.1.1(d) and any such prepayment of
Revolving Loans shall be made PRO RATA among the Revolving Loans
of the same type and, if applicable, having the same Interest
Period of all Lenders that have made such Revolving Loans;
(B) all such voluntary prepayments shall require at least
one but no more than five Business Days' prior written notice to
the Administrative Agent; and
(C) all such voluntary partial prepayments shall be, in the
case of LIBO Rate Loans, in an aggregate minimum amount of
$1,000,000 and an integral multiple of $1,000,000 and, in the
case of Base Rate Loans, in an aggregate minimum amount of
$500,000 and an integral multiple of $100,000; and
(ii) Swing Line Loans, PROVIDED that
(A) all such voluntary prepayments shall require prior
telephonic notice to Scotiabank on or before 1:00 p.m., New York
time, on the day of such prepayment (such notice to be confirmed
in writing within 24 hours thereafter); and
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(B) all such voluntary partial prepayments shall be in an
aggregate minimum amount of $200,000 and an integral multiple of
$100,000.
(b) On each date when the sum of (i) the aggregate outstanding
principal amount of all Revolving Loans and Swing Line Loans and (ii) the
aggregate amount of all Letter of Credit Outstandings exceeds the Revolving
Loan Commitment Amount (as it may be reduced from time to time, including
pursuant to SECTION 2.2 and SECTION 3.1.2), the Borrower shall make a
mandatory prepayment of all the Revolving Loans or all Swing Line Loans (or
both) and, if necessary, give cash collateral to the Administrative Agent
pursuant to an agreement satisfactory to the Administrative Agent to
collateralize Letter of Credit Outstandings, in an aggregate amount equal
to such excess.
(c) Concurrently with the receipt (or deemed receipt) of any Net
Proceeds by the Borrower or any of its Restricted Subsidiaries, the
Borrower shall make a mandatory prepayment of the Loans (i) in an amount
equal to 100% of such Net Proceeds with respect to Net Proceeds described
in CLAUSES (b), (c) AND (d) of the definition thereof and (ii) 50% of such
Net Proceeds with respect to the Net Proceeds described in CLAUSE (A) of
the definition thereof, in each case, to be applied as set forth in SECTION
3.1.2.
(d) On the Stated Maturity Date and on each Quarterly Payment Date
occurring during any period set forth below, the Borrower shall make a
scheduled repayment of the aggregate outstanding principal amount of the
Term Loans, if any, in an amount equal to the amount set forth below:
Required Repayment Amount
Expressed as a Percentage
Period of the Conversion Amount
------ --------------------------
Conversion Date through (and including) the
date of the first anniversary of the
Conversion Date 3.75%
the first day following the first anniversary
of the Conversion Date through (and
including) the date of the second anniversary
of the Conversion Date 5%
the first day following the second
anniversary of the Conversion Date through
(and including) the date of the third
anniversary of the Conversion Date 7.5%
the first day following the third anniversary
of the Conversion Date through (and
including) the date of the fourth anniversary
of the Conversion Date 8.75%
Stated Maturity Date for Term Loans 100% of remaining
principal
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Required Repayment Amount
Expressed as a Percentage
Period of the Conversion Amount
------ --------------------------
balance
(e) Immediately upon any acceleration of the Stated Maturity Date of
any Loans pursuant to SECTION 8.2 or SECTION 8.3, the Borrower shall repay
all the Loans, unless, pursuant to SECTION 8.3, only a portion of all the
Loans is so accelerated (in which case the portion so accelerated shall be
so repaid).
Each prepayment of any Loans made pursuant to this Section shall be without
premium or penalty, except as may be required by SECTION 4.4. No prepayment of
principal of any Revolving Loans or Swing Line Loans pursuant to CLAUSE (a) or
(b) shall cause a reduction in the Revolving Loan Commitment Amount or the Swing
Line Loan Commitment Amount, as the case may be.
SECTION 3.1.2. APPLICATION. Amounts prepaid shall be applied as set forth
in this Section.
(a) Subject to CLAUSE (b), each prepayment or repayment of the
principal of the Loans shall be applied, to the extent of such prepayment
or repayment, FIRST, to the principal amount thereof being maintained as
Base Rate Loans, and SECOND, to the principal amount thereof being
maintained as LIBO Rate Loans; PROVIDED, that mandatory prepayments of LIBO
Rate Loans made pursuant to CLAUSE (c) of SECTION 3.1.1, if not made on the
last day of the Interest Period with respect thereto, shall be prepaid
subject to the provisions of SECTION 4.4 (together with a payment of all
accrued interest).
(b) Each prepayment of Loans made pursuant to CLAUSE (c) of SECTION
3.1.1 shall be applied (i) FIRST, (A) prior to the Conversion Date, to the
mandatory prepayment of the outstanding principal amount of all Term Loans
and/or a reduction in the Term Loan Commitment Amount, and (B) on and after
the Conversion Date, to the mandatory prepayment of the outstanding
principal amount of all Term Loans (with the amount of such prepayment of
the Term Loans being applied to the remaining Term Loan, amortization
payments, in inverse order in accordance with the amount of each such
remaining Term Loan amortization payment), until all Term Loans have been
paid in full, and (ii) SECOND, once all Term Loans have been repaid in full
and the Term Loan Commitment Amount has been reduced to $0, all prepayments
of Loans made pursuant to CLAUSE (c) of SECTION 3.1.1 shall be applied to
the repayment of any outstanding Revolving Loans and, in the case of Asset
Sales only, a reduction of the Revolving Loan Commitment Amount in
accordance with SECTION 2.2.2.
SECTION 3.2. INTEREST PROVISIONS. Interest on the outstanding principal
amount of Loans shall accrue and be payable in accordance with this SECTION 3.2.
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SECTION 3.2.1. RATES. Subject to SECTION 2.3.2, pursuant to an
appropriately delivered Borrowing Request or Continuation/Conversion Notice, the
Borrower may elect that Loans comprising a Borrowing accrue interest at a rate
per annum:
(a) on that portion maintained from time to time as a Base Rate Loan,
equal to the sum of the Alternate Base Rate from time to time in effect
plus the Applicable Margin; PROVIDED that all Swing Line Loans shall always
accrue interest at the then effective Applicable Margin for Revolving Loans
maintained as Base Rate Loans; and
(b) on that portion maintained as a LIBO Rate Loan, during each
Interest Period applicable thereto, equal to the sum of the LIBO Rate
(Reserve Adjusted) for such Interest Period plus the Applicable Margin.
All LIBO Rate Loans shall bear interest from and including the first day of
the applicable Interest Period to (but not including) the last day of such
Interest Period at the interest rate determined as applicable to such LIBO Rate
Loan.
SECTION 3.2.2. POST-MATURITY RATES. After the date any principal amount
of any Loan or Reimbursement Obligation is due and payable (whether on the
Stated Maturity Date, upon acceleration or otherwise), or after any other
monetary Obligation of the Borrower shall have become due and payable, the
Borrower shall pay, but only to the extent permitted by law, interest (after as
well as before judgment) on such amounts at a rate per annum equal to the
Alternate Base Rate from time to time in effect plus the Applicable Margin then
in effect plus a margin of 2%.
SECTION 3.2.3. PAYMENT DATES. Interest accrued on each Loan shall be
payable, without duplication:
(a) on the Stated Maturity Date therefor;
(b) on the date of any payment or prepayment, in whole or in part, of
principal outstanding on such Loan on the principal amount so paid or
prepaid;
(c) with respect to Base Rate Loans, on each Quarterly Payment Date
occurring after the Effective Date;
(d) with respect to LIBO Rate Loans, on the last day of each
applicable Interest Period (and, if such Interest Period shall exceed three
months, on the date occurring on each three-month interval occurring after
the first day of such Interest Period); and
(e) on that portion of any Loans the Stated Maturity Date of which is
accelerated pursuant to SECTION 8.2 or SECTION 8.3, immediately upon such
acceleration.
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Interest accrued on Loans or other monetary Obligations arising under this
Agreement or any other Loan Document after the date such amount is due and
payable (whether on the Stated Maturity Date, upon acceleration or otherwise)
shall be payable upon demand.
SECTION 3.3. FEES. The Borrower agrees to pay the fees set forth in this
SECTION 3.3. All such fees shall be non-refundable.
SECTION 3.3.1. COMMITMENT FEE. The Borrower agrees to pay to the
Administrative Agent for the account of each Lender, for the period (including
any portion thereof when any of its Commitments are suspended by reason of the
Borrower's inability to satisfy any condition of ARTICLE V) commencing on the
Effective Date and continuing through the applicable Commitment Termination
Date, a commitment fee in an amount equal to the Applicable Commitment Fee
Margin, in each case on such Lender's Percentage of the sum of the average daily
unused portion of the applicable Commitment Amount (net of Letter of Credit
Outstandings, in the case of the Revolving Loan Commitment Amount.) All
commitment fees payable pursuant to this Section shall be calculated on a year
comprised of 360 days and payable by the Borrower in arrears on each Quarterly
Payment Date, commencing with the first Quarterly Payment Date following the
Effective Date, on the Conversion Date, and on the Revolving Loan Commitment
Termination Date. The making of Swing Line Loans shall not constitute usage of
the Revolving Loan Commitment with respect to the calculation of commitment fees
to be paid by the Borrower to the Lenders.
SECTION 3.3.2. AGENT'S FEE. The Borrower agrees to pay to the
Administrative Agent, for its own account, the fees in the amounts and on the
dates set forth in the Fee Letter.
SECTION 3.3.3. LETTER OF CREDIT FEE. The Borrower agrees to pay to the
Administrative Agent, for the PRO RATA account of the applicable Issuer and each
Revolving Loan Lender, a Letter of Credit fee in an amount per annum equal to
the then Applicable Margin for Revolving Loans maintained as LIBO Rate Loans,
multiplied by the Stated Amount of each such Letter of Credit, such fees being
payable, upon issuance of each Letter of Credit (for the period from the date of
issuance to the earlier of the expiration date of the applicable Letter of
Credit and the immediately succeeding Quarterly Payment Date), quarterly in
arrears on each Quarterly Payment Date. The Borrower further agrees to pay to
the applicable Issuer in advance on the date of issuance or extension of each
Letter of Credit (for the period from the date of issuance to the earlier of the
expiration date of the applicable Letter of Credit and the immediately
succeeding Quarterly Payment Date, and thereafter quarterly in arrears on each
Quarterly Payment Date) a fronting fee as specified in the Fee Letter or as
otherwise agreed to by the Borrower and such Issuer.
ARTICLE IV
CERTAIN LIBO RATE AND OTHER PROVISIONS
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SECTION 4.1. LIBO RATE LENDING UNLAWFUL. If any Lender shall determine
(which determination shall, upon notice thereof to the Borrower and the Lenders,
be conclusive and binding on the Borrower) that the introduction of or any
change in or in the interpretation of any law makes it unlawful, or any central
bank or other governmental authority asserts that it is unlawful, for such
Lender to make, continue or maintain any Loan as, or to convert any Loan into, a
LIBO Rate Loan, the obligations of such Lender to make, continue, maintain or
convert any such LIBO Rate Loan shall, upon such determination, forthwith be
suspended until such Lender shall notify the Administrative Agent that the
circumstances causing such suspension no longer exist, and all outstanding LIBO
Rate Loans of such Lender shall automatically convert into Base Rate Loans at
the end of the then current Interest Periods with respect thereto or sooner, if
required by such law or assertion.
SECTION 4.2. DEPOSITS UNAVAILABLE. If the Administrative Agent shall have
determined that:
(a) Dollar deposits in the relevant amount and for the relevant
Interest Period are not available to it in its relevant market; or
(b) by reason of circumstances affecting it's relevant market,
adequate means do not exist for ascertaining the interest rate applicable
hereunder to LIBO Rate Loans,
then, upon notice from the Administrative Agent to the Borrower and the Lenders,
the obligations of all Lenders under SECTION 2.3 and SECTION 2.4 to make or
continue any Loans as, or to convert any Loans into, LIBO Rate Loans shall
forthwith be suspended until the Administrative Agent shall notify the Borrower
and the Lenders that the circumstances causing such suspension no longer exist.
SECTION 4.3. INCREASED LIBO RATE LOAN COSTS, ETC. The Borrower agrees to
reimburse each Lender for any increase in the cost to such Lender of, or any
reduction in the amount of any sum receivable by such Lender in respect of,
making, continuing or maintaining (or of its obligation to make, continue or
maintain) any Loans as, or of converting (or of its obligation to convert) any
Loans into, LIBO Rate Loans that arise in connection with any change in, or the
introduction, adoption, effectiveness, interpretation, reinterpretation or
phase-in after the date hereof of, any law or regulation, directive, guideline,
decision or request (whether or not having the force of law) of any court,
central bank, regulator or other governmental authority, except for such changes
with respect to increased capital costs and taxes which are governed by SECTIONS
4.5 and 4.6, respectively. Such Lender shall promptly notify the Administrative
Agent and the Borrower in writing of the occurrence of any such event, such
notice to state, in reasonable detail, the reasons therefor and the additional
amount required fully to compensate such Lender for such increased cost or
reduced amount. Such additional amounts shall be payable by the Borrower
directly to such Lender within five days (with at least one day being a Business
Day) of its receipt of such notice, and such notice shall, in the absence of
manifest error, be conclusive and binding on the Borrower.
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Without limiting the foregoing, in the event that, as a result of any such
change, introduction, adoption or the like described above, the LIBOR Reserve
Percentage decreases for any Lender's LIBO Rate Loans, such Lender shall give
prompt notice thereof in writing to the Administrative Agent and the Borrower.
On the first Business Day following delivery of such notice, the LIBO Rate
(Reserve Adjusted) attributable to such Lender's LIBO Rate Loans shall be
adjusted to give the Borrower the benefit of such decrease (for so long as such
decrease shall remain in effect).
SECTION 4.4. FUNDING LOSSES. In the event any Lender shall incur any loss
or expense (including any loss or expense incurred by reason of the liquidation
or reemployment of deposits or other funds acquired by such Lender to make,
continue or maintain any portion of the principal amount of any Loan as, or to
convert any portion of the principal amount of any Loan into, a LIBO Rate Loan)
as a result of:
(a) any conversion or repayment or prepayment of the principal amount
of any LIBO Rate Loans on a date other than the scheduled last day of the
Interest Period applicable thereto, whether pursuant to SECTION 3.1 or
otherwise;
(b) any Loans not being made as LIBO Rate Loans in accordance with the
Borrowing Request therefor; or
(c) any Loans not being continued as, or converted into, LIBO Rate
Loans in accordance with the Continuation/Conversion Notice therefor,
then, upon the written notice of such Lender to the Borrower (with a copy to the
Administrative Agent), the Borrower shall, within five days of its receipt
thereof, pay directly to such Lender such amount as will (in the reasonable
determination of such Lender) reimburse such Lender for such loss or expense.
Such written notice (which shall include calculations in reasonable detail)
shall, be rebuttably presumptive evidence of the amount of such loss or expense.
SECTION 4.5. INCREASED CAPITAL COSTS. If any change in, or the
introduction, adoption, effectiveness, interpretation, reinterpretation or
phase-in of, any law or regulation, directive, guideline, decision or request
(whether or not having the force of law) of any court, central bank, regulator
or other governmental authority affects or would affect the amount of capital
required or expected to be maintained by any Lender (including any Issuer) or
any Person controlling such Lender, and such Lender determines (in good faith
but in its sole and absolute discretion) that the rate of return on its or such
controlling Person's capital as a consequence of the Commitments or the Loans
made, or the Letters of Credit issued by or participated in, by such Lender is
reduced to a level below that which such Lender or such controlling Person could
have achieved but for the occurrence of any such circumstance, then, in any such
case upon notice from time to time by such Lender to the Borrower, the Borrower
shall immediately pay directly to such Lender additional amounts sufficient to
compensate such Lender or such controlling Person for such reduction in rate of
return. A statement of such Lender as to any such additional amount or amounts
(including calculations thereof in reasonable detail) shall, be rebuttably
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presumptive evidence of the amount of such loss or expense. In determining such
amount, such Lender may use any method of averaging and attribution that it (in
its sole and absolute discretion) shall deem applicable.
SECTION 4.6. TAXES. (a) Any and all payments by the Borrower and each
other Obligor under this Agreement and each other Loan Document shall be made
without setoff, counterclaim or other defense, and free and clear of, and
without deduction or withholding for or on account of, any Taxes, except to the
extent such Taxes are imposed by law. In the event that any Taxes are required
by law to be deducted or withheld from any payment required to be made by the
Borrower or any other Obligor to or on behalf of the Administrative Agent or any
Lender hereunder or under any other Loan Document, then:
(i) subject to CLAUSE (f), if such Taxes are Non-Excluded Taxes,
the amount of such payment shall be increased as may be necessary such
that such payment is made, after withholding or deduction for or on
account of such Taxes, in an amount that is not less than the amount
provided for herein or in such other Loan Document; and
(ii) the Borrower shall withhold the full amount of such Taxes
from such payment (as increased pursuant to CLAUSE (a) (i)) and shall
pay such amount to the Governmental Authority imposing such Taxes in
accordance with applicable law.
(b) In addition, the Borrower and each other Obligor shall pay any and
all Other Taxes imposed to the relevant Governmental Authority imposing
such Other Taxes in accordance with applicable law.
(c) As promptly as practicable after the payment of any Taxes or Other
Taxes, and in any event within 45 days of any such payment being due, the
Borrower shall furnish to the Administrative Agent a copy of an official
receipt (or a certified copy thereof) evidencing the payment of such Taxes
or Other Taxes. The Administrative Agent shall make copies thereof
available to any Lender upon request therefor.
(d) Subject to CLAUSE (f), the Borrower shall indemnify the
Administrative Agent and each Lender for any Non-Excluded Taxes and
Other Taxes levied, imposed or assessed on (and whether or not paid
directly by) the Administrative Agent or such Lender (and whether or
not such Non-Excluded Taxes or Other Taxes are correctly or legally
asserted by the relevant Governmental Authority). Promptly upon
having knowledge that any such Non-Excluded Taxes or Other Taxes have
been levied, imposed or assessed, and promptly upon notice thereof by
the Administrative Agent or any Lender, the Borrower shall pay such
Non-Excluded Taxes or Other Taxes directly to the relevant
Governmental Authority (PROVIDED, HOWEVER, that neither the
Administrative Agent nor any Lender shall be under any obligation to
provide any such notice to the Borrower). In addition, the Borrower
shall indemnify the Administrative Agent and each Lender for any
incremental Taxes that may become payable by the Administrative Agent
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or any Lender as a result of any failure of the Borrower to pay any
Taxes when due to the appropriate Governmental Authority or to
deliver to the Administrative Agent, pursuant to CLAUSE (c),
documentation evidencing the payment of Taxes or Other Taxes. With
respect to indemnification for Non-Excluded Taxes and Other Taxes
actually paid by the Administrative Agent or any Lender or the
indemnification provided in the immediately preceding sentence, such
indemnification shall be made within 30 days after the date the
Administrative Agent or such Lender, as the case may be, makes
written demand therefor. The Borrower acknowledges that any payment
made to the Administrative Agent or any Borrower or to any
Governmental Authority in respect of the indemnification obligations
of the Borrower provided in this clause shall constitute a payment in
respect of which the provisions of 73
(e) Each Non-U.S. Lender, on or prior to the date on which such
non-U.S. Lender becomes a Lender hereunder (and from time to time
thereafter upon the request of the Borrower or the Administrative
Agent, but only for so long as such non-U.S. Lender is legally
entitled to do so), shall deliver to the Borrower and the
Administrative Agent either
(i)(x) two duly completed copies of either (A) Internal Revenue
Service Form 1001 or (B) Internal Revenue Service Form 4224, or in
either case an applicable successor form, and (y) a duly completed
copy of Internal Revenue Service Form W-8 or W-9 or applicable
successor form; or
(ii) in the case of a Non-U.S. Lender that is not legally
entitled to deliver either form listed in CLAUSE (e)(i)(x), (x) a
certificate of a duly authorized officer of such Non-U.S. Lender to
the effect that such Non-U.S. Lender is not (A) a "bank" within the
meaning of Section 881(c)(3)(A) of the Code, (B) a "10 percent
shareholder" of the Borrower within the meaning of Section
881(c)(3)(B) of the Code, or (C) a controlled foreign corporation
receiving interest from a related person within the meaning of Section
881(c)(3)(C) of the Code (such certificate, an "Exemption
Certificate") and (y) two duly completed copies of Internal Revenue
Service Form W-8 or applicable successor form.
(f) The Borrower shall not be obligated to gross up any payments to
any Lender pursuant to CLAUSE (a)(i), or to indemnify any Lender pursuant
to CLAUSE (d), in respect of United States federal withholding taxes to the
extent imposed as a result of (i) the failure of such Lender to deliver to
the Borrower the form or forms and/or an Exemption Certificate, as
applicable to such Lender, pursuant to CLAUSE (e), (ii) such form or forms
and/or Exemption Certificate not establishing a complete exemption from
U.S. federal withholding tax or the information or certifications made
therein by the Lender being untrue or inaccurate on the date delivered in
any material respect, or (iii) the Lender designating a successor lending
office at which it maintains its Loans which has the effect of causing such
Lender to become obligated for tax payments in excess of those in effect
immediately prior to such designation; PROVIDED, HOWEVER, that the Borrower
shall be
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obligated to gross up any payments to any such Lender pursuant to
CLAUSE (a)(i), and to indemnify any such Lender pursuant to CLAUSE
(d), in respect to United States federal withholding taxes if (i)
any such failure to deliver a form or forms or an Exemption
Certificate or the failure of such form or forms or Exemption
Certificate to establish a complete exemption from U.S. federal
withholding tax or inaccuracy or untruth contained therein resulted
from a change in any applicable statute, treaty, regulation or other
applicable law or any interpretation of any of the foregoing
occurring after the date hereof, which change rendered such Lender no
longer legally entitled to deliver such form or forms or Exemption
Certificate or otherwise ineligible for a complete exemption from
U.S. federal withholding tax, or rendered the information or
certifications made in such form or forms or Exemption Certificate
untrue or inaccurate in a material respect, (ii) the redesignation of
the Lender's lending office was made at the request of the Borrower
or (iii) the obligation to gross up payments to any such Lender
pursuant to CLAUSE (a)(i) or to indemnify any such Lender pursuant to
CLAUSE (d) is with respect to an Assignee Lender that becomes an
Assignee Lender as a result of an assignment made at the request of
the Borrower.
SECTION 4.7. PAYMENTS, COMPUTATIONS, ETC. Unless otherwise expressly
provided, all payments by the Borrower pursuant to this Agreement, the Notes,
each Letter of Credit or any other Loan Document shall be made by the Borrower
to the Administrative Agent for the PRO RATA account of the Lenders entitled to
receive such payment. All such payments required to be made to the
Administrative Agent shall be made, without setoff, deduction or counterclaim,
not later than 1:00 p.m., New York time, on the date due, in same day or
immediately available funds, to such account as the Administrative Agent shall
specify from time to time by notice to the Borrower. Funds received after that
time shall be deemed to have been received by the Administrative Agent on the
next succeeding Business Day. The Administrative Agent shall promptly remit in
same day funds to each Lender its share, if any, of such payments received by
the Administrative Agent for the account of such Lender. All interest
(including interest on LIBO Rate Loans) and fees shall be computed on the basis
of the actual number of days (including the first day but excluding the last
day) occurring during the period for which such interest or fee is payable over
a year comprised of 360 days (or, in the case of interest on a Base Rate Loan
(calculated at other than the Federal Funds Rate), 365 days or, if appropriate,
366 days). Whenever any payment to be made shall otherwise be due on a day
which is not a Business Day, such payment shall (except as otherwise required by
CLAUSE (c) of the definition of the term "INTEREST PERIOD") be made on the next
succeeding Business Day and such extension of time shall be included in
computing interest and fees, if any, in connection with such payment.
SECTION 4.8. SHARING OF PAYMENTS. If any Lender shall obtain any payment
or other recovery (whether voluntary, involuntary, by application of setoff or
otherwise) on account of any Loan or Reimbursement Obligation (other than
pursuant to the terms of SECTION 4.3, 4.4, 4.5 or 4.6) in excess of its PRO RATA
share of payments then or therewith obtained by all Lenders, such Lender shall
purchase from the other Lenders such participations in Credit Extensions made by
them as shall be necessary to cause such purchasing Lender to share the excess
payment or other recovery ratably with each of them; PROVIDED, HOWEVER, that if
all or any portion of the excess
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payment or other recovery is thereafter recovered from such purchasing
Lender, the purchase shall be rescinded and each Lender which has sold a
participation to the purchasing Lender shall repay to the purchasing Lender
the purchase price to the ratable extent of such recovery together with an
amount equal to such selling Lender's ratable share (according to the
proportion of:
(a) the amount of such selling Lender's required repayment to the
purchasing Lender
TO
(b) total amount so recovered from the purchasing Lender)
of any interest or other amount paid or payable by the purchasing Lender in
respect of the total amount so recovered. The Borrower agrees that any Lender
so purchasing a participation from another Lender pursuant to this Section may,
to the fullest extent permitted by law, exercise all its rights of payment
(including pursuant to SECTION 4.9) with respect to such participation as fully
as if such Lender were the direct creditor of the Borrower in the amount of such
participation. If under any applicable bankruptcy, insolvency or other similar
law, any Lender receives a secured claim in lieu of a setoff to which this
Section applies, such Lender shall, to the extent practicable, exercise its
rights in respect of such secured claim in a manner consistent with the rights
of the Lenders entitled under this Section to share in the benefits of any
recovery on such secured claim.
SECTION 4.9. SETOFF. Each Lender shall, upon the occurrence and during
the continuance of any Default described in CLAUSES (a) through (d) of SECTION
8.1.9 or, with the consent of the Required Lenders, upon the occurrence and
during the continuance of any other Event of Default, have the right to
appropriate and apply to the payment of the Obligations owing to it (whether or
not then due), and (as security for such Obligations) the Borrower hereby grants
to each Lender a continuing security interest in, any and all balances, credits,
deposits, accounts or moneys of the Borrower then or thereafter maintained with
such Lender; PROVIDED, HOWEVER, that any such appropriation and application
shall be subject to the provisions of SECTION 4.8. Each Lender agrees promptly
to notify the Borrower and the Administrative Agent after any such setoff and
application made by such Lender; PROVIDED, HOWEVER, that the failure to give
such notice shall not affect the validity of such setoff and application. The
rights of each Lender under this Section are in addition to other rights and
remedies (including other rights of setoff under applicable law or otherwise)
which such Lender may have.
SECTION 4.10. REPLACEMENT OF LENDER. Each Lender agrees that, upon the
occurrence of any event set forth in SECTIONS 4.1, 4.3, 4.5, or 4.6, such Lender
will use reasonable efforts to book and maintain its Loans through a different
lending office or to transfer its Loans to an Affiliate with the objective of
avoiding or minimizing the consequences of such event; PROVIDED that such
booking or transfer is not otherwise disadvantageous to such Lender as
determined by such Lender in its sole and absolute discretion. If any Lender
has demanded to be paid additional amounts pursuant to SECTIONS 4.1, 4.3, 4.5 or
4.6, and the payment of such additional amounts
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are, and are likely to continue to be, more onerous in the reasonable
judgment of the Borrower than with respect to the other Lenders, then the
Borrower shall have the right at any time when no Default or Event of Default
shall have occurred and be continuing to seek one or more financial
institutions which are not Affiliates of the Borrower (each, a "REPLACEMENT
LENDER") to purchase with the written consent of the Administrative Agent
(which consent shall not be (x) required if such proposed Replacement Lender
is already a Lender, or an Affiliate of a Lender, or (y) unreasonably delayed
or withheld) the outstanding Loans and Commitments of such Lender (the
"AFFECTED LENDER"), and if the Borrower locates a Replacement Lender, the
Affected Lender shall, upon
(i) prior written notice to the Administrative Agent,
(ii) (A) payment to the Affected Lender of the purchase price agreed
between it and the Replacement Lender (or, failing such agreement, a
purchase price in the amount of the outstanding principal amount of the
Affected Lender's Loans and accrued interest thereon to the date of
payment) by the Replacement Lender plus (B) payment by the Borrower of all
amounts (other than principal and interest) then due to the Affected Lender
or accrued for its account hereunder or under any other Loan Document,
(iii) satisfaction of the provisions set forth in SECTION 10.11.1, and
(iv) payment by the Borrower to the Affected Lender and the
Administrative Agent of all reasonable out-of-pocket expenses in connection
with such assignment and assumption (including the processing fees
described in SECTION 10.11.1),
assign and delegate all its rights and obligations under this Agreement and any
other Loan Document to which it is a party (including its outstanding Loans) to
the Replacement Lender (such assignment to be made without recourse,
representation or warranty), and the Replacement Lender shall assume such rights
and obligations, whereupon the Replacement Lender shall in accordance with
SECTION 10.11.1 become a party to each Loan Document to which the Affected
Lender is a party and shall have the rights and obligations of a Lender
thereunder and the Affected Lender shall be released from its obligations
hereunder and each other Loan Document to the extent of such assignment and
delegation.
ARTICLE V
CONDITIONS TO CREDIT EXTENSIONS
SECTION 5.1. INITIAL CREDIT EXTENSION. The obligations of the Lenders
and, if applicable, the Issuer to fund the initial Credit Extension shall be
subject to the prior or concurrent satisfaction of each of the conditions
precedent set forth in this SECTION 5.1.
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SECTION 5.1.1. RESOLUTIONS, ETC. The Administrative Agent shall have
received from each Obligor, as applicable, (i) a copy of a good standing
certificate, dated a date reasonably close to the Closing Date, for each such
Person and (ii) a certificate, dated the date of the initial Credit Extension
and with counterparts for each Lender, duly executed and delivered by such
Person's Secretary or Assistant Secretary, as to:
(a) resolutions of each such Person's Board of Directors then in full
force and effect authorizing the execution, delivery and performance of
this Agreement, each other Loan Document to be executed by such Person and
the transactions contemplated hereby and thereby;
(b) the incumbency and signatures of those of its officers, authorized
to act with respect to this Agreement and each other Loan Document to be
executed by such Person; and
(c) the full force and validity of each Organic Document of such
Person and copies thereof;
upon which certificates the Administrative Agent, each Lender and each Issuer
may conclusively rely until it shall have received a further certificate of the
Secretary or Assistant Secretary, of any such Person canceling or amending the
prior certificate of such Person.
SECTION 5.1.2. CLOSING DATE CERTIFICATE. The Administrative Agent shall
have received, with counterparts for each Lender, the Borrower Closing Date
Certificate, dated the date of the initial Credit Extension and duly executed
and delivered by an Authorized Officer of the Borrower, in which certificate the
Borrower shall agree and acknowledge that the statements made therein shall be
deemed to be true and correct representations and warranties of the Borrower as
of such date, and, at the time each such certificate is delivered, such
statements shall in fact be true and correct. All documents and agreements
required to be appended to the Borrower Closing Date Certificate shall be in
form and substance reasonably satisfactory to the Administrative Agent.
SECTION 5.1.3. DELIVERY OF NOTES. The Administrative Agent shall have
received, for the account of each Lender, such Lender's Notes duly executed and
delivered by an Authorized Officer of the Borrower.
SECTION 5.1.4. PLEDGE AGREEMENTS. The Administrative Agent shall have
received, with counterparts for each Lender,
(a) the Borrower Pledge Agreement, dated as of the date hereof, duly
executed and delivered by an Authorized Officer of the Borrower, together
with
(i) certificates evidencing all of the (A) issued and outstanding
shares of Capital Stock of the Borrower's Restricted Subsidiaries, and
(B) shares of Capital
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Stock owned by the Borrower with respect to any of its U.S.
Subsidiaries which certificates shall be accompanied by
undated stock powers duly executed in blank;
(ii) certificates evidencing 65% of the issued and outstanding
shares of Capital Stock of each direct Foreign Subsidiary of the
Borrower, which certificates shall be accompanied by undated stock
powers duly executed in blank, or, if any securities pledged pursuant
to the Borrower Pledge Agreement are uncertificated securities,
confirmation and evidence satisfactory to the Administrative Agent
that the security interest in such uncertificated securities has been
perfected by the Administrative Agent for the benefit of the Secured
Parties in accordance with the U.C.C. and all laws otherwise
applicable to the perfection of the pledge of such shares; and
(iii) all Pledged Notes (as defined in the Borrower Pledge
Agreement), if any, evidencing Indebtedness payable to the Borrower
duly endorsed to the order of the Administrative Agent, together with
Uniform Commercial Code Financing Statements (or similar instruments)
in respect of such Pledged Notes executed by the Borrower to be filed
in such jurisdictions as the Administrative Agent may reasonably
request;
(b) the Subsidiary Pledge Agreement, dated as of the date hereof, duly
executed and delivered by an Authorized Officer of each Guarantor that has
any Subsidiaries, together with
(i) certificates evidencing all of the issued and outstanding
shares of Capital Stock owned by such Guarantor which certificates
shall be accompanied by undated stock powers duly executed in blank;
(ii) certificates evidencing 65% of the issued and outstanding
shares of each direct Foreign Subsidiary of such Guarantor, which
certificates shall be accompanied by undated stock powers duly
executed in blank, or, if any securities pledged pursuant to the
Subsidiary Pledge Agreement are uncertificated securities,
confirmation and evidence satisfactory to the Administrative Agent
that the security interest in such uncertificated securities has been
transferred to and perfected by the Administrative Agent for the
benefit of the Secured Parties in accordance with Section 8-313,
Section 8-321 and Section 9-115 of the U.C.C. and all laws otherwise
applicable to the perfection of the pledge of such shares; and
(iii) all Pledged Notes (as defined in the Subsidiary Pledge
Agreement), if any, evidencing Indebtedness payable to a Guarantor
duly endorsed to the order of the Administrative Agent, together with
Uniform Commercial Code Financing Statements (or similar instruments)
in respect of such Pledged Notes executed by
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such Guarantor to be filed in such jurisdictions as the
Administrative Agent may reasonably request; and
(c) the Administrative Agent and its counsel shall be satisfied that
(i) the Lien granted to the Administrative Agent, for the benefit of the
Secured Parties in the collateral described above is a first priority (or
local equivalent thereof) security interest; and (ii) no Lien exists on any
of the collateral described above other than the Lien created in favor of
the Administrative Agent, for the benefit of the Secured Parties, pursuant
to a Loan Document.
SECTION 5.1.5. SECURITY AGREEMENTS. The Administrative Agent shall have
received, with counterparts for each Lender, executed counterparts of the
Borrower Security Agreement and the Subsidiary Security Agreement, each dated as
of the date hereof, duly executed by the applicable Obligor, together with
(a) executed copies of Uniform Commercial Code financing statements
(Form UCC-1), naming the applicable Obligor as a debtor and the
Administrative Agent as the secured party, or other similar instruments or
documents, to be filed under the Uniform Commercial Code of all
jurisdictions as may be necessary or, in the opinion of the Administrative
Agent, desirable to perfect the security interests of the Administrative
Agent pursuant to the applicable Security Agreement;
(b) executed copies of proper Uniform Commercial Code Form UCC-3
termination statements, if any, necessary to release all Liens and other
rights of any Person
(i) in any collateral described in such Security Agreement
previously granted by any Person, and
(ii) securing any of the Indebtedness identified in ITEM 7.2.2(b)
of the Disclosure Schedule,
together with such other Uniform Commercial Code Form UCC-3 termination
statements as the Administrative Agent may reasonably request from such
Obligors; and
(c) certified copies of Uniform Commercial Code Requests for
Information or Copies (Form UCC-11), or a similar search report certified
by a party acceptable to the Administrative Agent, dated a date reasonably
near to the date of the initial Credit Extension, listing all effective
financing statements which name any Obligor (under its present name and any
previous names) as the debtor and which are filed in the jurisdictions in
which filings were made pursuant to CLAUSE (a) above, together with copies
of such financing statements (none of which shall cover any collateral
described in any Security Agreement).
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(d) the Administrative Agent and its counsel shall be satisfied that
the Lien granted to the Administrative Agent, for the benefit of the
Secured Parties in the collateral described above is a first priority (or
local equivalent) security interest; and no Lien exists on any of the
collateral described above other than (i) the Lien created in favor of the
Administrative Agent, for the benefit of the Secured Parties, pursuant to a
Loan Document or (ii) the Liens permitted pursuant to SECTION 7.2.3.
SECTION 5.1.6. PATENT SECURITY AGREEMENT, COPYRIGHT SECURITY AGREEMENT AND
TRADEMARK SECURITY AGREEMENT. The Administrative Agent shall have received the
Patent Security Agreement, the Copyright Security Agreement and the Trademark
Security Agreement, as applicable, each dated as of the date of the initial
Credit Extension, duly executed and delivered by the applicable Obligor.
SECTION 5.1.7. FINANCIAL INFORMATION, ETC. The Administrative Agent shall
have received, with counterparts for each Lender,
(a) audited consolidated financial statements of the Borrower and its
Subsidiaries as at December 31, 1997, without Impermissible Qualification
and the results of which shall be satisfactory to the Administrative Agent;
and
(b) a PRO FORMA opening balance sheet of the Borrower, as of the
Closing Date (the "PRO FORMA BALANCE SHEET"), certified by the chief
financial or accounting Authorized Officer of the Borrower, giving effect
to the contemplated financing and reflecting the existing and proposed
legal and capital structure (both debt and equity) of the Borrower, which
shall be satisfactory to the Administrative Agent in all respects.
SECTION 5.1.8. COMPLIANCE CERTIFICATE. The Administrative Agent shall
have received, with counterparts for each Lender, an initial Compliance
Certificate on a PRO FORMA basis as if the Credit Extension to be made on the
date of the initial Credit Extension had occurred as of June 30, 1998 and as to
such items therein as the Administrative Agent reasonably requests, dated the
date of the initial Credit Extension, duly executed (and with all schedules
thereto duly completed) and delivered by the chief executive, financial or
accounting Authorized Officer of the Borrower.
SECTION 5.1.9. SOLVENCY, ETC. The Administrative Agent shall have
received, with counterparts for each Lender, a certificate duly executed and
delivered by the chief financial or accounting Authorized Officer of the
Borrower, dated the date of the initial Credit Extension, in the form of
EXHIBIT M attached hereto.
SECTION 5.1.10. PAYMENT OF OUTSTANDING INDEBTEDNESS, ETC. All
Indebtedness identified in ITEM 7.2.2(b) ("Indebtedness to be Paid") of the
Disclosure Schedule (including under or in connection with the Existing Loan
Agreement), together with all interest, all prepayment premiums and other
amounts due and payable with respect thereto, shall have been paid in full from
the proceeds of the initial Credit Extension and the commitments in respect of
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such Indebtedness shall have been terminated, and all Liens securing payment of
any such Indebtedness have been released and the Administrative Agent shall have
received all Uniform Commercial Code Form UCC-3 termination statements or other
instruments as may be suitable or appropriate in connection therewith. The
lenders under the Existing Loan Agreement shall have delivered a pay-off letter
in customary form and otherwise in form and substance satisfactory to the
Administrative Agent.
SECTION 5.1.11. SUBSIDIARY GUARANTY. The Administrative Agent shall have
received, with counterparts for each Lender, the Subsidiary Guaranty, dated as
of the date hereof, duly executed and delivered by each Guarantor.
SECTION 5.1.12. CLOSING FEES, EXPENSES, ETC. The Administrative Agent
shall have received for its own account all fees, costs and expenses due and
payable pursuant to SECTIONS 3.3 and 10.3, if then invoiced (in reasonable
detail).
SECTION 5.1.13. INSURANCE. The Administrative Agent shall have received,
with copies for each Lender, certified copies of the insurance policies (or
binders in respect thereof), from one or more insurance companies satisfactory
to the Administrative Agent, evidencing coverage required to be maintained
pursuant hereto and each Loan Document.
SECTION 5.1.14. OPINIONS OF COUNSEL. The Administrative Agent shall have
received opinions, dated the date of the initial Credit Extension and addressed
to the Administrative Agent and all Lenders, from Xxxxxx, Xxxxx & Xxxxxxx, LLP,
counsel to the Obligors, substantially in the form of EXHIBIT I hereto.
SECTION 5.1.15. MATERIAL ADVERSE CHANGE. No Material Adverse Effect has
occurred since December 31, 1997.
SECTION 5.2. ALL CREDIT EXTENSIONS. The obligation of each Lender and
each Issuer to make any Credit Extension (including the initial Credit
Extension) shall be subject to SECTIONS 2.1.4 and 2.1.5 and the satisfaction of
each of the conditions precedent set forth in this SECTION 5.2.
SECTION 5.2.1. COMPLIANCE WITH WARRANTIES, NO DEFAULT, ETC. Both before
and after giving effect to any Credit Extension (but, if any Default of the
nature referred to in SECTION 8.1.5 shall have occurred with respect to any
other Indebtedness, without giving effect to the application, directly or
indirectly, of the proceeds thereof) the following statements shall be true and
correct:
(a) the representations and warranties set forth in ARTICLE VI
(excluding, however, those contained in SECTION 6.7) and in each other Loan
Document shall, in each case, be true and correct with the same effect as
if then made (unless stated to relate solely to an earlier date, in which
case such representations and warranties shall be true and correct in all
material respects as of such earlier date);
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(b) except as disclosed by the Borrower to the Administrative Agent
and the Lenders pursuant to SECTION 6.7,
(i) no labor controversy, litigation, arbitration or governmental
investigation or proceeding shall be pending or, to the knowledge of
the Borrower, threatened against the Borrower or any of its
Subsidiaries which could reasonably be expected to have a Material
Adverse Effect, or which would adversely affect the legality, validity
or enforceability of this Agreement or any other Loan Document; and
(ii) no development shall have occurred in any labor controversy,
litigation, arbitration or governmental investigation or proceeding
disclosed pursuant to SECTION 6.7 which could reasonably be expected
to have a Material Adverse Effect; and
(c) no Default shall have then occurred and be continuing.
SECTION 5.2.2. CREDIT EXTENSION REQUEST, ETC. Subject to SECTION 2.3.2,
the Administrative Agent shall have received a Borrowing Request if Loans are
being requested, or an Issuance Request if a Letter of Credit is being requested
or extended. Each of the delivery of a Borrowing Request or Issuance Request
and the acceptance by the Borrower of the proceeds of such Credit Extension
shall constitute a representation and warranty by the Borrower that on the date
of such Credit Extension (both immediately before and after giving effect to
such Credit Extension and the application of the proceeds thereof) the
statements made in SECTION 5.2.1 are true and correct in all material respects.
SECTION 5.2.3. SATISFACTORY LEGAL FORM. All documents executed or
submitted pursuant hereto by or on behalf of the Borrower or any of its
Subsidiaries or any other Obligors shall be reasonably satisfactory in form and
substance to the Administrative Agent and its counsel; the Administrative Agent
and its counsel shall have received all information, approvals, opinions,
documents or instruments as the Administrative Agent or its counsel may
reasonably request.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
In order to induce the Secured Parties to enter into this Agreement and to
make Credit Extensions hereunder, the Borrower represents and warrants to each
Secured Party as set forth in this Article.
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SECTION 6.1. ORGANIZATION, ETC. The Borrower and each of its Subsidiaries
is (i) validly organized and existing and in good standing under the laws of
the state or jurisdiction of its incorporation or organization, and (ii) duly
qualified to do business and is in good standing as a foreign entity in each
jurisdiction where the nature of its business requires such qualification,
except where the failure to so qualify would not result in a Material Adverse
Effect, and has full power and authority and holds all requisite governmental
licenses, permits and other approvals to enter into and perform its Obligations
under this Agreement and each other Loan Document to which it is a party and to
own and hold under lease its property and to conduct its business substantially
as currently conducted by it except where the failure to hold such licenses,
permits and other approvals would not result in a Material Adverse Effect.
SECTION 6.2. DUE AUTHORIZATION, NON-CONTRAVENTION, ETC. The execution,
delivery and performance by the Borrower of this Agreement and each other Loan
Document executed or to be executed by it, the execution, delivery and
performance by each other Obligor of each Loan Document executed or to be
executed by it, are in each case within each such Person's powers, have been
duly authorized by all necessary action, and do not
(a) contravene any such Person's Organic Documents;
(b) contravene any contractual restriction binding on or affecting any
such Person except any such contravention which would not have a Material
Adverse Effect;
(c) contravene (i) any court decree or order binding on or affecting
any such Person or (ii) any law or governmental regulation binding on or
affecting any such Person; or
(d) result in, or require the creation or imposition of, any Lien on
any of such Person's properties (except as permitted by this Agreement).
SECTION 6.3. GOVERNMENT APPROVAL, REGULATION, ETC. Except as set forth in
Item 6.3 of the Disclosure Schedule, No authorization or approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body or other Person other than those that have been duly obtained or
made and which are in full force and effect is required for the due execution,
delivery or performance by the Borrower or any other Obligor of any Loan
Document to which it is a party. Neither the Borrower nor any of its
Subsidiaries is an "investment company" within the meaning of the Investment
Company Act of 1940, as amended, or a "holding company", or a "subsidiary
company" of a "holding company", or an "affiliate" of a "holding company" or of
a "subsidiary company" of a "holding company", within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
SECTION 6.4. VALIDITY, ETC. This Agreement and each other Loan Document
executed by the Borrower will, on the due execution and delivery thereof,
constitute, the legal, valid and binding obligations of the Borrower,
enforceable against the Borrower in accordance with their respective terms; and
each other Loan Document executed by each other Obligor will, on the due
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execution and delivery thereof by such Obligor, constitute the legal, valid and
binding obligation of such Obligor enforceable against such Obligor in
accordance with its terms (except, in any case, as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally and by principles of equity).
SECTION 6.5. FINANCIAL INFORMATION. The financial statements of the
Borrower and its Subsidiaries furnished to the Administrative Agent and each
Lender pursuant to SECTION 5.1.7(a) have been prepared in accordance with GAAP
consistently applied, and present fairly the consolidated financial condition of
the Persons covered thereby as at the dates thereof and the results of their
operations for the periods then ended. All balance sheets, all statements of
operations, shareholders' equity and cash flow and all other financial
information of each of the Borrower and its Subsidiaries furnished pursuant to
SECTION 7.1.1 have been and will for periods following the Effective Date be
prepared in accordance with GAAP consistently applied, and do or will present
fairly the consolidated financial condition of the Persons covered thereby as at
the dates thereof and the results of their operations for the periods then
ended.
SECTION 6.6. NO MATERIAL ADVERSE CHANGE. No Material Adverse Effect has
occurred since December 31, 1997.
SECTION 6.7. LITIGATION, LABOR CONTROVERSIES, ETC. There is no pending
or, to the knowledge of the Borrower or its Subsidiaries, threatened material
litigation, action, proceeding, investigation or labor controversy (i) affecting
the Borrower or any of its Subsidiaries or any Obligor, or any of their
respective properties, businesses, assets or revenues, which could reasonably be
expected to have a Material Adverse Effect except as disclosed in ITEM 6.7 of
the Disclosure Schedule or (ii) which purports to affect the legality, validity
or enforceability of this Agreement or any other Loan Document.
SECTION 6.8. SUBSIDIARIES. The Borrower has no Subsidiaries, except those
Subsidiaries
(a) which are identified in ITEM 6.8 of the Disclosure Schedule; or
(b) which are permitted to have been organized or acquired in
accordance with SECTIONS 7.2.5 or 7.2.10.
SECTION 6.9. OWNERSHIP OF PROPERTIES. The Borrower and each of its
Subsidiaries owns (i) in the case of owned real property, good and marketable
fee title to, and (ii) in the case of owned personal property, good and valid
title to, or, in the case of leased real or personal property, valid and
enforceable leasehold interests (as the case may be) in, all of its properties
and assets, real and personal, tangible and intangible, of any nature
whatsoever, free and clear in each case of all Liens or claims, except for Liens
permitted pursuant to SECTION 7.2.3.
SECTION 6.10. TAXES. The Borrower and each of its Subsidiaries has filed
all tax returns and reports required by law to have been filed by it and has
paid all taxes and
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governmental charges thereby shown to be due and owing, except any such taxes
or charges which are being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP shall
have been set aside on its books.
SECTION 6.11. PENSION AND WELFARE PLANS. During the
twelve-consecutive-month period prior to the date of the execution and
delivery of this Agreement and prior to the date of any Credit Extension
hereunder, no steps have been taken to terminate any Pension Plan under
circumstances in which the Pension Plan has insufficient assets to pay all
its benefit liabilities (as required by section 4041(b)(1) of ERISA), and no
contribution failure has occurred with respect to any Pension Plan,
sufficient to give rise to a Lien under section 302(f) of ERISA. No
condition exists or event or transaction has occurred with respect to any
Pension Plan which might result in the incurrence by the Borrower or any
member of the Controlled Group of any material liability, material fine or
material penalty. Except as disclosed in ITEM 6.11 of the Disclosure
Schedule, neither the Borrower nor any member of the Controlled Group has any
material contingent liability with respect to any post-retirement benefit
under a Welfare Plan, other than liability for continuation coverage
described in Part 6 of Title I of ERISA.
SECTION 6.12. ENVIRONMENTAL WARRANTIES. Except as set forth in ITEM 6.12
of the Disclosure Schedule:
(a) all facilities and property (including underlying groundwater)
owned or leased by the Borrower or any of its Subsidiaries have been, and
continue to be, owned or leased by the Borrower and its Subsidiaries in
material compliance with all Environmental Laws;
(b) there have been no past, and there are no pending or threatened
(i) claims, complaints, notices or requests for information
received by the Borrower or any of its Subsidiaries with respect to
any alleged violation of any Environmental Law which could result in a
liability to the Borrower or its Restricted Subsidiaries in excess of
$1,000,000 individually or in the aggregate, or
(ii) complaints, notices or inquiries to the Borrower or any of
its Subsidiaries regarding potential liability under any Environmental
Law which could result in a liability to the Borrower or its
Restricted Subsidiaries in excess of $1,000,000 individually or in the
aggregate;
(c) there have been no Releases of Hazardous Materials at, on or
under any property now or previously owned or leased by the Borrower or any
of its Subsidiaries that have, or could reasonably be expected to have, a
Material Adverse Effect;
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(d) the Borrower and its Subsidiaries have been issued and are in
material compliance with all permits, certificates, approvals, licenses and
other authorizations relating to environmental matters and necessary for
their businesses;
(e) no property now or previously owned or leased by the Borrower or
any of its Subsidiaries is listed or proposed for listing (with respect to
owned property only) on the National Priorities List pursuant to CERCLA, on
the CERCLIS or on any similar state list of sites requiring investigation
or clean-up;
(f) there are no underground storage tanks, active or abandoned,
including petroleum storage tanks, on or under any property now or
previously owned or leased by the Borrower or any of its Subsidiaries that,
singly or in the aggregate, have, or could reasonably be expected to have,
a Material Adverse Effect;
(g) neither the Borrower nor any Subsidiary of the Borrower has
directly transported or directly arranged for the transportation of any
Hazardous Material to any location which is listed or proposed for listing
on the National Priorities List pursuant to CERCLA, on the CERCLIS or on
any similar state list or which is the subject of federal, state or local
enforcement actions or other investigations which may lead to material
claims against the Borrower or such Subsidiary for any remedial work,
damage to natural resources or personal injury, including claims under
CERCLA;
(h) there are no polychlorinated biphenyls or friable asbestos
present at any property now or previously owned or leased by the Borrower
or any Subsidiary of the Borrower that, singly or in the aggregate, have,
or could reasonably be expected to have, a Material Adverse Effect; and
(i) no conditions exist at, on or under any property now or
previously owned or leased by the Borrower which, with the passage of time,
or the giving of notice or both, would give rise to material liability
under any Environmental Law.
SECTION 6.13. ACCURACY OF INFORMATION. None of the factual information
heretofore or contemporaneously furnished by or on behalf of the Borrower in
writing to any Secured Party for purposes of or in connection with this
Agreement or any transaction contemplated hereby or with respect to any
Permitted Acquisition or the financing contemplated hereby (true and complete
copies of which were furnished to the Secured Parties in connection with its
execution and delivery hereof), contains any untrue statement of a material
fact, and none of the other factual information hereafter furnished in
connection with this Agreement or any other Loan Document by the Borrower or any
other Obligor to any Secured Party will contain any untrue statement of a
material fact on the date as of which such information is dated or certified
and, as of the date of the execution and delivery of this Agreement by the
Administrative Agent and each Lender, the information delivered prior to the
date of execution and delivery of this Agreement (unless such information
specifically relates to a prior date) does not, and the factual information
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hereafter furnished shall not on the date as of which such information is dated
or certified, omit to state any material fact necessary to make any information
not misleading.
SECTION 6.14. REGULATIONS U AND X. No Obligor is engaged in the business
of extending credit for the purpose of purchasing or carrying margin stock, and
no proceeds of any Credit Extensions will be used to purchase or carry margin
stock or otherwise for a purpose which violates, or would be inconsistent with,
F.R.S. Board Regulation U or X. Terms for which meanings are provided in F.R.S.
Board Regulation U or X or any regulations substituted therefor, as from time to
time in effect, are used in this Section with such meanings.
SECTION 6.15. YEAR 2000 PROBLEM. Each Obligor has reviewed the areas
within its business and operations which could be adversely affected by, and
has developed or is developing a program to address on a timely basis, the
"Year 2000 Problem" (that is, the risk that computer applications used by
such Obligor may be unable to recognize and properly perform date-sensitive
functions involving certain dates prior to and any date after December 31,
1999). Based on such review and program, no Obligor reasonably believes that
the "Year 2000 Problem" could reasonably be expected to have a Material
Adverse Effect. At the request of the Administrative Agent, the Borrower
shall provide the Administrative Agent assurance reasonably acceptable to the
Administrative Agent of the Borrower's Year 2000 compatibility.
SECTION 6.16. GOVERNMENT CONTRACTS. The Borrower is not materially in
default as to the terms of any government contract and has received no notices
of default or notices to cure under any government contract for which the
performance deficiency noted by any Governmental Authority has not been cured or
otherwise resolved to such Governmental Authority's satisfaction.
SECTION 6.17. NO DEBARMENT. The Borrower is not subject to any pending or
threatened debarment proceedings.
SECTION 6.18. ASSIGNMENT OF PAYMENTS. The Borrower has the right to assign
to the Administrative Agent all payments due or to become due under each of the
Borrower's or the Restricted Subsidiary's government contracts, and there exists
no uncancelled prior assignment of payments under any of such Persons's
government contracts.
ARTICLE VII
COVENANTS
SECTION 7.1. AFFIRMATIVE COVENANTS. The Borrower agrees with each Lender,
each Issuer and the Administrative Agent that until all Commitments have expired
or terminated, all Obligations have been paid and performed in full and all
Letters of Credit have expired or terminated (or the Administrative Agent shall
have received cash (in a cash collateral account on terms satisfactory to the
Administrative Agent) in the amount of all Letters of Credit
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Outstanding), the Borrower will, and will cause its Subsidiaries to, perform
or cause to be performed the obligations set forth below.
SECTION 7.1.1. FINANCIAL INFORMATION, REPORTS, NOTICES, ETC. The Borrower
will furnish or cause to be furnished to the Administrative Agent (with
sufficient copies for each Lender) copies of the following financial statements,
reports, notices and information:
(a) as soon as available and in any event within 60 days after the end
of each of the first three Fiscal Quarters of each Fiscal Year, an
unaudited consolidated balance sheet of the Borrower and its Subsidiaries
as of the end of such Fiscal Quarter and consolidated statements of income
and cash flow of the Borrower and its Subsidiaries for such Fiscal Quarter
and for the period commencing at the end of the previous Fiscal Year and
ending with the end of such Fiscal Quarter, and including (in each case),
in comparative form the figures for the corresponding Fiscal Quarter in,
and year to date portion of, the immediately preceding Fiscal Year,
certified as complete and correct by the chief financial or accounting
Authorized Officer of the Borrower;
(b) as soon as available and in any event within 105 days after the
end of each Fiscal Year, a copy of the consolidated balance sheet of the
Borrower and its Subsidiaries, and the related consolidated statements of
stockholders' equity and cash flow and the consolidated statements of
income of the Borrower and its Subsidiaries for such Fiscal Year, setting
forth in comparative form the figures for the immediately preceding Fiscal
Year, audited (without any Impermissible Qualification) by independent
public accountants acceptable to the Administrative Agent, stating that, in
performing the examination necessary to deliver the audited financial
statements of the Borrower, no knowledge was obtained of any Default;
(c) concurrently with the delivery of the financial information
pursuant to CLAUSES (a) and (b), a Compliance Certificate, executed by the
chief executive, financial or accounting Authorized Officer of the
Borrower, showing compliance with the financial covenants set forth in
SECTION 7.2.4 and stating that no Default has occurred and is continuing
(or, if a Default has occurred, specifying the details of such Default and
the action that the Borrower has taken or proposes to take with respect
thereto);
(d) as soon as possible and in any event within five days after the
Borrower or any of its Subsidiaries obtains knowledge of the occurrence of
a Default, a statement of the chief executive, financial or accounting
Authorized Officer of the Borrower setting forth details of such Default
and the action which the Borrower has taken and proposes to take with
respect thereto;
(e) as soon as possible and in any event within five days after the
Borrower or any of its Subsidiaries obtains knowledge of (i) the occurrence
of any material adverse development with respect to any litigation, action,
proceeding or labor controversy described in ITEM 6.7 of the Disclosure
Schedule or (ii) the commencement of any
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litigation, action, proceeding or labor controversy of the type and
materiality described in SECTION 6.7, notice thereof and, to the extent
the Administrative Agent requests, copies of all documentation relating
thereto;
(f) promptly after the sending or filing thereof, copies of all
reports, notices, prospectuses and registration statements which the
Borrower or any of its Subsidiaries files with the SEC or any national
securities exchange;
(g) immediately upon becoming aware of (i) the institution of any
steps by the Borrower or any other Person to terminate any Pension Plan,
(ii) the failure to make a required contribution to any Pension Plan if
such failure is sufficient to give rise to a Lien under Section 302(f) of
ERISA, (iii) the taking of any action with respect to a Pension Plan which
could result in the requirement that the Borrower furnish a bond or other
security to the PBGC or such Pension Plan, or (iv) the occurrence of any
event with respect to any Pension Plan which could result in the incurrence
by the Borrower of any material liability, fine or penalty, notice thereof
and copies of all documentation relating thereto;
(h) promptly upon receipt thereof from the Borrower's audit committee,
copies of all "management letters" submitted to the Borrower by the
independent public accountants referred to in CLAUSE (b) in connection with
each audit made by such accountants; and
(i) such other financial and other information as any Lender through
the Administrative Agent may from time to time reasonably request
(including information and reports in such detail as the Administrative
Agent may request with respect to the terms of and information provided
pursuant to the Compliance Certificate).
SECTION 7.1.2. MAINTENANCE OF EXISTENCE; COMPLIANCE WITH LAWS, ETC. The
Borrower will, and will cause each of its Subsidiaries to,
(a) except as otherwise permitted by SECTION 7.2.10, preserve and
maintain its legal existence; and
(b) comply in all material respects with all applicable laws, rules,
regulations and orders, including the payment, before the same become
delinquent, of all taxes, assessments and governmental charges imposed upon
the Borrower or its Subsidiaries or upon their property except to the
extent being diligently contested in good faith by appropriate proceedings
and for which adequate reserves in accordance with GAAP have been set aside
on the books of the Borrower or its Subsidiaries, as applicable.
SECTION 7.1.3. MAINTENANCE OF PROPERTIES. The Borrower will, and will
cause each of its Subsidiaries to, maintain, preserve, protect and keep its and
their respective properties in good repair, working order and condition
(ordinary wear and tear excepted), and make necessary
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repairs, renewals and replacements so that the business carried on by the
Borrower and its Subsidiaries may be properly conducted at all times, unless
the Borrower determines in good faith that the continued maintenance of such
property is no longer economically desirable.
SECTION 7.1.4. INSURANCE. The Borrower will, and will cause each of its
Subsidiaries to:
(a)maintain insurance on its property with financially sound and
reputable insurance companies against loss and damage in at least the
amounts (and with only those deductibles) customarily maintained, and
against such risks as are typically insured against in the same general
area, by Persons of comparable size engaged in the same or similar business
as the Borrower and its Subsidiaries; and
(b) all worker's compensation, employer's liability insurance or
similar insurance as may be required under the laws of any state or
jurisdiction in which it may be engaged in business.
Without limiting the foregoing, all insurance policies required pursuant to this
Section shall (i) name the Administrative Agent on behalf of Secured Parties as
mortgagee (in the case of property insurance) or additional insured (in the case
of liability insurance), as applicable, and provide that no cancellation or
modification of the policies will be made without thirty days' prior written
notice, (or ten days' prior written notice with respect to failure to pay the
premium), to the Administrative Agent and (ii) be in addition to any
requirements to maintain specific types of insurance contained in the other Loan
Documents.
SECTION 7.1.5. BOOKS AND RECORDS. The Borrower will, and will cause each
of its Subsidiaries to, keep books and records in accordance with GAAP which
accurately reflect all of its business affairs and transactions and permit the
Administrative Agent and each Lender or any of their respective representatives,
at reasonable times and intervals upon reasonable notice to the Borrower, to
visit its offices, to discuss its financial matters with its officers and
employees, and its independent public accountants (and the Borrower hereby
authorizes such independent public accountant to discuss the Borrower's and
Subsidiaries' financial matters with the Administrative Agent and each Lender or
their representatives whether or not any representative of the Borrower, is
present so long as the Borrower has been given reasonable prior written notice
of such meeting) and to examine (and photocopy extracts from) any of its books
and records. The Borrower shall pay any fees of such independent public
accountant incurred in connection with the Administrative Agent's or any
Lender's exercise of its rights pursuant to this Section. In addition to having
the right to perform field audits of the Borrower's books and records, the
Administrative Agent shall have the right, but not the obligation, to contact
the contracting officer under any government contract directly to determine the
Borrower's or any Restricted Subsidiary's contract performance status on the
government contract; however, any contact between the Administrative Agent and
the contracting officer shall be made on reasonable notice to the Borrower and
in the presence of a representative or representatives of the Borrower. At the
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Administrative Agent's request, the Borrower shall promptly arrange for such
communications between the Administrative Agent and a contracting officer.
SECTION 7.1.6. ENVIRONMENTAL LAW COVENANT. The Borrower will, and will
cause each of its Subsidiaries to,
(a) use and operate all of its facilities and properties in material
compliance with all Environmental Laws, keep all necessary permits,
approvals, certificates, licenses and other authorizations relating to
environmental matters in effect and remain in material compliance
therewith, and handle all Hazardous Materials in material compliance with
all applicable Environmental Laws; and
(b) promptly notify the Administrative Agent and provide copies upon
receipt of all material written claims, complaints, notices or inquiries
relating to the condition of its facilities and properties in respect of,
or as to compliance with, Environmental Laws, and shall promptly resolve
any non-compliance with Environmental Laws and keep its property free of
any Lien imposed by any Environmental Law.
SECTION 7.1.7. FUTURE SUBSIDIARIES; COLLATERAL. The Borrower shall
promptly notify the Administrative Agent upon any Person becoming a Subsidiary,
or upon an Obligor directly or indirectly acquiring additional Capital Stock of
any existing Subsidiary, and
(a) such Person shall, if it is a U.S. Subsidiary, (i) execute and
deliver to the Administrative Agent a supplement to the Subsidiary Guaranty
and a supplement to the Subsidiary Security Agreement and (ii) to the
extent such U.S. Subsidiary is required to pledge stock of a Subsidiary
pursuant to CLAUSE (b) of SECTION 7.1.7, execute and deliver to the
Administrative Agent a supplement to the Subsidiary Pledge Agreement, if
not already a party thereto as a pledgor, in a manner satisfactory to the
Administrative Agent;
(b) the Borrower and each U.S. Subsidiary shall, pursuant to the
applicable Pledge Agreement (as supplemented, if necessary, by a foreign
pledge agreement in form and substance satisfactory to the Administrative
Agent), pledge to the Administrative Agent all of the outstanding shares of
capital stock of (i) each U.S. Subsidiary and (ii) any Subsidiary that is
not a U.S. Subsidiary owned (other than where such ownership is in such
U.S. Subsidiary's capacity as a nominee shareholder) directly by the
Borrower or such U.S. Subsidiary (PROVIDED, that, subject to the last
sentence of this Section, not more than 65% of the capital stock of any
Foreign Subsidiary shall be so pledged), along with undated stock powers
for such certificates, executed in blank (or, if any such shares of capital
stock are uncertificated, confirmation and evidence satisfactory to the
Administrative Agent that the security interest in such uncertificated
securities has been perfected by the Administrative Agent, for the benefit
of the Secured Parties, in accordance with the U.C.C. or any other similar
or local or foreign law which may be applicable);
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(c) the Borrower and each U.S. Subsidiary shall, pursuant to the
applicable Pledge Agreement, pledge to the Administrative Agent for its
benefit and that of the Secured Parties, all intercompany notes evidencing
Indebtedness in favor of the Borrower or such U.S. Subsidiary (which shall
be in a form acceptable to the Administrative Agent); and
(d) if such Person owns any real property having a value as
determined in good faith by the Administrative Agent in excess of
$2,500,000, such Obligor will execute and deliver to the Administrative
Agent a Mortgage, together with, in the case of real property, mortgagee's
title insurance policies in amounts, in form and substance (including, if
available, a revolving credit endorsement) and issued by insurers
satisfactory to the Administrative Agent, and such policies shall be
accompanied by evidence of the payment in full of all premiums thereon.
together, in each case, with such opinions of legal counsel for the Borrower,
which may be the corporate general counsel of the Borrower, (which shall be from
counsel satisfactory to the Administrative Agent) relating thereto, which legal
opinions shall be in form and substance satisfactory to the Administrative
Agent. The Borrower agrees that if, as a result of a change in law after the
date hereof, (i) a Foreign Subsidiary can execute and deliver a supplement to
the Subsidiary Guaranty or execute and deliver a supplement to the Subsidiary
Pledge Agreement as a pledgor or (ii) the Borrower or any Subsidiary can pledge
more than 65% of the Capital Stock of any Foreign Subsidiary or any intercompany
Indebtedness of any Subsidiary evidenced by a note or other instrument, in any
such case without material adverse tax consequences to the Borrower or such
Subsidiary, then the provisions of CLAUSE (a) of this Section shall thereafter
apply to any Foreign Subsidiary and/or (as the case may be) the provisions of
CLAUSE (b) of this Section shall thereafter apply to 100% of the Capital Stock
of such Foreign Subsidiary.
