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CREDIT AGREEMENT
dated as of _____ __, 2002,
by and among
VERIDIAN CORPORATION,
as Borrower,
the Lenders referred to herein,
and
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Administrative Agent
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FIRST UNION SECURITIES, INC. (d/b/a WACHOVIA SECURITIES),
acted as Sole Lead Arranger
and Book Manager
TABLE OF CONTENTS
ARTICLE I DEFINITIONS.......................................................................1
SECTION 1.1 Definitions...............................................................1
SECTION 1.2 General..................................................................18
SECTION 1.3 Other Definitions and Provisions.........................................18
ARTICLE II REVOLVING CREDIT FACILITY.......................................................19
SECTION 2.1 Revolving Credit Loans...................................................19
SECTION 2.2 Swingline Loans..........................................................19
SECTION 2.3 Procedure for Advances of Revolving Credit and Swingline Loans...........20
SECTION 2.4 Repayment of Revolving Credit and Swingline Loans........................21
SECTION 2.5 Notes....................................................................22
SECTION 2.6 Permanent Reduction of the Revolving Credit Commitment...................22
SECTION 2.7 Termination of Revolving Credit Facility.................................23
ARTICLE III LETTER OF CREDIT FACILITY......................................................23
SECTION 3.1 L/C Commitment...........................................................23
SECTION 3.2 Procedure for Issuance of Letters of Credit..............................24
SECTION 3.3 Commissions and Other Charges............................................24
SECTION 3.4 L/C Participations.......................................................25
SECTION 3.5 Reimbursement Obligation of the Borrower.................................25
SECTION 3.6 Obligations Absolute.....................................................26
SECTION 3.7 Effect of Application....................................................26
ARTICLE IV TERM LOAN FACILITY..............................................................27
SECTION 4.1 Initial Term Loans.......................................................27
SECTION 4.2 Procedure for Advance of Initial Term Loans..............................27
SECTION 4.3 Repayment of Term Loans..................................................27
SECTION 4.4 Prepayments of Term Loans................................................29
SECTION 4.5 Term Notes...............................................................31
SECTION 4.6 Optional Increase In Term Loan Commitment................................31
ARTICLE V GENERAL LOAN PROVISIONS..........................................................33
SECTION 5.1 Interest.................................................................33
SECTION 5.2 Notice and Manner of Conversion or Continuation of Loans.................36
SECTION 5.3 Fees.....................................................................36
SECTION 5.4 Manner of Payment........................................................36
SECTION 5.5 Crediting of Payments and Proceeds.......................................37
SECTION 5.6 Adjustments..............................................................37
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SECTION 5.7 Nature of Obligations of Lenders Regarding Advances; Assumption by the
Administrative Agent......................................................38
SECTION 5.8 Changed Circumstances.....................................................38
SECTION 5.9 Indemnity.................................................................40
SECTION 5.10 Capital Requirements......................................................40
SECTION 5.11 Taxes.....................................................................41
SECTION 5.12 Reimbursement Conditions; Replacement of Lenders..........................42
SECTION 5.13 Security..................................................................43
ARTICLE VI CLOSING; CONDITIONS OF CLOSING AND BORROWING....................................43
SECTION 6.1 Closing..................................................................43
SECTION 6.2 Conditions to Closing and Initial Advances...............................43
SECTION 6.3 Conditions to All Advances...............................................47
ARTICLE VII REPRESENTATIONS AND WARRANTIES OF THE BORROWER.................................48
SECTION 7.1 Representations and Warranties...........................................48
SECTION 7.2 Survival of Representations and Warranties, Etc..........................54
ARTICLE VIII FINANCIAL INFORMATION AND NOTICES.............................................54
SECTION 8.1 Financial Statements and Projections.....................................55
SECTION 8.2 Officer's Compliance Certificate.........................................56
SECTION 8.3 Accountants' Certificate.................................................56
SECTION 8.4 Other Reports............................................................56
SECTION 8.5 Notice of Litigation and Other Matters...................................56
SECTION 8.6 Accuracy of Information..................................................57
ARTICLE IX AFFIRMATIVE COVENANTS...........................................................58
SECTION 9.1 Preservation of Legal Existence and Related Matters......................58
SECTION 9.2 Maintenance of Property..................................................58
SECTION 9.3 Insurance................................................................58
SECTION 9.4 Accounting Methods and Financial Records.................................58
SECTION 9.5 Payment and Performance of Obligations...................................58
SECTION 9.6 Compliance With Laws and Approvals.......................................59
SECTION 9.7 Environmental Laws.......................................................59
SECTION 9.8 Compliance with ERISA....................................................59
SECTION 9.9 Compliance With Agreements...............................................59
SECTION 9.10 Visits and Inspections...................................................60
SECTION 9.11 Additional Subsidiaries..................................................60
SECTION 9.12 Use of Proceeds..........................................................60
SECTION 9.13 Intercompany Loans.......................................................60
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SECTION 9.14 Assignment of Federal Claims..............................................61
SECTION 9.16 Further Assurances........................................................61
ARTICLE X FINANCIAL COVENANTS..............................................................61
SECTION 10.1 Total Leverage Ratio......................................................61
SECTION 10.2 Fixed Charge Coverage Ratio...............................................62
SECTION 10.3 Capital Expenditures......................................................62
SECTION 10.4 Minimum Adjusted EBITDA...................................................63
SECTION 10.5 Asset Coverage Ratio......................................................63
ARTICLE XI NEGATIVE COVENANTS..............................................................64
SECTION 11.1 Limitations on Debt.......................................................64
SECTION 11.2 Limitations on Liens......................................................65
SECTION 11.3 Limitations on Loans, Advances, Investments and Acquisitions..............66
SECTION 11.4 Limitations on Mergers and Liquidation....................................68
SECTION 11.5 Limitations on Sale of Assets.............................................68
SECTION 11.6 Limitations on Dividends and Distributions................................69
SECTION 11.7 Limitations on Exchange and Issuance of Capital Stock.....................69
SECTION 11.8 Transactions with Affiliates..............................................69
SECTION 11.9 Certain Accounting Changes; Organizational Documents......................70
SECTION 11.10 Amendments; Payments and Prepayments of Subordinated Debt.................70
SECTION 11.11 Restrictive Agreements....................................................70
SECTION 11.12 Nature of Business........................................................70
SECTION 11.13 Impairment of Security Interests..........................................70
ARTICLE XII DEFAULT AND REMEDIES...........................................................71
SECTION 12.1 Events of Default.........................................................71
SECTION 12.2 Remedies..................................................................74
SECTION 12.3 Rights and Remedies Cumulative; Non-Waiver; etc...........................74
ARTICLE XIII THE ADMINISTRATIVE AGENT......................................................75
SECTION 13.1 Appointment...............................................................75
SECTION 13.2 Delegation of Duties......................................................75
SECTION 13.3 Exculpatory Provisions....................................................75
SECTION 13.4 Reliance by the Administrative Agent......................................76
SECTION 13.5 Notice of Default.........................................................76
SECTION 13.6 Non-Reliance on the Administrative Agent and Other Lenders................76
SECTION 13.7 Indemnification...........................................................77
SECTION 13.8 The Administrative Agent in Its Individual Capacity.......................77
SECTION 13.9 Resignation of the Administrative Agent; Successor Administrative Agent...77
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ARTICLE XIV MISCELLANEOUS..................................................................78
SECTION 14.1 Notices...................................................................78
SECTION 14.2 Expenses; Indemnity.......................................................79
SECTION 14.3 Set-off...................................................................80
SECTION 14.4 Governing Law.............................................................80
SECTION 14.5 Jurisdiction and Venue....................................................80
SECTION 14.6 Binding Arbitration; Waiver of Jury Trial.................................81
SECTION 14.7 Reversal of Payments......................................................82
SECTION 14.8 Injunctive Relief; Punitive Damages.......................................82
SECTION 14.9 Accounting Matters........................................................82
SECTION 14.10 Successors and Assigns; Participations....................................83
SECTION 14.11 Amendments, Waivers and Consents..........................................87
SECTION 14.12 Performance of Duties.....................................................88
[SECTION 14.13 Syndication of Credit Facility............................................88
SECTION 14.14 All Powers Coupled with Interest..........................................88
SECTION 14.15 Survival of Indemnities...................................................88
SECTION 14.16 Titles and Captions.......................................................88
SECTION 14.17 Severability of Provisions................................................88
SECTION 14.18 Counterparts..............................................................88
SECTION 14.19 Term of Agreement.........................................................88
SECTION 14.20 Advice of Counsel.........................................................89
SECTION 14.21 No Strict Construction....................................................89
SECTION 14.22 Inconsistencies with Other Documents; Independent Effect of Covenants.....89
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EXHIBITS
Exhibit A-1 - Form of Revolving Credit Note
Exhibit A-2 - Form of Swingline Note
Exhibit A-3 - Form of Term Note
Exhibit B-1 - Form of Notice of Revolving Loan Borrowing
Exhibit B-2 - Form of Notice of Term Loan Borrowing
Exhibit C - Form of Notice of Account Designation
Exhibit D - Form of Notice of Prepayment
Exhibit E - Form of Notice of Conversion/Continuation
Exhibit F - Form of Officer's Compliance Certificate
Exhibit G - Form of Assignment and Acceptance
Exhibit H - Form of Guaranty Agreement
Exhibit I - Form of Collateral Agreements
Exhibit J - Form of Lender Addition and Acknowledgment Agreement
Exhibit K - Form of Intercompany Subordination Agreement
Exhibit L - Form of Assignment of Government Contract
SCHEDULES
Schedule 1 - Lenders and Commitments
Schedule 7.1(a) - Jurisdictions of Organization and Qualification
Schedule 7.1(c) - Subsidiaries and Capitalization
Schedule 7.1(f) - Tax Matters
Schedule 7.1(h) - Environmental
Schedule 7.1(i) - Multiemployer Plans
Schedule 7.1(l) - Material Contracts
Schedule 7.1(m) - Labor and Collective Bargaining Agreements
Schedule 7.1(t) - Debt and Guaranty Obligations
Schedule 7.1(u) - Litigation
Schedule 7.1(y) - Bank Accounts
Schedule 11.2 - Existing Liens
Schedule 11.3 - Existing Loans, Advances and Investments
Schedule 11.8 - Transactions with Affiliates
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CREDIT AGREEMENT, dated as of the ____ day of _________, 2002, by and
among VERIDIAN CORPORATION, a Delaware corporation, as the Borrower, the lenders
who are or may become a party to this Agreement, as the Lenders, and WACHOVIA
BANK, NATIONAL ASSOCIATION, a national banking association, as Administrative
Agent for the Lenders. First Union Securities, Inc. d/b/a Wachovia Securities
acted as Sole Lead Arranger and Book Manager with respect to the Credit Facility
(as defined below).
STATEMENT OF PURPOSE
The Borrower has requested, and the Lenders have agreed to extend
certain credit facilities to the Borrower on the terms and conditions of this
Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, such parties
hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions. The following terms when used in this Agreement
shall have the meanings assigned to them below:
"Accounts Receivable" means all trade accounts receivable of the
Borrower or any of its Subsidiaries.
"Additional Term Loans" shall have the meaning assigned thereto in
Section 4.6.
"Additional Term Loan Effective Date" means the date, which shall be a
Business Day, on or before the Term Loan Increase Termination Date, but no
earlier than thirty (30) days after any Increase Notification Date, on which the
Term Lenders make any Additional Term Loans to the Borrower pursuant to Section
4.6.
"Adjusted EBITDA" means, for any period, the sum of the following
determined on a pro forma Consolidated basis, without duplication, in accordance
with GAAP: (a) the sum of (i) EBITDA of the Borrower and its Subsidiaries for
such period plus (ii) all Approved EBITDA Adjustments for such period plus (b)
Permitted Acquisition EBITDA for such period plus (iii) all Permitted Veritect
Discontinued Operations Charges for such period.
"Administrative Agent" means Wachovia in its capacity as Administrative
Agent hereunder, and any successor thereto appointed pursuant to Section 13.9.
"Administrative Agent's Office" means the office of the Administrative
Agent specified in or determined in accordance with the provisions of Section
14.1(c).
"Advances" means, as to any Lender at any time, (a) an amount equal to
the sum of (i) the aggregate principal amount of all Revolving Credit Loans made
by such Lender then outstanding, (ii) such Lender's Revolving Credit Commitment
Percentage of the L/C Obligations then
outstanding, (iii) such Lender's Revolving Credit Commitment Percentage of the
Swingline Loans then outstanding and (iv) the aggregate principal amount of all
Term Loans made by such Lender then outstanding, or (b) the making of any Loan
or participation in any Letter of Credit by such Lender, as the context
requires.
"Affiliate" means, with respect to any Person, any other Person (other
than a Subsidiary of the Borrower) which directly or indirectly through one or
more intermediaries, controls, or is controlled by, or is under common control
with, such first Person or any of its Subsidiaries. The term "control" means (a)
the power to vote ten percent (10%) or more of the securities or other equity
interests of a Person having ordinary voting power, or (b) the possession,
directly or indirectly, of any other power to direct or cause the direction of
the management and policies of a Person, whether through ownership of voting
securities, by contract or otherwise.
"Agreement" means this Credit Agreement, as amended, restated,
supplemented or otherwise modified from time to time.
"Applicable Law" means all applicable provisions of constitutions, laws,
statutes, ordinances, rules, treaties, regulations, permits, licenses,
approvals, interpretations and orders of courts or Governmental Authorities and
all orders and decrees of all courts and arbitrators.
"Applicable Margin" shall have the meaning assigned thereto in Section
5.1(c).
"Application" means an application, in the form specified by the Issuing
Lender from time to time, requesting the Issuing Lender to issue a Letter of
Credit.
"Approved EBITDA Adjustments" means the collective reference to the
adjustments to EBITDA of the Borrower and its Subsidiaries identified as
"Approved EBITDA Adjustments" on Schedule 1A of the financial conditions
certificate delivered pursuant to Section 6.2(e)(ii), as updated from time to
time pursuant to Section 8.1(a); provided that each such adjustment to EBITDA is
approved by the Administrative Agent in its sole discretion; provided further
that any single adjustment of $10,000,000 or more shall require the approval of
the Required Lenders. Approved EBITDA Adjustments shall not include any
Permitted Acquisition EBITDA Adjustments or any Veritect Discontinued Operations
Charges.
"Approved Fund" means any Person (other than a natural Person),
including, without limitation, any special purpose entity, that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business;
provided, that with respect to any assignment of any Revolving Credit
Commitment, such Approved Fund must be administered by (a) a Lender, (b) an
Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.
"Arbitration Rules" shall have the meaning assigned thereto in Section
14.6(a).
"Asset Coverage Ratio" shall have the meaning assigned thereto in
Section 10.5.
"Assignment and Acceptance" shall have the meaning assigned thereto in
Section 14.10.
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"Assignments of Federal Claims" means the assignments of federal claims
executed by the Borrower and/or one or more of the Subsidiaries (upon written
demand by the Administrative Agent) for the benefit of the Administrative Agent
and the Lenders and properly acknowledged by the appropriate government
representatives in accordance with the Assignment of Claims Act of 1940, as
amended, in substantially the form attached hereto as Exhibit L, as amended or
modified from time to time.
"Base Rate" means, at any time, the higher of (a) the Prime Rate and (b)
the Federal Funds Rate plus 1/2 of 1%; each change in the Base Rate shall take
effect simultaneously with the corresponding change or changes in the Prime Rate
or the Federal Funds Rate.
"Base Rate Loan" means any Loan bearing interest at a rate based upon
the Base Rate as provided in Section 5.1(a).
"Benefited Lender" shall have the meaning assigned thereto in Section
5.6.
"Borrower" means Veridian Corporation, a Delaware corporation, in its
capacity as borrower hereunder.
"Business Day" means (a) for all purposes other than as set forth in
clause (b) below, any day other than a Saturday, Sunday or legal holiday on
which banks in Charlotte, North Carolina and New York, New York, are open for
the conduct of their commercial banking business, and (b) with respect to all
notices and determinations in connection with, and payments of principal and
interest on, any LIBOR Rate Loan, any day that is a Business Day described in
clause (a) and that is also a day for trading by and between banks in Dollar
deposits in the London interbank market.
"Calculation Date" shall have the meaning assigned thereto in Section
5.1(c).
"Capital Asset" means, with respect to the Borrower and its
Subsidiaries, any asset that should, in accordance with GAAP, be classified and
accounted for as a capital asset on a Consolidated balance sheet of the Borrower
and its Subsidiaries.
"Capital Expenditures" means with respect to the Borrower and its
Subsidiaries for any period, the aggregate cost of all Capital Assets acquired
by the Borrower and its Subsidiaries during such period, as determined in
accordance with GAAP.
"Capital Lease" means any lease of any property by the Borrower or any
of its Subsidiaries, as lessee, that should, in accordance with GAAP, be
classified and accounted for as a capital lease on a Consolidated balance sheet
of the Borrower and its Subsidiaries.
"Cash Equivalents" shall have the meaning assigned thereto in Section
11.3(c).
"Change in Control" shall have the meaning assigned thereto in Section
12.1(i).
"Closing Date" means the date of this Agreement or such later Business
Day upon which each condition described in Section 6.2 shall be satisfied or
waived in all respects in a manner acceptable to the Administrative Agent, in
its sole discretion.
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"Code" means the Internal Revenue Code of 1986, and the rules and
regulations thereunder, each as amended or modified from time to time.
"Collateral" shall mean the collateral security for the Obligations
pledged or granted pursuant to the Security Documents.
"Collateral Agreement" means the collective reference to any security,
pledge or other collateral agreement, executed from time to time by the Borrower
or any of its Domestic Subsidiaries in favor of the Administrative Agent for the
ratable benefit of itself and the Lenders, substantially in the form of Exhibit
I, as such agreement may be amended, restated, supplemented or otherwise
modified from time to time.
"Commitment" means, as to any Lender, the sum of such Lender's Revolving
Credit Commitment and Term Loan Commitment as set forth opposite such Lender's
name on Schedule 1 hereto, as the same may be reduced or modified at any time or
from time to time pursuant to the terms hereof.
"Consolidated" means, when used with reference to financial statements
or financial statement items of the Borrower and its Subsidiaries, such
statements or items on a consolidated basis in accordance with applicable
principles of consolidation under GAAP.
"Credit Facility" means, collectively, the Revolving Credit Facility,
the Term Loan Facility and the L/C Facility.
"Debt" means, with respect to the Borrower and its Subsidiaries at any
date and without duplication, the sum of the following calculated in accordance
with GAAP: (a) all liabilities, obligations and indebtedness for borrowed money
including but not limited to obligations evidenced by bonds, debentures, notes
or other similar instruments of any such Person, (b) all obligations to pay the
deferred purchase price of property or services of any such Person (including,
without limitation, all obligations under non-competition agreements), except
trade payables arising in the ordinary course of business not more than ninety
(90) days past due, (c) all obligations of any such Person as lessee under
Capital Leases, (d) all Debt of any other Person secured by a Lien on any asset
of any such Person, (e) all Guaranty Obligations of any such Person, (f) all
obligations, contingent or otherwise, of any such Person relative to the face
amount of letters of credit, whether or not drawn, including without limitation
any Reimbursement Obligation, and banker's acceptances issued for the account of
any such Person, (g) all obligations of any such Person to redeem, repurchase,
exchange, defease or otherwise make payments in respect of capital stock or
other securities or partnership interests of such Person and, (h) all net
payment obligations incurred by any such Person pursuant to Hedging Agreements.
"Default" means any of the events specified in Section 12.1 which with
the passage of time, the giving of notice or any other condition, would
constitute an Event of Default.
"Disputes" shall have the meaning set forth in Section 14.6.
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"Dollars" or "$" means, unless otherwise qualified, dollars in lawful
currency of the United States.
"Domestic Subsidiary" means any Subsidiary of the Borrower organized
under the laws of the United States, the law of any state thereof or the
District of Columbia or the laws of Puerto Rico.