The Borrower shall, and shall cause each of its Subsidiaries to, cause
the Secured Parties to have at all times a first priority perfected security
interest (subject only to Liens permitted under SECTION 7.2.3) in all of the
property (real and personal, including Capital Stock owned by such Obligors) now
or hereafter acquired from time to time by the Borrower and such Subsidiaries to
the extent the same is of the type of property that constitutes "Collateral" (as
defined in any Loan Document). Without limiting the generality of the
foregoing, the Borrower shall, and shall cause each of its Subsidiaries to,
promptly execute, deliver and/or file (as applicable) Uniform Commercial Code
financing statements and other instruments and documentation deemed necessary by
the Administrative Agent to grant and perfect such security interest, in each
case in form and substance satisfactory to the Administrative Agent.
SECTION 7.1.8. USE OF PROCEEDS. The Borrower will apply the proceeds of
the Revolving Loans only in accordance with CLAUSES (a) through (c); and the
proceeds of the Term Loans only in accordance with CLAUSE (d):
(a) to (i) refinance outstanding Indebtedness and obligations of the
Borrower under the Existing Loan Agreements and (ii) refinance certain
Indebtedness of VisiCom assumed
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by the Borrower, all such Indebtedness under this CLAUSE (a)(ii) and under
CLAUSE(a)(i), together, in an amount not to exceed $39,500,000;
(b) for working capital and general corporate purposes of the Borrower
and its Restricted Subsidiaries, including Permitted Acquisitions by such
Persons;
(c) to pay fees and expenses related to the Loans and the Commitments;
and
(d) to finance Permitted Acquisitions and to pay transaction fees and
expenses related to the Permitted Acquisitions.
SECTION 7.1.9. CONTRACT OBLIGATIONS. The Borrower shall, and shall cause
each Restricted Subsidiary, to perform in accordance with its terms every
contract, agreement, obligation or other arrangement to which such Person is a
party or by which it or any of its property is bound including government
contracts. In the event that any material default or material performance
deficiency occurs, the Borrower shall notify the Administrative Agent promptly
in writing. The Borrower shall provide the Administrative Agent promptly with
copies of any cure notices or default notices it may receive from a Governmental
Authority on any government contract and detail the proposed corrective action.
At the Administrative Agent's request, the Borrower shall also provide the
Administrative Agent with copies of any stop work notices in effect at the date
of the Administrative Agent's request.
SECTION 7.2. NEGATIVE COVENANTS. The Borrower covenants and agrees with
each Lender, each Issuer and the Administrative Agent that until all Commitments
have expired or terminated, all Obligations have been paid and performed in full
and all Letters of Credit have expired or terminated (or the Administrative
Agent shall have received immediately available funds in a collateral account on
terms satisfactory to the Administrative Agent in the amount of all Letters of
Credit Outstanding), the Borrower will, and will cause its Restricted
Subsidiaries to, perform or cause to be performed the obligations set forth
below.
SECTION 7.2.1. BUSINESS ACTIVITIES. The Borrower will not, and will not
permit any of its Restricted Subsidiaries to, engage in any business activity
except those business activities primarily engaged in by the Borrower and its
Restricted Subsidiaries as of the Closing Date and activities reasonably
incidental thereto.
SECTION 7.2.2. INDEBTEDNESS. The Borrower will not, and will not permit
any of its Restricted Subsidiaries to, create, incur, assume or permit to exist
any Indebtedness, other than:
(a) Indebtedness in respect of the Obligations;
(b) until the date of the initial Credit Extension, Indebtedness that
is to be repaid in full as further identified in ITEM 7.2.2(b) of the
Disclosure Schedule;
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(c) Indebtedness existing as of the Effective Date which is identified
in ITEM 7.2.2(c) of the Disclosure Schedule;
(d)unsecured Indebtedness (i) incurred in the ordinary course of
business of the Borrower and its Subsidiaries (including open accounts
extended by suppliers on normal trade terms in connection with purchases of
goods and services which are not overdue for a period of more than 90 days
or, if overdue for more than 90 days, as to which a dispute exists and
adequate reserves in conformity with GAAP have been established on the
books of the Borrower or such Subsidiary) and (ii) in respect of
performance, surety or appeal bonds provided in the ordinary course of
business, but excluding (in each case), Indebtedness incurred through the
borrowing of money or Contingent Liabilities in respect thereof;
(e) Indebtedness of any Restricted Subsidiary owing to the Borrower or
any other Restricted Subsidiary, which Indebtedness
(i) shall, if payable to the Borrower or a U.S. Subsidiary, be
evidenced by one or more promissory notes in form and substance
satisfactory to the Administrative Agent, duly executed and delivered
in pledge to the Administrative Agent pursuant to a Loan Document, and
shall not be forgiven or otherwise discharged for any consideration
other than payment in full or in part in cash (PROVIDED, that only the
amount repaid in part shall be discharged); and
(ii) if incurred by a Foreign Subsidiary owing to the Borrower or
a Guarantor, shall not (when aggregated with the amount of Investments
made by the Borrower and the Guarantors in Foreign Subsidiaries under
CLAUSE (e)(i) of SECTION 7.2.5), exceed $3,000,000;
(f) unsecured Indebtedness (not evidenced by a note or other
instrument) of the Borrower owing to a Subsidiary that has previously
executed and delivered to the Administrative Agent the Interco
Subordination Agreement;
(g) Indebtedness of the Borrower and its Restricted Subsidiaries in
respect of Capitalized Lease Liabilities which does not exceed $1,000,000
in the aggregate; and
(h) other Indebtedness of the Borrower and its Restricted Subsidiaries
(including purchase money Indebtedness) in an aggregate amount at any time
outstanding not to exceed $5,000,000;
PROVIDED, HOWEVER, that no Indebtedness otherwise permitted by CLAUSE (e) shall
be assumed or otherwise incurred if a Default has occurred and is then
continuing or would result therefrom.
SECTION 7.2.3. LIENS. The Borrower will not, and will not permit any of
its Restricted Subsidiaries to, create, incur, assume or permit to exist any
Lien upon any of its
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property (including Capital Stock of any Person), revenues or assets, whether
now owned or hereafter acquired, except:
(a) Liens securing payment of the Obligations;
(b) until the date of the initial Credit Extension, Liens securing
payment of Indebtedness of the type described in CLAUSE (b) of SECTION
7.2.2;
(c) Liens existing as of the Effective Date and disclosed in ITEM
7.2.3(c) of the Disclosure Schedule securing Indebtedness described in
CLAUSE (c) of SECTION 7.2.2; PROVIDED that no such Lien shall encumber any
additional collateral and the amount of Indebtedness secured by such Lien
is not increased from that existing on the Effective Date;
(d) Liens for taxes, assessments or other governmental charges or
levies not at the time delinquent or thereafter payable without penalty or
being diligently contested in good faith by appropriate proceedings and for
which adequate reserves in accordance with GAAP shall have been set aside
on its books;
(e) Liens in favor of carriers, warehousemen, mechanics, materialmen
and landlords granted in the ordinary course of business for amounts not
overdue or being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP shall
have been set aside on its books;
(f) Liens incurred or deposits made in the ordinary course of business
in connection with workmen's compensation, unemployment insurance or other
forms of governmental insurance or benefits, or to secure performance of
tenders, statutory obligations, bids, leases or other similar obligations
(other than for borrowed money) entered into in the ordinary course of
business or to secure obligations on surety and appeal bonds or performance
bonds;
(g) judgment Liens in existence for less than 45 days after the entry
thereof or with respect to which execution has been stayed or the payment
of which is covered in full (subject to a customary deductible) by
insurance maintained with responsible insurance companies and which do not
otherwise result in an Event of Default under SECTION 8.1.6;
(h) easements, rights-of-way, zoning restrictions, minor defects or
irregularities in title and other similar encumbrances not interfering in
any material respect with the value or use of the property to which such
Lien is attached; and
(i) Liens securing payment of Indebtedness of the type described in
CLAUSE (h) of Section 7.2.2 used to purchase assets of the Borrower or any
of its Restricted Subsidiaries so long as such Lien extends only to the
asset or assets so financed.
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SECTION 7.2.4. FINANCIAL CONDITION AND OPERATIONS. The Borrower will not
permit to occur any of the events set forth below.
(a) The Borrower will not permit the Total Debt to EBITDA Ratio as of
the last day of any Fiscal Quarter to be greater than the ratio set forth
opposite such date:
Total Debt to EBITDA
Date Ratio
---- --------------------
Closing Date, 3.50:1.00
third Fiscal Quarter of Fiscal Year 1998, 3.50:1.00
fourth Fiscal Quarter of Fiscal Year 1998, 3.50:1.00
first Fiscal Quarter of Fiscal Year 1999, 3.50:1.00
second Fiscal Quarter of Fiscal Year 1999, and 3.50:1.00
third Fiscal Quarter of Fiscal Year 1999 3.50:1.00
fourth Fiscal Quarter of Fiscal Year 1999, 3.25:1.00
first Fiscal Quarter of Fiscal Year 2000, 3.25:1.00
second Fiscal Quarter of Fiscal Year 2000, and 3.25:1.00
third Fiscal Quarter of Fiscal Year 2000 3.25:1.00
fourth Fiscal Quarter of Fiscal Year 2000, 3.00:1.00
first Fiscal Quarter of Fiscal Year 2001, 3.00:1.00
second Fiscal Quarter of Fiscal Year 2001, and 3.00:1.00
third Fiscal Quarter of Fiscal Year 2001 3.00:1.00
fourth Fiscal Quarter of Fiscal Year 2001, 2.75:1.00
first Fiscal Quarter of Fiscal Year 2002, 2.75:1.00
second Fiscal Quarter of Fiscal Year 2002, and 2.75:1.00
third Fiscal Quarter of Fiscal Year 2002 2.75:1.00
fourth Fiscal Quarter of Fiscal Year 2002, 2.25:1.00
first Fiscal Quarter of Fiscal Year 2003, and 2.25:1.00
second Fiscal Quarter of Fiscal Year 2003 2.25:1.00
(b) The Borrower shall not permit its Tangible Net Worth as of the end
of any Fiscal Quarter to be less than the sum of (i) $28,000,000, PLUS (ii)
50% of Net Income for each such period.
(c) The Borrower will not permit the Fixed Charge Coverage Ratio as of
the end of any Fiscal Quarter occurring during any period set forth below
to be less than the ratio set forth opposite such period:
PERIOD FIXED CHARGE COVERAGE RATIO
------ ---------------------------
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Ending on the Closing Date 1.50:1.00
Each Fiscal Quarter thereafter 1.50:1.00
(d) The Borrower shall not permit the EBITDA of itself and its
Restricted Subsidiaries on a consolidated basis for the Fiscal Year set
forth below, to be less than the amount set forth opposite such Fiscal
Year:
FISCAL YEAR AMOUNT
----------- ------
Fiscal Year 1998 $25,300,000
Fiscal Year 1999 $26,800,000
Fiscal Year 2000 $29,900,000
Fiscal Year 2001 $38,700,000
Fiscal Year 2002 $45,250,000
Each Fiscal Year thereafter $45,250,000
(e) The Borrower shall not permit its Quick Ratio as of the last day
of any Fiscal Quarter to be less than the ratio set forth opposite such
date:
DATE RATIO
---- -----
Closing Date and 1.00:1.00
third Fiscal Quarter of Fiscal Year 1998 1.00:1.00
fourth Fiscal Quarter of Fiscal Year 1998, 1.05:1.00
first Fiscal Quarter of Fiscal Year 1999, 1.05:1.00
second Fiscal Quarter of Fiscal Year 1999, and 1.05:1.00
third Fiscal Quarter of Fiscal Year 1999 1.05:1.00
fourth Fiscal Quarter of Fiscal Year 1999, 1.10:1.00
first Fiscal Quarter of Fiscal Year 2000, 1.10:1.00
second Fiscal Quarter of Fiscal Year 2000, and 1.10:1.00
third Fiscal Quarter of Fiscal Year 2000 1.10:1.00
fourth Fiscal Quarter of Fiscal Year 2000, 1.15:1.00
first Fiscal Quarter of Fiscal Year 2001, 1.15:1.00
second Fiscal Quarter of Fiscal Year 2001, and 1.15:1.00
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third Fiscal Quarter of Fiscal Year 2001 1.15:1.00
fourth Fiscal Quarter of Fiscal Year 2001, 1.20:1.00
first Fiscal Quarter of Fiscal Year 2002, 1.20:1.00
second Fiscal Quarter of Fiscal Year 2002, and 1.20:1.00
third Fiscal Quarter of Fiscal Year 2002 1.20:1.00
fourth Fiscal Quarter of Fiscal Year 2002, 1.25:1.00
first Fiscal Quarter of Fiscal Year 2003, and 1.25:1.00
second Fiscal Quarter of Fiscal Year 2003 1.25:1.00
SECTION 7.2.5. INVESTMENTS. The Borrower will not, and will not permit
any of its Restricted Subsidiaries to, purchase, make, incur, assume or permit
to exist any Investment in any other Person other than Restricted Subsidiaries,
except:
(a) Investments existing on the Effective Date and identified in ITEM
7.2.5(a) of the Disclosure Schedule;
(b) Cash Equivalent Investments;
(c) without duplication and subject to the proviso contained in CLAUSE
(e), Investments to the extent permitted as Indebtedness pursuant to
SECTION 7.2.2;
(d) without duplication, Investments permitted as Capital Expenditures
pursuant to SECTION 7.2.7;
(e) Investments by way of contributions to capital or purchases of
equity (i) by the Borrower in any Restricted Subsidiaries or by such
Restricted Subsidiary in other Restricted Subsidiaries; or (ii) by any
Subsidiary in the Borrower;
(f) Investments constituting (i) accounts receivable arising,
(ii) trade debt granted, or (iii) deposits made in connection with the
purchase price of goods or services, in each case in the ordinary course of
business;
(g) Investments by way of Permitted Acquisitions;
(h) Investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes with,
customers and suppliers, in each case in the ordinary course of business;
(i) Investments consisting of any deferred portion of the sales price
received by the Borrower or any Subsidiary in connection with any asset
sale permitted under SECTION 7.2.11; and
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(j)other Investments (other than any acquisition of any Person) in an
amount not to exceed $10,000,000 over the term of this Agreement;
PROVIDED, HOWEVER, that
(k) any Investment which when made complies with the requirements of
CLAUSES (a), (b) or (c) of the definition of the term "Cash Equivalent
Investment" may continue to be held notwithstanding that such Investment if
made thereafter would not comply with such requirements; and
(l) no Investment otherwise permitted by CLAUSES (d), (e), (g) or (j)
shall be permitted to be made if any Default has occurred and is continuing
or would result therefrom.
SECTION 7.2.6. RESTRICTED PAYMENTS, ETC. The Borrower will not, and will
not permit any of its Restricted Subsidiaries to, declare or make a Restricted
Payment, or make any deposit for any Restricted Payment, other than:
(a) dividends or distributions payable in common stock of the Borrower
or preferred stock of the Borrower and its Restricted Subsidiaries; and
(b) Restricted Payments made by Restricted Subsidiaries to the
Borrower or wholly owned Subsidiaries.
(c) The Borrower and any of its Restricted Subsidiaries may redeem
Capital Stock, provided, that the following conditions are met:
(i) the Total Debt to EBITDA Ratio, immediately following such
redemption is less than 3.00:1.00, calculated on a PRO FORMA basis;
and
(ii) the Fixed Charge Coverage Ratio immediately following the
redemption shall not be less than the ratio required for the period in
which such redemption occurs, as set forth in SECTION 7.2.4(c),
calculated on a pro forma basis; and
(iii) the aggregate value of such redemptions shall not exceed
$3,000,000 in Fiscal Year 1998, $3,500,000 in Fiscal Year 1999, and
$4,000,000 in any Fiscal Year thereafter; and
(iv) the aggregate value of all such redemptions shall not
exceed $8,000,000; and
(v) the unborrowed Revolving Loan Commitment Amount shall not be
less than $7,500,000 at the time of such redemption; and
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(vi) at the time of such Restricted Payment, both before and
after giving effect to such Restricted Payment, no Default or Event of
Default shall have occurred and be continuing or caused thereby.
SECTION 7.2.7. CAPITAL EXPENDITURES, ETC. The Borrower will not, and will
not permit any of its Subsidiaries to, make or commit to make Capital
Expenditures in any Fiscal Year, except
Subject to CLAUSES (d) and (h) of SECTION 7.2.2, Capital Expenditures
(other than in the form of Capitalized Lease Liabilities) which do not
aggregate in excess of the amount set forth below opposite such Fiscal
Year:
Capital
Fiscal Year Expenditure Amount
----------- ------------------
1998 $ 7,500,000
1999 $ 7,500,000
2000 $ 8,000,000
2001 $ 8,500,000
2002 $ 9,000,000
2003 $ 9,000,000
SECTION 7.2.8. NO PREPAYMENT OF SUBORDINATED DEBT. The Borrower will not,
and will not permit any of its Subsidiaries to,
(a) without the consent of the Required Lenders, make any payment or
prepayment of principal of, or premium or interest on, any Subordinated
Debt (i) other than, in the case of interest only, the stated, scheduled
date for such payment of interest set forth in the Sub Debt Documents
governing such Subordinated Debt, or (ii) which would violate the terms of
this Agreement or the Sub Debt Documents governing such Subordinated Debt;
(b) refinance, redeem, retire, purchase, defease or otherwise acquire
any Subordinated Debt; PROVIDED, HOWEVER, that the Borrower may redeem the
Existing Subordinated Debt if
(i) (A) the average of the daily closing prices of its common
stock for the period ending five days prior to the call for such
redemption, is at least 25% greater than the conversion price then in
effect, and (B) the closing price of its common stock on the trading
date prior to the date of the call for such redemption, is at least
25% greater than the conversion price then in effect; and
(ii) no Default or Event of Default has occurred and is then
continuing or would occur as a result of such redemption call; or
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(c) make any deposit (including the payment of amounts into a sinking
fund or other similar fund) for any of the foregoing purposes.
SECTION 7.2.9. STOCK OF RESTRICTED SUBSIDIARIES. The Borrower will not,
and will not permit any of its Restricted Subsidiaries to, (i) issue any Capital
Stock (whether for value or otherwise) to any Person other than (in the case of
Restricted Subsidiaries) officers or employees of the Restricted Subsidiaries,
in connection with incentive compensation programs or employee benefit plans,
and the Borrower or another wholly owned Restricted Subsidiary or (ii) other
than as set forth in SECTION 7.2.6, become liable in respect of any obligation
(contingent or otherwise) to purchase, redeem, retire, acquire or make any other
payment in respect of any shares of Capital Stock of the Borrower or any
Restricted Subsidiary or any option, warrant or other right to acquire any such
shares of Capital Stock.
SECTION 7.2.10. CONSOLIDATION, MERGER, ETC. The Borrower will not, and
will not permit any of its Restricted Subsidiaries to, liquidate or dissolve,
consolidate with, or merge into or with, any other Person, or purchase or
otherwise acquire all or substantially all of the assets of any Person (or of
any division thereof), except
(a) any Restricted Subsidiary may liquidate or dissolve voluntarily
into, and may merge with and into, the Borrower or any other Restricted
Subsidiary (PROVIDED, HOWEVER, that a Guarantor may only liquidate or
dissolve into, or merge with and into, the Borrower or another Guarantor),
and the assets or stock of any Restricted Subsidiary may be purchased or
otherwise acquired by the Borrower or any other Restricted Subsidiary
(PROVIDED, HOWEVER, that the assets or stock of any Guarantor may only be
purchased or otherwise acquired by the Borrower or another Guarantor);
PROVIDED, FURTHER, that in no event shall any Pledged Subsidiary
consolidate with or merge with and into any Restricted Subsidiary other
than another Pledged Subsidiary unless after giving effect thereto, the
Administrative Agent shall have a perfected pledge of, and security
interest in and to, at least the same percentage of the issued and
outstanding shares of Capital Stock of the surviving Person as the
Administrative Agent had immediately prior to such merger or consolidation
in form and substance satisfactory to the Administrative Agent and its
counsel, pursuant to such documentation and opinions as shall be necessary
in the opinion of the Administrative Agent to create, perfect or maintain
the collateral position of the Administrative Agent and the Secured Parties
therein as contemplated by this Agreement; and
(b) so long as no Default has occurred and is continuing or would occur after
giving effect thereto, the Borrower or any of its Restricted Subsidiaries may
(to the extent permitted by CLAUSE (g) of SECTION 7.2.5) purchase all or
substantially all of the assets or stock of any Person (or any division
thereof), or acquire such Person by merger.
SECTION 7.2.11. PERMITTED DISPOSITIONS. Other than in connection with the
Borrower's incentive compensation arrangements, the Borrower will not, and will
not permit any of its Restricted Subsidiaries to, sell, transfer, lease,
contribute or otherwise convey (including by way of merger), or grant options,
warrants or other rights with respect to, any of the Borrower's
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or such Restricted Subsidiaries' assets (including accounts receivable and
capital stock of Restricted Subsidiaries) to any Person in one transaction or
series of transactions unless such disposition is (i) in the ordinary course
of its business, (ii) permitted by SECTION 7.2.10, (iii) the disposition of
Linkabit in connection with an initial public offering (A) upon satisfaction
of the Administrative Agent that no Default shall have occurred, then be
continuing or would result from the initial public offering, and (B) provided
Linkabit repays intercompany indebtedness to the Borrower in an amount not
less than $12,000,000, or (iv) of assets having an aggregate value not in
excess of $1,000,000 in any Fiscal Year so long as the Borrower complies with
SECTION 3.1.1(c)..
SECTION 7.2.12. MODIFICATION OF CERTAIN AGREEMENTS. The Borrower will
not, and will not permit any of its Restricted Subsidiaries to, consent to any
amendment, supplement, waiver or other modification of, or enter into any
forbearance from exercising any rights with respect to the terms or provisions
contained in,
(a) the Sub Debt Documents, other than any amendment, supplement,
waiver or modification which (i) extends the date or reduces the amount of
any required repayment, prepayment or redemption of the principal of such
Subordinated Debt, (ii) reduces the rate or extends the date for payment of
the interest, premium (if any) or fees payable on such Subordinated Debt or
(iii) makes the covenants, events of default or remedies in such Sub Debt
Documents less restrictive on the Borrower; or
(b) each purchase agreement pursuant to which a Permitted Acquisition
occurs; or
(c) The Borrower's or any Restricted Subsidiary's Organic
Documents to the extent that any such change would be adverse to the
interests of the Secured Parties.
SECTION 7.2.13. TRANSACTIONS WITH AFFILIATES. The Borrower will not, and
will not permit any of its Restricted Subsidiaries to, enter into or cause or
permit to exist any arrangement or contract (including for the purchase, lease
or exchange of property or the rendering of services) with any of its other
Affiliates, unless such arrangement or contract (i) is on fair and reasonable
terms no less favorable to the Borrower or such Restricted Subsidiary than it
could obtain in an arm's-length transaction with a Person that is not an
Affiliate and (ii) is of the kind which would be entered into by a prudent
Person in the position of the Borrower or such Restricted Subsidiary with a
Person that is not one of its Affiliates.
SECTION 7.2.14. RESTRICTIVE AGREEMENTS, ETC. The Borrower will not, and will
not permit any of its Restricted Subsidiaries to, enter into any agreement
prohibiting
(a) the creation or assumption of any Lien upon its properties,
revenues or assets, whether now owned or hereafter acquired;
(b) the ability of any Obligor to amend or otherwise modify this
Agreement or any other Loan Document; or
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(c) the ability of any Restricted Subsidiary to make any payments,
directly or indirectly, to the Borrower, including by way of dividends,
advances, repayments of loans, reimbursements of management and other
intercompany charges, expenses and accruals or other returns on
investments.
The foregoing prohibitions shall not apply to restrictions contained in this
Agreement and any other Loan Document.
SECTION 7.2.15. SALE AND LEASEBACK. The Borrower will not, and will not
permit any of its Restricted Subsidiaries to, directly or indirectly enter into
any agreement or arrangement providing for the sale or transfer by it of any
property (now owned or hereafter acquired) to a Person and the subsequent lease
or rental of such property or other similar property from such Person, unless
upon such sale or transfer the Borrower has applied the Net Proceeds of such
sale and leaseback pursuant to SECTION 3.1.1(c).
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.1. LISTING OF EVENTS OF DEFAULT. Each of the following events
or occurrences described in this Article shall constitute an "EVENT OF DEFAULT".
SECTION 8.1.1. NON-PAYMENT OF OBLIGATIONS. The Borrower shall default in
the payment or prepayment when due of
(a) any principal of or interest on any Loan, or any Reimbursement
Obligation or any deposit of cash for collateral purposes pursuant to
SECTION 2.6.4; or
(b) any fee described in ARTICLE III or any other monetary Obligation
and such default shall continue unremedied for a period of three days
(including one Business Day) after such amount was due.
SECTION 8.1.2. BREACH OF WARRANTY. Any representation or warranty of any
Obligor made or deemed to be made in any Loan Document (including any
certificates delivered pursuant to ARTICLE V) is or shall be incorrect when made
or deemed to have been made in any material respect.
SECTION 8.1.3. NON-PERFORMANCE OF CERTAIN COVENANTS AND OBLIGATIONS. The
Borrower shall default in the due performance or observance of any of its
obligations under SECTION 7.1.1, SECTION 7.1.8 or SECTION 7.2 or any Obligor
shall default in the due performance or observance of its obligations under (i)
Articles III or IV of the Subsidiary Guaranty, (ii) Articles III or IV of a
Security Agreement, or (iii) Articles III or IV of a Pledge Agreement.
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SECTION 8.1.4. NON-PERFORMANCE OF OTHER COVENANTS AND OBLIGATIONS. Any
Obligor shall default in the due performance and observance of any other
agreement contained herein or in any other Loan Document executed by it, and
such default shall continue unremedied for a period of 30 days after notice
thereof shall have been given to the Borrower by the Administrative Agent or any
Lender.
SECTION 8.1.5. DEFAULT ON OTHER INDEBTEDNESS. A default shall occur in
the payment when due (subject to any applicable grace period), whether by
acceleration or otherwise, of any Indebtedness (other than Indebtedness
described in SECTION 8.1.1) of the Borrower or any of its Subsidiaries or any
other Obligor having a principal amount, individually or in the aggregate, in
excess of $2,000,000, or a default shall occur in the performance or observance
of any obligation or condition with respect to such Indebtedness if the effect
of such default is to accelerate the maturity of any such Indebtedness or such
default shall continue unremedied for any applicable period of time sufficient
to permit the holder or holders of such Indebtedness, or any trustee or agent
for such holders, to cause or declare such Indebtedness to become due and
payable or to require such Indebtedness to be prepaid, redeemed, purchased or
defeased, or require an offer to purchase or defease such Indebtedness to be
made, prior to its expressed maturity.
SECTION 8.1.6. JUDGMENTS. Any judgment or order for the payment of money
in excess of $2,000,000 (exclusive of any amounts fully covered by insurance
(less any applicable deductible) and as to which the insurer has acknowledged
its responsibility to cover such judgment or order) shall be rendered against
the Borrower or any of its Subsidiaries or any other Obligor and such judgment
shall not have been vacated or discharged or stayed or bonded pending appeal
within 30 days after the entry thereof.
SECTION 8.1.7. PENSION PLANS. Any of the following events shall occur
with respect to any Pension Plan
(a) the institution of any steps by the Borrower, any member of its
Controlled Group or any other Person to terminate a Pension Plan if, as a
result of such termination, the Borrower or any such member could be
required to make a contribution to such Pension Plan, or could reasonably
expect to incur a liability or obligation to such Pension Plan, in excess
of $1,000,000; or
(b) a contribution failure occurs with respect to any Pension Plan
sufficient to give rise to a Lien under section 302(f) of ERISA.
SECTION 8.1.8. CHANGE IN CONTROL. Any Change in Control shall occur.
SECTION 8.1.9. BANKRUPTCY, INSOLVENCY, ETC. The Borrower, any of its
Restricted Subsidiaries, any other Subsidiary which is material to the Borrower
or any other Obligor shall
(a) become insolvent or generally fail to pay, or admit in writing its
inability or unwillingness generally to pay, debts as they become due;
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(b) apply for, consent to, or acquiesce in the appointment of a
trustee, receiver, sequestrator or other custodian for any substantial part
of the property of any thereof, or make a general assignment for the
benefit of creditors;
(c) in the absence of such application, consent or acquiescence in or
permit or suffer to exist the appointment of a trustee, receiver,
sequestrator or other custodian for a substantial part of the property of
any thereof, and such trustee, receiver, sequestrator or other custodian
shall not be discharged within 60 days; PROVIDED, that the Borrower, each
Subsidiary and each other Obligor hereby expressly authorizes each Secured
Party to appear in any court conducting any relevant proceeding during such
60-day period to preserve, protect and defend their rights under the Loan
Documents;
(d) permit or suffer to exist the commencement of any bankruptcy,
reorganization, debt arrangement or other case or proceeding under any
bankruptcy or insolvency law or any dissolution, winding up or liquidation
proceeding, in respect thereof, and, if any such case or proceeding is not
commenced by the Borrower, any Subsidiary or any Obligor, such case or
proceeding shall be consented to or acquiesced in by the Borrower, such
Subsidiary or such Obligor, as the case may be, or shall result in the
entry of an order for relief or shall remain for 60 days undismissed;
PROVIDED, that the Borrower, each Subsidiary and each Obligor hereby
expressly authorizes each Secured Party to appear in any court conducting
any such case or proceeding during such 60-day period to preserve, protect
and defend their rights under the Loan Documents; or
(e) take any action authorizing, or in furtherance of, any of the
foregoing.
SECTION 8.1.10. IMPAIRMENT OF SECURITY, ETC. Any Loan Document or any
Lien granted thereunder shall (except in accordance with its terms), in whole or
in part, terminate, cease to be effective or cease to be the legally valid,
binding and enforceable obligation of any Obligor party thereto; any Obligor or
any other party shall, directly or indirectly, contest in any manner such
effectiveness, validity, binding nature or enforceability; or, except as
permitted under any Loan Document, any Lien securing any Obligation shall, in
whole or in part, cease to be a perfected first priority Lien.
SECTION 8.1.11. FAILURE OF SUBORDINATION. Unless otherwise waived or
consented to by the Administrative Agent, the Lenders and the Issuers in
writing, the subordination provisions relating to any Subordinated Debt (the
"SUBORDINATION PROVISIONS") shall fail to be enforceable by the Administrative
Agent, the Lenders and the Issuers in accordance with the terms thereof, or the
monetary Obligations shall fail to constitute "Senior Indebtedness" (or similar
term) referring to the Obligations; or the Borrower or any of its Subsidiaries
shall, directly or indirectly, disavow or contest in any manner (i) the
effectiveness, validity or enforceability of any of the Subordination
Provisions, (ii) that the Subordination Provisions exist for the benefit of the
Administrative Agent, the Lenders and the Issuers or (iii) that all payments of
principal of or
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premium and interest on the Subordinated Debt, or realized from
the liquidation of any property of any Obligor, shall be subject to any of such
Subordination Provisions.
SECTION 8.1.12. GOVERNMENT CONTRACTS. Any government contract is
terminated for default or any "show cause" letter is not ultimately cured.
SECTION 8.2. ACTION IF BANKRUPTCY. If any Event of Default described in
CLAUSES (a) through (d) of SECTION 8.1.9 shall occur, the Commitments (if not
theretofore terminated) shall automatically terminate and the outstanding
principal amount of all outstanding Loans and all other Obligations (including
Reimbursement Obligations) shall automatically be and become immediately due and
payable, without presentment, protest, notice or demand (all of which are hereby
expressly waived by the Borrower) and the Borrower or any other Obligor shall
automatically and immediately be obligated to deposit with the Administrative
Agent cash collateral in an amount equal to all Letter of Credit Outstandings.
SECTION 8.3. ACTION IF OTHER EVENT OF DEFAULT. If any Event of Default
(other than any Event of Default described in CLAUSES (a) through (d) of SECTION
8.1.9) shall occur for any reason, whether voluntary or involuntary, and be
continuing, the Administrative Agent, upon the direction of the Required
Lenders, shall by notice to the Borrower declare all or any portion of the
outstanding principal amount of the Loans and other Obligations (including
Reimbursement Obligations) to be due and payable and/or the Commitments (if not
theretofore terminated) to be terminated, whereupon the full unpaid amount of
such Loans and other Obligations which shall be so declared due and payable
shall be and become immediately due and payable, without further presentment,
protest, notice or demand (all of which are hereby expressly waived by the
Borrower) and/or, as the case may be, the Commitments shall terminate and the
Borrower and the Obligors shall automatically and immediately be obligated to
deposit with the Administrative Agent cash collateral in an amount equal to all
Letter of Credit Outstandings.
ARTICLE IX
THE CREDIT AGENTS
SECTION 9.1. ACTIONS. Each Lender hereby appoints (a) Scotiabank as its
Administrative Agent and Imperial as its Documentation Agent under and for
purposes of this Agreement, the Notes and each other Loan Document, and (b)
Scotiabank as its Agent (as defined in the Collateral Documents) under and for
purposes of the Collateral Documents. Each Lender authorizes the Credit Agents
to act on behalf of such Lender under this Agreement, the Notes and each other
Loan Document and, in the absence of other written instructions from the
Required Lenders received from time to time by the Credit Agents (with respect
to which the Credit Agents agree that they will comply, except as otherwise
provided in this Section or as otherwise advised by counsel in order to avoid
contravention of applicable law), to exercise such powers hereunder and
thereunder as are specifically delegated to or required of the Credit Agents by
the terms hereof and thereof, together with such powers as may be reasonably
incidental
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thereto. Each Lender hereby indemnifies (which indemnity shall
survive any termination of this Agreement) the Credit Agents, PRO RATA according
to such Lender's Percentage, from and against any and all liabilities,
obligations, losses, damages, claims, costs or expenses of any kind or nature
whatsoever which may at any time be imposed on, incurred by, or asserted
against, the Credit Agents in any way relating to or arising out of this
Agreement, the Notes and any other Loan Document, including reasonable
attorneys' fees, and as to which the Credit Agents are not reimbursed by the
Borrower; PROVIDED, HOWEVER, that no Lender shall be liable for the payment of
any portion of such liabilities, obligations, losses, damages, claims, costs or
expenses which are determined by a court of competent jurisdiction in a final
proceeding to have resulted from the Credit Agents' gross negligence or wilful
misconduct. The Credit Agents shall not be required to take any action
hereunder or under any other Loan Document, or to prosecute or defend any suit
in respect of this Agreement or any other Loan Document, unless they are
indemnified hereunder to their satisfaction. If any indemnity in favor of the
Credit Agents shall be or become, in the Credit Agents' determination,
inadequate, the Credit Agents may call for additional indemnification from the
Lenders and cease to do the acts indemnified against hereunder until such
additional indemnity is given.
SECTION 9.2. FUNDING RELIANCE, ETC. Unless the Administrative Agent shall
have been notified by telephone, confirmed in writing, by any Lender by
3:00 p.m., New York time, on the Business Day prior to a Borrowing that such
Lender will not make available the amount which would constitute its Percentage
of such Borrowing on the date specified therefor, the Administrative Agent may
assume that such Lender has made such amount available to the Administrative
Agent and, in reliance upon such assumption, make available to the Borrower a
corresponding amount. If and to the extent that such Lender shall not have made
such amount available to the Administrative Agent, such Lender and the Borrower
severally agree to repay the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
the Administrative Agent made such amount available to the Borrower to the date
such amount is repaid to the Administrative Agent, at the interest rate
applicable at the time to Loans comprising such Borrowing (in the case of the
Borrower) and (in the case of a Lender), at the Federal Funds Rate (for the
first two Business Days after which such amount has not been repaid, and
thereafter at the interest rate applicable to Loans comprising such Borrowing.
SECTION 9.3. EXCULPATION. Neither the Credit Agents nor any of their
directors, officers, employees or agents shall be liable to any Lender for any
action taken or omitted to be taken by them under this Agreement or any other
Loan Document, or in connection herewith or therewith, except for their own
wilful misconduct or gross negligence, nor responsible for any recitals or
warranties herein or therein, nor for the effectiveness, enforceability,
validity or due execution of this Agreement or any other Loan Document, nor for
the creation, perfection or priority of any Liens purported to be created by any
of the Loan Documents, or the validity, genuineness, enforceability, existence,
value or sufficiency of any collateral security, nor to make any inquiry
respecting the performance by the Borrower of its obligations hereunder or under
any other Loan Document. Any such inquiry which may be made by the Credit
Agents shall not obligate it to make any further inquiry or to take any action.
The Credit Agents shall be entitled to rely upon advice of counsel concerning
legal matters and upon any notice, consent, certificate,
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statement or writing which the Credit Agents believe to be genuine and to
have been presented by a proper Person.
SECTION 9.4. SUCCESSOR. Either of the Credit Agents may resign from its
agency position at any time upon at least 30 days' prior notice to the Borrower
and all Lenders. If either of the Credit Agents at any time shall resign, the
Required Lenders may, upon at least 3 days' (so long as one of such days is a
Business Day) prior notice to the Borrower and all Lenders, appoint another
Lender as a successor Administrative Agent, Documentation Agent, or Agent, as
appropriate, which shall thereupon become the Administrative Agent,
Documentation Agent or Agent, as appropriate, hereunder. If no successor
Administrative Agent, Documentation Agent or Agent, as appropriate, shall have
been so appointed by the Required Lenders, and shall have accepted such
appointment, within 30 days after the retiring Credit Agent's giving notice of
resignation, then the retiring Credit Agent may, on behalf of the Lenders, upon
at least 3 days' prior notice to the Borrower and all Lenders, appoint a
successor Administrative Agent, Documentation Agent or Agent, as appropriate,
which shall be one of the Lenders or a commercial banking institution organized
under the laws of the U.S. (or any State thereof) or a U.S. branch or agency of
a commercial banking institution, and having (x) a combined capital and surplus
of at least $250,000,000 and (y) a credit rating of AA or better by Xxxxx'x or a
comparable rating by S&P; PROVIDED, HOWEVER, that if, after expending all
reasonable commercial efforts, such retiring Credit Agent is unable to find a
commercial banking institution which is willing to accept such appointment and
which meets the qualifications set forth in CLAUSE (y) above, such retiring
Credit Agent, shall be permitted to appoint as its successor from all available
commercial banking institutions willing to accept such appointment such
institution having the highest credit rating of all such available and willing
institutions. Upon the acceptance of any appointment as such Credit Agent
hereunder by a successor Credit Agent, such successor Credit Agent shall be
entitled to receive from the retiring Credit Agent such documents of transfer
and assignment as such successor Credit Agent may reasonably request, and shall
thereupon succeed to and become vested with all rights, powers, privileges and
duties of the retiring Credit Agent, and the retiring Credit Agent shall be
discharged from its duties and obligations under this Agreement. After any
retiring Credit Agent's resignation hereunder as the Credit Agent, the
provisions of
(a) this ARTICLE IX shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was a Credit Agent under this
Agreement; and
(b) SECTION 10.3 and SECTION 10.4 shall continue to inure to its
benefit.
SECTION 9.5. CREDIT EXTENSIONS BY SCOTIABANK AND IMPERIAL. Each of
Scotiabank and Imperial shall have the same rights and powers with respect to
(x) the Credit Extensions made by it or any of its Affiliates, and (y) the Notes
held by it or any of its Affiliates as any other Lender and may exercise the
same as if it were not a Credit Agent. Such Credit Agent and its Affiliates may
accept deposits from, lend money to, and generally engage in any kind of
business with the Borrower or any Subsidiary or Affiliate of the Borrower as if
Scotiabank or Imperial, as appropriate were not a Credit Agent hereunder.
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SECTION 9.6. CREDIT DECISIONS. Each Lender acknowledges that it has,
independently of the Credit Agents and each other Lender, and based on such
Lender's review of the financial information of the Borrower, this Agreement,
the other Loan Documents (the terms and provisions of which being satisfactory
to such Lender) and such other documents, information and investigations as such
Lender has deemed appropriate, made its own credit decision to extend its
Commitments. Each Lender also acknowledges that it will, independently of the
Credit Agents and each other Lender, and based on such other documents,
information and investigations as it shall deem appropriate at any time,
continue to make its own credit decisions as to exercising or not exercising
from time to time any rights and privileges available to it under this Agreement
or any other Loan Document.
SECTION 9.7. COPIES, ETC. Each Credit Agent shall give prompt notice to
each Lender of each notice or request required or permitted to be given to such
Credit Agent by the Borrower pursuant to the terms of this Agreement (unless
concurrently delivered to the Lenders by the Borrower). Such Credit Agent will
distribute to each Lender each document or instrument received for its account
and copies of all other communications received by such Credit Agent from the
Borrower for distribution to the Lenders by such Credit Agent in accordance with
the terms of this Agreement or any other Loan Document.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1. WAIVERS, AMENDMENTS, ETC. The provisions of this Agreement
and of each other Loan Document may from time to time be amended, modified or
waived, if such amendment, modification or waiver is in writing and consented to
by the Borrower and the Required Lenders; PROVIDED, HOWEVER, that no such
amendment, modification or waiver shall:
(a) extend any Commitment Termination Date or modify this SECTION 10.1
without the consent of all Lenders;
(b) increase the aggregate amount of any Lender's Percentage of any
Commitment Amount, increase the aggregate amount of any Loans required to
be made by a Lender pursuant to its Commitments or reduce any fees
described in ARTICLE III payable to any Lender without the consent of such
Lender;
(c) extend the Stated Maturity Date for any Lender's Loan, or reduce
the principal amount of or rate of interest on any Lender's Loan or extend
the date on which interest or fees are payable in respect of such Lender's
Loans, in each case, without the consent of such Lender (it being
understood and agreed, however, that any vote to rescind any acceleration
made pursuant to SECTION 8.2 and SECTION 8.3 of amounts owing with respect
to the Loans and other Obligations shall only require the vote of the
Required Lenders);
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(d) change the definition of "Required Lenders" or any requirement
hereunder that any particular action be taken by all Lenders without the
consent of all Lenders;
(e) increase the Stated Amount of any Letter of Credit unless
consented to by the Issuer of such Letter of Credit;
(f) release (i) any Guarantor from its obligations under a Guaranty or
(ii) all or substantially all of the collateral under the Loan Documents,
in either case without the consent of all Lenders as expressly provided
herein or therein;
(g) change any of the terms of CLAUSE (c) of SECTION 2.1.4 or SECTION
2.3.2 without the consent of Scotiabank; or
(h) affect adversely the interests, rights or obligations of the
Administrative Agent (in its capacity as the Administrative Agent), or any
Issuer (in its capacity as Issuer), unless consented to by the
Administrative Agent or such Issuer, as the case may be.
No failure or delay on the part of the Administrative Agent, any Issuer or any
Lender in exercising any power or right under this Agreement or any other Loan
Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power or right preclude any other or further exercise
thereof or the exercise of any other power or right. No notice to or demand on
the Borrower or any other Obligor in any case shall entitle it to any notice or
demand in similar or other circumstances. No waiver or approval by the
Administrative Agent, any Issuer or any Lender under this Agreement or any other
Loan Document shall, except as may be otherwise stated in such waiver or
approval, be applicable to subsequent transactions. No waiver or approval
hereunder shall require any similar or dissimilar waiver or approval thereafter
to be granted hereunder.
SECTION 10.2. NOTICES. All notices and other communications provided to
any party hereto under this Agreement or any other Loan Document shall be in
writing or by facsimile and addressed, delivered or transmitted to such party at
its address or facsimile number set forth below its signature hereto or set
forth in the Lender Assignment Agreement or at such other address or facsimile
number as may be designated by such party in a notice to the other parties. Any
notice, if mailed and properly addressed with postage prepaid or if properly
addressed and sent by pre-paid courier service, shall be deemed given when
received; any notice, if transmitted by facsimile, shall be deemed given when
the confirmation of transmission thereof is received by the transmitter.
SECTION 10.3. PAYMENT OF COSTS AND EXPENSES. The Borrower agrees to pay
on demand all reasonable expenses of the Administrative Agent (including the
reasonable fees, costs and out-of-pocket expenses of counsel to the
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Administrative Agent, special counsel to the Administrative Agent, and of local
counsel, if any, who may be retained by counsel to the Administrative Agent) in
connection with
(a)(i) the syndication efforts of Scotiabank and any due diligence
investigation; PROVIDED, HOWEVER, that the Borrower shall not pay for
expenses incurred in connection with assignments which occur after the
Closing Date and (ii) the negotiation, preparation, execution and delivery
and administration of this Agreement and of each other Loan Document,
including schedules and exhibits, and any amendments, waivers, consents,
supplements or other modifications to this Agreement or any other Loan
Document as may from time to time hereafter be required, whether or not the
transactions contemplated hereby are consummated; and
(b) the filing, recording, refiling or rerecording of any Loan
Document and/or any Uniform Commercial Code financing statements relating
thereto and all amendments, supplements, amendments and restatements and
other modifications to any thereof and any and all other documents or
instruments of further assurance required to be filed or recorded or
refiled or rerecorded by the terms hereof or the terms of any Loan
Document; and
(c) the preparation and review of the form of any document or
instrument relevant to this Agreement or any other Loan Document.
The Borrower further agrees to pay, and to save each Secured Party harmless from
all liability for, any stamp or other taxes which may be payable in connection
with the execution or delivery of this Agreement, the Credit Extensions
hereunder, or the issuance of the Notes, Letters of Credit or any other Loan
Documents. The Borrower also agrees to reimburse each Secured Party upon demand
for all reasonable out-of-pocket expenses (including reasonable attorneys' fees
and legal expenses of counsel to each Secured Party incurred by such Secured
Party in connection with (x) the negotiation of any restructuring or "work-out"
with the Borrower, whether or not consummated, of any Obligations and (y) the
enforcement of any Obligations.
SECTION 10.4. INDEMNIFICATION. In consideration of the execution and
delivery of this Agreement by each Secured Party, the Borrower hereby
indemnifies, exonerates and holds each Secured Party and each of their
respective officers, directors, employees and agents (collectively, the
"INDEMNIFIED PARTIES") free and harmless from and against any and all actions,
causes of action, suits, losses, costs, liabilities and damages, and expenses
incurred in connection therewith (irrespective of whether any such Indemnified
Party is a party to the action for which indemnification hereunder is sought),
including reasonable attorneys' fees and disbursements, whether incurred in
connection with actions between or among the parties hereto or the parties
hereto and third parties (collectively, the "INDEMNIFIED LIABILITIES"), incurred
by the Indemnified Parties or any of them as a result of, or arising out of, or
relating to
(a) any transaction financed or to be financed in whole or in part,
directly or indirectly, with the proceeds of any Credit Extension,
including all Indemnified
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Liabilities arising in connection with transactions contemplated hereby
or by any other Loan Document or transactions which are financed with
proceeds of any Loan or which are supported by any Letter of Credit;
(b) the entering into and performance of this Agreement and any other
Loan Document by any of the Indemnified Parties (including any action
brought by or on behalf of the Borrower as the result of any determination
by the Required Lenders pursuant to ARTICLE V not to fund any Credit
Extension), provided that any such action is resolved in favor of such
Indemnified Party;
(c) any investigation, litigation or proceeding related to any
acquisition or proposed acquisition by the Borrower or any of its
Subsidiaries of all or any portion of the stock or assets of any Person,
whether or not an Indemnified Party is party thereto;
(d) any investigation, litigation or proceeding related to any
environmental cleanup, audit, compliance or other matter relating to the
protection of the environment or the Release by the Borrower or any of its
Subsidiaries of any Hazardous Material;
(e) the presence on or under, or the escape, seepage, leakage,
spillage, discharge, emission, discharging or releases from, any real
property owned or operated by the Borrower or any Subsidiary thereof of any
Hazardous Material (including any losses, liabilities, damages, injuries,
costs, expenses or claims asserted or arising under any Environmental Law),
regardless of whether caused by, or within the control of, the Borrower or
such Subsidiary; or
(f) each Lender's Environmental Liability (the indemnification herein
shall survive repayment of the Notes and any transfer of the property of
the Borrower or any of its Subsidiaries by foreclosure or by a deed in lieu
of foreclosure for any Lender's Environmental Liability, regardless of
whether caused by, or within the control of, the Borrower or such
Subsidiary);
except for any such Indemnified Liabilities arising for the account of a
particular Indemnified Party by reason of the relevant Indemnified Party's gross
negligence or wilful misconduct. The Borrower and its successors and assigns
hereby waive, release and agree not to make any claim or bring any cost recovery
action against, any Secured Party under CERCLA or any state equivalent, or any
similar law now existing or hereafter enacted. It is expressly understood and
agreed that to the extent that any of such Persons is strictly liable under any
Environmental Laws, the Borrower's obligation to such Person under this
indemnity shall likewise be without regard to fault on the part of the Borrower
with respect to the violation or condition which results in liability of such
Person. If and to the extent that the foregoing undertaking may be
unenforceable for any reason, the Borrower hereby agrees to make the maximum
contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law.
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SECTION 10.5. SURVIVAL. The obligations of the Borrower under SECTIONS
4.3, 4.4, 4.5, 4.6, 10.3 and 10.4, and the obligations of the Lenders under
SECTION 9.1, shall in each case survive any assignment from one Lender to
another (in the case of SECTIONS 10.3 and 10.4) and any termination of this
Agreement, the payment in full of all the Obligations and the termination of all
the Commitments. The representations and warranties made by the Borrower and
each other Obligor in this Agreement and in each other Loan Document shall
survive the execution and delivery of this Agreement and each such other Loan
Document.
SECTION 10.6. SEVERABILITY. Any provision of this Agreement or any other
Loan Document which is prohibited or unenforceable in any jurisdiction shall, as
to such provision and such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions of
this Agreement or such Loan Document or affecting the validity or enforceability
of such provision in any other jurisdiction.
SECTION 10.7. HEADINGS. The various headings of this Agreement and of
each other Loan Document are inserted for convenience only and shall not affect
the meaning or interpretation of this Agreement or such other Loan Document or
any provisions hereof or thereof.
SECTION 10.8. EXECUTION IN COUNTERPARTS, EFFECTIVENESS, ETC. This
Agreement may be executed by the parties hereto in several counterparts, each of
which shall be an original and all of which shall constitute together but one
and the same agreement. This Agreement shall become effective when counterparts
hereof executed on behalf of the Borrower, the Administrative Agent and each
Lender (or notice thereof satisfactory to the Administrative Agent) shall have
been received by the Administrative Agent and notice thereof shall have been
given by the Administrative Agent to the Borrower and each Lender.
SECTION 10.9. GOVERNING LAW; ENTIRE AGREEMENT. THIS AGREEMENT, THE NOTES
AND EACH OTHER LOAN DOCUMENT (INCLUDING PROVISIONS WITH RESPECT TO INTEREST,
LOAN CHARGES AND COMMITMENT FEES) SHALL EACH BE DEEMED TO BE A CONTRACT MADE
UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR
SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE
STATE OF NEW YORK), EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF A
SECURITY INTEREST OR MORTGAGE HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF
ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN
THE STATE OF NEW YORK. This Agreement, the Notes, the other Loan Documents and
the Fee Letter constitute the entire understanding among the parties hereto with
respect to the subject matter hereof and thereof and supersede any prior
agreements, written or oral, with respect thereto.
SECTION 10.10. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns; PROVIDED, HOWEVER, that:
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(a) the Borrower may not assign or transfer its rights or obligations
hereunder without the prior written consent of the Administrative Agent and
all Lenders; and
(b) the rights of sale, assignment and transfer of the Lenders are
subject to SECTION 10.11.
SECTION 10.11. SALE AND TRANSFER OF LOANS AND NOTES; PARTICIPATIONS IN
LOANS AND NOTES. Each Lender may assign, or sell participations in, its Loans,
Letters of Credit and Commitments to one or more other Persons in accordance
with this SECTION 10.11.
SECTION 10.11.1. ASSIGNMENTS. Any Lender,
(a) with the consent of the Borrower and the Administrative Agent
(which consents shall not be unreasonably delayed or withheld and, which
consent, in the case of the Borrower, shall not be required during the
continuation of an Event of Default) may at any time assign and delegate to
one or more commercial banks or other financial institutions, and
(b) upon notice to the Borrower and the Administrative Agent, may
assign and delegate to any of its Affiliates or to any other Lender
(each Person described in either of the foregoing clauses as being the Person to
whom such assignment and delegation is to be made, being hereinafter referred to
as an "ASSIGNEE LENDER"), all or any fraction of such Lender's total Loans,
Letter of Credit Outstandings and Commitments in a minimum aggregate amount of
$5,000,000 if such assignment is to a party other than an Affiliate or another
Lender, a fund or an Approved Fund (or, if less, the entire remaining amount of
such Lender's Loans, Letter of Credit Outstandings and Commitments). Each
Obligor and the Administrative Agent shall be entitled to continue to deal
solely and directly with a Lender in connection with the interests so assigned
and delegated to an Assignee Lender until
(c) notice of such assignment and delegation, together with
(i) payment instructions, (ii) the Internal Revenue Service Forms or other
statements contemplated or required to be delivered pursuant to SECTION
4.6, if applicable, and (iii) addresses and related information with
respect to such Assignee Lender, shall have been delivered to the Borrower
and the Administrative Agent by such assignor Lender and such Assignee
Lender;
(d) such Assignee Lender shall have executed and delivered to the
Borrower and the Administrative Agent a Lender Assignment Agreement,
accepted by the Administrative Agent; and
(e) the processing fees described below shall have been paid.
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From and after the date that the Administrative Agent accepts such Lender
Assignment Agreement, (x) the Assignee Lender thereunder shall be deemed
automatically to have become a party hereto and to the extent that rights and
obligations hereunder have been assigned and delegated to such Assignee
Lender in connection with such Lender Assignment Agreement, shall have the
rights and obligations of a Lender hereunder and under the other Loan
Documents, and (y) the assignor Lender, to the extent that rights and
obligations hereunder have been assigned and delegated by it in connection
with such Lender Assignment Agreement, shall be released from its obligations
hereunder and under the other Loan Documents. Within five Business Days
after its receipt of notice that the Administrative Agent has received and
accepted an executed Lender Assignment Agreement (and if requested by the
Assignee Lender), but subject to CLAUSE (c), the Borrower shall execute and
deliver to the Administrative Agent (for delivery to the relevant Assignee
Lender) a new Note evidencing such Assignee Lender's assigned Loans and
Commitments and, if the assignor Lender has retained Loans and Commitments
hereunder (and if requested by such Lender), a replacement Note in the
principal amount of the Loans and Commitments retained by the assignor Lender
hereunder (such Note to be in exchange for, but not in payment of, the Note
then held by such assignor Lender). Each such Note shall be dated the date
of the predecessor Note. The assignor Lender shall xxxx each predecessor
Note "exchanged" and deliver each of them to the Borrower. Accrued interest
on that part of each predecessor Note evidenced by a new Note, and accrued
fees, shall be paid as provided in the Lender Assignment Agreement. Accrued
interest on that part of each predecessor Note evidenced by a replacement
Note shall be paid to the assignor Lender. Accrued interest and accrued fees
shall be paid at the same time or times provided in the predecessor Note and
in this Agreement. Such assignor Lender or such Assignee Lender must also
pay a processing fee in the amount of $3,500 to the Administrative Agent upon
delivery of any Lender Assignment Agreement. Notwithstanding any other term
of this Section, the agreement of Scotiabank to provide the Swing Line Loan
Commitment shall not impair or otherwise restrict in any manner the ability
of Scotiabank to make any assignment of its Loans or Commitments, it being
understood and agreed that Scotiabank may terminate its Swing Line Loan
Commitment, either in whole or in part, in connection with the making of any
assignment so long as the assignee has agreed to assume the Swing Line Loan
Commitment. Any attempted assignment and delegation not made in accordance
with this SECTION 10.11.1 shall be null and void. Notwithstanding anything
to the contrary set forth above, any Lender may (without requesting the
consent of the Borrower or the Administrative Agent) pledge its Loans to a
Federal Reserve Bank in support of borrowings made by such Lender from such
Federal Reserve Bank.
(f) In the event that S&P or Xxxxx'x, shall, after the date that any
Person becomes a Lender, downgrade the long-term certificate of deposit
ratings of such Lender, and the resulting ratings shall be below BBB- or
Baa3, respectively, or the equivalent, then the Borrower, the Swingline
Lender and each Issuer shall each have the right, but not the obligation,
upon notice to such Lender and the Administrative Agent, to replace such
Lender with a Replacement Lender acceptable to the Borrower and the
Administrative Agent (such consents not to be unreasonably withheld or
delayed; PROVIDED, that no such consent shall be required if the
Replacement Lender is an existing Lender), and upon any such downgrading of
any Lender's long-term certificate of deposit
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rating, each such Lender hereby agrees to transfer and assign (in
accordance with SECTION 10.11.1) all of its Commitments, Loans, Notes
and other rights and obligations under this Agreement and all other
Loan Documents (including Reimbursement Obligations) to such
Replacement Lender; PROVIDED, HOWEVER, that (i) such assignment shall
be without recourse, representation or warranty (other than that such
Lender owns the Commitments, Loans and Notes being assigned, free and
clear of any Liens) and (ii) the purchase price paid by the
Replacement Lender shall be in the amount of such Lender's Loans and
its Percentage of outstanding Reimbursement Obligations, together with
all accrued and unpaid interest and fees in respect thereof, plus all
other amounts (other than the amounts (if any) demanded and
unreimbursed under SECTIONS 4.2, 4.3, 4.5 and 4.6, which shall be paid
by the Borrower), owing to such Lender hereunder. Upon any such
termination or assignment, such Lender shall cease to be a party
hereto but shall continue to be entitled to the benefits of any
provisions of this Agreement which by their terms survive the
termination of this Agreement.
(g) Upon receipt by the Borrower of the predecessor Note marked
"canceled", the Borrower shall issue a replacement Note or Notes, as the
case may be, to such Replacement Lender and such institution shall become a
"Lender" for all purposes under this Agreement and the other Loan
Documents.
The Borrower hereby designates the Administrative Agent to serve as the
Borrower's agent, solely for the purpose of this Section, to maintain a register
(the "REGISTER") on which the Administrative Agent will record each Lender's
Commitment, the Loans made by each Lender and the Notes evidencing such Loans,
and each repayment in respect of the principal amount of the Loans of each
Lender and annexed to which the Administrative Agent shall retain a copy of each
Lender Assignment Agreement delivered to the Administrative Agent pursuant to
this Section. Failure to make any recordation, or any error in such
recordation, shall not affect the Borrower's or any other Obligor's Obligations
in respect of such Loans or Notes. The entries in the Register shall be
conclusive, in the absence of manifest error, and the Borrower, the
Administrative Agent and the Lenders shall treat each Person in whose name a
Loan and related Note is registered as the owner thereof for all purposes of
this Agreement, notwithstanding notice or any provision herein to the contrary.
A Lender's Commitment and the Loans made pursuant thereto and the Notes
evidencing such Loans may be assigned or otherwise transferred in whole or in
part only by registration of such assignment or transfer in the Register. Any
assignment or transfer of a Lender's Commitment or the Loans or the Notes
evidencing such Loans made pursuant thereto shall be registered in the Register
only upon delivery to the Administrative Agent of a Lender Assignment Agreement
duly executed by the assignor thereof. No assignment or transfer of a Lender's
Commitment or the Loans made pursuant thereto or the Notes evidencing such Loans
shall be effective unless such assignment or transfer shall have been recorded
in the Register by the Administrative Agent as provided in this Section.
SECTION 10.11.2. PARTICIPATIONS. Any Lender may sell to one or more
commercial banks, financial institutions, any of its Affiliates, a fund, an
Approved Fund or another Lender (each of such commercial banks, financial
institutions, any of its Affiliates, a fund, an Approved
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Fund and another Lender being herein called a "PARTICIPANT") participating
interests in any of the Loans, Commitments, or other interests of such Lender
hereunder; PROVIDED, HOWEVER, that
(a) no participation contemplated in this SECTION 10.11 shall relieve
such Lender from its Commitments or its other obligations hereunder or
under any other Loan Document;
(b) such Lender shall remain solely responsible for the performance of
its Commitments and such other obligations;
(c) the Borrower and each other Obligor and the Administrative Agent
shall continue to deal solely and directly with such Lender in connection
with such Lender's rights and obligations under this Agreement and each of
the other Loan Documents;
(d) no Participant, unless such Participant is an Affiliate of such
Lender or is itself a Lender, shall be entitled to require such Lender to
take or refrain from taking any action hereunder or under any other Loan
Document, except that such Lender may agree with any Participant that such
Lender will not, without such Participant's consent, take any actions of
the type described in CLAUSE (a), (b), (f) or, to the extent requiring the
consent of each Lender, CLAUSE (c) of SECTION 10.1; and
(e) the Borrower shall not be required to pay any amount under this
Agreement that is greater than the amount which it would have been required
to pay had no participating interest been sold.
The Borrower acknowledges and agrees that each Participant, for purposes of
SECTIONS 4.3, 4.4, 4.5, 4.6, 4.8, 4.9, 7.1.1, 10.3 and 10.4, shall be considered
a Lender. Each Participant shall only be indemnified for increased costs
pursuant to SECTION 4.3, 4.5 or 4.6 if and to the extent that the Lender which
sold such participating interest to such Participant concurrently is entitled to
make, and does make, a claim on the Borrower for such increased costs. Any
Lender that sells a participating interest in any Loan, Commitment or other
interest to a Participant under this SECTION 10.11.2 shall indemnify and hold
harmless the Borrower and the Administrative Agent from and against any taxes,
penalties, interest or other costs or losses (including reasonable attorneys'
fees and expenses) incurred or payable by the Borrower or the Administrative
Agent as a result of the failure of the Borrower or the Administrative Agent to
comply with its obligations to deduct or withhold any Taxes from any payments
made pursuant to this Agreement to such Lender or the Administrative Agent, as
the case may be, which Taxes would not have been incurred or payable if such
Participant had been a Non-U.S. Lender that was entitled to deliver to the
Borrower, the Administrative Agent or such Lender, and did in fact so deliver, a
duly completed and valid Form 1001 or 4224 (or applicable successor form)
entitling such Participant to receive payments under this Agreement without
deduction or withholding of any United States federal taxes.
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SECTION 10.12. OTHER TRANSACTIONS. Nothing contained herein shall
preclude the Administrative Agent, any Issuer or any other Lender from engaging
in any transaction, in addition to those contemplated by this Agreement or any
other Loan Document, with the Borrower or any of its Affiliates in which the
Borrower or such Affiliate is not restricted hereby from engaging with any other
Person.
SECTION 10.13.CONFIDENTIALITY. The Administrative Agent, the Issuer and
the Lenders shall hold all non-public information (which has been identified as
such by the Borrower or any of its Subsidiaries) provided to them by the
Borrower or any of its Subsidiaries pursuant to or in connection with this
Agreement in accordance with their customary procedures for handling
confidential information of this nature, but may make disclosure to any of their
examiners, regulators (including the National Association of Insurance
Commissioners), Affiliates, outside auditors, counsel and other professional
advisors in connection with this Agreement or any other Loan Document or as
reasonably required by any potential BONA FIDE transferee, participant or
assignee, or in connection with the exercise of remedies under a Loan Document,
or as requested by any governmental agency or representative thereof or pursuant
to legal process; PROVIDED, HOWEVER, that unless specifically prohibited by
applicable law or court order, the Administrative Agent, the Issuer and each
Lender shall promptly notify the Borrower of any request by any governmental
agency or representative thereof (other than any such request in connection with
an examination of the financial condition of the Administrative Agent, the
Issuer or such Lender by such governmental agency) for disclosure of any such
non-public information and, where practicable, prior to disclosure of such
information; prior to any such disclosure pursuant to this SECTION 10.13, the
Administrative Agent, the Issuer and each Lender shall require any such BONA
FIDE transferee, participant and assignee receiving a disclosure of non-public
information to agree, for the benefit of the Borrower and its Subsidiaries, in
writing to be bound by this SECTION 10.13; and to require such Person to require
any other Person to whom such Person discloses such non-public information to be
similarly bound by this SECTION 10.13; and except as may be required by an order
of a court of competent jurisdiction and to the extent set forth therein, no
Lender shall be obligated or required to return any materials furnished by the
Borrower or any of its Subsidiaries.
SECTION 10.14. FORUM SELECTION AND CONSENT TO JURISDICTION. ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE ADMINISTRATIVE
AGENT, THE LENDERS, ANY ISSUER OR THE BORROWER IN CONNECTION HEREWITH OR
THEREWITH SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE
OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY
COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE ADMINISTRATIVE AGENT'S
OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER
PROPERTY MAY BE FOUND. THE BORROWER HEREBY
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XXXXXXXXXXX XXXXXXXX XXX XXXXXX XXXXXX CORPORATION COMPANY (THE "PROCESS
AGENT"), WITH AN OFFICE ON THE DATE HEREOF AT 000 XXXXXX XXXXXX, XXX XXXX,
XXX XXXX 00000, AS ITS AGENT TO RECEIVE, ON ITS BEHALF AND ON BEHALF OF ITS
PROPERTY, SERVICE OF COPIES OF THE SUMMONS AND COMPLAINT AND ANY OTHER
PROCESS WHICH MAY BE SERVED IN ANY SUCH ACTION OR PROCEEDING. SUCH SERVICE
MAY BE MADE BY MAILING OR DELIVERING A COPY OF SUCH PROCESS TO THE BORROWER
IN CARE OF THE PROCESS AGENT AT THE PROCESS AGENT'S ABOVE ADDRESS, AND THE
BORROWER HEREBY IRREVOCABLY AUTHORIZES AND DIRECTS THE PROCESS AGENT TO
ACCEPT SUCH SERVICE ON ITS BEHALF. THE BORROWER IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL
SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK AT THE ADDRESS FOR NOTICES
SPECIFIED IN SECTION 10.2. THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY
HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION
BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH
LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT THE
BORROWER HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY
COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE,
ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE)
WITH RESPECT TO ITSELF OR ITS PROPERTY, THE BORROWER HEREBY IRREVOCABLY
WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW SUCH IMMUNITY IN RESPECT OF ITS
OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
SECTION 10.15. WAIVER OF JURY TRIAL. THE ADMINISTRATIVE AGENT, EACH
LENDER, EACH ISSUER AND THE BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHTS THEY MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING
OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT,
OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR
WRITTEN) OR ACTIONS OF THE ADMINISTRATIVE AGENT, SUCH LENDER, SUCH ISSUER OR THE
BORROWER IN CONNECTION HEREWITH OR THEREWITH. THE BORROWER ACKNOWLEDGES AND
AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION
(AND EACH OTHER PROVISION OF EACH OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY)
AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE ADMINISTRATIVE AGENT,
EACH LENDER AND EACH ISSUER ENTERING INTO THIS AGREEMENT AND EACH SUCH OTHER
LOAN DOCUMENT.
-91-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
THE TITAN CORPORATION
By:
-----------------------------------
Title:
Address:
Facsimile No.:
Attention:
THE BANK OF NOVA SCOTIA,
as the Administrative Agent
By:
-----------------------------------
Title:
Address: Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Attention:
IMPERIAL BANK,
as the Documentation Agent
By:
-----------------------------------
Title:
Address:
Facsimile No.:
Attention:
-00-
XXXXXXX
XXX XXXX XX XXXX XXXXXX
By:
-----------------------------------
Title:
FIRST UNION COMMERCIAL CORPORATION
By:
-----------------------------------
Title:
PARIBAS
By:
-----------------------------------
Title:
By:
-----------------------------------
Title:
COMERICA BANK - CALIFORNIA
By:
-----------------------------------
Title:
IMPERIAL BANK
By:
-----------------------------------
Title:
-93-
SCHEDULE I
DISCLOSURE SCHEDULE TO CREDIT AGREEMENT
ITEM 6.7 Litigation.
ITEM 6.8 Existing Subsidiaries.
ITEM 6.9 Plant Sites and Property Matters.
ITEM 6.11 Employee Benefit Plans.
ITEM 6.12 Environmental Matters.
ITEM 6.13 Intellectual Property.
ITEM 7.2.2(b) Indebtedness to be Paid.
CREDITOR OUTSTANDING PRINCIPAL AMOUNT
ITEM 7.2.3(c) Ongoing Liens.
ITEM 7.2.5(a) Ongoing Investments.
SCHEDULE II
PERCENTAGES;
LIBO OFFICE;
DOMESTIC OFFICE
PERCENTAGES
NAME AND NOTICE ADDRESS OF REVOLVING LOAN TERM LOAN
LENDER LIBO OFFICE DOMESTIC OFFICE COMMITMENT COMMITMENT
-------------------------- ----------- --------------- -------------- ------------
The Bank of Nova Scotia Same as Same as 31.25% 31.25%
Atlanta Agency Notice Notice
000 Xxxxxxxxx Xxxxxx, X.X. Xxxxxxx Xxxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Eudia Xxxxx
Paribas Same as Same as 12.50% 12.50%
000 Xxxxxxxxxx Xxxxxx Notice Notice
Xxxxx 0000 Xxxxxxx Xxxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxx Xxxxx
First Union Same as Same as 18.75% 18.75%
0000 Xxxxx Xxxxxx Xxxx Notice Notice
0xx Xxxxx Xxxxxxx Xxxxxxx
Xxxxx Xxxxx
XxXxxx, XX 00000
Attn: Xxxx XxXxxxx
Comerica Same as Same as 18.75% 18.75%
000 Xxxxx Xxxx Xxxxxx Xxxxxx
Xxxxx Xxxx, XX 00000 Address Address
Attn: Xxxxxx Xxxx
PERCENTAGES
NAME AND NOTICE ADDRESS OF REVOLVING LOAN TERM LOAN
LENDER LIBO OFFICE DOMESTIC OFFICE COMMITMENT COMMITMENT
-------------------------- ----------- --------------- -------------- ------------
Imperial Bank Same as Same as 18.75% 18.75%
000 X Xxxxxx, Xxxxx 000 Xxxxxx Xxxxxx
Xxx Xxxxx, XX 00000 Address Address
Attn: Xxxx Xxxxxxx
TABLE OF CONTENTS
PAGE
----
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1. Defined Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.2. Use of Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . .28
SECTION 1.3. Cross-References . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
SECTION 1.4. Accounting and Financial Determinations. . . . . . . . . . . . . . . . . .28
ARTICLE II COMMITMENTS, BORROWING AND ISSUANCE PROCEDURES, NOTES
AND LETTERS OF CREDIT
SECTION 2.1. Commitments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29
SECTION 2.1.1. Revolving Loan Commitment and Swing Line Loan Commitment . . . . . . . .29
SECTION 2.1.2. Letter of Credit Commitment. . . . . . . . . . . . . . . . . . . . . . .29
SECTION 2.1.3. Term Loan Commitment . . . . . . . . . . . . . . . . . . . . . . . . . .30
SECTION 2.1.4. Lenders Not Permitted or Required to Make Loans. . . . . . . . . . . . .30
SECTION 2.1.5. Issuer Not Permitted or Required to Issue Letters of Credit. . . . . . .30
SECTION 2.2. Reduction of the Commitment Amounts. . . . . . . . . . . . . . . . . . . .31
SECTION 2.2.1. Optional . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31
SECTION 2.2.2. Mandatory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31
SECTION 2.3. Borrowing Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . .31
SECTION 2.3.1. Borrowing Procedure. . . . . . . . . . . . . . . . . . . . . . . . . . .31
SECTION 2.3.2. Swing Line Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . .32
SECTION 2.4. Continuation and Conversion Elections. . . . . . . . . . . . . . . . . . .33
SECTION 2.5. Funding. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33
SECTION 2.6. Issuance Procedures. . . . . . . . . . . . . . . . . . . . . . . . . . . .33
SECTION 2.6.1. Other Lenders' Participation . . . . . . . . . . . . . . . . . . . . . .34
SECTION 2.6.2. Disbursements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34
SECTION 2.6.3. Reimbursement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .35
SECTION 2.6.4. Deemed Disbursements . . . . . . . . . . . . . . . . . . . . . . . . . .35
SECTION 2.6.5. Nature of Reimbursement Obligations. . . . . . . . . . . . . . . . . . .35
SECTION 2.7. Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36
ARTICLE III REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
SECTION 3.1. Repayments and Prepayments; Application. . . . . . . . . . . . . . . . . .36
SECTION 3.1.1. Repayments and Prepayments . . . . . . . . . . . . . . . . . . . . . . .36
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SECTION 3.1.2. Application. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38
SECTION 3.2. Interest Provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . .39
SECTION 3.2.1. Rates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39
SECTION 3.2.2. Post-Maturity Rates. . . . . . . . . . . . . . . . . . . . . . . . . . .39
SECTION 3.2.3. Payment Dates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40
SECTION 3.3. Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40
SECTION 3.3.1. Commitment Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40
SECTION 3.3.2. Agent's Fee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40
SECTION 3.3.3. Letter of Credit Fee . . . . . . . . . . . . . . . . . . . . . . . . . .41
ARTICLE IV CERTAIN LIBO RATE AND OTHER PROVISIONS
SECTION 4.1. LIBO Rate Lending Unlawful . . . . . . . . . . . . . . . . . . . . . . . .41
SECTION 4.2. Deposits Unavailable . . . . . . . . . . . . . . . . . . . . . . . . . . .41
SECTION 4.3. Increased LIBO Rate Loan Costs, etc. . . . . . . . . . . . . . . . . . . .42
SECTION 4.4. Funding Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42
SECTION 4.5. Increased Capital Costs. . . . . . . . . . . . . . . . . . . . . . . . . .43
SECTION 4.6. Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43
SECTION 4.7. Payments, Computations, etc. . . . . . . . . . . . . . . . . . . . . . . .45
SECTION 4.8. Sharing of Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . .46
SECTION 4.9. Setoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .46
SECTION 4.10. Replacement of Lender . . . . . . . . . . . . . . . . . . . . . . . . . .47
ARTICLE V CONDITIONS TO CREDIT EXTENSIONS
SECTION 5.1. Initial Credit Extension . . . . . . . . . . . . . . . . . . . . . . . . .48
SECTION 5.1.1. Resolutions, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . .48
SECTION 5.1.2. Closing Date Certificate . . . . . . . . . . . . . . . . . . . . . . . .48
SECTION 5.1.3. Delivery of Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . .49
SECTION 5.1.4. Pledge Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . .49
SECTION 5.1.5. Security Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . .50
SECTION 5.1.6. Patent Security Agreement, Copyright Security Agreement
and Trademark Security Agreement. . . . . . . . . . . . . . . . . . . .51
SECTION 5.1.7. Financial Information, etc . . . . . . . . . . . . . . . . . . . . . . .51
SECTION 5.1.8. Compliance Certificate . . . . . . . . . . . . . . . . . . . . . . . . .51
SECTION 5.1.9. Solvency, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .51
SECTION 5.1.10. Payment of Outstanding Indebtedness, etc. . . . . . . . . . . . . . . .52
SECTION 5.1.11. Subsidiary Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . .52
SECTION 5.1.12. Closing Fees, Expenses, etc . . . . . . . . . . . . . . . . . . . . . .52
SECTION 5.1.13. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52
SECTION 5.1.14. Opinions of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . .52
SECTION 5.1.15. Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . .52
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SECTION 5.2. All Credit Extensions. . . . . . . . . . . . . . . . . . . . . . . . . . .52
SECTION 5.2.1. Compliance with Warranties, No Default, etc. . . . . . . . . . . . . . .52
SECTION 5.2.2. Credit Extension Request, etc. . . . . . . . . . . . . . . . . . . . . .53
SECTION 5.2.3. Satisfactory Legal Form. . . . . . . . . . . . . . . . . . . . . . . . .53
ARTICLE VI REPRESENTATIONS AND WARRANTIES
SECTION 6.1. Organization, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . .54
SECTION 6.2. Due Authorization, Non-Contravention, etc. . . . . . . . . . . . . . . . .54
SECTION 6.3. Government Approval, Regulation, etc . . . . . . . . . . . . . . . . . . .54
SECTION 6.4. Validity, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55
SECTION 6.5. Financial Information. . . . . . . . . . . . . . . . . . . . . . . . . . .55
SECTION 6.6. No Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . .55
SECTION 6.7. Litigation, Labor Controversies, etc . . . . . . . . . . . . . . . . . . .55
SECTION 6.8. Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55
SECTION 6.9. Ownership of Properties. . . . . . . . . . . . . . . . . . . . . . . . . .55
SECTION 6.10. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .56
SECTION 6.11. Pension and Welfare Plans . . . . . . . . . . . . . . . . . . . . . . . .56
SECTION 6.12. Environmental Warranties. . . . . . . . . . . . . . . . . . . . . . . . .56
SECTION 6.13. Accuracy of Information . . . . . . . . . . . . . . . . . . . . . . . . .57
SECTION 6.14. Regulations U and X . . . . . . . . . . . . . . . . . . . . . . . . . . .58
SECTION 6.15. Year 2000 Problem . . . . . . . . . . . . . . . . . . . . . . . . . . . .58
SECTION 6.16. Government Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . .58
SECTION 6.17. No Debarment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .58
SECTION 6.18. Assignment of Payments . . . . . . . . . . . . . . . . . . . . . . . . . .58
ARTICLE VII COVENANTS
SECTION 7.1. Affirmative Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . .58
SECTION 7.1.1. Financial Information, Reports, Notices, etc . . . . . . . . . . . . . .59
SECTION 7.1.2. Maintenance of Existence; Compliance with Laws, etc. . . . . . . . . . .60
SECTION 7.1.3. Maintenance of Properties. . . . . . . . . . . . . . . . . . . . . . . .60
SECTION 7.1.4. Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .61
SECTION 7.1.5. Books and Records. . . . . . . . . . . . . . . . . . . . . . . . . . . .61
SECTION 7.1.6. Environmental Law Covenant . . . . . . . . . . . . . . . . . . . . . . .62
SECTION 7.1.7. Future Subsidiaries; Collateral. . . . . . . . . . . . . . . . . . . . .62
SECTION 7.1.8. Use Of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . . . .63
SECTION 7.1.9. Contract Obligations. . . . . . . . . . . . . . . . . . . . . . . . . . .64
SECTION 7.2. Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . .64
SECTION 7.2.1. Business Activities. . . . . . . . . . . . . . . . . . . . . . . . . . .64
SECTION 7.2.2. Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .64
SECTION 7.2.3. Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .65
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SECTION 7.2.4. Financial Condition and Operations . . . . . . . . . . . . . . . . . . .66
SECTION 7.2.5. Investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .69
SECTION 7.2.6. Restricted Payments, etc . . . . . . . . . . . . . . . . . . . . . . . .70
SECTION 7.2.7. Capital Expenditures, etc. . . . . . . . . . . . . . . . . . . . . . . .70
SECTION 7.2.8. No Prepayment of Subordinated Debt . . . . . . . . . . . . . . . . . . .71
SECTION 7.2.9. Stock of Restricted Subsidiaries . . . . . . . . . . . . . . . . . . . .71
SECTION 7.2.10. Consolidation, Merger, etc. . . . . . . . . . . . . . . . . . . . . . .72
SECTION 7.2.11. Permitted Dispositions. . . . . . . . . . . . . . . . . . . . . . . . .72
SECTION 7.2.12. Modification of Certain Agreements. . . . . . . . . . . . . . . . . . .73
SECTION 7.2.13. Transactions with Affiliates. . . . . . . . . . . . . . . . . . . . . .73
SECTION 7.2.14. Restrictive Agreements, etc . . . . . . . . . . . . . . . . . . . . . .73
SECTION 7.2.15. Sale and Leaseback. . . . . . . . . . . . . . . . . . . . . . . . . . .73
ARTICLE VIII EVENTS OF DEFAULT
SECTION 8.1. Listing of Events of Default . . . . . . . . . . . . . . . . . . . . . . .74
SECTION 8.1.1. Non-Payment of Obligations . . . . . . . . . . . . . . . . . . . . . . .74
SECTION 8.1.2. Breach of Warranty . . . . . . . . . . . . . . . . . . . . . . . . . . .74
SECTION 8.1.3. Non-Performance of Certain Covenants and Obligations . . . . . . . . . .74
SECTION 8.1.4. Non-Performance of Other Covenants and Obligations . . . . . . . . . . .74
SECTION 8.1.5. Default on Other Indebtedness. . . . . . . . . . . . . . . . . . . . . .74
SECTION 8.1.6. Judgments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .75
SECTION 8.1.7. Pension Plans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .75
SECTION 8.1.8. Change in Control. . . . . . . . . . . . . . . . . . . . . . . . . . . .75
SECTION 8.1.9. Bankruptcy, Insolvency, etc. . . . . . . . . . . . . . . . . . . . . . .75
SECTION 8.1.10. Impairment of Security, etc . . . . . . . . . . . . . . . . . . . . . .76
SECTION 8.1.11. Failure of Subordination. . . . . . . . . . . . . . . . . . . . . . . .76
SECTION 8.1.12. Government Contracts . . . . . . . . . . . . . . . . . . . . . . . . . .76
SECTION 8.2. Action if Bankruptcy . . . . . . . . . . . . . . . . . . . . . . . . . . .76
SECTION 8.3. Action if Other Event of Default . . . . . . . . . . . . . . . . . . . . .77
ARTICLE IX THE CREDIT AGENTS
SECTION 9.1. Actions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .77
SECTION 9.2. Funding Reliance, etc. . . . . . . . . . . . . . . . . . . . . . . . . . .78
SECTION 9.3. Exculpation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .78
SECTION 9.4. Successor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .78
SECTION 9.5. Credit Extensions by Scotiabank and Imperial . . . . . . . . . . . . . . .79
SECTION 9.6. Credit Decisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . .79
SECTION 9.7. Copies, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .79
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ARTICLE X MISCELLANEOUS PROVISIONS
SECTION 10.1. Waivers, Amendments, etc. . . . . . . . . . . . . . . . . . . . . . . . .80
SECTION 10.2. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .81
SECTION 10.3. Payment of Costs and Expenses . . . . . . . . . . . . . . . . . . . . . .81
SECTION 10.4. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . .82
SECTION 10.5. Survival. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .83
SECTION 10.6. Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .83
SECTION 10.7. Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .83
SECTION 10.8. Execution in Counterparts, Effectiveness, etc . . . . . . . . . . . . . .84
SECTION 10.9. Governing Law; Entire Agreement . . . . . . . . . . . . . . . . . . . . .84
SECTION 10.10. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . .84
SECTION 10.11. Sale and Transfer of Loans and Notes; Participations in Loans
and Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .84
SECTION 10.11.1. Assignments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .84
SECTION 10.11.2. Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . .87
SECTION 10.12. Other Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . .88
SECTION 10.13. Confidentiality. . . . . . . . . . . . . . . . . . . . . . . . . . . . .88
SECTION 10.14. Forum Selection and Consent to Jurisdiction. . . . . . . . . . . . . . .89
SECTION 10.15. Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . . . .90
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SCHEDULE I - Disclosure Schedule
SCHEDULE II - Percentages; LIBO Office; Domestic Office
EXHIBIT A-1 - Form of Revolving Note
EXHIBIT A-2 - Form of Term Note
EXHIBIT A-3 - Form of Swing Line Note
EXHIBIT B-1 - Form of Borrowing Request
EXHIBIT B-2 - Form of Issuance Request
EXHIBIT C - Form of Continuation/Conversion Notice
EXHIBIT D - Form of Borrower Closing Date Certificate
EXHIBIT E - Form of Compliance Certificate
EXHIBIT G-1 - Form of Borrower Pledge Agreement
EXHIBIT G-2 - Form of Subsidiary Pledge Agreement
EXHIBIT H-1 - Form of Borrower Security Agreement
EXHIBIT H-2 - Form of Subsidiary Security Agreement
EXHIBIT I - Form of Opinion of Counsel to the Obligors
EXHIBIT J - Form of Subsidiary Guaranty
EXHIBIT K - Form of Interco Subordination Agreement
EXHIBIT L - Form of Lender Assignment Agreement
EXHIBIT M - Form of Officer's Solvency Certificate
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EXHIBIT A-1
REVOLVING NOTE
$[ ] July 29, 1998
FOR VALUE RECEIVED, the undersigned, THE TITAN CORPORATION, a Delaware
corporation (the "BORROWER"), promises to pay to the order of [Name of Lender]
and its registered assigns (the "REVOLVING LENDER") on the Stated Maturity
for all Revolving Loans, the principal sum of [ ]
DOLLARS ($[ ]) or, if less, the aggregate unpaid principal amount of
all Revolving Loans made by the Revolving Lender pursuant to that certain
Credit Agreement, dated as of July 29, 1998 (as amended, supplemented,
amended and restated or otherwise modified from time to time, the "CREDIT
AGREEMENT"), among the Borrower, the various financial institutions
(including the Lender) as are or may become parties thereto (collectively,
the "LENDERS"), The Bank of Nova Scotia, as administrative agent for the
Lenders ("ADMINISTRATIVE AGENT") and Imperial Bank, as Documentation Agent.
Unless otherwise defined, terms used herein have the meanings provided in the
Credit Agreement.
The Borrower also promises to pay interest on the unpaid principal amount
hereof from time to time outstanding from the date hereof until maturity
(whether by acceleration or otherwise) and, after maturity, until paid, at the
rates per annum and on the dates specified in the Credit Agreement. Payments of
both principal and interest are to be made in lawful money of the United States
of America in same day or immediately available funds to the account designated
by the Administrative Agent pursuant to the Credit Agreement.
This Revolving Note is one of the Revolving Notes referred to in, and
evidences Indebtedness incurred under, the Credit Agreement, to which reference
is made for a description of the security for this Revolving Note and for a
statement of the terms and conditions on which the Borrower is permitted and
required to make prepayments and repayments of principal of the Indebtedness
evidenced by this Revolving Note and on which such Indebtedness may be declared
to be immediately due and payable.
The Borrower hereby irrevocably authorizes the Revolving Lender to make (or
cause to be made) appropriate notations on the grid attached hereto (or on any
continuation of such grid), which notations, if made, shall evidence, inter
alia, the date of and the outstanding principal of, the Revolving Loans
evidenced hereby. Such notations shall be rebuttable presumptive evidence of
the accuracy of the information so set forth; provided, however, that the
failure of the Revolving Lender to make any such notations shall not limit or
otherwise affect any Obligations of the Borrower.
Any assignment or transfer of this Revolving Note shall be effective solely
be registration thereof in the Register pursuant to the Credit Agreement.
All parties hereto, whether as makers, endorsers, or otherwise, severally
waive presentment for payment, demand, protest and notice of dishonor.
THIS REVOLVING NOTE SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH
PURPOSES SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE
OF NEW YORK).
THE TITAN CORPORATION
By
------------------------------------
Name:
Title:
-2-
REVOLVING LOANS AND PRINCIPAL PAYMENTS
Date Amount of Revolving Interest Amount of Principal Unpaid Principal Total Notation
Loan Made Period Repaid Balance Made By
Alternate LIBO (If Applicable) Alternate LIBO Alternate LIBO
Base Rate Rate Base Rate Rate Base Rate Rate
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EXHIBIT A-2
TERM NOTE
$[ ] July 29, 1998
FOR VALUE RECEIVED, the undersigned, THE TITAN CORPORATION, a Delaware
corporation (the "BORROWER"), promises to pay to the order of [Name of Lender]
and its registered assigns (the "TERM LENDER") on the Stated Maturity Date for
all Loans, the principal sum of [ ] DOLLARS ($[ ]) or, if
less, the aggregate unpaid principal amount of all Term Loans made by the Term
Lender pursuant to that certain Credit Agreement, dated as of July 29, 1998 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the "CREDIT AGREEMENT"), among the Borrower, the various financial
institutions (including the Lender) as are or may become parties thereto
(collectively, the "LENDERS"), The Bank of Nova Scotia, as administrative agent
for the Lenders (the "ADMINISTRATIVE AGENT") and Imperial Bank, as Documentation
Agent. Terms used herein have the meanings provided in the Credit Agreement.
The Borrower also promises to pay interest on the unpaid principal amount
hereof from time to time outstanding from the date hereof until maturity
(whether by acceleration or otherwise) and, after maturity, until paid, at the
rates per annum and on the dates specified in the Credit Agreement. Payments of
both principal and interest are to be made in lawful money of the United States
of America in same day or immediately available funds to the account designated
by the Administrative Agent pursuant to the Credit Agreement.
This Term Note is the Term Note referred to in, and evidences Indebtedness
incurred under, the Credit Agreement, to which reference is made for a
description of the security for this Term Note and for a statement of the terms
and conditions on which the Borrower is permitted and required to make
prepayments and repayments of principal of the Indebtedness evidenced by this
Term Note and on which such Indebtedness may be declared to be immediately due
and payable.
The Borrower hereby irrevocably authorizes the Term Lender to make (or
cause to be made) appropriate notations on the grid attached hereto (or on any
continuation of such grid), which notations, if made, shall evidence, INTER
ALIA, the date of and the outstanding principal of, the Term Loans evidenced
hereby. Such notations shall be rebuttable presumptive evidence of the accuracy
of the information so set forth; PROVIDED, HOWEVER, that the failure of the Term
Lender to make any such notations shall not limit or otherwise affect any
Obligations of the Borrower.
Any assignment or transfer of this Term Note shall be effective solely by
registration thereof in the Register pursuant to the Credit Agreement.
All parties hereto, whether as makers, endorsers, or otherwise, severally
waive presentment for payment, demand, protest and notice of dishonor.
THIS TERM NOTE AND SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED
BY THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSES
SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK).
THE TITAN CORPORATION
By
---------------------------------
Name:
Title:
TERM LOAN AND PRINCIPAL PAYMENTS
Date Amount of Interest Amount of Principal Unpaid Principal Total Notation
Term Loan Made Period Repaid Balance Made By
Alternate LIBO (If Applicable) Alternate LIBO Alternate LIBO
Base Rate Rate Base Rate Rate Base Rate Rate
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EXHIBIT A-3
SWING LINE NOTE
$5,000,000 July 29, 1998
FOR VALUE RECEIVED, the undersigned, THE TITAN CORPORATION, a Delaware
corporation (the "BORROWER") promises to pay to the order of THE BANK OF NOVA
SCOTIA and its registered assigns (the "SWING LINE LENDER") on the Stated
Maturity Date for all Revolving Loans, the principal sum of FIVE MILLION
DOLLARS ($5,000,000) or, if less, the aggregate unpaid principal amount of all
Swing Line Loans made by the Swing Line Lender pursuant to that certain Credit
Agreement, dated as of July 29, 1998 (as amended, supplemented, amended and
restated or otherwise modified from time to time, the "CREDIT AGREEMENT"), among
the Borrower, the various financial institutions (including the Lender) as are
or may become parties thereto (collectively, the "LENDERS"), The Bank of Nova
Scotia, as administrative agent for the Lenders (the "ADMINISTRATIVE AGENT") and
Imperial Bank, as Documentation Agent. Unless otherwise defined, terms used
herein have the meanings provided in the Credit Agreement.
The Borrower also promises to pay interest on the unpaid principal amount
hereof from time to time outstanding from the date hereof until maturity
(whether by acceleration or otherwise) and, after maturity, until paid, at the
rates per annum and on the dates specified in the Credit Agreement. Payments of
both principal and interest are to be made in lawful money of the United States
of America in same day or immediately available funds to the account designated
by the Administrative Agent pursuant to the Credit Agreement.
This Swing Line Note is the Swing Line Note referred to in, and evidences
Indebtedness incurred under, the Credit Agreement, to which reference is made
for a description of the security for this Swing Line Note and for a statement
of the terms and conditions on which the Borrower is permitted and required to
make prepayments and repayments of principal of the Indebtedness evidenced by
this Swing Line Note and on which such Indebtedness may be declared to be
immediately due and payable.
The Borrower hereby irrevocably authorizes the Swing Line Lender to make
(or cause to be made) appropriate notations on the grid attached hereto (or on
any continuation of such grid), which notations, if made, shall evidence, INTER
ALIA, the date of and the outstanding principal of, the Swing Line Loans
evidenced hereby. Such notations shall be rebuttable presumptive evidence of
the accuracy of the information so set forth; PROVIDED, HOWEVER, that
the failure of the Swing Line Lender to make any such notations shall not
limit or otherwise affect any Obligations of the Borrower.
Any assignment or transfer of this Swing Line Note shall be effective
solely by registration thereof in the Register pursuant to the Credit Agreement.
All parties hereto, whether as makers, endorsers, or otherwise, severally
waive presentment for payment, demand, protest and notice of dishonor.
THIS SWING LINE NOTE AND SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH
PURPOSES SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE
OF NEW YORK).
THE TITAN CORPORATION
By
--------------------------------
Name:
Title:
SWING LINE LOANS AND PRINCIPAL PAYMENTS
Amount of Amount of Unpaid
Date Swing Line Principal Principal Total Notation
Loan Made Repaid Balance Made By
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EXHIBIT B-1
BORROWING REQUEST
The Bank of Nova Scotia,
as Agent
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:
THE TITAN CORPORATION
Gentlemen and Ladies:
This Borrowing Request is delivered to you pursuant to Section 2.3 of the
Credit Agreement, dated as of July 29, 1998 (as amended, supplemented, amended
and restated or otherwise modified from time to time, the "CREDIT AGREEMENT"),
among The Titan Corporation (the "BORROWER"), the various financial institutions
as are or may become parties thereto (collectively, the "LENDERS") The Bank of
Nova Scotia, as administrative agent for the Lenders (the "ADMINISTRATIVE
AGENT"), and Imperial Bank, as documentation agent. Unless otherwise defined
herein or the context otherwise requires, terms used herein have the meanings
provided in the Credit Agreement.
The Borrower hereby requests that a [Revolving Loan] [Term Loan] [Swing
Line Loan] be made in the aggregate principal amount of $ _____________ on
_____________ , ____ as a * [LIBO Rate Loan having an Interest Period of [one]
[two] [three] [six] month(s)] [Base Rate Loan].
The Borrower hereby acknowledges that, pursuant to Section 5.2.2 of the
Credit Agreement, each of the delivery of this Borrowing Request and the
acceptance by the Borrower of the proceeds of the Loans requested hereby
constitute a representation and warranty by the Borrower that, on the date of
such Loans, and immediately before and after giving effect thereto and to the
application of the proceeds therefrom, the statements set forth in Section 5.2.1
of the Credit Agreement are true and correct in all material respects.
-------------------
* Insert appropriate interest rate option and, if applicable, the number
of months with respect to LIBO Rate Loans. Note that Swing Line Loans must
be made as Base Rate Loans.
The Borrower agrees that if prior to the time of the Borrowing requested
hereby any matter certified to herein by it will not be true and correct in all
material respects at such time as if then made, it will immediately so notify
the Administrative Agent. Except to the extent, if any, that prior to the time
of the Borrowing requested hereby the Agent shall receive written notice to the
contrary from the Borrower, each matter certified to herein shall be deemed once
again to be certified as true and correct in all material respects at the date
of such Borrowing as if then made.
Please wire transfer the proceeds of the Borrowing to the accounts of the
following persons at the financial institutions indicated respectively:
Amount to be Name, Account No.,
Transferred Address, etc.
------------- ------------------
Person to be Paid
-----------------
$
------------ ----------------------------
----------------------------
Attention:
------------------
$
------------ ----------------------------
----------------------------
Attention:
------------------
$
------------ ----------------------------
Balance of such
proceeds ----------------------------
Attention:
------------------
-2-
IN WITNESS WHEREOF, the Borrower has caused this Borrowing Request to be
executed and delivered, and the certification and representations and warranties
contained herein to be made, by its duly Authorized Officer this __ day of
____________, ____.
THE TITAN CORPORATION
By
----------------------------
Name:
Title:
-3-
EXHIBIT B-2
ISSUANCE REQUEST
The Bank of Nova Scotia,
as Agent
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:
------------------
THE TITAN CORPORATION
Gentlemen and Ladies:
This Issuance Request is delivered to you pursuant to Section 2.6 of the
Credit Agreement, dated as of July 29, 1998 (as amended, supplemented, amended
and restated or otherwise modified from time to time, the "CREDIT AGREEMENT"),
among The Titan Corporation, a Delaware corporation (the "BORROWER"), the
various financial institutions as are or may become parties thereto which extend
a Commitment thereunder (collectively, the "LENDERS") and The Bank of Nova
Scotia, as administrative agent for the Lenders (the "ADMINISTRATIVE AGENT"),
and Imperial Bank, as documentation agent. Unless otherwise defined herein or
the context otherwise requires, terms used herein have the meanings provided in
the Credit Agreement.
The Borrower hereby requests that the Issuer (*)[issue a Letter of Credit
on , (the "DATE OF ISSUANCE") in the initial Stated Amount
of $____________ with a Stated Expiry Date (as defined therein) of ____________,
____] [extend the Stated Expiry Date (as defined under Letter of Credit No.__,
issued on _______________, ____, in the initial Stated Amount of $_____________)
to a revised Stated Expiry Date (as defined therein) of ________________, ____].
(**)[The beneficiary of the requested Letter of Credit will be
___________________________.]
-------------------
(*) Insert and complete as appropriate.
(**) Delete if Issuance Request is for an extension.
The Borrower hereby acknowledges that, pursuant to Section 5.2.2 of the
Credit Agreement, each of the delivery of this Issuance Request and the
(*)[issuance] [extension] of the Letter of Credit requested hereby, all
statements set forth in Section 5.2.1 of the Credit Agreement are true and
correct in all material respects.
The Borrower agrees that if, prior to the time of the [issuance]
[extension] of the Letter of Credit requested hereby, any matter certified to
herein by it will not be true and correct in all material respects at such time
as if then made, it will immediately so notify the Administrative Agent. Except
to the extent, if any, that prior to the time of the [issuance] [extension] of
the Letter of Credit requested hereby the Administrative Agent and the Issuer
shall receive written notice to the contrary from the Borrower, each matter
certified to herein shall be deemed to be certified as true and correct in all
material respects at the date of such [issuance] [extension].
-------------------
(*) Insert as appropriate.
-2-
IN WITNESS WHEREOF, the Borrower has caused this Issuance Request to be
executed and delivered, and the certification and representations and warranties
contained herein to be made, by its duly Authorized Officer this __ day of
___________, ____.
THE TITAN CORPORATION
By:
-------------------------------
Name:
Title:
-3-
EXHIBIT C
CONTINUATION/CONVERSION NOTICE
The Bank of Nova Scotia,
as Agent
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:
------------------------
THE TITAN CORPORATION
Gentlemen and Ladies:
This Continuation/Conversion Notice is delivered to you pursuant to Section
2.4 of the Credit Agreement, dated as of July 29, 1998 (as amended,
supplemented, amended and restated or otherwise modified from time to time, the
"CREDIT AGREEMENT"), among The Titan Corporation, a Delaware corporation (the
"BORROWER"), the various financial institutions as are or may become parties
thereto (collectively, the "LENDERS") The Bank of Nova Scotia, as administrative
agent for the Lenders (the "ADMINISTRATIVE AGENT"), and Imperial Bank, as
documentation agent. Unless otherwise defined herein or the context otherwise
requires, terms used herein have the meanings provided in the Credit Agreement.
The Borrower hereby requests that on ________, ____,
(*)[(1) (**)$ of the presently outstanding principal
amount of the [Revolving Loans] [Term Loans] originally made on _______,
____,]
(*)[(2) and all Loans presently being maintained as (***)[Base Rate
Loans] [LIBO Rate Loans],]
(3) be [converted into] [continued as],
-------------------
(*) Delete if not applicable.
(**) Subject to minimum amounts and multiples contemplated in Section 2.4.
(***) Insert appropriate interest rate option and, if applicable, the number
of months with respect to LIBO Rate Loans.
(4) ***[LIBO Rate Loans having an Interest Period of [one] [two]
[three] [six] month(s)] [Base Rate Loans].
(*)[The Borrower hereby:
(a) certifies and warrants that no Default has occurred and is
continuing or will (immediately after giving effect to the continuation or
conversion requested hereby) occur and be continuing; and
(b) agrees that if prior to the time of such continuation or
conversion any matter certified to herein by it will not be true and
correct at such time as if then made, it will immediately so notify the
Administrative Agent.
Except to the extent, if any, that prior to the time of the continuation or
conversion requested hereby the Administrative Agent shall receive written
notice to the contrary from the Borrower, each matter certified to herein shall
be deemed to be certified at the date of such continuation or conversion as if
then made.]
-------------------
* Applicable only if Loans are being continued as, or converted into,
LIBO Rate Loans.
-2-
IN WITNESS WHEREOF, the Borrower has caused this Continuation/Conversion
Notice to be executed and delivered, and the certification and representations
and warranties contained herein to be made, by its duly Authorized Officer this
___ day of _____________, ____.
THE TITAN CORPORATION
By
-----------------------------
Name:
Title:
-3-
EXHIBIT D
CLOSING DATE CERTIFICATE
THE TITAN CORPORATION
This Closing Date Certificate (this "CERTIFICATE") is delivered pursuant to
Section 5.1.2 of the Credit Agreement, dated as of July 29, 1998 (as amended,
supplemented, amended and restated or otherwise modified from time to time, the
"CREDIT AGREEMENT") among The Titan Corporation, a Delaware corporation (the
"BORROWER"), the various financial institutions as are or may become parties
thereto (collectively, the "LENDERS"), The Bank of Nova Scotia ("SCOTIABANK") as
administrative agent for the Lenders (in such capacity, the "ADMINISTRATIVE
AGENT"), and Imperial Bank, as documentation agent. Capitalized terms not
otherwise defined herein shall have the meanings set forth in the Credit
Agreement.
The undersigned hereby certifies, represents and warrants for and on behalf
of the Borrower, as of the Closing Date, as follows:
1. FINANCIAL INFORMATION, ETC. True and complete copies of each of the
following documents are attached hereto as ANNEX I:
(a) audited consolidated financial statements of the Borrower and its
Subsidiaries as at December 31, 1997, without Impermissible Qualification;
and
(b) a PRO FORMA opening balance sheet of the Borrower, as of the
Closing Date, certified by the chief financial or accounting Authorized
Officer of the Borrower, giving effect to the contemplated financing and
reflecting the existing and proposed legal and capital structure (both debt
and equity) of the Borrower.
2. PAYMENT OF OUTSTANDING INDEBTEDNESS, ETC. All Indebtedness identified
in Item 7.2.2(b) of the Disclosure Schedule to the Credit Agreement (including
under or in connection with the Existing Loan Agreements), together with all
interest, all prepayment premiums and other amounts due and payable with respect
thereto, have been paid in full from the proceeds of the initial Credit
Extension and the commitments in respect of such Indebtedness have been
terminated, and all Liens securing payment of any such Indebtedness have been
released and the Administrative Agent has received all Uniform Commercial Code
Form UCC-3 termination statements or other instruments as may be suitable or
appropriate in connection therewith.
3. CLOSING FEES, EXPENSES, ETC. The Administrative Agent has received for
its own accounts, or for the account of each Lender, as the case may be, all
fees, costs and expenses due and payable pursuant to Section 3.3 and 10.3 of the
Credit Agreement, if then invoiced.
4. INSURANCE. Attached hereto as ANNEX II are certified copies of
certificates of insurance (or binders in respect thereof), from one or more
insurance companies, evidencing coverage required to be maintained pursuant to
the Credit Agreement and each Loan Document.
5. MATERIAL ADVERSE CHANGE. There has not occurred a Material Adverse
Effect since December 31, 1997.
6.. COMPLIANCE WITH WARRANTIES, NO DEFAULT, ETC. Both before and after
giving effect to the initial Credit Extensions the following statements shall be
true and correct:
(a) the representations and warranties set forth in ARTICLE VI
(excluding, however, those contained in SECTION 6.7) and in each other Loan
Document are, in each case, true and correct with the same effect as if
made as of the date hereof (unless stated to relate solely to an earlier
date, in which case such representations and warranties are true and
correct in all material respects as of such earlier date);
(b) except as disclosed by the Borrower to the Administrative Agent
and the Lenders pursuant to SECTION 6.7,
(i) no labor controversy, litigation, arbitration or
governmental investigation or proceeding is pending or, to the
knowledge of the Borrower, threatened against the Borrower or any of
its Subsidiaries which could reasonably be expected to have a Material
Adverse Effect, or which would adversely affect the legality, validity
or enforceability of the Credit Agreement or any other Loan Document;
and
(ii) no development has occurred in any labor controversy,
litigation, arbitration or governmental investigation or proceeding
disclosed pursuant to SECTION 6.7 which could reasonably be expected
to have a Material Adverse Effect; and
(iii) no Default shall has occurred and is continuing.
-2-
IN WITNESS WHEREOF, the undersigned has caused this Certificate to be
executed and delivered, and the certification, representations and warranties
contained herein to be duly made, by an Authorized Officer this 29th day of
July, 1998.
THE TITAN CORPORATION
By:
------------------------------
Title:
-3-
EXHIBIT E
COMPLIANCE CERTIFICATE
The Bank of Nova Scotia,
as Administrative Agent
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxx
THE TITAN CORPORATION.
Gentlemen and Ladies:
This Compliance Certificate is delivered to you pursuant to [Section 5.1.8]
[clause (c) of Section 7.1.1] of the Credit Agreement, dated as of July 29, 1998
(as amended, supplemented, amended and restated or otherwise modified from time
to time, the "CREDIT AGREEMENT"), among The Titan Corporation, a Delaware
corporation (the "BORROWER"), the various financial institutions as are or may
become parties thereto (collectively, the "LENDERS"), The Bank of Nova Scotia,
as administrative agent for the Lenders (in such capacity, the "ADMINISTRATIVE
AGENT"), and Imperial Bank, as documentation agent. Unless otherwise defined in
this Compliance Certificate, terms used herein (including the Attachments
hereto) have the meanings provided in the Credit Agreement. Each reference to a
Section is to the relevant Section in the Credit Agreement.
The Borrower hereby certifies and warrants that as of __________ __, ____
(the "COMPUTATION DATE"):
1. The Total Debt to EBITDA Ratio was _____:1, as computed on ATTACHMENT 1
hereto.
The maximum Total Debt to EBITDA Ratio permitted pursuant to clause (a) of
Section 7.2.4 is _____:1 and, accordingly, the Total Debt to EBITDA Ratio
covenant [has] [has not] been satisfied.
2. The Tangible Net of the Borrower is $_________________, as computed on
ATTACHMENT 3 hereto.
The minimum Tangible Net Worth required pursuant to clause (b) of Section
7.2.4 (as computed on ATTACHMENT 3 hereto) is $____, and accordingly, the
Tangible Net Worth covenant [has][has not] been satisfied.
3. The Fixed Charge Coverage Ratio was _____:1, as computed on ATTACHMENT 4
hereto.
The minimum Fixed Charge Coverage Ratio permitted pursuant to clause (c) of
Section 7.2.4 is _____:1 and, accordingly, the Fixed Charge Coverage Ratio
covenant [has] [has not] been satisfied.
4. The EBITDA (for the Fiscal Year in which the Computation Date occurs) was
$___________, as computed on ATTACHMENT 2 hereto.
The minimum EBITDA (for the Fiscal Year in which the Computation Date
occurs) required by clause (d) of Section 7.2.4 of the Credit Agreement was
$ ___________, and accordingly, the aforementioned requirement has [not]
been satisfied.
5. The Quick Ratio was ____ to 1.0, as computed on ATTACHMENT 5 hereto.
The minimum Quick Ratio permitted by clause (e) of Section 7.2.4 of the
Credit Agreement on the Computation Date was ___ to 1.), and accordingly,
the aforementioned requirement has [not] been satisfied.
6.6. The Indebtedness of any Restricted Subsidiary owing to the Borrower or any
other Restricted Subsidiary under clause (e)(ii) of Section 7.2.2 of the
Credit Agreement, which, when incurred by a Foreign Subsidiary owing to the
Borrower or a Guarantor (when aggregated with the amount of Investments
made by the Borrower and the Guarantors in Foreign Subsidiaries under
CLAUSE (e)(i) of SECTION 7.2.5 under the Credit Agreement) was
$___________. Such Indebtedness pursuant to such clause (e)(ii) of Section
7.2.2, is not allowed to exceed $3,000,000, and accordingly, such
Indebtedness was [not] permitted.
7. The Indebtedness of the Borrower and its Restricted Subsidiaries in respect
of Capitalized Lease Liabilities under clause (g) of Section 7.2.2 of the
Credit Agreement, in the aggregate, was $_________. Such Indebtedness
pursuant to such clause (g) of Section 7.2.2 of the Credit Agreement, is
not allowed exceed $1,000,000 in the aggregate, and accordingly, such
Indebtedness was [not] permitted.
8. Other Indebtedness of the Borrower and its Restricted Subsidiaries
(including purchase money Indebtedness) under clause (h) of Section 7.2.2
of the Credit Agreement, was, in the aggregate, $____________. Such other
Indebtedness pursuant to clause (h) of
2
Section 7.2.2 of the Credit Agreement, is not allowed to exceed, in an
aggregate amount at any time, $5,000,000, and accordingly, such
Indebtedness was [not] permitted.
9. Other Investments of the Borrower or any of its Restricted Subsidiaries
under clause (j) of Section 7.2.5 of the Credit Agreement, was $__________.
Such other Investments pursuant to clause (j) of Section 7.2.5 of the
Credit Agreement are not permitted to exceed $10,000,000 over the term of
the Credit Agreement, and accordingly, to date, such Investments were [not]
permitted.
10. Compliance with clause (c) of Section 7.2.6:
(a) The Total Debt to EBITDA Ratio immediately following the proposed
redemption of Capital Stock of the Borrower or any of its Restricted
Subsections was ___:1.0, calculated on a PRO FORMA basis, giving
effect to such proposed redemption. The maximum Total Debt to EBITDA
Ratio so calculated on a PRO FORMA basis may not exceed 3:00:1.00,
and, accordingly, such redemption was [not] permitted. The aggregate
value of Capital Stock redemptions for the Borrower and its Restricted
Subsidiaries under clause (c)(iii) of Section 7.2.6 of the Credit
Agreement was $_______. The aggregate value of such redemptions
pursuant to clause (c)(iii) of Section 7.2.6 of the Credit Agreement
are not permitted to exceed $__________, and accordingly, such
redemptions were [not] permitted.
(b) The aggregate value of Capital Stock redemptions for the Borrower and
its Restricted Subsidiaries under clause (c)(iv) of Section 7.2.6 of
the Credit Agreement was $_______. The aggregate value of such
redemptions pursuant to clause (c)(iv) of Section 7.2.6 of the Credit
Agreement are not permitted to exceed $8,000,000, and accordingly, to
date, such redemptions were [not] permitted.
(c) The unborrowed Revolving Loan Commitment Amount at the time of Capital
Stock redemptions for the Borrower and its Restricted Subsidiaries
under clause (c)(v) of Section 7.2.6 of the Credit Agreement was
$_______. The unborrowed Revolving Loan Commitment Amount at the time
of such Capital Stock redemptions pursuant to clause (c)(v) of Section
7.2.6 of the Credit Agreement are not permitted to exceed $7,500,000,
and accordingly, to date, such [redemptions] were [not] permitted.
11. The aggregate amount of Capital Expenditures made or committed to be made
during the Fiscal Year in which the Computation Date occurs is $__________.
The maximum amount of Capital Expenditures permitted by Section 7.2.7 of
the Credit Agreement
3
during this Fiscal Year was $________, and accordingly, the aforementioned
requirement has [not] been satisfied.
12. The aggregate value of the sales, transfers, leases, contributions or
conveyances (including by way of merger), or grants of options, warrants or
other rights with respect to, any of the Borrower's or such Restricted
Subsidiaries' assets (including accounts receivable and capital stock of
Restricted Subsidiaries) to any Person in one transaction or series of
transactions, pursuant to clause (iv) of Section 7.2.11 of the Credit
Agreement made in the Fiscal Year to date in which the Computation Date
occurs was $_______. The maximum amount of assets, in the aggregate,
which may be disposed of in any Fiscal Year, pursuant to clause (iv) of
Section 7.2.11 of the Credit Agreement, is $1,000,000, so long as the
Borrower complies with Section 3.1.1(c) of the Credit Agreement, and
accordingly, the aforementioned disposition [is][was][not] permitted.
4
IN WITNESS WHEREOF, the Borrower has caused this Certificate to be duly
executed and delivered by its chief executive, financial or accounting
Authorized Officer this ____ day of __________, ____.
THE TITAN CORPORATION
By:
--------------------------------
Name:
Title:
ATTACHMENT 1
(to __/__/__ Compliance
Certificate)
TOTAL DEBT TO EBITDA RATIO
on __/__/__
(the "Computation Date")
1. Total Debt:
(a) all obligations of the Borrower and its
Restricted Subsidiaries for borrowed money or
advances and all obligations of the Borrower
and its Restricted Subsidiaries evidenced by
bonds, debentures, notes or similar $_______
instruments (which, in the case of the Loans,
shall be deemed to equal the aggregate amount
of Loans outstanding on the Computation Date). . . . . . .
(b) all obligations, contingent or otherwise,
relative to the face amount of all letters of
credit, whether or not drawn, and banker's
acceptances issued for the account of the
Borrower and its Restricted Subsidiaries
(which, in the case of Letter of Credit $_______
Outstandings shall be deemed to equal the
aggregate amount of Letter of Credit
Outstandings on the Computation Date). . . . . . . . . . .
(c) all monetary obligations of the Borrower or
any of its Restricted Subsidiaries under any
leasing or similar arrangement which have $_______
been (or, in accordance with GAAP, should be)
classified as capitalized leases valued at
the capitalized amount thereof . . . . . . . . . . . . . .
(d) all Contingent Liabilities of the Borrower
and its Restricted Subsidiaries in respect of $_______
ITEMS 1(a) through 1(c). . . . . . . . . . . . . . . . . .
(e) The sum of ITEMS 1(a) through 1(d) . . . . . . . . . . . . $_______
(f) intercompany Indebtedness between the
Borrower and any of its Restricted $________
Subsidiaries . . . . . . . . . . . . . . . . . . . . . . .
(g) TOTAL DEBT: ITEM 1(e) minus ITEM 1(f). . . . . . . . . . . $________
2. SEE ITEM 1(f) OF ATTACHMENT 2
3. APPLICABLE CONSOLIDATED DEBT TO EBITDA RATIO: The
ratio of ITEM 1(g) to ITEM 2(f) . . . . . . . . . . . . . . . . _____:1
ATTACHMENT 2
(to__/__/__Compliance
Certificate)
EBITDA
for the four consecutive Fiscal Quarters
ending on ____ (the "Computation Date")
(the "Computation Period")
1. EBITDA:
(a) Net Income:
(i) the aggregate of all amounts which
would be included as net income on the
consolidated financial statements of
the Borrower and its Restricted
Subsidiaries for the Computation
Period . . . . . . . . . . . . . . . . . . . . . . $________
(ii) any non-cash and non-recurring gains
or non-cash and non-recurring losses,
including fees, costs, charges and
other expenses incurred by the
Borrower and its Restricted
Subsidiaries in connection with any
discontinued operation,
reorganization, consolidation or
restructuring, all in accordance with
GAAP . . . . . . . . . . . . . . . . . . . . . . . $________
(iii) Net Income: ITEM 1(a)(i) minus
ITEM 1(a)(ii) . . . . . . . . . . . . . . . . $________
(b) the amount deducted by the Borrower and its
Restricted Subsidiaries, in determining Net
Income, representing amortization. . . . . . . . . . . . $_______
(c) the amount deducted, in determining Net
Income, of all federal, state and local
income taxes (whether paid in cash or
deferred) of the Borrower and its
Restricted Subsidiaries. . . . . . . . . . . . . . . . . $_______
(d) Interest Expense of the Borrower and its
Restricted Subsidiaries. . . . . . . . . . . . . . . . . $_______
(e) the amount deducted, in determining Net
Income, representing depreciation of assets
of the Borrower and its Restricted
Subsidiaries . . . . . . . . . . . . . . . . . . . . . . $_______
(f) EBITDA: the sum of ITEMS 2(a)(iii) through
2(e) . . . . . . . . . . . . . . . . . . . . . . . . . . $_______
ATTACHMENT 3
(to __/__/__ Compliance
Certificate)
TANGIBLE NET WORTH
for the ____ Fiscal Quarter,
ending on ________, ____
(the "Computation Date")
1. TANGIBLE NET WORTH: As of the Computation Date, on a consolidated
basis for the Borrower and its Restricted Subsidiaries
a. The sum of Capital Stock taken at par $________
value, capital surplus and retained
earnings (or accumulated deficit) of the
Borrower on the Computation Date:
b. The sum of all non-cash and non-recurring $________
charges, including fees, costs, charges
and other expenses incurred by the
Borrower and its Restricted Subsidiaries
in connection with any discontinued
operation, reorganization, consolidation
or restructuring:
c. The sum of ITEM 1(a) and ITEM 1(b): $________
d. Treasury stock of the Borrower and, to
the extent included in ITEM 1(a),
minority interests in Restricted
Subsidiaries of the Borrower at such $________
date:
e. The value of all intangible assets of the $________
Borrower and its Restricted Subsidiaries:
f. The sum of ITEM 1(d) and ITEM 1(e): $________
g. TANGIBLE NET WORTH: ITEM 1(c) over ITEM
1(f): $________
2. REQUIRED TANGIBLE NET WORTH: As of the Computation Date, on a consolidated
basis for the Borrower and its Restricted Subsidiaries:
(a) $28,000,000
(b) 50% of the aggregate Net Income
[(excluding any losses)] for the period
commencing on the Closing Date and ending
on the last day of the Fiscal Quarter
ending on or immediately prior to the
Computation Date . . . . . . . . . . . . . . . . . . . . . $_______
(c) Required Tangible Net Worth: The sum of
ITEM(2)(a) and ITEM 2(b): . . . . . . . . . . . . . . . . $_______
ATTACHMENT 4
(to__/__/__Compliance
Certificate)
FIXED CHARGE COVERAGE RATIO
for the Fiscal Quarter,
ending on ____,____(the "Computation Date")
1. Fixed Change Coverage Ratio
a. EBITDA (see ITEM 1(f) of Attachment 2) . . . . . . . . . . $_________
b. Capital Expenditures made during the
four consecutive Fiscal Quarters ending
on the Computation Date. . . . . . . . . . . . . . . . . . $_________
c. ITEM 1(a) minus ITEM 1(b) $_________
d. Interest Expense paid in cash. . . . . . . . . . . . . . .
$_________
e. Scheduled principal payments of the
Term Loans after giving effect to any
reductions in such scheduled principal
repayments attributable to any optional
or mandatory prepayments of the Term
Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . $_________
f. Restricted Payments. . . . . . . . . . . . . . . . . . . . $_________
g. All federal, state and foreign income
taxes actually paid in cash by the
Borrower and its Restricted
Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . $_________
h. The sum of ITEMS 1(d) through 1(g) . . . . . . . . . . . . $_________
i. FIXED CHARGE COVERAGE RATIO: The ratio
of ITEM 1(c) to ITEM 1(h): ____: to 1
3
ATTACHMENT 5
to (__/__/__Compliance
Certificate)
QUICK RATIO
for the Fiscal Quarter
ending on _____,____
(the "Computation Date)
1. Quick Ratio: for the Computation Date, on a consolidated basis for the
Borrower and the Restricted Subsidiaries.
a. Cash and Cash Equivalents. . . . . . . . . . . . . . . . $________
b. Net amount of accounts receivable. . . . . . . . . . . . $________
c. The sum of ITEM 1(a) and ITEM 1(b) . . . . . . . . . . . $________
d. Current liabilities (other than non-cash
current liabilities) of the
Borrower and the Restricted
Subsidiaries (including the aggregate
principal amount of outstanding
Revolving Loans and the current
portion of the Term Loan then
outstanding and the current portion
of any other long-term debt) . . . . . . . . . . . . . . $________
e. QUICK RATIO: The ratio of ITEM 1(c)
to ITEM 1(d):. . . . . . . . . . . . . . . . . . . . . . ____: to 1
4
EXHIBIT G-1
BORROWER PLEDGE AGREEMENT
This PLEDGE AGREEMENT (as amended, supplemented, amended and restated or
otherwise modified from time to time, the "PLEDGE AGREEMENT"), dated as of July
29, 1998, is made by THE TITAN CORPORATION, a Delaware corporation (the
"PLEDGOR"), in favor of THE BANK OF NOVA SCOTIA ("SCOTIABANK"), in its capacity
as agent (the "ADMINISTRATIVE AGENT") for each of the Secured Parties.
W I T N E S S E T H:
WHEREAS, pursuant to a Credit Agreement, dated as of July 29, 1998 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the "CREDIT AGREEMENT"), among the Pledgor, the various financial
institutions as are or may become parties thereto (the "LENDERS"), Scotiabank,
as agent for the Lenders (the "ADMINISTRATIVE AGENT"), and Imperial Bank, as
Documentation Agent, the Lenders and the Issuers have extended Commitments to
make Credit Extensions to the Borrower;
WHEREAS, as a condition precedent to the making of the Credit Extensions
(including the initial Credit Extension) under the Credit Agreement, the Pledgor
is required to execute and deliver this Pledge Agreement;
WHEREAS, the Pledgor has duly authorized the execution, delivery and
performance of this Pledge Agreement; and
NOW THEREFORE, for good and valuable consideration the receipt of which is
hereby acknowledged, and in order to induce the Lenders and the Issuers to make
Credit Extensions (including the initial Credit Extension) to the Pledgor
pursuant to the Credit Agreement, the Pledgor agrees, for the benefit of each
Secured Party, as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. CERTAIN TERMS. The following terms (whether or not
underscored) when used in this Pledge Agreement, including its preamble and
recitals, shall have the following meanings (such definitions to be equally
applicable to the singular and plural forms thereof):
"ADMINISTRATIVE AGENT" is defined in the PREAMBLE.
"CERTIFICATED INTERESTS" means, collectively, all Pledged Interests
evidenced by certificates.
"COLLATERAL" is defined in SECTION 2.1.
"CREDIT AGREEMENT" is defined in the FIRST RECITAL.
"DISTRIBUTIONS" means all stock dividends, liquidating dividends, shares of
stock resulting from (or in connection with the exercise of) stock splits,
reclassifications, warrants, options, non-cash dividends, mergers,
consolidations, and all other distributions (whether similar or dissimilar to
the foregoing) on or with respect to any Pledged Interests or other shares of
Capital Stock constituting Collateral, but shall not include Dividends.
"DIVIDENDS" means cash dividends and cash distributions with respect to any
Pledged Interests or other Pledged Property made in the ordinary course of
business and not a liquidating dividend.
"LENDER" and "LENDERS" are defined in the FIRST RECITAL.
"LLC" means each limited liability company listed from time to time as a
Pledged Interest Issuer on ATTACHMENT 1 hereto.
"LLC INTEREST" means the entire ownership interest of the Pledgor in each
Pledged Interest Issuer that is a LLC listed on ATTACHMENT 1 hereto, including
such Pledgor's capital account, its gain, loss, deduction and credit of such
Pledged Interest Issuer, the Pledgor's interest in all distributions made or to
be made by such Pledged Interest Issuer to the Pledgor and all of the other
rights, titles and interests of the Pledgor as an owner or a member of such
Pledged Interest Issuer, whether set forth in the operating or membership
agreement of such Pledged Interest Issuer, by separate agreement or otherwise.
"PARTNERSHIP" means each general partnership or limited partnership listed
from time to time as a Pledged Interest Issuer on ATTACHMENT 1 hereto.
"PARTNERSHIP INTEREST" means the entire ownership interest of the Pledgor
in each Pledged Interest Issuer that is a Partnership listed on ATTACHMENT 1
hereto, including the Pledgor's capital account, its gain, loss, deduction and
credit of such Pledged Interest Issuer, the Pledgor's interest in all
distributions made or to be made by such Pledged Interest Issuer to the Pledgor
and all of the other rights, titles and interests of the Pledgor as an owner, a
general partner or a limited partner of such Pledged Interest Issuer, whether
set forth in the partnership agreement of such Pledged Interest Issuer, by
separate agreement or otherwise.
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"PLEDGE AGREEMENT" is defined in the PREAMBLE.
"PLEDGED INTEREST ISSUERS" means each Person identified in ATTACHMENT 1
hereto as the issuer of the Pledged Interests (including the maker of each
Pledged Note) identified opposite the name of such Person and each Person whose
ownership, equity or other similar interests, including shares of Capital Stock,
Partnership Interests and LLC Interests, are required to be pledged hereunder
and under the Credit Agreement from time to time.
"PLEDGED INTERESTS" means (i) all ownership, equity or other similar
interests, including shares of Capital Stock, Partnership Interests and LLC
Interests, of any Pledged Interest Issuer and (ii) all Pledged Notes and other
promissory notes, in each case which are pledged by the Pledgor to the
Administrative Agent hereunder or may from time to time hereafter be pledged by
the Pledgor to the Administrative Agent.
"PLEDGED NOTES" means all promissory notes of any Pledged Interest Issuer
(whether or not in the form of EXHIBIT C hereto) which are delivered by the
Pledgor to the Administrative Agent as Pledged Property hereunder, as such
promissory notes, in accordance with SECTION 4.1.6, are amended, modified or
supplemented from time to time, together with any promissory note of any Pledged
Interest Issuer taken in extension or renewal thereof or substitution therefor.
"PLEDGED PROPERTY" means all Pledged Interests and all other instruments
and securities, in each case which are now being pledged by the Pledgor to the
Administrative Agent or may from time to time hereafter be pledged or required
to be pledged by the Pledgor to the Administrative Agent for the purpose of
pledge under this Pledge Agreement or any other Loan Document, and all proceeds
of any of the foregoing.
"PLEDGOR" is defined in the PREAMBLE.
"SECURED OBLIGATIONS" is defined in SECTION 2.2.
"SECURITIES ACT" is defined in SECTION 6.2.
"TERMINATION DATE" means the date on which all Obligations have been paid
in full, all Commitments have been fully terminated and the Letter of Credit has
been canceled or otherwise terminated.
"U.C.C." means the Uniform Commercial Code, as in effect from time to time
in the State of New York; PROVIDED, that if by reason of mandatory provisions of
law or the exercise of remedies, the perfection or the effect of perfection or
non-perfection of the Lien granted in any Collateral is governed by the Uniform
Commercial Code as in effect in a jurisdiction other than New York, "U.C.C."
means the Uniform Commercial Code as in effect in such other jurisdiction for
purposes of the provisions hereof relating to such perfection or effect of
perfection or non-perfection or the exercise of remedies.
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SECTION 1.2. CREDIT AGREEMENT DEFINITIONS. Unless otherwise defined
herein or the context otherwise requires, terms used in this Pledge Agreement,
including its preamble and recitals, have the meanings provided in the Credit
Agreement.
SECTION 1.3. U.C.C. DEFINITIONS. Unless otherwise defined herein or in
the Credit Agreement or the context otherwise requires, terms for which meanings
are provided in the U.C.C. are used in this Pledge Agreement with such meanings.
ARTICLE II
PLEDGE
SECTION 2.1. GRANT OF SECURITY INTEREST. The Pledgor hereby pledges,
hypothecates, assigns, charges, mortgages, delivers and transfers to the
Administrative Agent, for its benefit and the ratable benefit of each of the
Secured Parties, and the Pledgor hereby grants to the Administrative Agent, for
its benefit and the ratable benefit of the Secured Parties, a continuing
security interest in, all of the following property (the "COLLATERAL"):
(a) all Pledged Interests of each Pledged Interest Issuer identified
in ATTACHMENT 1 hereto issued from time to time;
(b) all other Pledged Property, whether now or hereafter delivered to
the Administrative Agent in connection with this Pledge Agreement;
(c) all right, title and interest of the Pledgor, whether now existing
or hereafter arising or acquired, in, to and under any partnership
agreement, limited liability company agreement or similar agreement which
governs the rights and obligations of the holder of ownership, equity or
similar interests in a Pledged Interest Issuer;
(d) all Dividends, Distributions, interest and without duplication,
other payments and rights with respect to any Pledged Property; and
(e) all proceeds of any of the foregoing.
SECTION 2.2. SECURITY FOR OBLIGATIONS. This Pledge Agreement secures the
payment in full of all Obligations of each Obligor now or hereafter existing
under the Credit Agreement and each other Loan Document, whether for principal,
interest, costs, fees, indemnities, expenses, or otherwise (including all
Obligations of the Pledgor now or hereafter existing under this Pledge Agreement
and each other Loan Document to which such Pledgor is or may become a party),
with all such Obligations being referred to as the "SECURED OBLIGATIONS".
-4-
SECTION 2.3. PLEDGE AND TRANSFER OF PLEDGED PROPERTY. Any Certificated
Interests representing or evidencing any Collateral shall be delivered to and
held by or on behalf of the Administrative Agent pursuant hereto, shall be in
suitable form for transfer by delivery, and shall be accompanied by all
necessary instruments of transfer or assignment, duly executed in blank by the
Pledgor or, if any Collateral constitutes uncertificated securities,
confirmation and evidence satisfactory to the Administrative Agent that the
Pledgor has taken all actions requested by the Administrative Agent to provide
for the transfer to and perfection by the Administrative Agent of the security
interests in such uncertificated securities for the benefit of the Secured
Parties in accordance with the U.C.C. and any other applicable law.
SECTION 2.4. DIVIDENDS ON PLEDGED INTERESTS. In the event that any
Dividend or other payment is to be paid on any Pledged Interests (including any
payment of any principal or interest on any Pledged Note) at a time when no
Default of the nature referred to in Section 8.1.9 of the Credit Agreement or
Event of Default has occurred and is continuing or would result therefrom, such
Dividend or payment may be paid directly to the Pledgor. If any such Default or
Event of Default has occurred and is continuing, then any such Dividend or
payment shall be paid directly to the Administrative Agent for the benefit of
the Secured Parties.
SECTION 2.5. CONTINUING SECURITY INTEREST. This Pledge Agreement shall
create a continuing security interest in the Collateral and shall
(a) remain in full force and effect until the Termination Date;
(b) be binding upon the Pledgor and its successors, transferees and
assigns; and
(c) inure, together with the rights and remedies of the Administrative
Agent hereunder, to the benefit of the Administrative Agent and each other
Secured Party.
Without limiting CLAUSE (C), any Lender may assign or otherwise transfer (in
whole or in part) any Note or Loan held by it to any other Person or entity, and
such other Person or entity shall thereupon become vested with all the rights
and benefits in respect thereof granted to such Lender under any Loan Document
(including this Pledge Agreement) or otherwise, subject, however, to any
contrary provisions in such assignment or transfer, and to the provisions of
Section 10.11 and Article IX of the Credit Agreement. Upon (i) the sale,
transfer or other disposition of Collateral in accordance with the Credit
Agreement or (ii) the occurrence of the Termination Date, the security interests
granted herein shall automatically terminate with respect to (x) such Collateral
(in the case of clause (i)) or (y) all Collateral (in the case of clause (ii)),
and at such time the Administrative Agent will, at the Pledgor's sole expense,
deliver to the applicable Pledgor, without any representations, warranties or
recourse of any kind whatsoever, all certificates and instruments previously
delivered to an Administrative Agent representing or evidencing all Pledged
Interests, together with all other Collateral held by the Administrative Agent
hereunder, and execute and deliver to the Pledgor such documents as the Pledgor
shall reasonably request to evidence such termination.
-5-
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. REPRESENTATIONS AND WARRANTIES, ETC. In order to induce the
Secured Parties to enter into the Credit Agreement and to make Credit Extensions
thereunder, the Pledgor represents and warrants to each Secured Party as set
forth in this Article.
SECTION 3.1.1. OWNERSHIP, NO LIENS, ETC. The Pledgor is the legal and
beneficial owner of, and has good and marketable title to (and has full right
and authority to pledge and assign) its Collateral, free and clear of all Liens,
options and other charges, except any Lien granted pursuant hereto in favor of
the Secured Parties.
SECTION 3.1.2. VALID SECURITY INTEREST. The execution and delivery of this
Pledge Agreement, together with (a)(i) in the case of Collateral that
constitutes a Certificated Interest, the delivery of such Collateral to the
Administrative Agent together with undated stock powers executed in blank by the
Pledgor, (ii) in the case of Collateral that constitutes an uncertificated
security, the registration with the Pledged Interest Issuer of such
uncertificated security, or (iii) in the case of Collateral that constitutes
Pledged Notes, delivery of such Collateral and an allonge to such Collateral to
the Administrative Agent, or (b) in the case of other than Certificated
Interests, the filing of U.C.C. financing statements in the filing offices
listed on Attachment 1 hereto, is effective to create a valid, perfected, first
priority security interest in such Collateral and all proceeds thereof, securing
the Secured Obligations. Possession by the Administrative Agent of the Pledged
Interests, if certificated, or registration by the Pledgor of the Pledged
Interests, if uncertificated, is the only action necessary to perfect or protect
such security interest in the Pledged Interests and the proceeds thereof,
subject to Section 9-306 of the U.C.C.