"EBITDA" means, for any period, the sum of the following determined on a
Consolidated basis, without duplication, for any Person and its Subsidiaries in
accordance with GAAP: (a) Net Income for such period plus (b) the sum of the
following to the extent deducted in determining Net Income: (i) the amount of
Interest Expense paid in cash or payable in cash and accrued during such period,
(ii) the amount of Income Tax Expense, calculated without taking into account
any Income Tax Expense related to any extraordinary items during such period,
(iii) the amount of amortization and depreciation expense for such period and
(iv) non-cash losses realized on the sale of assets during such period,
calculated without taking into account any extraordinary items less (c) interest
income and any cash or non-cash gains realized on the sale of assets during such
period.
"Eligible Assignee" means, with respect to any assignment of the rights,
interest and obligations of a Lender hereunder, a Person that is at the time of
such assignment (a) a commercial bank organized under the laws of the United
States or any state thereof, having combined capital and surplus in excess of
$500,000,000, (b) a commercial bank organized under the laws of any other
country that is a member of the Organization of Economic Cooperation and
Development, or a political subdivision of any such country, having combined
capital and surplus in excess of $500,000,000, (c) a finance company, insurance
company or other financial institution which in the ordinary course of business
extends credit of the type extended hereunder and that has total assets in
excess of $1,000,000,000, (d) already a Lender hereunder (whether as an original
party to this Agreement or as the assignee of another Lender), (e) the successor
(whether by transfer of assets, merger or otherwise) to all or substantially all
of the commercial lending business of the assigning Lender, (f) any Affiliate of
an assigning Lender, (g) any Approved Fund or (h) any other Person that has been
approved in writing as an Eligible Assignee by the Borrower (other than upon the
occurrence and during the continuance of any Default or Event of Default) and
the Administrative Agent.
"Employee Benefit Plan" means any employee benefit plan within the
meaning of Section 3(3) of ERISA which (a) is maintained for employees of the
Borrower or any ERISA Affiliate or (b) has at any time within the preceding six
(6) years been maintained for the employees of the Borrower or any current or
former ERISA Affiliate.
"Environmental Claims" means any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens, accusations,
allegations, notices of noncompliance or violation, investigations (other than
internal reports prepared by any Person in the ordinary course of business and
not in response to any third party action or request of any kind) or proceedings
relating in any way to any actual or alleged violation of or liability under any
Environmental Law or relating to any permit issued, or any approval given, under
any such Environmental Law, including, without limitation, any and all claims by
Governmental Authorities for enforcement, cleanup, removal, response, remedial
or other actions or damages, contribution, indemnification cost
5
recovery, compensation or injunctive relief resulting from Hazardous Materials
or arising from alleged injury or threat of injury to human health or the
environment.
"Environmental Laws" means all applicable provisions of law, statute,
ordinances, rules, regulations, judgments, writs, injunctions, decrees, orders,
awards and standards promulgated by the government of the United States or any
foreign government or by any state, province, municipality or other political
subdivision thereof or therein or by any court, agency or instrumentality,
regulatory authority or commission of any of the foregoing concerning the
protection of, or regulating the discharge of substances into, the environment.
"ERISA" means the Employee Retirement Income Security Act of 1974, and
the rules and regulations thereunder, each as amended or modified from time to
time.
"ERISA Affiliate" means any Person who together with the Borrower is
treated as a single employer within the meaning of Section 414(b), (c), (m) or
(o) of the Code or Section 4001(b) of ERISA.
"Eurodollar Reserve Percentage" means, for any day, the percentage
(expressed as a decimal and rounded upwards, if necessary, to the next higher
1/100th of 1%) which is in effect for such day as prescribed by the Federal
Reserve Board (or any successor) for determining the maximum reserve requirement
(including without limitation any basic, supplemental or emergency reserves) in
respect of eurocurrency liabilities or any similar category of liabilities for a
member bank of the Federal Reserve System in New York City.
"Event of Default" means any of the events specified in Section 12.1,
provided that any requirement for passage of time, giving of notice, or any
other condition, has been satisfied.
"Excess Cash Flow" means, for any period of determination determined in
accordance with GAAP, the sum of (a) Adjusted EBITDA of the Borrower and its
Subsidiaries (but excluding all non-cash Approved EBITDA Adjustments and all
Permitted Acquisition EBITDA) for such period, minus (b) income taxes (to the
extent such taxes are paid in cash) and Interest Expense paid in cash deducted
in the determination of Net Income for such period, minus (c) all principal
payments (whether scheduled payments or optional prepayments, but excluding
mandatory prepayments) made in respect of Debt during such period, minus (d) all
Capital Expenditures net of the proceeds of Debt used to fund such Capital
Expenditures, plus or minus, as applicable, (e) the net change in the working
capital of the Borrower and its Subsidiaries during such period minus (f) cash
consideration paid for Permitted Acquisitions net of the proceeds of any Debt
used to fund any such cash consideration.
"Excess Proceeds" shall have the meaning assigned thereto in Section
2.6(b).
"Exchange Act" means that Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"Existing Credit Agreement" means the Amended and Restated Credit
Agreement dated as of September 14, 2000 by and among the Borrower, the lenders
party thereto and the agents listed
6
therein, as amended, restated, modified or otherwise supplemented from time to
time prior to the date hereof.
"Existing Letters of Credit" means the collective reference to the
existing letters of credit issued under the Existing Credit Agreement.
"FDIC" means the Federal Deposit Insurance Corporation, or any successor
thereto.
"Federal Funds Rate" means, at any time, the rate per annum (rounded
upwards, if necessary, to the next higher 1/100th of 1%) representing the daily
effective federal funds rate as quoted by the Administrative Agent and confirmed
in Federal Reserve Board Statistical Release H.15 (519) or any successor or
substitute publication selected by the Administrative Agent. If, for any reason,
such rate is not available, then "Federal Funds Rate" shall mean a daily rate
which is determined, in the opinion of the Administrative Agent, to be the rate
at which federal funds are being offered for sale in the national federal funds
market at 9:00 a.m. (Charlotte time). Rates for weekends or holidays shall be
the same as the rate for the most immediate preceding Business Day.
"Fee Letter" has the meaning assigned thereto in Section 5.3(b).
"Fiscal Year" means the fiscal year of the Borrower and its Subsidiaries
ending on December 31.
"Foreign Subsidiary" means any Subsidiary of the Borrower that is not a
Domestic Subsidiary.
"GAAP" means generally accepted accounting principles, as recognized by
the American Institute of Certified Public Accountants and the Financial
Accounting Standards Board, consistently applied and maintained on a consistent
basis for the Borrower and its Subsidiaries throughout the period indicated and
(subject to Section 14.9) consistent with the prior financial practice of the
Borrower and its Subsidiaries.
"Governmental Approvals" means all authorizations, consents, approvals,
licenses and exemptions of, registrations and filings with, and reports to, all
Governmental Authorities.
"Governmental Authority" means any nation, province, state or political
subdivision thereof, and any government or any Person exercising executive,
legislative, regulatory or administrative functions of or pertaining to
government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"Guaranty Agreements" means the collective reference to the
unconditional guaranty agreements executed from time to time by any Domestic
Subsidiary in favor of the Administrative Agent for the ratable benefit of
itself and the Lenders, substantially in the form of Exhibit H, as amended,
restated, supplemented or otherwise modified from time to time.
"Guaranty Obligation" means, with respect to the Borrower and its
Subsidiaries, without duplication, any obligation, contingent or otherwise, of
any such Person pursuant to which such Person has directly or indirectly
guaranteed any Debt or other obligation of any other Person and,
7
without limiting the generality of the foregoing, any obligation, direct or
indirect, contingent or otherwise, of any such Person (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Debt or other
obligation (whether arising by virtue of partnership arrangements, by agreement
to keep well, to purchase assets, goods, securities or services, to take-or-pay,
or to maintain financial statement condition or otherwise) or (b) entered into
for the purpose of assuring in any other manner the obligee of such Debt or
other obligation of the payment thereof or to protect such obligee against loss
in respect thereof (in whole or in part); provided, that the term Guaranty
Obligation shall not include endorsements for collection or deposit in the
ordinary course of business.
"Hazardous Materials" means any flammable explosives, radioactive
materials, hazardous materials, hazardous wastes, hazardous or toxic substances
or related materials defined in the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended (42 U.S.C. Sections 9601, et
seq.), the Hazardous Materials Transportation Act, as amended (49 U.S.C.
Sections 1801, et seq.), the Resource Conservation and Recovery Act, as amended
(42 U.S.C. Sections 6901, et seq.), and in the regulations adopted and
publications promulgated pursuant thereto, or any other applicable federal,
state or local government law, ordinance, rule or regulation.
"Hedging Agreement" means any agreement with respect to any Interest
Rate Contract, forward rate agreement, commodity swap, forward foreign exchange
agreement, currency swap agreement, cross-currency rate swap agreement, currency
option agreement or other agreement or arrangement designed to alter the risks
of any Person arising from fluctuations in interest rates, currency values or
commodity prices, all as amended, restated, supplemented or otherwise modified
from time to time.
"Hedging Obligations" shall have the meaning assigned thereto in the
definition of Obligations.
"Income Tax Expense" means, with respect to the Borrower and its
Subsidiaries, for any period, the amount of income taxes or similar taxes
(whether federal, state, local or foreign) paid or payable during such period,
as determined in accordance with GAAP.
"Increase Lenders" shall have the meaning assigned thereto in Section
4.6(b).
"Increase Notification" means the written notice by the Borrower of its
desire to increase the Term Loan Commitment pursuant to Section 4.6.
"Increase Notification Date" means the date on which the Increase
Notification is received by the Administrative Agent.
"Initial Term Loans" shall mean the term loans to be made to the
Borrower by the Lenders pursuant to Section 4.1 and shall not include any of the
Additional Term Loans made to the Borrower pursuant to Section 4.6.
"Insurance and Condemnation Proceeds" shall have the meaning assigned
thereto in Section 4.4(b)(iv).
8
"Interest Expense" means, with respect to the Borrower and its
Subsidiaries for any period, the gross interest expense (including, without
limitation, interest expense attributable to Capital Leases and all net payment
obligations pursuant to Hedging Agreements) of the Borrower and its
Subsidiaries, all determined for such period on a Consolidated basis, without
duplication, in accordance with GAAP.
"Interest Period" shall have the meaning assigned thereto in Section
5.1(b).
"Interest Rate Contract" means any interest rate swap agreement,
interest rate cap agreement, interest rate floor agreement, interest rate collar
agreement, interest rate option or any other agreement regarding the hedging of
interest rate risk exposure executed in connection with hedging the interest
rate exposure of any Person and any confirming letter executed pursuant to such
agreement, all as amended, restated, supplemented or otherwise modified from
time to time.
"IPO" has the meaning assigned thereto in Section 6.2(f)(i).
"ISP98" means the International Standby Practices (1998 Revision,
effective January 1, 1999), International Chamber of Commerce Publication No.
590.
"Issuing Lender" means Wachovia, in its capacity as issuer of any Letter
of Credit, or any successor thereto.
"L/C Commitment" means the lesser of (a) Twenty Million Dollars
($20,000,000) and (b) the Revolving Credit Commitment.
"L/C Facility" means the letter of credit facility established pursuant
to Article III.
"L/C Obligations" means at any time, an amount equal to the sum of (a)
the aggregate undrawn and unexpired amount of the then outstanding Letters of
Credit and (b) the aggregate amount of drawings under Letters of Credit which
have not then been reimbursed pursuant to Section 3.5.
"L/C Participants" means the collective reference to all the Lenders
having Revolving Credit Commitments other than the Issuing Lender.
"Lender" means each Person executing this Agreement as a Lender
(including, without limitation, the Issuing Lender and the Swingline Lender
unless the context otherwise requires) set forth on the signature pages hereto
and each Person that hereafter becomes a party to this Agreement as a Lender
pursuant to Section 14.10.
"Lending Office" means, with respect to any Lender, the office of such
Lender maintaining such Lender's Revolving Credit Commitment Percentage or Term
Loan Percentage, as applicable, of the Advances.
"Letters of Credit" means the collective reference to (a) standby
letters of credit issued pursuant to the L/C Facility and (b) the Existing
Letters of Credit.
9
"LIBOR" means, with respect to a particular Interest Period, the rate of
interest per annum determined on the basis of the rate for deposits in Dollars
in minimum amounts of at least $5,000,000 for a period equal to the applicable
Interest Period which appears on the Dow Xxxxx Market Screen 3750 at
approximately 11:00 a.m. (London time) two (2) Business Days prior to the first
day of the applicable Interest Period (rounded upward, if necessary, to the
nearest 1/100th of 1%). If, for any reason, such rate does not appear on Dow
Xxxxx Market Screen 3750, then "LIBOR" shall be determined by the Administrative
Agent to be the arithmetic average of the rate per annum at which deposits in
Dollars in minimum amounts of at least $5,000,000 would be offered by first
class banks in the London interbank market to the Administrative Agent at
approximately 11:00 a.m. (London time) two (2) Business Days prior to the first
day of the applicable Interest Period for a period equal to such Interest
Period. Each calculation by the Administrative Agent of LIBOR shall be
conclusive and binding for all purposes, absent manifest error.
"LIBOR Rate" means a rate per annum (rounded upwards, if necessary, to
the next higher 1/100th of 1%) determined by the Administrative Agent pursuant
to the following formula:
LIBOR Rate = LIBOR
--------------------------------
1.00-Eurodollar Reserve Percentage
"LIBOR Rate Loan" means any Loan bearing interest at a rate based upon
the LIBOR Rate as provided in Section 5.1(a).
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest, hypothecation or encumbrance of any kind in respect
of such asset, including, without limitation, any filing under the Assignment of
Claims Act of 1940, as amended, whether or not filed or delivered. For the
purposes of this Agreement, a Person shall be deemed to own subject to a Lien
any asset which it has acquired or holds subject to the interest of a vendor or
lessor under any conditional sale agreement, Capital Lease or other title
retention agreement relating to such asset.
"Loan Documents" means, collectively, this Agreement, the Notes, the
Applications, the Security Documents, each joinder agreement and each other
document, instrument, certificate and agreement executed and delivered by the
Borrower or any Subsidiary thereof in connection with this Agreement or
otherwise referred to herein or contemplated hereby, all as may be amended,
restated, supplemented or otherwise modified from time to time.
"Loans" means the collective reference to the Revolving Credit Loans,
the Term Loans and the Swingline Loans and "Loan" means any of such Loans.
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, operations, properties, or condition (financial or otherwise)
of the Borrower and its Subsidiaries on a Consolidated basis, (b) the ability of
the Borrower or any Subsidiary to perform its obligations under any Loan
Document, or (c) the validity or enforceability of the Loan Documents taken as a
whole or the rights or remedies of the Administrative Agent or the Lenders under
the Loan Documents taken as a whole.
10
"Material Contract" means (a) any Material Governmental Contract, (b)
any other contract or other agreement, written or oral, of the Borrower or any
of its Subsidiaries involving monetary liability of or to any such Person in an
amount in excess of $1,000,000 per annum, or (c) any other contract or
agreement, written or oral, of the Borrower or any of its Subsidiaries the
failure to comply with which could reasonably be expected to have a Material
Adverse Effect.
"Material Governmental Contract" means, as of any date of determination,
a contract between the Borrower or any of its Subsidiaries and an agency,
department or instrumentality of the United States or any state Governmental
Authority in the United States where the Borrower or such Subsidiary is the
prime contractor and at least five million Dollars ($5,000,000) of potential
revenues remain outstanding to be earned over the remaining term of such
contract.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate is making, or
is accruing an obligation to make, or has accrued an obligation to make
contributions within the preceding six (6) years.
"Net Cash Proceeds" means, as applicable, (a) with respect to any sale
or other disposition of assets, the gross cash proceeds received by the Borrower
or any of its Subsidiaries from such sale less the sum of (i) all cash income
taxes and other cash taxes assessed by a Governmental Authority as a result of
such sale and any other cash fees and expenses incurred in connection therewith
and (ii) the principal amount of, premium, if any, and cash interest on any Debt
secured by a Lien on the asset (or a portion thereof) sold, which Debt is
required to be repaid in connection with such sale, (b) with respect to any
offering of capital stock or issuance of Debt, the gross cash proceeds received
by the Borrower or any of its Subsidiaries therefrom less all legal,
underwriting and other cash fees and expenses incurred in connection therewith
and (c) with respect to any payment under an insurance policy or in connection
with a condemnation proceeding, the amount of cash proceeds received by the
Borrower or its Subsidiaries from an insurance company or Governmental
Authority, as applicable, net of all expenses of collection.
"Net Income" means, with respect to the Borrower and its Subsidiaries,
for any period of determination, the net income (or loss) of the Borrower and
its Subsidiaries for such period, determined on a Consolidated basis in
accordance with GAAP; provided that there shall be excluded from Net Income the
net income (or loss) of any Person, in which the Borrower or any of its
Subsidiaries has a joint interest with a third party, except to the extent such
net income is actually paid in cash to the Borrower or any of its Subsidiaries
by dividend or other distribution during such period.
"New Lender" shall have the meaning assigned thereto in Section 4.6(b).
"Notes" means the collective reference to the Revolving Credit Notes,
the Term Notes and Swingline Notes and "Note" means any of such Notes.
"Notice of Account Designation" shall have the meaning assigned thereto
in Section 2.3(b).
"Notice of Conversion/Continuation" shall have the meaning assigned
thereto in Section
5.2.
11
"Notice of Prepayment" shall have the meaning assigned thereto in
Section 2.4(c).
"Notice of Revolving Loan Borrowing" shall have the meaning assigned
thereto in Section 2.3(a).
"Notice of Term Loan Borrowing" shall have the meaning assigned thereto
in Section 4.2.
"Obligations" means, in each case, whether now in existence or hereafter
arising: (a) the principal of and interest on (including interest accruing after
the filing of any bankruptcy or similar petition) the Loans, (b) the L/C
Obligations, (c) all existing or future payment and other obligations owing by
the Borrower under any Hedging Agreement (which such Hedging Agreement is
permitted hereunder) with any Person that is a Lender hereunder at the time such
Hedging Agreement is executed (all such obligations with respect to any such
Hedging Agreement "Hedging Obligations"), and (d) all other fees and commissions
(including attorneys' fees), charges, indebtedness, loans, liabilities,
financial accommodations, obligations, covenants and duties owing by the
Borrower or any of its Subsidiaries to the Lender, the Lenders or the
Administrative Agent, in each case under or in respect of this Agreement, any
Note, any Letter of Credit or any of the other Loan Documents of every kind,
nature and description, direct or indirect, absolute or contingent, due or to
become due, contractual or tortious, liquidated or unliquidated, and whether or
not evidenced by any note.
"Officer's Compliance Certificate" shall have the meaning assigned
thereto in Section 8.2.
"Other Taxes" shall have the meaning assigned thereto in Section
5.11(b).
"Pacific Sierra" means Pacific-Sierra Research, Ltd.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
agency.
"Pension Plan" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to the provisions of Title IV of ERISA or
Section 412 of the Code and which (a) is maintained for the employees of the
Borrower or any ERISA Affiliates or (b) has at any time within the preceding six
(6) years been maintained for the employees of the Borrower or any of its
current or former ERISA Affiliates.
"Permitted Acquisition" has the meaning assigned thereto in Section
11.3(e).
"Permitted Acquisition Diligence Information" means with respect to any
acquisition proposed by the Borrower or any Subsidiary thereof, to the extent
applicable, all financial information, all environmental reports (including,
without limitation, any phase I and, to the extent applicable, phase II
reports), all Material Contracts, all customer lists, all supply agreements, and
all other material information, in each case, requested to be delivered to the
Administrative Agent in connection with such proposed acquisition.
"Permitted Acquisition Documents" means with respect to any acquisition
proposed by the Borrower or any Subsidiary thereof, the purchase agreement, sale
agreement, merger agreement or other agreement evidencing such acquisition,
including, without limitation, all legal
12
opinions and each other document executed, delivered, contemplated by or
prepared in connection therewith and any amendment, modification or supplement
to any of the foregoing.
"Permitted Acquisition EBITDA" means, for any period, the sum of the
following determined on a Consolidated basis, without duplication, in accordance
with GAAP: (a) EBITDA for the target of a Permitted Acquisition and its
Subsidiaries plus (b) all Permitted Acquisition EBITDA Adjustments relating to
such Permitted Acquisition.
"Permitted Acquisition EBITDA Adjustments" means any adjustment in
connection with any Permitted Acquisition or divestiture (other than Approved
EBITDA Adjustments) to actual historical EBITDA made in connection with such
Permitted Acquisition or divestiture; provided that such adjustments are (a)
consistent with Regulation S-X of the U.S. Securities and Exchange Commission or
(b) approved by the Administrative Agent in its sole discretion.
"Permitted Benefit Plan" means the collective reference to the Stock
Incentive Plan and any other employee stock option or other incentive
compensation plan, approved by the Borrower's board of directors and entered
into in the ordinary course of business; provided that a summary description of
such plan, in form and substance satisfactory to the Administrative Agent, is
delivered to the Administrative Agent prior to the implementation of such plan.
"Permitted Liens" shall have the meaning assigned thereto in Section
11.2.
"Permitted Veritect Divestiture" means any sale, transfer or other
disposition of (a) at least fifty-one percent (51%) of the capital stock or (b)
all or any portion of the assets of Veritect to any Person or Persons other than
the Borrower or any Subsidiary thereof; provided that (a) the Borrower and its
Subsidiaries comply with the applicable provisions of Section 4.4(b)(iii) with
respect to any Net Cash Proceeds of any such sale, transfer or other
disposition, (b) neither the Borrower nor any Subsidiary thereof assumes or
incurs any liability as a result of such sale, transfer or other dispositions
(except for any ordinary course indemnification obligations arising in
connection with such sale, transfer or other disposition, which such
indemnification obligations are reasonably satisfactory to the Administrative
Agent), and (c) such sale, transfer or other disposition does not result in the
creation of any Lien on any assets of the Borrower or any of its Subsidiaries.
"Permitted Veritect Discontinued Operations Charges" means the sum of
(a) all Veritect Discontinued Operations Charges accrued on or prior to the
Closing Date and set forth on Schedule 1B of the financial condition certificate
delivered pursuant to Section 6.2(e)(ii); provided that each such Veritect
Discontinued Operations Charge is approved by the Administrative Agent in its
sole discretion plus (b) up to a maximum amount of $3,000,000 in the aggregate
of all Veritect Discontinued Operations Charges accruing after the Closing Date.
"Person" means an individual, corporation, limited liability company,
partnership, association, trust, business trust, joint venture, joint stock
company, pool, syndicate, sole proprietorship, unincorporated organization,
Governmental Authority or any other form of entity or group thereof.
13
"Preferred Stock" means the senior redeemable exchangeable preferred
stock of the Borrower issued pursuant to the Preferred Stock Certificate of
Designation.
"Preferred Stock Certificate of Designation" means the amended
certificate of designation of the Borrower dated as of September 14, 2000, as
amended or modified in accordance with the terms hereof.
"Prime Rate" means, at any time, the rate of interest per annum publicly
announced from time to time by Wachovia as its prime rate. Each change in the
Prime Rate shall be effective as of the opening of business on the day such
change in such prime rate occurs. The parties hereto acknowledge that the rate
announced publicly by Wachovia as its prime rate is an index or base rate and
shall not necessarily be its lowest or best rate charged to its customers or
other banks.
"Prohibited Transaction" shall mean any transaction involving any
Employee Benefit Plan which is proscribed by Section 406 of ERISA or Section
4975 of the Code.
"Purchasing Lender" shall have the meaning assigned to such term in
Section 14.10.
"Register" shall have the meaning assigned thereto in Section 14.10(d).
"Reimbursement Obligation" means the obligation of the Borrower to
reimburse the Issuing Lender pursuant to Section 3.5 for amounts drawn under
Letters of Credit.
"Required Lenders" means, at any date, any combination of Lenders
holding at least fifty-one percent (51%) of each of (a) the Revolving Credit
Commitment (or, if the Revolving Credit Facility has been terminated, any
combination of Lenders holding at least fifty-one percent (51%) of the aggregate
outstanding Advances thereunder), and (b) the aggregate outstanding Advances
under the Term Loan Facility (including, if applicable, outstanding Advances of
Additional Term Loans).
"Responsible Officer" means any of the chief executive officer or chief
financial officer of the Borrower or any other officer of the Borrower
reasonably acceptable to the Administrative Agent.
"Revolving Credit Commitment" means (a) as to any Lender, the obligation
of such Lender to make Revolving Credit Loans to the account of the Borrower
hereunder in an aggregate principal amount at any time outstanding not to exceed
the amount set forth opposite such Lender's name on Schedule 1 hereto as such
amount may be reduced or modified at any time or from time to time pursuant to
the terms hereof and (b) as to all Lenders, the aggregate commitment of all
Lenders to make Revolving Credit Loans, as such amount may be reduced at any
time or from time to time pursuant to the terms hereof. The Revolving Credit
Commitment of all Lenders on the Closing Date shall be Seventy Million Dollars
($70,000,000).
"Revolving Credit Commitment Percentage" means, as to any Lender at any
time, the ratio of (a) the amount of the Revolving Credit Commitment of such
Lender to (b) the Revolving Credit Commitments of all Lenders; provided, that if
at any time the Revolving Credit Commitments of all Lenders have been reduced to
zero, then the Revolving Credit Commitment Percentage as of such
14
time shall equal the Revolving Credit Commitment Percentage as of the time
immediately before the Revolving Credit Commitments of all Lenders are reduced
to zero.
"Revolving Credit Facility" means the revolving credit facility
established pursuant to Article II.
"Revolving Credit Loans" means any revolving loan made to the Borrower
pursuant to Section 2.1, and all such revolving loans collectively as the
context requires.
"Revolving Credit Maturity Date" means the earliest of the dates
referred to in Section 2.7.
"Revolving Credit Notes" means the collective reference to the Revolving
Credit Notes made by the Borrower payable to the order of each Lender,
substantially in the form of Exhibit A-1 hereto, evidencing the Revolving Credit
Facility, and any amendments and modifications thereto, any substitutes
therefor, and any replacements, restatements, renewals or extension thereof, in
whole or in part; "Revolving Credit Note" means any of such Revolving Credit
Notes.
"Security Documents" means the collective reference to the Guaranty
Agreements, the Collateral Agreement, the Assignments of Federal Claims, if any,
and each other agreement or writing pursuant to which the Borrower or any
Subsidiary thereof purports to pledge or grant a security interest in any
property or assets securing all or any portion of the Obligations or any such
Person purports to guaranty the payment and/or performance of all or any portion
of the Obligations.
"Senior Debt" means all Total Debt other than Subordinated Debt.
"Solvent" shall have the meaning assigned thereto in Section 7.1(q).
"Stock Incentive Plan" means Veridian Corporation 2000 Stock Purchase
Plan as in effect on the date hereof, a copy of which has been provided to the
Administrative Agent.
"Subordinated Debt" means the collective reference to any Debt of the
Borrower or any Subsidiary subordinated in right and time of payment to the
Obligations and containing such other terms and conditions (including, without
limitation, subordination terms), in each case as are satisfactory to the
Required Lenders.
"Subordinated Notes" means the Senior Subordinated Notes issued pursuant
to the Subordinated Note Agreement.
"Subordinated Note Agreement" means the Note Agreement dated as of
September 14, 2000 between Veridian Corporation, as issuer, and the purchasers
party thereto, as amended or modified to the extent permitted pursuant to the
terms of this Agreement.
"Subordinated Note Documents" means the Subordinated Note Agreement, the
Subordinated Notes, each other document, guaranty or other agreement executed in
connection with the Subordinated Note Agreement or the Subordinated Notes, in
each case as amended or modified to the extent permitted pursuant to the terms
of this Agreement.
15
"Subsidiary" means as to any Person, any corporation, partnership,
limited liability company or other entity of which more than fifty percent (50%)
of the outstanding capital stock or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other managers of
such corporation, partnership, limited liability company or other entity is at
the time directly or indirectly owned by or the management is otherwise directly
or indirectly controlled by such Person (irrespective of whether, at the time,
capital stock or other ownership interests of any other class or classes of such
corporation, partnership, limited liability company or other entity shall have
or might have voting power by reason of the happening of any contingency).
Unless otherwise qualified references to "Subsidiary" or "Subsidiaries" herein
shall refer to those of the Borrower.
"Swingline Commitment" means the lesser of (a) Ten Million Dollars
($10,000,000) and (b) the Revolving Credit Commitment.
"Swingline Facility" means the swingline facility established pursuant
to Section 2.2.
"Swingline Lender" means Wachovia in its capacity as swingline lender
hereunder.
"Swingline Loan" means any swingline loan made by the Swingline Lender
to the Borrower pursuant to Section 2.2, and all such swingline loans
collectively as the context requires.
"Swingline Note" means the Swingline Note made by the Borrower payable
to the order of the Swingline Lender, substantially in the form of Exhibit A-2
hereto, evidencing the Swingline Loans, and any amendments and modifications
thereto, any substitutes therefor, and any replacements, restatements, renewals
or extensions thereof, in whole or in part.
"Swingline Termination Date" means the first to occur of (a) the
resignation of Wachovia as Administrative Agent in accordance with Section 13.9
or (b) the Revolving Credit Maturity Date.
"Taxes" shall have the meaning assigned thereto in Section 5.11(a).
"Term Loan Commitment" means (a) as to any Lender, the obligation of
such Lender to make the Term Loans to the account of the Borrower hereunder in
an aggregate principal amount not to exceed the amount set forth opposite such
Lender's name on Schedule 1 hereto, as such amount may be reduced or modified at
any time or from time to time pursuant to the terms hereof and (b) as to all
Lenders, the aggregate commitment to make Term Loans. The Term Loan Commitment
of all Lenders as of the Closing Date shall be One Hundred Thirty Million
Dollars ($130,000,000).
"Term Loan Facility" shall mean the term loan facility established
pursuant to Article IV.
"Term Loan Increase Termination Date" means the first to occur of (a)
June 30, 2006 (b) the date of termination by the Administrative Agent on behalf
of the Lenders pursuant to Section 12.2(a), or (c) the date of termination
pursuant to Section 4.4.
"Term Loan Maturity Date" means the first to occur of (a) June 30, 2008,
or (b) the date of termination by the Administrative Agent on behalf of the
Lenders pursuant to Section 12.2(a).
16
"Term Loan Percentage" means, as to any Lender, (a) prior to making the
Term Loans, the ratio of (i) the Term Loan Commitment of such Lender to (ii) the
Term Loan Commitments of all Lenders and (b) after the Term Loans are made, the
ratio of (i) the outstanding principal balance of the Term Loan of such Lender
to (ii) the aggregate outstanding principal balance of the Term Loans of all
Lenders.
"Term Loans" shall mean the term loans to be made to the Borrower by the
Lenders pursuant to Section 4.1 and all Additional Term Loans made to the
Borrower pursuant to Section 4.6.
"Term Notes" means the Term Notes made by the Borrower payable to the
order of each of the Lenders, substantially in the form of Exhibit A-3 hereto,
evidencing the Debt incurred by the Borrower pursuant to the Term Loan Facility,
and any amendments, modifications and supplements thereto, any substitute
therefor, and any replacement, restatements, renewals or extensions thereof, in
whole or in part.
"Termination Event" means: (a) except for any such event that could not
reasonably be expected to have a Material Adverse Effect, a "Reportable Event"
described in Section 4043 of ERISA for which the notice requirement has not been
waived by the PBGC, or (b) except that could not reasonably be expected to have
a Material Adverse Effect, the withdrawal of the Borrower or any ERISA Affiliate
from a Pension Plan during a plan year in which it was a "substantial employer"
as defined in Section 4001(a)(2) of ERISA, or (c) the termination of a Pension
Plan, the filing of a notice of intent to terminate a Pension Plan or the
treatment of a Pension Plan amendment as a termination under Section 4041(c) of
ERISA, or (d) the institution of proceedings to terminate, or the appointment of
a trustee with respect to, any Pension Plan by the PBGC, or (e) any other event
or condition which would constitute grounds under Section 4042(a) of ERISA for
the termination of, or the appointment of a trustee to administer, any Pension
Plan, or (f) the imposition of a Lien pursuant to Section 412 of the Code or
Section 302 of ERISA, or (g) except where such event could not reasonably be
expected to have a Material Adverse Effect, the partial or complete withdrawal
of the Borrower or any ERISA Affiliate from a Multiemployer Plan, if withdrawal
liability is asserted by such plan against the Borrower and its Subsidiaries, or
(h) except for any such event that could not reasonably be expected to have a
Material Adverse Effect, any event or condition which results in the
reorganization or insolvency of a Multiemployer Plan under Sections 4241 or 4245
of ERISA, or (i) except for any such event that could not reasonably be expected
to have a Material Adverse Effect, any event or condition which results in the
termination of a Multiemployer Plan under Section 4041A of ERISA or the
institution by PBGC of proceedings to terminate a Multiemployer Plan under
Section 4042 of ERISA.
"Total Debt" means, as of any date of determination with respect to the
Borrower and its Subsidiaries on a Consolidated basis without duplication, the
sum of all Debt of the Borrower and its Subsidiaries.
"Total Leverage Ratio" has the meaning assigned thereto in Section 10.1.
17
"Unfunded Benefit Liabilities" shall mean, with respect to any Employee
Benefit Plan as of any date, the amount of the unfunded benefit liabilities
determined in accordance with Section 4001(a)(18) of ERISA.
"Uniform Customs" means the Uniform Customs and Practice for Documentary
Credits (1993 Revision), effective January, 1994 International Chamber of
Commerce Publication No. 500.
"United States" means the United States of America.
"U.S. Government" means the United States or any of its departments,
agencies or instrumentalities, provided that the full faith and credit of the
United States is pledged in support thereof.
"Veritect" means Veritect, Inc., a Delaware corporation.
"Veritect Discontinued Operations Charges" means all discontinued
operations charges (including, without limitation, all losses from discontinued
operations and losses from the disposal of discontinued operations) with respect
to Veritect whether accrued prior to, on or after the Closing Date.
"Wachovia" means Wachovia Bank, National Association, a national banking
association, and its successors.
"Wholly-Owned" means, with respect to a Subsidiary, that all of the
shares of capital stock or other ownership interests of such Subsidiary are,
directly or indirectly, owned or controlled by the Borrower and/or one or more
of its Wholly-Owned Subsidiaries (except for directors' qualifying shares or
other shares required by Applicable Law to be owned by a Person other than the
Borrower).
SECTION 1.2 General. Unless otherwise specified, a reference in this
Agreement to a particular article, section, subsection, Schedule or Exhibit is a
reference to that article, section, subsection, Schedule or Exhibit of this
Agreement. Wherever from the context it appears appropriate, each term stated in
either the singular or plural shall include the singular and plural, and
pronouns stated in the masculine, feminine or neuter gender shall include the
masculine, the feminine and the neuter. Any reference herein to "Charlotte time"
shall refer to the applicable time of day in Charlotte, North Carolina.
SECTION 1.3 Other Definitions and Provisions.
(a) Use of Capitalized Terms. Unless otherwise defined therein, all
capitalized terms defined in this Agreement shall have the defined meanings when
used in this Agreement, the Notes and the other Loan Documents or any
certificate, report or other document made or delivered pursuant to this
Agreement.
(b) Miscellaneous. The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement.
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ARTICLE II
REVOLVING CREDIT FACILITY
SECTION 2.1 Revolving Credit Loans. Subject to the terms and conditions
of this Agreement, and in reliance upon the representations and warranties set
forth herein, each Lender severally agrees to make Revolving Credit Loans to the
Borrower from time to time from the Closing Date through, but not including, the
Revolving Credit Maturity Date as requested by the Borrower in accordance with
the terms of Section 2.3; provided, that (a) the aggregate principal amount of
all outstanding Revolving Credit Loans (after giving effect to any amount
requested) shall not exceed the Revolving Credit Commitment less the sum of all
outstanding Swingline Loans and L/C Obligations, (b) the principal amount of
outstanding Revolving Credit Loans from any Lender to the Borrower shall not at
any time exceed such Lender's Revolving Credit Commitment less such Lender's
Revolving Credit Commitment Percentage of outstanding L/C Obligations and
outstanding Swingline Loans and (c) after giving effect to such Loan the
Borrower and its Subsidiaries shall be in pro forma compliance with Section 10.5
hereof. Each Revolving Credit Loan by a Lender shall be in a principal amount
equal to such Lender's Revolving Credit Commitment Percentage of the aggregate
principal amount of Revolving Credit Loans requested on such occasion. Subject
to the terms and conditions hereof, the Borrower may borrow, repay and reborrow
Revolving Credit Loans hereunder until the Revolving Credit Maturity Date.
Revolving Credit Loans made on the Closing Date shall be funded in a manner
consistent with the provisions of Section 6.2(g)(i).
SECTION 2.2 Swingline Loans.
(a) Availability. Subject to the terms and conditions of this Agreement,
the Swingline Lender agrees to make Swingline Loans to the Borrower from time to
time from the Closing Date through, but not including, the Swingline Termination
Date; provided, that (a) the aggregate principal amount of all outstanding
Swingline Loans (after giving effect to any amount requested), shall not exceed
the lesser of (i) the Revolving Credit Commitment less the sum of all
outstanding Revolving Credit Loans and the L/C Obligations and (ii) the
Swingline Commitment, and (b) after giving effect to such Loan, the Borrower and
its Subsidiaries shall be in pro forma compliance with Section 10.5 hereof.
(b) Refunding.
(i) Swingline Loans shall be refunded by the Lenders on demand by
the Swingline Lender. Such refundings shall be made by the Lenders in accordance
with their respective Revolving Credit Commitment Percentages and shall
thereafter be reflected as Revolving Credit Loans of the Lenders on the books
and records of the Administrative Agent. Each Lender shall fund its respective
Revolving Credit Commitment Percentage of Revolving Credit Loans as required to
repay Swingline Loans outstanding to the Swingline Lender upon demand by the
Swingline Lender but in no event later than 2:00 p.m. (Charlotte time) on the
next succeeding Business Day after such demand is made. No Lender's obligation
to fund its respective Revolving Credit Commitment Percentage of a Swingline
Loan shall be affected by any other Lender's failure to fund its Revolving
Credit Commitment Percentage of a Swingline Loan, nor shall any Lender's
19
Revolving Credit Commitment Percentage be increased as a result of any such
failure of any other Lender to fund its Revolving Credit Commitment Percentage
of a Swingline Loan.
(ii) The Borrower shall pay to the Swingline Lender on demand the
amount of such Swingline Loans to the extent amounts received from the Lenders
are not sufficient to repay in full the outstanding Swingline Loans requested or
required to be refunded. In addition, the Borrower hereby authorizes the
Administrative Agent to charge any account maintained by the Borrower with the
Swingline Lender (up to the amount available therein) in order to immediately
pay the Swingline Lender the amount of such Swingline Loans to the extent
amounts received from the Lenders are not sufficient to repay in full the
outstanding Swingline Loans requested or required to be refunded. If any portion
of any such amount paid to the Swingline Lender shall be recovered by or on
behalf of the Borrower from the Swingline Lender in bankruptcy or otherwise, the
loss of the amount so recovered shall be ratably shared among all the Lenders in
accordance with their respective Revolving Credit Commitment Percentages (unless
the amounts so recovered by or on behalf of the Borrower pertain to a Swingline
Loan extended after the occurrence and during the continuance of an Event of
Default of which the Administrative Agent has received notice in the manner
required pursuant to Section 13.5 and which such Event of Default has not been
waived by the Required Lenders or the Lenders, as applicable).
(iii) Each Lender acknowledges and agrees that its obligation to
refund Swingline Loans in accordance with the terms of this Section 2.2 is
absolute and unconditional and shall not be affected by any circumstance
whatsoever, including, without limitation, non-satisfaction of the conditions
set forth in Article VI. Further, each Lender agrees and acknowledges that if
prior to the refunding of any outstanding Swingline Loans pursuant to this
Section 2.2, one of the events described in Section 12.1(j) or (k) shall have
occurred, each Lender will, on the date the applicable Revolving Credit Loan
would have been made, purchase an undivided participating interest in the
Swingline Loan to be refunded in an amount equal to its Revolving Credit
Commitment Percentage of the aggregate amount of such Swingline Loan. Each
Lender will immediately transfer to the Swingline Lender, in immediately
available funds, the amount of its participation and upon receipt thereof the
Swingline Lender will deliver to such Lender a certificate evidencing such
participation dated the date of receipt of such funds and for such amount.