SECTION 3.1.3. AS TO PLEDGED INTERESTS. In the case of
(a) any Pledged Interests (other than Pledged Notes) constituting
Collateral,
(i) all of such Pledged Interests are duly authorized, and
validly issued, fully paid, and non-assessable, and constitute that
percentage of the issued and outstanding shares of Capital Stock,
Partnership Interests, LLC Interests and other ownership interest of
each Pledged Interest Issuer set forth on Attachment I hereto; and
(ii) the Pledgor has delivered to the Administrative Agent true
and complete copies of the partnership, membership, operating or
ownership agreements, as applicable, for each Pledged Interest Issuer
that is a LLC or a Partnership, which agreements are currently in full
force and effect and have not
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been amended or modified except as disclosed to the Administrative
Agent in writing;
(b) each Pledged Note, all of such Pledged Notes have been duly
authorized, executed, endorsed, issued and delivered, and are the legal,
valid and binding obligation of the issuers thereof, and are not in
default.
SECTION 3.1.4. LOCATION OF PLEDGOR. The jurisdictions in which the
Pledgor is located for purposes of Sections 9-103 and 9-104 of the U.C.C. are
set forth in ATTACHMENT 1 hereto.
SECTION 3.1.5. NATURE OF PLEDGED INTERESTS. No LLC Interests or
Partnership Interests are represented by certificates.
ARTICLE IV
COVENANTS
SECTION 4.1. COVENANTS. The Pledgor covenants and agrees that, at all
times prior to the Termination Date, it will perform, comply with and be bound
by the obligations set forth in this Article.
SECTION 4.1.1. PROTECT COLLATERAL; FURTHER ASSURANCES, ETC. The Pledgor
covenants and agrees that it will not sell, assign, transfer, pledge, or
encumber in any other manner the Collateral (except in favor of the
Administrative Agent hereunder). The Pledgor will warrant and defend the right
and title herein granted unto the Administrative Agent in and to the Collateral
(and all right, title, and interest represented by the Collateral) against the
claims and demands of all other Persons. The Pledgor agrees that from time to
time, at the expense of the Pledgor, it will promptly execute and deliver all
further instruments, and take all further action, that may be necessary or
desirable, or that either Administrative Agent may reasonably request, in order
to perfect and protect any security interest granted or purported to be granted
hereby or to enable the Administrative Agent to exercise and enforce their
rights and remedies hereunder with respect to any Collateral. The Pledgor will
not, without thirty (30) days' prior written notice to the Administrative Agent,
(i) change its name or structure so as to make any financing or other statement
filed pursuant to this Pledge Agreement become seriously misleading or (ii)
change the jurisdiction in which it is located to other than those specified in
SECTION 3.1.4. The Pledgor will pledge hereunder, immediately upon its
acquisition (directly or indirectly) thereof, any and all additional
Indebtedness owed to the Pledgor pursuant to any note with an Obligor. The
Pledgor further covenants and agrees as follows:
(a) If the Pledgor shall become entitled to receive or shall receive
any stock or other certificate (including any certificate representing a
Dividend or a Distribution in connection with any reclassification,
increase or reduction of capital or any certificate issued in connection
with any reorganization), option or rights, whether in addition to, in
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substitution of, as a conversion of, or in exchange for any portion of the
Collateral (or otherwise in respect thereof), the Pledgor shall accept the
same as the agent of the Administrative Agent, hold the same in trust for
the Administrative Agent and deliver the same forthwith to the
Administrative Agent in the exact form received, duly endorsed (in blank)
by the Pledgor to the Administrative Agent, if required, together with an
undated stock power or other necessary instrument of transfer covering such
certificate duly executed in blank by the Pledgor, to be held by the
Administrative Agent, subject to the terms of this Pledge Agreement, as
additional security for the Secured Obligations. In addition, any sums
paid upon or in respect of the Collateral upon the liquidation or
dissolution of any Pledged Interest Issuer shall be held by the
Administrative Agent as additional security for the Secured Obligations.
If any sums of money or property so paid or distributed in respect of any
Collateral shall be received by the Pledgor, then the Pledgor shall, until
such money or property is paid or delivered to the Administrative Agent,
hold such money or property in trust for the Administrative Agent (on
behalf of the Secured Parties), segregated from other funds of the Pledgor,
as additional collateral securing the Secured Obligations.
(b) Except as otherwise expressly permitted by the Credit Agreement,
without the prior written consent of the Administrative Agent, the Pledgor
will not (i) consent to any material modification, extension or alteration
of the terms of any partnership, membership or operating agreement of the
LLCs or the Partnerships or (ii) accept a surrender of any partnership,
membership or operating agreement of any of the LLCs or the Partnerships,
as applicable, or waive any breach of or default under any such agreement
by any other party thereto.
(c) The Pledgor will advise the Administrative Agent promptly, in
reasonable detail (i) of any Lien or claim made or asserted against any
material part of the Collateral, (ii) of any material change in the
composition of the Collateral, and (iii) of the occurrence of any other
event relating specifically to the Pledgor or its assets which could
reasonably be expected to have a material adverse effect on the aggregate
value of the Collateral or on the security interests created hereunder.
SECTION 4.1.2. REGISTRATION OF PLEDGED INTERESTS, ETC. Concurrently with
the execution and delivery of this Pledge Agreement, the Pledgor shall execute
and deliver to the applicable Pledged Interest Issuer instructions to register,
substantially in the form of EXHIBIT A hereto, and cause each Pledged Interest
Issuer to execute and deliver to the Administrative Agent the Initial
Transaction Statement, substantially in the form of EXHIBIT B hereto, confirming
that each Pledged Interest Issuer (in which the Pledgor owns a Pledged Interest
(other than in the case of a Certificated Interest or a Pledged Note)) has
registered the pledge by the Pledgor effected by this Pledge Agreement on its
books. In addition, the Pledgor agrees that it shall cause each Issuer of
Certificated Securities to execute and deliver to the Administrative Agent an
acknowledgment in a form satisfactory to the Administrative Agent.
-8-
SECTION 4.1.3. STOCK POWERS, ETC. The Pledgor agrees that all
Certificated Interests constituting Collateral delivered by the Pledgor pursuant
to this Pledge Agreement will be accompanied by duly executed undated blank
stock powers, or other equivalent instruments of transfer acceptable to the
Administrative Agent, as are necessary under all applicable laws to perfect the
Lien in favor of the Secured Parties on such Collateral. The Pledgor will, from
time to time upon the request of the Administrative Agent, promptly deliver to
the Administrative Agent such stock powers, instruments, and similar documents,
satisfactory in form and substance to the Administrative Agent, with respect to
the Collateral as the Administrative Agent may reasonably request and will, from
time to time upon the request of the Administrative Agent after the occurrence,
and during the continuance, of any Event of Default, promptly transfer any
Pledged Interests or other shares of Capital Stock or other ownership interests
constituting Collateral into the name of any nominee designated by the
Administrative Agent.
SECTION 4.1.4. CONTINUOUS PLEDGE. The Pledgor will, at all times, keep
pledged to the Administrative Agent pursuant hereto all Pledged Interests and
all other shares of Capital Stock or other ownership interests constituting
Collateral, all Dividends and Distributions with respect thereto (provided that
if no Event of Default or Default described in Section 8.1.9 of the Credit
Agreement shall have occurred or be continuing, such Dividends and Distributions
may be used for working capital or other purposes), all Pledged Notes, all
interest, principal and other proceeds received by the Administrative Agent with
respect to the Pledged Notes, and all other Collateral and other securities,
instruments, proceeds, and rights from time to time received by or distributable
to the Pledgor in respect of any Collateral and will not permit any Pledged
Interest Issuer to issue any Capital Stock or other ownership interests which
shall not have been immediately duly pledged hereunder on a first priority
perfected basis.
SECTION 4.1.5. VOTING RIGHTS; DIVIDENDS, ETC. The Pledgor agrees:
(a) after any Default of the nature referred to in Section 8.1.9 of
the Credit Agreement or any Event of Default shall have occurred and be
continuing, promptly upon receipt of notice thereof by the Pledgor and
without any request therefor by either Administrative Agent, such Pledgor
will deliver (properly endorsed where required hereby or requested by the
Administrative Agent) to the Administrative Agent all Dividends,
Distributions, all other cash payments, and all proceeds of the Collateral,
all of which shall be held by the Administrative Agent for the benefit of
the Secured Parties as additional Collateral for use in accordance with
SECTION 6.4; and
(b) after any Event of Default shall have occurred and be continuing
and the Administrative Agent has notified the Pledgor of the
Administrative Agent's intention to exercise its voting power under this
Section.
(i) the Administrative Agent may exercise (to the exclusion of
the Pledgor) the voting power and all other incidental rights of
ownership with respect to any Pledged Interests or other shares of
Capital Stock or other
-9-
ownership interests constituting Collateral and the Pledgor hereby
grants the Administrative Agent an irrevocable proxy, exercisable
under such circumstances, to vote the Pledged Interests and such other
Collateral; and
(ii) promptly to deliver to the Administrative Agent such
additional proxies and other documents requested by the Administrative
Agent as may be necessary to allow the Administrative Agent to
exercise such voting power.
All Dividends, Distributions, cash payments and proceeds which may at any time
and from time to time be held by the Pledgor but which the Pledgor is then
obligated to deliver to the Administrative Agent, shall, until delivery to the
Administrative Agent, be held by the Pledgor separate and apart from its other
property in trust for the Secured Parties. The Administrative Agent agrees that
unless an Event of Default shall have occurred and be continuing and the
Administrative Agent shall have given the notice referred to in CLAUSE (B), the
Pledgor shall have the exclusive voting power with respect to any shares of
Capital Stock or other ownership interests (including any of the Pledged
Interests) constituting Collateral and the Administrative Agent shall, upon the
written request of the Pledgor, promptly deliver such proxies and other
documents, if any, as shall be reasonably requested by the Pledgor which are
necessary to allow the Pledgor to exercise voting power with respect to any such
share of Capital Stock or other ownership interests (including any of the
Pledged Interests) constituting Collateral; PROVIDED, HOWEVER, that no vote
shall be cast, or consent, waiver, or ratification given, or action taken by the
Pledgor that would impair any Collateral or be inconsistent with or violate any
provision of the Credit Agreement or any other Loan Document.
SECTION 4.1.6. ADDITIONAL UNDERTAKINGS. The Pledgor will not, without the
prior written consent of the Administrative Agent, take or omit to take any
action the taking or the omission of which could result in any impairment or
alteration of any instrument constituting Collateral. In furtherance of the
foregoing, the Pledgor agrees that it will not, without the prior written
consent of the Administrative Agent which consent shall not be unreasonably
withheld:
(a) enter into any agreement amending, supplementing, or waiving any
provision of any Pledged Note (including any underlying instrument pursuant
to which such Pledged Note is issued) or compromising or releasing or
extending the time for payment of any obligation of the maker thereof; or
(b) take or omit to take any action the taking or the omission of
which would result in any impairment or alteration of any obligation of the
maker of any Pledged Note or other instrument constituting Collateral.
SECTION 4.1.7. PLEDGOR REMAINS LIABLE. Anything herein to the contrary
notwithstanding,
-10-
(a) the Pledgor shall remain liable to perform all of its duties and
obligations as an owner of the Pledged Interests, to the same extent as if
this Pledge Agreement had not been executed;
(b) the exercise by either Administrative Agent or any other Secured
Party of any of its rights hereunder shall not release the Pledgor from any
of its duties or obligations as owner of the Pledged Interests; and
(c) neither Administrative Agent nor any other Secured Party shall
have any obligation or liability as an owner of any Pledged Interest as
applicable, by reason of this Pledge Agreement.
ARTICLE V
THE AGENT
SECTION 5.1. ADMINISTRATIVE AGENT APPOINTED ATTORNEY-IN-FACT. The Pledgor
hereby irrevocably appoints the Administrative Agent as the Pledgor's
attorney-in-fact, with full authority in the place and stead of the Pledgor and
in the name of the Pledgor or otherwise, from time to time in the Administrative
Agent's discretion, after the occurrence and during the continuance of a Default
of the nature referred to in Section 8.1.9 of the Credit Agreement or any other
Event of Default, to take any action and to execute any instrument which such
Administrative Agent may deem necessary or advisable to accomplish the purposes
of this Pledge Agreement:
(a) to ask, demand, collect, xxx for, recover, compromise, receive and
give acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral;
(b) to receive, endorse, and collect any drafts or other instruments,
documents and chattel paper, in connection with CLAUSE (A); and
(c) to file any claims or take any action or institute any proceedings
which such Administrative Agent may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights of
such Administrative Agent with respect to any of the Collateral.
The Pledgor hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest.
SECTION 5.2. ADMINISTRATIVE AGENT MAY PERFORM. If the Pledgor fails to
perform any agreement contained herein, the Administrative Agent may perform, or
cause performance of,
-11-
such agreement, and the reasonable expenses of the Administrative Agent
incurred in connection therewith shall be jointly and severally payable by
the Pledgor pursuant to SECTION 6.4.
SECTION 5.3. ADMINISTRATIVE AGENT HAVE NO DUTY. The powers conferred on
the Administrative Agent hereunder are solely to protect its interests (on
behalf of the Secured Parties) in the Collateral and shall not impose any duty
on it to exercise any such powers. Except for reasonable care of any Collateral
in its possession and the accounting for moneys actually received by it
hereunder, the Administrative Agent shall have no duty as to any Collateral or
responsibility for
(a) ascertaining or taking action with respect to calls, conversions,
exchanges, maturities, tenders or other matters relative to any Pledged
Property, whether or not the Administrative Agent has or is deemed to have
knowledge of such matters, or
(b) taking any necessary steps to preserve rights against prior
parties or any other rights pertaining to any Collateral.
SECTION 5.4. REASONABLE CARE. The Administrative Agent is required to
exercise reasonable care in the custody and preservation of any of the
Collateral in its possession; PROVIDED, HOWEVER, the Administrative Agent shall
be deemed to have exercised reasonable care in the custody and preservation of
any of the Collateral if it takes such action for that purpose as the Pledgor
reasonably requests in writing at times other than upon the occurrence and
during the continuance of any Event of Default. The failure of the
Administrative Agent to comply with any such request at any time shall not in
itself be deemed a failure to exercise reasonable care.
ARTICLE VI
REMEDIES
SECTION 6.1. CERTAIN REMEDIES. If any Event of Default shall have
occurred and be continuing:
(a) The Administrative Agent may exercise in respect of the Collateral,
in addition to other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party on default
under the U.C.C. (whether or not the U.C.C. applies to the affected
Collateral) and also may, without notice except as specified below, sell
the Collateral or any part thereof in one or more parcels at public or
private sale, at any of the Administrative Agent' offices or elsewhere, for
cash, on credit or for future delivery, and upon such other terms as the
Administrative Agent may deem commercially reasonable. The Pledgor agrees
that, to the extent notice of sale shall be required by law, at least ten
days' prior notice to the Pledgor of the time and place of any public sale
or the time after which any private sale is to be made shall constitute
reasonable notification. The Administrative Agent shall not be obligated
to make any sale of Collateral regardless
-12-
of notice of sale having been given. The Administrative Agent may adjourn
any public or private sale from time to time by announcement at the time
and place fixed therefor, and such sale may, without further notice, be
made at the time and place to which it was so adjourned.
(b) The Administrative Agent may
(i) transfer all or any part of the Collateral into the name of
the Administrative Agent or its nominee, with or without disclosing
that such Collateral is subject to the Lien hereunder,
(ii) notify the parties obligated on any of the Collateral to
make payment to the Administrative Agent of any amount due or to
become due thereunder,
(iii) enforce collection of any of the Collateral by suit or
otherwise, and surrender, release or exchange all or any part thereof,
or compromise or extend or renew for any period (whether or not longer
than the original period) any obligations of any nature of any party
with respect thereto,
(iv) endorse any checks, drafts, or other writings in the
Pledgor's name to allow collection of the Collateral,
(v) take control of any proceeds of the Collateral, and
(vi) execute (in the name, place and stead of the Pledgor)
endorsements, assignments, stock powers and other instruments of
conveyance or transfer with respect to all or any of the Collateral.
[SECTION 6.2. SECURITIES LAWS. If the Administrative Agent shall
determine to exercise their right to sell all or any of the Collateral pursuant
to SECTION 6.1, the Pledgor agrees that, upon request of the Administrative
Agent, the Pledgor will, at the Pledgor's own expense:
(a) execute and deliver, and cause each issuer of the Collateral
contemplated to be sold and the directors and officers thereof to execute
and deliver, all such instruments and documents, and do or cause to be done
all such other acts and things, as may be necessary or, in the opinion of
the Administrative Agent, advisable to register such Collateral under the
provisions of the Securities Act of 1933, as from time to time amended (the
"SECURITIES ACT") and comparable legislation in other jurisdictions, and to
cause the registration statement relating thereto to become effective and
to remain effective for such period as prospectuses are required by law to
be furnished, and to make all amendments and supplements thereto and to the
related prospectus which, in the opinion of the Administrative Agent, are
necessary or advisable, all in conformity with the requirements of the
Securities Act and the rules and regulations of the Securities and
-13-
Exchange Commission applicable thereto and comparable legislation, rules
and regulations in other jurisdictions;
(b) use its best efforts to qualify the Collateral under the state
securities or "Blue Sky" laws and to obtain all necessary governmental
approvals for the sale of the Collateral, as requested by the
Administrative Agent;
(c) cause each such Pledged Interest Issuer to make available to its
security holders, as soon as practicable, an earnings statement that will
satisfy the provisions of Section 11(a) of the Securities Act and
comparable legislation in other jurisdictions; and
(d) do or cause to be done all such other acts and things as may be
necessary to make such sale of the Collateral or any part thereof valid and
binding and in compliance with applicable law.
The Pledgor further acknowledges the impossibility of ascertaining the amount of
damages that would be suffered by the Administrative Agent and the Secured
Parties by reason of the failure by the Pledgor to perform any of the covenants
contained in this Section and, consequently, agrees that, if the Pledgor shall
fail to perform any of such covenants, the Pledgor shall pay, as liquidated
damages and not as a penalty, an amount equal to the value (as determined by the
Administrative Agent) of the Collateral on the date the Administrative Agent
shall demand compliance with this Section.]
SECTION 6.3. COMPLIANCE WITH RESTRICTIONS. The Pledgor agrees that in any
sale of any of the Collateral whenever an Event of Default shall have occurred
and be continuing, the Administrative Agent is hereby authorized to comply with
any limitation or restriction in connection with such sale as they may be
advised by counsel is necessary in order to avoid any violation of applicable
law (including compliance with such procedures as may restrict the number of
prospective bidders and purchasers, require that such prospective bidders and
purchasers have certain qualifications, and restrict such prospective bidders
and purchasers to persons who will represent and agree that they are purchasing
for their own account for investment and not with a view to the distribution or
resale of such Collateral), or in order to obtain any required approval of the
sale or of the purchaser by any governmental regulatory authority or official,
and the Pledgor further agrees that such compliance shall not result in such
sale being considered or deemed not to have been made in a commercially
reasonable manner, nor shall the Administrative Agent or any other Secured Party
be liable nor accountable to the Pledgor for any discount allowed by the reason
of the fact that such Collateral is sold in compliance with any such limitation
or restriction.
SECTION 6.4. APPLICATION OF PROCEEDS. All cash proceeds received by the
Administrative Agent in respect of any sale of, collection from, or other
realization upon, all or any part of the Collateral may, in the discretion of
the Administrative Agent, be held by the Administrative Agent as additional
collateral security for, or then or at any time thereafter be applied (after
payment of any amounts payable to the Administrative Agent pursuant
-14-
to Section 10.3 of the Credit Agreement and SECTION 6.5) in whole or in part
by the Administrative Agent against, all or any part of the Secured
Obligations in such order as the Administrative Agent shall elect.
Any surplus of such cash or cash proceeds held by the Administrative Agent
and remaining after the occurrence of the Termination Date shall be paid over to
the Pledgor or to whomsoever may be lawfully entitled to receive such surplus.
SECTION 6.5. INDEMNITY AND EXPENSES. The Pledgor hereby agrees to
indemnify and hold harmless the Administrative Agent from and against any and
all claims, losses, and liabilities arising out of or resulting from this Pledge
Agreement (including enforcement of this Pledge Agreement), except claims,
losses, or liabilities resulting from an Administrative Agent's gross negligence
or wilful misconduct. Upon demand, the Pledgor agrees that it will pay to the
Administrative Agent the amount of any and all reasonable expenses, including
the reasonable fees and disbursements of their counsel and of any experts and
Administrative Agent, which the Administrative Agent may incur in connection
with:
(a) the administration of this Pledge Agreement, the Credit Agreement
and any other Loan Document;
(b) the custody, preservation, use, or operation of, or the sale of,
collection from, or other realization upon, any of the Collateral;
(c) the exercise or enforcement of any of the rights of the
Administrative Agent hereunder; or
(d) the failure by the Pledgor to perform or observe any of the
provisions hereof.
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.1. LOAN DOCUMENT. This Pledge Agreement is a Loan Document
executed pursuant to the Credit Agreement and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions thereof, including Article XII thereof.
SECTION 7.2. PROTECTION OF COLLATERAL. The Administrative Agent may from
time to time, at its option, perform any act which the Pledgor agrees hereunder
to perform and which the Pledgor shall fail to perform after being requested in
writing so to perform (it being understood that no such request need be given
after the occurrence and during the continuance of an Event of Default) and the
Administrative Agent may from time to time take any other action which the
Administrative Agent reasonably deems necessary for the maintenance,
preservation or protection of any of the Collateral or of its security interest
therein.
-15-
SECTION 7.3. BINDING ON SUCCESSORS, TRANSFEREES AND ASSIGNS; ASSIGNMENT.
This Pledge Agreement shall be jointly and several binding upon the Pledgor and
its successors, transferees and assigns and shall inure to the benefit of and be
enforceable by each Secured Party and their respective successors, transferees
and assigns; PROVIDED, HOWEVER, that the Pledgor may not assign any of its
obligations hereunder without the prior written consent of all Lenders.
SECTION 7.4. AMENDMENTS, ETC. No amendment to or waiver of any provision
of this Pledge Agreement, nor consent to any departure by the Pledgor herefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Administrative Agent (on behalf of the Lenders or the Required Lenders,
as the case may be) and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.
SECTION 7.5. NOTICES. All notices and other communications provided for
hereunder shall be in writing (including facsimile communication) and, mailed or
telecopied or delivered to the Pledgor, at the address specified in the Credit
Agreement. All such notices and other communications, when mailed and properly
addressed with postage prepaid or if properly addressed and sent by pre-paid
courier service, shall be deemed given when received; any such notice or
communication, if transmitted by telecopier, shall be deemed given when
transmitted and electronically confirmed.
SECTION 7.6. NO WAIVER; REMEDIES. No failure on the part of any Secured
Party to exercise, and no delay in exercising, any right hereunder shall operate
as a waiver thereof; nor shall any single or partial exercise of any right
hereunder preclude any other or further exercise thereof or the exercise of any
other right. The remedies herein provided are cumulative and not exclusive of
any remedies provided by law.
SECTION 7.7. CAPTIONS. Section captions used in this Pledge Agreement are
for convenience of reference only, and shall not affect the construction of this
Pledge Agreement.
SECTION 7.8. SEVERABILITY. Wherever possible each provision of this
Pledge Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Pledge Agreement shall
be prohibited by or invalid under such law, such provision shall be ineffective
to the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Pledge
Agreement.
SECTION 7.9. GOVERNING LAW, ENTIRE AGREEMENT, ETC. THIS PLEDGE AGREEMENT
SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF
THE STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF
THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).
-16-
SECTION 7.10. COUNTERPARTS. This Pledge Agreement may be executed by the
parties hereto in several counterparts, each of which shall be deemed to be an
original and all of which shall constitute together but one and the same
agreement.
-17-
IN WITNESS WHEREOF, the Pledgor has caused this Pledge Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
THE TITAN CORPORATION
By
---------------------------------
Name:
Title:
ACKNOWLEDGED AND ACCEPTED:
THE BANK OF NOVA SCOTIA,
as Administrative Agent
By
-----------------------------------
Name:
Title:
-18-
EXHIBIT A
to Borrower
Pledge Agreement
INSTRUCTION TO REGISTER PLEDGE
___________ __, ____
[ ]
Attention: ________________
Ladies and Gentlemen:
The undersigned, a [member] [partner] [shareholder] of ___________, [a
___________ limited liability company] [a __________ corporation] [a ___________
partnership] (the "COMPANY"), hereby instructs the Company to register on the
books of the Company the pledge of the undersigned's [membership] [partnership]
interest in favor of The Bank of Nova Scotia, as administrative agent (the
"ADMINISTRATIVE AGENT"), pursuant to the Pledge Agreement, dated as of July 29,
1998, made by, among others, the undersigned in favor of the Administrative
Agent.
Very truly yours,
THE TITAN CORPORATION
By:
---------------------------------
Name:
Title:
cc: The Bank of Nova Scotia
EXHIBIT B
to Borrower
Pledge Agreement
INITIAL TRANSACTION STATEMENT
___________ __, ____
To: The Bank of Nova Scotia
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:
This statement is to advise you that a pledge of the following
uncertificated securities has been registered in the name of The Bank of Nova
Scotia, as Administrative Agent (the "ADMINISTRATIVE AGENT"), as follows:
1. Uncertificated Securities:
The entire [limited liability company] [partnership] interests of THE
TITAN CORPORATION in the undersigned [limited liability company]
[_____ partnership] [corporation].
2. Registered Owner:
THE TITAN CORPORATION
3. Pledged in favor of:
The Bank of Nova Scotia,
as the Administrative Agent
4. There are no liens or restrictions of the undersigned [limited
liability company] [_______ partnership] [corporation] and no adverse
claims to which the uncertificated securities are or may be subject
known to the undersigned [limited liability company] [______
partnership] [corporation], other than in favor of The Bank of Nova
Scotia, in its capacity as the Administrative Agent.
5. The pledge was registered on _______ __, ____.
6. No transfer of the uncertificated securities shall be made without the
prior written consent of the Administrative Agent.
THIS STATEMENT IS MERELY A RECORD OF THE RIGHTS OF THE ADDRESSEE AS OF THE
TIME OF ITS ISSUANCE. DELIVERY OF THIS STATEMENT, OF ITSELF, CONFERS NO RIGHTS
ON THE RECIPIENT. THIS STATEMENT IS NEITHER A NEGOTIABLE INSTRUMENT NOR A
SECURITY.
Very truly yours,
[NAME OF PLEDGED INTEREST ISSUER]
By:
-----------------------------------
Name:
Title:
-3-
EXHIBIT C
to Borrower
Pledge Agreement
DEMAND PROMISSORY NOTE
$ , 19__
FOR VALUE RECEIVED, the undersigned, ______________, a _______________
corporation (the "MAKER"), promises to pay to the order of ________________, a
___________ _________ (the "PAYEE"), on demand up to the principal sum of
DOLLARS ($ ) outstanding from time to time,
representing the aggregate principal amount of an intercompany loan made by the
Payee to the Maker.
The unpaid principal amount of this promissory note (the "NOTE") from time
to time outstanding shall accrue interest as agreed to from time to time between
Maker and Payee, with such interest payable as agreed to from time to time
between Maker and Payee. All payments of interest shall be recorded on the
books and records of the Payee. Upon Notice from the Agent (hereinafter
defined) that a Default (as defined in the Credit Agreement, hereinafter
defined) of the nature referred to in Section 8.1.9 of the Credit Agreement or
any other Event of Default (as defined in the Credit Agreement) has occurred and
is continuing, the Maker shall make such payments, in same day funds, to such
accounts as the Agent shall direct in such notice.
This Note is one of the Pledged Notes referred to in the Pledge Agreement
dated as of July 29, 1998 (as amended, supplemented, amended and restated or
otherwise modified, the "PLEDGE AGREEMENT"), between THE TITAN CORPORATION (the
"PLEDGOR"), and The Bank of Nova Scotia ("SCOTIABANK") as the Administrative
Agent, and this Note has been pledged to the Administrative Agent security for
the Secured Obligations (as defined in the Pledge Agreement) under the Credit
Agreement and other Loan Documents. Upon the occurrence and continuance of an
Event of Default under the Credit Agreement, and notice thereof by the
Administrative Agent to the Maker, the Administrative Agent shall have all
rights of the Payee to collect and accelerate, and enforce all rights with
respect to, the Indebtedness evidenced by this Note. Unless otherwise defined
herein or the context otherwise requires, terms used herein have the meanings
provided in the Credit Agreement dated as of July 29, 1998 (as amended,
supplemented, amended and restated or otherwise modified from time to time, the
"CREDIT AGREEMENT"), among THE TITAN CORPORATION, a Delaware corporation (the
"BORROWER"), the various financial institutions as are or may become parties
thereto (the "LENDERS"), Scotiabank, as agent for the Lenders (the
"ADMINISTRATIVE AGENT"), and Imperial Bank, as Documentation Agent.
In addition to, but not in limitation of, the foregoing, the Maker further
agrees to pay all expenses, including reasonable attorneys' fees and legal
expenses, incurred by the holder (including the Administrative Agent as pledgee)
of this Note endeavoring to collect any amounts payable hereunder which are not
paid when due, whether by acceleration or otherwise.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEW YORK.
-2-
THE MAKER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS
IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON THIS NOTE.
THE MAKER ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT
CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE PAYEE TO ACCEPT THIS NOTE.
[NAME OF MAKER]
By
----------------------------------
Name:
Title:
Pay to the order of THE BANK OF NOVA
SCOTIA, as Administrative Agent
By
----------------------------------
Name:
Title:
-3-
ATTACHMENT 1
to Borrower
Pledge Agreement
Pledged Interests
-----------------
Authorized Outstanding % of Shares
Shares Shares Pledged
---------- ------------ -----------
Titan Technologies and Information 10,000,000 10,000,000 100
Systems Corporation
Titan Purification, Inc. 5,000,000 5,000,000 100
DBA Systems, Inc. 10,000,000 100 100
Horizons Technology, Inc. 1,000 1,000 100
Linkabit Wireless, Inc. 85,000,000 10,000,000 100
Unidyne Corporation 1,000 100 100
Titan Software Systems Corporation 20,000,000 10,000,000 100
Pulse Sciences, Inc. 1,000,000 318,412 100
Titan Environmental Corporation 10,000,000 6,000,000 100
TomoTherapeutics, Inc. 10,000,000 4,999,995 98.198
Federal Services, Inc. 1,000 100 100
Eldyne, Inc. 1,000 100 100
Diversified Control Systems, Inc. 1,000 100 100
Titan Broadband Communications Corporation 3,800,000 1,000,000 100
Titan Aerochem, Inc. 1,000 1,000 100
Pledged Notes
-------------
Principal Amount
Pledged Note Issuer of Pledged Note
------------------- ---------------
Titan Technologies and Information - Demand Promissory Note dated July 29, 1998 $80,000,000
Systems Corporation
Titan Purification, Inc. - Demand Promissory Note dated July 29, 1998 $80,000,000
Systems Corporation - Demand Promissory Note dated July 29, 1998 $80,000,000
DBA Systems, Inc. - Demand Promissory Note dated July 29, 1998 $80,000,000
Horizons Technology, Inc. - Demand Promissory Note dated July 29, 1998 $80,000,000
Linkabit Wireless, Inc. - Demand Promissory Note dated July 29, 1998 $80,000,000
Unidyne Corporation - Demand Promissory Note dated July 29, 1998 $80,000,000
Titan Software Systems Corporation - Demand Promissory Note dated July 29, 1998 $80,000,000
Pulse Sciences, Inc. - Demand Promissory Note dated July 29, 1998 $80,000,000
Titan Environmental Corporation - Demand Promissory Note dated July 29, 1998 $80,000,000
TomoTherapeutics, Inc. - Demand Promissory Note dated July 29, 1998 $80,000,000
Federal Services, Inc. - Demand Promissory Note dated July 29, 1998 $80,000,000
Eldyne, Inc. - Demand Promissory Note dated July 29, 1998 $80,000,000
Principal Amount
Pledged Note Issuer of Pledged Note
------------------- ----------------
Diversified Control Systems, Inc. - Demand Promissory Note dated July 29, 1998 $80,000,000
Titan Broadband Communications - Demand Promissory Note dated July 29, 1998 $80,000,000
Corporation
Titan Aerochem, Inc. - Demand Promissory Note dated July 29, 1998 $80,000,000
Validity Corporation - Demand Promissory Note dated July 29, 1998 $80,000,000
Location of Pledgor (Section 3.1.4)
------------------
The Titan Corporation
0000 Xxxxxxx Xxxx Xxxx
Xxx Xxxxx, XX 00000
[EXECUTION COPY]
SUBSIDIARY PLEDGE AGREEMENT
This PLEDGE AGREEMENT (as amended, supplemented, amended and restated or
otherwise modified from time to time, the "PLEDGE AGREEMENT"), dated as of July
29, 1998, is made by each U.S. Subsidiary (as defined in the Credit Agreement
referred to below) of THE TITAN CORPORATION, a Delaware corporation, now or
after the date hereof (including pursuant to SECTION 7.6) a signatory hereto
(each, individually, a "PLEDGOR," and collectively, the "PLEDGORS"), in favor of
THE BANK OF NOVA SCOTIA ("SCOTIABANK"), in its capacity as Administrative Agent
(the "ADMINISTRATIVE AGENT") for each of the Secured Parties.
W I T N E S S E T H:
WHEREAS, pursuant to a Credit Agreement, dated as of July 29, 1998 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the "CREDIT AGREEMENT"), among THE TITAN CORPORATION, a Delaware (the
"BORROWER"), the various financial institutions as are or may become parties
thereto (the "LENDERS"), Scotiabank, as agent for the Lenders (the
"ADMINISTRATIVE AGENT") and Imperial Bank, as Documentation Agent, the Lenders
and the Issuers have extended Commitments to make Credit Extensions to the
Borrower;
WHEREAS, as a condition precedent to the making of the Credit Extensions
(including the initial Credit Extension) under the Credit Agreement, each
Pledgor is required to execute and deliver this Pledge Agreement;
WHEREAS, each Pledgor has duly authorized the execution, delivery and
performance of this Pledge Agreement; and
WHEREAS, it is in the best interests of each Pledgor to execute this Pledge
Agreement inasmuch as such Pledgor will derive substantial direct and indirect
benefits from the Credit Extensions made from time to time to the Borrower by
the Lenders and the Issuers pursuant to the Credit Agreement;
NOW THEREFORE, for good and valuable consideration the receipt of which is
hereby acknowledged, and in order to induce the Lenders and the Issuers to make
Credit Extensions (including the initial Credit Extension) to the Borrower
pursuant to the Credit Agreement, each Pledgor jointly and severally agrees, for
the benefit of each Secured Party, as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. CERTAIN TERMS. The following terms (whether or not
underscored) when used in this Pledge Agreement, including its preamble and
recitals, shall have the following meanings (such definitions to be equally
applicable to the singular and plural forms thereof):
"ADMINISTRATIVE AGENT" is defined in the PREAMBLE.
"CERTIFICATED INTERESTS" means, collectively, all Pledged Interests
evidenced by certificates.
"COLLATERAL" is defined in SECTION 2.1.
"CREDIT AGREEMENT" is defined in the FIRST RECITAL.
"DISTRIBUTIONS" means all stock dividends, liquidating dividends, shares of
stock resulting from (or in connection with the exercise of) stock splits,
reclassifications, warrants, options, non-cash dividends, mergers,
consolidations, and all other distributions (whether similar or dissimilar to
the foregoing) on or with respect to any Pledged Interests or other shares of
Capital Stock constituting Collateral, but shall not include Dividends.
"DIVIDENDS" means cash dividends and cash distributions with respect to any
Pledged Interests or other Pledged Property made in the ordinary course of
business and not a liquidating dividend.
"LENDER" and "LENDERS" are defined in the FIRST RECITAL.
"LLC" means each limited liability company listed from time to time as a
Pledged Interest Issuer on ATTACHMENT 1 hereto.
"LLC INTEREST" means the entire ownership interest of any Pledgor in each
Pledged Interest Issuer that is a LLC listed on ATTACHMENT 1 hereto, including
such Pledgor's capital account, its gain, loss, deduction and credit of such
Pledged Interest Issuer, his interest in all distributions made or to be made by
such Pledged Interest Issuer to such Pledgor and all of the other rights, titles
and interests of such Pledgor as an owner or a member of such Pledged Interest
Issuer, whether set forth in the operating or membership agreement of such
Pledged Interest Issuer, by separate agreement or otherwise.
"PARTNERSHIP" means each general partnership or limited partnership listed
from time to time as a Pledged Interest Issuer on ATTACHMENT 1 hereto.
"PARTNERSHIP INTEREST" means the entire ownership interest of the Pledgor
in each Pledged Interest Issuer that is a Partnership listed on ATTACHMENT 1
hereto, including the Pledgor's capital
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account, its gain, loss, deduction and credit of such Pledged Interest
Issuer, the Pledgor's interest in all distributions made or to be made by
such Pledged Interest Issuer to the Pledgor and all of the other rights,
titles and interests of the Pledgor as an owner, a general partner or a
limited partner of such Pledged Interest Issuer, whether set forth in the
partnership agreement of such Pledged Interest Issuer, by separate agreement
or otherwise.
"PLEDGE AGREEMENT" is defined in the PREAMBLE.
"PLEDGED INTEREST ISSUERS" means each Person identified in ATTACHMENT 1
hereto as the issuer of the Pledged Interests (including the maker of each
Pledged Note) identified opposite the name of such Person and each Person whose
ownership, equity or other similar interests, including shares of Capital Stock,
Partnership Interests and LLC Interests, are required to be pledged hereunder
and under the Credit Agreement from time to time.
"PLEDGED INTERESTS" means (i) all ownership, equity or other similar
interests, including shares of Capital Stock, Partnership Interests and LLC
Interests, of any Pledged Interest Issuer and (ii) all Pledged Notes and other
promissory notes, in each case which are pledged by any Pledgor to the
Administrative Agent hereunder or may from time to time hereafter be pledged by
any Pledgor to the Administrative Agent.
"PLEDGED NOTES" means all promissory notes of any Pledged Interest Issuer
(whether or not in the form of EXHIBIT C hereto) which are delivered by any
Pledgor to the Administrative Agent as Pledged Property hereunder, as such
promissory notes, in accordance with SECTION 4.1.6, are amended, modified or
supplemented from time to time, together with any promissory note of any Pledged
Interest Issuer taken in extension or renewal thereof or substitution therefor.
"PLEDGED PROPERTY" means all Pledged Interests and all other instruments
and securities, in each case which are now being pledged by any Pledgor to the
Administrative Agent or may from time to time hereafter be pledged or required
to be pledged by any Pledgor to the Administrative Agent for the purpose of
pledge under this Pledge Agreement or any other Loan Document, and all proceeds
of any of the foregoing.
"PLEDGOR" is defined in the PREAMBLE.
"SECURED OBLIGATIONS" is defined in SECTION 2.2.
"SECURITIES ACT" is defined in SECTION 6.2.
"TERMINATION DATE" means the date on which all Obligations have been paid
in full, all Commitments have been fully terminated and the Letter of Credit has
been canceled or otherwise terminated.
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"U.C.C." means the Uniform Commercial Code, as in effect from time to time
in the State of New York; PROVIDED, that if by reason of mandatory provisions of
law or the exercise of remedies, the perfection or the effect of perfection or
non-perfection of the Lien granted in any Collateral is governed by the Uniform
Commercial Code as in effect in a jurisdiction other than New York, "U.C.C."
means the Uniform Commercial Code as in effect in such other jurisdiction for
purposes of the provisions hereof relating to such perfection or effect of
perfection or non-perfection or the exercise of remedies.
SECTION 1.2. CREDIT AGREEMENT DEFINITIONS. Unless otherwise defined
herein or the context otherwise requires, terms used in this Pledge Agreement,
including its preamble and recitals, have the meanings provided in the Credit
Agreement.
SECTION 1.3. U.C.C. DEFINITIONS. Unless otherwise defined herein or in
the Credit Agreement or the context otherwise requires, terms for which meanings
are provided in the U.C.C. are used in this Pledge Agreement with such meanings.
ARTICLE II
PLEDGE
SECTION 2.1. GRANT OF SECURITY INTEREST. Each Pledgor hereby pledges,
hypothecates, assigns, charges, mortgages, delivers and transfers to the
Administrative Agent, for its benefit and the ratable benefit of each of the
Secured Parties, and each Pledgor hereby grants to the Administrative Agent, for
its benefit and the ratable benefit of the Secured Parties, a continuing
security interest in, all of the following property (the "COLLATERAL"):
(a) all Pledged Interests of each Pledged Interest Issuer identified
in ATTACHMENT 1 hereto issued from time to time;
(b) all other Pledged Property, whether now or hereafter delivered to
the Administrative Agent in connection with this Pledge Agreement;
(c) all right, title and interest of such Pledgor, whether now
existing or hereafter arising or acquired, in, to and under any partnership
agreement, limited liability company agreement or similar agreement which
governs the rights and obligations of the holder of ownership, equity or
similar interests in a Pledged Interest Issuer;
(d) all Dividends, Distributions, interest and without duplication,
other payments and rights with respect to any Pledged Property; and
(e) all proceeds of any of the foregoing.
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SECTION 2.2. SECURITY FOR OBLIGATIONS. This Pledge Agreement secures the
payment in full of all Obligations of each Obligor now or hereafter existing
under the Credit Agreement and each other Loan Document, whether for principal,
interest, costs, fees, indemnities, expenses, or otherwise (including all
Obligations of each Pledgor now or hereafter existing under this Pledge
Agreement and each other Loan Document to which such Pledgor is or may become a
party), with all such Obligations being referred to as the "SECURED
OBLIGATIONS".
SECTION 2.3. PLEDGE AND TRANSFER OF PLEDGED PROPERTY. Any Certificated
Interests representing or evidencing any Collateral shall be delivered to and
held by or on behalf of the Administrative Agent pursuant hereto, shall be in
suitable form for transfer by delivery, and shall be accompanied by all
necessary instruments of transfer or assignment, duly executed in blank by the
applicable Pledgor or, if any Collateral constitutes uncertificated securities,
confirmation and evidence satisfactory to the Administrative Agent that the
applicable Pledgor has taken all actions requested by the Administrative Agent
to provide for the transfer to and perfection by the Administrative Agent of the
security interests in such uncertificated securities for the benefit of the
Secured Parties in accordance with the U.C.C. and any other applicable law.
SECTION 2.4. DIVIDENDS ON PLEDGED INTERESTS. In the event that any
Dividend or other payment is to be paid on any Pledged Interests (including any
payment of any principal or interest on any Pledged Note) at a time when no
Default of the nature referred to in Section 8.1.9 of the Credit Agreement or
Event of Default has occurred and is continuing or would result therefrom, such
Dividend or payment may be paid directly to the applicable Pledgor. If any such
Default or Event of Default has occurred and is continuing, then any such
Dividend or payment shall be paid directly to the Administrative Agent for the
benefit of the Secured Parties.
SECTION 2.5. CONTINUING SECURITY INTEREST. This Pledge Agreement shall
create a continuing security interest in the Collateral and shall
(a) remain in full force and effect until the Termination Date;
(b) be binding upon each Pledgor and its successors, transferees and
assigns; and
(c) inure, together with the rights and remedies of the Administrative
Agent hereunder, to the benefit of the Administrative Agent and each other
Secured Party.
Without limiting CLAUSE (c), any Lender may assign or otherwise transfer (in
whole or in part) any Note or Loan held by it to any other Person or entity,
and such other Person or entity shall thereupon become vested with all the
rights and benefits in respect thereof granted to such Lender under any Loan
Document (including this Pledge Agreement) or otherwise, subject, however, to
any contrary provisions in such assignment or transfer, and to the provisions
of Section 10.11 and Article X of the Credit Agreement. Upon (i) the sale,
transfer or other disposition of Collateral in accordance with the Credit
Agreement or (ii) the occurrence of the Termination Date, the security
interests granted herein shall automatically terminate with respect
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to (x) such Collateral (in the case of clause (i)) or (y) all Collateral (in
the case of clause (ii)), and at such time the Administrative Agent will, at
each Pledgor's sole expense, deliver to the applicable Pledgor, without any
representations, warranties or recourse of any kind whatsoever, all
certificates and instruments previously delivered to an Administrative Agent
representing or evidencing all Pledged Interests, together with all other
Collateral held by the Administrative Agent hereunder, and execute and
deliver to the applicable Pledgor such documents as a Pledgor shall
reasonably request to evidence such termination.
SECTION 2.6. SECURITY INTEREST ABSOLUTE. All rights of the Administrative
Agent and the security interests granted to the Administrative Agent hereunder,
and all obligations of each Pledgor hereunder, shall be joint and several and
shall be absolute and unconditional, irrespective of
(a) any lack of validity or enforceability of the Credit Agreement or
any other Loan Document;
(b) the failure of any Secured Party
(i) to assert any claim or demand or to enforce any right or
remedy against any Obligor or any other Person under the provisions of
the Credit Agreement, any other Loan Document or otherwise, or
(ii) to exercise any right or remedy against any other guarantor
of, or collateral securing, any Secured Obligations;
(c) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Secured Obligations or any other
extension, compromise or renewal of any Secured Obligation;
(d) any reduction, limitation, impairment or termination of any
Secured Obligations for any reason, including any claim of waiver, release,
surrender, alteration or compromise, and shall not be subject to (and each
Pledgor hereby waives any right to or claim of) any defense or setoff,
counterclaim, recoupment or termination whatsoever by reason of the
invalidity, illegality, irregularity, compromise, unenforceability of, or
any other event or occurrence affecting, any Secured Obligations or
otherwise;
(e) any amendment to, rescission, waiver, or other modification of, or
any consent to departure from, any of the terms of the Credit Agreement or
any other Loan Document;
(f) any addition, exchange, release, surrender or non-perfection of
any collateral (including the Collateral), or any amendment to or waiver or
release of or addition to or consent to departure from any guaranty, for
any of the Secured Obligations; or
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(g) any other circumstances which might otherwise constitute a defense
available to, or a legal or equitable discharge of, any Obligor, any surety
or any guarantor.
SECTION 2.7. POSTPONEMENT OF SUBROGATION, ETC. Each Pledgor agrees
that it will not exercise any rights which it may acquire by reason of any
payment made hereunder, whether by way of subrogation, reimbursement or
otherwise, until following the Termination Date. Any amount paid prior to
the Termination Date shall be held in trust for the benefit of the Secured
Parties and shall immediately be paid to the Administrative Agent for the
benefit of the Secured Parties and credited and applied against the Secured
Obligations, whether matured or unmatured, in accordance with the terms of
the Credit Agreement; PROVIDED, HOWEVER, that if
(a) any Pledgor has made payment to the Secured Parties of all or any
part of the Secured Obligations; and
(b) the Termination Date has occurred;
then each Secured Party agrees that, at such Pledgor's request, the
Administrative Agent, on behalf of the Secured Parties, will execute and
deliver to such Pledgor appropriate documents (without recourse and without
representation or warranty) necessary to evidence the transfer by subrogation
to such Pledgor of an interest in the Secured Obligations resulting from such
payment by such Pledgor. In furtherance of the foregoing, at all times prior
to the Termination Date, each Pledgor shall refrain from taking any action or
commencing any proceeding against any Borrower or any other Obligor (or its
successors or assigns, whether in connection with a bankruptcy proceeding or
otherwise) to recover any amounts in respect of payments made under this
Pledge Agreement to any Secured Party. Notwithstanding the foregoing, to the
extent necessary to toll the statute of limitations, such Pledgor may take
such action required to preserve any rights it has by way of rights of
subrogation as consented to by the Administrative Agent in its reasonable
discretion.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. REPRESENTATIONS AND WARRANTIES, ETC. In order to induce the
Secured Parties to enter into the Credit Agreement and to make Credit Extensions
thereunder, each Pledgor represents and warrants to each Secured Party as set
forth in this Article.
SECTION 3.1.1. OWNERSHIP, NO LIENS, ETC. Each Pledgor is the legal and
beneficial owner of, and has good and marketable title to (and has full right
and authority to pledge and assign) its Collateral, free and clear of all Liens,
options and other charges, except any Lien granted pursuant hereto in favor of
the Secured Parties.
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SECTION 3.1.2. VALID SECURITY INTEREST. The execution and delivery of this
Pledge Agreement, together with (a)(i) in the case of Collateral that
constitutes a Certificated Interest, the delivery of such Collateral to the
Administrative Agent together with undated stock powers executed in blank by the
Pledgor, (ii) in the case of Collateral that constitutes an uncertificated
security, the registration with the Pledged Interest Issuer of such
uncertificated security, or (iii) in the case of Collateral that constitutes
Pledged Notes, delivery of such Collateral and an allonge to such Collateral to
the Administrative Agent, or (b) in the case of other than Certificated
Interests, the filing of U.C.C. financing statements in the filing offices
listed on Attachment 1 hereto, is effective to create a valid, perfected, first
priority security interest in such Collateral and all proceeds thereof, securing
the Secured Obligations. Possession by the Administrative Agent of the Pledged
Interests, if certificated, or registration by the applicable Pledgor of the
Pledged Interests, if uncertificated, is the only action necessary to perfect or
protect such security interest in the Pledged Interests and the proceeds
thereof, subject to Section 9-306 of the U.C.C.
SECTION 3.1.3. AS TO PLEDGED INTERESTS. In the case of
(a) any Pledged Interests (other than Pledged Notes) constituting
Collateral,
(i) all of such Pledged Interests are duly authorized, and
validly issued, fully paid, and non-assessable, and constitute that
percentage of the issued and outstanding shares of Capital Stock,
Partnership Interests, LLC Interests and other ownership interest of
each Pledged Interest Issuer set forth on Attachment I hereto; and
(ii)the Pledgor has delivered to the Administrative Agent true
and complete copies of the partnership, membership, operating or
ownership agreements, as applicable, for each Pledged Interest Issuer
that is a LLC or a Partnership, which agreements are currently in full
force and effect and have not been amended or modified except as
disclosed to the Administrative Agent in writing;
(b) in the case of each Pledged Note, all of such Pledged Notes have
been duly authorized, executed, endorsed, issued and delivered, and are the
legal, valid and binding obligation of the issuers thereof, and are not in
default.
SECTION 3.1.4. LOCATION OF PLEDGOR. The jurisdictions in which the
Pledgor is located for purposes of Sections 9-103 and 9-104 of the U.C.C. are
set forth in ATTACHMENT 1 hereto.
SECTION 3.1.5. NATURE OF PLEDGED INTERESTS. No LLC Interests or
Partnership Interests are represented by certificates.
ARTICLE IV
COVENANTS
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SECTION 4.1. COVENANTS. Each Pledgor covenants and agrees that, at all
times prior to the Termination Date, it will perform, comply with and be bound
by the obligations set forth in this Article.
SECTION 4.1.1. PROTECT COLLATERAL; FURTHER ASSURANCES, ETC. Each Pledgor
covenants and agrees that it will not sell, assign, transfer, pledge, or
encumber in any other manner the Collateral (except in favor of the
Administrative Agent hereunder). Each Pledgor will warrant and defend the right
and title herein granted unto the Administrative Agent in and to the Collateral
(and all right, title, and interest represented by the Collateral) against the
claims and demands of all other Persons. Each Pledgor agrees that from time to
time, at the expense of such Pledgor, it will promptly execute and deliver all
further instruments, and take all further action, that may be necessary or
desirable, or that either Administrative Agent may reasonably request, in order
to perfect and protect any security interest granted or purported to be granted
hereby or to enable the Administrative Agent to exercise and enforce their
rights and remedies hereunder with respect to any Collateral. The Pledgor will
not, without thirty (30) days' prior written notice to the Administrative Agent,
(i) change its name or structure so as to make any financing or other statement
filed pursuant to this Pledge Agreement become seriously misleading or (ii)
change the jurisdiction in which it is located to other than those specified in
SECTION 3.1.4. Each Pledgor will pledge hereunder, immediately upon its
acquisition (directly or indirectly) thereof, any and all additional
Indebtedness owed to such Pledgor pursuant to any note with an Obligor. Each
Pledgor further covenants and agrees as follows:
(a) If any Pledgor shall become entitled to receive or shall receive
any stock or other certificate (including any certificate representing a
Dividend or a Distribution in connection with any reclassification,
increase or reduction of capital or any certificate issued in connection
with any reorganization), option or rights, whether in addition to, in
substitution of, as a conversion of, or in exchange for any portion of the
Collateral (or otherwise in respect thereof), such Pledgor shall accept the
same as the agent of the Administrative Agent, hold the same in trust for
the Administrative Agent and deliver the same forthwith to the
Administrative Agent in the exact form received, duly endorsed (in blank)
by such Pledgor to the Administrative Agent, if required, together with an
undated stock power or other necessary instrument of transfer covering such
certificate duly executed in blank by such Pledgor, to be held by the
Administrative Agent, subject to the terms of this Pledge Agreement, as
additional security for the Secured Obligations. In addition, any sums
paid upon or in respect of the Collateral upon the liquidation or
dissolution of any Pledged Interest Issuer shall be held by the
Administrative Agent as additional security for the Secured Obligations.
If any sums of money or property so paid or distributed in respect of any
Collateral shall be received by any Pledgor, then such Pledgor shall, until
such money or property is paid or delivered to the Administrative Agent,
hold such money or property in trust for the Administrative Agent (on
behalf of the Secured Parties), segregated from other funds of such
Pledgor, as additional collateral securing the Secured Obligations.
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(b) Except as otherwise expressly permitted by the Credit Agreement,
without the prior written consent of the Administrative Agent, no Pledgor
will (i) consent to any material modification, extension or alteration of
the terms of any membership or operating agreement of the LLCs or the
Partnerships or (ii) accept a surrender of any membership or operating
agreement of any of the LLCs or the Partnerships, as applicable, or waive
any breach of or default under any such agreement by any other party
thereto.
(c) Each Pledgor will advise the Administrative Agent promptly, in
reasonable detail (i) of any Lien or claim made or asserted against any
material part of the Collateral, (ii) of any material change in the
composition of the Collateral, and (iii) of the occurrence of any other
event relating specifically to such Pledgor or its assets which could
reasonably be expected to have a material adverse effect on the aggregate
value of the Collateral or on the security interests created hereunder.
SECTION 4.1.2. REGISTRATION OF PLEDGED INTERESTS, ETC. Concurrently with
the execution and delivery of this Pledge Agreement, each Pledgor shall execute
and deliver to the applicable Pledged Interest Issuer instructions to register,
substantially in the form of EXHIBIT A hereto, and cause each Pledged Interest
Issuer to execute and deliver to the Administrative Agent the Initial
Transaction Statement, substantially in the form of EXHIBIT B hereto, confirming
that each Pledged Interest Issuer (in which such Pledgor owns a Pledged Interest
(other than in the case of a Certificated Interest or a Pledged Note)) has
registered the pledge by such Pledgor effected by this Pledge Agreement on its
books. In addition, the Pledgor agrees that it shall cause each Issuer of
Certificated Securities to execute and deliver to the Administrative Agent an
acknowledgment in a form satisfactory to the Administrative Agent.
SECTION 4.1.3. STOCK POWERS, ETC. Each Pledgor agrees that all
Certificated Interests constituting Collateral delivered by such Pledgor
pursuant to this Pledge Agreement will be accompanied by duly executed undated
blank stock powers, or other equivalent instruments of transfer acceptable to
the Administrative Agent, as is necessary under all applicable laws to perfect
the Lien in favor of the Secured Parties on such Collateral. Each Pledgor will,
from time to time upon the request of the Administrative Agent, promptly deliver
to the Administrative Agent such stock powers, instruments, and similar
documents, satisfactory in form and substance to the Administrative Agent, with
respect to the Collateral as the Administrative Agent may reasonably request and
will, from time to time upon the request of the Administrative Agent after the
occurrence, and during the continuance, of any Event of Default, promptly
transfer any Pledged Interests or other shares of Capital Stock or other
ownership interests constituting Collateral into the name of any nominee
designated by the Administrative Agent.
SECTION 4.1.4. CONTINUOUS PLEDGE. Each Pledgor will, at all times, keep
pledged to the Administrative Agent pursuant hereto all Pledged Interests and
all other shares of Capital Stock or other ownership interests constituting
Collateral, all Dividends and Distributions with respect thereto (provided that
if no Event of Default or Default described in Section 8.1.9 of the
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Credit Agreement shall have occurred or be continuing, such Dividends and
Distributions may be used for working capital or other purposes), all
Pledged Notes, all interest, principal and other proceeds received by the
Administrative Agent with respect to the Pledged Notes, and all other
Collateral and other securities, instruments, proceeds, and rights from time
to time received by or distributable to such Pledgor in respect of any
Collateral and will not permit any Pledged Interest Issuer to issue any
Capital Stock or other ownership interests which shall not have been
immediately duly pledged hereunder on a first priority perfected basis.
SECTION 4.1.5. VOTING RIGHTS; DIVIDENDS, ETC. Each Pledgor agrees:
(a) after any Default of the nature referred to in Section 8.1.9 of
the Credit Agreement or an Event of Default shall have occurred and be
continuing, promptly upon receipt of notice thereof by such Pledgor and
without any request therefor by either Administrative Agent, such Pledgor
will deliver (properly endorsed where required hereby or requested by the
Administrative Agent) to the Administrative Agent all Dividends,
Distributions, all other cash payments, and all proceeds of the Collateral,
all of which shall be held by the Administrative Agent for the benefit of
the Secured Parties as additional Collateral for use in accordance with
SECTION 6.4; and
(b) after any Event of Default shall have occurred and be continuing
and the Administrative Agent has notified any Pledgor of the Administrative
Agent's intention to exercise its voting power under this Section.
(i) the Administrative Agent may exercise (to the exclusion of
each Pledgor) the voting power and all other incidental rights of
ownership with respect to any Pledged Interests or other shares of
Capital Stock or other ownership interests constituting Collateral and
each Pledgor hereby grants the Administrative Agent an irrevocable
proxy, exercisable under such circumstances, to vote the Pledged
Interests and such other Collateral; and
(ii) promptly to deliver to the Administrative Agent such
additional proxies and other documents requested by the Administrative
Agent as may be necessary to allow the Administrative Agent to
exercise such voting power.
All Dividends, Distributions, cash payments and proceeds which may at any time
and from time to time be held by any Pledgor but which such Pledgor is then
obligated to deliver to the Administrative Agent, shall, until delivery to the
Administrative Agent, be held by such Pledgor separate and apart from its other
property in trust for the Secured Parties. The Administrative Agent agrees that
unless an Event of Default shall have occurred and be continuing and the
Administrative Agent shall have given the notice referred to in CLAUSE (b), such
Pledgor shall have the exclusive voting power with respect to any shares of
Capital Stock or other ownership interests (including any of the Pledged
Interests) constituting Collateral and the Administrative Agent shall, upon the
written request of such Pledgor, promptly deliver such proxies and other
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documents, if any, as shall be reasonably requested by such Pledgor which are
necessary to allow such Pledgor to exercise voting power with respect to any
such share of Capital Stock or other ownership interests (including any of
the Pledged Interests) constituting Collateral; PROVIDED, HOWEVER, that no
vote shall be cast, or consent, waiver, or ratification given, or action
taken by any Pledgor that would impair any Collateral or be inconsistent with
or violate any provision of the Credit Agreement or any other Loan Document.
SECTION 4.1.6. ADDITIONAL UNDERTAKINGS. No Pledgor will, without the
prior written consent of the Administrative Agent, take or omit to take any
action the taking or the omission of which could result in any impairment or
alteration of any instrument constituting Collateral. In furtherance of the
foregoing, each Pledgor agrees that it will not, without the prior written
consent of the Administrative Agent (which consent shall not be unreasonably
withheld):
(a) enter into any agreement amending, supplementing, or waiving any
provision of any Pledged Note (including any underlying instrument pursuant
to which such Pledged Note is issued) or compromising or releasing or
extending the time for payment of any obligation of the maker thereof; or
(b) take or omit to take any action the taking or the omission of
which would result in any impairment or alteration of any obligation of the
maker of any Pledged Note or other instrument constituting Collateral.
SECTION 4.1.7. PLEDGOR REMAINS LIABLE. Anything herein to the contrary
notwithstanding,
(a) each Pledgor shall remain liable to perform all of its duties and
obligations as an owner of the Pledged Interests, to the same extent as if
this Pledge Agreement had not been executed;
(b) the exercise by either Administrative Agent or any other Secured
Party of any of its rights hereunder shall not release any Pledgor from any
of its duties or obligations as owner of the Pledged Interests; and
(c) neither Administrative Agent nor any other Secured Party shall
have any obligation or liability as an owner of any Pledged Interest as
applicable, by reason of this Pledge Agreement.
ARTICLE V
THE Administrative Agent
SECTION 5.1. ADMINISTRATIVE AGENT APPOINTED ATTORNEY-IN-FACT. Each
Pledgor hereby irrevocably appoints the Administrative Agent as such Pledgor's
attorney-in-fact, with full
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authority in the place and stead of such Pledgor and in the name of such
Pledgor or otherwise, from time to time in the Administrative Agent's
discretion, after the occurrence and during the continuance of a Default of
the nature referred to in Section 8.1.9 of the Credit Agreement or any other
Event of Default, to take any action and to execute any instrument which such
Administrative Agent may deem necessary or advisable to accomplish the
purposes of this Pledge Agreement:
(a) to ask, demand, collect, xxx for, recover, compromise, receive and
give acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral;
(b) to receive, endorse, and collect any drafts or other instruments,
documents and chattel paper, in connection with CLAUSE (a); and
(c) to file any claims or take any action or institute any proceedings
which such Administrative Agent may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights of
such Administrative Agent with respect to any of the Collateral.
Each Pledgor hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest.
SECTION 5.2. ADMINISTRATIVE AGENT MAY PERFORM. If any Pledgor fails to
perform any agreement contained herein, the Administrative Agent may itself
perform, or cause performance of, such agreement, and the reasonable expenses of
the Administrative Agent incurred in connection therewith shall be jointly and
severally payable by the Pledgors pursuant to SECTION 6.4.
SECTION 5.3. ADMINISTRATIVE AGENT HAVE NO DUTY. The powers conferred on
the Administrative Agent hereunder are solely to protect its interests (on
behalf of the Secured Parties) in the Collateral and shall not impose any duty
on it to exercise any such powers. Except for reasonable care of any Collateral
in their possession and the accounting for moneys actually received by it
hereunder, the Administrative Agent shall have no duty as to any Collateral or
responsibility for
(a) ascertaining or taking action with respect to calls, conversions,
exchanges, maturities, tenders or other matters relative to any Pledged
Property, whether or not the Administrative Agent has or are deemed to have
knowledge of such matters, or
(b) taking any necessary steps to preserve rights against prior
parties or any other rights pertaining to any Collateral.
SECTION 5.4. REASONABLE CARE. The Administrative Agent is required to
exercise reasonable care in the custody and preservation of any of the
Collateral in its possession;
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PROVIDED, HOWEVER, the Administrative Agent shall be deemed to have exercised
reasonable care in the custody and preservation of any of the Collateral if
it takes such action for that purpose as any Pledgor reasonably requests in
writing at times other than upon the occurrence and during the continuance of
any Event of Default. The failure of the Administrative Agent (or either one
of them) to comply with any such request at any time shall not in itself be
deemed a failure to exercise reasonable care.
ARTICLE VI
REMEDIES
SECTION 6.1. CERTAIN REMEDIES. If any Event of Default shall have
occurred and be continuing:
(a) The Administrative Agent may exercise in respect of the
Collateral, in addition to other rights and remedies provided for herein
or otherwise available to it, all the rights and remedies of a secured
party on default under the U.C.C. (whether or not the U.C.C. applies to
the affected Collateral) and also may, without notice except as
specified below, sell the Collateral or any part thereof in one or more
parcels at public or private sale, at any of the Administrative Agent'
offices or elsewhere, for cash, on credit or for future delivery, and
upon such other terms as the Administrative Agent may deem commercially
reasonable. Each Pledgor agrees that, to the extent notice of sale
shall be required by law, at least ten days' prior notice to any Pledgor
of the time and place of any public sale or the time after which any
private sale is to be made shall constitute reasonable notification.
The Administrative Agent shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given. The
Administrative Agent may adjourn any public or private sale from time to
time by announcement at the time and place fixed therefor, and such sale
may, without further notice, be made at the time and place to which it
was so adjourned.
(b) The Administrative Agent may
(i) transfer all or any part of the Collateral into the name of
the Administrative Agent or its nominee, with or without disclosing
that such Collateral is subject to the Lien hereunder,
(ii) notify the parties obligated on any of the Collateral to
make payment to the Administrative Agent of any amount due or to
become due thereunder,
(iii) enforce collection of any of the Collateral by suit or
otherwise, and surrender, release or exchange all or any part thereof,
or compromise or extend or renew for any period (whether or not longer
than the original period) any obligations of any nature of any party
with respect thereto,
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(iv) endorse any checks, drafts, or other writings in any
Pledgor's name to allow collection of the Collateral,
(v) take control of any proceeds of the Collateral, and
(vi) execute (in the name, place and stead of any Pledgor)
endorsements, assignments, stock powers and other instruments of
conveyance or transfer with respect to all or any of the Collateral.
[SECTION 6.2. SECURITIES LAWS. If the Administrative Agent shall
determine to exercise their right to sell all or any of the Collateral pursuant
to SECTION 6.1, each Pledgor agrees that, upon request of either Administrative
Agent, such Pledgor will, at such Pledgor's own expense:
(a) execute and deliver, and cause each issuer of the Collateral
contemplated to be sold and the directors and officers thereof to execute
and deliver, all such instruments and documents, and do or cause to be done
all such other acts and things, as may be necessary or, in the opinion of
the Administrative Agent, advisable to register such Collateral under the
provisions of the Securities Act of 1933, as from time to time amended (the
"SECURITIES ACT"), and comparable legislation in other jurisdictions, and
to cause the registration statement relating thereto to become effective
and to remain effective for such period as prospectuses are required by law
to be furnished, and to make all amendments and supplements thereto and to
the related prospectus which, in the opinion of the Administrative Agent,
are necessary or advisable, all in conformity with the requirements of the
Securities Act and the rules and regulations of the Securities and Exchange
Commission applicable thereto and comparable legislation, rules and
regulations in other jurisdictions;
(b) use its best efforts to qualify the Collateral under the state
securities or "Blue Sky" laws and to obtain all necessary governmental
approvals for the sale of the Collateral, as requested by the
Administrative Agent;
(c) cause each such Pledged Interest Issuer to make available to its
security holders, as soon as practicable, an earnings statement that will
satisfy the provisions of Section 11(a) of the Securities Act and
comparable legislation in other jurisdictions; and
(d) do or cause to be done all such other acts and things as may be
necessary to make such sale of the Collateral or any part thereof valid and
binding and in compliance with applicable law.
Each Pledgor further acknowledges the impossibility of ascertaining the amount
of damages that would be suffered by the Administrative Agent and the Secured
Parties by reason of the failure by such Pledgor to perform any of the covenants
contained in this Section and, consequently,
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jointly and severally, agrees that, if any Pledgor shall fail to perform any
of such covenants, the Pledgors shall pay, as liquidated damages and not as a
penalty, an amount equal to the value (as determined by the Administrative
Agent) of the Collateral on the date the Administrative Agent shall demand
compliance with this Section.]
SECTION 6.3. COMPLIANCE WITH RESTRICTIONS. Each Pledgor agrees that in
any sale of any of the Collateral whenever an Event of Default shall have
occurred and be continuing, the Administrative Agent are hereby authorized to
comply with any limitation or restriction in connection with such sale as they
may be advised by counsel is necessary in order to avoid any violation of
applicable law (including compliance with such procedures as may restrict the
number of prospective bidders and purchasers, require that such prospective
bidders and purchasers have certain qualifications, and restrict such
prospective bidders and purchasers to persons who will represent and agree that
they are purchasing for their own account for investment and not with a view to
the distribution or resale of such Collateral), or in order to obtain any
required approval of the sale or of the purchaser by any governmental regulatory
authority or official, and each Pledgor further agrees that such compliance
shall not result in such sale being considered or deemed not to have been made
in a commercially reasonable manner, nor shall the Administrative Agent or any
other Secured Party be liable nor accountable to any Pledgor for any discount
allowed by the reason of the fact that such Collateral is sold in compliance
with any such limitation or restriction.
SECTION 6.4. APPLICATION OF PROCEEDS. All cash proceeds received by the
Administrative Agent in respect of any sale of, collection from, or other
realization upon, all or any part of the Collateral may, in the discretion of
the Administrative Agent, be held by the Administrative Agent as additional
collateral security for, or then or at any time thereafter be applied (after
payment of any amounts payable to the Administrative Agent pursuant to
Section 10.3 of the Credit Agreement and SECTION 6.5) in whole or in part by the
Administrative Agent against, all or any part of the Secured Obligations in such
order as the Administrative Agent shall elect.
Any surplus of such cash or cash proceeds held by the Administrative Agent
and remaining after the occurrence of the Termination Date shall be paid over to
the applicable Pledgor or to whomsoever may be lawfully entitled to receive such
surplus.
SECTION 6.5. INDEMNITY AND EXPENSES. Each Pledgor hereby jointly and
severally agrees to indemnify and hold harmless the Administrative Agent from
and against any and all claims, losses, and liabilities arising out of or
resulting from this Pledge Agreement (including enforcement of this Pledge
Agreement), except claims, losses, or liabilities resulting from an
Administrative Agent's gross negligence or wilful misconduct. Upon demand, each
Pledgor jointly and severally agrees that it will pay to the Administrative
Agent the amount of any and all reasonable expenses, including the reasonable
fees and disbursements of their counsel and of any experts and agent, which the
Administrative Agent may incur in connection with:
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(a) the administration of this Pledge Agreement, the Credit Agreement
and any other Loan Document;
(b) the custody, preservation, use, or operation of, or the sale of,
collection from, or other realization upon, any of the Collateral;
(c) the exercise or enforcement of any of the rights of the
Administrative Agent hereunder; or
(d) the failure by any Pledgor to perform or observe any of the
provisions hereof.
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.1. LOAN DOCUMENT. This Pledge Agreement is a Loan Document
executed pursuant to the Credit Agreement and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions thereof, including Article X thereof.
SECTION 7.2. PROTECTION OF COLLATERAL. The Administrative Agent may from
time to time, at their option, perform any act which any Pledgor agrees
hereunder to perform and which such Pledgor shall fail to perform after being
requested in writing so to perform (it being understood that no such request
need be given after the occurrence and during the continuance of an Event of
Default) and the Administrative Agent may from time to time take any other
action which the Administrative Agent reasonably deems necessary for the
maintenance, preservation or protection of any of the Collateral or of their
security interest therein.
SECTION 7.3. BINDING ON SUCCESSORS, TRANSFEREES AND ASSIGNS; ASSIGNMENT.
This Pledge Agreement shall be jointly and several binding upon each Pledgor and
its successors, transferees and assigns and shall inure to the benefit of and be
enforceable by each Secured Party and their respective successors, transferees
and assigns; PROVIDED, HOWEVER, that no Pledgor may assign any of its
obligations hereunder without the prior written consent of all Lenders.
SECTION 7.4. AMENDMENTS, ETC. No amendment to or waiver of any provision
of this Pledge Agreement, nor consent to any departure by any Pledgor herefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Administrative Agent (on behalf of the Lenders or the Required Lenders,
as the case may be) and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.
SECTION 7.5. NOTICES. All notices and other communications provided for
hereunder shall be in writing (including facsimile communication) and, mailed or
telecopied or delivered to each Pledgor, in care of the Borrower at the address
specified in the Credit Agreement. All such
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notices and other communications, when mailed and properly addressed with
postage prepaid or if properly addressed and sent by pre-paid courier
service, shall be deemed given when received; any such notice or
communication, if transmitted by telecopier, shall be deemed given when
transmitted and electronically confirmed.
SECTION 7.6. ADDITIONAL SUBSIDIARY PLEDGORS. Upon the execution and
delivery by any other Person of an instrument in the form of Annex I hereto,
such Person shall become a "Pledgor" hereunder with the same force and effect as
if originally named as a "Pledgor" herein. The execution and delivery of any
such instrument shall not require the consent of any other Pledgor hereunder.
The rights and obligations of each Pledgor hereunder shall remain in full force
and effect notwithstanding the addition of any new Pledgor as a party to this
Pledge Agreement.
SECTION 7.7. NO WAIVER; REMEDIES. No failure on the part of any Secured
Party to exercise, and no delay in exercising, any right hereunder shall operate
as a waiver thereof; nor shall any single or partial exercise of any right
hereunder preclude any other or further exercise thereof or the exercise of any
other right . The remedies herein provided are cumulative and not exclusive of
any remedies provided by law.
SECTION 7.8. CAPTIONS. Section captions used in this Pledge Agreement are
for convenience of reference only, and shall not affect the construction of this
Pledge Agreement.
SECTION 7.9. SEVERABILITY. Wherever possible each provision of this
Pledge Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Pledge Agreement shall
be prohibited by or invalid under such law, such provision shall be ineffective
to the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Pledge
Agreement.
SECTION 7.10. GOVERNING LAW, ENTIRE AGREEMENT, ETC. THIS PLEDGE AGREEMENT
SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF
THE STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF
THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK). THIS PLEDGE AGREEMENT
AND THE OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING AMONG THE
PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDE ANY PRIOR
AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT THERETO.
SECTION 7.12. FORUM SELECTION AND CONSENT TO JURISDICTION. ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH,
THIS PLEDGE AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENTS (WHETHER ORAL
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OR WRITTEN) OR ACTIONS OF THE SECURED PARTIES OR ANY PLEDGOR SHALL BE BROUGHT
AND MAINTAINED IN THE COURTS OF THE STATE OF NEW YORK, NEW YORK COUNTY OR IN
THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK;
PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY PROPERTY MAY
BE BROUGHT, AT EITHER ADMINISTRATIVE AGENT'S OPTION, IN THE COURTS OF ANY
JURISDICTION WHERE SUCH PROPERTY MAY BE FOUND. EACH PLEDGOR HEREBY EXPRESSLY
AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW
YORK, NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET
FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED
THEREBY IN CONNECTION WITH SUCH LITIGATION. EACH PLEDGOR IRREVOCABLY CONSENTS
TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL
SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK. EACH PLEDGOR HEREBY
EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF
ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM
THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE
EXTENT THAT ANY PLEDGOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM
JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE
OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR
OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, SUCH PLEDGOR HEREBY
IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS
PLEDGE AGREEMENT AND THE OTHER LOAN DOCUMENTS.
SECTION 7.13. WAIVER OF JURY TRIAL. EACH PLEDGOR HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, THIS PLEDGE AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY COURSE
OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS
OF THE SECURED PARTIES OR SUCH PLEDGOR. EACH PLEDGOR ACKNOWLEDGES AND AGREES
THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION AND
THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE SECURED PARTIES ENTERING
INTO THE CREDIT AGREEMENT.
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SECTION 7.14. COUNTERPARTS. This Pledge Agreement may be executed by the
parties hereto in several counterparts, each of which shall be deemed to be an
original and all of which shall constitute together but one and the same
agreement.
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IN WITNESS WHEREOF, the Pledgor has caused this Pledge Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
TITAN TECHNOLOGIES AND
INFORMATION SYSTEMS CORPORATION
By:
----------------------------
Name:
Title:
TITAN PURIFICATION, INC.
By:
----------------------------
Name:
Title:
DBA SYSTEMS, INC.
By:
----------------------------
Name:
Title:
VALIDITY CORPORATION
By:
----------------------------
Name:
Title:
LINKABIT WIRELESS, INC.
By:
----------------------------
Name:
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Title:
UNIDYNE CORPORATION
By:
----------------------------
Name:
Title:
TITAN SOFTWARE SYSTEMS CORPORATION
By:
----------------------------
Name:
Title:
PULSE SCIENCES, INC.
By:
----------------------------
Name:
Title:
HORIZONS TECHNOLOGY, INC.
By:
----------------------------
Name:
Title:
TITAN ENVIRONMENTAL CORPORATION
By:
----------------------------
Name:
Title:
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TOMOTHERAPEUTICS, INC.
By:
------------------------------
Name:
Title:
FEDERAL SERVICES, INC.
By:
------------------------------
Name:
Title:
ELDYNE, INC.
By:
------------------------------
Name:
Title:
DIVERSIFIED CONTROL
SYSTEMS, INC.
By:
------------------------------
Name:
Title:
-00-
XXXXX XXXXXXXXX COMMUNICATIONS
CORPORATION
By:
------------------------------
Name:
Title:
TITAN AEROCHEM, INC.
By:
------------------------------
Name:
Title:
ACKNOWLEDGED AND ACCEPTED:
THE BANK OF NOVA SCOTIA,
as Administrative Agent
By:
------------------------
Name:
Title:
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ANNEX I to
the Subsidiary Pledge
Agreement
SUPPLEMENT, dated as of ________________, ____ (this "SUPPLEMENT"), to
the Subsidiary Pledge Agreement, dated as of July 29, 1998 (together with all
amendments, supplements, restatements and other modifications, if any, from
time to time thereafter made thereto, the "PLEDGE AGREEMENT"), among the
initial signatories thereto and each other Person (such capitalized term, and
other terms used in this Supplement, to have the meanings set forth in
Article I of the Pledge Agreement) which from time to time thereafter became
a party thereto pursuant to Section 7.6 thereof (each, individually, a
"PLEDGOR", and, collectively, the "PLEDGORS"), in favor of the Secured
Parties (as defined in the Pledge Agreement).
W I T N E S S E T H:
WHEREAS, pursuant to the provisions of Section 7.6 of the Pledge Agreement,
the undersigned is becoming a Pledgor under the Pledge Agreement; and
WHEREAS, the undersigned Pledgor desires to become a "Pledgor" under the
Pledge Agreement in order to induce the Secured Parties to continue to extend
Credit Extensions under the Credit Agreement;
NOW, THEREFORE, in consideration of the premises, and for other
consideration (the receipt and sufficiency of which is hereby acknowledged), the
undersigned agrees, for the benefit of each Secured Party, as follows.
SECTION 1. In accordance with the terms of the Pledge Agreement, by its
signature below the undersigned hereby irrevocably agrees to become a Pledgor
under the Pledge Agreement with the same force and effect as if it were an
original signatory thereto and the undersigned Pledgor, hereby (a) agrees to be
bound by and comply with all of the terms and provisions of the Pledge Agreement
applicable to it as a Pledgor and (b) represents and warrants that the
representations and warranties made by it as a Pledgor thereunder are true and
correct as of the date hereof. In furtherance of the foregoing, each reference
to a "Pledgor" in the Pledge Agreement shall be deemed to include the
undersigned Pledgor.
SECTION 2. The undersigned Pledgor hereby represents and warrants that
this Supplement has been duly authorized, executed and delivered by it and that
this Supplement and the Pledge Agreement constitute the legal, valid and binding
obligation of the undersigned Pledgor, enforceable against it in accordance with
its terms.
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SECTION 3. Except as expressly supplemented hereby, the Pledge Agreement
shall remain in full force and effect in accordance with its terms.
SECTION 4. In the event any one or more of the provisions contained in
this Supplement should be held invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions contained
herein and in the Pledge Agreement shall not in any way be affected or impaired.
SECTION 5. THIS SUPPLEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. This Supplement may be executed by the parties hereto in
several counterparts, each of which shall be deemed to be an original and all of
which shall constitute together but one and the same agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Supplement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the day and year first above written.
[NAME OF ADDITIONAL SUBSIDIARY PLEDGOR]
By:
----------------------------
Name:
Title:
ACCEPTED BY:
THE BANK OF NOVA SCOTIA,
as Administrative Agent
By:
-------------------------
Name:
Title:
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EXHIBIT A
to SUBSIDIARY
Pledge Agreement
INSTRUCTION TO REGISTER PLEDGE
___________ __, ____
[ ]
Attention: ________________
Ladies and Gentlemen:
The undersigned, a [member] [partner] [shareholder] of ___________, a
[___________ limited liability company] [a ________ partnership] [a __________
corporation] (the "COMPANY"), hereby instructs the Company to register on the
books of the Company the pledge of the undersigned's [membership] [partnership]
interest in favor of The Bank of Nova Scotia as Administrative Agent (the
"ADMINISTRATIVE AGENT"), pursuant to the Pledge Agreement, dated as of July 29,
1998, made by, among others, the undersigned in favor of the Administrative
Agent.
Very truly yours,
[NAME OF PLEDGOR]
By:______________________
Name:
Title:
cc: The Bank of Nova Scotia
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EXHIBIT B
to SUBSIDIARY
Pledge Agreement
INITIAL TRANSACTION STATEMENT
___________ __, ____
To: The Bank of Nova Scotia
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxx Xxxxxxxxx
This statement is to advise you that a pledge of the following
uncertificated securities has been registered in the name of The Bank of Nova
Scotia, as Administrative Agent (the "ADMINISTRATIVE AGENT"), as follows:
1. Uncertificated Securities:
The entire [limited liability company] [partnership] interests of
[NAME OF PLEDGOR] in the undersigned [limited liability company]
[________ partnership] [corporation].
2. Registered Owner:
[NAME OF PLEDGOR]
3. Pledged in favor of:
The Bank of Nova Scotia,
as the Administrative Agent
4. There are no liens or restrictions of the undersigned [limited
liability company] [________ partnership] [corporation] and no adverse
claims to which the uncertificated securities are or may be subject
known to the undersigned [limited liability company] [________
partnership] [corporation], other than in favor of The Bank of Nova
Scotia, in its capacity as the Administrative Agent.
5. The pledge was registered on _______ __, ____.
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6. No transfer of the uncertificated securities shall be made without the
prior written consent of the Administrative Agent.
THIS STATEMENT IS MERELY A RECORD OF THE RIGHTS OF THE ADDRESSEE AS OF THE
TIME OF ITS ISSUANCE. DELIVERY OF THIS STATEMENT, OF ITSELF, CONFERS NO RIGHTS
ON THE RECIPIENT. THIS STATEMENT IS NEITHER A NEGOTIABLE INSTRUMENT NOR A
SECURITY.
Very truly yours,
[NAME OF PLEDGED INTEREST ISSUER]
By:___________________________________
Name:
Title:
-2-
EXHIBIT C
to SUBSIDIARY
Pledge Agreement
DEMAND PROMISSORY NOTE
$___________________ _______________, 19__
FOR VALUE RECEIVED, the undersigned, ______________, a _______________
corporation (the "MAKER"), promises to pay to the order of ________________, a
___________ _________ (the "PAYEE"), on demand up to the principal sum of
___________________ DOLLARS ($______________) outstanding from time to time,
representing the aggregate principal amount of an intercompany loan made by the
Payee to the Maker.
The unpaid principal amount of this promissory note (the "NOTE") from time
to time outstanding shall accrue interest as agreed to from time to time between
Maker and Payee, with such interest payable as agreed to from time to time
between Maker and Payee. All payments of interest shall be recorded on the
books and records of the Payee. Upon Notice from the Agent (hereinafter
defined) that a Default (as defined in the Credit Agreement, hereinafter
defined) of the nature referred to in Section 8.1.9 of the Credit Agreement or
any other Event of Default (as defined in the Credit Agreement) has occurred and
is continuing, the Maker shall make such payments, in same day funds, to such
accounts as the Agent shall direct in such notice.
This Note is one of the Pledged Notes referred to in the Subsidiary Pledge
Agreement dated as of July 29, 1998 (as amended, supplemented, amended and
restated or otherwise modified, the "PLEDGE AGREEMENT"), among each Subsidiary
of the Borrower signatory thereto (the "PLEDGOR"), The Bank of Nova Scotia
("SCOTIABANK") as the Administrative Agent, and this Note has been pledged to
the Administrative Agent as security for the Secured Obligations (as defined in
the Pledge Agreement) under the Credit Agreement and other Loan Documents. Upon
the occurrence and continuance of an Event of Default under the Credit
Agreement, and notice thereof by the Administrative Agent to the Maker, the
Administrative Agent shall have all rights of the Payee to collect and
accelerate, and enforce all rights with respect to, the Indebtedness evidenced
by this Note. Unless otherwise defined herein or the context otherwise
requires, terms used herein have the meanings provided in the Credit Agreement
dated as of July 29, 1998 (as amended, supplemented, amended and restated or
otherwise modified from time to time, the "CREDIT AGREEMENT"), among The Titan
Corporation, a Delaware corporation (the "BORROWER"), the various financial
institutions as a[cad 179]re or may become parties thereto (the "LENDERS"), and
Scotiabank, as agent for the Lenders (the "ADMINISTRATIVE AGENT").
In addition to, but not in limitation of, the foregoing, the Maker further
agrees to pay all expenses, including reasonable attorneys' fees and legal
expenses, incurred by the holder
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(including the Administrative Agent as pledgee) of this Note endeavoring to
collect any amounts payable hereunder which are not paid when due, whether by
acceleration or otherwise.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEW YORK.
-2-
THE MAKER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS
IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON THIS NOTE.
THE MAKER ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT
CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE PAYEE TO ACCEPT THIS NOTE.
[NAME OF MAKER]
By
----------------------------------------
Name:
Title:
Pay to the order of THE BANK OF NOVA SCOTIA,
as Administrative Agent
By
----------------------------------------
Name:
Title:
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ATTACHMENT 1
to SUBSIDIARY
Pledge Agreement
TITAN TECHNOLOGIES AND INFORMATION SYSTEMS CORPORATION
Pledged Notes
-------------
None
Pledged Interests
-----------------
DESCRIPTION OF CORPORATE INTERESTS
----------------------------------
Interest Interest Outstanding % of Shares
Pledged Interest Issuer Percentage Percentage Shares Pledged
----------------------- ---------- ---------- ----------- ------------
Validity Corporation 100 500,000 60,500 100
Principal Amount
Pledged Note Issuer of Pledged Note
------------------- ---------------
Location of Pledgor (Section 3.1.4)
-------------------
Validity Corporation
0000 Xxxxxxx Xxxx Xxxx
Xxx Xxxxx, XX 00000
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ATTACHMENT 1
to SUBSIDIARY
Pledge Agreement
TITAN PURIFICATION, INC.
Pledged Notes
-------------
None
Pledged Interests
-----------------
None
Pledgor's
Membership
Character of Interest
Pledged Interest Issuer Interest Percentage
----------------------- ------------- ----------
Principal Amount
Pledged Note Issuer of Pledged Note
------------------- ----------------
Location of Pledgor (Section 3.1.4)
-------------------
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ATTACHMENT 1
to SUBSIDIARY
Pledge Agreement
DBA SYSTEMS, INC.
Pledged Notes
-------------
None
Pledged Interests
-----------------
None
Pledgor's
Membership
Character of Interest
Pledged Interest Issuer Interest Percentage
----------------------- ------------- ----------
Principal Amount
Pledged Note Issuer of Pledged Note
------------------- ----------------
Location of Pledgor (Section 3.1.4)
-------------------
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ATTACHMENT 1
to SUBSIDIARY
Pledge Agreement
VALIDITY CORPORATION
Pledged Notes
-------------
None
Pledged Interests
-----------------
None
Pledgor's
Membership
Character of Interest
Pledged Interest Issuer Interest Percentage
----------------------- ------------ -----------
Principal Amount
Pledged Note Issuer of Pledged Note
------------------- ----------------
Location of Pledgor (Section 3.1.4)
-------------------
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ATTACHMENT 1
to SUBSIDIARY
Pledge Agreement
LINKABIT WIRELESS, INC.
Pledged Notes
-------------
None
Pledged Interests
-----------------
None
Pledgor's
Membership
Character of Interest
Pledged Interest Issuer Interest Percentage
----------------------- ------------- ----------
Principal Amount
Pledged Note Issuer of Pledged Note
------------------- ----------------
Location of Pledgor (Section 3.1.4)
-------------------
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ATTACHMENT 1
to SUBSIDIARY
Pledge Agreement
UNIDYNE CORPORATION
Pledged Notes
-------------
None
Pledged Interests
-----------------
None
Pledgor's
Membership
Character of Interest
Pledged Interest Issuer Interest Percentage
----------------------- ------------- -----------
Principal Amount
Pledged Note Issuer of Pledged Note
------------------- ----------------
Location of Pledgor (Section 3.1.4)
-------------------
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ATTACHMENT 1
to SUBSIDIARY
Pledge Agreement
TITAN SOFTWARE SYSTEMS CORPORATION
Pledged Notes
-------------
None
Pledged Interests
-----------------
None
Pledgor's
Membership
Character of Interest
Pledged Interest Issuer Interest Percentage
----------------------- ------------ ----------
Principal Amount
Pledged Note Issuer of Pledged Note
------------------- -----------------
Location of Pledgor (Section 3.1.4)
-------------------
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ATTACHMENT 1
to SUBSIDIARY
Pledge Agreement
PULSE SCIENCES, INC.
Pledged Notes
-------------
None
Pledged Interests
-----------------
None
Pledgor's
Membership
Character of Interest
Pledged Interest Issuer Interest Percentage
----------------------- ------------ ----------
Principal Amount
Pledged Note Issuer of Pledged Note
------------------- ----------------
Location of Pledgor (Section 3.1.4)
-------------------
-8-
ATTACHMENT 1
to SUBSIDIARY
Pledge Agreement
HORIZONS TECHNOLOGY, INC.
Pledged Notes
-------------
None
Pledged Interests
----
None
Pledgor's
Membership
Character of Interest
Pledged Interest Issuer Interest Percentage
----------------------- ------------ ----------
Principal Amount
Pledged Note Issuer of Pledged Note
------------------- -----------------
Location of Pledgor (Section 3.1.4)
-------------------
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ATTACHMENT 1
to SUBSIDIARY
Pledge Agreement
TITAN ENVIRONMENTAL CORPORATION
Pledged Notes
-------------
None
Pledged Interests
-----------------
None
Pledgor's
Membership
Character of Interest
Pledged Interest Issuer Interest Percentage
----------------------- ------------ -----------
Principal Amount
Pledged Note Issuer of Pledged Note
------------------- -----------------
Location of Pledgor (Section 3.1.4)
-------------------
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ATTACHMENT 1
to SUBSIDIARY
Pledge Agreement
TOMOTHERAPEUTICS, INC.
Pledged Notes
--------------
None
Pledged Interests
-----------------
None
Pledgor's
Membership
Character of Interest
Pledged Interest Issuer Interest Percentage
----------------------- ------------ ----------
Principal Amount
Pledged Note Issuer of Pledged Note
------------------- ----------------
Location of Pledgor (Section 3.1.4)
-------------------
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ATTACHMENT 1
to SUBSIDIARY
Pledge Agreement
FEDERAL SERVCES, INC.
Pledged Notes
-------------
None
Pledged Interests
-----------------
None
Pledgor's
Membership
Character of Interest
Pledged Interest Issuer Interest Percentage
----------------------- ------------ ------------
Principal Amount
Pledged Note Issuer of Pledged Note
------------------- ----------------
Location of Pledgor (Section 3.1.4)
-------------------
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ATTACHMENT 1
to SUBSIDIARY
Pledge Agreement
ELDYNE, INC.
Pledged Notes
-------------
None
Pledged Interests
-----------------
None
Pledgor's
Membership
Character of Interest
Pledged Interest Issuer Interest Percentage
----------------------- ------------ -----------
Principal Amount
Pledged Note Issuer of Pledged Note
------------------- ----------------
Location of Pledgor (Section 3.1.4)
-------------------
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ATTACHMENT 1
to SUBSIDIARY
Pledge Agreement
DIVERSIFIED CONTROL SYSTEMS, INC.
Pledged Notes
-------------
None
Pledged Interests
-----------------
None
Pledgor's
Membership
Character of Interest
Pledged Interest Issuer Interest Percentage
----------------------- ------------ -----------
Principal Amount
Pledged Note Issuer of Pledged Note
------------------- ----------------
Location of Pledgor (Section 3.1.4)
-------------------
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ATTACHMENT 1
to SUBSIDIARY
Pledge Agreement
TITAN BROADBAND COMMUNICATIONS CORPORATION
Pledged Notes
-------------
None
Pledged Interests
-----------------
None
Pledgor's
Membership
Character of Interest
Pledged Interest Issuer Interest Percentage
----------------------- ------------ ----------
Principal Amount
Pledged Note Issuer of Pledged Note
------------------- -----------------
Location of Pledgor (Section 3.1.4)
-------------------
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ATTACHMENT 1
to SUBSIDIARY
Pledge Agreement
TITAN AEROCHEM, INC.
Pledged Notes
-------------
None
Pledged Interests
-----------------
None
Pledgor's
Membership
Character of Interest
Pledged Interest Issuer Interest Percentage
----------------------- ------------ -----------
Principal Amount
Pledged Note Issuer of Pledged Note
------------------- ----------------
Location of Pledgor (Section 3.1.4)
-------------------
-16-
[EXECUTION COPY]
BORROWER SECURITY AGREEMENT
This SECURITY AGREEMENT (as amended, supplemented, amended and restated or
otherwise modified from time to time, the "SECURITY AGREEMENT"), dated as of
July 29, 1998, is made by THE TITAN CORPORATION, a Delaware corporation (the
"GRANTOR") in favor of THE BANK OF NOVA SCOTIA ("SCOTIABANK"), in its capacity
as administrative agent (the "ADMINISTRATIVE AGENT") for each of the Secured
Parties.
W I T N E S S E T H :
WHEREAS, pursuant to a Credit Agreement, dated as of July 29, 1998 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the "CREDIT AGREEMENT"), among the Grantor, the various financial
institutions as are or may become parties thereto (the "LENDERS"), Scotiabank,
as administrative agent (the "ADMINISTRATIVE AGENT") and Imperial Bank, as
Documentation Agent, the Lenders and the Issuers have extended Commitments to
make Credit Extensions to the Grantor;
WHEREAS, as a condition precedent to the making of the Credit Extensions
(including the initial Credit Extension) under the Credit Agreement, the Grantor
is required to execute and deliver this Security Agreement;
WHEREAS, the Grantor has duly authorized the execution, delivery and
performance of this Security Agreement; and
NOW THEREFORE, for good and valuable consideration the receipt of which is
hereby acknowledged, and in order to induce the Lenders and the Issuers to make
Credit Extensions (including the initial Credit Extension) to the Grantor
pursuant to the Credit Agreement, the Grantor agrees, for the benefit of each
Secured Party, as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. CERTAIN TERMS. The following terms (whether or not
underscored) when used in this Security Agreement, including its preamble and
recitals, shall have the
following meanings (such definitions to be equally applicable to the singular
and plural forms thereof):
"ADMINISTRATIVE AGENT" is defined in the PREAMBLE.
"COLLATERAL" is defined in SECTION 2.1.
"COLLATERAL ACCOUNT" is defined in CLAUSE (b) of SECTION 4.1.2(b).
"COMPUTER HARDWARE AND SOFTWARE COLLATERAL" means:
(a) all computer and other electronic data processing hardware,
integrated computer systems, central processing units, memory units,
display terminals, printers, features, computer elements, card readers,
tape drives, hard and soft disk drives, cables, electrical supply hardware,
generators, power equalizers, accessories and all peripheral devices and
other related computer hardware;
(b) all software programs (including both source code, object code and
all related applications and data files), whether now owned, licensed or
leased or hereafter acquired by the Grantor, designed for use on the
computers and electronic data processing hardware described in CLAUSE (a)
above;
(c) all firmware associated therewith;
(d) all documentation (including flow charts, logic diagrams, manuals,
guides and specifications) with respect to such hardware, software and
firmware described in the preceding CLAUSES (a) through (c); and
(e) all rights with respect to all of the foregoing, including any and
all copyrights, licenses, options, warranties, service contracts, program
services, test rights, maintenance rights, support rights, improvement
rights, renewal rights and indemnifications and any substitutions,
replacements, additions or model conversions of any of the foregoing.
"COPYRIGHT COLLATERAL" means all copyrights (including all copyrights for
semi-conductor chip product mask works) of the Grantor, whether statutory or
common law, registered or unregistered, now or hereafter in force throughout the
world including all of the Grantor's right, title and interest in and to all
copyrights registered in the United States Copyright Office or anywhere else in
the world and also including the copyrights referred to in ITEM A of SCHEDULE IV
attached hereto, and all applications for registration thereof, whether pending
or in preparation, all copyright licenses, including each copyright license
referred to in ITEM B of SCHEDULE IV attached hereto, the right to xxx for past,
present and future
infringements of any thereof, all rights corresponding thereto throughout the
world, all extensions and renewals of any thereof and all proceeds of the
foregoing, including licenses, royalties, income, payments, claims, damages
and proceeds of suit.
"CREDIT AGREEMENT" is defined in the FIRST RECITAL.
"EQUIPMENT" is defined in CLAUSE (a) of SECTION 2.1.
"GRANTOR" is defined in the PREAMBLE.
"INTELLECTUAL PROPERTY COLLATERAL" means, collectively, the Computer
Hardware and Software Collateral, the Copyright Collateral, the Patent
Collateral, the Trademark Collateral and the Trade Secrets Collateral.
"INVENTORY" is defined in CLAUSE (b) of SECTION 2.1
"LENDER" and "LENDERS" are defined in the FIRST RECITAL.
"PATENT COLLATERAL" means:
(a) all letters patent and applications for letters patent throughout
the world, including all patent applications in preparation for filing
anywhere in the world and including each patent and patent application
referred to in ITEM A of SCHEDULE II attached hereto;
(b) all reissues, divisions, continuations, continuations-in-part,
extensions, renewals and reexaminations of any of the items described in
CLAUSE (a);
(c) all patent licenses, including each patent license referred to in
ITEM B of SCHEDULE II attached hereto; and
(d) all proceeds of, and rights associated with, the foregoing
(including license royalties and proceeds of infringement suits), the right
to xxx third parties for past, present or future infringements of any
patent or patent application, including any patent or patent application
referred to in ITEM A of SCHEDULE II attached hereto, and for breach or
enforcement of any patent license, including any patent license referred to
in ITEM B of SCHEDULE II attached hereto, and all rights corresponding
thereto throughout the world.
"RECEIVABLES" is defined in CLAUSE (c) of SECTION 2.1.
"RELATED CONTRACTS" is defined in CLAUSE (c) of SECTION 2.1.
"SECURED OBLIGATIONS" is defined in SECTION 2.2.
-3-
"SECURITY AGREEMENT" is defined in the PREAMBLE.
"TERMINATION DATE" means the date on which all obligations have
indefeasibly been paid in full, all Commitments have been fully terminated and
all Letters of Credit have been canceled or otherwise terminated.
"TRADEMARK COLLATERAL" means:
(a) all trademarks, trade names, corporate names, company names,
business names, fictitious business names, trade styles, service marks,
certification marks, collective marks, logos, other source of business
identifiers, prints and labels on which any of the foregoing have appeared
or appear, designs and general intangibles of a like nature (all of the
foregoing items in this CLAUSE (a) being collectively called a
"TRADEMARK"), now existing anywhere in the world or hereafter adopted or
acquired, whether currently in use or not, all registrations and recordings
thereof and all applications in connection therewith, whether pending or in
preparation for filing, including registrations, recordings and
applications in the United States Patent and Trademark Office or in any
office or agency of the United States of America or any State thereof or
any foreign country, including those referred to in ITEM A of SCHEDULE III
attached hereto;
(b) all Trademark licenses, including each Trademark license referred
to in ITEM B of SCHEDULE III attached hereto;
(c) all reissues, extensions or renewals of any of the items
described in CLAUSES (a) and (b);
(d) all of the goodwill of the business connected with the use of,
and symbolized by the items described in, CLAUSES (a) and (b); and
(e) all proceeds of, and rights associated with, the foregoing,
including any claim by the Grantor against third parties for past, present
or future infringement or dilution of any Trademark, Trademark registration
or Trademark license, including any Trademark, Trademark registration or
Trademark license referred to in ITEM A and ITEM B of SCHEDULE III attached
hereto, or for any injury to the goodwill associated with the use of any
such Trademark or for breach or enforcement of any Trademark license.
"TRADE SECRETS COLLATERAL" means all common law and statutory trade secrets
and all other confidential or proprietary or useful information and all know-how
obtained by or used in or contemplated at any time for use in the business of
the Grantor (all of the foregoing being collectively called a "TRADE SECRET"),
whether or not such Trade Secret has been reduced to a writing or other tangible
form, including all documents and things embodying, incorporating or referring
in any way to such Trade Secret, all Trade Secret licenses, including
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each Trade Secret license referred to in SCHEDULE V attached hereto, and
including the right to xxx for and to enjoin and to collect damages for the
actual or threatened misappropriation of any Trade Secret and for the breach
or enforcement of any such Trade Secret license.
"U.C.C." means the Uniform Commercial Code, as in effect from time to time
in the State of New York.
SECTION 1.2. CREDIT AGREEMENT DEFINITIONS. Unless otherwise defined
herein or the context otherwise requires, terms used in this Security Agreement,
including its preamble and recitals, have the meanings provided in the Credit
Agreement.
SECTION 1.3. U.C.C. DEFINITIONS. Unless otherwise defined herein or in
the Credit Agreement or the context otherwise requires, terms for which meanings
are provided in the U.C.C. are used in this Security Agreement, including its
preamble and recitals, with such meanings.
ARTICLE II
SECURITY INTEREST
SECTION 2.1. GRANT OF SECURITY. The Grantor hereby assigns and pledges to
the Administrative Agent for its benefit and the ratable benefit of each of the
Secured Parties, and hereby grants to the Administrative Agent for its benefit
and the ratable benefit of each of the Secured Parties, a security interest in
all of the following, whether now or hereafter existing or acquired by the
Grantor (the "COLLATERAL"):
(a) all equipment in all of its forms of the Grantor, wherever
located, including all parts thereof and all accessions, additions,
attachments, improvements, substitutions and replacements thereto and
therefor and all accessories related thereto (any and all of the foregoing
being the "EQUIPMENT");
(b) all inventory in all of its forms of the Grantor, wherever
located, including
(i) all raw materials and work in process therefor, finished
goods thereof, and materials used or consumed in the manufacture or
production thereof,
(ii) all goods in which the Grantor has an interest in mass or a
joint or other interest or right of any kind (including goods in which
the Grantor has an interest or right as consignee), and
(iii) all goods which are returned to or repossessed by the
Grantor,
-5-
and all accessions thereto, products thereof and documents therefor (any
and all such inventory, materials, goods, accessions, products and
documents being the "INVENTORY");
(c) all accounts, contracts, contract rights, chattel paper,
documents, instruments, and general intangibles (including tax refunds) of
the Grantor, whether or not arising out of or in connection with the sale
or lease of goods or the rendering of services, and all rights of the
Grantor now or hereafter existing in and to all security agreements,
guaranties, leases and other contracts securing or otherwise relating to
any such accounts, contracts, contract rights, chattel paper, documents,
instruments, and general intangibles, excluding any rights in the foregoing
items of Collateral as to which the grant of a security interest would
violate a valid and enforceable restriction on such grant, unless and until
any required consents have been obtained (any and all such accounts,
contracts, contract rights, chattel paper, documents, instruments, and
general intangibles being the "RECEIVABLES", and any and all such security
agreements, guaranties, leases and other contracts being the "RELATED
CONTRACTS");
(d) all Intellectual Property Collateral of the Grantor;
(e) all books, records, writings, data bases, information and other
property relating to, used or useful in connection with, evidencing,
embodying, incorporating or referring to, any of the foregoing in this
SECTION 2.1;
(f) all of the Grantor's other property and rights of every kind and
description and interests therein; and
(g) all products, offspring, rents, issues, profits, returns, income
and proceeds of and from any and all of the foregoing Collateral (including
proceeds which constitute property of the types described in CLAUSES (a),
(b), (c), (d), (e) and (f), and, to the extent not otherwise included, all
payments under insurance which the Grantor is entitled to receive (whether
or not the Administrative Agent is the loss payee thereof), or any
indemnity, warranty or guaranty, payable by reason of loss or damage to or
otherwise with respect to any of the foregoing Collateral).
SECTION 2.2. SECURITY FOR OBLIGATIONS. This Security Agreement secures
the payment of all Obligations of the Grantor now or hereafter existing under
the Credit Agreement and each other Loan Document, whether for principal,
interest, costs, fees, expenses or otherwise, with all such obligations being
collectively referred to as the "SECURED OBLIGATIONS".
SECTION 2.3. CONTINUING SECURITY INTEREST; TRANSFER OF NOTES. This
Security Agreement shall create a continuing security interest in the Collateral
and shall
-6-
(a) remain in full force and effect until the Termination Date;
(b) be binding upon the Grantor and its successors, transferees and
assigns; and
(c) inure, together with the rights and remedies of the Administrative
Agent hereunder, to the benefit of the Administrative Agent and each other
Secured Party.
Without limiting the generality of the foregoing CLAUSE (c), any Lender may
assign or otherwise transfer (in whole or in part) any Note or Credit Extension
held by it to any other Person or entity, and such other Person or entity shall
thereupon become vested with all the rights and benefits in respect thereof
granted to such Lender under any Loan Document (including this Security
Agreement) or otherwise, subject, however, to any contrary provisions in such
assignment or transfer, and to the provisions of Section 10.11 and Article IX of
the Credit Agreement. Upon (i) the sale, transfer or other disposition of
Collateral in accordance with the Credit Agreement or (ii) the occurrence of the
Termination Date, the security interests granted herein shall automatically
terminate with respect to (x) such Collateral (in the case of clause (i)) or (y)
all Collateral (in the case of clause (ii)), and at such time the Administrative
Agent will, at the Grantor's sole expense, execute and deliver to the Grantor
(without any representations, warranties or recourse to the Administrative
Agent), such documents as the Grantor shall reasonably request to evidence such
termination.
SECTION 2.4. GRANTOR REMAINS LIABLE. Anything herein to the contrary
notwithstanding
(a) the Grantor shall remain liable under the contracts and agreements
included in the Collateral to the extent set forth therein, and shall
perform all of its duties and obligations under such contracts and
agreements to the same extent as if this Security Agreement had not been
executed;
(b) the exercise by the Administrative Agent of any of its rights
hereunder shall not release the Grantor from any of its duties or
obligations under any such contracts or agreements included in the
Collateral; and
(c) neither the Administrative Agent nor any other Secured Party shall
have any obligation or liability under any such contracts or agreements
included in the Collateral by reason of this Security Agreement, nor shall
the Administrative Agent or any other Secured Party be obligated to perform
any of the obligations or duties of the Grantor thereunder or to take any
action to collect or enforce any claim for payment assigned hereunder.
ARTICLE III
-7-
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. REPRESENTATIONS AND WARRANTIES. The Grantor represents and
warrants to each Secured Party as set forth in this Section.
SECTION 3.1.1. LOCATION OF COLLATERAL, ETC. All of the Equipment,
Inventory of the Grantor is located at the places specified in ITEM A, ITEM B
and ITEM C, respectively, of SCHEDULE I hereto. None of the Equipment and
Inventory has, within the four months preceding the date of this Security
Agreement, been located at any place other than the places specified in ITEM A
and ITEM B, respectively, of SCHEDULE I hereto except as set forth in a footnote
thereto. The place(s) of business and chief executive office of the Grantor and
the office(s) where the Grantor keeps its records concerning the Receivables,
and all originals of all chattel paper which evidence Receivables, are located
at the address set forth in ITEM D of SCHEDULE I hereto. The Grantor has no
trade names other than those set forth in ITEM E of SCHEDULE I hereto. During
the four months preceding the date hereof, the Grantor has not been known by any
legal name different from the one set forth on the signature page hereto, nor
has the Grantor been the subject of any merger or other corporate
reorganization, except as set forth in ITEM F of SCHEDULE I hereto. If the
Collateral includes any Inventory located in the State of California, the
Grantor is not a "retail merchant" within the meaning of Section 9102 of the
Uniform Commercial Code - Secured Transactions of the State of California. All
Receivables evidenced by a promissory note or other instrument, negotiable
document or chattel paper have been duly endorsed and accompanied by duly
executed instruments of transfer or assignment, all in form and substance
satisfactory to the Administrative Agent and delivered and pledged to the
Administrative Agent pursuant to SECTION 4.1.7.
SECTION 3.1.2. OWNERSHIP, NO LIENS, ETC. The Grantor owns its Collateral
free and clear of any Lien, security interest, charge or encumbrance except for
the security interest created by this Security Agreement and except as permitted
by the Credit Agreement. No effective financing statement or other instrument
similar in effect covering all or any part of the Collateral is on file in any
recording office, except such as may have been filed in favor of the
Administrative Agent relating to this Security Agreement or as have been filed
in connection with Liens permitted pursuant to Section 7.2.3 of the Credit
Agreement.
SECTION 3.1.3. POSSESSION AND CONTROL. The Grantor has exclusive
possession and control of its Equipment and Inventory.
SECTION 3.1.4. NEGOTIABLE DOCUMENTS, INSTRUMENTS AND CHATTEL PAPER. The
Grantor has, contemporaneously herewith, delivered to the Administrative Agent
possession of all originals of all negotiable documents, instruments and chattel
paper currently owned or held by the Grantor (duly endorsed in blank, if
requested by the Administrative Agent).
-8-
SECTION 3.1.5. INTELLECTUAL PROPERTY COLLATERAL. With respect to any
Intellectual Property Collateral the loss, impairment or infringement of which
might have a Material Adverse Effect:
(a) such Intellectual Property Collateral is subsisting and has not
been adjudged invalid or unenforceable, in whole or in part;
(b) such Intellectual Property Collateral is valid and enforceable;
(c) the Grantor has made all necessary filings and recordations to
protect its interest in such Intellectual Property Collateral, including
recordations of all of its interests in the Patent Collateral and Trademark
Collateral in the United States Patent and Trademark Office and in
corresponding offices throughout the world and its claims to the Copyright
Collateral in the United States Copyright Office and in corresponding
offices throughout the world;
(d) other than as previously disclosed to the Administrative Agent,
the Grantor is the exclusive owner of the entire and unencumbered right,
title and interest in and to such Intellectual Property Collateral and no
claim has been made that the use of such Intellectual Property Collateral
does or may violate the asserted rights of any third party; and
(e) the Grantor has performed and will continue to perform all acts
and has paid and will continue to pay all required fees and taxes to
maintain each and every item of Intellectual Property Collateral in full
force and effect throughout the world, as applicable.
The Grantor owns directly or is entitled to use by license or otherwise, all
patents, Trademarks, Trade Secrets, copyrights, mask works, licenses,
technology, know-how, processes and rights with respect to any of the foregoing
used in, necessary for or of importance to the conduct of the Grantor's
business.
SECTION 3.1.6. VALIDITY, ETC. This Security Agreement creates a valid
security interest in the Collateral, securing the payment of the Secured
Obligations, and all filings and other actions necessary or desirable to perfect
and protect such security interest have been duly taken.
SECTION 3.1.7. AUTHORIZATION, APPROVAL, ETC. Except as have been obtained
or made and are in full force and effect, no authorization, approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required either
(a) for the grant by the Grantor of the security interest granted
hereby or for the execution, delivery and performance of this Security
Agreement by the Grantor; or
-9-
(b) for the perfection of or the exercise by the Administrative Agent
of its rights and remedies hereunder.
SECTION 3.1.8. COMPLIANCE WITH LAWS. The Grantor is in compliance with
the requirements of all applicable laws (including the provisions of the Fair
Labor Standards Act), rules, regulations and orders of every governmental
authority, the non-compliance with which might have a Material Adverse Effect or
which might materially adversely affect the value of the Collateral or the worth
of the Collateral as collateral security.
ARTICLE IV
COVENANTS
SECTION 4.1. CERTAIN COVENANTS. The Grantor covenants and agrees that
until the Termination Date has occurred, the Grantor will perform, comply with
and be bound by the obligations set forth in this Article.
SECTION 4.1.1. AS TO EQUIPMENT AND INVENTORY. The Grantor hereby agrees
that it shall
(a) keep all the Equipment and Inventory (other than Inventory sold in
the ordinary course of business, or except as otherwise provided in the
Credit Agreement or any of the other Loan Documents) at the places therefor
specified in SECTION 3.1.1 or, upon 30 days' prior written notice to the
Administrative Agent, at such other places in a jurisdiction where all
representations and warranties set forth in ARTICLE III shall be true and
correct, and all action required pursuant to the FIRST SENTENCE of SECTION
4.1.7 shall have been taken with respect to the Equipment and Inventory
(collectively, "SPECIFIED LOCATIONS"); PROVIDED, HOWEVER, that the Grantor
may move and/or maintain certain items of Equipment at locations other than
at Specified Locations so long as the value of Collateral of this type of
the Grantor and similar Collateral (as defined in the Subsidiary Security
Agreement) of the Restricted Subsidiaries, shall not exceed $2,000,000 at
any time;
(b) cause the Equipment to be maintained and preserved in the same
condition, repair and working order as when new, ordinary wear and tear
excepted, and in accordance with any manufacturer's manual or good business
practice; and forthwith, or in the case of any loss or damage to any of the
Equipment, as quickly as practicable after the occurrence thereof, make or
cause to be made all repairs, replacements, and other improvements in
connection therewith which are necessary or desirable to such end; and
promptly furnish to the Administrative Agent a statement respecting any
material loss or damage to any of the Equipment; and
-10-
(c) pay promptly when due all property and other taxes, assessments
and governmental charges or levies imposed upon, and all claims (including
claims for labor, materials and supplies) against, the Equipment and
Inventory, except to the extent the validity thereof is being contested in
good faith by appropriate proceedings and for which adequate reserves in
accordance with GAAP have been set aside.
SECTION 4.1.2. AS TO RECEIVABLES AND RELATED CONTRACTS.
(a) The Grantor shall keep its place(s) of business and chief
executive office and the office(s) where it keeps its records concerning
the Receivables, and all originals of all chattel paper which evidences
Receivables, located at the address(es) set forth in ITEM D of SCHEDULE I
hereto, or, upon 30 days' prior written notice to the Administrative Agent,
at such other locations in a jurisdiction where all actions required by the
first sentence of SECTION 4.1.7 shall have been taken with respect to the
Receivables; not change its name except upon 30 days' prior written notice
to the Administrative Agent; hold and preserve such records and chattel
paper; and permit representatives of the Administrative Agent at any time
during normal business hours to inspect (upon reasonable prior written
notice so long as no Event of Default shall have occurred or be continuing)
and make abstracts from such records and chattel paper. In addition, the
Grantor shall give the Administrative Agent a supplement to SCHEDULE I
hereto on each date a Compliance Certificate is required to be delivered to
the Administrative Agent under the Credit Agreement, which shall set forth
any changes to the information set forth in SECTION 3.1.1.
(b) Upon written notice by the Administrative Agent to the Grantor
pursuant to this clause, all proceeds of Collateral received by the Grantor
shall be delivered in kind to the Administrative Agent for deposit to a
deposit account (the "COLLATERAL ACCOUNT") of the Grantor maintained with
the Administrative Agent, and the Grantor shall not commingle any such
proceeds, and shall hold separate and apart from all other property, all
such proceeds in express trust for the benefit of the Administrative Agent
until delivery thereof is made to the Administrative Agent. The
Administrative Agent will not give the notice referred to in the preceding
sentence unless there shall have occurred and be continuing a Default of
the nature set forth in Section 8.1.9 of the Credit Agreement or an Event
of Default.
(c) The Administrative Agent shall have the right to apply any amount
in the Collateral Account to the payment of any Secured Obligations which
are due and payable or payable upon demand, or to the payment of any
Secured Obligations at any time that an Event of Default shall exist.
(d) The Grantor shall not cause the aggregate value of Receivables or
Related Contracts or rights thereunder and the value of similar Receivables
and Related
-11-
Contracts (as defined in the Subsidiary Security Agreement) as to which a
Lien in favor of the Administrative Agent cannot be granted hereunder
pursuant to CLAUSE (c) of SECTION 2.1, or pursuant to the Subsidiary
Security Agreement, to exceed $2,000,000 at any time.
SECTION 4.1.3. AS TO COLLATERAL.
(a) Until the occurrence and continuance of a Default of the nature
set forth in Section 8.1.9 of the Credit Agreement or an Event of Default,
and such time as the Administrative Agent shall notify the Grantor of the
revocation of such power and authority the Grantor (i) may in the ordinary
course of its business (except as otherwise permitted under the Credit
Agreement), at its own expense, sell, lease or furnish under the contracts
of service any of the Inventory normally held by the Grantor for such
purpose, and use and consume, in the ordinary course of its business
(except as otherwise permitted under the Credit Agreement), any raw
materials, work in process or materials normally held by the Grantor for
such purpose, (ii) will, at its own expense, endeavor to collect, as and
when due, all amounts due with respect to any of the Collateral, including
the taking of such action with respect to such collection as the
Administrative Agent may reasonably request following the occurrence of a
Default of the nature set forth in Section 8.1.9 of the Credit Agreement or
an Event of Default or, in the absence of such request, as the Grantor may
deem advisable, and (iii) may grant, in the ordinary course of business
(except as otherwise permitted under the Credit Agreement), to any party
obligated on any of the Collateral, any rebate, refund or allowance to
which such party may be lawfully entitled, and may accept, in connection
therewith, the return of goods, the sale or lease of which shall have given
rise to such Collateral. The Administrative Agent, however, may, at any
time following a Default of the nature set forth in Section 8.1.9 of the
Credit Agreement or an Event of Default, whether before or after any
revocation of such power and authority or the maturity of any of the
Secured Obligations, notify any parties obligated on any of the Collateral
to make payment to the Administrative Agent of any amounts due or to become
due thereunder and enforce collection of any of the Collateral by suit or
otherwise and surrender, release, or exchange all or any part thereof, or
compromise or extend or renew for any period (whether or not longer than
the original period) any indebtedness thereunder or evidenced thereby.
Upon request of the Administrative Agent following a Default of the nature
set forth in Section 8.1.9 of the Credit Agreement or an Event of Default,
the Grantor will, at its own expense, notify any parties obligated on any
of the Collateral to make payment to the Administrative Agent of any
amounts due or to become due thereunder.
(b) The Administrative Agent is authorized to endorse, in the name of
the Grantor, any item, howsoever received by the Administrative Agent,
representing any payment on or other proceeds of any of the Collateral.
-12-
SECTION 4.1.4. AS TO INTELLECTUAL PROPERTY COLLATERAL. The Grantor
covenants and agrees to comply with the following provisions as such provisions
relate to any Intellectual Property Collateral of the Grantor that:
(a) The Grantor shall not, unless the Grantor shall either (i)
reasonably and in good faith determine (and notice of such determination
shall have been delivered to the Administrative Agent) that any of the
Patent Collateral is of negligible economic value to the Grantor, or (ii)
have a valid business purpose to do otherwise, do any act, or omit to do
any act, whereby any of the Patent Collateral may lapse or become abandoned
or dedicated to the public or unenforceable.
(b) The Grantor shall not, and the Grantor shall not permit any of its
licensees to, unless the Grantor shall either (i) reasonably and in good
faith determine (and notice of such determination shall have been delivered
to the Administrative Agent) that any of the Trademark Collateral is of
negligible economic value to the Grantor, or (ii) have a valid business
purpose to do otherwise,
(i) fail to continue to use any of the Trademark Collateral in
order to maintain all of the Trademark Collateral in full force free
from any claim of abandonment for non-use,
(ii) fail to maintain as in the past the quality of products and
services offered under all of the Trademark Collateral,
(iii) fail to employ all of the Trademark Collateral registered
with any Federal or state or foreign authority with an appropriate
notice of such registration,
(iv) adopt or use any other Trademark which is confusingly
similar or a colorable imitation of any of the Trademark Collateral,
(v) use any of the Trademark Collateral registered with any
Federal or state or foreign authority except for the uses for which
registration or application for registration of all of the Trademark
Collateral has been made, and
(vi) do or permit any act or knowingly omit to do any act whereby
any of the Trademark Collateral may lapse or become invalid or
unenforceable.
(c) The Grantor shall not, unless the Grantor shall either
(i) reasonably and in good faith determine (and notice of such
determination shall have been delivered to the Administrative Agent)
that any of
-13-
the Copyright Collateral or any of the Trade Secrets Collateral is of
negligible economic value to the Grantor, or
(ii) have a valid business purpose to do otherwise, do or permit
any act or knowingly omit to do any act whereby any of the Copyright
Collateral or any of the Trade Secrets Collateral may lapse or become
invalid or unenforceable or placed in the public domain except upon
expiration of the end of an unrenewable term of a registration
thereof.
(d) The Grantor shall notify the Administrative Agent immediately if
it knows, or has reason to know, that any application or registration
relating to any material item of the Intellectual Property Collateral may
become abandoned or dedicated to the public or placed in the public domain
or invalid or unenforceable, or of any adverse determination or development
(including the institution of, or any such determination or development in,
any proceeding in the United States Patent and Trademark Office, the United
States Copyright Office or any foreign counterpart thereof or any court)
regarding the Grantor's ownership of any of the Intellectual Property
Collateral, its right to register the same or to keep and maintain and
enforce the same.
(e) In no event shall the Grantor or any of its agents, employees,
designees or licensees file an application for the registration of any
Intellectual Property Collateral with the United States Patent and
Trademark Office, the United States Copyright Office or any similar office
or agency in any other country or any political subdivision thereof, unless
it promptly upon such filing informs the Administrative Agent, and upon
request of the Administrative Agent, executes and delivers any and all
agreements, instruments, documents and papers as the Administrative Agent
may reasonably request to evidence the Administrative Agent's security
interest in such Intellectual Property Collateral and the goodwill and
general intangibles of the Grantor relating thereto or represented thereby.
(f) The Grantor shall take all necessary steps, including in any
proceeding before the United States Patent and Trademark Office, the United
States Copyright Office or any similar office or agency in any other
country or any political subdivision thereof, to maintain and pursue any
application (and to obtain the relevant registration) filed with respect
to, and to maintain any registration of, the Intellectual Property
Collateral, including the filing of applications for renewal, affidavits of
use, affidavits of incontestability and opposition, interference and
cancellation proceedings and the payment of fees and taxes (except to the
extent that dedication, abandonment or invalidation is permitted under the
foregoing CLAUSES (a), (b) and (c)).
(g) The Grantor shall, contemporaneously herewith, execute and deliver
to the Administrative Agent a Patent Security Agreement, a Trademark
Security Agreement and a Copyright Security Agreement in the forms of
EXHIBIT A, EXHIBIT B and
-14-
EXHIBIT C hereto, respectively, and shall execute and deliver to the
Administrative Agent any other document required to acknowledge or
register or perfect the Administrative Agent's interest in any part of
the Intellectual Property Collateral.
SECTION 4.1.5. INSURANCE. The Grantor will maintain or cause to be
maintained with responsible insurance companies insurance with respect to its
business and properties (including the Equipment and Inventory) against such
casualties and contingencies and of such types and in such amounts as is
required pursuant to the Credit Agreement and will, upon the request of the
Administrative Agent, furnish a certificate of a reputable insurance broker
setting forth the nature and extent of all insurance maintained by the Grantor
in accordance with this Section. Without limiting the foregoing, the Grantor
further agrees as follows:
(a) Each policy for property insurance shall show the Administrative
Agent as loss payee.
(b) Each policy for liability insurance shall show the Administrative
Agent as an additional insured.
(c) Each insurance policy shall provide that at least 30 days' prior
written notice of cancellation or of lapse shall be given to the
Administrative Agent by the insured (or at least 10 days' prior written
notice of cancellation shall be given with respect to failure to pay the
premium).
(d) The Grantor shall, if so requested by the Administrative Agent,
deliver to the Administrative Agent a copy of each insurance policy.
SECTION 4.1.6. TRANSFERS AND OTHER LIENS. The Grantor shall not:
(a) sell, assign (by operation of law or otherwise) or otherwise
dispose of any of the Collateral, except as permitted by the Credit
Agreement; or
(b) create or suffer to exist any Lien or other charge or encumbrance
upon or with respect to any of the Collateral to secure Indebtedness of any
Person or entity, except for the security interest created by this Security
Agreement and except as permitted by the Credit Agreement.
SECTION 4.1.7. FURTHER ASSURANCES, ETC. The Grantor agrees that, from
time to time at its own expense, it will promptly execute and deliver all
further instruments and documents, and take all further action, that may be
necessary or desirable (provided that it is reasonable), or that the
Administrative Agent may reasonably request, in order to perfect, preserve and
protect any security interest granted or purported to be granted hereby or to
enable the Administrative Agent to exercise and enforce its rights and remedies
hereunder with respect to any Collateral. Without limiting the generality of
the foregoing, the Grantor will
-15-
(a) xxxx conspicuously each document (evidencing title) included in
the Inventory, each chattel paper included in the Receivables and each
Related Contract and, at the request of the Administrative Agent, upon the
occurrence and during the continuance of an Event of Default each of its
records pertaining to the Collateral with a legend, in form and substance
satisfactory to the Administrative Agent, indicating that such document,
chattel paper, Related Contract or Collateral is subject to the security
interest granted hereby;
(b) if any Receivable shall be evidenced by a promissory note or other
instrument, negotiable document or chattel paper, deliver and pledge to the
Administrative Agent hereunder such promissory note, instrument, negotiable
document or chattel paper duly endorsed and accompanied by duly executed
instruments of transfer or assignment, all in form and substance
satisfactory to the Administrative Agent;
(c) execute and file such financing or continuation statements, or
amendments thereto, and such other instruments or notices [(including any
assignment of claim form under or pursuant to the federal assignment of
claims statute, 31 U.S.C. Section 3726, any successor or amended version
thereof or any regulation promulgated under or pursuant to any version
thereof)], as may be necessary or desirable (provided that it is
reasonable), or as the Administrative Agent may reasonably request, in
order to perfect and preserve the security interests and other rights
granted or purported to be granted to the Administrative Agent hereby; and
(d) furnish to the Administrative Agent, from time to time at the
Administrative Agent's request, statements and schedules further
identifying and describing the Collateral and such other reports in
connection with the Collateral as the Administrative Agent may reasonably
request, all in reasonable detail.
With respect to the foregoing and the grant of the security interest hereunder,
the Grantor hereby authorizes the Administrative Agent to file one or more
financing or continuation statements, and amendments thereto, relative to all or
any part of the Collateral without the signature of the Grantor where permitted
by law. A carbon, photographic or other reproduction of this Security Agreement
or any financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law.
ARTICLE V
THE ADMINISTRATIVE AGENT
-16-
SECTION 5.1. ADMINISTRATIVE AGENT APPOINTED ATTORNEY-IN-FACT. The
Grantor hereby irrevocably appoints the Administrative Agent the Grantor's
attorney-in-fact, with full authority in the place and stead of the Grantor
and in the name of the Grantor or otherwise, from time to time in the
Administrative Agent's discretion, following the occurrence and continuation
of a Default of the nature set forth in Section 8.1.9 of the Credit Agreement
or an Event of Default, to take any action and to execute any instrument
which the Administrative Agent may deem necessary or advisable to accomplish
the purposes of this Security Agreement, including:
(a) to ask, demand, collect, xxx for, recover, compromise, receive and
give acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral;
(b) to receive, endorse, and collect any drafts or other instruments,
documents and chattel paper, in connection with CLAUSE (a) above;
(c) to file any claims or take any action or institute any proceedings
which the Administrative Agent may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights of
the Administrative Agent with respect to any of the Collateral; and
(d) to perform the affirmative obligations of the Grantor hereunder
(including all obligations of the Grantor pursuant to SECTION 4.1.7).
The Grantor hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest.
SECTION 5.2. ADMINISTRATIVE AGENT MAY PERFORM. If any Grantor fails to
perform any agreement contained herein, the Administrative Agent may itself
perform, or cause performance of, such agreement, and the expenses of the
Administrative Agent incurred in connection therewith shall be payable by the
Grantor pursuant to SECTION 6.2.
SECTION 5.3. ADMINISTRATIVE AGENT HAS NO DUTY. In addition to, and not in
limitation of, SECTION 2.4, the powers conferred on the Administrative Agent
hereunder are solely to protect its interest (on behalf of the Secured Parties)
in the Collateral and shall not impose any duty on it to exercise any such
powers. Except for reasonable care of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, the Administrative
Agent shall have no duty as to any Collateral or as to the taking of any
necessary steps to preserve rights against prior parties or any other rights
pertaining to any Collateral.
SECTION 5.4. REASONABLE CARE. The Administrative Agent is required to
exercise reasonable care in the custody and preservation of any of the
Collateral in its possession;
-17-
PROVIDED, HOWEVER, the Administrative Agent shall be deemed to have exercised
reasonable care in the custody and preservation of any of the Collateral, if
it takes such action for that purpose as any Grantor reasonably requests in
writing at times other than upon the occurrence and during the continuance of
any Event of Default, but failure of the Administrative Agent to comply with
any such request at any time shall not in itself be deemed a failure to
exercise reasonable care.
ARTICLE VI
REMEDIES
SECTION 6.1. CERTAIN REMEDIES. If any Event of Default shall have
occurred and be continuing:
(a) The Administrative Agent may exercise in respect of the
Collateral, in addition to other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured party
on default under the U.C.C. (whether or not the U.C.C. applies to the
affected Collateral) and also may
(i) require the Grantor to, and the Grantor hereby agrees that
it will, at its expense and upon request of the Administrative Agent
forthwith, assemble all or part of the Collateral as directed by the
Administrative Agent and make it available to the Administrative Agent
at a place to be designated by the Administrative Agent which is
reasonably convenient to both parties, and
(ii) without notice except as specified below, sell the
Collateral or any part thereof in one or more parcels at public or
private sale, at any of the Administrative Agent's offices or
elsewhere, for cash, on credit or for future delivery, and upon such
other terms as the Administrative Agent may deem commercially
reasonable. The Grantor agrees that, to the extent notice of sale
shall be required by law, at least ten days' prior notice to the
Grantor of the time and place of any public sale or the time after
which any private sale is to be made shall constitute reasonable
notification. The Administrative Agent shall not be obligated to make
any sale of Collateral regardless of notice of sale having been given.
The Administrative Agent may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor, and
such sale may, without further notice, be made at the time and place
to which it was so adjourned.
(b) All cash proceeds received by the Administrative Agent in respect
of any sale of, collection from, or other realization upon all or any part
of the Collateral may, in the discretion of the Administrative Agent, be
held by the Administrative Agent as collateral for, and/or then or at any
time thereafter applied (after payment of any
-18-
amounts payable to the Administrative Agent pursuant to SECTION 6.2) in
whole or in part by the Administrative Agent for the ratable benefit of
the Secured Parties against, all or any part of the Secured Obligations
in such order as the Administrative Agent shall elect. Any surplus of
such cash or cash proceeds held by the Administrative Agent and
remaining after payment in full in cash of all the Secured Obligations
shall be paid over to the applicable Grantor or to whomsoever may be
lawfully entitled to receive such surplus.
SECTION 6.2. INDEMNITY AND EXPENSES.
(a) The Grantor agrees to indemnify the Administrative Agent from and
against any and all claims, losses and liabilities arising out of or
resulting from this Security Agreement (including enforcement of this
Security Agreement), except claims, losses or liabilities resulting from
the Administrative Agent's gross negligence or wilful misconduct.
(b) The Grantor will upon demand pay to the Administrative Agent the
amount of any and all reasonable expenses, including the reasonable fees
and disbursements of its counsel and of any experts and agents, which the
Administrative Agent may incur in connection with
(i) the administration of this Security Agreement,
(ii) the custody, preservation, use or operation of, or the sale
of, collection from, or other realization upon, any of the Collateral,
and
(iii) the exercise or enforcement of any of the rights of the
Administrative Agent or the Secured Parties hereunder, or (iv) the
failure by any Grantor to perform or observe any of the provisions
hereof.
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.1. LOAN DOCUMENT. This Security Agreement is a Loan Document
executed pursuant to the Credit Agreement and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions thereof including Article X thereof.
SECTION 7.2. AMENDMENTS; ETC. No amendment to or waiver of any provision
of this Security Agreement nor consent to any departure by any Grantor here
from, shall in any event be effective unless the same shall be in writing and
signed by the Administrative Agent (on behalf of the Lenders or the Required
Lenders, as the case may be), and then such waiver
-19-
or consent shall be effective only in the specific instance and for the
specific purpose for which given.
SECTION 7.3. NOTICES. All notices and other communications provided for
hereunder shall be in writing (including facsimile communication) and, if to any
Grantor, mailed or telecopied or delivered to it, addressed to it at the address
specified in the Credit Agreement, if to either Administrative Agent, mailed or
telecopied or delivered to it, addressed to it at the address of such
Administrative Agent specified in the Credit Agreement. All such notices and
other communications, when mailed and properly addressed with postage prepaid or
if properly addressed and sent by pre-paid courier service, shall be deemed
given when received; any such notice or communication, if transmitted by
telecopier, shall be deemed given when transmitted and electronically confirmed.
SECTION 7.4. CAPTIONS. Section captions used in this Security Agreement
are for convenience of reference only, and shall not affect the construction of
this Security Agreement.
SECTION 7.5. SEVERABILITY. Wherever possible each provision of this
Security Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Security Agreement
shall be prohibited by or invalid under such law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Security Agreement.
SECTION 7.6. COUNTERPARTS. This Security Agreement may be executed by the
parties hereto in several counterparts, each of which shall be deemed an
original and all of which shall constitute together but one and the same
agreement.
SECTION 7.7. GOVERNING LAW, ENTIRE AGREEMENT, ETC. THIS SECURITY
AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE
INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS
5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK),
EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST
HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE
GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.