Whenever, at any time after the Swingline Lender has received from any Lender
such Lender's participating interest in a Swingline Loan, the Swingline Lender
receives any payment on account thereof, the Swingline Lender will distribute to
such Lender its participating interest in such amount (appropriately adjusted,
in the case of interest payments, to reflect the period of time during which
such Lender's participating interest was outstanding and funded).
SECTION 2.3 Procedure for Advances of Revolving Credit
and Swingline Loans.
(a) Requests for Borrowing. The Borrower shall give the Administrative
Agent irrevocable prior written notice in the form attached hereto as Exhibit
B-1 (a "Notice of Revolving Loan Borrowing") not later than Noon (Charlotte
time) (i) on the same Business Day as each Base Rate Loan and each Swingline
Loan and (ii) at least three (3) Business Days before each LIBOR Rate Loan, of
its intention to borrow, specifying (A) the date of such borrowing, which shall
be a Business Day, (B) the amount of such borrowing, which shall be (x) with
respect to Base Rate Loans in an aggregate principal amount of $1,000,000 or a
whole multiple of $50,000 in excess
20
thereof, (y) with respect to LIBOR Rate Loans in an aggregate principal amount
of $4,000,000 or a whole multiple of $100,000 in excess thereof and (z) with
respect to Swingline Loans in an aggregate principal amount of $50,000 or a
whole multiple of $50,000 in excess thereof, (C) whether such Loan is to be a
Revolving Credit Loan, (D) in the case of a Revolving Credit Loan whether the
Loans are to be LIBOR Rate Loans or Base Rate Loans, and (E) in the case of a
LIBOR Rate Loan, the duration of the Interest Period applicable thereto. A
Notice of Revolving Loan Borrowing received after Noon (Charlotte time) shall be
deemed received on the next Business Day. The Administrative Agent shall
promptly notify the Lenders of each Notice of Revolving Loan Borrowing.
(b) Disbursement of Revolving Credit and Swingline Loans. Not later than
3:00 p.m. (Charlotte time) on the proposed borrowing date, (i) each Lender will
make available to the Administrative Agent, for the account of the Borrower, at
the office of the Administrative Agent in funds immediately available to the
Administrative Agent, such Lender's Revolving Credit Commitment Percentage of
the Revolving Credit Loans to be made on such borrowing date and (ii) the
Swingline Lender will make available to the Administrative Agent, for the
account of the Borrower, at the office of the Administrative Agent in funds
immediately available to the Administrative Agent, the Swingline Loans to be
made on such borrowing date. The Borrower hereby irrevocably authorizes the
Administrative Agent to disburse the proceeds of each borrowing requested
pursuant to this Section 2.3 in immediately available funds by crediting or
wiring such proceeds to the deposit account of the Borrower identified in the
most recent notice substantially in the form of Exhibit C hereto (a "Notice of
Account Designation") delivered by the Borrower to the Administrative Agent or
may be otherwise agreed upon by the Borrower and the Administrative Agent from
time to time. Subject to Section 5.7 hereof, the Administrative Agent shall not
be obligated to disburse the portion of the proceeds of any Revolving Credit
Loan requested pursuant to this Section 2.3 to the extent that any Lender has
not made available to the Administrative Agent its Revolving Credit Commitment
Percentage of such Loan. Revolving Credit Loans to be made for the purpose of
refunding Swingline Loans shall be made by the Lenders as provided in Section
2.2(b).
SECTION 2.4 Repayment of Revolving Credit and Swingline Loans.
(a) Repayment on Termination Date. The Borrower shall repay the
outstanding principal amount of (i) all Revolving Credit Loans in full on the
Revolving Credit Maturity Date, and (ii) all Swingline Loans in accordance with
Section 2.2(b), together, in each case, with all accrued but unpaid interest
thereon.
(b) Mandatory Repayment of Revolving Credit Loans. If at any time the
outstanding principal amount of all Revolving Credit Loans plus the sum of all
outstanding Swingline Loans and L/C Obligations exceeds the Revolving Credit
Commitment, the Borrower shall repay immediately upon notice from the
Administrative Agent, by payment to the Administrative Agent for the account of
the Lenders, Advances in an amount equal to such excess with each such repayment
applied first to the principal amount of outstanding Swingline Loans, second to
the principal amount of outstanding Revolving Credit Loans and third, with
respect to any Letters of Credit then outstanding, a payment of cash collateral
into a cash collateral account opened by the Administrative Agent, for the
benefit of the Lenders in an amount equal to the aggregate then
21
undrawn and unexpired amount of such Letters of Credit (such cash collateral to
be applied in accordance with Section 12.2(b)).
(c) Optional Repayments. The Borrower may at any time and from time to
time repay the Revolving Credit and/or Swingline Loans, in whole or in part,
upon at least three (3) Business Days' irrevocable notice to the Administrative
Agent with respect to LIBOR Rate Loans and one (1) Business Day irrevocable
notice with respect to Base Rate Loans and Swingline Loans, in the form attached
hereto as Exhibit D (a "Notice of Prepayment") specifying the date and amount of
repayment and whether the repayment is of LIBOR Rate Loans, Base Rate Loans,
Swingline Loans or a combination thereof, and, if of a combination thereof, the
amount allocable to each. Upon receipt of such notice, the Administrative Agent
shall promptly notify each Lender. If any such notice is given, the amount
specified in such notice shall be due and payable on the date set forth in such
notice. Partial repayments shall be in an aggregate amount of $1,000,000 or a
whole multiple of $50,000 in excess thereof with respect to Base Rate Loans,
$4,000,000 or a whole multiple of $100,000 in excess thereof with respect to
LIBOR Rate Loans and $50,000 or a whole multiple of $50,000 in excess thereof
with respect to Swingline Loans.
(d) Limitation on Repayment of LIBOR Rate Loans. The Borrower may not
repay any LIBOR Rate Loan on any day other than on the last day of the Interest
Period applicable thereto unless such repayment is accompanied by any amount
required to be paid pursuant to Section 5.9 hereof.
(e) Hedging Agreements. No repayment or prepayment pursuant to this
Section 2.4 shall affect any of the Borrower's obligations under any Hedging
Agreement.
SECTION 2.5 Notes.
(a) Revolving Credit Notes. Each Lender's Revolving Credit Loans and the
obligation of the Borrower to repay such Revolving Credit Loans shall be
evidenced by a separate Revolving Credit Note executed by the Borrower payable
to the order of such Lender.
(b) Swingline Notes. The Swingline Loans and the obligations of the
Borrower to repay such Swingline Loans shall be evidenced by a Swingline Note
executed by the Borrower payable to the order of the Swingline Lender.
SECTION 2.6 Permanent Reduction of the Revolving Credit
Commitment.
(a) Voluntary Reduction. The Borrower shall have the right at any time
and from time to time, upon at least five (5) Business Days prior written notice
to the Administrative Agent, to permanently reduce, without premium or penalty,
(i) the entire Revolving Credit Commitment at any time or (ii) portions of the
Revolving Credit Commitment, from time to time, in an aggregate principal amount
not less than $1,000,000 or any whole multiple of $500,000 in excess thereof.
The amount of each partial permanent reduction shall be applied pro rata to
reduce the remaining mandatory reduction amounts required under Section 2.6(b),
and such reduction shall permanently reduce the Lenders' Revolving Credit
Commitments pro rata in accordance with their respective Revolving Credit
Commitment Percentages.
22
(b) Mandatory Reduction. If at any time proceeds ("Excess Proceeds")
remain after the prepayment of Term Loans pursuant to Section 4.4(b)(i), (ii),
(iii) or (iv), the Revolving Credit Commitment shall be permanently reduced on
the date of the required prepayment under Section 4.4(b) by an amount equal to
the amount of such Excess Proceeds.
(c) Application. Each permanent reduction permitted or required pursuant
to this Section 2.6 shall be accompanied by a payment of principal sufficient to
reduce the aggregate outstanding Revolving Credit Loans, Swingline Loans and L/C
Obligations, as applicable, after such reduction to the Revolving Credit
Commitment as so reduced and if the Revolving Credit Commitment as so reduced is
less than the aggregate amount of all outstanding Letters of Credit, the
Borrower shall be required to deposit in a cash collateral account opened by the
Administrative Agent in an amount equal to the aggregate then undrawn and
unexpired amount of such Letters of Credit. Any reduction of the Revolving
Credit Commitment to zero shall be accompanied by payment of all outstanding
Revolving Credit Loans and Swingline Loans (and furnishing of cash collateral
satisfactory to the Administrative Agent for all L/C Obligations) and shall
result in the termination of the Revolving Credit Commitment and the Swingline
Commitment and the Revolving Credit Facility. Such cash collateral shall be
applied in accordance with Section 12.2(b). If the reduction of the Revolving
Credit Commitment requires the repayment of any LIBOR Rate Loan, such repayment
shall be accompanied by any amount required to be paid pursuant to Section 5.9
hereof.
SECTION 2.7 Termination of Revolving Credit Facility. The Revolving
Credit Facility shall terminate on the earliest of (a) June 30, 2007, (b) the
date of termination pursuant to Section 2.6, or (c) the date of termination by
the Administrative Agent on behalf of the Lenders pursuant to Section 12.2(a).
ARTICLE III
LETTER OF CREDIT FACILITY
SECTION 3.1 L/C Commitment. Subject to the terms and conditions hereof,
the Issuing Lender, in reliance on the agreements of the other Lenders set forth
in Section 3.4(a), agrees to issue Letters of Credit for the account of the
Borrower on any Business Day from the Closing Date through but not including the
Revolving Credit Maturity Date in such form as may be approved from time to time
by the Issuing Lender; provided, that the Issuing Lender shall have no
obligation to issue any Letter of Credit if, after giving effect to such
issuance, (a) the L/C Obligations would exceed the L/C Commitment, (b) the
aggregate principal amount of outstanding Revolving Credit Loans, plus the
aggregate principal amount of outstanding Swingline Loans, plus the aggregate
amount of L/C Obligations would exceed the Revolving Credit Commitment. Each
Letter of Credit shall (i) be denominated in Dollars in a minimum amount
acceptable to the Issuing Lender; (ii) be a standby letter of credit issued to
support obligations of the Borrower or any of its Subsidiaries, contingent or
otherwise, incurred in the ordinary course of business, (iii) expire on a date
satisfactory to the Issuing Lender, which date shall be no later than the
earlier of (i) one (1) year after its date of issuance and (ii) the fifth (5th)
Business Day prior to the Revolving Credit Maturity Date and (iv) be subject to
the Uniform Customs and/or ISP 98, as set forth in the Application or as
determined by the Issuing Lender and, to the extent not inconsistent therewith,
the laws of the State of North Carolina or (c) the Borrower and its Subsidiaries
would no longer be in pro forma
23
compliance with Section 10.5 hereof. The Issuing Lender shall not at any time
be obligated to issue any Letter of Credit hereunder if such issuance would
conflict with, or cause the Issuing Lender or any L/C Participant to exceed
any limits imposed by, any Applicable Law. References herein to "issue" and
derivations thereof with respect to Letters of Credit shall also include
extensions or modifications of any existing Letters of Credit, unless the
context otherwise requires.
SECTION 3.2 Procedure for Issuance of Letters of Credit. The Borrower
may from time to time request that the Issuing Lender issue a Letter of Credit
by delivering to the Issuing Lender at the Administrative Agent's Office an
Application therefor, completed to the reasonable satisfaction of the Issuing
Lender, and such other certificates, documents and other papers and
information as the Issuing Lender may request. Upon receipt of any
Application, the Issuing Lender shall process such Application and the
certificates, documents and other papers and information delivered to it in
connection therewith in accordance with its customary procedures and shall,
subject to Section 3.1 and Article VI hereof, promptly issue the Letter of
Credit requested thereby (but in no event shall the Issuing Lender be required
to issue any Letter of Credit earlier than three (3) Business Days after its
receipt of the Application therefor and all such other certificates, documents
and other papers and information relating thereto) by issuing the original of
such Letter of Credit to the beneficiary thereof or as otherwise may be agreed
by the Issuing Lender and the Borrower. The Issuing Lender shall promptly
furnish to the Borrower a copy of such Letter of Credit and promptly notify
each Lender of the issuance and upon request by any Lender, furnish to such
Lender a copy of such Letter of Credit and the amount of such Lender's L/C
Participation therein.
SECTION 3.3 Commissions and Other Charges.
(a) The Borrower shall pay to the Administrative Agent, for the
account of the Issuing Lender and the L/C Participants, a letter of credit
commission with respect to each Letter of Credit in an amount equal to the
face amount of such Letter of Credit multiplied by the Applicable Margin with
respect to Revolving Credit Loans which are LIBOR Rate Loans (determined on a
per annum basis). Such commission shall be payable quarterly in arrears on the
last Business Day of each calendar quarter and on the Revolving Credit
Maturity Date. The Administrative Agent shall, promptly following its receipt
thereof, distribute to the Issuing Lender and the L/C Participants all
commissions received pursuant to this Section 3.3(a) in accordance with their
respective Revolving Credit Commitment Percentages.
(b) In addition to the foregoing commission, the Borrower shall pay
the Issuing Lender an issuance fee with respect to each Letter of Credit in an
amount equal to the face amount of such Letter of Credit multiplied by one
hundred twenty-five hundredths percent (0.125%) per annum. Such issuance fee
shall be payable quarterly in arrears on the last Business Day of each
calendar quarter and on the Revolving Credit Maturity Date.
(c) In addition to the foregoing fees and commissions, the Borrower
shall pay or reimburse the Issuing Lender for such normal and customary costs
and expenses as are incurred or charged by the Issuing Lender in issuing,
effecting payment under, amending or otherwise administering any Letter of
Credit.
24
SECTION 3.4 L/C Participations.
(a) The Issuing Lender irrevocably agrees to grant and hereby
grants to each L/C Participant, and, to induce the Issuing Lender to issue
Letters of Credit hereunder, each L/C Participant irrevocably agrees to accept
and purchase and hereby accepts and purchases from the Issuing Lender, on the
terms and conditions hereinafter stated, for such L/C Participant's own
account and risk an undivided interest equal to such L/C Participant's
Revolving Credit Commitment Percentage in the Issuing Lender's obligations and
rights under and in respect of each Letter of Credit issued hereunder and the
amount of each draft paid by the Issuing Lender thereunder. Each L/C
Participant unconditionally and irrevocably agrees with the Issuing Lender
that, if a draft is paid under any Letter of Credit for which the Issuing
Lender is not reimbursed in full by the Borrower through a Revolving Credit
Loan or otherwise in accordance with the terms of this Agreement, such L/C
Participant shall pay to the Issuing Lender upon demand at the Issuing
Lender's address for notices specified herein an amount equal to such L/C
Participant's Revolving Credit Commitment Percentage of the amount of such
draft, or any part thereof, which is not so reimbursed.
(b) Upon becoming aware of any amount required to be paid by any
L/C Participant to the Issuing Lender pursuant to Section 3.4(a) in respect of
any unreimbursed portion of any payment made by the Issuing Lender under any
Letter of Credit, the Issuing Lender shall notify each L/C Participant of the
amount and due date of such required payment and such L/C Participant shall
pay to the Issuing Lender the amount specified on the applicable due date. If
any such amount is paid to the Issuing Lender after the date such payment is
due, such L/C Participant shall pay to the Issuing Lender on demand, in
addition to such amount, the product of (i) such amount, times (ii) the daily
average Federal Funds Rate as determined by the Administrative Agent during
the period from and including the date such payment is due to the date on
which such payment is immediately available to the Issuing Lender, times (iii)
a fraction the numerator of which is the number of days that elapse during
such period and the denominator of which is 360. A certificate of the Issuing
Lender with respect to any amounts owing under this Section 3.4(b) shall be
conclusive in the absence of manifest error. With respect to payment to the
Issuing Lender of the unreimbursed amounts described in this Section 3.4(b),
if the L/C Participants receive notice that any such payment is due (A) prior
to 1:00 p.m. (Charlotte time) on any Business Day, such payment shall be due
that Business Day, and (B) after 1:00 p.m. (Charlotte time) on any Business
Day, such payment shall be due on the following Business Day.
(c) Whenever, at any time after the Issuing Lender has made payment
under any Letter of Credit and has received from any L/C Participant its
Revolving Credit Commitment Percentage of such payment in accordance with this
Section 3.4, the Issuing Lender receives any payment related to such Letter of
Credit (whether directly from the Borrower or otherwise, or any payment of
interest on account thereof, the Issuing Lender will distribute to such L/C
Participant its pro rata share thereof; provided, that in the event that any
such payment received by the Issuing Lender shall be required to be returned
by the Issuing Lender, such L/C Participant shall return to the Issuing Lender
the portion thereof previously distributed by the Issuing Lender to it.
SECTION 3.5 Reimbursement Obligation of the Borrower. In the event of
any drawing under any Letter of Credit, the Borrower agrees to reimburse
(either with the proceeds of a Revolving Credit Loan as provided for in this
Section 3.5 or with funds from other sources), in same
25
day funds, the Issuing Lender on each date on which the Issuing Lender
notifies the Borrower of the date and amount of a draft paid under any Letter
of Credit for the amount of (a) such draft so paid and (b) any amounts
referred to in Section 3.3(c) incurred by the Issuing Lender in connection
with such payment. Unless the Borrower shall immediately notify the Issuing
Lender that the Borrower intends to reimburse the Issuing Lender for such
drawing from other sources or funds, the Borrower shall be deemed to have
timely given a Notice of Revolving Loan Borrowing to the Administrative Agent
requesting that the Lenders make a Revolving Credit Loan bearing interest at
the Base Rate on such date in the amount of (a) such draft so paid and (b) any
amounts referred to in Section 3.3(c) incurred by the Issuing Lender in
connection with such payment, and the Lenders shall make a Revolving Credit
Loan bearing interest at the Base Rate in such amount, the proceeds of which
shall be applied to reimburse the Issuing Lender for the amount of the related
drawing and costs and expenses. Each Lender acknowledges and agrees that its
obligation to fund a Revolving Credit Loan in accordance with this Section 3.5
to reimburse the Issuing Lender for any draft paid under a Letter of Credit is
absolute and unconditional and shall not be affected by any circumstance
whatsoever, including, without limitation, non-satisfaction of the conditions
set forth in Section 2.3(a) or Article VI. If the Borrower has elected to pay
the amount of such drawing with funds from other sources and shall fail to
reimburse the Issuing Lender as provided above, the unreimbursed amount of
such drawing shall bear interest at the rate which would be payable on any
outstanding Base Rate Loans which were then overdue from the date such amounts
become payable (whether at stated maturity, by acceleration or otherwise)
until payment in full.
SECTION 3.6 Obligations Absolute. The Borrower's obligations under this
Article III (including without limitation the Reimbursement Obligation) shall
be absolute and unconditional under any and all circumstances and irrespective
of any set-off, counterclaim or defense to payment which the Borrower may have
or have had against the Issuing Lender or any beneficiary of a Letter of
Credit or any other Person. The Borrower also agrees that the Issuing Lender
and the L/C Participants shall not be responsible for, and the Borrower's
Reimbursement Obligation under Section 3.5 shall not be affected by, among
other things, the validity or genuineness of documents or of any endorsements
thereon, even though such documents shall in fact prove to be invalid,
fraudulent or forged, or any dispute between or among the Borrower and any
beneficiary of any Letter of Credit or any other party to which such Letter of
Credit may be transferred or any claims whatsoever of the Borrower against any
beneficiary of such Letter of Credit or any such transferee. The Issuing
Lender shall not be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except for errors or
omissions caused by the Issuing Lender's gross negligence or willful
misconduct. The Borrower agrees that any action taken or omitted by the
Issuing Lender under or in connection with any Letter of Credit or the related
drafts or documents, if done in the absence of gross negligence or willful
misconduct, shall be binding on the Borrower and shall not result in any
liability of the Issuing Lender or any L/C Participant to the Borrower. The
responsibility of the Issuing Lender to the Borrower in connection with any
draft presented for payment under any Letter of Credit shall, in addition to
any payment obligation expressly provided for in such Letter of Credit, be
limited to determining that the documents (including each draft) delivered
under such Letter of Credit in connection with such presentment are in
conformity with such Letter of Credit.
SECTION 3.7 Effect of Application. To the extent that any provision of
any Application related to any Letter of Credit is inconsistent with the
provisions of this Article III, the provisions of this Article III shall
apply.
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ARTICLE IV
TERM LOAN FACILITY
SECTION 4.1 Initial Term Loans. Subject to the terms and conditions of
this Agreement, each Lender severally agrees to make an Initial Term Loan to
the Borrower on the Closing Date. The Initial Term Loans shall be funded by
each Lender in a principal amount equal to such Lender's Term Loan Percentage
of the aggregate principal amount of the Initial Term Loans made on the
Closing Date, which aggregate principal amount shall equal the total Term Loan
Commitment. Initial Term Loans made on the Closing Date shall be funded in a
manner consistent with the provisions of Section 6.2(g)(i).
SECTION 4.2 Procedure for Advance of Initial Term Loans. The Borrower
shall give the Administrative Agent an irrevocable prior written notice in the
form attached hereto as Exhibit B-2 (a "Notice of Term Loan Borrowing") prior
to Noon (Charlotte time) on the Closing Date requesting that the Lenders make
the Initial Term Loans as a Base Rate Loan on such date. Upon receipt of such
Notice of Term Loan Borrowing from the Borrower, the Administrative Agent
shall promptly notify each Lender thereof. Not later than 3:00 p.m. (Charlotte
time) on the Closing Date, each Lender will make available to the
Administrative Agent for the account of the Borrower, at the office of the
Administrative Agent in immediately available funds, the amount of such
Initial Term Loans to be made by such Lender on such borrowing date. The
Borrower hereby irrevocably authorizes the Administrative Agent to disburse
the proceeds of the Initial Term Loans in immediately available funds by wire
transfer to such Person or Persons as may be designated by the Borrower.
SECTION 4.3 Repayment of Term Loans.
(a) Initial Term Loans. The Borrower shall repay the aggregate
outstanding principal amount of the Initial Term Loans in consecutive
quarterly installments on the last Business Day of each of March, June,
September and December commencing September 2002 as set forth below, except as
the amounts of individual installments may be adjusted pursuant to Section 4.4
hereof:
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FISCAL YEAR PAYMENT DATE PRINCIPAL INSTALLMENT
($)
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2002 September $325,000
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December $325,000
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2003 March $325,000
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June $325,000
-----------------------------------------------------------------
September $325,000
-----------------------------------------------------------------
December $325,000
------------------------------------------------------------------------------------------
2004 March $325,000
-----------------------------------------------------------------
June $325,000
-----------------------------------------------------------------
September $325,000
-----------------------------------------------------------------
December $325,000
------------------------------------------------------------------------------------------
2005 March $325,000
-----------------------------------------------------------------
June $325,000
-----------------------------------------------------------------
September $325,000
-----------------------------------------------------------------
December $325,000
------------------------------------------------------------------------------------------
2006 March $325,000
-----------------------------------------------------------------
June $325,000
-----------------------------------------------------------------
September $325,000
-----------------------------------------------------------------
December $325,000
------------------------------------------------------------------------------------------
2007 March $325,000
-----------------------------------------------------------------
June $325,000
-----------------------------------------------------------------
September $30,875,000
-----------------------------------------------------------------
December $30,875,000
------------------------------------------------------------------------------------------
2008 March $30,875,000
-----------------------------------------------------------------
June $30,875,000
------------------------------------------------------------------------------------------
(b) Additional Term Loans. The Borrower shall repay the aggregate
outstanding principal amount of the Additional Term Loans (if any) in
consecutive quarterly installments on the last Business Day of each calendar
quarter commencing with the first full calendar quarter ending after the
applicable Additional Term Loan Effective Date, in the following amounts
(which such amount shall be calculated on the applicable Additional Term Loan
Effective Date): (i) as of any fiscal quarter end prior to the fiscal quarter
ending September 30, 2007, an amount equal to one-quarter of one percent
(0.25%) of the original principal amount of the applicable Additional Term
Loans, and (ii) as of any fiscal quarter ending on or after September 30,
2007, an amount equal to twenty-five percent (25%) of the sum of (X) the
original amount of the applicable Additional Term Loans less (Y) the projected
amount of all scheduled amortization payments to be made with respect to the
applicable Additional Term Loans (determined as of the applicable Additional
Term Loan Effective Date) prior to September 30, 2007; provided that such
amounts of individual installments may be adjusted pursuant to Section 4.4
hereof.
(c) Payment at Maturity. If not sooner paid, the Term Loans shall
be paid in full, together with accrued interest thereon, on the Term Loan
Maturity Date. Amounts repaid under the Term Loans may not be reborrowed and
will constitute a permanent reduction in such Term Loan Commitment.
28
SECTION 4.4 Prepayments of Term Loans.
(a) Optional Prepayment of Term Loans. The Borrower shall have the
right at any time and from time to time, upon delivery to the Administrative
Agent of a Notice of Prepayment at least three (3) Business Days prior to any
repayment, to prepay the Term Loans in whole or in part without premium or
penalty except as provided in Section 5.9. Each optional prepayment of the
Term Loans hereunder shall be in an aggregate principal amount of at least
$5,000,000 or any whole multiple of $1,000,000 in excess thereof and shall be
applied to the outstanding principal installments of the Term Loans (pro rata
among the Initial Term Loans and the Additional Term Loans) in inverse order
of maturity thereof. Each repayment shall be accompanied by any amount
required to be paid pursuant to Section 5.9 hereof.
(b) Mandatory Prepayment of Term Loans.
(i) Debt Proceeds. The Borrower shall make mandatory
principal prepayments of the Term Loans in the manner set forth in Section
4.4(b)(vi) below in amounts equal to one hundred percent (100%) of the
aggregate Net Cash Proceeds from any incurrence of Debt in excess of $500,000
in any Fiscal Year (other than Net Cash Proceeds from Debt permitted pursuant
to this Agreement and Sections 11.1(c) through 11.1(i)) by the Borrower or any
of its Subsidiaries. Such prepayment shall be made within three (3) Business
Days after the date of receipt of Net Cash Proceeds of any such transaction.
(This provision shall not be deemed to permit the incurrence of Debt not
otherwise permitted pursuant to this Agreement.)
(ii) Equity Proceeds. The Borrower shall make mandatory
principal prepayments of the Term Loans in the manner set forth in Section
4.4(b)(vi) below in amounts equal to fifty percent (50%) of the aggregate Net
Cash Proceeds from any offering of equity securities (other than any stock
issued (a) pursuant to the IPO, (b) to a seller in connection with a Permitted
Acquisition or (c) in connection with any Permitted Benefit Plan) by the
Borrower or any of its Subsidiaries. Such prepayment shall be made within
three (3) Business Days after the date of receipt of Net Cash Proceeds of any
such transaction. (This provision shall not be deemed to permit the offering,
sale or issuance of equity not otherwise permitted pursuant to this
Agreement.)
(iii) Asset Sale Proceeds. No later than one hundred eighty
(180) days following the receipt thereof by the Borrower or any Subsidiary
thereof, the Borrower shall make mandatory principal prepayments of the Term
Loans in the manner set forth in Section 4.4(b)(vi) below in amounts equal to
one hundred percent (100%) of the aggregate Net Cash Proceeds from the sale or
other disposition or series of related sales or other dispositions of assets
by the Borrower or any of its Subsidiaries occurring after the Closing Date
(other than any such dispositions permitted under Section 11.5 (a) through
(d)) in excess of $5,000,000 in any Fiscal Year which have not been reinvested
in similar assets as of the date that is one hundred eighty (180) days
following the receipt thereof by the Borrower or any Subsidiary thereof,
unless such Net Cash Proceeds have been committed to be reinvested within such
one hundred eighty (180) day period and are thereafter actually reinvested in
similar assets within two hundred seventy (270) days after receipt of such Net
Cash Proceeds. If such Net Cash Proceeds are not actually reinvested in
accordance with the terms of this Section 4.4(b)(iii) by the date which is two
29
hundred seventy (270) days after the receipt thereof, the Borrower shall make
a mandatory prepayment in an amount equal to such Net Cash Proceeds as
described above on such date. Notwithstanding any of the foregoing to the
contrary, upon and during the continuance of an Event of Default and upon
notice from the Administrative Agent, all such Net Cash Proceeds received by
the Borrower and its Subsidiaries shall be applied to make prepayments of the
Term Loans pursuant to Section 4.4(b)(vi), such prepayments to be made within
three (3) Business Days after the later to occur of such notice from the
Administrative Agent or the receipt of such Net Cash Proceeds. (This provision
shall not be deemed to permit the sale of assets not otherwise permitted
pursuant to this Agreement.)
(iv) Insurance Proceeds. No later than one hundred eighty
(180) days following the date of receipt by the Borrower or any of its
Subsidiaries of any Net Cash Proceeds under any of the insurance policies
maintained pursuant to Section 9.3 that relate to the loss of, or damage to,
any assets of the Borrower or Subsidiary (including, without limitation, any
condemnation proceeding) ("Insurance and Condemnation Proceeds") which have
not been reinvested as of such date in similar assets, the Borrower shall make
mandatory principal prepayments of the Term Loans in the manner set forth in
Section 4.4(b)(vi) below in amounts equal to one hundred percent (100%) of the
aggregate amount of such Insurance and Condemnation Proceeds received by the
Borrower or any of its Subsidiaries. Notwithstanding any of the foregoing to
the contrary, upon and during the continuance of an Event of Default and upon
notice from the Administrative Agent, all Insurance and Condemnation Proceeds,
received by the Borrower and its Subsidiaries shall be applied to make
prepayments of the Term Loans, such prepayments to be made within three (3)
Business Days after the Borrower's receipt of such Insurance and Condemnation
Proceeds.
(v) Excess Cash Flow. Within ninety (90) days after the end
of any Fiscal Year (or, if earlier, the date of delivery of audited financial
statements pursuant to Section 8.1(b)) commencing with the Fiscal Year ending
December 31, 2003, the Borrower shall make a mandatory principal prepayment
(in the manner set forth in Section 4.4(b)(vi) below) of the Term Loans in an
amount equal to fifty percent (50%) of Excess Cash Flow, if any, for such
Fiscal Year.
(vi) Notice; Manner of Payment. Upon the occurrence of any
event triggering the prepayment requirement under Sections 4.4(b)(i) through
and including 4.4(b)(v), the Borrower shall promptly deliver a Notice of
Prepayment to the Administrative Agent and upon receipt of such notice, the
Administrative Agent shall promptly so notify the Lenders. Each prepayment
under this Section 4.4(b) shall be applied as follows: (A) first, to reduce in
inverse order of maturity the remaining scheduled principal installments of
the Term Loans (pro rata among the Initial Term Loans and the Additional Term
Loans), pursuant to Section 4.3 and (B) second, in the case of a prepayment
under clauses (i), (ii), (iii) or (iv) above only, to the extent of any
excess, to reduce permanently the Revolving Credit Commitment, pursuant to
Section 2.6(b). Notwithstanding anything in this Section 4.4 to the contrary,
any Term Loan Lender shall have the right to refuse its pro rata share (based
on Term Loan Percentage) of any such mandatory prepayment at which time the
remaining amount shall be applied first, to temporarily reduce the Revolving
Credit Loans, and then, to the extent of any remaining funds, the Borrower may
elect to (a) prepay the outstanding Term Loans in the manner set forth in this
Section 4.4 regardless of the election of the Term Loan Lender or retain such
excess amount. No
30
prepayment or repayment pursuant to this Section 4.4 shall affect any of the
Borrower's obligations under any Hedging Agreement.
Amounts prepaid under the Term Loans pursuant to this Section 4.4 may not be
reborrowed and will constitute a permanent reduction in such Term Loan
Commitment. Each prepayment shall be accompanied by any amount required to be
paid pursuant to Section 5.9 hereof.
SECTION 4.5 Term Notes. Except as otherwise provided in Section 14.10
(a) - (e), each Lender's Term Loan and the obligation of the Borrower to repay
such Term Loan shall be evidenced by a separate Term Note executed by the
Borrower payable to the order of such Lender.
SECTION 4.6 Optional Increase In Term Loan Commitment
(a) Subject to the conditions set forth below, the Borrower shall
have the option, exercisable on no more than two (2) separate occasions
following the Closing Date until the Term Loan Increase Termination Date to
incur additional indebtedness under this Agreement in the form of an increase
of the Term Loan Commitment of up to Fifty Million Dollars ($50,000,000). The
Borrower, by providing an Increase Notification, may request that additional
Term Loans be made on the applicable Additional Term Loan Effective Date
pursuant to such increase in the Term Loan Commitment (each such additional
Term Loan, an "Additional Term Loan, and collectively, the "Additional Term
Loans").
(b) Each Additional Term Loan shall be obtained from existing
Lenders, entities that qualify as Eligible Assignees, or from other banks,
financial institutions or investment funds, in each case in accordance with
this Section 4.6. Participation in any Additional Term Loans shall be offered
first to each of the existing Lenders; provided that each such Lender shall
have no obligation to provide any portion of such Additional Term Loans. If
the amount of the Additional Term Loans requested by the Borrower shall exceed
the commitments which the existing Lenders are willing to provide with respect
to such Additional Term Loans, then the Borrower may invite other banks,
financial institutions and investment funds which meet the requirements of an
Eligible Assignee to join this Agreement as Lenders for the portion of such
Additional Term Loans not committed to by existing Lenders (each such other
bank, financial institution or investment fund, a "New Lender" and
collectively with the existing Lenders providing increased Commitments, the
"Increase Lenders"). The Administrative Agent is authorized to enter into, on
behalf of the Lenders, any amendment to this Agreement or any other Loan
Document as may be necessary to incorporate the terms of any Additional Term
Loan herein or therein; provided that such amendment shall not modify this
Agreement or any other Loan Document in any manner materially adverse to any
Lender and shall otherwise be in accordance with Section 14.11 hereof.
(c) The following terms and conditions shall apply to each
Additional Term Loan: (i) the Additional Term Loans made under this Section
4.6 shall constitute Obligations of the Borrower and shall be secured and
guaranteed with the other Advances on a pari passu basis; (ii) any New Lender
making Additional Term Loans shall be entitled to the same voting rights as
the existing Lenders under the Term Loan Facility and the Additional Term
Loans shall receive proceeds of prepayments on the same basis as the Initial
Term Loans (except to the extent
31
otherwise specified in Section 4.3 and Section 4.4(b)(vi)); (iii) the Borrower
shall execute such Term Loan Notes as are necessary to reflect the Additional
Term Loans under this Section 4.6; (iv) the Administrative Agent and the
Lenders shall have received from the Borrower updated financial projections
and an Officer's Compliance Certificate, in each case in form and substance
satisfactory to the Administrative Agent, demonstrating that, after giving
effect to any such Additional Term Loan, the Borrower will be in pro forma
compliance with the financial covenants set forth in Article X; (v) no Default
or Event of Default shall have occurred and be continuing hereunder as of the
Additional Term Loan Effective Date or after giving effect to the making of
any such Additional Term Loans; (vi) the representations and warranties made
by the Borrower and contained in Article VII shall be true and correct on and
as of the Additional Term Loan Effective Date with the same effect as if made
on and as of such date (other than those representations and warranties that
by their terms speak as of a particular date, which representations and
warranties shall be true and correct as of such particular date); (vii) the
Borrower shall demonstrate, on a pro forma basis (as of the date of, and after
giving effect to, the making of any such Additional Term Loan), an Asset
Coverage Ratio equal to or exceeding the ratio required pursuant to Section
10.5; (viii) the amount of such increase in the Term Loan Commitment and any
Additional Term Loans obtained thereunder shall not (A) be less than a minimum
principal amount of $15,000,000, or any whole multiple of $5,000,000 in excess
thereof and (B) shall not cause the Term Loan Commitment to exceed
$180,000,000 in the aggregate; (ix) the Borrower and each such Lender or
lender not theretofore a Lender shall execute and deliver to the
Administrative Agent, for its acceptance and recording in the Register, a
Lender Addition and Acknowledgment Agreement acknowledged by the
Administrative Agent and each Subsidiary and substantially in the form of
Exhibit J attached hereto, and (x) the Administrative Agent shall have
received any documents or information, including any joinder agreements, in
connection with such increase in the Term Loan Commitment as it may request in
its reasonable discretion.
(d) Upon the execution, delivery, acceptance and recording of the
Lender Addition and Acknowledgement Agreement, from and after the applicable
Additional Term Loan Effective Date, each such Increase Lender shall have a
Term Loan Commitment as therein set forth and all the rights and obligations
of a Lender with such a Term Loan Commitment hereunder. The Increase Lenders
shall make the applicable Additional Term Loans to the Borrower on the
applicable Additional Term Loan Effective Date in an amount equal to each such
Lender's Term Loan Commitment.
(e) The Administrative Agent shall maintain a copy of each Lender
Addition and Acknowledgement Agreement delivered to it in accordance with
Section 14.10(d).
(f) Within five (5) Business Days after receipt of notice, the
Borrower shall execute and deliver to the Administrative Agent, in exchange
for any surrendered Term Loan Note or Term Loan Notes of any existing Lender
or with respect to any Lender not theretofore a Lender, a new Term Loan Note
or Term Loan Notes to the order of the applicable Lenders in amounts equal to
the Term Loan Commitment of such Lenders pursuant to the Lender Addition and
Acknowledgement Agreement. Such new Term Loan Note or Term Loan Notes shall be
in an aggregate principal amount equal to the aggregate principal amount of
such Term Loan Commitments, shall be dated as of the applicable Additional
Term Loan Effective Date and shall
32
otherwise be in substantially the form of the existing Term Loan Notes. Each
surrendered Term Loan Note and/or Term Loan Notes shall be canceled and
returned to the Borrower.
(g) The Applicable Margin and pricing grid, if applicable, for the
Additional Term Loans shall be determined on the applicable Additional Term
Loan Effective Date. If the Applicable Margin and pricing grid, if applicable,
for such Additional Term Loans at such time exceeds the Applicable Margin or
existing pricing grid, as applicable, for Term Loans or any prior Additional
Term Loans, in each case as set forth in Section 5.1(c), then the Applicable
Margin and pricing grid, if applicable, for all Term Loans shall be increased
to be equal to the Applicable Margin and pricing grid, if applicable, for such
Additional Term Loans as determined on the applicable Additional Loan
Effective Date. In addition, an amortization schedule shall be prepared by the
Administrative Agent in accordance with the terms of Section 4.3(b) to provide
for the repayment of the applicable Additional Term Loans.
ARTICLE V
GENERAL LOAN PROVISIONS
SECTION 5.1 Interest.
(a) Interest Rate Options. Subject to the provisions of this
Section 5.1, at the election of the Borrower, (i) Revolving Credit Loans and
Term Loans shall bear interest at (A) the Base Rate plus the Applicable Margin
as set forth in Section 5.1(c) or (B) the LIBOR Rate plus the Applicable
Margin as set forth in Section 5.1(c) (provided that the LIBOR Rate shall not
be available until three (3) Business Days after the Closing Date unless the
Administrative Agent shall have received an indemnification agreement with
respect to any such LIBOR Rate borrowing in form and substance satisfactory
thereto at least three (3) Business Days prior to the Closing Date) and (ii)
any Swingline Loan shall bear interest at the Base Rate plus the Applicable
Margin as set forth in Section 5.1(c). The Borrower shall select the rate of
interest (Base Rate or LIBOR Rate) and Interest Period, if any, applicable to
any Loan at the time a Notice of Revolving Loan Borrowing or Notice of Term
Loan Borrowing is given or at the time a Notice of Conversion/Continuation is
given pursuant to Section 5.2. Each Loan or portion thereof bearing interest
based on the Base Rate shall be a "Base Rate Loan", each Loan or portion
thereof bearing interest based on the LIBOR Rate shall be a "LIBOR Rate Loan."
Any Loan or any portion thereof as to which the Borrower has not duly
specified an interest rate as provided herein shall be deemed a Base Rate
Loan.