THIS SECURITY AGREEMENT AND THE OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE
UNDERSTANDING AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER
HEREOF AND SUPERSEDE ANY PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT
THERETO.
-20-
IN WITNESS WHEREOF, the Grantor has caused this Security Agreement to
be duly executed and delivered by its officer thereunto duly authorized as of
the date first above written.
THE TITAN CORPORATION
By
-------------------------------------
Name:
Title:
THE BANK OF NOVA SCOTIA, as
Administrative Agent
By
-------------------------------------
Name:
Title:
SCHEDULE I
to Security Agreement
Item A. Location of Equipment
---------------------
Description Location
----------- --------
1.
2.
3.
Item B. Location of Inventory
---------------------
Description Location
----------- --------
1.
2.
3.
Item C. Location of Lock Boxes
----------------------
Contact
Bank Name And Address Account Number Person
--------------------- -------------- ------
1.
2.
3.
Item D. Place(s) of Business And Chief Executive Office
-----------------------------------------------
Item E. Trade Names
-----------
Item F. Merger or Other Corporate Reorganization
----------------------------------------
SCHEDULE II
to Security Agreement
Item A. Patents
-------
Issued Patents
--------------
*Country Patent No. Issue Date Inventor(s) Title
-------- ---------- ---------- -----------------
Pending Patent Applications
---------------------------
*Country Serial No. Filing Date Inventor(s) Title
-------- ---------- ----------- -----------------
Patent Applications in Preparation
----------------------------------
Expected
*Country Docket No. Filing Date Inventor(s) Title
-------- ---------- ----------- -----------------
Item B. Patent Licenses
---------------
*Country or Effective Expiration Subject
Territory Licensor Licensee Date Date Matter
----------- -------- -------- --------- ---------- -------
-------------------
(*) List Items Related to the United States First for Ease of
Recordation. List Items Related to Other Countries Next,
Grouped by Country and in Alphabetical Order by Country
Name.
SCHEDULE III
to Security Agreement
Item A. Trademarks
----------
Registered Trademarks
---------------------
(*)Country Trademark Registration No. Registration Date
---------- --------- ---------------- -----------------
Pending Trademark Applications
------------------------------
*Country Trademark Serial No. Filing Date
-------- --------- ---------- -----------
Trademark Applications in Preparation
-------------------------------------
Expected Products/
*Country Trademark Docket No. Filing Date Services
-------- --------- ---------- ----------- --------
Item B. Trademark Licenses
------------------
*Country or Effective Expiration
Territory Trademark Licensor Licensee Date Date
----------- --------- -------- -------- --------- ----------
-------------------
(*)* List Items Related to the United States First for Ease of
Recordation. List Items Related to Other Countries Next,
Grouped by Country and in Alphabetical Order by Country
Name.
SCHEDULE IV
to Security Agreement
Item A. Copyrights/Mask Works
---------------------
Registered Copyrights/Mask Works
--------------------------------
*Country Registration No. Registration Date Author(s) Title
-------- --------------- ----------------- --------- ------
Copyright/Mask Work Pending Registration Applications
-----------------------------------------------------
*Country Serial No. Filing Date Author(s) Title
-------- ---------- ----------- --------- -----
Copyright/Mask Work Registration Applications in Preparation
------------------------------------------------------------
Expected
*Country Docket No. Filing Date Author(s) Title
-------- ---------- ----------- --------- -----
Item B. Copyright/Mask Work Licenses
----------------------------
*Country or Effective Expiration Subject
Territory Licensor Licensee Date Date Matter
----------- -------- -------- --------- ---------- -------
-------------------
* List items related to the United States first for ease of
recordation. List items related to other countries next,
grouped by country and in alphabetical order by country
name.
SCHEDULE V
to Security Agreement
Trade Secret or Know-How Licenses
---------------------------------
*Country or Effective Expiration Subject
Territory Licensor Licensee Date Date Matter
----------- -------- -------- --------- ---------- -------
-------------------
* List items related to the United States first for ease of
recordation. List items related to other countries next,
grouped by country and in alphabetical order by country
name.
EXHIBIT A
to Security Agreement
PATENT SECURITY AGREEMENT
This PATENT SECURITY AGREEMENT (this "AGREEMENT"), dated as of July 29,
1998, is made between THE TITAN CORPORATION, a Delaware corporation (the
"GRANTOR"), and THE BANK OF NOVA SCOTIA ("SCOTIABANK"), in its capacity as
Administrative Agent (the "ADMINISTRATIVE AGENT") for each of the Secured
Parties;
W I T N E S S E T H :
WHEREAS, pursuant to a Credit Agreement, dated as of July 29, 1998 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the "CREDIT AGREEMENT"), among the Grantor, the various financial
institutions as are or may become parties thereto (the "LENDERS"), Scotiabank,
as Administrative Agent for the Lenders (the "ADMINISTRATIVE AGENT") and
Imperial Bank, as Documentation Agent, the Lenders and the Issuers have extended
Commitments to make Credit Extensions to the Grantor;
WHEREAS, in connection with the Credit Agreement, the Grantor has executed
and delivered a Borrower Security Agreement, dated as of July 29, 1998 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the "SECURITY AGREEMENT";
WHEREAS, as a condition precedent to the making of the Credit Extensions
(including the initial Credit Extension) under the Credit Agreement, the Grantor
is required to execute and deliver this Security Agreement; and
WHEREAS, the Grantor has duly authorized the execution, delivery and
performance of this Security Agreement;
NOW THEREFORE, for good and valuable consideration the receipt of which is
hereby acknowledged, and in order to induce the Lenders and the Issuers to make
Credit Extensions (including the initial Credit Extension) to the Grantor
pursuant to the Credit Agreement, the Grantor agrees, for the benefit of each
Secured Party, as follows.
SECTION 1. DEFINITIONS. Unless otherwise defined herein or the context
otherwise requires, terms used in this Agreement, including its preamble and
recitals, have the meanings provided (or incorporated by reference) in the
Security Agreement.
SECTION 2. GRANT OF SECURITY INTEREST. For good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, to secure all of the Secured Obligations, the Grantor does hereby
mortgage, pledge and hypothecate to the Administrative Agent, and grant to the
Administrative Agent a security interest in, for its benefit and the benefit of
each Secured Party, all of the following property (the "PATENT COLLATERAL"),
whether now owned or hereafter acquired or existing by it:
(a) all letters patent and applications for letters patent throughout
the world, including all patent applications in preparation for filing
anywhere in the world and including each patent and patent application
referred to in ITEM A of ATTACHMENT 1 attached hereto;
(b) all reissues, divisions, continuations, continuations-in-part,
extensions, renewals and reexaminations of any of the items described in
CLAUSE (a);
(c) all patent licenses, including each patent license referred to in
ITEM B of ATTACHMENT 1 attached hereto; and
(d) all proceeds of, and rights associated with, the foregoing
(including license royalties and proceeds of infringement suits), the right
to xxx third parties for past, present or future infringements of any
patent or patent application, including any patent or patent application
referred to in ITEM A of ATTACHMENT 1 attached hereto, and for breach or
enforcement of any patent license, including any patent license referred to
in ITEM B of ATTACHMENT 1 attached hereto, and all rights corresponding
thereto throughout the world.
SECTION 3. SECURITY AGREEMENT. This Agreement has been executed and
delivered by the Grantor for the purpose of registering the security interest of
the Administrative Agent in the Patent Collateral with the United States Patent
and Trademark Office and corresponding offices in other countries of the world.
The security interest granted hereby has been granted as a supplement to, and
not in limitation of, the security interest granted to the Administrative Agent
for its benefit and the benefit of each Secured Party under the Security
Agreement. The Security Agreement (and all rights and remedies of the
Administrative Agent and each Secured Party thereunder) shall remain in full
force and effect in accordance with its terms.
SECTION 4. RELEASE OF SECURITY INTEREST. Upon the Termination Date, the
Administrative Agent shall, at the Grantor's expense, execute and deliver to the
Grantor all instruments and other documents as may be necessary or proper to
release the lien on and security interest in the Patent Collateral which has
been granted hereunder.
SECTION 5. ACKNOWLEDGMENT. The Grantor does hereby
further acknowledge and affirm that the rights and remedies of the
Administrative Agent with respect to the security interest in the Patent
Collateral granted hereby are more fully set forth in the Security
-2-
Agreement, the terms and provisions of which (including the remedies provided
for therein) are incorporated by reference herein as if fully set forth
herein.
SECTION 6. LOAN DOCUMENT, ETC. This Agreement is a Loan Document executed
pursuant to the Credit Agreement and shall (unless otherwise expressly indicated
herein) be construed, administered and applied in accordance with the terms and
provisions of the Credit Agreement.
SECTION 7. COUNTERPARTS. This Agreement may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
and all of which shall constitute together but one and the same agreement.
-3-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the day and year first above written.
THE TITAN CORPORATION
By
------------------------------------
Name:
Title:
THE BANK OF NOVA SCOTIA, as
Administrative Agent
By
------------------------------------
Name:
Title:
-4-
ATTACHMENT 1
to Patent Security Agreement
Item A. Patents
-------
Issued Patents
--------------
(*)Country Patent No. Issue Date Inventor(s) Title
---------- ---------- ---------- -----------------
Pending Patent Applications
---------------------------
*Country Serial No. Filing Date Inventor(s) Title
-------- ---------- ----------- -----------------
Patent Applications in Preparation
----------------------------------
Expected
*Country Docket No. Filing Date Inventor(s) Title
-------- ---------- ----------- -----------------
Item B. Patent Licenses
---------------
*Country or Effective Expiration Subject
Territory Licensor Licensee Date Date Matter
----------- -------- -------- --------- ---------- -------
------------------
* List items related to the United States first for ease of
recordation. List items related to other countries next,
grouped by country and in alphabetical order by country
name.
EXHIBIT B
to Security Agreement
TRADEMARK SECURITY AGREEMENT
This TRADEMARK SECURITY AGREEMENT (this "AGREEMENT"), dated as of July 29,
1998, is made between THE TITAN CORPORATION, a Delaware corporation (the
"GRANTOR"), and THE BANK OF NOVA SCOTIA ("Scotiabank"), as Administrative Agent
(the "ADMINISTRATIVE AGENT") for each of the Secured Parties;
W I T N E S S E T H :
WHEREAS, pursuant to a Credit Agreement, dated as of July 29, 1998 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the "CREDIT AGREEMENT"), among the Grantor, the various financial
institutions as are or may become parties thereto (the "LENDERS"), Scotiabank,
as Administrative Agent for the Lenders (the "ADMINISTRATIVE AGENT") and
Imperial Bank, as Documentation Agent, the Lenders have extended Commitments to
make Credit Extensions to the Grantor;
WHEREAS, in connection with the Credit Agreement, the Grantor has executed
and delivered a Borrower Security Agreement, dated as of July 29, 1998 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the "SECURITY AGREEMENT";
WHEREAS, as a condition precedent to the making of the Credit Extensions
(including the initial Credit Extension) under the Credit Agreement, the Grantor
is required to execute and deliver this Security Agreement; and
WHEREAS, the Grantor has duly authorized the execution, delivery and
performance of this Security Agreement;
NOW THEREFORE, for good and valuable consideration the receipt of which is
hereby acknowledged, and in order to induce the Lenders and the Issuers to make
Credit Extensions (including the initial Credit Extension) to the Grantor
pursuant to the Credit Agreement, the Grantor agrees, for the benefit of each
Secured Party, as follows.
SECTION 1. DEFINITIONS. Unless otherwise defined herein or the context
otherwise requires, terms used in this Agreement, including its preamble and
recitals, have the meanings provided (or incorporated by reference) in the
Security Agreement.
SECTION 2. GRANT OF SECURITY INTEREST. For good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
to secure all of the Secured Obligations, the Grantor does hereby mortgage,
pledge and hypothecate to the Administrative Agent, and grant to the
Administrative Agent a security interest in, for its benefit and the benefit
of each Secured Party, all of the following property (the "TRADEMARK
COLLATERAL"), whether now owned or hereafter acquired or existing by it:
(a) all trademarks, trade names, corporate names, company names,
business names, fictitious business names, trade styles, service marks,
certification marks, collective marks, logos, other source of business
identifiers, prints and labels on which any of the foregoing have appeared
or appear, designs and general intangibles of a like nature (all of the
foregoing items in this CLAUSE (a) being collectively called a
"TRADEMARK"), now existing anywhere in the world or hereafter adopted or
acquired, whether currently in use or not, all registrations and recordings
thereof and all applications in connection therewith, whether pending or in
preparation for filing, including registrations, recordings and
applications in the United States Patent and Trademark Office or in any
office or agency of the United States of America or any State thereof or
any foreign country, including those referred to in ITEM A of ATTACHMENT 1
attached hereto;
(b) all Trademark licenses, including each Trademark license referred
to in ITEM B of ATTACHMENT 1 attached hereto;
(c) all reissues, extensions or renewals of any of the items
described in CLAUSES (a) and (b);
(d) all of the goodwill of the business connected with the use of,
and symbolized by the items described in, CLAUSES (a) and (b); and
(e) all proceeds of, and rights associated with, the foregoing,
including any claim by the Grantor against third parties for past, present
or future infringement or dilution of any Trademark, Trademark registration
or Trademark license, including any Trademark, Trademark registration or
Trademark license referred to in ITEM A and ITEM B of ATTACHMENT 1 attached
hereto, or for any injury to the goodwill associated with the use of any
such Trademark or for breach or enforcement of any Trademark license.
SECTION 3. SECURITY AGREEMENT. This Agreement has been executed and
delivered by the Grantor for the purpose of registering the security interest of
the Administrative Agent in the Trademark Collateral with the United States
Patent and Trademark Office and corresponding offices in other countries of the
world. The security interest granted hereby has been granted as a supplement
to, and not in limitation of, the security interest granted to the
Administrative Agent for its benefit and the benefit of each Secured Party under
the Security
-2-
Agreement. The Security Agreement (and all rights and remedies of the
Administrative Agent and each Secured Party thereunder) shall remain in full
force and effect in accordance with its terms.
SECTION 4. RELEASE OF SECURITY INTEREST. Upon the Termination Date, the
Administrative Agent shall, at the Grantor's expense, execute and deliver to the
Grantor all instruments and other documents as may be necessary or proper to
release the lien on and security interest in the Trademark Collateral which has
been granted hereunder.
SECTION 5. ACKNOWLEDGMENT. The Grantor does hereby further acknowledge
and affirm that the rights and remedies of the Administrative Agent with
respect to the security interest in the Trademark Collateral granted hereby
are more fully set forth in the Security Agreement, the terms and provisions
of which (including the remedies provided for therein) are incorporated by
reference herein as if fully set forth herein.
SECTION 6. LOAN DOCUMENT, ETC. This Agreement is a Loan Document executed
pursuant to the Credit Agreement and shall (unless otherwise expressly indicated
herein) be construed, administered and applied in accordance with the terms and
provisions of the Credit Agreement.
SECTION 7. COUNTERPARTS. This Agreement may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
and all of which shall constitute together but one and the same agreement.
-3-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the day and year first above written.
THE TITAN CORPORATION
By
------------------------------------
Name:
Title:
THE BANK OF NOVA SCOTIA, as
Administrative Agent
By
------------------------------------
Name:
Title:
-4-
ATTACHMENT 1
to Trademark
Security Agreement
Item A. Trademarks
----------
Registered Trademarks
---------------------
*Country Trademark Registration No. Registration Date
-------- --------- ---------------- -----------------
Pending Trademark Applications
------------------------------
*Country Trademark Serial No. Filing Date
-------- --------- ---------- -----------
Trademark Applications in Preparation
-------------------------------------
Expected Products/
*Country Trademark Docket No. Filing Date Services
-------- --------- ---------- ----------- --------
Item B. Trademark Licenses
------------------
*Country or Effective Expiration
Territory Trademark Licensor Licensee Date Date
----------- --------- -------- -------- --------- ----------
-------------------
* List items related to the United States first for ease of
recordation. List items related to other countries next,
grouped by country and in alphabetical order by country
name.
EXHIBIT C
to Security Agreement
COPYRIGHT SECURITY AGREEMENT
This COPYRIGHT SECURITY AGREEMENT (this "AGREEMENT"), dated as of July 29,
1998, is made between THE TITAN CORPORATION, a Delaware corporation (the
"GRANTOR"), and THE BANK OF NOVA SCOTIA ("SCOTIABANK"), in its capacity as
Administrative Agent (the "ADMINISTRATIVE AGENT") for each of the Secured
Parties;
W I T N E S S E T H :
WHEREAS, pursuant to a Credit Agreement, dated as of July 29, 1998 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the "CREDIT AGREEMENT"), among the Grantor, the various financial
institutions as are or may become parties thereto (the "LENDERS"), Scotiabank,
as Administrative Agent for the Lenders (in such capacity, the "ADMINISTRATIVE
AGENT") and Imperial Bank, as Documentation Agent. The Lenders have extended
Commitments to make Credit Extensions to the Grantor;
WHEREAS, in connection with the Credit Agreement, the Grantor has executed
and delivered a Borrower Security Agreement, dated as of July 29, 1998 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the "SECURITY AGREEMENT";
WHEREAS, as a condition precedent to the making of the Credit Extensions
(including the initial Credit Extension) under the Credit Agreement, the Grantor
is required to execute and deliver this Security Agreement; and
WHEREAS, the Grantor has duly authorized the execution, delivery and
performance of this Security Agreement;
NOW THEREFORE, for good and valuable consideration the receipt of which is
hereby acknowledged, and in order to induce the Lenders and the Issuers to make
Credit Extensions (including the initial Credit Extension) to the Grantor
pursuant to the Credit Agreement, the Grantor agrees, for the benefit of each
Secured Party, as follows.
SECTION 1. DEFINITIONS. Unless otherwise defined herein or the context
otherwise requires, terms used in this Agreement, including its preamble and
recitals, have the meanings provided (or incorporated by reference) in the
Security Agreement.
SECTION 2. GRANT OF SECURITY INTEREST. For good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
to secure all of the Secured Obligations, the Grantor does hereby mortgage,
pledge and hypothecate to the Administrative Agent, and grant to the
Administrative Agent a security interest in, for its benefit and the benefit
of each Secured Party, all of the following property (the "COPYRIGHT
COLLATERAL"), whether now owned or hereafter acquired or existing by it,
being all copyrights (including all copyrights for semi-conductor chip
product mask works) of the Grantor, whether statutory or common law,
registered or unregistered, now or hereafter in force throughout the world
including all of the Grantor's right, title and interest in and to all
copyrights registered in the United States Copyright Office or anywhere else
in the world and also including the copyrights referred to in ITEM A of
ATTACHMENT 1 attached hereto, and all applications for registration thereof,
whether pending or in preparation, all copyright licenses, including each
copyright license referred to in ITEM B of ATTACHMENT 1 attached hereto, the
right to xxx for past, present and future infringements of any thereof, all
rights corresponding thereto throughout the world, all extensions and
renewals of any thereof and all proceeds of the foregoing, including
licenses, royalties, income, payments, claims, damages and proceeds of suit.
SECTION 3. SECURITY AGREEMENT. This Agreement has been executed and
delivered by the Grantor for the purpose of registering the security interest of
the Administrative Agent in the Copyright Collateral with the United States
Copyright Office and corresponding offices in other countries of the world. The
security interest granted hereby has been granted as a supplement to, and not in
limitation of, the security interest granted to the Administrative Agent for its
benefit and the benefit of each Secured Party under the Security Agreement. The
Security Agreement (and all rights and remedies of the Administrative Agent and
each Secured Party thereunder) shall remain in full force and effect in
accordance with its terms.
SECTION 4. RELEASE OF SECURITY INTEREST. Upon the Termination Date, the
Administrative Agent shall, at the Grantor's expense, execute and deliver to the
Grantor all instruments and other documents as may be necessary or proper to
release the lien on and security interest in the Copyright Collateral which has
been granted hereunder.
SECTION 5. ACKNOWLEDGMENT. The Grantor does hereby
further acknowledge and affirm that the rights and remedies of the
Administrative Agent with respect to the security interest in the Copyright
Collateral granted hereby are more fully set forth in the Security Agreement,
the terms and provisions of which (including the remedies provided for therein)
are incorporated by reference herein as if fully set forth herein.
SECTION 6. LOAN DOCUMENT, ETC. This Agreement is a Loan Document executed
pursuant to the Credit Agreement and shall (unless otherwise expressly indicated
herein) be construed, administered and applied in accordance with the terms and
provisions of the Credit Agreement.
-2-
SECTION 7. COUNTERPARTS. This Agreement may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
and all of which shall constitute together but one and the same agreement.
-3-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the day and year first above written.
THE TITAN CORPORATION
By
------------------------------------
Name:
Title:
THE BANK OF NOVA SCOTIA, as
Administrative Agent
By
------------------------------------
Name:
Title:
-4-
ATTACHMENT 1
to Copyright
Security Agreement
Item A. Copyrights/Mask Works
---------------------
Registered Copyrights/Mask Works
--------------------------------
*Country Registration No. Registration Date Author(s) Title
-------- ---------------- ----------------- --------- -----
Copyright/Mask Work Pending Registration Applications
-----------------------------------------------------
*Country Serial No. Filing Date Author(s) Title
-------- ---------- ----------- --------- -----
Copyright/Mask Work Registration Applications in Preparation
------------------------------------------------------------
Expected
*Country Docket No. Filing Date Author(s) Title
-------- ---------- ----------- --------- -----
Item B. Copyright/Mask Work Licenses
----------------------------
*Country or Effective Expiration Subject
----------------
* List items related to the United States first for ease of
recordation. List items related to other countries next,
grouped by country and in alphabetical order by country
name.
Territory Licensor Licensee Date Date Matter
----------- -------- -------- --------- ---------- -------
EXHIBIT H-2
SUBSIDIARY SECURITY AGREEMENT
This SECURITY AGREEMENT (as amended, supplemented, amended and restated or
otherwise modified from time to time, the "SECURITY AGREEMENT"), dated as of
July 29, 1998, is made by each Subsidiary (as defined in the Credit Agreement
referred to below) of the Borrower (as defined below), now or after the date
hereof (including pursuant to SECTION 7.4) a signatory hereto (each,
individually, a "GRANTOR," and collectively, the "GRANTORS"), in favor of THE
BANK OF NOVA SCOTIA ("SCOTIABANK"), as administrative agent (together with any
successor(s) thereto in such capacity, the "ADMINISTRATIVE AGENT") for each of
the Secured Parties.
W I T N E S S E T H :
WHEREAS, pursuant to a Credit Agreement, dated as of July 29, 1998 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the "CREDIT AGREEMENT"), among THE TITAN CORPORATION, a Delaware
corporation (the "BORROWER"), the various financial institutions as are or may
become parties thereto (the "LENDERS"), Scotiabank, as administrative agent for
the Lenders (in such capacity, the "ADMINISTRATIVE AGENT") and Imperial Bank, as
Documentation Agent, the Lenders and the Issuers have extended Commitments to
make Credit Extensions to the Borrower;
WHEREAS, as a condition precedent to the making of the Credit Extensions
(including the initial Credit Extension) under the Credit Agreement, each
Grantor is required to execute and deliver this Security Agreement;
WHEREAS, each Grantor is a Subsidiary of the Borrower;
WHEREAS, each Grantor has duly authorized the execution, delivery and
performance of this Security Agreement; and
WHEREAS, it is in the best interests of each Grantor to execute this
Security Agreement inasmuch as such Grantor will derive substantial direct and
indirect benefits from the Credit Extensions made from time to time to the
Borrower by the Lenders and the Issuers pursuant to the Credit Agreement;
NOW THEREFORE, for good and valuable consideration the receipt of which is
hereby acknowledged, and in order to induce the Lenders and the Issuers to make
Credit Extensions
(including the initial Credit Extension) to the Borrower pursuant to the
Credit Agreement, each Grantor jointly and severally agrees, for the benefit
of each Secured Party, as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. CERTAIN TERMS. The following terms (whether or not
underscored) when used in this Security Agreement, including its preamble and
recitals, shall have the following meanings (such definitions to be equally
applicable to the singular and plural forms thereof):
"ADMINISTRATIVE AGENT" is defined in the PREAMBLE.
"BORROWER" is defined in the FIRST RECITAL.
"COLLATERAL" is defined in SECTION 2.1.
"COLLATERAL ACCOUNT" is defined in CLAUSE (B) of SECTION 4.1.2(B).
"COMPUTER HARDWARE AND SOFTWARE COLLATERAL" means:
(a) all computer and other electronic data processing hardware,
integrated computer systems, central processing units, memory units,
display terminals, printers, features, computer elements, card readers,
tape drives, hard and soft disk drives, cables, electrical supply hardware,
generators, power equalizers, accessories and all peripheral devices and
other related computer hardware;
(b) all software programs (including both source code, object code and
all related applications and data files), whether now owned, licensed or
leased or hereafter acquired by any Grantor, designed for use on the
computers and electronic data processing hardware described in CLAUSE (A)
above;
(c) all firmware associated therewith;
(d) all documentation (including flow charts, logic diagrams, manuals,
guides and specifications) with respect to such hardware, software and
firmware described in the preceding CLAUSES (A) through (C); and
(e) all rights with respect to all of the foregoing, including any and
all copyrights, licenses, options, warranties, service contracts, program
services, test rights, maintenance rights, support rights, improvement
rights, renewal rights and indemnifications and any substitutions,
replacements, additions or model conversions of any of the foregoing.
-2-
"COPYRIGHT COLLATERAL" means all copyrights (including all copyrights for
semi-conductor chip product mask works) of each Grantor, whether statutory or
common law, registered or unregistered, now or hereafter in force throughout the
world including all of such Grantor's right, title and interest in and to all
copyrights registered in the United States Copyright Office or anywhere else in
the world and also including the copyrights referred to in ITEM A of SCHEDULE IV
attached hereto, and all applications for registration thereof, whether pending
or in preparation, all copyright licenses, including each copyright license
referred to in ITEM B of SCHEDULE IV attached hereto, the right to xxx for past,
present and future infringements of any thereof, all rights corresponding
thereto throughout the world, all extensions and renewals of any thereof and all
proceeds of the foregoing, including licenses, royalties, income, payments,
claims, damages and proceeds of suit.
"CREDIT AGREEMENT" is defined in the FIRST RECITAL.
"EQUIPMENT" is defined in CLAUSE (A) of SECTION 2.1.
"GRANTOR" and "GRANTORS" are defined in the PREAMBLE.
"INTELLECTUAL PROPERTY COLLATERAL" means, collectively, the Computer
Hardware and Software Collateral, the Copyright Collateral, the Patent
Collateral, the Trademark Collateral and the Trade Secrets Collateral.
"INVENTORY" is defined in CLAUSE (B) of SECTION 2.1
"LENDERS" is defined in the FIRST RECITAL.
"PATENT COLLATERAL" means:
(a) all letters patent and applications for letters patent throughout
the world, including all patent applications in preparation for filing
anywhere in the world and including each patent and patent application
referred to in ITEM A of SCHEDULE II attached hereto;
(b) all reissues, divisions, continuations, continuations-in-part,
extensions, renewals and reexaminations of any of the items described in
CLAUSE (A);
(c) all patent licenses, including each patent license referred to in
ITEM B of SCHEDULE II attached hereto; and
(d) all proceeds of, and rights associated with, the foregoing
(including license royalties and proceeds of infringement suits), the right
to xxx third parties for past, present or future infringements of any
patent or patent application, including any patent or patent
-3-
application referred to in ITEM A of SCHEDULE II attached hereto, and
for breach or enforcement of any patent license, including any patent
license referred to in ITEM B of SCHEDULE II attached hereto, and all
rights corresponding thereto throughout the world.
"RECEIVABLES" is defined in CLAUSE (C) of SECTION 2.1.
"RELATED CONTRACTS" is defined in CLAUSE (C) of SECTION 2.1.
"SECURED OBLIGATIONS" is defined in SECTION 2.2.
"SECURITY AGREEMENT" is defined in the PREAMBLE.
"TERMINATION DATE" means the date on which all Obligations have
indefeasibly been paid in full, all Commitments have been fully terminated and
the Letter of Credit has been canceled or otherwise terminated.
"TRADEMARK COLLATERAL" means:
(a) all trademarks, trade names, corporate names, company names,
business names, fictitious business names, trade styles, service marks,
certification marks, collective marks, logos, other source of business
identifiers, prints and labels on which any of the foregoing have appeared
or appear, designs and general intangibles of a like nature (all of the
foregoing items in this CLAUSE (A) being collectively called a
"TRADEMARK"), now existing anywhere in the world or hereafter adopted or
acquired, whether currently in use or not, all registrations and recordings
thereof and all applications in connection therewith, whether pending or in
preparation for filing, including registrations, recordings and
applications in the United States Patent and Trademark Office or in any
office or agency of the United States of America or any State thereof or
any foreign country, including those referred to in ITEM A of SCHEDULE III
attached hereto;
(b) all Trademark licenses, including each Trademark license referred
to in ITEM B of SCHEDULE III attached hereto;
(c) all reissues, extensions or renewals of any of the items
described in CLAUSES (A) and (B);
(d) all of the goodwill of the business connected with the use of,
and symbolized by the items described in, CLAUSES (A) and (B); and
(e) all proceeds of, and rights associated with, the foregoing,
including any claim by any Grantor against third parties for past, present
or future infringement or dilution of any Trademark, Trademark registration
or Trademark license, including any Trademark,
-4-
Trademark registration or Trademark license referred to in ITEM A and
ITEM B of SCHEDULE III attached hereto, or for any injury to the
goodwill associated with the use of any such Trademark or for breach
or enforcement of any Trademark license.
"TRADE SECRETS COLLATERAL" means all common law and statutory trade secrets
and all other confidential or proprietary or useful information and all know-how
obtained by or used in or contemplated at any time for use in the business of
any Grantor (all of the foregoing being collectively called a "TRADE SECRET"),
whether or not such Trade Secret has been reduced to a writing or other tangible
form, including all documents and things embodying, incorporating or referring
in any way to such Trade Secret, all Trade Secret licenses, including each Trade
Secret license referred to in SCHEDULE V attached hereto, and including the
right to xxx for and to enjoin and to collect damages for the actual or
threatened misappropriation of any Trade Secret and for the breach or
enforcement of any such Trade Secret license.
"U.C.C." means the Uniform Commercial Code, as in effect from time to time
in the State of New York.
SECTION 1.2. CREDIT AGREEMENT DEFINITIONS. Unless otherwise defined
herein or the context otherwise requires, terms used in this Security Agreement,
including its preamble and recitals, have the meanings provided in the Credit
Agreement.
SECTION 1.3. U.C.C. DEFINITIONS. Unless otherwise defined herein or in
the Credit Agreement or the context otherwise requires, terms for which meanings
are provided in the U.C.C. are used in this Security Agreement, including its
preamble and recitals, with such meanings.
ARTICLE II
SECURITY INTEREST
SECTION 2.1. GRANT OF SECURITY. Each Grantor hereby assigns and pledges
to the Administrative Agent for its benefit and the ratable benefit of each of
the Secured Parties, and hereby grants to the Administrative Agent for its
benefit and the ratable benefit of each of the Secured Parties, a security
interest in all of the following, whether now or hereafter existing or acquired
by such Grantor (the "COLLATERAL"):
(a) all equipment in all of its forms of such Grantor, wherever
located, including all parts thereof and all accessions, additions,
attachments, improvements, substitutions and replacements thereto and
therefor and all accessories related thereto (any and all of the foregoing
being the "EQUIPMENT");
(b) all inventory in all of its forms of such Grantor, wherever
located, including
-5-
(i) all raw materials and work in process therefor, finished
goods thereof, and materials used or consumed in the manufacture or
production thereof,
(ii) all goods in which such Grantor has an interest in mass or a
joint or other interest or right of any kind (including goods in which
such Grantor has an interest or right as consignee), and
(iii) all goods which are returned to or repossessed by such
Grantor,
and all accessions thereto, products thereof and documents therefor (any
and all such inventory, materials, goods, accessions, products and
documents being the "INVENTORY");
(c) all accounts, contracts, contract rights, chattel paper,
documents, instruments, and general intangibles (including tax refunds) of
such Grantor, whether or not arising out of or in connection with the sale
or lease of goods or the rendering of services, and all rights of such
Grantor now or hereafter existing in and to all security agreements,
guaranties, leases and other contracts securing or otherwise relating to
any such accounts, contracts, contract rights, chattel paper, documents,
instruments, and general intangibles, excluding any rights in the foregoing
items of Collateral as to which the grant of a security interest would
violate a valid and enforceable restriction on such grant, unless and until
any required consents have been obtained (any and all such accounts,
contracts, contract rights, chattel paper, documents, instruments, and
general intangibles being the "RECEIVABLES", and any and all such security
agreements, guaranties, leases and other contracts being the "RELATED
CONTRACTS");
(d) all Intellectual Property Collateral of such Grantor;
(e) all books, records, writings, data bases, information and other
property relating to, used or useful in connection with, evidencing,
embodying, incorporating or referring to, any of the foregoing in this
SECTION 2.1;
(f) all of such Grantor's other property and rights of every kind and
description and interests therein; and
(g) all products, offspring, rents, issues, profits, returns, income
and proceeds of and from any and all of the foregoing Collateral (including
proceeds which constitute property of the types described in CLAUSES (A),
(B), (C), (D), (E) and (F), and, to the extent not otherwise included, all
payments under insurance which such Grantor is entitled to receive (whether
or not the Administrative Agent is the loss payee thereof), or any
indemnity, warranty or guaranty, payable by reason of loss or damage to or
otherwise with respect to any of the foregoing Collateral).
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SECTION 2.2. SECURITY FOR OBLIGATIONS. This Security Agreement secures
the payment of (i) all Obligations of the Borrower now or hereafter existing
under the Credit Agreement and each other Loan Document to which the Borrower is
or may become a party, whether for principal, interest, costs, fees, expenses or
otherwise, and (ii) all obligations of each Grantor and each other Obligor now
or hereafter existing under this Security Agreement and each other Loan Document
to which such Grantor or such other Obligor is or may become a party, with all
such obligations of the Borrower and such Grantor and such other Obligor being
collectively referred to as the "SECURED OBLIGATIONS".
SECTION 2.3. CONTINUING SECURITY INTEREST; TRANSFER OF NOTES. This
Security Agreement shall create a continuing security interest in the Collateral
and shall
(a) remain in full force and effect until the Termination Date;
(b) be binding upon each Grantor and its successors, transferees and
assigns; and
(c) inure, together with the rights and remedies of the Administrative
Agent hereunder, to the benefit of the Administrative Agent and each other
Secured Party.
Without limiting the generality of the foregoing CLAUSE (C), any Lender may
assign or otherwise transfer (in whole or in part) any Note or Credit Extension
held by it to any other Person or entity, and such other Person or entity shall
thereupon become vested with all the rights and benefits in respect thereof
granted to such Lender under any Loan Document (including this Security
Agreement) or otherwise, subject, however, to any contrary provisions in such
assignment or transfer, and to the provisions of Section 10.11 and Article IX of
the Credit Agreement. Upon (i) the sale, transfer or other disposition of
Collateral in accordance with the Credit Agreement or (ii) the occurrence of the
Termination Date, the security interests granted herein shall automatically
terminate with respect to (x) such Collateral (in the case of clause (i)) or (y)
all Collateral (in the case of clause (ii)), and at such time the Administrative
Agent will, at each Grantor's sole expense, execute and deliver to the
applicable Grantor (without any representations, warranties or recourse to
either Administrative Agent), such documents as such Grantor shall reasonably
request to evidence such termination.
SECTION 2.4. GRANTOR REMAINS LIABLE. Anything herein to the contrary
notwithstanding
(a) each Grantor shall remain liable under the contracts and
agreements included in the Collateral to the extent set forth therein, and
shall perform all of its duties and obligations under such contracts and
agreements to the same extent as if this Security Agreement had not been
executed;
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(b) the exercise by the Administrative Agent of any of its rights
hereunder shall not release any Grantor from any of its duties or
obligations under any such contracts or agreements included in the
Collateral; and
(c) neither Administrative Agent nor any other Secured Party shall
have any obligation or liability under any such contracts or agreements
included in the Collateral by reason of this Security Agreement, nor shall
the Administrative Agent or any other Secured Party be obligated to perform
any of the obligations or duties of any Grantor thereunder or to take any
action to collect or enforce any claim for payment assigned hereunder.
SECTION 2.5. SECURITY INTEREST ABSOLUTE. All rights of the Administrative
Agent and the security interests granted to the Administrative Agent hereunder,
and all obligations of each Grantor hereunder, shall be absolute and
unconditional, irrespective of
(a) any lack of validity or enforceability of the Credit Agreement or any
other Loan Document;
(b) the failure of any Secured Party
(i) to assert any claim or demand or to enforce any right or
remedy against any Obligor or any other Person under the provisions of the
Credit Agreement, any other Loan Document or otherwise, or
(ii) to exercise any right or remedy against any other guarantor
of, or collateral securing, any Secured Obligations;
(c) any change in the time, manner or place of payment of, or in any other
term of, all or any of the Secured Obligations or any other extension,
compromise or renewal of any Secured Obligation;
(d) any reduction, limitation, impairment or termination of any Secured
Obligations for any reason, including any claim of waiver, release, surrender,
alteration or compromise, and shall not be subject to (and each Grantor hereby
waives any right to or claim of) any defense or setoff, counterclaim, recoupment
or termination whatsoever by reason of the invalidity, illegality, irregularity,
compromise, unenforceability of, or any other event or occurrence affecting, any
Secured Obligations or otherwise;
(e) any amendment to, rescission, waiver, or other modification of, or any
consent to departure from, any of the terms of the Credit Agreement or any other
Loan Document;
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(f) any addition, exchange, release, surrender or non-perfection of any
collateral (including the Collateral), or any amendment to or waiver or release
of or addition to or consent to departure from any guaranty, for any of the
Secured Obligations; or
(g) any other circumstances which might otherwise constitute a defense
available to, or a legal or equitable discharge of, any Obligor, any surety or
any guarantor.
SECTION 2.6. POSTPONEMENT OF SUBROGATION, ETC. Each Grantor agrees that
it will not exercise any rights which it may acquire by way of rights of
subrogation under this Security Agreement, by any payment made hereunder,
whether by way of subrogation, reimbursement or otherwise, until following the
Termination Date. Any amount paid to any Grantor on account of any such
subrogation rights prior to the Termination Date shall be held in trust for the
benefit of the Secured Parties and shall immediately be paid to the
Administrative Agent for the benefit of the Secured Parties and credited and
applied against the Obligations, whether matured or unmatured, in accordance
with the terms of the Credit Agreement; PROVIDED, HOWEVER, that if
(a) any Grantor has made payment to the Secured Parties of all or any
part of the Obligations; and
(b) the Termination Date has occurred;
then each Secured Party agrees that, at such Grantor's request, the
Administrative Agent, on behalf of the Secured Parties, will execute and deliver
to such Grantor appropriate documents (without recourse and without
representation or warranty) necessary to evidence the transfer by subrogation to
such Grantor of an interest in the Obligations resulting from such payment by
such Grantor. In furtherance of the foregoing, at all times prior to the
Termination Date, each Grantor shall refrain from taking any action or
commencing any proceeding against any Borrower or any other Obligor (or its
successors or assigns, whether in connection with a bankruptcy proceeding or
otherwise) to recover any amounts in the respect of payments made under this
Security Agreement to any Secured Party. Notwithstanding the foregoing, to the
extent necessary to toll the statute of limitations, such Grantor may take such
action required to preserve any rights it has by way of rights of subrogation as
consented to by the Administrative Agent in its reasonable discretion.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. REPRESENTATIONS AND WARRANTIES. Each Grantor represents and
warrants to each Secured Party (a) as to all matters contained in Article VI of
the Credit Agreement insofar as the representations and warranties contained
therein are applicable to such Grantor and its properties, each such
representation and warranty set forth in such Article (insofar as applicable as
aforesaid) and all other terms of the Credit Agreement to which reference is
made
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therein, together with all related definitions and ancillary provisions,
being hereby incorporated into this Security Agreement by reference as though
specifically set forth in this Section and (b) insofar as the representations
and warranties contained herein are applicable to such Grantor and its
properties, as set forth in this Article.
SECTION 3.1.1. LOCATION OF COLLATERAL, ETC. All of the Equipment,
Inventory of such Grantor is located at the places specified in ITEM A, ITEM B
and ITEM C, respectively, of SCHEDULE I hereto. None of the Equipment and
Inventory has, within the four months preceding the date of this Security
Agreement, been located at any place other than the places specified in ITEM A
and ITEM B, respectively, of SCHEDULE I hereto except as set forth in a footnote
thereto. The place(s) of business and chief executive office of such Grantor
and the office(s) where such Grantor keeps its records concerning the
Receivables, and all originals of all chattel paper which evidence Receivables,
are located at the address set forth in ITEM D of SCHEDULE I hereto. Such
Grantor has no trade names other than those set forth in ITEM E of SCHEDULE I
hereto. During the four months preceding the date hereof, such Grantor has not
been known by any legal name different from the one set forth on the signature
page hereto, nor has such Grantor been the subject of any merger or other
corporate reorganization, except as set forth in ITEM F of SCHEDULE I hereto.
If the Collateral includes any Inventory located in the State of California,
such Grantor is not a "retail merchant" within the meaning of Section 9102 of
the Uniform Commercial Code - Secured Transactions of the State of California.
All Receivables evidenced by a promissory note or other instrument, negotiable
document or chattel paper have been duly endorsed and accompanied by duly
executed instruments of transfer or assignment, all in form and substance
satisfactory to the Administrative Agent and delivered and pledged to the
Administrative Agent pursuant to SECTION 4.1.7
SECTION 3.1.2. OWNERSHIP, NO LIENS, ETC. Such Grantor owns its Collateral
free and clear of any Lien, security interest, charge or encumbrance except for
the security interest created by this Security Agreement and except as permitted
by the Credit Agreement. No effective financing statement or other instrument
similar in effect covering all or any part of the Collateral is on file in any
recording office, except such as may have been filed in favor of the
Administrative Agent relating to this Security Agreement or as have been filed
in connection with Liens permitted pursuant to Section 7.2.3 of the Credit
Agreement.
SECTION 3.1.3. POSSESSION AND CONTROL. Such Grantor has exclusive
possession and control of its Equipment and Inventory.
SECTION 3.1.4. NEGOTIABLE DOCUMENTS, INSTRUMENTS AND CHATTEL PAPER. Such
Grantor has, contemporaneously herewith, delivered to the Administrative Agent
possession of all originals of all negotiable documents, instruments and chattel
paper currently owned or held by such Grantor (duly endorsed in blank, if
requested by the Administrative Agent).
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SECTION 3.1.5. INTELLECTUAL PROPERTY COLLATERAL. With respect to any
Intellectual Property Collateral the loss, impairment or infringement of which
might have a Material Adverse Effect:
(a) such Intellectual Property Collateral is subsisting and has not
been adjudged invalid or unenforceable, in whole or in part;
(b) such Intellectual Property Collateral is valid and enforceable;
(c) such Grantor has made all necessary filings and recordations to
protect its interest in such Intellectual Property Collateral, including
recordations of all of its interests in the Patent Collateral and Trademark
Collateral in the United States Patent and Trademark Office and in
corresponding offices throughout the world and its claims to the Copyright
Collateral in the United States Copyright Office and in corresponding
offices throughout the world;
(d) other than as previously disclosed to the Administrative Agent,
such Grantor is the exclusive owner of the entire and unencumbered right,
title and interest in and to such Intellectual Property Collateral and no
claim has been made that the use of such Intellectual Property Collateral
does or may violate the asserted rights of any third party; and
(e) such Grantor has performed and will continue to perform all acts
and has paid and will continue to pay all required fees and taxes to
maintain each and every item of Intellectual Property Collateral in full
force and effect throughout the world, as applicable.
Such Grantor owns directly or is entitled to use by license or otherwise, all
patents, Trademarks, Trade Secrets, copyrights, mask works, licenses,
technology, know-how, processes and rights with respect to any of the foregoing
used in, necessary for or of importance to the conduct of such Grantor's
business.
SECTION 3.1.6. VALIDITY, ETC. This Security Agreement creates a valid
security interest in the Collateral, securing the payment of the Secured
Obligations, and all filings and other actions necessary or desirable to perfect
and protect such security interest have been duly taken.
SECTION 3.1.7. AUTHORIZATION, APPROVAL, ETC. Except as have been obtained
or made and are in full force and effect, no authorization, approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required either
(a) for the grant by such Grantor of the security interest granted
hereby or for the execution, delivery and performance of this Security
Agreement by such Grantor; or
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(b) for the perfection of or the exercise by the Administrative Agent
of its rights and remedies hereunder.
SECTION 3.1.8. COMPLIANCE WITH LAWS. Such Grantor is in compliance with
the requirements of all applicable laws (including the provisions of the Fair
Labor Standards Act), rules, regulations and orders of every governmental
authority, the non-compliance with which might have a Material Adverse Effect or
which might materially adversely affect the value of the Collateral or the worth
of the Collateral as collateral security.
ARTICLE IV
COVENANTS
SECTION 4.1. CERTAIN COVENANTS. Each Grantor covenants and agrees that,
so long as any portion of the Secured Obligations shall remain unpaid, any
Letters of Credit shall be outstanding or any Lender or Issuer shall have any
outstanding Commitment, such Grantor will, unless the Required Lenders shall
otherwise consent in writing, perform, comply with and be bound by (a) all of
the agreements, covenants and obligations contained in Article VII of the Credit
Agreement which are applicable to such Grantor or its properties, each such
agreement, covenant and obligation contained in such Article and all other terms
of the Credit Agreement to which reference is made herein, together with all
related definitions and ancillary provisions, being hereby incorporated into
this Security Agreement by reference as though specifically set forth in this
Section and (b) the obligations set forth in this Article.
SECTION 4.1.1. AS TO EQUIPMENT AND INVENTORY. Such Grantor hereby agrees
that it shall
(a) keep all the Equipment and Inventory (other than Inventory sold in
the ordinary course of business, or except as otherwise provided in the
Credit Agreement or any of the other Loan Documents) at the places therefor
specified in SECTION 3.1.1 or, upon 30 days' prior written notice to the
Administrative Agent, at such other places in a jurisdiction where all
representations and warranties set forth in ARTICLE III shall be true and
correct, and all action required pursuant to the FIRST SENTENCE of SECTION
4.1.7 shall have been taken with respect to the Equipment and Inventory
(collectively, "SPECIFIED LOCATIONS"); PROVIDED, HOWEVER, that such Grantor
may move and/or maintain certain items of Equipment at locations other than
at Specified Locations, so long as the value of Collateral of this type of
such Grantor and each other Grantor and similar Collateral (as defined in
the Borrower Security Agreement) of the Borrower shall not exceed
$2,000,000 at any time;
(b) cause the Equipment to be maintained and preserved in the same
condition, repair and working order as when new, ordinary wear and tear
excepted, and in accordance with
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any manufacturer's manual or good business practice; and forthwith, or
in the case of any loss or damage to any of the Equipment, as quickly as
practicable after the occurrence thereof, make or cause to be made all
repairs, replacements, and other improvements in connection therewith
which are necessary or desirable to such end; and promptly furnish to
the Administrative Agent a statement respecting any material loss or
damage to any of the Equipment; and
(c) pay promptly when due all property and other taxes, assessments
and governmental charges or levies imposed upon, and all claims (including
claims for labor, materials and supplies) against, the Equipment and
Inventory, except to the extent the validity thereof is being contested in
good faith by appropriate proceedings and for which adequate reserves in
accordance with GAAP have been set aside.
SECTION 4.1.2. AS TO RECEIVABLES AND RELATED CONTRACTS.
(a) Such Grantor shall keep its place(s) of business and chief
executive office and the office(s) where it keeps its records concerning
the Receivables, and all originals of all chattel paper which evidences
Receivables, located at the address(es) set forth in ITEM D of SCHEDULE I
hereto, or, upon 30 days' prior written notice to the Administrative Agent,
at such other locations in a jurisdiction where all actions required by the
first sentence of SECTION 4.1.7 shall have been taken with respect to the
Receivables; not change its name except upon 30 days' prior written notice
to the Administrative Agent; hold and preserve such records and chattel
paper; and permit representatives of the Administrative Agent at any time
during normal business hours to inspect (upon reasonable prior written
notice so long as no Event of Default shall have occurred and be
continuing) and make abstracts from such records and chattel paper. In
addition, the Grantor shall give the Administrative Agent a supplement to
SCHEDULE I hereto on each date a Compliance Certificate is required to be
delivered to the Administrative Agent under the Credit Agreement, which
shall set forth any changes to the information set forth in SECTION 3.1.1.
(b) Upon written notice by the Administrative Agent to such Grantor
pursuant to this clause, all proceeds of Collateral received by such
Grantor shall be delivered in kind to the Administrative Agent for deposit
to a deposit account (the "COLLATERAL ACCOUNT") of such Grantor maintained
with the Administrative Agent, and such Grantor shall not commingle any
such proceeds, and shall hold separate and apart from all other property,
all such proceeds in express trust for the benefit of the Administrative
Agent until delivery thereof is made to the Administrative Agent. The
Administrative Agent will not give the notice referred to in the preceding
sentence unless there shall have occurred and be continuing a Default of
the nature set forth in Section 8.1.9 of the Credit Agreement or an Event
of Default.
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(c) The Administrative Agent shall have the right to apply any amount
in the Collateral Account to the payment of any Secured Obligations which
are due and payable or payable upon demand, or to the payment of any
Secured Obligations at any time that an Event of Default shall exist.
(d)Such Grantor shall not cause the aggregate value of Receivables or
Related Contracts or rights thereunder and the value of similar Receivables
and Related Contracts (as defined in the Borrower Security Agreement) as to
which a Lien in favor of the Administrative Agent cannot be granted
hereunder pursuant to CLAUSE (C) of SECTION 2.1 (including Liens granted by
other Grantors), or pursuant to the Borrower Security Agreement to exceed
$2,000,000 at any time.
SECTION 4.1.3. AS TO COLLATERAL.
(a) Until the occurrence and continuance of a Default of the nature
set forth in Section 8.1.9 of the Credit Agreement or an Event of Default,
and such time as the Administrative Agent shall notify such Grantor of the
revocation of such power and authority such Grantor (i) may in the ordinary
course of its business (except as otherwise permitted under the Credit
Agreement), at its own expense, sell, lease or furnish under the contracts
of service any of the Inventory normally held by such Grantor for such
purpose, and use and consume, in the ordinary course of its business
(except as otherwise permitted under the Credit Agreement), any raw
materials, work in process or materials normally held by such Grantor for
such purpose,(ii) will, at its own expense, endeavor to collect, as and
when due, all amounts due with respect to any of the Collateral, including
the taking of such action with respect to such collection as the
Administrative Agent may reasonably request following the occurrence of a
Default of the nature set forth in Section 8.1.9 of the Credit Agreement or
an Event of Default or, in the absence of such request, as such Grantor may
deem advisable, and (iii) may grant, in the ordinary course of business
(except as otherwise permitted under the Credit Agreement), to any party
obligated on any of the Collateral, any rebate, refund or allowance to
which such party may be lawfully entitled, and may accept, in connection
therewith, the return of goods, the sale or lease of which shall have given
rise to such Collateral. The Administrative Agent, however, may, at any
time following a Default of the nature set forth in Section 8.1.9 of the
Credit Agreement or an Event of Default, whether before or after any
revocation of such power and authority or the maturity of any of the
Secured Obligations, notify any parties obligated on any of the Collateral
to make payment to the Administrative Agent of any amounts due or to become
due thereunder and enforce collection of any of the Collateral by suit or
otherwise and surrender, release, or exchange all or any part thereof, or
compromise or extend or renew for any period (whether or not longer than
the original period) any indebtedness thereunder or evidenced thereby.
Upon request of the Administrative Agent following a Default of the nature
set forth in Section 8.1.9 of the Credit Agreement or an Event of Default,
such Grantor will, at its own expense, notify
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any parties obligated on any of the Collateral to make payment to the
Administrative Agent of any amounts due or to become due thereunder.
(b) The Administrative Agent is authorized to endorse, in the name of
such Grantor, any item, howsoever received by the Administrative Agent,
representing any payment on or other proceeds of any of the Collateral.
SECTION 4.1.4. AS TO INTELLECTUAL PROPERTY COLLATERAL. Each Grantor
covenants and agrees to comply with the following provisions as such provisions
relate to any Intellectual Property Collateral of such Grantor that:
(a)Such Grantor shall not, unless such Grantor shall either (i)
reasonably and in good faith determine (and notice of such determination
shall have been delivered to the Administrative Agent) that any of the
Patent Collateral is of negligible economic value to such Grantor, or (ii)
have a valid business purpose to do otherwise, do any act, or omit to do
any act, whereby any of the Patent Collateral may lapse or become abandoned
or dedicated to the public or unenforceable.
(b)Such Grantor shall not, and such Grantor shall not permit any of
its licensees to, unless such Grantor shall either (i) reasonably and in
good faith determine (and notice of such determination shall have been
delivered to the Administrative Agent) that any of the Trademark Collateral
is of negligible economic value to such Grantor, or (ii) have a valid
business purpose to do otherwise,
(i) fail to continue to use any of the Trademark Collateral in
order to maintain all of the Trademark Collateral in full force free
from any claim of abandonment for non-use,
(ii) fail to maintain as in the past the quality of products and
services offered under all of the Trademark Collateral,
(iii) fail to employ all of the Trademark Collateral registered
with any Federal or state or foreign authority with an appropriate
notice of such registration,
(iv) adopt or use any other Trademark which is confusingly
similar or a colorable imitation of any of the Trademark Collateral,
(v) use any of the Trademark Collateral registered with any
Federal or state or foreign authority except for the uses for which
registration or application for registration of all of the Trademark
Collateral has been made, and
(vi) do or permit any act or knowingly omit to do any act whereby
any of the Trademark Collateral may lapse or become invalid or
unenforceable.
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(c)Such Grantor shall not, unless such Grantor shall either
(i) reasonably and in good faith determine (and notice of such
determination shall have been delivered to the Administrative Agent)
that any of the Copyright Collateral or any of the Trade Secrets
Collateral is of negligible economic value to such Grantor, or
(ii) have a valid business purpose to do otherwise, do or permit
any act or knowingly omit to do any act whereby any of the Copyright
Collateral or any of the Trade Secrets Collateral may lapse or become
invalid or unenforceable or placed in the public domain except upon
expiration of the end of an unrenewable term of a registration
thereof.
(d) Such Grantor shall notify the Administrative Agent immediately if
it knows, or has reason to know, that any application or registration
relating to any material item of the Intellectual Property Collateral may
become abandoned or dedicated to the public or placed in the public domain
or invalid or unenforceable, or of any adverse determination or development
(including the institution of, or any such determination or development in,
any proceeding in the United States Patent and Trademark Office, the United
States Copyright Office or any foreign counterpart thereof or any court)
regarding such Grantor's ownership of any of the Intellectual Property
Collateral, its right to register the same or to keep and maintain and
enforce the same.
(e)In no event shall such Grantor or any of its agents, employees,
designees or licensees file an application for the registration of any
Intellectual Property Collateral with the United States Patent and
Trademark Office, the United States Copyright Office or any similar office
or agency in any other country or any political subdivision thereof, unless
it promptly upon such filing informs the Administrative Agent, and upon
request of the Administrative Agent, executes and delivers any and all
agreements, instruments, documents and papers as the Administrative Agent
may reasonably request to evidence the Administrative Agent's security
interest in such Intellectual Property Collateral and the goodwill and
general intangibles of such Grantor relating thereto or represented
thereby.
(f)Such Grantor shall take all necessary steps, including in any
proceeding before the United States Patent and Trademark Office, the
United States Copyright Office or any similar office or agency in any
other country or any political subdivision thereof, to maintain and
pursue any application (and to obtain the relevant registration) filed
with respect to, and to maintain any registration of, the Intellectual
Property Collateral, including the filing of applications for renewal,
affidavits of use, affidavits of incontestability and opposition,
interference and cancellation proceedings and the
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payment of fees and taxes (except to the extent that dedication,
abandonment or invalidation is permitted under the foregoing CLAUSES
(A), (B) and (C)).
(g)Such Grantor shall, contemporaneously herewith, execute and deliver
to the Administrative Agent a Patent Security Agreement, a Trademark
Security Agreement and a Copyright Security Agreement in the forms of
EXHIBIT A, EXHIBIT B and EXHIBIT C hereto, respectively, and shall execute
and deliver to the Administrative Agent any other document required to
acknowledge or register or perfect the Administrative Agent's interest in
any part of the Intellectual Property Collateral.
SECTION 4.1.5. INSURANCE. Such Grantor will maintain or cause to be
maintained with responsible insurance companies insurance with respect to its
business and properties (including the Equipment and Inventory) against such
casualties and contingencies and of such types and in such amounts as is
required pursuant to the Credit Agreement and will, upon the request of the
Administrative Agent, furnish a certificate of a reputable insurance broker
setting forth the nature and extent of all insurance maintained by such Grantor
in accordance with this Section. Without limiting the foregoing, such Grantor
further agrees as follows:
(a) Each policy for property insurance shall show the Administrative
Agent as loss payee.
(b) Each policy for liability insurance shall show the Administrative
Agent as an additional insured.
(c) Each insurance policy shall provide that at least 30 days' prior
written notice of cancellation or of lapse shall be given to the
Administrative Agent by the insured (or at least 10 days' prior written
notice of cancellation shall be given with respect to failure to pay the
premium).
(d) Such Grantor shall, if so requested by the Administrative Agent,
deliver to the Administrative Agent a copy of each insurance policy.
SECTION 4.1.6. TRANSFERS AND OTHER LIENS. Such Grantor shall not:
(a) sell, assign (by operation of law or otherwise) or otherwise
dispose of any of the Collateral, except as permitted by the Credit
Agreement; or
(b) create or suffer to exist any Lien or other charge or encumbrance
upon or with respect to any of the Collateral to secure Indebtedness of any
Person or entity, except for the security interest created by this Security
Agreement and except as permitted by the Credit Agreement.
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SECTION 4.1.7. FURTHER ASSURANCES, ETC. Such Grantor agrees that, from
time to time at its own expense, it will promptly execute and deliver all
further instruments and documents, and take all further action, that may be
necessary or desirable (provided that it is reasonable), or that the
Administrative Agent may reasonably request, in order to perfect, preserve and
protect any security interest granted or purported to be granted hereby or to
enable the Administrative Agent to exercise and enforce its rights and remedies
hereunder with respect to any Collateral. Without limiting the generality of
the foregoing, such Grantor will
(a) xxxx conspicuously each document (evidencing title) included in
the Inventory, each chattel paper included in the Receivables and each
Related Contract and, at the request of the Administrative Agent, and upon
the occurrence and during the continuance of an Event of Default, each of
its records pertaining to the Collateral with a legend, in form and
substance satisfactory to the Administrative Agent, indicating that such
document, chattel paper, Related Contract or Collateral is subject to the
security interest granted hereby;
(b) if any Receivable shall be evidenced by a promissory note or other
instrument, negotiable document or chattel paper, deliver and pledge to the
Administrative Agent hereunder such promissory note, instrument, negotiable
document or chattel paper duly endorsed and accompanied by duly executed
instruments of transfer or assignment, all in form and substance
satisfactory to the Administrative Agent;
(c) execute and file such financing or continuation statements, or
amendments thereto, and such other instruments or notices [(including any
assignment of claim form under or pursuant to the federal assignment of
claims statute, 31 U.S.C. Section 3726, any successor or amended version
thereof or any regulation promulgated under or pursuant to any version
thereof)], as may be necessary or desirable (provided that it is
reasonable), or as the Administrative Agent may reasonably request, in
order to perfect and preserve the security interests and other rights
granted or purported to be granted to the Administrative Agent hereby; and
(d) furnish to the Administrative Agent, from time to time at the
Administrative Agent's request, statements and schedules further
identifying and describing the Collateral and such other reports in
connection with the Collateral as the Administrative Agent may reasonably
request, all in reasonable detail.
With respect to the foregoing and the grant of the security interest hereunder,
such Grantor hereby authorizes the Administrative Agent to file one or more
financing or continuation statements, and amendments thereto, relative to all or
any part of the Collateral without the signature of such Grantor where permitted
by law. A carbon, photographic or other reproduction of this Security Agreement
or any financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law.
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ARTICLE V
THE AGENT
SECTION 5.1. ADMINISTRATIVE AGENT APPOINTED ATTORNEY-IN-FACT. Each
Grantor hereby irrevocably appoints the Administrative Agent such Grantor's
attorney-in-fact, with full authority in the place and stead of such Grantor
and in the name o tf such Grantor or otherwise, from time to time in the
Administrative Agent's discretion, following the occurrence and continuation
of a Default of the nature set forth in Section 8.1.9 of the Credit Agreement
or an Event of Default, to take any action and to execute any instrument
which the Administrative Agent may deem necessary or advisable to accomplish
the purposes of this Security Agreement, including:
(a) to ask, demand, collect, xxx for, recover, compromise, receive and
give acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral;
(b) to receive, endorse, and collect any drafts or other instruments,
documents and chattel paper, in connection with CLAUSE (A) above;
(c) to file any claims or take any action or institute any proceedings
which the Administrative Agent may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights of
the Administrative Agent with respect to any of the Collateral; and
(d) to perform the affirmative obligations of such Grantor hereunder
(including all obligations of such Grantor pursuant to SECTION 4.1.7).
Such Grantor hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest.
SECTION 5.2. ADMINISTRATIVE AGENT MAY PERFORM. If any Grantor fails to
perform any agreement contained herein, the Administrative Agent may itself
perform, or cause performance of, such agreement, and the expenses of the
Administrative Agent incurred in connection therewith shall be payable by such
Grantor pursuant to SECTION 6.2.
SECTION 5.3. ADMINISTRATIVE AGENT HAS NO DUTY. In addition to, and not in
limitation of, SECTION 2.4, the powers conferred on the Administrative Agent
hereunder are solely to protect its interest (on behalf of the Secured Parties)
in the Collateral and shall not impose any duty on it to exercise any such
powers. Except for reasonable care of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, the Administrative
Agent shall have no duty as to any Collateral or as to the taking of any
necessary steps to preserve rights against prior parties or any other rights
pertaining to any Collateral.
-19-
SECTION 5.4. REASONABLE CARE. The Administrative Agent is required to
exercise reasonable care in the custody and preservation of any of the
Collateral in its possession; PROVIDED, HOWEVER, the Administrative Agent shall
be deemed to have exercised reasonable care in the custody and preservation of
any of the Collateral, if it takes such action for that purpose as any Grantor
reasonably requests in writing at times other than upon the occurrence and
during the continuance of any Event of Default, but failure of the
Administrative Agent to comply with any such request at any time shall not in
itself be deemed a failure to exercise reasonable care.
ARTICLE VI
REMEDIES
SECTION 6.1. CERTAIN REMEDIES. If any Event of Default shall have
occurred and be continuing:
(a) The Administrative Agent may exercise in respect of the
Collateral, in addition to other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured party
on default under the U.C.C. (whether or not the U.C.C. applies to the
affected Collateral) and also may
(i) require each Grantor to, and such Grantor hereby agrees that
it will, at its expense and upon request of the Administrative Agent
forthwith, assemble all or part of the Collateral as directed by the
Administrative Agent and make it available to the Administrative Agent
at a place to be designated by the Administrative Agent which is
reasonably convenient to both parties, and
(ii) without notice except as specified below, sell the
Collateral or any part thereof in one or more parcels at public or
private sale, at any of the Administrative Agent's offices or
elsewhere, for cash, on credit or for future delivery, and upon such
other terms as the Administrative Agent may deem commercially
reasonable. Each Grantor agrees that, to the extent notice of sale
shall be required by law, at least ten days' prior notice to such
Grantor of the time and place of any public sale or the time after
which any private sale is to be made shall constitute reasonable
notification. The Administrative Agent shall not be obligated to make
any sale of Collateral regardless of notice of sale having been given.
The Administrative Agent may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor, and
such sale may, without further notice, be made at the time and place
to which it was so adjourned.
(b) All cash proceeds received by the Administrative Agent in respect
of any sale of, collection from, or other realization upon all or any part
of the Collateral may, in the discretion of the Administrative Agent, be
held by the Administrative Agent as collateral
-20-
for, and/or then or at any time thereafter applied (after payment of
any amounts payable to the Administrative Agent pursuant to SECTION
6.2) in whole or in part by the Administrative Agent for the ratable
benefit of the Secured Parties against, all or any part of the
Secured Obligations in such order as the Administrative Agent shall
elect. Any surplus of such cash or cash proceeds held by the
Administrative Agent and remaining after payment in full in cash of
all the Secured Obligations shall be paid over to the applicable
Grantor or to whomsoever may be lawfully entitled to receive such
surplus.
SECTION 6.2. INDEMNITY AND EXPENSES.
(a) Each Grantor jointly and severally agrees to indemnify the
Administrative Agent from and against any and all claims, losses and
liabilities arising out of or resulting from this Security Agreement
(including enforcement of this Security Agreement), except claims, losses
or liabilities resulting from the Administrative Agent's gross negligence
or wilful misconduct.
(b) Each Grantor will upon demand pay to the Administrative Agent the
amount of any and all reasonable expenses, including the reasonable fees
and disbursements of its counsel and of any experts and agents, which the
Administrative Agent may incur in connection with
(i) the administration of this Security Agreement,
(ii) the custody, preservation, use or operation of, or the sale
of, collection from, or other realization upon, any of the Collateral,
and
(iii) the exercise or enforcement of any of the rights of the
Administrative Agent or the Secured Parties hereunder, or (iv) the
failure by any Grantor to perform or observe any of the provisions
hereof.
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.1. LOAN DOCUMENT. This Security Agreement is a Loan Document
executed pursuant to the Credit Agreement and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions thereof including Article X thereof.
SECTION 7.2. AMENDMENTS; ETC. No amendment to or waiver of any provision
of this Security Agreement nor consent to any departure by any Grantor here
from, shall in any event be effective unless the same shall be in writing and
signed by the Administrative Agent (on behalf
-21-
of the Lenders or the Required Lenders, as the case may be), and then such
waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given.
SECTION 7.3. NOTICES. All notices and other communications provided for
hereunder shall be in writing (including facsimile communication) and, if to any
Grantor, mailed or telecopied or delivered to it, addressed to it, care of the
Borrower at the address for the Borrower specified in the Credit Agreement, if
to either Administrative Agent, mailed or telecopied or delivered to it,
addressed to it at the address of such Administrative Agent specified in the
Credit Agreement. All such notices and other communications, when mailed and
properly addressed with postage prepaid or if properly addressed and sent by
pre-paid courier service, shall be deemed given when received; any such notice
or communication, if transmitted by telecopier, shall be deemed given when
transmitted and electronically confirmed.
SECTION 7.4. ADDITIONAL SUBSIDIARY GRANTORS. Upon the execution and
delivery by any other Person of an instrument in the form of Annex I hereto,
such Person shall become a "Guarantor" hereunder with the same force and effect
as if originally named as a "Guarantor" herein. The execution and delivery of
any such instrument shall not require the consent of any other Guarantor
hereunder. The rights and obligations of each Guarantor hereunder shall remain
in full force and effect notwithstanding the addition of any new Guarantor as a
party to this Guaranty.
SECTION 7.5. CAPTIONS. Section captions used in this Security Agreement
are for convenience of reference only, and shall not affect the construction of
this Security Agreement.
SECTION 7.6. SEVERABILITY. Wherever possible each provision of this
Security Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Security Agreement
shall be prohibited by or invalid under such law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Security Agreement.
SECTION 7.7. COUNTERPARTS. This Security Agreement may be executed by the
parties hereto in several counterparts, each of which shall be deemed an
original and all of which shall constitute together but one and the same
agreement.
SECTION 7.8. GOVERNING LAW, ENTIRE AGREEMENT, ETC. THIS SECURITY
AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE
INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS
5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK),
EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST
HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE
GOVERNED BY THE LAWS OF A
-22-
JURISDICTION OTHER THAN THE STATE OF NEW YORK. THIS SECURITY AGREEMENT AND
THE OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING AMONG THE
PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDE ANY
PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT THERETO.
SECTION 7.9. FORUM SELECTION AND CONSENT TO JURISDICTION. ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS SECURITY
AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE SECURED PARTIES
OR ANY GRANTOR SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE
STATE OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK LOCATED IN NEW YORK COUNTY IN THE STATE OF NEW YORK;
PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR
OTHER PROPERTY MAY BE BROUGHT, AT EITHER THE AGENT'S OPTION, IN THE COURTS OF
ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. EACH
GRANTOR HEREBY IRREVOCABLY APPOINTS CSC UNITED STATES CORPORATION COMPANY (THE
"PROCESS AGENT"), WITH AN OFFICE ON THE DATE HEREOF AT 000 XXXXXX XXXXXX, XXX
XXXX, XXX XXXX 00000, AS ITS AGENT TO RECEIVE, ON ITS BEHALF AND ON BEHALF OF
ITS PROPERTY, SERVICE OF COPIES OF THE SUMMONS AND COMPLAINT AND ANY OTHER
PROCESS WHICH MAY BE SERVED IN ANY SUCH ACTION OR PROCEEDING. SUCH SERVICE MAY
BE MADE BY MAILING OR DELIVERING A COPY OF SUCH PROCESS TO SUCH GRANTOR IN CARE
OF THE PROCESS AGENT AT THE PROCESS AGENT'S ABOVE ADDRESS, AND EACH GRANTOR
HEREBY IRREVOCABLY AUTHORIZES AND DIRECTS THE PROCESS AGENT TO ACCEPT SUCH
SERVICE ON ITS BEHALF. EACH GRANTOR IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR
WITHOUT THE STATE OF NEW YORK ADDRESSED TO SUCH GRANTOR, CARE OF THE BORROWER,
AT THE ADDRESS FOR NOTICES SPECIFIED IN THE CREDIT AGREEMENT. EACH GRANTOR
HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF
THE STATE OF NEW YORK, NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AS
SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED
THEREBY IN CONNECTION WITH SUCH LITIGATION. EACH GRANTOR IRREVOCABLY CONSENTS
TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL
SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK. EACH GRANTOR HEREBY EXPRESSLY
AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
-23-
PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO
THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED
TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. TO THE EXTENT THAT SUCH GRANTOR HAS OR HEREAFTER MAY
ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS
(WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT
IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY,
SUCH GRANTOR HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS
OBLIGATIONS UNDER THIS SECURITY AGREEMENT.
SECTION 7.10. WAIVER OF JURY TRIAL. THE SECURED PARTIES AND EACH GRANTOR
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER, OR IN CONNECTION WITH, THIS SECURITY AGREEMENT, OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE
SECURED PARTIES OR EACH GRANTOR. EACH GRANTOR ACKNOWLEDGES AND AGREES THAT IT
HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH
OTHER PROVISION OF EACH OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY) AND THAT
THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE SECURED PARTIES ENTERING INTO
THE CREDIT AGREEMENT AND EACH SUCH OTHER LOAN DOCUMENT.
-24-
IN WITNESS WHEREOF, each Grantor has caused this Security Agreement to be
duly executed and delivered by its officer thereunto duly authorized as of the
date first above written.
TITAN TECHNOLOGIES AND
INFORMATION SYSTEMS
CORPORATION
By:
------------------------------------
Name:
Title:
TITAN PURIFICATION, INC.
By:
------------------------------------
Name:
Title:
DBA SYSTEMS, INC.
By:
------------------------------------
Name:
Title:
VALIDITY CORPORATION
By:
------------------------------------
Name:
Title:
LINKABIT WIRELESS, INC.
By:
------------------------------------
Name:
Title:
-25-
UNIDYNE CORPORATION
By:
------------------------------------
Name:
Title:
TITAN SOFTWARE SYSTEMS CORPORATION
By:
------------------------------------
Name:
Title:
PULSE SCIENCES, INC.
By:
------------------------------------
Name:
Title:
TITAN ENVIRONMENTAL CORPORATION
By:
------------------------------------
Name:
Title:
TOMOTHERAPEUTICS, INC.
By:
------------------------------------
Name:
Title:
-26-
FEDERAL SERVICES, INC.
By:
------------------------------------
Name:
Title:
ELDYNE, INC.
By:
------------------------------------
Name:
Title:
DIVERSIFIED CONTROL SYSTEMS, INC.
By:
------------------------------------
Name:
Title:
TITAN BROADBAND COMMUNICATIONS
CORPORATION
By:
------------------------------------
Name:
Title:
TITAN AEROCHEM, INC.
By:
------------------------------------
Name:
Title:
-27-
HORIZONS TECHNOLOGY, INC.
By:
------------------------------------
Name:
Title:
-00-
XXX XXXX XX XXXX XXXXXX, as
Administrative Agent
By:
------------------------------------------------------------------------
Name:
Title:
-29-
ANNEX I to
the Subsidiary Security Agreement
SUPPLEMENT, dated as of ________________, ____ (this
"SUPPLEMENT"), to the Subsidiary Security Agreement, dated
as of July 29, 1998 (together with all amendments,
supplements, restatements and other modifications, if any,
from time to time thereafter made thereto, the "SECURITY
AGREEMENT"), among the initial signatories thereto and each
other Person (such capitalized term, and other terms used in
this Supplement, to have the meanings set forth in Article I
of the Security Agreement) which from time to time
thereafter became a party thereto pursuant to Section 7.4
thereof (each, individually, a "GUARANTOR", and,
collectively, the "GUARANTORS"), in favor of the Secured
Parties (as defined in the Guaranty).
W I T N E S S E T H:
WHEREAS, pursuant to the provisions of Section 7.4 of the Security
Agreement, the undersigned is becoming a Grantor under the Security Agreement;
and
WHEREAS, the undersigned Grantor desires to become a "Grantor" under the
Security Agreement in order to induce the Secured Parties to continue to extend
Credit Extensions under the Credit Agreement;
NOW, THEREFORE, in consideration of the premises, and for other
consideration (the receipt and sufficiency of which is hereby acknowledged), the
undersigned agrees, for the benefit of each Secured Party, as follows.
SECTION 1. In accordance with the terms of the Security Agreement, by its
signature below the undersigned hereby irrevocably agrees to become a Grantor
under the Security Agreement with the same force and effect as if it were an
original signatory thereto and the undersigned Grantor, hereby (a) agrees to be
bound by and comply with all of the terms and provisions of the Security
Agreement applicable to it as a Grantor and (b) represents and warrants that the
representations and warranties made by it as a Grantor thereunder are true and
correct as of the date hereof. In furtherance of the foregoing, each reference
to a "Grantor" in the Security Agreement shall be deemed to include the
undersigned Grantor.
SECTION 2. The undersigned Grantor hereby represents and warrants that
this Supplement has been duly authorized, executed and delivered by it and that
this Supplement and
the Security Agreement constitute the legal, valid and binding obligation of
the undersigned Grantor, enforceable against it in accordance with its terms.
SECTION 3. Except as expressly supplemented hereby, the Security Agreement
shall remain in full force and effect in accordance with its terms.
SECTION 4. In the event any one or more of the provisions contained in
this Supplement should be held invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions contained
herein and in the Security Agreement shall not in any way be affected or
impaired.
SECTION 5. THIS SUPPLEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. This Supplement may be executed by the parties hereto in
several counterparts, each of which shall be deemed to be an original and all of
which shall constitute together but one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Supplement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the day and year first above written.
[NAME OF ADDITIONAL SUBSIDIARY GRANTOR]
By:
--------------------------------------
Name:
Title:
ACCEPTED BY:
THE BANK OF NOVA SCOTIA,
as Administrative Agent
By:
--------------------------
Name:
Title:
-3-
SCHEDULE I
to Security Agreement
([NAME OF GRANTOR])
Item A. Location of Equipment
Description Location
----------- --------
1.
2.
3.
Item B. Location of Inventory
Description Location
----------- --------
1.
2.
3.
Item C. Location of Lock Boxes
Contact
Bank Name and Address Account Number Person
--------------------- -------------- --------
1.
2.
3.
Item D. Place(s) of Business and Chief Executive Office
Item E. Trade Names
Item F. Merger or Other Corporate Reorganization
-4-
SCHEDULE II
to Security Agreement
([NAME OF GRANTOR])
Item A. Patents
Issued Patents
(*)Country Patent No. Issue Date Inventor(s) Title
---------- ---------- ---------- ----------- -----
Pending Patent Applications
*Country Serial No. Filing Date Inventor(s) Title
-------- ---------- ----------- ----------- -----
Patent Applications in Preparation
Expected
*Country Docket No. Filing Date Inventor(s) Title
------- ---------- ----------- ----------- -----
Item B. Patent Licenses
-------------------
* List items related to the United States first for ease of
recordation. List items related to other countries next,
grouped by country and in alphabetical order by country
name.
-5-
*Country or Effective Expiration Subject
Territory Licensor Licensee Date Date Matter
------------ -------- -------- --------- ---------- -------
-6-
SCHEDULE III
to Security Agreement
([NAME OF GRANTOR])
Item A. Trademarks
Registered Trademarks
(*)Country Trademark Registration No. Registration Date
---------- --------- ---------------- ------------------
Pending Trademark Applications
*Country Trademark Serial No. Filing Date
-------- --------- ---------- -----------
Trademark Applications in Preparation
Expected Products/
*Country Trademark Docket No. Filing Date Services
-------- --------- ---------- ----------- --------
Item B. Trademark Licenses
*Country or Effective Expiration
Territory Trademark Licensor Licensee Date Date
----------- --------- -------- -------- ---- ----
------------------------
* List items related to the United States first for ease of
recordation. List items related to other countries next,
grouped by country and in alphabetical order by country
name.
-7-
SCHEDULE IV
to Security Agreement
([NAME OF GRANTOR])
Item A. Copyrights/mask Works
Registered Copyrights/Mask Works
(*)Country Registration No. Registration Date Author(s) Title
---------- ---------------- ----------------- --------- -----
Copyright/Mask Work Pending Registration Applications
*Country Serial No. Filing Date Author(s) Title
-------- ---------- ----------- --------- -----
Copyright/Mask Work Registration Applications in Preparation
Expected
*Country Docket No. Filing Date Author(s) Title
-------- ---------- ----------- --------- -----
Item B. Copyright/Mask Work Licenses
*Country or Effective Expiration Subject
Territory Licensor Licensee Date Date Matter
----------- -------- --------- ---------- ---------- -------
------------------------
* List items related to the United States first for ease of
recordation. List items related to other countries next,
grouped by country and in alphabetical order by country
name.
-8-
-9-
SCHEDULE V
to Security Agreement
([NAME OF GRANTOR])
TRADE SECRET OR KNOW-HOW LICENSES
(*)Country or Effective Expiration Subject
Territory Licensor Licensee Date Date Matter
------------- -------- -------- --------- ---------- -------
-----------------------
* List items related to the United States first for ease of
recordation. List items related to other countries next,
grouped by country and in alphabetical order by country
name.
-10-
EXHIBIT A
to Security Agreement
PATENT SECURITY AGREEMENT
This PATENT SECURITY AGREEMENT (this "AGREEMENT"), dated as of July 29,
1998, is made between ___________________, a ____________ (the "GRANTOR"), and
THE BANK OF NOVA SCOTIA ("SCOTIABANK"), in its capacity as Administrative Agent
for each of the Secured Parties;
W I T N E S S E T H :
WHEREAS, pursuant to a Credit Agreement, dated as of July 29, 1998 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the "CREDIT AGREEMENT"), among THE TITAN CORPORATION, a Delaware
corporation (the "BORROWER"), the various financial institutions as are or may
become parties thereto (the "LENDERS"), Scotiabank, as Administrative Agent, and
Imperial Bank, as Documentation Agent, the Lenders and the Issuers have extended
Commitments to make Credit Extensions to the Borrower;
WHEREAS, in connection with the Credit Agreement, the Grantor has executed
and delivered a Subsidiary Security Agreement, dated as of July 29, 1998 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the "SECURITY AGREEMENT");
WHEREAS, as a condition precedent to the making of the Credit Extensions
(including the initial Credit Extension) under the Credit Agreement, the Grantor
is required to execute and deliver this Security Agreement;
WHEREAS, the Grantor has duly authorized the execution, delivery and
performance of this Security Agreement; and
WHEREAS, it is in the best interests of the Grantor to execute this
Security Agreement inasmuch as the Grantor will derive substantial direct and
indirect benefits from the Credit Extensions made from time to time to the
Borrower by the Lenders and the Issuers pursuant to the Credit Agreement;
NOW THEREFORE, for good and valuable consideration the receipt of which is
hereby acknowledged, and in order to induce the Lenders and the Issuers to make
Credit Extensions (including the initial Credit Extension) to the Borrower
pursuant to the Credit Agreement, the Grantor agrees, for the benefit of each
Secured Party, as follows.
SECTION 1. DEFINITIONS. Unless otherwise defined herein or the context
otherwise requires, terms used in this Agreement, including its preamble and
recitals, have the meanings provided (or incorporated by reference) in the
Security Agreement.
SECTION 2. GRANT OF SECURITY INTEREST. For good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, to secure all of the Secured Obligations, the Grantor does hereby
mortgage, pledge and hypothecate to the Administrative Agent, and grant to the
Administrative Agent a security interest in, for its benefit and the benefit of
each Secured Party, all of the following property (the "PATENT COLLATERAL"),
whether now owned or hereafter acquired or existing by it:
(a) all letters patent and applications for letters patent throughout
the world, including all patent applications in preparation for filing
anywhere in the world and including each patent and patent application
referred to in ITEM A of ATTACHMENT 1 attached hereto;
(b) all reissues, divisions, continuations, continuations-in-part,
extensions, renewals and reexaminations of any of the items described in
CLAUSE (A);
(c) all patent licenses, including each patent license referred to in
ITEM B of ATTACHMENT 1 attached hereto; and
(d) all proceeds of, and rights associated with, the foregoing
(including license royalties and proceeds of infringement suits), the right
to xxx third parties for past, present or future infringements of any
patent or patent application, including any patent or patent application
referred to in ITEM A of ATTACHMENT 1 attached hereto, and for breach or
enforcement of any patent license, including any patent license referred to
in ITEM B of ATTACHMENT 1 attached hereto, and all rights corresponding
thereto throughout the world.
SECTION 3. SECURITY AGREEMENT. This Agreement has been executed and
delivered by the Grantor for the purpose of registering the security interest of
the Administrative Agent in the Patent Collateral with the United States Patent
and Trademark Office and corresponding offices in other countries of the world.
The security interest granted hereby has been granted as a supplement to, and
not in limitation of, the security interest granted to the Administrative Agent
for its benefit and the benefit of each Secured Party under the Security
Agreement. The Security Agreement (and all rights and remedies of the
Administrative Agent and each Secured Party thereunder) shall remain in full
force and effect in accordance with its terms.
SECTION 4. RELEASE OF SECURITY INTEREST. Upon the Termination Date, the
Administrative Agent shall, at the Grantor's expense, execute and deliver to the
Grantor all
instruments and other documents as may be necessary or proper to release the
lien on and security interest in the Patent Collateral which has been granted
hereunder.
SECTION 5. ACKNOWLEDGMENT. The Grantor does hereby
further acknowledge and affirm that the rights and remedies of the
Administrative Agent with respect to the security interest in the Patent
Collateral granted hereby are more fully set forth in the Security Agreement,
the terms and provisions of which (including the remedies provided for therein)
are incorporated by reference herein as if fully set forth herein.
SECTION 6. LOAN DOCUMENT, ETC. This Agreement is a Loan Document executed
pursuant to the Credit Agreement and shall (unless otherwise expressly indicated
herein) be construed, administered and applied in accordance with the terms and
provisions of the Credit Agreement.
SECTION 7. COUNTERPARTS. This Agreement may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
and all of which shall constitute together but one and the same agreement.
-3-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the day and year first above written.
[NAME OF GRANTOR]
By
--------------------------------
Name:
Title:
THE BANK OF NOVA SCOTIA, as
Administrative Agent
By
--------------------------------
Name:
Title:
-4-
ATTACHMENT 1
to Patent Security Agreement
Item A. Patents
Issued Patents
(*)Country Patent No. Issue Date Inventor(s) Title
---------- ---------- ---------- ----------- -----
Pending Patent Applications
*Country Serial No. Filing Date Inventor(s) Title
-------- ---------- ----------- ----------- -----
Patent Applications in Preparation
Expected
*Country Docket No. Filing Date Inventor(s) Title
-------- ---------- ----------- ----------- -----
Item B. Patent Licenses
*Country or Effective Expiration Subject
Territory Licensor Licensee Date Date Matter
---------- -------- -------- ---- ---- -------
------------------------
* List items related to the United States first for ease of
recordation. List items related to other countries next,
grouped by country and in alphabetical order by country
name.
-5-
EXHIBIT B
to Security Agreement
TRADEMARK SECURITY AGREEMENT
This TRADEMARK SECURITY AGREEMENT (this "AGREEMENT"), dated as of July 29,
1998, is made between _____________________, a ___________ __________ (the
"GRANTOR"), and THE BANK OF NOVA SCOTIA ("Scotiabank"), as Administrative Agent
(the "ADMINISTRATIVE AGENT") for each of the Secured Parties;
W I T N E S S E T H :
WHEREAS, pursuant to a Credit Agreement, dated as of July 29, 1998 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the "CREDIT AGREEMENT"), among THE TITAN CORPORATION, a Delaware
corporation, (the "BORROWER"), the various financial institutions as are or may
become parties thereto (the "LENDERS"), Scotiabank, as administrative agent (the
"ADMINISTRATIVE AGENT"), and Imperial Bank, as Documentation Agent, the Lenders
and the Issuers have extended Commitments to make Credit Extensions to the
Borrower;
WHEREAS, in connection with the Credit Agreement, the Grantor has executed
and delivered a Subsidiary Security Agreement, dated as of July 29, 1998 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the "SECURITY AGREEMENT");
WHEREAS, as a condition precedent to the making of the Credit Extensions
(including the initial Credit Extension) under the Credit Agreement, the Grantor
is required to execute and deliver this Security Agreement;
WHEREAS, the Grantor has duly authorized the execution, delivery and
performance of this Security Agreement; and
WHEREAS, it is in the best interests of the Grantor to execute this
Security Agreement inasmuch as the Grantor will derive substantial direct and
indirect benefits from the Credit Extensions made from time to time to the
Borrower by the Lenders and the Issuers pursuant to the Credit Agreement;
NOW THEREFORE, for good and valuable consideration the receipt of which is
hereby acknowledged, and in order to induce the Lenders and the Issuers to make
Credit Extensions (including the initial Credit Extension) to the Borrower
pursuant to the Credit Agreement, the Grantor agrees, for the benefit of each
Secured Party, as follows.
SECTION 1. DEFINITIONS. Unless otherwise defined herein or the context
otherwise requires, terms used in this Agreement, including its preamble and
recitals, have the meanings provided (or incorporated by reference) in the
Security Agreement.
SECTION 2. GRANT OF SECURITY INTEREST. For good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, to secure all of the Secured Obligations, the Grantor does hereby
mortgage, pledge and hypothecate to the Administrative Agent, and grant to the
Administrative Agent a security interest in, for its benefit and the benefit of
each Secured Party, all of the following property (the "TRADEMARK COLLATERAL"),
whether now owned or hereafter acquired or existing by it:
(a) all trademarks, trade names, corporate names, company names,
business names, fictitious business names, trade styles, service marks,
certification marks, collective marks, logos, other source of business
identifiers, prints and labels on which any of the foregoing have appeared
or appear, designs and general intangibles of a like nature (all of the
foregoing items in this CLAUSE (A) being collectively called a
"TRADEMARK"), now existing anywhere in the world or hereafter adopted or
acquired, whether currently in use or not, all registrations and recordings
thereof and all applications in connection therewith, whether pending or in
preparation for filing, including registrations, recordings and
applications in the United States Patent and Trademark Office or in any
office or agency of the United States of America or any State thereof or
any foreign country, including those referred to in ITEM A of ATTACHMENT 1
attached hereto;
(b) all Trademark licenses, including each Trademark license referred
to in ITEM B of ATTACHMENT 1 attached hereto;
(c) all reissues, extensions or renewals of any of the items
described in CLAUSES (A) and (B);
(d) all of the goodwill of the business connected with the use of,
and symbolized by the items described in, CLAUSES (A) and (B); and
(e) all proceeds of, and rights associated with, the foregoing,
including any claim by the Grantor against third parties for past, present
or future infringement or dilution of any Trademark, Trademark registration
or Trademark license, including any Trademark, Trademark registration or
Trademark license referred to in ITEM A and ITEM B of ATTACHMENT 1 attached
hereto, or for any injury to the goodwill associated with the use of any
such Trademark or for breach or enforcement of any Trademark license.
SECTION 3. SECURITY AGREEMENT. This Agreement has been executed and
delivered by the Grantor for the purpose of registering the security interest of
the Administrative Agent in the Trademark Collateral with the United States
Patent and Trademark Office and corresponding offices in other countries of the
world. The security interest granted hereby has been granted as a supplement
to, and not in limitation of, the security interest granted to the
Administrative Agent for its benefit and the benefit of each Secured Party under
the Security Agreement. The Security Agreement (and all rights and remedies of
the Administrative Agent and each Secured Party thereunder) shall remain in full
force and effect in accordance with its terms.
SECTION 4. RELEASE OF SECURITY INTEREST. Upon the Termination Date, the
Administrative Agent shall, at the Grantor's expense, execute and deliver to the
Grantor all instruments and other documents as may be necessary or proper to
release the lien on and security interest in the Trademark Collateral which has
been granted hereunder.
SECTION 5. ACKNOWLEDGMENT. The Grantor does hereby
further acknowledge and affirm that the rights and remedies of the
Administrative Agent with respect to the security interest in the Trademark
Collateral granted hereby are more fully set forth in the Security Agreement,
the terms and provisions of which (including the remedies provided for therein)
are incorporated by reference herein as if fully set forth herein.
SECTION 6. LOAN DOCUMENT, ETC. This Agreement is a Loan Document executed
pursuant to the Credit Agreement and shall (unless otherwise expressly indicated
herein) be construed, administered and applied in accordance with the terms and
provisions of the Credit Agreement.
SECTION 7. COUNTERPARTS. This Agreement may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
and all of which shall constitute together but one and the same agreement.
-3-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the day and year first above written.
[NAME OF GRANTOR]
By
------------------------------
Name:
Title:
THE BANK OF NOVA SCOTIA, as
Administrative Agent
By
------------------------------
Name:
Title:
-4-
ATTACHMENT 1
to Trademark
Security Agreement
Item A. Trademarks
Registered Trademarks
(*)Country Trademark Registration No. Registration Date
---------- --------- ---------------- -----------------
Pending Trademark Applications
*Country Trademark Serial No. Filing Date
-------- --------- ---------- -----------
Trademark Applications in Preparation
Expected Products/
*Country Trademark Docket No. Filing Date Services
-------- --------- ---------- ----------- --------
------------------------
* List items related to the United States first for ease of
recordation. List items related to other countries next,
grouped by country and in alphabetical order by country
name.
-5-
Item B. Trademark Licenses
*Country or Effective Expiration
Territory Trademark Licensor Licensee Date Date
----------- --------- -------- -------- ---- ----
-6-
EXHIBIT C
to Security Agreement
COPYRIGHT SECURITY AGREEMENT
This COPYRIGHT SECURITY AGREEMENT (this "AGREEMENT"), dated as of July 29,
1998, is made between _____________________, a __________ (the
"GRANTOR"), and THE BANK OF NOVA SCOTIA ("SCOTIABANK"), in its capacity as
Administrative Agent (the "ADMINISTRATIVE AGENT") for each of the Secured
Parties;
W I T N E S S E T H :
WHEREAS, pursuant to a Credit Agreement, dated as of July 29, 1998 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the "CREDIT AGREEMENT"), among THE TITAN CORPORATION, a Delaware
corporation (the "BORROWER"), the various financial institutions as are or may
become parties thereto (the "LENDERS"), Scotiabank, as administrative agent for
the Lenders (the "ADMINISTRATIVE AGENT"), and Imperial Bank, as Documentation
Agent, the Lenders and the Issuers have extended Commitments to make Credit
Extensions to the Borrower;
WHEREAS, in connection with the Credit Agreement, the Grantor has executed
and delivered a Subsidiary Security Agreement, dated as of July 29, 1998 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the "SECURITY AGREEMENT");
WHEREAS, as a condition precedent to the making of the Credit Extensions
(including the initial Credit Extension) under the Credit Agreement, the Grantor
is required to execute and deliver this Security Agreement;
WHEREAS, the Grantor has duly authorized the execution, delivery and
performance of this Security Agreement; and
WHEREAS, it is in the best interests of the Grantor to execute this
Security Agreement inasmuch as the Grantor will derive substantial direct and
indirect benefits from the Credit Extensions made from time to time to the
Borrower by the Lenders and the Issuers pursuant to the Credit Agreement;
NOW THEREFORE, for good and valuable consideration the receipt of which is
hereby acknowledged, and in order to induce the Lenders and the Issuers to make
Credit Extensions
(including the initial Credit Extension) to the Borrower pursuant to the
Credit Agreement, the Grantor agrees, for the benefit of each Secured Party,
as follows.
SECTION 1. DEFINITIONS. Unless otherwise defined herein or the context
otherwise requires, terms used in this Agreement, including its preamble and
recitals, have the meanings provided (or incorporated by reference) in the
Security Agreement.
SECTION 2. GRANT OF SECURITY INTEREST. For good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, to secure all of the Secured Obligations, the Grantor does hereby
mortgage, pledge and hypothecate to the Administrative Agent, and grant to the
Administrative Agent a security interest in, for its benefit and the benefit of
each Secured Party, all of the following property (the "COPYRIGHT COLLATERAL"),
whether now owned or hereafter acquired or existing by it, being all copyrights
(including all copyrights for semi-conductor chip product mask works) of the
Grantor, whether statutory or common law, registered or unregistered, now or
hereafter in force throughout the world including all of the Grantor's right,
title and interest in and to all copyrights registered in the United States
Copyright Office or anywhere else in the world and also including the copyrights
referred to in ITEM A of ATTACHMENT 1 attached hereto, and all applications for
registration thereof, whether pending or in preparation, all copyright licenses,
including each copyright license referred to in ITEM B of ATTACHMENT 1 attached
hereto, the right to xxx for past, present and future infringements of any
thereof, all rights corresponding thereto throughout the world, all extensions
and renewals of any thereof and all proceeds of the foregoing, including
licenses, royalties, income, payments, claims, damages and proceeds of suit.
SECTION 3. SECURITY AGREEMENT. This Agreement has been executed and
delivered by the Grantor for the purpose of registering the security interest of
the Administrative Agent in the Copyright Collateral with the United States
Copyright Office and corresponding offices in other countries of the world. The
security interest granted hereby has been granted as a supplement to, and not in
limitation of, the security interest granted to the Administrative Agent for its
benefit and the benefit of each Secured Party under the Security Agreement. The
Security Agreement (and all rights and remedies of the Administrative Agent and
each Secured Party thereunder) shall remain in full force and effect in
accordance with its terms.
SECTION 4. RELEASE OF SECURITY INTEREST. Upon the Termination Date, the
Administrative Agent shall, at the Grantor's expense, execute and deliver to the
Grantor all instruments and other documents as may be necessary or proper to
release the lien on and security interest in the Copyright Collateral which has
been granted hereunder.
SECTION 5. ACKNOWLEDGMENT. The Grantor does hereby
further acknowledge and affirm that the rights and remedies of the
Administrative Agent with respect to the security interest in the Copyright
Collateral granted hereby are more fully set forth in the Security
Agreement, the terms and provisions of which (including the remedies provided
for therein) are incorporated by reference herein as if fully set forth
herein.
SECTION 6. LOAN DOCUMENT, ETC. This Agreement is a Loan Document executed
pursuant to the Credit Agreement and shall (unless otherwise expressly indicated
herein) be construed, administered and applied in accordance with the terms and
provisions of the Credit Agreement.
SECTION 7. COUNTERPARTS. This Agreement may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
and all of which shall constitute together but one and the same agreement.
-3-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the day and year first above written.
[NAME OF GRANTOR]
By
-------------------------------------
Name:
Title:
THE BANK OF NOVA SCOTIA, as
Administrative Agent
By
-------------------------------------
Name:
Title:
-4-
ATTACHMENT 1
to Copyright
Security Agreement
Item A. Copyrights/mask Works
Registered Copyrights/Mask Works
(*)Country Registration No. Registration Date Author(s) Title
---------- ---------------- ----------------- --------- -----
Copyright/Mask Work Pending Registration Applications
*Country Serial No. Filing Date Author(s) Title
-------- ---------- ----------- --------- -----
Copyright/Mask Work Registration Applications in Preparation
Expected
*Country Docket No. Filing Date Author(s) Title
-------- ---------- ----------- --------- ------
Item B. Copyright/Mask Work Licenses
*Country or Effective Expiration Subject
Territory Licensor Licensee Date Date Matter
----------- -------- -------- ---- ---- ------
--------------------------
* List items related to the United States first for ease of
recordation. List items related to other countries next,
grouped by country and in alphabetical order by country
name.
-5-
July 29, 0000
Xxx Xxxx xx Xxxx Xxxxxx
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: THE TITAN CORPORATION
Ladies and Gentlemen:
This letter is furnished to you in connection with the Credit Agreement, dated
as of July 29, 1998 (the "CREDIT AGREEMENT"), between The Titan Corporation (the
"BORROWER"), various financial institutions from time to time parties thereto
(the "LENDERS"), The Bank of Nova Scotia as the agent for the Lenders (in such
capacity, the "AGENT"), and Imperial Bank as the documentation agent. Unless
otherwise defined, terms used herein have the meanings provided in the Credit
Agreement.
In connection with this opinion, I have examined originals or copies, certified
or otherwise identified to my satisfaction, of such certificates or comparable
documents of public officials and of officers and other representatives of the
Borrower and the Subsidiaries, and such other agreements, instruments and other
documents, as I have deemed necessary for the purposes of this opinion.
In addition, in connection with this opinion, I have examined originals or
copies, certified or otherwise identified to my satisfaction, of the following
documents (each dated July 29, 1998, unless otherwise stated):
(a) the Credit Agreement;
(b) the Notes;
(c) the Borrower Security Agreement;
(d) the Subsidiary Security Agreement;
(e) the Borrower Pledge Agreement;
(f) the Subsidiary Pledge Agreement;
(g) the Subsidiary Guaranty;
(h) the Intercompany Subordination Agreement;
(i) the Trademark Security Agreement;
(j) the Patent Security Agreement;
(k) the Copyright Security Agreement;
(l) copies of the Articles and Certificates of Incorporation and By-Laws
described on Exhibit "A" attached hereto (collectively, the "Organic
Documents");
(m) copies of the resolutions of the Board of Directors of the entities
described on Exhibit "A" attached hereto; and
(n) copies of the good standing/status certificates described on Exhibit
"B" attached hereto.
For purposes of this opinion, the agreements, documents, notes and instruments
referred to in clauses (a) through (k) above are hereinafter collectively
referred to as the "TRANSACTION DOCUMENTS." The Persons described on Exhibit
"A" other than Borrower are sometimes collectively referred to herein as the
"Subsidiaries."
Based upon the foregoing, and subject to the limitations, assumptions,
exceptions and qualifications set forth below, I am of the opinion that as of
the date hereof:
1. The Borrower is (i) a corporation duly incorporated and existing and
in good standing under the laws of Delaware and (ii) duly qualified to do
business in each jurisdiction where the nature of its business requires
such qualification except where the failure to so qualify would not
constitute a Material Adverse Effect. The Borrower has full power and
authority, and holds all requisite governmental licenses, permits and other
approvals, to enter into and perform its Obligations under each Transaction
The Bank of Nova Scotia
July 29, 1998
Page 3
Document to which it is a party and to conduct its business substantially
as currently conducted by it.
2. Each Subsidiary is (i) a corporation duly incorporated and existing
and in good standing under the laws of the state of its incorporation and
(ii) duly qualified to do business in each jurisdiction where the nature of
its business requires such qualification except where the failure to so
qualify would not constitute a Material Adverse Effect. Each Subsidiary
has full power and authority, and holds all requisite governmental
licenses, permits and other approvals, to enter into and perform its
Obligations under each Transaction Document to which it is a party and to
conduct its business substantially as currently conducted by it such that
the failure to hold such licenses, permits, and other approvals would not
constitute a Material Adverse Effect.
3. The Borrower has duly authorized by all necessary corporate action the
execution, delivery and performance of each Transaction Document to which
it is a party, and the execution, delivery and performance thereof do not
(a) contravene the Organic Documents of the Borrower;
(b) contravene any law or governmental regulation or, to the best of
my knowledge, any contractual restriction, court decree or order
binding on or affecting the Borrower, the contravention of which
constitute a Material Adverse Effect; or
(c) result in, or require the creation or imposition of, any Lien
under any agreement or instrument on any properties of the
Borrower, other than a Lien in favor of the Agent pursuant to the
terms of a Transaction Document.
4. Each Subsidiary has duly authorized by all necessary corporate action
the execution, delivery and performance of each Transaction Document to
which it is a party, and the execution, delivery and performance thereof do
not
(a) contravene the Organic Documents of such Subsidiary;
(b) contravene any law or governmental regulation or, to the best of
my knowledge, any contractual restriction, court decree or order
binding on
The Bank of Nova Scotia
July 29, 1998
Page 4
or affecting such Subsidiary, the contravention of which
constitute a Material Adverse Effect; or
(c) result in, or require the creation or imposition of, any Lien
under any agreement or instrument on any properties of such
Subsidiary, other than a Lien in favor of the Agent pursuant to
the terms of a Transaction Document.
5. No authorization or approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body is required for
the due execution, delivery or performance by the Borrower of any of the
Transaction Documents to which it is a party.
6. No authorization or approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body is required for
the due execution, delivery or performance by each Subsidiary of any of the
Transaction Documents to which it is a party.
7. There is no pending, nor, to the best of my knowledge after due
inquiry, threatened litigation, action, proceeding, investigation or labor
controversy affecting the Borrower or any of its properties, business,
assets or revenues which may cause a Material Adverse Effect or which
purports to affect the legality, validity or enforceability of any of the
Transaction Documents.
8. There is no pending, nor, to the best of my knowledge after due
inquiry, threatened litigation, action, proceeding, investigation or labor
controversy affecting each Subsidiary or any of its properties, business,
assets or revenues which may cause a Material Adverse Effect or which
purports to affect the legality, validity or enforceability of any of the
Transaction Documents.
9. The Pledged Interests (as defined in the Borrower Pledge Agreement),
other than Pledged Notes (as defined in the Borrower Pledge Agreement),
issued by the Subsidiaries listed in ATTACHMENT I to the Borrower Pledge
Agreement have been duly authorized and validly issued, are fully paid and
non-assessable and constitute all of the issued and outstanding shares of
stock of such Subsidiaries.
The Bank of Nova Scotia
July 29, 1998
Page 5
10. The Pledged Interests (as defined in the Subsidiary Pledge Agreement),
other than Pledged Notes (as defined in the Subsidiary Pledge Agreement),
issued by the Subsidiaries listed in ATTACHMENT I to the Subsidiary Pledge
Agreement have been duly authorized and validly issued, are fully paid and
non-assessable and constitute all of the issued and outstanding shares of
stock of such Subsidiaries.
I assume for purposes of this opinion that each individual, corporation, limited
liability company, partnership, association, joint-stock company, trust,
unincorporated organization, joint venture or Governmental Authority (foreign or
domestic) (each, a "PERSON") who is a party to any of the Transaction Documents
(other than the Borrower and the Subsidiaries) is duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization; that each of such Transaction Documents has been duly authorized
by each Person who is a party thereto (other than the Borrower and the
Subsidiaries); that each of the Transaction Documents has been duly executed and
delivered by each Person who is a party thereto (other than the Borrower and the
Subsidiaries) and constitutes or will constitute the legal, valid and binding
obligation of each Person (other than the Borrower and the Subsidiaries),
enforceable in accordance with its terms; and that each Person (other than the
Borrower and the Subsidiaries) that is a party to any Transaction Document has
the requisite corporate or other organizational power and authority to perform
its obligations under such Transaction Document. I am not expressing any
opinion as to the effect of any compliance or non-compliance by any agent, bank,
or other lender with any state or federal laws or regulations applicable to the
transactions contemplated by the Transaction Documents because of the nature of
such Person's business.
For purposes of my opinions in paragraphs 1 and 2 above with respect to good
standing, I have relied upon the certificates described in Exhibit "B" attached
hereto.
Whenever a statement herein is qualified by "knowledge" or any similar phrase,
it is intended to indicate that, during the course of my representation of
Borrower and the Subsidiaries, no information that would give me current actual
knowledge of the inaccuracy of such statement has come to my attention.
I express no opinion herein as to any law other than the laws of the State of
California, the general corporate laws of the State of Delaware, and the federal
law of the United States. The opinions expressed above are limited to the laws
of the State of California, the general corporate laws of the State of Delaware,
and the Federal laws of the United States, and do not express any opinion herein
concerning any other law.
The Bank of Nova Scotia
July 29, 1998
Page 6
I express no opinion regarding any laws, rules or regulations that relate to or
limit the effect of the Transaction Documents with respect to contracts with any
governmental agency involving matters of national security or other sensitive
military or governmental activities.
The opinions expressed herein have been rendered at your request, are solely for
your benefit in connection with the transactions contemplated by the Transaction
Documents and may not be relied upon by you in any other manner or by any other
Person in any manner or for any purpose and may not be communicated or published
by you to any other Person for any purpose without my prior written approval in
each instance.
Very truly yours,
By:__________________________
Xxx Xxxxxx, General Counsel
EXHIBIT "A"
LIST OF ARTICLES/CERTIFICATES OF INCORPORATION AND BY-LAWS
REVIEWED BY GENERAL COUNSEL
EXHIBIT "B"
GOOD STANDING/STATUS CERTIFICATES
July 29, 0000
Xxx Xxxx xx Xxxx Xxxxxx
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Re: THE TITAN CORPORATION
Ladies and Gentlemen:
This letter is furnished to you in connection with the Credit Agreement, dated
as of July 29, 1998 (the "CREDIT AGREEMENT"), between The Titan Corporation (the
"BORROWER"), various financial institutions from time to time parties thereto
(the "LENDERS"), The Bank of Nova Scotia as the agent for the Lenders (in such
capacity, the "ADMINISTRATIVE AGENT"), and Imperial Bank as the documentation
agent. Unless otherwise defined, terms used herein have the meanings provided
in the Credit Agreement. The Uniform Commercial Code as in effect in the State
of New York is referred to herein as the "UCC". The Uniform Commercial Code as
in effect in the State of California is referred to herein as the "CALIFORNIA
UCC."
We have acted as special counsel to the Borrower and its Subsidiaries in
connection with the preparation of the Transaction Documents (as defined
below). In that regard, we have examined originals or copies, certified or
otherwise identified to our satisfaction, of the following documents (each
dated July 29, 1998, unless otherwise stated):
a. the Credit Agreement;
b. the Notes;
c. the Borrower Security Agreement;
d. the Subsidiary Security Agreement;
e. the Borrower Pledge Agreement;
f. the Subsidiary Pledge Agreement;
g. the Trademark Security Agreement;
h. the Patent Security Agreement;
i. the Copyright Security Agreement;
j. the Subsidiary Guaranty;
k. the Intercompany Subordination Agreement;
l. execution copies of financing statements on Form UCC-1 (the
"BORROWER SECURITY AGREEMENT FINANCING STATEMENTS") under the
California UCC, naming the Borrower as debtor and the
Administrative Agent as secured party, covering the Collateral
described in the Borrower Security Agreement and the Borrower
Pledge Agreement (the "BORROWER SECURITY AGREEMENT COLLATERAL"),
which Financing Statements will be filed in the filing offices (the
"BORROWER SECURITY AGREEMENT FILING OFFICES") listed in ITEM A in
SCHEDULE I hereto; and
m. execution copies of financing statements on Form UCC-1 (the
"SECURITY AGREEMENT FINANCING STATEMENTS") under the California
UCC, naming the relevant Subsidiary as debtor and the
Administrative Agent as secured party, covering the Collateral
described in the Subsidiary Security Agreement and the Subsidiary
Pledge Agreement (the "SUBSIDIARY SECURITY AGREEMENT COLLATERAL"),
which Financing Statements will be filed in the filing offices (the
"SECURITY AGREEMENT FILING OFFICES") listed in ITEM B in SCHEDULE I
hereto.
For purposes of this opinion, the agreements, documents, notes and instruments
referred to in clauses (a) through (k) above are hereinafter collectively
referred to as the "TRANSACTION DOCUMENTS." The Persons described on Exhibit
"A" other than Borrower are sometimes collectively referred to herein as the
"Subsidiaries." The Borrower Security Agreement Financing Statements and the
Security Agreement Financing Statements are sometimes collectively referred to
herein as the "Financing Statements."
As to certain factual matters, we have, with your consent, relied upon
certificates or opinions of officers, counsel or other representatives of the
Borrower and the Subsidiaries and the representations and warranties of the
Borrower and the Subsidiaries in the Transaction Documents, all without
independent verification by us. In addition, we have obtained and
The Bank of Nova Scotia
July 29, 1998
Page 3
relied upon such certificates and assurances from public officials as we have
deemed necessary.
We have investigated such questions of law for the purpose of rendering this
opinion as we have deemed necessary. Members of our firm who are involved with
this matter are admitted to the bars in the States of California and New York.
For the purposes of our opinion, we have assumed, with your consent and without
independent investigation, the correctness and accuracy of the opinion, dated
July 29, 1998, of Xxx Xxxxxx, Esq., general counsel to the Borrower. We are
opining herein only as to the effect on the subject transaction of the present
internal laws of the States of New York, California and Federal law (without
regard to conflicts of laws or principles), excluding municipal and local
ordinances and regulations. We express no opinion with respect to the
applicability to or the effect on the subject transaction of the laws of any
other jurisdiction. We expressly disclaim any responsibility to revise or
supplement this opinion should any such laws be changed by, or compilations of
any such laws be updated to reflect, legislative or regulatory action, judicial
decision or otherwise after the date hereof. Nor do we opine upon any laws,
rules or regulations that relate to or limit the effect of the Transaction
Documents with respect to contracts with any governmental agency involving
matters of national security or other sensitive military or governmental
activities.
GENERAL ASSUMPTIONS AND LIMITATIONS
Our opinions expressed below are subject to the following assumptions and
limitations:
(1) We have assumed the genuineness of all signatures on the documents
reviewed by us, the authenticity of all such documents submitted to us as
originals, and the conformity to the originals of all such documents submitted
to us as photocopies or conformed copies and the authenticity of the originals
of such latter documents.
(2) We have assumed that: (i) the Administrative Agent and the Lenders
have not waived, subordinated or agreed to any modification of the attachment,
perfection or priority of the security interests created by the Transaction
Documents or acted in any way inconsistent with the maintenance, perfection, or
priority of such security interests; (ii) the tangible personal property
constituting the Collateral located in California and described on the UCC-1s
filed in the appropriate California governmental office will at all relevant
times be located in the State of California; (iii) at all relevant times, each
of the parties (other than the Borrower and the Subsidiaries) to the Transaction
Documents (a) is validly existing and in
The Bank of Nova Scotia
July 29, 1998
Page 4
good standing in the respective jurisdiction of its organization and has
satisfied all applicable governmental requirements and other laws and
requirements, in each case to the extent necessary to its execution, delivery
and performance of the Transaction Documents to which it is a party, (b) has
the requisite power and authority, respectively, to act with respect to the
authorization, execution, delivery and performance of such documents and
agreements to which it is a party, and (c) has duly and validly authorized,
executed and delivered each of such documents and agreements to which it is a
party; and (iv) the execution, delivery and performance at closing of the
Transaction Documents by each party, other than the Borrower and the
Subsidiaries, do not conflict with, result in a breach or violation of, or
constitute a default under, any of the terms, conditions or provisions of the
articles or certificate of incorporation or by-laws of each such party.
(3) We have assumed that: (i) other than the Transaction Documents,
there are no agreements or understandings among the parties, written or oral,
and no usage of trade or course of prior dealing among the parties which would,
in either case, define, supplement or qualify the terms of any of the
Transaction Documents, and (ii) each of the Borrower and the Subsidiaries has
rights in the Collateral owned by it such that each item of Collateral
constitutes property in which a security interest can be granted under the UCC,
and that each of the Borrower and the Subsidiaries has received value under the
Transaction Documents, all as required by Section 9-203 of the UCC for a
security interest to attach to collateral and be enforceable.
(4) We have assumed that all applicable California taxes due and
payable by the Administrative Agent and the Lenders have been paid.
OPINIONS
Based upon the foregoing, and subject to the limitations, qualifications,
assumptions and exceptions set forth below, we are of the opinion that:
1. Each of the Transaction Documents to which the Borrower is a party
constitutes the legal, valid and binding obligation of the Borrower enforceable
against the Borrower in accordance with its terms.
2. Each of the Transaction Documents to which each Subsidiary is a
party constitutes the legal, valid and binding obligation of such Subsidiary
enforceable against such Subsidiary in accordance with its terms.
The Bank of Nova Scotia
July 29, 1998
Page 5
3. The Borrower Pledge Agreement creates a valid security interest in
favor of the Administrative Agent in the Collateral (as defined in the Borrower
Pledge Agreement), as security for the Secured Obligations (as defined in the
Borrower Pledge Agreement), and the Administrative Agent having and maintaining
possession of the certificates representing the Pledged Interests (as defined in
the Borrower Pledge Agreement), other than Pledged Notes (as defined in the
Borrower Pledge Agreement), together with stock powers duly executed in blank by
the Borrower delivered to the Administrative Agent today (either in California
or New York) results in the perfection of such security interest, and, further,
the Administrative Agent is a "protected purchaser" of such Pledged Interests.
4. The Subsidiary Pledge Agreement creates a valid security interest
in favor of the Administrative Agent in the Collateral (as defined in the
Subsidiary Pledge Agreement), as security for the Secured Obligations (as
defined in the Subsidiary Pledge Agreement), and the Administrative Agent having
and maintaining possession of the certificates representing the Pledged
Interests (as defined in the Subsidiary Pledge Agreement), other than Pledged
Notes (as defined in the Subsidiary Pledge Agreement), together with stock
powers duly executed in blank by the relevant Subsidiary delivered to the
Administrative Agent today (either in California or New York) results in the
perfection of such security interest, and, further, the Administrative Agent is
a "protected purchaser" of such Pledged Interests.
5. The provisions of the Borrower Security Agreement are effective
under the laws of the State of New York to create in favor of the Administrative
Agent a legal and valid security interest in all right, title and interest of
the Borrower in and to all Borrower Security Agreement Collateral, in which a
security interest can be created under the UCC (the "BORROWER UCC COLLATERAL"),
including, without limitation (a) all "equipment" and "inventory" (each as
defined in the UCC), now or hereafter owned by the Borrower, and located in
California, (b) all "accounts" and "general intangibles" (each as defined in the
UCC) now or hereafter owned by the Borrower, to the extent that the Borrower is
deemed to be located in California within the meaning of Section 9-103 of the
UCC, and (c) all "proceeds" (as defined in the UCC) of such "equipment",
"inventory", "accounts" and "general intangibles" (located in California or,
with respect to intangible collateral, to the extent Borrower continues to be
located in California within the meaning of Section 9-103 of the UCC).
6. The provisions of the Subsidiary Security Agreement are effective
under the laws of the State of New York to create in favor of the Administrative
Agent a legal and valid
The Bank of Nova Scotia
July 29, 1998
Page 6
security interest in all right, title and interest of each Subsidiary in and
to all Subsidiary Security Agreement Collateral, in which a security interest
can be created under the UCC (the "SUBSIDIARY UCC COLLATERAL"), including,
without limitation (a) all "equipment" and "inventory" (each as defined in
the UCC), now or hereafter owned by each Subsidiary, and located in
California, (b) all "accounts" and "general intangibles" (each as defined in
the UCC) now or hereafter owned by each Subsidiary, to the extent that each
Subsidiary is deemed to be located in California within the meaning of
Section 9-103 of the UCC, and (c) all "proceeds" (as defined in the UCC) of
such "equipment", "inventory", "accounts" and "general intangibles" (located
in California or, with respect to intangible collateral, to the extent each
such Subsidiary continues to be located in California within the meaning of
Section 9-103 of the UCC).
7. The Financing Statements are in appropriate form for filing and,
upon the filing of (a) the Borrower Security Agreement Financing Statements in
the Borrower Security Agreement Filing Offices, and (b) the Security Agreement
Financing Statements in the Security Agreement Filing Offices, and the payment
of the fees and charges set forth on SCHEDULE I hereto which are required in
connection with such filings, the Administrative Agent's security interest in
all right, title and interest of the Obligors in and to the Borrower UCC
Collateral and the Subsidiary UCC Collateral, shall be fully perfected, to the
extent that a security interest in such collateral can be perfected by the
filing of such financing statements in such offices.
8. Except for the filing of (a) the Borrower Security Agreement
Financing Statements in the Borrower Security Agreement Filing Offices, and (b)
the Security Agreement Financing Statements in the Security Agreement Filing
Offices, and the payment of the fees and charges described in PARAGRAPH 7 above,
no other recordation or filing need be made, and no other action need be taken,
in order to perfect or maintain the perfection of the Administrative Agent's
security interest in the Borrower UCC Collateral and the Subsidiary UCC
Collateral, other than the filings and actions described above (regarding
Pledged Interests) or below.
9. No consent, approval, authorization or order of, or filing or
registration with, any Federal or New York State governmental agency or body is
required to be made in connection with the execution, delivery and performance
by the Borrower of the Transaction Documents to which it is a party, except for
(i) recording the Trademark Security Agreement and the Patent Security Agreement
with the United States Patent and Trademark Office and
The Bank of Nova Scotia
July 29, 1998
Page 7
the Copyright Security Agreement with the United States Copyright Office, and
(ii) filing the Financing Statements in the appropriate filing offices in all
appropriate jurisdictions.
10. The Copyright Security Agreement creates in favor of the
Administrative Agent a valid security interest in each of the copyrights listed
in Schedule A thereto which is duly and validly registered in the United States
Copyright Office (each a "Copyright" and collectively the "Copyrights"). Upon
the proper filing of the Financing Statements in the offices listed in Schedule
I hereto and the recordation of the Copyright Security Agreement in the United
States Copyright Office, the Administrative Agent will have a perfected security
interest in each Copyright.
11. The Patent Security Agreement creates in favor of the
Administrative Agent a valid security interest in each of the patents listed in
Schedule A thereto which is duly and validly issued by the United States Patent
and Trademark Office (each a "Patent" and collectively the "Patents"). Upon the
proper filing of the Financing Statements in the offices listed in Schedule I
hereto and the recordation of the Patent Security Agreement in the United States
Patent and Trademark Office, the Administrative Agent will have a perfected
security interest in each Patent.
12. The Trademark Security Agreement creates a favor of the
Administrative Agent a valid security interest in each of the trademarks listed
in Schedule A thereto which is duly and validly registered in the United States
Patent and Trademark Office (each a "Trademark" and collectively the
"Trademarks"). Upon the proper filing of the Financing Statements in the
offices listed in Schedule I hereto and the recordation of the Trademark
Security Agreement in the United States Patent and Trademark Office, the
Administrative Agent will have a perfected security interest in each Trademark.
ADDITIONAL ASSUMPTIONS, QUALIFICATIONS,
LIMITATIONS AND EXCEPTIONS
Our opinions expressed above are subject to the following additional
qualifications, assumptions, limitations and exceptions:
(i) Our opinion is based upon our review only of those laws, statutes,
rules and regulations which, in our experience, are normally applicable to
transactions which are similar to the transactions contemplated by the
Transaction Documents, and we are not expressing any opinion as to the effect of
compliance by any party to the Transaction Documents with
The Bank of Nova Scotia
July 29, 1998
Page 8
any laws, statutes, rules or regulations applicable to the transactions
because of the nature of such party's business, and we have assumed that the
Borrower and the Subsidiaries are not subject to any licensing or other
regulatory requirements or provisions under New York, California or Federal
law, other than those generally affecting persons conducting business for
profit, which would affect the ability of the Borrower or the Subsidiaries to
perform their respective obligations under the Transaction Documents.
However, to our best knowledge, Borrower and the Subsidiaries are not subject
to any licensing or other regulatory requirements or provisions under New
York, California or Federal law.
(ii) Whenever a statement herein is qualified by "known to us", "to our
best knowledge" or similar phrase, it is intended to indicate that, during the
course of our representation of Borrower and the Subsidiaries, no information
that would give us current actual knowledge of the inaccuracy of such statement
has come to the attention of those attorneys in this firm who have rendered
legal services in connection with the representation described in the
introductory paragraph of this opinion letter. We have not, however, undertaken
any further independent investigation to determine the accuracy of any such
statement, and any limited inquiry undertaken by us during the preparation of
this opinion letter should not be regarded as such an investigation or imply
that we have any duty to make such an investigation; no inference as to our
knowledge of any matters bearing on the accuracy of any such statement should be
drawn from the fact of our representation of Borrower and the Subsidiaries in
connection with this transaction.
(iii) For purposes of our opinions 3 and 4 above, (i) we have assumed
that the Administrative Agent and the other Lenders do not have notice of any
adverse claim to the Pledged Interests, (ii) the Collateral defined in the
Borrower Pledge Agreement is and will remain physically within the State of New
York, (iii) "protected purchaser" shall have the meaning set forth in UCC
Section 8303, and (iv) such opinions do not apply to any proceeds or other
distributions received in connection therewith. For the purposes of opinions 9
through 12 above we have assumed that the holder of the Copyrights, Patents and
Trademarks at the time of filing and recordation of each of the Copyright
Security Agreement, the Patent Security Agreement and the Trademark Security
Agreement, respectively, is as indicated on the Schedules attached thereto.
The Bank of Nova Scotia
July 29, 1998
Page 9
(iv) Our opinions set forth in paragraphs 1 and 2 above are limited by
the following:
a) applicable bankruptcy, receivership, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement
of the rights and remedies of creditors, secured parties and parties to
executory contracts generally; and such duties and standards as are or may
be imposed on creditors, including, without limitation, good faith,
materiality, reasonableness, and fair dealing under the UCC or any other
applicable law or judicial decision; and
b) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law) and the
exercise of equitable powers by a court of competent jurisdiction (and no
opinion is given herein as to any specific or equitable relief of any kind
or as to the availability of equitable remedies);
(v) Our opinions are limited by the following:
a) applicable laws relating to fraudulent conveyances and
preferential transfers, as to which we express no opinion; and
b) law and public policy governing provisions of any of the
Transaction Documents providing contribution to a party or indemnifying or
prospectively releasing a party with respect to a liability.
(vi) Our opinions are subject to the constitutionality and continued
validity of all statutes and laws reviewed and relied upon by us in connection
with rendering the opinions set forth herein.
(vii) We advise you that courts may not strictly enforce certain
covenants contained in the Transaction Documents or allow acceleration of the
maturity of the debt evidenced by thereby if it concludes that such enforcement
or acceleration would be unreasonable under the then existing circumstances.
(viii) We express no opinion as to the validity, enforceability or
perfection of any security interest in (i) any property with respect to which
any federal filing, registration or consent is necessary to assign or perfect an
interest therein (except as expressly stated above), (ii) any equipment, rail
cars or vehicles as to which perfection of a security interest is
The Bank of Nova Scotia
July 29, 1998
Page 10
dependent upon a notation being made on a certificate of title or the like,
(iii) any property the creation of a security interest in which is excluded
from the California UCC or the UCC (e.g., claims for wages, loans made by an
insurance company, rights of setoff, tort claims, etc.), (iv) any consumer
goods, equipment used in farming operations, farm products, crops, timber or
minerals and the like (including oil and gas) or accounts resulting from the
sale thereof, any beneficial interest in a trust or a decedent's estate or
letters of credit (all as defined in the California UCC or the UCC), or
accounts, chattel paper, documents, instruments or general intangibles (all
as defined in the UCC) which are or will be due from the United States, any
state of the United States, county, municipality or other governmental body
or any agency, department or instrumentality thereof, unless the same has
been assigned to the Lender pursuant to the Assignment of Claims Act of 1940,
as amended, or any similar law or regulation relating to the assignment or
pledge thereof; in that connection, however, the creation and perfection of a
security interest in such collateral is accomplished under the Transaction
Documents together with the filing of the Financing Statements and the
Administrative Agent's taking possession of the Pledged Interests as noted
above, (v) balances, credits, deposits, accounts, deposit accounts or monies
maintained at an office or branch of the Lender other than an office or
branch located within the State of California, (vi) goods which are moveable
in nature, (vii) any interest in or claim in or under any policy of
insurance, except a claim to proceeds payable by reason of loss or damage
under insurance policies maintained with respect to inventory or equipment as
required by and in compliance with the Transaction Documents, (viii) goods as
against a consignor which has delivered or may hereafter deliver such goods
to the Borrower or the Subsidiaries under a true consignment (as
distinguished from a consignment intended as security), (ix) goods which are
installed in or affixed to, or become a part of a product or mass with, goods
which are not items of Collateral, (x) inventory in the event of any failure
by the Borrower or the Subsidiaries to have compiled or to comply fully with
the Fair Labor Standards Act of 1932, as amended, including Sections 206 and
207 thereof, or (xi) fixtures. Furthermore, we express no opinion (a)
regarding whether any particular item of Collateral is or is not a "fixture",
or (b) with respect to the priority of any lien or security interest under
the Transaction Documents (other than the specific opinion rendered above in
paragraphs 3 and 4 regarding "protected purchasers"). We bring to your
attention the fact that security interests in deposit accounts subject to the
California UCC are perfected by notice to the depositary institution, and not
by filing of a financing statement.
(ix) Certain rights, remedies, and waivers contained in the Transaction
Documents may be limited or rendered ineffective by applicable laws or judicial
decisions governing such provisions or are otherwise limited by the restrictions
of public policy.
The Bank of Nova Scotia
July 29, 1998
Page 11
(x) We call to your attention the fact that under the California UCC,
the effectiveness of financing statements will lapse five years after the date
of filing thereof, and your security interests perfected pursuant to such
financing statements will become unperfected, unless continuation statements are
filed within six months prior to the end of such five-year period. We also call
to your attention to the fact that security interests under the California UCC
perfected pursuant to such financing statements in any of the Collateral will be
terminated (i) as to any Collateral acquired by a debtor more than four months
after such party changes its name, identity or corporate structure to such an
extent as to make its financing statements seriously misleading, unless a new
appropriate financing statement indicating the new name, identity or
organizational structure of such party is properly filed before the expiration
of four months after such change and (ii) as to any collateral consisting of
accounts, general intangibles or mobile goods, four months after a debtor
changes its chief executive office (or, if earlier, when perfection under the
laws of the applicable state would have lapsed under the first sentence of this
paragraph), unless such security interests are perfected in such new
jurisdiction before that termination. We further call your attention to the
fact that, with respect to any collateral consisting of goods which are (i)
relocated to another jurisdiction, refiling in such jurisdiction may be required
to continue perfection under the laws of such jurisdiction, and (ii) relocated
from another jurisdiction to California, refiling in California within four
months is required to continue any perfection obtained under the law of such
other jurisdiction; provided, however, goods relocated from another jurisdiction
to the locations in California described in Schedule I attached hereto complying
with the description of the collateral in the financing statements (described
above) will not require any such refiling.
(xi) We bring to your attention the fact that (i) security interests
granted with respect to after-acquired property are not enforceable or
perfected until the party granting the security interest has acquired rights
in such properties, (ii) that certain rights of debtors and duties of secured
parties described in Sections 1102(3) and 9501(3) of the California UCC and
Sections 1-102(3) and 9-501(3) of the UCC may not be waived, released or
disclaimed by agreement prior to a default, (iii) security interests in favor
of the Administrative Agent and the Lenders may be affected in the future by
circumstances covered by Section 9301(4) of the California UCC and Section
9-301(4) of the UCC, and (iv) our opinions are further subject to the
limitations with respect to buyers in the ordinary course of business imposed
by Section 9307 and 9308 of the California UCC and Sections 9-307 and 9-308
of the UCC and the limitations with respect to documents, instruments and
securities imposed by Section 9309 of the California UCC and Section 9-309 of
the UCC.
The Bank of Nova Scotia
July 29, 1998
Page 12
(xii) This opinion insofar as it opines on the creation of a security
interest is limited to the creation of security interests under the laws of the
States of New York and California.
(xiii) We express no opinion with respect to the validity, binding effect
or enforceability of any provision of the Transaction Documents which purports
to authorize the Lender to sign or file financing statements without the
signature of the applicable debtor (except to the extent a secured party may be
permitted to execute and file financing statements without the signature of the
debtor under Section 9402(2) of the California UCC and Section 9-402(2) of the
UCC).
(xiv) The creation or enforceability of any security interest granted in
accounts receivable is subject (except as provided in Section 9318 of the
California UCC and Section 9-318 of the UCC, as applicable) to the rights of
account debtors, and the terms of any contracts between the respective debtor
and such account debtors, and any claims or defenses of such account debtors
against the respective debtor arising under or outside such contracts.
(xv) We call your attention to the fact that, under certain
circumstances described in Section 9306 of the California UCC and Section 9-306
of the UCC, the right of a secured party to enforce a security interest in the
proceeds of collateral may be limited (unless the proceeds consist of the
collateral described in the financing statements (described above) and the
security interest in such proceeds can be perfected by the proper filing of such
financing statements).
(xvi) We advise you that guarantors of personal property secured
obligations may be treated as "debtors" under the California UCC and the UCC,
thereby accorded rights and remedies of debtors established by the California
UCC and the UCC.
(xvii) We express no opinion as to (i) the title to or the descriptions
of, any security interest in any property described in the Transaction Documents
in which a security interest has been granted pursuant to the Transaction
Documents; (ii) the existence or effect of liens, security interests, charges,
encumbrances or claims of right or ownership with respect thereto (other than
the security interests granted in favor of the Administrative Agent); (iii)
whether such property is the property intended to secure the obligations of the
Borrower under the Transaction Documents; and (iv) any matter affecting or in
any way related to title. We draw your attention to the fact that certain third
party liens may impact the priority of the Administrative Agent's security
interest in the Collateral.
The Bank of Nova Scotia
July 29, 1998
Page 13
(xviii) We express no opinion with respect to the validity or
enforceability of any provision of the Transaction Documents that:
a) In effect, liquidates damages for the breach of a contract;
b) Imposes what a court may deem to be penalties (prepayment
penalties or otherwise), forfeitures, late payment charges or an increased
rate of interest, upon delinquency or default in the payment of sums due
under the Transaction Documents or any other defaults;
c) Seeks to define what constitutes good faith or commercially
reasonable behavior. We note that a court might not permit the exercise
of any right or remedy provided in the Transaction Documents if, under the
circumstances then existing, such exercise is deemed to be inconsistent
with the covenant of good faith and fair dealing implied under applicable
law to exist in all agreements or if the party seeking to exercise such
right or remedy fails to act in a commercially reasonable manner or fails
to fulfill other duties imposed by statute or judicial decisions. We do
believe, however, that subject to the limitations expressed elsewhere in
this opinion, enforcement and/or (to the extent permitted under the
Transaction Documents) acceleration would be available if an event of
default occurs as a result of a material breach of a material covenant
contained in the Transaction Documents;
d) To the extent public policy limits provisions of the
Transaction Documents that purport to indemnify or otherwise exonerate any
party to the Transaction Documents from the consequences of its
inadvertent failure to take actions required to be taken by it thereunder,
it being acknowledged that certain defenses, such as waiver, estoppel and
laches, may not be waivable in any event;
e) Purports to grant to the Administrative Agent and the Lenders
any "self-help" or summary remedies;
f) Purports to waive the right of Borrower or the Subsidiaries to
object to subject matter, jurisdiction or venue, or to assert any defense
based on lack of subject matter, jurisdiction or venue;
The Bank of Nova Scotia
July 29, 1998
Page 14
g) Purports to waive Borrower's or the Subsidiaries right to a
jury trial; and/or
h) Purports to exculpate or release any party thereto from
liability for the acts or omissions of such party proximately causing
damages or injuries as the result of such party's ordinary or gross
negligence or willful or intentional misconduct, or which purports to
impose a duty upon Borrower or any other person, firm or entity, to
indemnify any other party when any claimed damages result from the
ordinary or gross negligence or willful or intentional misconduct of the
party seeking such indemnity to the extent such provisions violate public
policy
(xix) We bring your attention to the fact that requirements in the
Transaction Documents specifying that provisions thereof may only be waived in
writing may not be valid, binding or enforceable to the extent that an oral
agreement or an implied agreement by trade practice or course of conduct has
been created modifying any provisions of such documents.