(b) Interest Periods. In connection with each LIBOR Rate Loan, the
Borrower, by giving notice at the times described in Section 5.1(a), shall
elect an interest period (each, an "Interest Period") to be applicable to such
Loan, which Interest Period shall be a period of one (1), two (2), three (3),
or six (6) months with respect to each LIBOR Rate Loan; provided that:
(i) the Interest Period shall commence on the date of
advance of or conversion to any LIBOR Rate Loan and, in the case of
immediately successive Interest Periods, each successive Interest
Period shall commence on the date on which the next preceding Interest
Period expires;
33
(ii) if any Interest Period would otherwise expire on
a day that is not a Business Day, such Interest Period shall expire on
the next succeeding Business Day; provided, that if any Interest Period
with respect to a LIBOR Rate Loan would otherwise expire on a day that
is not a Business Day but is a day of the month after which no further
Business Day occurs in such month, such Interest Period shall expire on
the next preceding Business Day;
(iii) any Interest Period with respect to a LIBOR Rate
Loan that begins on the last Business Day of a calendar month (or on a
day for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end on the last
Business Day of the relevant calendar month at the end of such Interest
Period;
(iv) no Interest Period shall extend beyond the
Revolving Credit Maturity Date or the Term Loan Maturity Date, as
applicable, and Interest Periods shall be selected by the Borrower so
as to permit the Borrower to make mandatory reductions of the Revolving
Credit Commitment pursuant to Section 2.6(b) and the quarterly
principal installment payments pursuant to Section 4.3 without payment
of any amounts pursuant to Section 5.9; and
(v) there shall be no more than eight (8) Interest
Periods in effect at any time.
(c) Applicable Margin. The applicable margin per annum provided for
in Section 5.1(a) with respect to any Loan (the "Applicable Margin") shall be
based upon the table set forth below by reference to the Total Leverage Ratio
and adjusted quarterly on the date (each a "Calculation Date") ten (10)
Business Days after the date by which the Borrower is required to provide an
Officer's Compliance Certificate for the most recently ended fiscal quarter of
the Borrower; provided that (a) the initial Applicable Margin shall be based
on Pricing Level I (as set forth below) and shall remain at Pricing Level I
(as set forth below) until the Calculation Date with respect to the fiscal
quarter ending June 30, 2002 and thereafter shall be determined by reference
to the Total Leverage Ratio as of the last day of the most recently ended
fiscal quarter of the Borrower preceding the applicable Calculation Date and
(b) if the Borrower fails to provide the Officer's Compliance Certificate as
required by Section 8.2 for the most recently ended fiscal quarter of the
Borrower preceding the applicable Calculation Date, the Applicable Margin from
such Calculation Date shall be based on Pricing Level I (as shown below) until
such time as an appropriate Officer's Compliance Certificate is provided, at
which time the Pricing Level shall be determined by reference to the Total
Leverage Ratio as of the last day of the most recently ended fiscal quarter of
the Borrower preceding such Calculation Date. The Applicable Margin shall be
effective from one Calculation Date until the next Calculation Date. Any
adjustment in the Applicable Margin shall be applicable to all Advances then
existing or subsequently made or issued.
34
------------------------------------------------------------------------------------------------------------------
LIBOR FOR BASE RATE FOR BASE RATE FOR
TOTAL REVOLVING REVOLVING LIBOR FOR TERM LOAN
PRICING LEVEL LEVERAGE RATIO CREDIT FACILITY CREDIT FACILITY TERM LOAN FACILITY FACILITY
------------- -------------- --------------- --------------- ------------------ --------
------------------------------------------------------------------------------------------------------------------
Level I Greater than 3.0 2.75% 1.50% 3.25% 2.00%
to 1.0
------------------------------------------------------------------------------------------------------------------
Level II Less than or 2.50% 1.25% 3.00% 1.75%
equal to 3.0 to
1.0, but greater
than 2.5 to 1.0
------------------------------------------------------------------------------------------------------------------
Level III Less than or 2.25% 1.00% 2.75% 1.50%
equal to 2.5 to
1.0
------------------------------------------------------------------------------------------------------------------
(d) Default Rate. Subject to Section 12.3, at the discretion of the
Administrative Agent or as directed by the Required Lenders, upon the
occurrence and during the continuance of an Event of Default, (i) the Borrower
shall no longer have the option to request LIBOR Rate Loans or Swingline
Loans, (ii) all outstanding LIBOR Rate Loans shall bear interest at a rate per
annum of two percent (2%) in excess of the rate then applicable to LIBOR Rate
Loans from the date of such Event of Default until the end of the applicable
Interest Period and thereafter at a rate per annum equal to two percent (2%)
in excess of the rate then applicable to Base Rate Loans, and (iii) all
outstanding Base Rate Loans and other Obligations arising hereunder or under
any other Loan Document shall bear interest from the date of such Event of
Default at a rate per annum equal to two percent (2%) in excess of the rate
then applicable to Base Rate Loans or such other Obligations arising hereunder
or under any other Loan Document. Interest shall continue to accrue on the
Notes after the filing by or against the Borrower of any petition seeking any
relief in bankruptcy or under any act or law pertaining to insolvency or
debtor relief, whether state, federal or foreign.
(e) Interest Payment and Computation. Interest on each Base Rate
Loan shall be payable in arrears on the last Business Day of each calendar
quarter commencing June 30, 2002; and interest on each LIBOR Rate Loan shall
be payable on the last day of each Interest Period applicable thereto, and if
such Interest Period extends over three (3) months, at the end of each three
(3) month interval during such Interest Period. Interest on LIBOR Rate Loans
and all fees payable hereunder shall be computed on the basis of a 360-day
year and assessed for the actual number of days elapsed and interest on Base
Rate Loans shall be computed on the basis of a 365/66-day year and assessed
for the actual number of days elapsed.
(f) Maximum Rate. In no contingency or event whatsoever shall the
aggregate of all amounts deemed interest hereunder or under any of the Notes
charged or collected pursuant to the terms of this Agreement or pursuant to
any of the Notes exceed the highest rate permissible under any Applicable Law
which a court of competent jurisdiction shall, in a final determination, deem
applicable hereto. In the event that such a court determines that the Lenders
have charged or received interest hereunder in excess of the highest
applicable rate, the rate in effect hereunder shall automatically be reduced
to the maximum rate permitted by Applicable Law and the Lenders shall at the
Administrative Agent's option (i) promptly refund to the Borrower any interest
received by the Lenders in excess of the maximum lawful rate or (ii) apply
such excess to the principal balance of the Obligations on a pro rata basis.
It is the intent hereof that the Borrower not pay or contract to pay, and that
neither the Administrative Agent nor any Lender receive or contract to
receive,
35
directly or indirectly in any manner whatsoever, interest in excess of that
which may be paid by the Borrower under Applicable Law.
SECTION 5.2 Notice and Manner of Conversion or Continuation of Loans.
Provided that no Default or Event of Default has occurred and is then
continuing, the Borrower shall have the option to (a) convert following the
third Business Day after the Closing Date all or any portion of any
outstanding Base Rate Loans (other than Swingline Loans) in a principal amount
equal to $4,000,000 or any whole multiple of $100,000 in excess thereof into
one or more LIBOR Rate Loans and (b) upon the expiration of any Interest
Period, (i) convert all or any part of its outstanding LIBOR Rate Loans in a
principal amount equal to $1,000,000 or a whole multiple of $50,000 in excess
thereof into Base Rate Loans (other than Swingline Loans) or (ii) continue
such LIBOR Rate Loans as LIBOR Rate Loans. Whenever the Borrower desires to
convert or continue Loans as provided above, the Borrower shall give the
Administrative Agent irrevocable prior written notice in the form attached as
Exhibit E (a "Notice of Conversion/Continuation") not later than 11:00 a.m.
(Charlotte time) three (3) Business Days before the day on which a proposed
conversion or continuation of such Loan is to be effective specifying (A) the
Loans to be converted or continued, and, in the case of any LIBOR Rate Loan to
be converted or continued, the last day of the Interest Period therefor, (B)
the effective date of such conversion or continuation (which shall be a
Business Day), (C) the principal amount of such Loans to be converted or
continued, and (D) the Interest Period to be applicable to such converted or
continued LIBOR Rate Loan. The Administrative Agent shall promptly notify the
Lenders of such Notice of Conversion/Continuation.
SECTION 5.3 Fees.
(a) Commitment Fee. Commencing on the Closing Date, the Borrower
shall pay to the Administrative Agent, for the account of the Lenders, a
non-refundable commitment fee at a rate per annum equal to 0.50% on the
average daily unused portion of the Revolving Credit Commitment. The
commitment fee shall be payable in arrears on the last Business Day of each
calendar quarter during the term of this Agreement commencing June 30, 2002,
and on the Revolving Credit Maturity Date. Such commitment fee shall be
distributed by the Administrative Agent to the Lenders in accordance with the
Lenders' respective Revolving Credit Commitment Percentages.
(b) Administrative Agent's Fee. In order to compensate the
Administrative Agent for structuring the Loans and for its obligations
hereunder, the Borrower agrees to pay to the Administrative Agent, for its
account, the fee set forth in the Fee Letter executed by the Borrower, the
Sole Lead Arranger and Book Manager and the Administrative Agent dated March
14, 2002 (the "Fee Letter").
(c) Underwriting Fees. The Borrower shall pay to the
Administrative Agent, for the account of the Administrative Agent, a
non-refundable underwriting fee in accordance with the terms of the Fee
Letter.
(d) Other Fees. The Borrower shall pay to the Administrative Agent
all other fees set forth in the Fee Letter in accordance with the terms
thereof.
SECTION 5.4 Manner of Payment. Each payment by the Borrower on account
of the principal of or interest on the Loans or of any fee, commission or
other amounts (including the
36
Reimbursement Obligation) payable to the Lenders under this Agreement or any
Note shall be made not later than 1:00 p.m. (Charlotte time) on the date
specified for payment under this Agreement to the Administrative Agent at the
Administrative Agent's Office for the account of the Lenders (other than as
set forth below) pro rata in accordance with their respective Revolving Credit
Commitment Percentages or Term Loan Percentages, as applicable, (except as
specified below), in Dollars, in immediately available funds and shall be made
without any set-off, counterclaim or deduction whatsoever. Any payment
received after such time but before 2:00 p.m. (Charlotte time) on such day
shall be deemed a payment on such date for the purposes of Section 12.1, but
for all other purposes shall be deemed to have been made on the next
succeeding Business Day. Any payment received after 2:00 p.m. (Charlotte time)
shall be deemed to have been made on the next succeeding Business Day for all
purposes. Upon receipt by the Administrative Agent of each such payment, the
Administrative Agent shall distribute to each Lender at its address for
notices set forth herein its pro rata share of such payment in accordance with
such Lender's Revolving Credit Commitment Percentage or Term Loan Percentage,
as applicable, (except as specified below) and shall wire advice of the amount
of such credit to each Lender. Each payment to the Administrative Agent of the
Issuing Lender's fees or L/C Participants' commissions shall be made in like
manner, but for the account of the Issuing Lender or the L/C Participants, as
the case may be. Each payment to the Administrative Agent of Administrative
Agent's fees or expenses shall be made for the account of the Administrative
Agent and any amount payable to any Lender under Sections 4.3, 5.8, 5.9, 5.10,
5.11 or 14.2 shall be paid to the Administrative Agent for the account of the
applicable Lender. Subject to Section 5.1(b)(ii) if any payment under this
Agreement or any Note shall be specified to be made upon a day which is not a
Business Day, it shall be made on the next succeeding day which is a Business
Day and such extension of time shall in such case be included in computing any
interest if payable along with such payment.
SECTION 5.5 Crediting of Payments and Proceeds. In the event that the
Borrower shall fail to pay any of the Obligations when due and the Obligations
have been accelerated pursuant to Section 12.2, all payments received by the
Lenders upon the Notes and the other Obligations and all net proceeds from the
enforcement of the Obligations shall be applied first to all expenses then due
and payable by the Borrower hereunder and under the other Loan Documents, then
to all indemnity obligations then due and payable by the Borrower hereunder
and under the other Loan Documents, then to all Administrative Agent's and
Issuing Lender's fees then due and payable, then to all commitment and other
fees and commissions then due and payable, then to accrued and unpaid interest
on the Swingline Note to the Swingline Lender, then to the principal amount
outstanding under the Swingline Note to the Swingline Lender, then to accrued
and unpaid interest on the other Notes, accrued and unpaid interest on the
Reimbursement Obligation and any Hedging Obligations (including any
termination payments and any accrued and unpaid interest thereon ) (pro rata
in accordance with all such amounts due), then to the principal amount of the
other Notes and Reimbursement Obligation (pro rata in accordance with all such
amounts due) and then to the cash collateral account described in Section
12.2(b) hereof to the extent of any L/C Obligations then outstanding, in that
order.
SECTION 5.6 Adjustments. If any Lender (a "Benefited Lender") shall at
any time receive any payment of all or part of the Obligations owing to it, or
interest thereon, or if any Lender shall at any time receive any collateral in
respect to the Obligations owing to it (whether voluntarily or involuntarily,
by set-off or otherwise) (other than as a result of the operation of the
proviso to Section 4.4(b)(vi) hereof or pursuant to Sections 5.8, 5.9, 5.10,
5.11 or 14.2 hereof) in a greater
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proportion than any such payment to or collateral received by any other
Lender, if any, in respect of the Obligations owing to such other Lender, or
interest thereon, such Benefited Lender shall purchase for cash from the other
Lenders such portion of each such other Lender's Advances, or shall provide
such other Lenders with the benefits of any such collateral, or the proceeds
thereof, as shall be necessary to cause such Benefited Lender to share the
excess payment or benefits of such collateral or proceeds ratably with each of
the Lenders; provided, that if all or any portion of such excess payment or
benefits is thereafter recovered from such Benefited Lender, such purchase
shall be rescinded, and the purchase price and benefits returned to the extent
of such recovery, but without interest. The Borrower agrees that each Lender
so purchasing a portion of another Lender's Advances may exercise all rights
of payment (including, without limitation, rights of set-off) with respect to
such portion as fully as if such Lender were the direct holder of such
portion.
SECTION 5.7 Nature of Obligations of Lenders Regarding Advances;
Assumption by the Administrative Agent. The obligations of the Lenders under
this Agreement to make the Loans and issue or participate in Letters of Credit
are several and are not joint or joint and several. Unless the Administrative
Agent shall have received notice from a Lender prior to a proposed borrowing
date that such Lender will not make available to the Administrative Agent such
Lender's ratable portion of the amount to be borrowed on such date (which
notice shall not release such Lender of its obligations hereunder), the
Administrative Agent may assume that such Lender has made such portion
available to the Administrative Agent on the proposed borrowing date in
accordance with Sections 2.3(b) and 4.2, and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If such amount is made available to the Administrative
Agent on a date after such borrowing date, such Lender shall pay to the
Administrative Agent on demand an amount equal to the product of (a) the
amount not made available by such Lender in accordance with the terms hereof,
times (b) the daily average Federal Funds Rate during such period as
determined by the Administrative Agent, times (c) a fraction the numerator of
which is the number of days that elapse from and including such borrowing date
to the date on which such amount not made available by such Lender in
accordance with the terms hereof shall have become immediately available to
the Administrative Agent and the denominator of which is 360. A certificate of
the Administrative Agent with respect to any amounts owing under this Section
5.7 shall be conclusive, absent manifest error. If such Lender's Revolving
Credit Commitment Percentage or Term Loan Percentage, as applicable, of such
borrowing is not made available to the Administrative Agent by such Lender
within three (3) Business Days after such borrowing date, the Administrative
Agent shall be entitled to recover such amount made available by the
Administrative Agent with interest thereon at the rate per annum applicable to
Base Rate Loans hereunder, on demand, from the Borrower. The failure of any
Lender to make available its Revolving Credit Commitment Percentage or Term
Loan Percentage, as applicable, of any Loan requested by the Borrower shall
not relieve it or any other Lender of its obligation, if any, hereunder to
make its Revolving Credit Commitment Percentage or Term Loan Percentage, as
applicable, of such Loan available on the borrowing date, but no Lender shall
be responsible for the failure of any other Lender to make its Revolving
Credit Commitment Percentage or Term Loan Percentage, as applicable, of such
Loan available on the borrowing date.
SECTION 5.8 Changed Circumstances.
(a) Circumstances Affecting LIBOR Rate Availability. If with respect to
any Interest Period the Administrative Agent or any Lender (after consultation
with the Administrative Agent)
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shall determine that, by reason of circumstances affecting the foreign
exchange and interbank markets generally, deposits in eurodollars, in the
applicable amounts are not being quoted via the Dow Xxxxx Market Screen 3750
or offered to the Administrative Agent or such Lender for such Interest
Period, then the Administrative Agent shall forthwith give notice thereof to
the Borrower. Thereafter, until the Administrative Agent notifies the Borrower
that such circumstances no longer exist, the obligation of the Lenders to make
LIBOR Rate Loans and the right of the Borrower to convert any Loan to or
continue any Loan as a LIBOR Rate Loan shall be suspended, and the Borrower
shall repay in full (or cause to be repaid in full) the then outstanding
principal amount of each such LIBOR Rate Loan together with accrued interest
thereon, on the last day of the then current Interest Period applicable to
such LIBOR Rate Loan or convert the then outstanding principal amount of each
such LIBOR Rate Loan to a Base Rate Loan as of the last day of such Interest
Period.
(b) Laws Affecting LIBOR Rate Availability. If, after the date
hereof, the introduction of, or any change in, any Applicable Law or any
change in the interpretation or administration thereof by any Governmental
Authority, central bank or comparable agency charged with the interpretation
or administration thereof, or compliance by any Lender (or any of its Lending
Offices) with any request or directive (whether or not having the force of
law) of any such Governmental Authority, central bank or comparable agency,
shall make it unlawful or impossible for any of the Lenders (or any of their
respective Lending Offices) to honor its obligations hereunder to make or
maintain any LIBOR Rate Loan, such Lender shall promptly give notice thereof
to the Administrative Agent and the Administrative Agent shall promptly give
notice to the Borrower and the other Lenders. Thereafter, until the
Administrative Agent notifies the Borrower that such circumstances no longer
exist, (i) the obligations of the Lenders to make LIBOR Rate Loans and the
right of the Borrower to convert any Loan or continue any Loan as a LIBOR Rate
Loan shall be suspended and thereafter the Borrower may select only Base Rate
Loans hereunder, and (ii) if any of the Lenders may not lawfully continue to
maintain a LIBOR Rate Loan to the end of the then current Interest Period
applicable thereto as a LIBOR Rate Loan, the applicable LIBOR Rate Loan shall
immediately be converted to a Base Rate Loan for the remainder of such
Interest Period.
(c) Increased Costs. If, after the date hereof, the introduction
of, or any change in, any Applicable Law, or in the interpretation or
administration thereof by any Governmental Authority, central bank or
comparable agency charged with the interpretation or administration thereof,
or compliance by any of the Lenders (or any of their respective Lending
Offices) with any request or directive (whether or not having the force of
law) of such Governmental Authority, central bank or comparable agency:
(i) shall subject any of the Lenders (or any of their
respective Lending Offices) to any tax, duty or other charge with respect to
any Note, Letter of Credit or Application or shall change the basis of
taxation of payments to any of the Lenders (or any of their respective Lending
Offices) of the principal of or interest on any Note, Letter of Credit or
Application or any other amounts due under this Agreement in respect thereof
(except for changes in the rate of tax on the overall net income of any of the
Lenders or any of their respective Lending Offices imposed by the jurisdiction
in which such Lender is organized or is or should be qualified to do business
or such Lending Office is located); or
39
(ii) shall impose, modify or deem applicable any
reserve (including, without limitation, any reserve imposed by the Board of
Governors of the Federal Reserve System), special deposit, insurance or
capital or similar requirement against assets of, deposits with or for the
account of, or credit extended by any of the Lenders (or any of their
respective Lending Offices) or shall impose on any of the Lenders (or any of
their respective Lending Offices) or the foreign exchange and interbank
markets any other condition affecting any Note; and the result of any of the
foregoing events described in clause (i) or (ii) above is to increase the
costs to any of the Lenders of maintaining any LIBOR Rate Loan or issuing or
participating in Letters of Credit or to reduce the yield or amount of any sum
received or receivable by any of the Lenders under this Agreement or under the
Notes in respect of a LIBOR Rate Loan or Letter of Credit or Application, then
such Lender shall promptly notify the Administrative Agent, and the
Administrative Agent shall promptly notify the Borrower of such fact and
demand compensation therefor and, within fifteen (15) days after such notice
by the Administrative Agent, the Borrower shall pay to such Lender such
additional amount or amounts as will compensate such Lender or Lenders for
such increased cost or reduction. The Administrative Agent will promptly
notify the Borrower of any event of which it has knowledge which will entitle
such Lender to compensation pursuant to this Section 5.8(c); provided, that
the Administrative Agent shall incur no liability whatsoever to the Lenders or
the Borrower in the event it fails to do so. The amount of such compensation
shall be determined, in the applicable Lender's sole discretion, based upon
the assumption that such Lender funded its Revolving Credit Commitment
Percentage or Term Loan Percentage, as applicable, of the LIBOR Rate Loans in
the London interbank market and using any reasonable attribution or averaging
methods which such Lender deems appropriate and practical. A certificate of
such Lender setting forth the basis for determining such amount or amounts
necessary to compensate such Lender shall be forwarded to the Borrower through
the Administrative Agent and shall be conclusively presumed to be correct save
for manifest error.