(xx) We express no opinion, as to the legality, validity, binding
nature, enforceability or otherwise with respect to (i) broadly stated waivers
of suretyship defenses, presentment, protest, demand, notice, appraisement,
valuation, stay, extension, moratorium, redemption or other rights granted by
law to the extent such waivers are held to be against public policy or
prohibited by law, (ii) any provision of any Transaction Document that may be
deemed to provide for the application of monies deposited in any account
maintained with the Administrative Agent or the Lender or collected by any of
the foregoing notwithstanding that no event of default shall have occurred and
be continuing, (iii) any provisions which purport to create a power of attorney,
proxy or agency relationship, (iv) any provision in the Transaction Documents
that provides for a power of attorney or for the appointment of a receiver as a
matter of right, (v) except as expressly addressed by the opinions set forth
above, any schedule or exhibit to any of the Transaction Documents, (vi) the
enforceability of any indemnity or reimbursement obligation by the Borrower or
the Subsidiaries concerning environmental remediation or the costs of compliance
with any environmental protection law to the extent public policy restricts or
objects such provisions, or (vii) any provision of the Transaction Documents
that purports to allow a set off by the Administrative Agent or the Lenders
against funds held by the Borrower or the Subsidiaries in trust, special
accounts or other segregated accounts.
The Bank of Nova Scotia
July 29, 1998
Page 15
This Opinion relates only to the matters expressly addressed above, is
applicable only as to the date hereof, and we express no opinion with respect to
any other matters. We disclaim any obligation to update this opinion for events
occurring after the date hereof.
Our opinions contained herein are rendered solely in connection with the
transactions contemplated under the Transaction Documents and may not be relied
upon in any manner by any Person other than the addressees hereof, any successor
or assignee of any addressee (including successive assignees) and any Person who
shall acquire a participation interest in the interest of the Lenders
(collectively, the "Reliance Parties"), or by any Reliance Party for any other
purpose. Our opinions herein shall not be quoted or otherwise included,
summarized or referred to in any publication or document, in whole or in part,
for any purposes whatsoever, or furnished to any Person other than a Reliance
Party (or a Person considering whether to become a Reliance Party), except as
may be required of any Reliance Party by applicable law or regulation or in
accordance with any auditing or oversight function or request of regulatory
agencies to which a Reliance Party is subject.
Very truly yours,
/s/ Xxxxxx, Xxxxx & Brokius, LLP
SCHEDULE I
SECURITY AGREEMENT FILING OFFICES
A. OFFICE (for the Borrower)
California Secretary of State
B. OFFICE (for each Subsidiary)
California Secretary of State
Customary filing fees will be charged for each UCC-1 Financing Statement filed
with the California Secretary of State.
Exhibit "A"
List of Subsidiaries
Titan Environmental Corporation
Tomo Therapeutics
Linkabit Wireless, Inc.
Pulse Sciences, Inc.
Federal Services, Inc.
Unidyne Corporation
Eldyne, Inc.
Diversified Control Systems, Inc.
Titan Aerochem, Inc.
Titan Broadband Communications Corporation
Titan Software Systems Corporation
Titan Purification, Inc.
DBA Systems, Inc.
Validity Corporation
Horizons Technology, Inc.
[EXECUTION COPY]
SUBSIDIARY GUARANTY
This SUBSIDIARY GUARANTY (as amended, supplemented, amended and restated or
otherwise modified from time to time, the "GUARANTY"), dated as of July 29,
1998, is made by each Subsidiary (such capitalized term, and other terms used in
this Guaranty, to have the meanings set forth in ARTICLE I) of THE TITAN
CORPORATION, a Delaware corporation (the "BORROWER"), now or after the date
hereof (including pursuant to SECTION 5.5) a party to this Guaranty
(individually referred to as a "GUARANTOR" and collectively referred to as the
"GUARANTORS") in favor of each of the Secured Parties, including THE BANK OF
NOVA SCOTIA, in its capacity as the Administrative Agent.
W I T N E S S E T H:
WHEREAS, pursuant to a Credit Agreement, dated as of July 29, 1998 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the "CREDIT AGREEMENT"), among the Borrower, the various financial
institutions as are, or may from time to time become, parties thereto
(collectively referred to as the "LENDERS"), the Administrative Agent, and
Imperial Bank, as Documentation Agent, the Lenders and the Issuers have extended
Commitments to make Credit Extensions to the Borrower;
WHEREAS, as a condition precedent to the making of the Credit Extensions
(including the initial Credit Extension) under the Credit Agreement, each
Guarantor is required to execute and deliver this Guaranty;
WHEREAS, each Guarantor has duly authorized the execution, delivery and
performance of this Guaranty; and
WHEREAS, it is in the best interests of each Guarantor to execute this
Guaranty inasmuch as such Guarantor will derive substantial direct and indirect
benefits from the Credit Extensions made from time to time to the Borrower by
the Lenders and the Issuers pursuant to the Credit Agreement;
NOW THEREFORE, for good and valuable consideration the receipt of which is
hereby acknowledged, and in order to induce the Lenders and the Issuers to make
Credit Extensions (including the initial Credit Extension) to the Borrower, each
Guarantor jointly and severally agrees, for the benefit of each Secured Party,
as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. CERTAIN TERMS. The following terms (whether or not
underscored) when used in this Guaranty, including its preamble and recitals,
shall have the following meanings (such definitions to be equally applicable to
the singular and plural forms thereof):
"BORROWER" is defined in the PREAMBLE.
"CREDIT AGREEMENT" is defined in the FIRST RECITAL.
"GUARANTOR" and "GUARANTORS" is defined in the PREAMBLE.
"GUARANTY" is defined in the PREAMBLE.
"LENDERS" is defined in the FIRST RECITAL.
"TERMINATION DATE" means the date on which all Obligations have
indefeasibly been paid in full, all Commitments have been fully terminated and
all Letters of Credit have been canceled or otherwise terminated.
SECTION 1.2. CREDIT AGREEMENT DEFINITIONS. Unless otherwise defined
herein or the context otherwise requires, terms used in this Guaranty, including
its preamble and recitals, have the meanings provided in the Credit Agreement.
ARTICLE II
GUARANTY PROVISIONS
SECTION 2.1. GUARANTY. Each Guarantor hereby jointly and severally
absolutely, unconditionally and irrevocably
(a) guarantees the full and punctual payment when due, whether at
stated maturity, by required prepayment, declaration, acceleration, demand
or otherwise, of all Obligations of the Borrower and each other Obligor now
or hereafter existing, whether for principal, interest (including interest
accruing at the then applicable rate provided in the Credit Agreement after
the occurrence of any Default set forth in Section 8.1.9 of the Credit
Agreement, whether or not a claim for post-filing or post-petition interest
is allowed under applicable law following the institution of a proceeding
under bankruptcy, insolvency or similar laws), fees, Reimbursement
Obligations, expenses or otherwise (including all such amounts which would
become due but for the operation of the
2
automatic stay under Section 362(a) of the United States Bankruptcy Code,
11 U.S.C. Section 362(a), and the operation of Sections 502(b) and 506(b)
of the United States Bankruptcy Code, 11 U.S.C. Section 502(b) and Section
506(b)); and
(b) indemnifies and holds harmless each Secured Party for any and all
costs and expenses (including reasonable attorneys' fees and expenses)
incurred by such Secured Party in enforcing any rights under this Guaranty;
PROVIDED, HOWEVER, that each Guarantor shall only be liable under this Guaranty
for the maximum amount of such liability that can be hereby incurred without
rendering this Guaranty, as it relates to such Guarantor, voidable under
applicable law relating to fraudulent conveyance or fraudulent transfer, and not
for any greater amount. This Guaranty constitutes a guaranty of payment when
due and not of collection, and each Guarantor specifically agrees that it shall
not be necessary or required that any Secured Party exercise any right, assert
any claim or demand or enforce any remedy whatsoever against the Borrower, any
other Obligor or any other Person before or as a condition to the obligations of
such Guarantor hereunder.
SECTION 2.2. REINSTATEMENT, ETC. Each Guarantor hereby jointly and
severally agrees that this Guaranty shall continue to be effective or be
reinstated, as the case may be, if at any time any payment (in whole or in part)
of any of the Obligations is invalidated, declared to be fraudulent or
preferential, set aside, rescinded or must otherwise be restored by any Secured
Party, upon the insolvency, bankruptcy, reorganization (or similar event) of the
Borrower, any other Obligor or otherwise, all as though such payment had not
been made.
SECTION 2.3. GUARANTY ABSOLUTE, ETC. This Guaranty shall in all respects
be a continuing, absolute, unconditional and irrevocable guaranty of payment,
and shall remain in full force and effect until the Termination Date has
occurred. Each Guarantor jointly and severally guarantees that the Obligations
of the Borrower and each other Obligor will be paid strictly in accordance with
the terms of the Credit Agreement and each other Loan Document under which they
arise, regardless of any law, regulation or order now or hereafter in effect in
any jurisdiction affecting any of such terms or the rights of any Secured Party
with respect thereto. The liability of each Guarantor under this Guaranty shall
be joint and several, absolute, unconditional and irrevocable irrespective of:
(a) any lack of validity, legality or enforceability of the Credit
Agreement or any other Loan Document;
(b) the failure of any Secured Party
(i) to assert any claim or demand or to enforce any right or
remedy against the Borrower, any other Obligor or any other Person
(including any other guarantor) under the provisions of the Credit
Agreement, any other Loan Document or otherwise, or
-3-
(ii) to exercise any right or remedy against any other guarantor
(including each Guarantor) of, or collateral securing, any
Obligations;
(c) any change in the time, manner or place of payment of, or in any
other term of, all or any part of the Obligations, or any other extension,
compromise or renewal of any Obligation;
(d) any reduction, limitation, impairment or termination of any
Obligations for any reason, including any claim of waiver, release,
surrender, alteration or compromise, and shall not be subject to (and each
Guarantor hereby waives any right to or claim of) any defense or setoff,
counterclaim, recoupment or termination whatsoever by reason of the
invalidity, illegality, nongenuineness, irregularity, compromise,
unenforceability of, or any other event or occurrence affecting, any
Obligations or otherwise;
(e) any amendment to, rescission, waiver, or other modification of, or
any consent to or departure from, any of the terms of the Credit Agreement
or any other Loan Document;
(f) any addition, exchange, release, surrender or non-perfection of
any collateral, or any amendment to or waiver or release or addition of, or
consent to or departure from, any other guaranty held by any Secured Party
securing any of the Obligations; or
(g) any other circumstance which might otherwise constitute a defense
available to, or a legal or equitable discharge of, the Borrower, any other
Obligor, any surety or any guarantor.
SECTION 2.4. SETOFF. Each Guarantor hereby irrevocably authorizes the
Administrative Agent and each other Secured Party, without the requirement that
any notice be given to such Guarantor (such notice being expressly waived by
each Guarantor), upon the occurrence and during the continuance of any Default
described in CLAUSES (A) through (D) of SECTION 8.1.9 of the Credit Agreement as
it relates to the Borrower or, with the consent of the Required Lenders, upon
the occurrence and during the continuance of any other Event of Default, to
set-off and appropriate and apply to the payment of the Obligations owing to the
Secured Parties (whether or not then due, and whether or not the Administrative
Agent or such other Secured Party has made any demand for payment of the
Obligations), any and all balances, claims, credits, deposits (general or
special, time or demand, provisional or final), accounts or money of such
Guarantor then or thereafter maintained with such Secured Party; PROVIDED,
HOWEVER, that any such appropriation and application shall be subject to the
provisions of Section 4.8 of the Credit Agreement. Each Secured Party agrees to
notify the applicable Guarantor and the Administrative Agent after any such
setoff and application made by such Secured Party; PROVIDED, HOWEVER, that the
failure to give such notice shall not affect the validity of such setoff and
application. The rights of each Secured Party under this Section are in
-4-
addition to other rights and remedies (including other rights of setoff under
applicable law or otherwise) which such Secured Party may have.
SECTION 2.5. WAIVER, ETC. Each Guarantor hereby waives promptness,
diligence, notice of acceptance and any other notice with respect to any of the
Obligations and this Guaranty and any requirement that the Administrative Agent
or any other Secured Party protect, secure, perfect or insure any Lien, or any
property subject thereto, or exhaust any right or take any action against the
Borrower, any other Obligor or any other Person (including any other guarantor)
or entity or any collateral securing the Obligations, as the case may be.
SECTION 2.6. POSTPONEMENT OF SUBROGATION, ETC. Each Guarantor agrees that
it will not exercise any rights which it may acquire by way of rights of
subrogation under this Guaranty or any other Loan Document to which it is a
party, nor shall any Guarantor seek or be entitled to seek any contribution or
reimbursement from the Borrower or any other Obligor, in respect of any payment
made hereunder, under any other Loan Document or otherwise, until following the
Termination Date. Any amount paid to any Guarantor on account of any such
subrogation rights prior to the Termination Date shall be held in trust for the
benefit of the Secured Parties and shall immediately be paid and turned over to
the Administrative Agent for the benefit of the Secured Parties in the exact
form received by such Guarantor (duly endorsed in favor of the Administrative
Agent, if required), to be credited and applied against the Obligations, whether
matured or unmatured, in accordance with SECTION 2.8; PROVIDED, HOWEVER, that if
(a) any Guarantor has made payment to the Secured Parties of all or
any part of the Obligations; and
(b) the Termination Date has occurred;
then at such Guarantor's request, the Administrative Agent, (on behalf of the
Secured Parties) will, at the expense of such Guarantor, execute and deliver to
such Guarantor appropriate documents (without recourse and without
representation or warranty) necessary to evidence the transfer by subrogation to
such Guarantor of an interest in the Obligations resulting from such payment by
such Guarantor. In furtherance of the foregoing, at all times prior to the
Termination Date, each Guarantor shall refrain from taking any action or
commencing any proceeding against the Borrower or any other Obligor (or its
successors or assigns, whether in connection with a bankruptcy proceeding or
otherwise) to recover any amounts in the respect of payments made under this
Guaranty to any Secured Party. Notwithstanding the foregoing, to the extent
necessary to toll the statute of limitations, such Guarantor may take such
action required to preserve any rights it has by way of rights of subrogation as
consented to by the Administrative Agent in its reasonable discretion.
SECTION 2.7. SUCCESSORS, TRANSFEREES AND ASSIGNS, ETC. This Guaranty
shall:
-5-
(a) be binding upon each Guarantor, and its successors, transferees
and assigns; and
(b) inure to the benefit of and be enforceable by the Administrative
Agent and each other Secured Party.
Without limiting the generality of CLAUSE (B), any Lender may assign or
otherwise transfer (in whole or in part) any Note or Credit Extension held by it
to any other Person and such other Person shall thereupon become vested with all
rights and benefits in respect thereof granted to such Lender under any Loan
Document (including this Guaranty) or otherwise, subject, however, to any
contrary provisions in such assignment or transfer, and to the provisions of
Article X of the Credit Agreement.
SECTION 2.8. PAYMENTS; APPLICATION. Each Guarantor hereby agrees with
each Secured Party as follows:
(a) Each Guarantor agrees that all payments made by such Guarantor
hereunder will be made in Dollars to the Administrative Agent, without
set-off, counterclaim or other defense and in accordance with Sections 4.6
and 4.7 of the Credit Agreement, free and clear of and without deduction
for any Taxes, the Guarantor hereby agreeing to comply with and be bound by
the provisions of Sections 4.6 and 4.7 of the Credit Agreement in respect
of all payments made by it hereunder and the provisions of which Sections
are hereby incorporated into and made a part of this Guaranty by this
reference as if set forth herein; PROVIDED, that references to the
"Borrower" in such Sections shall be deemed to be references to each
Guarantor, and references to "this Agreement" shall be deemed to be
references to this Guaranty.
(b) All payments made hereunder shall be applied upon receipt as
follows:
(i) first, to the payment of all Obligations owing to the
Administrative Agent;
(ii) second, after payment in full of the amounts specified in
CLAUSE (B)(I), to the ratable payment of all other Obligations owing
to the Secured Parties; and
(iii) third, after payment in full of the amounts specified in
CLAUSES (B)(I) and (B)(II), and following the Termination Date, to
such Guarantor or any other Person lawfully entitled to receive such
surplus.
SECTION 2.9. ACCELERATION OF GUARANTY. Each Guarantor hereby jointly and
severally agrees that, in the event of an Event of Default under Section 8.1.9
of the Credit Agreement, and if such Default shall occur at a time when any of
the Obligations may not then be due and payable, each Guarantor jointly and
severally agrees that it will pay to the Administrative Agent
-6-
(for the benefit of the Secured Parties) forthwith the full amount which would
be payable hereunder by each Guarantor if all such Obligations were then due and
payable.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. REPRESENTATIONS. In order to induce the Secured Parties to
enter into the Credit Agreement and make Credit Extensions thereunder, each
Guarantor represents and warrants to each Secured Party that the representations
and warranties contained in Article VI of the Credit Agreement, insofar as the
representations and warranties contained therein are applicable to it and its
properties, are true and correct in all material respects, each such
representation and warranty set forth in such Article (insofar as applicable as
aforesaid) and all other terms of the Credit Agreement to which reference is
made therein, together with all related definitions and ancillary provisions,
being hereby incorporated into this Guaranty by this reference as though
specifically set forth in this Article. Furthermore, each Guarantor represents
that it has knowledge of the Borrower's and each other Obligor's financial
condition and affairs and that it has adequate means to obtain from the Borrower
and each other Obligor on an ongoing basis information relating thereto and to
the Borrower's and such Obligor's ability to pay and perform the Obligations,
and agrees to assume the responsibility for keeping, and to keep, so informed
for so long as this Guaranty is in effect. Each Guarantor acknowledges and
agrees that the Secured Parties shall have no obligation to investigate the
financial condition or affairs of any Obligor for the benefit of such Guarantor
nor to advise such Guarantor of any fact respecting, or any change in, the
financial condition or affairs of the Borrower or any other Obligor that might
become known to any Secured Party at any time, whether or not such Secured Party
knows or believes or has reason to know or believe that any such fact or change
is unknown to such Guarantor, or might (or does) materially increase the risk of
such Guarantor as guarantor, or might (or would) affect the willingness of such
Guarantor to continue as a guarantor of the Obligations.
ARTICLE IV
COVENANTS, ETC.
SECTION 4.1. COVENANTS. Each Guarantor covenants and agrees that, at all
times prior to the Termination Date, it will perform, comply with and be bound
by all of the agreements, covenants and obligations contained in the Credit
Agreement (including Article VII thereof) which are applicable to such Guarantor
or its properties, each such agreement, covenant and obligation contained in the
Credit Agreement and all other terms of the Credit Agreement to which reference
is made herein, together with all related definitions and ancillary provisions,
being hereby incorporated into this Guaranty by this reference as though
specifically set forth in this Article.
-7-
ARTICLE V
MISCELLANEOUS PROVISIONS
SECTION 5.1. LOAN DOCUMENT. This Guaranty is a Loan Document executed
pursuant to the Credit Agreement and shall (unless otherwise expressly indicated
herein) be construed, administered and applied in accordance with the terms and
provisions thereof, including Article X thereof.
SECTION 5.2. BINDING ON SUCCESSORS, TRANSFEREES AND ASSIGNS; ASSIGNMENT.
In addition to, and not in limitation of, SECTION 2.7, this Guaranty shall be
jointly and severally binding upon each Guarantor and its successors,
transferees and assigns and shall inure to the benefit of and be enforceable by
each Secured Party and their respective successors, transferees and assigns (to
the full extent provided pursuant to SECTION 2.7); PROVIDED, HOWEVER, that no
Guarantor may (unless otherwise permitted under the terms of the Credit
Agreement) assign any of its obligations hereunder without the prior written
consent of all Lenders.
SECTION 5.3. AMENDMENTS, ETC. No amendment to or waiver of any provision
of this Guaranty, nor consent to any departure by any Guarantor herefrom, shall
in any event be effective unless the same shall be in writing and signed by the
Administrative Agent (on behalf of the Lenders or the Required Lenders, as the
case may be, pursuant to Section 10.1 of the Credit Agreement) and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.
SECTION 5.4. NOTICES. All notices and other communications provided for
hereunder shall be in writing (including facsimile communication) and, mailed or
telecopied or delivered to each Guarantor, in care of the Borrower at the
address or facsimile number of the Borrower specified in the Credit Agreement.
All such notices and other communications, when mailed and properly addressed
with postage prepaid or if properly addressed and sent by pre-paid courier
service, shall be deemed given when received; any such notice or communication,
if transmitted by facsimile, shall be deemed given when the confirmation of
transmission thereof is received by the transmitter.
SECTION 5.5. ADDITIONAL SUBSIDIARY GUARANTORS. Upon the execution and
delivery by any other Person of an instrument in the form of ANNEX I hereto,
such Person shall become a "Guarantor" hereunder with the same force and effect
as if originally named as a "Guarantor" herein. The execution and delivery of
any such instrument shall not require the consent of any other Guarantor
hereunder. The rights and obligations of each Guarantor hereunder shall remain
in full force and effect notwithstanding the addition of any new Guarantor as a
party to this Guaranty.
SECTION 5.6. NO WAIVER; REMEDIES. In addition to, and not in limitation
of, SECTION 2.3 and SECTION 2.5, no failure on the part of any Secured Party to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial
-8-
exercise of any right hereunder preclude any other or further exercise thereof
or the exercise of any other right. The remedies herein provided are cumulative
and not exclusive of any remedies provided by law.
SECTION 5.7. CAPTIONS. Section captions used in this Guaranty are for
convenience of reference only, and shall not affect the construction of this
Guaranty.
SECTION 5.8. SEVERABILITY. Wherever possible each provision of this
Guaranty shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Guaranty shall be prohibited by or
invalid under such law, such provision shall be ineffective to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Guaranty.
SECTION 5.9. GOVERNING LAW, ENTIRE AGREEMENT, ETC. THIS GUARANTY SHALL BE
DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE
STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK). THIS GUARANTY AND THE OTHER
LOAN DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING AMONG THE PARTIES HERETO WITH
RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDE ANY PRIOR AGREEMENTS, WRITTEN
OR ORAL, WITH RESPECT THERETO.
SECTION 5.10. FORUM SELECTION AND CONSENT TO JURISDICTION. ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS GUARANTY OR
ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE SECURED PARTIES OR ANY GUARANTOR
SHALL BE BROUGHT AND MAINTAINED IN THE COURTS OF THE STATE OF NEW YORK, NEW YORK
COUNTY OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY
PROPERTY MAY BE BROUGHT, AT THE ADMINISTRATIVE AGENT'S OPTION, IN THE COURTS OF
ANY JURISDICTION WHERE SUCH PROPERTY MAY BE FOUND. EACH GUARANTOR HEREBY
IRREVOCABLY APPOINTS CSC UNITED STATES CORPORATION COMPANY (THE "PROCESS
AGENT"), WITH AN OFFICE ON THE DATE HEREOF AT 000 XXXXXX XXXXXX, XXX XXXX, XXX
XXXX 00000, AS ITS ADMINISTRATIVE AGENT TO RECEIVE, ON ITS BEHALF AND ON BEHALF
OF ITS PROPERTY, SERVICE OF COPIES OF THE SUMMONS AND COMPLAINT AND ANY OTHER
PROCESS WHICH MAY BE SERVED IN ANY SUCH ACTION OR PROCEEDING. SUCH SERVICE MAY
BE MADE BY MAILING OR DELIVERING A COPY OF SUCH PROCESS TO SUCH GUARANTOR IN
CARE OF THE PROCESS AGENT AT THE PROCESS AGENT'S ABOVE ADDRESS, AND EACH
GUARANTOR
-9-
HEREBY IRREVOCABLY AUTHORIZES AND DIRECTS THE PROCESS AGENT TO ACCEPT SUCH
SERVICE ON ITS BEHALF. EACH GUARANTOR IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR
WITHOUT THE STATE OF NEW YORK ADDRESSED TO SUCH GUARANTOR, CARE OF THE BORROWER,
AT THE ADDRESS FOR NOTICES SPECIFIED IN THE CREDIT AGREEMENT. EACH GUARANTOR
HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF
THE STATE OF NEW YORK AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE
AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN
CONNECTION WITH SUCH LITIGATION. EACH GUARANTOR HEREBY EXPRESSLY AND
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH
IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION
BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH
LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT ANY
GUARANTOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY
COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT
PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO
ITSELF OR ITS PROPERTY, SUCH GUARANTOR HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY
IN RESPECT OF ITS OBLIGATIONS UNDER THIS GUARANTY AND THE OTHER LOAN DOCUMENTS.
SECTION 5.11. WAIVER OF JURY TRIAL. EACH GUARANTOR HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, THIS GUARANTY OR ANY OTHER LOAN DOCUMENT OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF
THE SECURED PARTIES OR SUCH GUARANTOR. EACH GUARANTOR ACKNOWLEDGES AND AGREES
THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION AND
THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE SECURED PARTIES ENTERING
INTO THE CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS.
SECTION 5.12. COUNTERPARTS. This Guaranty may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
and all of which shall constitute together but one and the same agreement.
-10-
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
TITAN TECHNOLOGIES AND
INFORMATION SYSTEMS CORPORATION
By:
-------------------------------------
Name:
Title:
TITAN PURIFICATION, INC.
By:
-------------------------------------
Name:
Title:
DBA SYSTEMS, INC.
By:
-------------------------------------
Name:
Title:
VALIDITY CORPORATION
By:
-------------------------------------
Name:
Title:
-11-
LINKABIT WIRELESS, INC.
By:
-------------------------------------
Name:
Title:
UNIDYNE CORPORATION
By:
-------------------------------------
Name:
Title:
TITAN SOFTWARE SYSTEMS CORPORATION
By:
-------------------------------------
Name:
Title:
PULSE SCIENCES, INC.
By:
-------------------------------------
Name:
Title:
TITAN ENVIRONMENTAL CORPORATION
By:
-------------------------------------
Name:
Title:
-12-
TOMOTHERAPEUTICS, INC.
By:
-------------------------------------
Name:
Title:
FEDERAL SERVICES, INC.
By:
-------------------------------------
Name:
Title:
ELDYNE, INC.
By:
-------------------------------------
Name:
Title:
DIVERSIFIED CONTROL SYSTEMS, INC.
By:
-------------------------------------
Name:
Title:
TITAN BROADBAND COMMUNICATIONS
CORPORATION
By:
-------------------------------------
Name:
Title:
-13-
TITAN AEROCHEM, INC.
By:
-------------------------------------
Name:
Title:
HORIZONS TECHNOLOGY, INC.
By:
-------------------------------------
Name:
Title:
ACCEPTED AND AGREED FOR ITSELF
AND ON BEHALF OF THE SECURED PARTIES:
THE BANK OF NOVA SCOTIA,
as Administrative Agent
By:
--------------------------------
Name:
Title:
-14-
ANNEX I to
the Subsidiary Guaranty
SUPPLEMENT, dated as of ________________, ____ (this
"SUPPLEMENT"), to the Subsidiary Guaranty, dated as of _____ __, ____
(together with all amendments, supplements, restatements and other
modifications, if any, from time to time thereafter made thereto, the
"GUARANTY"), among the initial signatories thereto and each other
Person (such capitalized term, and other terms used in this
Supplement, to have the meanings set forth in Article I of the
Guaranty) which from time to time thereafter became a party thereto
pursuant to Section 5.5 thereof (each, individually, a "GUARANTOR",
and, collectively, the "GUARANTORS"), in favor of the Secured Parties
(as defined in the Guaranty).
W I T N E S S E T H:
WHEREAS, pursuant to the provisions of Section 5.5 of the Guaranty, the
undersigned is becoming a Guarantor under the Guaranty; and
WHEREAS, the undersigned Guarantor desires to become a "Guarantor" under
the Guaranty in order to induce the Secured Parties to continue to extend Credit
Extensions under the Credit Agreement;
NOW, THEREFORE, in consideration of the premises, and for other
consideration (the receipt and sufficiency of which is hereby acknowledged), the
undersigned agrees, for the benefit of each Secured Party, as follows.
SECTION 1. In accordance with the terms of the Guaranty, by its signature
below the undersigned hereby irrevocably agrees to become a Guarantor under the
Guaranty with the same force and effect as if it were an original signatory
thereto and the undersigned Guarantor, hereby (a) agrees to be bound by and
comply with all of the terms and provisions of the Guaranty applicable to it as
a Guarantor and (b) represents and warrants that the representations and
warranties made by it as a Guarantor thereunder are true and correct as of the
date hereof. In furtherance of the foregoing, each reference to a "Guarantor"
in the Guaranty shall be deemed to include the undersigned Guarantor.
SECTION 2. The undersigned Guarantor hereby represents and warrants that
this Supplement has been duly authorized, executed and delivered by it and that
this Supplement and
the Guaranty constitute the legal, valid and binding obligation of the
undersigned Guarantor, enforceable against it in accordance with its terms.
SECTION 3. Except as expressly supplemented hereby, the Guaranty shall
remain in full force and effect in accordance with its terms.
SECTION 4. In the event any one or more of the provisions contained in
this Supplement should be held invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions contained
herein and in the Guaranty shall not in any way be affected or impaired.
SECTION 5. THIS SUPPLEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. This Supplement may be executed by the parties hereto in
several counterparts, each of which shall be deemed to be an original and all of
which shall constitute together but one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Supplement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the day and year first above written.
[NAME OF ADDITIONAL SUBSIDIARY GUARANTOR]
By:
-------------------------------------
Name:
Title:
ACCEPTED BY:
THE BANK OF NOVA SCOTIA,
as Administrative Agent
By:
--------------------------------
Name:
Title:
-3-
[EXECUTION COPY]
INTERCOMPANY SUBORDINATION AGREEMENT
THIS INTERCOMPANY SUBORDINATION AGREEMENT (this "SUBORDINATION AGREEMENT"),
dated as of July 29, 1998, made by and among each of the undersigned Persons
(such capitalized term, and other terms used herein without definition, to have
the meanings ascribed thereto in SECTION 1 below) and such other Persons that
may from time to time become a party hereto pursuant to the terms hereof or of
the Credit Agreement referred to below (collectively, the "SUBORDINATED
CREDITORS"), and THE TITAN CORPORATION, a Delaware corporation (the "BORROWER"),
in favor of the Administrative Agent and each of the Secured Parties.
W I T N E S S E T H:
WHEREAS, the Borrower has entered into a Credit Agreement, dated as of July
29, 1998 (as amended, supplemented, amended and restated or otherwise modified
from time to time, the "CREDIT AGREEMENT"), among the Borrower, the various
financial institutions as are, or may from time to time become, parties thereto
(together with their successors, transferees and assigns, the "LENDERS") The
Bank of Nova Scotia, as administrative agent (the "ADMINISTRATIVE AGENT") for
the Lenders, and Imperial Bank, as Documentation Agent pursuant to which the
Lenders and the Issuers have agreed to make Credit Extensions on the terms and
subject to the conditions set forth therein;
WHEREAS, as a condition precedent to the making of the Credit Extensions
(including the initial Credit Extension) under the Credit Agreement, the
Subordinated Creditors and the Borrower are required to execute and deliver this
Subordination Agreement;
WHEREAS, each Subordinated Creditor has duly authorized the execution,
delivery and performance of this Subordination Agreement; and
WHEREAS, it is in the best interests of each Subordinated Creditor to
execute this Subordination Agreement inasmuch as each Subordinated Creditor will
derive substantial direct and indirect benefits from the Credit Extensions made
from time to time to the Borrower by the Lenders pursuant to the Credit
Agreement;
NOW, THEREFORE, in consideration of the above premises and in order to
induce the Lenders and the Issuers to continue to make Credit Extensions to the
Borrower pursuant to the Credit Agreement, and for other good and valuable
consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
set forth above and as follows:
AGREEMENT
SECTION 1. DEFINITIONS. Terms used but not defined herein have the
meanings given to them in the Credit Agreement. As used in this Subordination
Agreement, the following terms shall have the meanings specified below:
"ADMINISTRATIVE AGENT" is defined in the FIRST RECITAL.
"BORROWER" is defined in the PREAMBLE.
"CREDIT AGREEMENT" is defined in the FIRST RECITAL.
"INTERCOMPANY DEBT" means, on any date, any Indebtedness of the Borrower
related to or resulting from any loan or advance from, or any non-equity
investment by, or any management or similar fees payable to, or any obligation
to pay for goods or services to, any Subsidiary of the Borrower.
"LENDER" is defined in the FIRST RECITAL.
"SENIOR INDEBTEDNESS" is defined in CLAUSE (a) of SECTION 2.
"SUBORDINATED CREDITOR" is defined in the PREAMBLE.
"SUBORDINATION AGREEMENT" is defined in the PREAMBLE.
SECTION 2. AGREEMENT TO SUBORDINATE.
(a) Subject to the terms of the Credit Agreement, the Borrower and
each of the Subordinated Creditors agree that the Intercompany Debt is and
shall be subject, subordinate and rendered junior, to the extent and in the
manner hereinafter set forth, in right of payment, to the prior payment in
cash in full of all Obligations of the Borrower now existing or hereafter
arising, whether for (i) principal, (ii) interest (including, without
limitation, interest accruing after the filing of a petition initiating any
proceeding referred to in CLAUSE (a) of SECTION 3, whether or not allowed
as a claim in such proceeding), (iii) reasonable costs, (iv) reasonable
fees (including, without limitation, reasonable attorneys' fees and
disbursements), (v) reasonable expenses, and (vi) otherwise (the
Obligations specified in CLAUSES(a)(i) through (a)(vi) above are referred
to collectively as the "SENIOR INDEBTEDNESS"). For purposes of this
Subordination Agreement, the Senior Indebtedness shall not be deemed to
have been paid in cash in full until the Lenders shall have received full
payment of the Senior Indebtedness in cash, which payment shall have been
retained by the Lenders for a period of time in excess of all applicable
preference or other similar periods under applicable bankruptcy, insolvency
or creditors' rights laws. Each of the Borrower and the Subordinated
Creditors waive notice of acceptance of this Subordination Agreement by the
Lenders, and the Subordinated Creditors waive notice of and consent to the
making, amount and terms of the Senior Indebtedness which may exist or be
created from time to time and any renewal, extension, amendment or
modification thereof, and any other lawful action which any Lender or
Lenders in its and their sole and absolute discretion may take or omit to
take with respect thereto. The provisions of this Section shall constitute
a continuing offer made for the benefit of and to all Lenders and each
Lender is hereby irrevocably authorized to enforce such provisions.
(b) In the event that the Borrower shall make, and/or any
Subordinated Creditor shall receive from any source whatsoever, any payment
on Intercompany Debt in contravention of this Subordination Agreement or
the terms of the Credit Agreement, then and in any such event such payment
shall be deemed to be the property of, segregated, received and held in
trust for the benefit of and shall be promptly paid over and delivered to
the Administrative Agent for the PRO RATA benefit of the Lenders.
(c) The Borrower shall not make, and no Subordinated Creditor shall
receive or accept from any source whatsoever, any payment in respect of any
Intercompany Debt if any Default of the type described in Section 8.1.1 or
Section 8.1.9 of the Credit Agreement or any other Event of Default shall
have occurred and be continuing or would result therefrom, unless and until
(i) the Senior Indebtedness has been paid in cash in full, (ii) in the case
of an Event of Default referred to above other than a Default of the nature
set forth in SECTION 8.1.9 of the Credit Agreement, such Event of Default
has been cured or waived or (iii) the Administrative Agent has otherwise
consented in writing.
SECTION 3. IN FURTHERANCE OF SUBORDINATION.
(a) Upon any distribution of all or any of the assets of the Borrower
in the event of
(i) any insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, relative to the Borrower, or to
its creditors, as such, or to its assets,
-3-
(ii) any liquidation, dissolution or other winding up of the
Borrower, whether voluntary or involuntary and whether or not
involving insolvency or bankruptcy, or
(iii) any assignment for the benefit of creditors or any other
marshalling of assets and liabilities of the Borrower,
then, and in any such event, unless the Administrative Agent shall
otherwise agree in writing, the Lenders shall receive payment in cash in
full of all amounts due or to become due (whether or not the Senior
Indebtedness has been declared due and payable prior to the date on which
the Senior Indebtedness would otherwise have become due and payable) on or
in respect of all Senior Indebtedness (including post-petition interest)
before the Subordinated Creditors or anyone claiming through or on their
behalf (including any receiver, trustee, or otherwise) are entitled to
receive from any source whatsoever any payment on account of principal of
(or premium, if any) or interest on or other amounts payable in respect of
the Intercompany Debt, and to that end, any payment or distribution of any
kind or character, whether in cash, property or securities, which may be
payable or deliverable in respect of the Intercompany Debt in any such
case, proceeding, dissolution, liquidation or other winding up or event,
shall be paid or delivered directly to the Administrative Agent for the
application (in the case of cash) to, or as collateral (in the case of
non-cash property or securities) for, the payment or prepayment of the
Senior Indebtedness until the Senior Indebtedness shall have been paid in
cash in full.
(b) If any proceedings, liquidation, dissolution or winding up
referred to in CLAUSE (a) above is commenced by or against the Borrower,
(i) the Administrative Agent or the Lenders are hereby
irrevocably authorized and empowered (in their own names or in the
name of the Borrower or otherwise), but shall have no obligation, to
demand, xxx for, collect and receive every payment or distribution in
respect of the Intercompany Debt above and give acquittance therefor
and to file claims and proofs of claim and take such other action
(including, without limitation, voting the Intercompany Debt or
enforcing any security interest or other lien securing payment of the
Intercompany Debt) as the Lenders or the Administrative Agent may
reasonably deem necessary or advisable for the exercise or enforcement
of any of the rights or interests of the Lenders or the Administrative
Agent hereunder; PROVIDED that in the event the Administrative Agent
or the Lenders take such action, the Administrative Agent or the
Lenders shall apply all proceeds FIRST, to the payment of the costs of
enforcement of this Subordination Agreement, and SECOND, to the PRO
RATA payment of the Senior Indebtedness; and
-4-
(ii) the Subordinated Creditors shall duly and promptly take such
action as the Lenders or the Administrative Agent may request (A) to
collect the Intercompany Debt for the account of the Lenders and the
Administrative Agent and to file appropriate claims or proofs of claim
in respect of the Intercompany Debt, (B) to execute and deliver to the
Lenders or the Administrative Agent such powers of attorney,
assignments, or other instruments as the Lenders or the Administrative
Agent may reasonably request in order to enable them to enforce any
and all claims with respect to, and any security interests and other
liens securing payment of, the Intercompany Debt and (C) to collect
and receive any and all payments or distributions which may be payable
or deliverable upon or with respect to the Intercompany Debt.
(c) All payments from any source whatsoever or distributions of
assets of the Borrower, whether in cash, property or securities upon or
with respect to the Intercompany Debt which are received by the
Subordinated Creditors contrary to the provisions of this Subordination
Agreement shall be received in trust for the PRO RATA benefit of the
Lenders, shall be segregated from other funds and property held by the
Subordinated Creditors and shall be forthwith paid over to the
Administrative Agent in the same form as so received (with any necessary
indorsement) to be applied, PRO RATA (in the case of cash) to, or held as
collateral (in the case of noncash property or securities) for, the payment
or prepayment of the Senior Indebtedness, whether matured or unmatured, in
accordance with the terms of this Subordination Agreement.
(d) The Lenders and the Administrative Agent are hereby authorized to
demand specific performance of this Subordination Agreement, whether or not
the Borrower or any Subordinated Creditor shall have complied with any of
the provisions hereof applicable to it, at any time when the Subordinated
Creditors or any one of them shall have failed to comply with any of the
provisions of this Subordination Agreement applicable to it. The
Subordinated Creditors hereby irrevocably waive any defense (other than the
defense of payment in full of the Senior Indebtedness) based on the
adequacy of a remedy at law which might be asserted as a bar to such remedy
of specific performance.
SECTION 4. NO ENFORCEMENT OR COMMENCEMENT OF ANY PROCEEDINGS. Each
Subordinated Creditor agrees that, so long as any Senior Indebtedness shall
remain unpaid, or any Commitment shall be in effect, it will not accelerate the
maturity of the Intercompany Debt or commence, or join with any creditor other
than the Lenders in commencing any proceeding referred to in CLAUSE (a) of
SECTION 3.
SECTION 5. RIGHTS OF SUBROGATION. The Subordinated Creditors agree that
no payment or distribution to the Lenders or the Administrative Agent pursuant
to the provisions of this Subordination Agreement shall entitle the Subordinated
Creditors to exercise any rights of subrogation in respect thereof until all
Senior Indebtedness has been paid in cash in full and
-5-
the Commitments have been terminated. The Subordinated Creditors agree that the
subordination provisions contained herein shall not be affected by any action,
or failure to act, by the Administrative Agent or the Lenders which results, or
may result, in affecting, impairing or extinguishing any right of reimbursement
or subrogation or other right or remedy of the Subordinated Creditors against
the Borrower. Notwithstanding the foregoing, to the extent necessary to toll
the statute of limitations, the Subordinated Creditors may take such action
required to preserve any rights they have by way of rights of subrogation as
consented to by the Administrative Agent in its reasonable discretion.
SECTION 6. SUBORDINATION LEGEND; FURTHER ASSURANCES. The Subordinated
Creditors and the Borrower will cause each note and instrument (if any)
evidencing the Intercompany Debt to be endorsed with the following legend:
"The indebtedness evidenced by this instrument is subordinated to
the prior payment in cash in full of the Senior Indebtedness (as
defined in the Intercompany Subordination Agreement, dated as of July
[ ], 1998) pursuant to, and to the extent provided in, the
Intercompany Subordination Agreement by the maker hereof and payee
named herein in favor of the Lenders and any person now or hereafter
designated as their agent."
Each of the Subordinated Creditors and the Borrower hereby agrees to xxxx its
books of account in such a manner as shall be effective to give proper notice of
the effect of this Subordination Agreement and will, in the case of any
Intercompany Debt which is not evidenced by any note or instrument, following
the occurrence and subject to the continuation of a Default of the type
described in Section 8.1.1 or 8.1.9 of the Credit Agreement or Event of Default,
upon the Administrative Agent's request, cause such Intercompany Debt to be
evidenced by an appropriate note or instrument or instruments endorsed with the
above legend. Each of the Subordinated Creditors and the Borrower will at its
expense and at any time and from time to time promptly execute and deliver all
further instruments and documents and take all further action that may be
necessary or that the Lenders or the Administrative Agent may reasonably request
in order to protect any right or interest granted or purported to be granted
hereunder or to enable the Lenders or the Administrative Agent to exercise and
enforce their rights and remedies hereunder.
SECTION 7. NO CHANGE IN OR DISPOSITION OF INTERCOMPANY DEBT. The
Subordinated Creditors will not, without the prior written consent of the
Administrative Agent:
(a) sell, assign to any Person other than a Subordinated Creditor,
transfer, endorse, pledge, encumber or otherwise dispose of any of the
Intercompany Debt;
(b) permit the terms of any of the Intercompany Debt to be changed in
such a manner as to have a material adverse effect upon the rights or
interests of the Lenders or the Administrative Agent; or
-6-
(c) upon the occurrence and during the continuation of any Default of
the type described in Section 8.1.1 or Section 8.1.9 of the Credit
Agreement or Event of Default, take, or permit to be taken, any action to
assert, collect or enforce the Intercompany Debt or any part thereof.
SECTION 8. AGREEMENT BY THE BORROWER. The Borrower agrees that it will
not make any payment on any of the Intercompany Debt, or take any other action,
in contravention of the provisions of this Subordination Agreement.
SECTION 9. OBLIGATIONS HEREUNDER NOT AFFECTED. All rights and interest of
the Lenders and the Administrative Agent hereunder, and all agreements and
obligations of the Subordinated Creditors and the Borrower hereunder, shall
remain in full force and effect irrespective of:
(a) any lack of validity or enforceability of any document evidencing
Senior Indebtedness;
(b) any change in the time, manner or place of payment of, or any
other term of, all or any of the Senior Indebtedness, or any other
amendment or waiver of or any consent to departure from any of the
documents evidencing or relating to the Senior Indebtedness;
(c) any exchange, release or non-perfection of any collateral, or any
release or amendment or waiver of or consent to departure from any guaranty
or Loan Document, for all or any of the Senior Indebtedness;
(d) any failure of any Lender or the Administrative Agent to assert
any claim or to enforce any right or remedy against any other party hereto
under the provisions of this Subordination Agreement, the Credit Agreement
or any other Loan Document other than this Subordination Agreement;
(e) any reduction, limitation, impairment or termination of the Senior
Indebtedness for any reason (other than the defense of payment in full of
the Senior Indebtedness), including any claim of waiver, release,
surrender, alteration or compromise, and shall not be subject to (and the
Borrower and each Subordinated Creditor hereby waive any right to or claim
of) any defense (other than the defense of payment in full of the Senior
Indebtedness) or setoff, counterclaim, recoupment or termination whatsoever
by reason of invalidity, illegality, nongenuineness, irregularity,
compromise, unenforceability of, or any other event or occurrence
affecting, any Senior Indebtedness; and
-7-
(f) any other circumstance which might otherwise constitute a defense
(other than the defense of payment in full of the Senior Indebtedness)
available to, or a discharge of, the Borrower in respect of the Senior
Indebtedness or the Subordinated Creditors in respect of this Subordination
Agreement.
This Subordination Agreement shall continue to be effective or be reinstated, as
the case may be, if at any time any payment of any of the Senior Indebtedness is
rescinded or must otherwise be returned by any Lender or the Administrative
Agent upon the insolvency, bankruptcy or reorganization of the Borrower or
otherwise, all as though such payment had not been made. The Subordinated
Creditors acknowledge and agree that the Lenders and the Administrative Agent
may in accordance with the terms of the Credit Agreement, without notice or
demand and without affecting or impairing the Subordinated Creditors'
obligations hereunder, from time to time (i) renew, compromise, extend,
increase, accelerate or otherwise change the time for payment of, or otherwise
change the terms of the Senior Indebtedness or any part thereof, including,
without limitation, to increase or decrease the rate of interest thereon or the
principal amount thereof; (ii) take or hold security for the payment of the
Senior Indebtedness and exchange, enforce, foreclose upon, waive and release any
such security; (iii) apply such security and direct the order or manner of sale
thereof as the Administrative Agent and the Lenders, in their sole discretion,
may determine; (iv) release and substitute one or more endorsers, warrantors,
borrowers or other obligors; and (v) exercise or refrain from exercising any
rights against the Borrower or any other Person.
SECTION 10. REPRESENTATIONS AND WARRANTIES. Each of the Subordinated
Creditors, in respect of itself and the Intercompany Debt owing to it, and the
Borrower, as the case may be, hereby represents and warrants as follows:
(a) the Subordinated Creditors own the Intercompany Debt now
outstanding free and clear of any Lien other than pursuant to any general
security agreement then in effect;
(b) this Subordination Agreement constitutes a legal, valid and
binding obligation of each Subordinated Creditor and the Borrower,
enforceable in accordance with its terms (subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding
in equity or at law) and an implied covenant of good faith and fair
dealing).
SECTION 11. AMENDMENTS, WAIVERS. No amendment or waiver of any provision
of this Subordination Agreement nor consent or any departure by the Subordinated
Creditors or the Borrower herefrom, shall in any event be effective unless the
same shall be in writing and signed by the Administrative Agent and the other
parties hereto, and then such waiver, amendment or consent shall be effective
only in the specific instance and for the specific purpose for which given. Any
waiver, forbearance, failure or delay by the Administrative
-8-
Agent or the Lenders in exercising, or the exercise or beginning of exercise by
the Administrative Agent or the Lenders of, any right, power or remedy,
simultaneous or later shall not preclude the further, simultaneous or later
exercise thereof, and every right, power or remedy of the Administrative Agent
and the Lenders shall continue in full force and effect until such right, power
or remedy is specifically waived in a writing executed or authorized by such
Lenders.
SECTION 12. EXPENSES. The Subordinated Creditors and the Borrower jointly
and severally agree to pay, upon demand, to the Administrative Agent or the
Lenders, as applicable, any and all reasonable costs and expenses, including,
without limitation, reasonable attorneys' fees and disbursements which the
Lenders or the Administrative Agent may incur in connection with the exercise or
enforcement of any of the rights or interest of the Lenders or the
Administrative Agent hereunder.
SECTION 13. ADDRESS FOR NOTICES. All notices and other communications
provided for hereunder shall be in writing (including facsimile communication)
and mailed or telecopied or delivered to either party hereto, if to the
Borrower, the Administrative Agent or any Lender, addressed to it at the address
of the Borrower or such Lender or the Administrative Agent (as the case may be)
listed in the Credit Agreement or in the Lender Assignment Agreement, as
applicable, and, if to other parties hereto, addressed to such parties in care
of the Borrower at the address specified in the Credit Agreement. All such
notices and other communications, when mailed and properly addressed with
postage prepaid or if properly addressed and sent by pre-paid courier service,
shall be deemed given when received; any such notice or communication, if
transmitted by facsimile, shall be deemed given when the confirmation of
transmission thereof is received by the transmitter.
SECTION 14. ENTIRE AGREEMENT; SEVERABILITY. This Subordination Agreement
contains the entire subordination agreement among the parties hereto with
respect to the subject matter hereof. If any of the provisions of this
Subordination Agreement shall be held invalid or unenforceable, this
Subordination Agreement shall be construed as if not containing those
provisions, and the rights and obligations of the parties hereto shall be
construed and enforced accordingly.
SECTION 15. CUMULATIVE RIGHTS. The rights, powers and remedies of the
Lenders and the Administrative Agent under this Subordination Agreement shall be
in addition to all rights, powers and remedies given to the Lenders and the
Administrative Agent by virtue of any contract, statute or rule of law, all of
which rights, powers and remedies shall be cumulative and may be exercised
successively or concurrently. The parties hereto expressly acknowledge and
agree that the Lenders and the Administrative Agent are intended, and by this
reference expressly made, third party beneficiaries of the provisions of this
Subordination Agreement.
-9-
SECTION 16. CONTINUING AGREEMENT; TRANSFER OF NOTES. This Subordination
Agreement is a continuing agreement of subordination and the Lenders may, from
time to time and without notice to the Subordinated Creditors, extend credit to
or make other financial arrangements with the Borrower in reliance hereon. This
Subordination Agreement shall (a) remain in full force and effect until the
Senior Indebtedness shall have been paid in cash in full and all Commitments
terminated, (b) be binding upon the Subordinated Creditors, the Borrower and
their respective successors, transferees and assigns, and (c) inure to the
benefit of and be enforceable by the Administrative Agent and each Lender and
their respective successors, transferees and assigns. Without limiting the
generality of the foregoing, any Lender may, subject to the provisions of the
Credit Agreement, assign or otherwise transfer the Senior Indebtedness held by
it to any other Person, subject to Section 10.11 of the Credit Agreement and
such other Person shall thereupon become vested with all the rights in respect
thereof granted to such Lender herein or otherwise.
SECTION 17. GOVERNING LAW. THIS SUBORDINATION AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.
SECTION 18. FORUM SELECTION AND CONSENT TO JURISDICTION. ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
SUBORDINATION AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE ADMINISTRATIVE AGENT OR ANY OF THE
LENDERS OR ANY SUBORDINATED CREDITOR OR THE BORROWER SHALL BE BROUGHT AND
MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK OR IN THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK. THE BORROWER AND
EACH SUBORDINATED CREDITOR HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND OF THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH
LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY
JUDGEMENT RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION. THE BORROWER AND
EACH SUBORDINATED CREDITOR IRREVOCABLY CONSENT TO THE SERVICE OF PROCESS BY
REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE
STATE OF NEW YORK AT THE ADDRESS FOR NOTICES OF SUCH PARTY SPECIFIED IN SECTION
13. THE BORROWER AND EACH SUBORDINATED CREDITOR HEREBY EXPRESSLY AND
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH
IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION
BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH
LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT
-10-
THE BORROWER OR SUCH SUBORDINATED CREDITOR HAS OR HEREAFTER MAY ACQUIRE ANY
IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER
THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF
EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, EACH OF THE
BORROWER AND EACH OF SUCH SUBORDINATED CREDITORS HEREBY IRREVOCABLY WAIVES SUCH
IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS SUBORDINATION AGREEMENT.
SECTION 19. WAIVER OF JURY TRIAL. THE BORROWER AND EACH SUBORDINATED
CREDITOR AND, BY ACCEPTING THIS SUBORDINATION AGREEMENT AND THE BENEFITS
THEREOF, THE ADMINISTRATIVE AGENT AND ANY LENDER HEREBY KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH,
THIS SUBORDINATION AGREEMENT OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE BORROWER OR SUCH
SUBORDINATED CREDITOR AND EACH SUCH PERSON ACKNOWLEDGES AND AGREES THAT IT HAS
RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION AND THAT THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDERS CONTINUING TO MAKE CREDIT
EXTENSIONS, ENTERING INTO THE CREDIT AGREEMENT AND FOR THE SUBORDINATED
CREDITORS ENTERING INTO THIS SUBORDINATION AGREEMENT.
SECTION 20. EXECUTION IN COUNTERPARTS. This Subordination Agreement may
be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the same
agreement.
-11-
IN WITNESS WHEREOF, the parties have caused this Subordination Agreement to
be duly executed and delivered as of the date first above written.
THE TITAN CORPORATION
By:
-------------------------------------
Name:
Title:
TITAN TECHNOLOGIES AND INFORMATION
SYSTEMS CORPORATION
By:
-------------------------------------
Name:
Title:
TITAN PURIFICATION, INC.
By:
-------------------------------------
Name:
Title:
DBA SYSTEMS, INC.
By:
-------------------------------------
Name:
Title:
VALIDITY CORPORATION
By:
-------------------------------------
Name:
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Title:
LINKABIT WIRELESS, INC.
By:
-------------------------------------
Name:
Title:
UNIDYNE CORPORATION
By:
-------------------------------------
Name:
Title:
TITAN SOFTWARE SYSTEMS CORPORATION
By:
-------------------------------------
Name:
Title:
PULSE SCIENCES, INC.
By:
-------------------------------------
Name:
Title:
TITAN ENVIRONMENTAL CORPORATION
By:
-------------------------------------
Name:
Title:
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TOMOTHERAPEUTICS, INC.
By:
-------------------------------------
Name:
Title:
FEDERAL SERVICES, INC.
By:
-------------------------------------
Name:
Title:
ELDYNE, INC.
By:
-------------------------------------
Name:
Title:
DIVERSIFIED CONTROL SYSTEMS, INC.
By:
-------------------------------------
Name:
Title:
TITAN BROADBAND COMMUNICATIONS CORPORATION
By:
-------------------------------------
Name:
Title:
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TITAN AEROCHEM, INC.
By:
-------------------------------------
Name:
Title:
HORIZONS TECHNOLOGY, INC.
By:
-------------------------------------
Name:
Title:
-15-
EXHIBIT L
LENDER ASSIGNMENT AGREEMENT
____ __, 19__
To: The Titan Corporation,
as Borrower
The Bank of Nova Scotia,
as Administrative Agent
THE TITAN CORPORATION
Gentlemen and Ladies:
We refer to clause (d) of Section 10.11.1 of the Credit Agreement, dated as
of July 29, ], 1998 (as amended, supplemented, amended and restated or otherwise
modified from time to time, the "CREDIT AGREEMENT"), among The Titan
Corporation, a Delaware corporation (the "BORROWER"), the various financial
institutions as are or may become parties thereto (collectively, the "LENDERS"),
The Bank of Nova Scotia, as agent for the Lenders (the "ADMINISTRATIVE AGENT")
and Imperial Bank, as Documentation Agent. Unless otherwise defined herein or
the context otherwise requires, terms used herein have the meanings provided in
the Credit Agreement.
As of ______ __, 19__ (the "ASSIGNMENT DATE"), ______________ (the
"ASSIGNOR") irrevocably sells, transfers, conveys and assigns, without recourse,
representation or warranty (except as expressly set forth herein), to
______________ (the "ASSIGNEE") and the Assignee irrevocably purchases from the
Assignor that portion of the Loans and Commitments of the Lender as set forth in
Schedule I hereto (the "ASSIGNED PORTION") with conveyances of the Revolving
Loans to include the Assignor's pro rata portion of any Letter of Credit
Outstandings the Assignor outstanding under the Credit Agreement, so that after
giving effect to the foregoing assignment and delegation, the Assignor's and the
Assignee's Percentages for the purposes of the Credit Agreement and each other
Loan Document will be as set forth on SCHEDULE I hereto.
In addition, this agreement constitutes notice to each of you, pursuant to
clause (c) of Section 10.11.1 of the Credit Agreement, of the assignment and
delegation to the Assignee of the Assigned Portion of the Credit Extensions and
Commitments of the Assignor outstanding under the Credit Agreement as of the
Assignment Date.
The Assignee shall pay to the Assignor on the Assignment Date an amount
equal to (a) all accrued and unpaid interest on the Assigned Portion and (b) all
accrued and unpaid commitment fees payable under Section 3.3.1 of the Credit
Agreement and Letter of Credit fees payable under Section 3.3.3 of the Credit
Agreement with respect to the Assigned Portion. In addition, the Assignor shall
pay to the Assignee on the Assignment Date an amount equal to all unearned
Letter of Credit fees, if any, which have been paid in advance pursuant to
Section 3.3.3 of the Credit Agreement for the period from and after the
Assignment Date. In any event, the Assignee is entitled to receive all payments
on account of interest, principal and fees accrued with respect to the Assigned
Portion for the period from and after the Assignment Date.
The Assignee hereby acknowledges and confirms that it has received a copy
of the Credit Agreement and the exhibits related thereto, together with copies
of the documents which were required to be delivered under the Credit Agreement
as a condition to the making of the Credit Extensions thereunder. The Assignee
further confirms and agrees that in becoming a Lender and in making its
Commitments and Credit Extensions under the Credit Agreement, such actions have
and will be made without recourse to, or representation or warranty by, the
Administrative Agent.
The Assignor represents and warrants that it is legally authorized to enter
into and deliver this agreement and represents that it is the legal and
beneficial owner of the Assigned Portion. Except as set forth in the previous
sentence, the Assignor makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made pursuant to or in connection with this agreement, or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
agreement, the Credit Agreement, any other Loan Document or any other instrument
or document furnished pursuant hereto or thereto, including the financial
condition of the Borrower or any of their Subsidiaries or the performance or
observance by any Lender of any of its obligations under the Credit Agreement,
any other Loan Document or any other instrument or document furnished pursuant
hereto or thereto. The Assignee represents and warrants that it is legally
authorized to enter into and deliver this agreement and confirms that it has
received a copy of the Credit Agreement, together with copies of the most recent
financial statements delivered pursuant to Section 7.1.1 of the Credit Agreement
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this agreement. In addition,
the Assignee independently and without reliance upon the Assignor, the Agents or
any other Lender, and based on such documents and information as it shall deem
appropriate at the time, shall continue to make its own credit decisions in
taking or not taking action under the Credit Agreement, the other Loan Documents
and the other instruments and documents delivered in connection therewith.
Except as otherwise provided in the Credit Agreement, effective as of the
Assignment Date
(a) the Assignee
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(i) shall be deemed automatically to have become a party to the
Credit Agreement and shall have all the rights and obligations of a
"Lender" under the Credit Agreement and the other Loan Documents as if
it were an original signatory thereto to the extent specified in the
second paragraph hereof;
(ii) agrees to be bound by the terms and conditions set forth in
the Credit Agreement and the other Loan Documents as if it were an
original signatory thereto; and
(b) the Assignor shall be released from its obligations under the
Credit Agreement and the other Loan Documents to the extent specified in
the second paragraph hereof.
The Assignor and the Assignee hereby agree that the [Assignor][Assignee]
will pay to the Administrative Agent the processing fee referred to in Section
10.11.1 of the Credit Agreement.
The Assignee hereby advises each of you that the Assignee's administrative
details with respect to the assigned Credit Extensions and Commitments are on
file with the Administrative Agent and requests the Administrative Agent to
acknowledge receipt of this document.
The Assignee agrees (for the benefit of the Assignor, the Borrower and the
Administrative Agent) to furnish, if required by clause (e) of Section 4.6 of
the Credit Agreement, the applicable Internal Revenue Service forms or other
forms required thereunder no later than the date of acceptance hereof by the
Agents. In addition, the Assignee represents and warrants (for the benefit of
the Assignor, the Borrower and the Administrative Agent) that, under applicable
law and treaties in effect as of the date hereof, no United States federal taxes
will be required to be withheld by the Administrative Agent or the Borrower with
respect to any payments to be made to the Assignee in respect of the Credit
Agreement.
Notwithstanding any other provisions hereof, if the consents of the
Borrower and the Administrative Agent are required under Section 10.11.1 of the
Credit Agreement, the assignment and delegation contemplated in this agreement
shall not be effective unless such consents shall have been obtained and in any
event no such assignment and delegation shall be effective unless and until such
assignment has been recorded in the Register by the Administrative Agent.
This Agreement may be executed by the Assignor and Assignee in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute one and the same
agreement.
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IN WITNESS WHEREOF, each of the undersigned has executed and delivered this
Lender Assignment Agreement as of the date first written above.
[NAME OF ASSIGNOR]
By:
--------------------------------
Title:
[NAME OF ASSIGNEE]
By:
--------------------------------
Title:
ACCEPTED AND AGREED TO:
THE BANK OF NOVA SCOTIA,
as Administrative Agent
By:
---------------------------
Title:
THE TITAN CORPORATION
By:
---------------------------
Title:
SCHEDULE I
ASSIGNOR'S ADJUSTED ADJUSTED
ORIGINAL ASSIGNOR ASSIGNEE
PERCENTAGE PERCENTAGE PERCENTAGE
REVOLVING
LOANS ____% ____% ____%
REVOLVING LOAN
COMMITMENT ____% ____% ____%
TERM LOANS ____% ____% ____%
TERM LOAN
COMMITMENT ____% ____% ____%
EXHIBIT M
SOLVENCY CERTIFICATE
This Certificate (this "CERTIFICATE") is delivered in connection with the
Credit Agreement, dated as of July 29, 1998 (as amended, supplemented, amended
and restated or otherwise modified from time to time, the "CREDIT AGREEMENT"),
among The Titan Corporation, a Delaware corporation (the "BORROWER"), the
various financial institutions as are, or may from time to time become, parties
thereto (together with their successors, transferees, and assigns, the
"LENDERS"), The Bank of Nova Scotia, as administrative agent (the
"ADMINISTRATIVE AGENT") for the Lenders and Imperial Bank, as Documentation
Agent. Unless otherwise defined herein, terms used herein have the meanings
provided in the Credit Agreement.
The undersigned hereby certifies that he is the [chief financial]
Authorized Officer of the Borrower (in such capacity, the "[CFO]") and that he
is authorized to execute and deliver this Certificate on behalf of the Borrower.
The undersigned further certifies on behalf of the Borrower, that:
(a) The [CFO] has continued to monitor the financial condition and
operations of the Borrower and its Subsidiaries, and the [CFO] has
knowledge of and has participated in the negotiation of the transactions
contemplated by the Credit Agreement and the other Loan Documents.
(b) The [CFO] and his staff are familiar with the process through
which the consolidated financial statements of the Borrower and its
Subsidiaries were generated and prepared.
(c) The [CFO] is familiar with the process through which the Pro Forma
Balance Sheet was generated and prepared. In making the statements set
forth in PARAGRAPH (F) hereof, the [CFO] has considered the current and
anticipated future capital requirements of the Borrower and its
Subsidiaries for the current and future conduct of the businesses of the
Borrower and its Subsidiaries.
(d) Based on the information reflected in the Pro Forma Balance Sheet
and the [CFO's] involvement in the process of collecting such information,
the [CFO] has no reason to believe that the Pro Forma Balance Sheet and
related financial statements are not
(i) a fair and reasonable presentation of the PRO FORMA financial
condition and operations of the Borrower and its Subsidiaries, as of
the date hereof, on a going-concern basis; and
(ii) a reasonable projection of the financial position, results
of operations and cash flows of the Borrower and its Subsidiaries
in each case on the basis of the assumptions stated in the Pro Forma
Balance Sheet, which assumptions the [CFO] believes to be reasonable.
(e) Immediately following the consummation of the transactions
contemplated by the Credit Agreement and the other Loan Documents, the
Borrower will be able to pay its Debts (as defined below) as they become
due, will have assets which will have a present "fair saleable value"
greater than its Debts as they become absolute and matured, and will have
assets which will have a fair value greater than the sum of all its Debts.
(f) Both before and immediately after giving effect to each
transaction contemplated by the Credit Agreement and the other Loan
Documents, the Borrower does not have unreasonably small capital and it is
not engaged in businesses or transactions, and (to the best of my
knowledge) does not intend that it will be engaged in any businesses or
transactions, for which it has unreasonably small capital.
(g) Both before and immediately after giving effect to each
transaction contemplated by the Credit Agreement and the other Loan
Documents, the Borrower does not intend to incur, nor believe that it has
incurred, Debts beyond its ability to pay them as they mature.
(h) Both before and immediately after giving effect to each
transaction contemplated by the Credit Agreement and each other Loan
Document, the Borrower has not incurred any obligation under, or in
connection therewith, with actual intent to hinder, delay or defraud either
present or future creditors of the Borrower or any of its Subsidiaries.
(i) For purposes hereof, "Debts" means all liabilities, obligations,
commitments and indebtedness of any and every kind and nature (including
all obligations to trade creditors), whether heretofore or now owing,
arising, due, or payable by the Borrower to any person and howsoever
evidenced, created, incurred, acquired, or owing, whether primary,
secondary, direct, contingent, fixed, or otherwise (the foregoing to
include, without limitation, all monetary obligations arising under the
Credit Agreement).
(j) The "fair salable value" of the Borrower's assets and investments
means the amount which may be realized within a reasonable time, either
through collection or sale
of such investments and other assets at the regular market value, based
upon the amount which could be obtained for the property in question within
such period by a capable and diligent business person from an interested
buyer who is willing to purchase under ordinary selling conditions.
Although no determination of the "fair salable value" has been made, it is
my opinion that the asset amounts reflected upon the historic records of
the Borrower do not exceed the "fair salable value."
(k) The [CFO] hereby acknowledges, on behalf of the Borrower, that the
Administrative Agent and each of the Lenders have relied upon the
statements contained herein and such statements are a material inducement
for the Administrative Agent and each of the Lenders to enter into the
Credit Agreement and the other Loan Documents.
Notwithstanding anything to the contrary herein, the [CFO] (i) is executing
this Certificate on behalf of the Borrower solely in his representative capacity
and not in his individual capacity, and (ii) shall not have any liability
whatsoever for any statements, certifications or representations made herein,
other than liability arising directly out of his intentional misconduct or gross
negligence.
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IN WITNESS WHEREOF, the undersigned Authorized Officer has executed this
Certificate on this 29th day of July, 1998.
THE TITAN CORPORATION
By:
--------------------------------
Name:
Title:
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