SECTION 5.9 Indemnity. The Borrower hereby indemnifies each of the
Lenders against any loss or expense which may arise or be attributable to each
Lender's obtaining, liquidating or employing deposits or other funds acquired
to effect, fund or maintain any Loan (a) as a consequence of any failure by
the Borrower to make any payment when due of any amount due hereunder in
connection with a LIBOR Rate Loan, (b) due to any failure of the Borrower to
borrow, continue or convert on a date specified therefor in a Notice of
Revolving Loan Borrowing, Notice of Term Loan Borrowing or Notice of
Conversion/Continuation or (c) due to any payment, prepayment or conversion of
any LIBOR Rate Loan on a date other than the last day of the Interest Period
therefor. The amount of such loss or expense shall be determined, in the
applicable Lender's sole discretion, based upon the assumption that such
Lender funded its Revolving Credit Commitment Percentage or Term Loan
Percentage, as applicable, of the LIBOR Rate Loans in the London interbank
market and using any reasonable attribution or averaging methods which such
Lender deems appropriate and practical. A certificate of such Lender setting
forth the basis for determining such amount or amounts necessary to compensate
such Lender shall be forwarded to the Borrower through the Administrative
Agent and shall be conclusively presumed to be correct save for manifest
error.
SECTION 5.10 Capital Requirements. If either (a) the introduction of,
or any change in, or in the interpretation of, any Applicable Law or (b)
compliance with any guideline or request from any central bank or comparable
agency or other Governmental Authority (whether or not having the force of
law), has or would have the effect of reducing the rate of return on the
40
capital of, or has affected or would affect the amount of capital required to
be maintained by, any Lender or any corporation controlling such Lender as a
consequence of, or with reference to the Commitments and other commitments of
this type, below the rate which such Lender or such other corporation could
have achieved but for such introduction, change or compliance, then within
five (5) Business Days after written demand by any such Lender, the Borrower
shall pay to such Lender from time to time as specified by such Lender
additional amounts sufficient to compensate such Lender or other corporation
for such reduction. A certificate as to such amounts submitted to the Borrower
and the Administrative Agent by such Lender, shall, in the absence of manifest
error, be presumed to be correct and binding for all purposes.
SECTION 5.11 Taxes.
(a) Payments Free and Clear. Subject to Section 5.11(e), any and
all payments by the Borrower hereunder or under the Notes or the Letters of
Credit shall be made free and clear of and without deduction for any and all
present or future taxes, levies, imposts, deductions, charges or withholding,
and all liabilities with respect thereto excluding, (i) in the case of each
Lender and the Administrative Agent, income and franchise taxes imposed on a
Lender's net income by the jurisdiction under the laws of which such Lender or
the Administrative Agent (as the case may be) is organized or is or should be
qualified to do business or any political subdivision thereof and (ii) in the
case of each Lender, income and franchise taxes imposed on a Lender's net
income by the jurisdiction of such Lender's Lending Office or any political
subdivision thereof (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter referred to as
"Taxes"). If the Borrower shall be required by law to deduct or withhold any
Taxes from or in respect of any sum payable hereunder or under any Note or in
respect of any Letter of Credit to any Lender or the Administrative Agent, (A)
the sum payable shall be increased as may be necessary so that after making
all required deductions or withholdings (including deductions or withholdings
applicable to additional sums payable under this Section 5.11) such Lender or
the Administrative Agent (as the case may be) receives an amount equal to the
amount such party would have received had no such deductions or withholdings
been made, (B) the Borrower shall make such deductions or withholdings, (C)
the Borrower shall pay the full amount deducted to the relevant taxing
authority or other authority in accordance with Applicable Law, and (D) the
Borrower shall deliver to the Administrative Agent and such Lender evidence of
such payment to the relevant taxing authority or other Governmental Authority
in the manner provided in Section 5.11(d). In such event, any Lender so
affected shall use commercially reasonable efforts to cooperate with the
Borrower to obtain a refunding of any Taxes paid by the Borrower pursuant to
this Section 5.11(a), and, if any such Taxes are actually refunded to a
Lender, such Lender shall promptly reimburse the Borrower for the amount
actually received.
(b) Stamp and Other Taxes. In addition, the Borrower shall pay any
present or future stamp, registration, recordation or documentary taxes or any
other similar fees or charges or excise or property taxes, levies of the
United States or any state or political subdivision thereof or any applicable
foreign jurisdiction which arise from any payment made hereunder or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement, the Loans, the Letters of Credit or the other Loan Documents, or
the perfection of any rights or security interest in respect thereof
(hereinafter referred to as "Other Taxes").
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(c) Indemnity. The Borrower shall indemnify each Lender and the
Administrative Agent for the full amount of Taxes and Other Taxes (including,
without limitation, any Taxes and Other Taxes imposed by any jurisdiction on
amounts payable under this Section 5.11) paid by such Lender or the
Administrative Agent (as the case may be) and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted.
Such indemnification shall be made within thirty (30) days from the date such
Lender or the Administrative Agent (as the case may be) makes written demand
therefor.
(d) Evidence of Payment. Within thirty (30) days after the date of
any payment of Taxes or Other Taxes, the Borrower shall furnish to the
Administrative Agent and the applicable Lender, at its address referred to in
Section 14.1, the original or a certified copy of a receipt evidencing payment
thereof or other evidence of payment satisfactory to the Administrative Agent.
(e) Delivery of Tax Forms. To the extent required by Applicable Law
to reduce or eliminate withholding or payment of taxes, each Lender and the
Administrative Agent shall deliver to the Borrower, with a copy to the
Administrative Agent, on the Closing Date or concurrently with the delivery of
the relevant Assignment and Acceptance, as applicable, (i) two United States
Internal Revenue Service Forms X-0, X-0XXX or W-8BEN, as applicable (or
successor forms) properly completed and certifying in each case that such
Lender is entitled to a complete exemption from withholding or deduction for
or on account of any United States federal income taxes, and (ii) an Internal
Revenue Service Form W-8BEN or W-8ECI or successor applicable form, as the
case may be, to establish an exemption from United States backup withholding
taxes. Each such Lender further agrees to deliver to the Borrower, with a copy
to the Administrative Agent, as applicable, two Form W-9, Form W-8BEN or
W-8ECI, or successor applicable forms or manner of certification, as the case
may be, on or before the date that any such form expires or becomes obsolete
or after the occurrence of any event requiring a change in the most recent
form previously delivered by it to the Borrower, certifying in the case of a
Form X-0, X-0XXX xx X-0XXX that such Lender is entitled to receive payments
under this Agreement without deduction or withholding of any United States
federal income taxes (unless in any such case an event (including without
limitation any change in treaty, law or regulation) has occurred prior to the
date on which any such delivery would otherwise be required which renders such
forms inapplicable or the exemption to which such forms relate unavailable and
such Lender notifies the Borrower and the Administrative Agent that it is not
entitled to receive payments without deduction or withholding of United States
federal income taxes) and, in the case of a Form X-0, X-0XXX or W-8ECI,
establishing an exemption from United States backup withholding tax. In the
event any such Lender fails to deliver any such form, the provisions of
Section 5.11 shall not be deemed to be applicable to such Lender.
(f) Survival. Without prejudice to the survival of any other
agreement of the Borrower hereunder, the agreements and obligations of the
Borrower contained in this Section 5.11 shall survive the payment in full of
the Obligations and the termination of the Commitments.
SECTION 5.12 Reimbursement Conditions; Replacement of Lenders. Any
requests for payment under Sections 5.8, 5.10 or 5.11 shall be made within 180
days of the actual incurrence of said costs, or if thereafter, the Borrower
shall have no liability to make said payment. If the Borrower is required to
pay additional amounts to or for the account of any Lender pursuant to
Sections 5.8, 5.10 or 5.11, then such Lender will change the jurisdiction of
its
42
applicable Lending Office if, in the judgment of such Lender, such change (a)
will eliminate or reduce any such additional payment which may thereafter
accrue, (b) will not subject such Lender to any unreimbursed cost or expense
and (c) is not otherwise disadvantageous to such Lender. In addition, if less
than all of the Lenders incur such increased costs or, if less than all of the
Lenders are unable to make loans because of conditions set forth in Section
5.8(b) that are unique to it, the Borrower may, at its sole expense and
effort, upon notice to such Lender and the Administrative Agent, require such
Lender to assign and delegate, without recourse (in accordance with and
subject to the restrictions contained in Section 14.10), all its interests,
rights and obligations under this Agreement to an Eligible Assignee that shall
assume such obligations (which assignee may be another Lender, if a Lender
accepts such assignment); provided that (A) the Borrower shall have received
the prior written consent of the Administrative Agent (and, if an L/C
Commitment is being assigned, the Issuing Bank), which consents shall not
unreasonably be withheld, (B) such Lender shall have received payment of an
amount equal to the outstanding principal of its Revolving Credit Loans,
participations in Letters of Credit and Term Loans and all accrued interest on
the foregoing, accrued fees and all other amounts payable to such Lender
hereunder, from the assignee (to the extent of such outstanding principal and
accrued interest and fees) or the Borrower (in the case of all other amounts)
and (C) such assignment will result in a reduction of the compensation or
payments requested by such Lender. A Lender shall not be required to make any
such assignment and delegation if, prior thereto, as a result of a waiver by
such Lender or otherwise, the circumstances entitling the Borrower to require
such assignment and delegation cease to apply.
SECTION 5.13 Security. The Obligations of the Borrower shall be
secured as provided in the Security Documents.
ARTICLE VI
CLOSING; CONDITIONS OF CLOSING AND BORROWING
SECTION 6.1 Closing. The closing shall take place at the offices of
Xxxxxxx Xxxxxxxxx Xxxxxxx & Xxxxxxx, L.L.P. at 10:00 a.m. on ____ __, 2002 or
on such other date and time as the parties hereto shall mutually agree.
SECTION 6.2 Conditions to Closing and Initial Advances. The
obligation of the Lenders to close this Agreement and to make the initial Loan
or issue or participate in the initial Letter of Credit, if any, is subject to
the satisfaction of each of the following conditions:
(a) Executed Loan Documents. This Agreement, the Revolving Credit
Notes, the Term Notes, the Swingline Note and the Security Documents, together
with any other applicable Loan Documents, shall have been duly authorized,
executed and delivered to the Administrative Agent by the parties thereto,
shall be in full force and effect and no Default or Event of Default shall
exist thereunder, and the Borrower shall have delivered original counterparts
thereof to the Administrative Agent.
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(b) Closing Certificates; etc.
(i) Officer's Certificate of the Borrower. The
Administrative Agent shall have received a certificate from a Responsible
Officer, in form and substance satisfactory to the Administrative Agent, to
the effect that all representations and warranties of the Borrower contained
in this Agreement and the other Loan Documents are true, correct and complete;
that the Borrower is not in violation of any of the covenants contained in
this Agreement and the other Loan Documents; that, after giving effect to the
transactions contemplated by this Agreement, no Default or Event of Default
has occurred and is continuing; and that the Borrower has satisfied each of
the closing conditions.
(ii) Certificate of Secretary of the Borrower and the
Subsidiaries. The Administrative Agent shall have received a certificate of
the secretary or assistant secretary of each of the Borrower and its
Subsidiaries that are parties to any Loan Document certifying as to the
incumbency and genuineness of the signature of each officer of the Borrower or
such Subsidiary executing Loan Documents to which the Borrower or such
Subsidiary is a party and certifying that attached thereto is a true, correct
and complete copy of (A) the articles of incorporation of the Borrower or such
Subsidiary and all amendments thereto, certified as of a recent date by the
appropriate Governmental Authority in its jurisdiction of incorporation, (B)
the bylaws of the Borrower or such Subsidiary as in effect on the date of such
certifications, (C) resolutions duly adopted by the Board of Directors of the
Borrower or such Subsidiary authorizing the borrowings contemplated hereunder
or the delivery of the Guaranty Agreement, as the case may be, and the
execution, delivery and performance of this Agreement and the other Loan
Documents to which the Borrower or such Subsidiary is a party, and (D) each
certificate required to be delivered pursuant to Section 6.2(b)(iii).
(iii) Certificates of Good Standing. The
Administrative Agent shall have received long-form certificates as of a recent
date of the good standing of the Borrower, and each Subsidiary, in each case,
under the laws of its respective jurisdiction of organization and, to the
extent requested by the Administrative Agent, each other jurisdiction where
the Borrower or such Subsidiary is qualified to do business and a certificate
of the relevant taxing authorities of such jurisdictions certifying that such
Person has filed required tax returns and owes no delinquent taxes.
(iv) Opinions of Counsel. The Administrative Agent
shall have received favorable opinions of counsel to the Borrower addressed to
the Administrative Agent and the Lenders with respect to the Borrower, the
Loan Documents and such other matters as the Lenders shall request.
(v) Tax Forms. The Administrative Agent shall have
received copies of the United States Internal Revenue Service forms required
by Section 5.11(e) hereof, if applicable.
(c) Collateral.
(i) Filings and Recordings. All filings and
recordations that are necessary to perfect the security interests of the
Lenders in the collateral described in the Security Documents shall have been
received by the Administrative Agent and the Administrative Agent
44
shall have received evidence satisfactory to the Administrative Agent that
upon such filings and recordations such security interests constitute valid
and perfected first priority Liens therein.
(ii) Pledged Collateral. The Administrative Agent
shall have received (A) original stock certificates or other certificates
evidencing the capital stock or other ownership interests pledged pursuant to
any Collateral Agreement, together with an undated stock power for each such
certificate duly executed in blank by the registered owner thereof and (B)
each original promissory note pledged pursuant to the Collateral Agreement.
(iii) Lien Search. The Administrative Agent shall have
received the results of a Lien search (including a search as to judgments,
pending litigation and tax matters to the extent requested by the
Administrative Agent) made against the Borrower and each Subsidiary under the
Uniform Commercial Code (or applicable judicial docket) as in effect in any
state in which any of their respective assets are located, indicating among
other things that their respective assets are free and clear of any Lien
except for Liens permitted hereunder.
(iv) Hazard and Liability Insurance. The
Administrative Agent shall have received certificates of insurance, evidence
of payment of all insurance premiums for the current policy year of each, and,
if requested by the Administrative Agent, copies (certified by a Responsible
Officer) of insurance policies in the form required under the Security
Documents and otherwise in form and substance reasonably satisfactory to the
Administrative Agent.
(d) Consents; Defaults.
(i) Governmental and Third Party Approvals. The
Borrower shall have obtained all necessary approvals, authorizations and
consents of any Person and of all Governmental Authorities and courts having
jurisdiction with respect to the transactions contemplated by this Agreement
and the other Loan Documents.
(ii) No Injunction, Etc. No action, proceeding,
investigation, regulation or legislation shall have been instituted,
threatened or proposed before any Governmental Authority to enjoin, restrain,
or prohibit, or to obtain substantial damages in respect of, or which is
related to or arises out of this Agreement or the other Loan Documents or the
consummation of the transactions contemplated hereby or thereby, or which, in
the Administrative Agent's sole discretion, would make it inadvisable to
consummate the transactions contemplated by this Agreement and such other Loan
Documents.
(iii) No Event of Default. No Default or Event of
Default shall have occurred and be continuing.
(e) Financial Matters.
(i) Financial Statements. The Administrative Agent
shall have received the most recent audited Consolidated financial statements
of the Borrower and its Subsidiaries, all in form and substance satisfactory
to the Administrative Agent and prepared in accordance with GAAP.
45
(ii) Financial Condition Certificate. The Borrower
shall have delivered to the Administrative Agent a certificate, in form and
substance satisfactory to the Administrative Agent, and certified as accurate
by a Responsible Officer, that (A) the Borrower and each of its Subsidiaries
are each Solvent, (B) the Borrower's and each Subsidiary's payables are
current and not past due, (C) attached thereto is (1) Schedule 1A, showing
certain Approved EBITDA Adjustments and (2) Schedule 1B, showing all Veritect
Discontinued Operations Charges as of the Closing Date, (D) the financial
projections previously delivered to the Administrative Agent represent the
good faith estimates (utilizing reasonable assumptions) of the financial
condition and operations of the Borrower and its Subsidiaries and (E) attached
thereto is a calculation of (1) the Applicable Margin pursuant to Section
5.1(c), (2) the Asset Coverage Ratio determined as of the most recent month
ending not more than thirty (30) days prior to the Closing Date,
demonstrating, to the satisfaction of the Administrative Agent, that such
ratio is equal to or greater than 1.0 to 1.0, (3) the Total Leverage Ratio
determined on a pro forma basis as of March 31, 2002 after giving pro forma
effect to the IPO and the other transactions contemplated hereby,
demonstrating, to the satisfaction of the Administrative Agent, that such
ratio is not greater than 3.0 to 1.0 and (4) Adjusted EBITDA for the twelve
(12) consecutive months ending on March 31, 2002 after giving pro forma effect
to the IPO and the other transactions contemplated hereby, demonstrating, to
the reasonable satisfaction of the Administrative Agent, that such Adjusted
EBITDA equals or exceeds $55,000,000.
(iii) Payment at Closing; Fee Letters. The Borrower
shall have paid to the Administrative Agent and the Lenders the fees set forth
or referenced in Section 5.3 and any other accrued and unpaid fees or
commissions due hereunder (including, without limitation, legal fees and
expenses) and to any other Person such amount as may be due thereto in
connection with the transactions contemplated hereby, including all taxes,
fees and other charges in connection with the execution, delivery, recording,
filing and registration of any of the Loan Documents.
(iv) Audit of Accounts Receivable. The Administrative
Agent shall have received an audit of Accounts Receivable performed by an
independent auditor acceptable to the Administrative Agent.
(f) Related Transactions.
(i) IPO. The Borrower shall have received a minimum
of $160,000,000 in Net Cash Proceeds from an initial public offering of common
stock of the Borrower on terms and conditions reasonably satisfactory to the
Administrative Agent (the "IPO").
(ii) Application of IPO Proceeds. The Borrower shall
have applied the Net Cash Proceeds from the IPO (A) to repay in full all
outstanding principal, accrued and unpaid interest, fees and all other
obligations under the Subordinated Note Documents and terminate the
Subordinated Notes, and (B) to repurchase and redeem all of the outstanding
Preferred Stock, in each case on terms and conditions reasonably satisfactory
to the Administrative Agent.
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(g) Miscellaneous.
(i) Existing Credit Agreement. The Existing Credit
Agreement shall be repaid in full and terminated and all collateral security
therefor shall be released and the Administrative Agent shall have received a
pay-off letter in form and substance satisfactory to it evidencing such
repayment, termination, reconveyance and release.
(ii) Other Documents. All opinions, certificates and other
instruments and all proceedings in connection with the transactions
contemplated by this Agreement shall be satisfactory in form and substance to
the Administrative Agent. The Administrative Agent shall have received copies
of all other documents, certificates and instruments reasonably requested
thereby, with respect to the transactions contemplated by this Agreement.
SECTION 6.3 Conditions to All Advances. The obligations of the Lenders
to make any Advances (including the initial Advance), convert or continue any
Loan and/or the Issuing Lender to issue or extend any Letter of Credit are
subject to the satisfaction of the following conditions precedent on the
relevant borrowing, continuation, conversion, issuance or extension date:
(a) Notice of Borrowing. The Administrative Agent shall have
received a Notice of Revolving Loan Borrowing or a Notice of Term Loan
Borrowing or Notice of Conversion/Continuation, as applicable, from the
Borrower (which in both cases shall include a certification by the chief
financial officer or the treasurer of the Borrower demonstrating, to the
satisfaction of the Administrative Agent, compliance with the Asset Coverage
Ratio pursuant to Section 10.5 as of the date of such Advance on a pro forma
basis after giving effect to the proposed Advance) in accordance with Section
2.3(a) or Section 4.2 or Section 5.2, as applicable, and a Notice of Account
Designation specifying the account or accounts to which the proceeds of any
Loans made after the Closing Date are to be disbursed.
(b) Continuation of Representations and Warranties. The
representations and warranties contained in Article VII shall be true and
correct on and as of such borrowing, continuation, conversion, extension or
issuance date with the same effect as if made on and as of such date; except
for any representation and warranty made as of an earlier date, which
representation and warranty shall remain true and correct as of such earlier
date.
(c) No Existing Default. No Default or Event of Default shall have
occurred and be continuing (i) on the borrowing, continuation or conversion
date with respect to such Loan or after giving effect to the Loans to be made,
continued or converted on such date or (ii) on the issue date with respect to
such Letter of Credit or after giving effect to the issuance or extension of
such Letter of Credit on such date.
(d) Additional Documents. The Administrative Agent shall have
received each additional document, instrument, legal opinion or other item
reasonably requested by it.
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ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF THE BORROWER
SECTION 7.1 Representations and Warranties. To induce the
Administrative Agent and Lenders to enter into this Agreement and to induce the
Lenders to make Advances, the Borrower hereby represents and warrants to the
Administrative Agent and Lenders both before and after giving effect to the
transactions contemplated hereunder that:
(a) Corporate Existence and Power. Each of the Borrower and its
Subsidiaries is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation or formation, has the power and
authority to own its properties and to carry on its business as now being and
hereafter proposed to be conducted (except where the failure to be in good
standing or possess such corporate power or authority would not reasonably be
expected to have a Material Adverse Effect) and is duly qualified and authorized
to do business in each jurisdiction in which the character of its properties or
the nature of its business requires such qualification and authorization except
where the failure to so qualify would not reasonably be expected to have a
Material Adverse Effect. The jurisdictions in which the Borrower and its
Subsidiaries are organized and qualified to do business as of the Closing Date
are described on Schedule 7.1(a).
(b) Corporate Authority; Binding Effect. Each of the Borrower and
its Subsidiaries has the right, power and authority and has taken all necessary
corporate and other action to authorize the execution, delivery and performance
of this Agreement and each of the other Loan Documents to which it is a party in
accordance with their respective terms. This Agreement and each of the other
Loan Documents have been duly executed and delivered by the duly authorized
officers of each of the Borrower and its Subsidiaries party thereto, and each
such document constitutes the legal, valid and binding obligation of each of the
Borrower and its Subsidiaries party thereto, enforceable in accordance with its
terms, except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar state or federal debtor relief laws from
time to time in effect which affect the enforcement of creditors' rights in
general and the availability of equitable remedies.
(c) Subsidiaries. Each Subsidiary of the Borrower as of the
Closing Date is listed on Schedule 7.1(c). As of the Closing Date, the
capitalization of the Borrower and its Subsidiaries consists of the number of
shares, authorized, issued and outstanding, of such classes and series, with or
without par value, described on Schedule 7.1(c). All outstanding shares have
been duly authorized and validly issued and are fully paid and nonassessable,
with no personal liability attaching to the ownership thereof, and not subject
to any preemptive or similar rights. The shareholders of the Subsidiaries of the
Borrower and the number of shares owned by each as of the Closing Date are
described on Schedule 7.1(c). As of the Closing Date, there are no outstanding
stock purchase warrants, subscriptions, options, securities, instruments or
other rights of any type or nature whatsoever, which are convertible into,
exchangeable for or otherwise provide for or permit the issuance of capital
stock of the Borrower or its Subsidiaries, except as described on Schedule
7.1(c).
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(d) Compliance of Agreement, Loan Documents and Borrowing with
Laws, Etc. The execution, delivery and performance by the Borrower and its
Subsidiaries of the Loan Documents to which each such Person is a party, in
accordance with their respective terms, the Advances hereunder and the
transactions contemplated hereby do not and will not, by the passage of time,
the giving of notice or otherwise, (i) require any Governmental Approval or
violate any Applicable Law relating to the Borrower or any of its Subsidiaries,
(ii) conflict with, result in a breach of or constitute a default under the
articles of incorporation, bylaws or other organizational documents of the
Borrower or any of its Subsidiaries or any indenture, agreement or other
instrument to which such Person is a party or by which any of its properties may
be bound or any Governmental Approval relating to such Person, (iii) result in
or require the creation or imposition of any Lien upon or with respect to any
property now owned or hereafter acquired by such Person other than Liens arising
under the Loan Documents or (iv) require any consent or authorization of, filing
with, or other act in respect of, an arbitrator or Governmental Authority and no
consent of any other Person is required in connection with the execution,
delivery, performance, validity or enforceability of this Agreement.
(e) Compliance with Law; Governmental Approvals. Each of the
Borrower and its Subsidiaries (i) has all Governmental Approvals required by any
Applicable Law for it to conduct its business, each of which is in full force
and effect, is final and not subject to review on appeal and is not the subject
of any pending or, to the best of its knowledge, threatened attack by direct or
collateral proceeding, (ii) is in compliance with each Governmental Approval
applicable to it and in compliance with all other Applicable Laws relating to it
or any of its respective properties and (iii) has timely filed all material
reports, documents and other materials required to be filed by it under all
Applicable Laws with any Governmental Authority and has retained all material
records and documents required to be retained by it under Applicable Law except
where the failure to obtain or comply with such Governmental Approval or be in
such compliance or file such reports, documents or other materials would not
reasonably be expected to have a Material Adverse Effect.
(f) Tax Returns and Payments. Except as otherwise disclosed on
Schedule 7.1(f), each of the Borrower and its Subsidiaries has duly filed or
caused to be filed all federal, state, local and other tax returns required by
Applicable Law to be filed and the failure of which to file would reasonably be
expected to have a Material Adverse Effect, and has paid, or made adequate
provision for the payment of, all federal, state, local and other taxes,
assessments and governmental charges or levies upon it and its property, income,
profits and assets which are due and payable. Such returns accurately reflect in
all material respects all liability for taxes of the Borrower and its
Subsidiaries for the periods covered thereby. As of the Closing Date, there is
no ongoing audit or examination or, to the knowledge of the Borrower, other
investigation by any Governmental Authority of the tax liability of the Borrower
and its Subsidiaries. As of the Closing Date, no Governmental Authority has
asserted any Lien or other claim against the Borrower or any Subsidiary thereof
with respect to unpaid taxes which has not been discharged or resolved. The
charges, accruals and reserves on the books of the Borrower and any of its
Subsidiaries in respect of federal, state, local and other taxes for all Fiscal
Years and portions thereof since the organization of the Borrower and any of its
Subsidiaries are in the judgment of the Borrower adequate, and the Borrower does
not anticipate any additional taxes or assessments for any of such years.
(g) Intellectual Property Matters. Each of the Borrower and its
Subsidiaries owns or possesses rights to use all franchises, licenses,
copyrights, copyright applications, patents, patent
49
rights or licenses, patent applications, trademarks, trademark rights, service
xxxx, service xxxx rights, trade names, trade name rights, copyrights and rights
with respect to the foregoing which the failure to own or possess would
reasonably be expected to have a Material Adverse Effect. No event has occurred
which permits, or after notice or lapse of time or both would permit, the
revocation or termination of any such rights, and neither the Borrower nor any
Subsidiary thereof is liable to any Person for infringement under Applicable Law
with respect to any such rights as a result of its business operations, except
where such revocation or liability could not reasonably be expected to have a
Material Adverse Effect.
(h) Environmental Matters. Except as set forth in Schedule 7.1(h)
or on Schedule A to the Environmental Certificate delivered in connection with
the closing of the Existing Credit Agreement (a copy of which Schedule A to the
Environmental Certificate is attached to Schedule 7.1(h)), the Borrower and each
of its Subsidiaries are in compliance in all material respects with all
applicable federal, state and local laws, ordinances and regulations relating to
safety and industrial hygiene or to the environmental condition, including,
without limitation, all Environmental Laws in jurisdictions in which the
Borrower or any of its Subsidiaries owns or operates, or has owned or operated,
a facility or site, or arranges or has arranged for disposal or treatment of
Hazardous Materials, accepts or has accepted for transport any Hazardous
Materials, or holds or has held any interest in real property or otherwise. No
demand, claim, notice, suit, suit in equity, action, administrative action or
investigation whether brought by any Governmental Authority, private person or
entity or otherwise, arising under, relating to or in connection with any
Environmental Laws is pending against the Borrower, or any of its Subsidiaries,
any real property in which the Borrower or any of its Subsidiaries holds or has
held an interest or any past or present operation of the Borrower or any of its
Subsidiaries, except as set forth in Schedule 7.1(h) hereto or on Schedule A to
the Environmental Certificate attached thereto. Neither the Borrower nor any of
its Subsidiaries (a) to the best of the Borrower's knowledge, is the subject of
any federal or state investigation evaluating whether any remedial action is
needed to respond to a release of any Hazardous Materials into the environment,
(b) has received any notice of any Hazardous Materials in, or upon, any of its
properties in violation of any Environmental Laws, or (c) knows of any basis for
any such investigation, notice or violation, except as disclosed in Schedule
7.1(h) hereto or on Schedule A to the Environmental Certificate attached
thereto, none of which will have a Material Adverse Effect. Except as set forth
in Schedule 7.1(h) hereto or on Schedule A to the Environmental Certificate
attached thereto, no release, threatened release or disposal of Hazardous
Materials is occurring or has occurred on, under or to any property of the
Borrower or any of its Subsidiaries in violation of any Environmental Laws.
(i) ERISA. The Borrower, its Subsidiaries, their ERISA Affiliates
and their respective Employee Benefit Plans are in compliance in all material
respects with those provisions of ERISA and of the Code which are applicable
with respect to any Employee Benefit Plan. No Prohibited Transaction and no
"Reportable Event" described in Section 4043 of ERISA for which the 30-day
notice period is not waived by the applicable regulations, has occurred with
respect to any such Employee Benefit Plan to the extent any such failure could
reasonably be expected to result in a Material Adverse Effect. Except as set
forth on Schedule 7.1(i) hereto, neither the Borrower, any of its Subsidiaries
nor any of their ERISA Affiliates is an employer with respect to any
Multiemployer Plan. The Borrower, its Subsidiaries and their ERISA Affiliates
have met the minimum funding requirements under ERISA and the Code with respect
to each of their respective Employee Benefit Plans, if any, and have not
incurred (i) any current, outstanding liability to the PBGC or (ii) any past
50
due liability to any Employee Benefit Plan. The execution, delivery and
performance of this Agreement, the Notes, the other Loan Documents and the other
documents executed or to be executed in connection herewith or therewith do not
constitute a Prohibited Transaction. There is no material Unfunded Benefit
Liability, determined in accordance with Section 4001(a)(18) of ERISA, with
respect to any Plan of the Borrower, any of its Subsidiaries or their ERISA
Affiliates.
(j) Margin Stock. Neither the Borrower nor any Subsidiary thereof
is engaged principally or as one of its activities in the business of extending
credit for the purpose of "purchasing" or "carrying" any "margin stock" (as each
such term is defined or used, directly or indirectly, in Regulation T, U or X of
the Board of Governors of the Federal Reserve System). No part of the proceeds
of any of the Loans or Letters of Credit will be used for purchasing or carrying
margin stock or for any purpose which violates, or which would be inconsistent
with, the provisions of Regulation T, U or X of such Board of Governors. "Margin
stock" (as such term is defined or used, directly or indirectly, in Regulation
T, U or X of the Board of Governors of the Federal Reserve System) constitutes
less than twenty-five percent (25%) of the value of those assets of the Borrower
and its Subsidiaries which are subject to any limitation on sale, pledge or
other restriction under this Agreement or any other Loan Document. None of the
Collateral is comprised of "margin stock" (as such term is defined or used,
directly or indirectly, in Regulation T, U or X of the Board of Governors of the
Federal Reserve System).
(k) Government Regulation. Neither the Borrower nor any Subsidiary
thereof is an "investment company" or a company "controlled" by an "investment
company" (as each such term is defined or used in the Investment Company Act of
1940, as amended) and neither the Borrower nor any Subsidiary thereof is, or
after giving effect to any Advance will be, subject to regulation under the
Public Utility Holding Company Act of 1935 or the Interstate Commerce Act, each
as amended, or any other Applicable Law which limits its ability to incur or
consummate the transactions contemplated hereby.
(l) Material Contracts. Schedule 7.1(l) sets forth a complete and
accurate list of all Material Contracts of the Borrower and its Subsidiaries in
effect as of the Closing Date not listed on any other Schedule hereto; other
than as set forth in Schedule 7.1(l), each such Material Contract is, and after
giving effect to the consummation of the transactions contemplated by the Loan
Documents will be, in full force and effect in accordance with the terms
thereof. Neither the Borrower nor any Subsidiary (nor, to the knowledge of the
Borrower, any other party thereto) is in breach of or in default under any
Material Contract in any material respect.
(m) Employee Relations. Each of the Borrower and its Subsidiaries
has a stable work force in place and is not, as of the Closing Date, party to
any collective bargaining agreement nor has any labor union been recognized as
the representative of its employees except as set forth on Schedule 7.1(m). The
Borrower knows of no pending, threatened or contemplated strikes, work stoppage
or other collective labor disputes involving its employees or those of its
Subsidiaries.
(n) Broker's Fees. Neither the Borrower nor any of its
Subsidiaries has retained an investment banker, broker or finder in connection
with the transactions contemplated by this Agreement and no broker's fees or
commissions are payable by the Borrower or any Subsidiary thereof in connection
therewith as a result of any action or inaction on its part.
51
(o) Financial Statements. The (i) audited Consolidated balance
sheet of the Borrower and its Subsidiaries as of December 31, 2001 and the
related audited statements of income and retained earnings and cash flows for
the Fiscal Year then ended and (ii) unaudited Consolidated balance sheet of the
Borrower and its Subsidiaries as of March 31, 2002 and related unaudited interim
statements of income and retained earnings, copies of which have been furnished
to the Administrative Agent and each Lender, are complete and correct and fairly
present on a Consolidated basis the assets, liabilities and financial position
of the Borrower and its Subsidiaries as at such dates, and the results of the
operations and changes of financial position for the periods then ended (other
than customary year-end adjustments for unaudited financial statements). All
such financial statements, including the related schedules and notes thereto,
have been prepared in accordance with GAAP. The Borrower and its Subsidiaries
have no Debt or off-balance sheet or contingent indebtedness, obligation or
other unusual forward or long-term commitment which is not fairly reflected in
the foregoing financial statements or in the notes thereto.
(p) No Material Adverse Change. Since December 31, 2001, there has
been no material adverse change in the business, properties, operations or
condition (financial or otherwise) of the Borrower and its Subsidiaries, taken
as a whole, and no event has occurred or condition arisen that could reasonably
be expected to have a Material Adverse Effect.
(q) Solvency. After giving effect to this Agreement, the Notes,
the other Loan Documents and the transactions contemplated hereby, the Security
Documents and the performance of the Borrower and the Subsidiaries under this
Agreement and the Guaranty Agreements, on a Consolidated basis, (a) the present
salable value and fair value of the Borrower's and the Subsidiaries' property
are (i) greater than the total amount of their liabilities (including identified
contingent liabilities, valued as the maximum amount that could reasonably be
expected to become an actual or matured liability), and (ii) greater than the
amount that would be required to pay their probable aggregate liability on their
then existing debts as they become absolute and matured; (b) the Borrower's and
the Subsidiaries' property does not constitute an unreasonable amount of capital
in relation to their business or any contemplated or undertaken transaction; and
(c) the Borrower and the Subsidiaries do not intend to incur, or believe that
they will incur, debts beyond their ability to pay such debts as they become due
(the foregoing financial condition, "Solvent"). This Agreement and the other
documents executed in connection herewith have been delivered by the Borrower
and the Subsidiaries in good faith and in exchange for equivalent consideration.
Neither the Borrower nor any Subsidiary has executed such documents, or made any
transfer or incurred any obligations thereunder or in connection therewith, with
the actual intent to hinder, defraud or delay either present or future
creditors.
(r) Titles to Properties. Each of the Borrower and its
Subsidiaries has such title to the real property owned or leased by it as is
necessary or desirable to the conduct of its business and valid and legal title
to all of its personal property and assets, including, but not limited to, those
reflected on the balance sheets of the Borrower and its Subsidiaries delivered
pursuant to Section 7.1(o), except those which have been disposed of by the
Borrower or its Subsidiaries subsequent to such date which dispositions have
been in the ordinary course of business or as otherwise expressly permitted
hereunder.
(s) Liens. None of the properties and assets of the Borrower or
any Subsidiary thereof is subject to any Lien, except Liens permitted pursuant
to Section 11.2. No financing statement
52
under the Uniform Commercial Code of any state which names the Borrower or any
Subsidiary thereof or any of their respective trade names or divisions as debtor
and which has not been terminated, has been filed in any state or other
jurisdiction and neither the Borrower nor any Subsidiary thereof has signed any
such financing statement or any security agreement authorizing any secured party
thereunder to file any such financing statement, except to perfect those Liens
permitted by Section 11.2 hereof.
(t) Debt and Guaranty Obligations. Schedule 7.1(t) is a complete
and correct listing of all Debt and Guaranty Obligations of the Borrower and its
Subsidiaries as of the Closing Date in excess of $1,000,000. The Borrower and
its Subsidiaries have performed and are in compliance with all of the terms of
such Debt and Guaranty Obligations and all instruments and agreements relating
thereto, and no default or event of default, or event or condition which with
notice or lapse of time or both would constitute such a default or event of
default on the part of the Borrower or its Subsidiaries exists with respect to
any such Debt or Guaranty Obligation.
(u) Litigation. Except for matters existing on the Closing Date
and set forth on Schedule 7.1(u), there are no actions, suits or proceedings
pending nor, to the best knowledge of the Borrower and/or each Subsidiary,
threatened against or in any other way relating adversely to or affecting the
Borrower or any Subsidiary thereof or any of their respective properties in any
court or before any arbitrator of any kind or before or by any Governmental
Authority which would reasonably be expected to have a Material Adverse Effect.
(v) Absence of Defaults. No event has occurred or is continuing
which constitutes a Default or an Event of Default, or which constitutes, or
which with the passage of time or giving of notice or both would constitute, a
default or event of default by the Borrower or any Subsidiary thereof under any
Material Contract or judgment, decree or order to which the Borrower or any of
its Subsidiaries is a party or by which the Borrower or any of its Subsidiaries
or any of their respective properties may be bound or which would require the
Borrower or any of its Subsidiaries to make any payment in excess of $1,000,000
thereunder prior to the scheduled maturity date therefor.
(w) Senior Debt Status. The Obligations of the Borrower and each
of its Subsidiaries under this Agreement and each of the other Loan Documents
ranks and shall continue to rank at least senior in priority of payment to all
Subordinated Debt and all senior unsecured Debt of each such Person and is
designated as "Senior Indebtedness" under all instruments and documents, now or
in the future, relating to all Subordinated Debt and all senior unsecured Debt
of such Person.
(x) Government Contracts. No notice of suspension, debarment, cure
notice, show cause notice or notice of termination for default which could
reasonably be expected to have a Material Adverse Effect has been issued by the
U.S. Government to the Borrower or any Subsidiary, and neither the Borrower nor
any Subsidiary is a party to any pending, or to the Borrower's or any
Subsidiary's knowledge threatened, suspension, debarment, termination for
default issued by the U.S. Government or other adverse U.S. Government action or
proceeding in connection with any contract with the U.S. Government which could
reasonably be expected to have a Material Adverse Effect.
53
(y) Bank Accounts. Except for the accounts listed on Schedule
7.1(y), none of the Borrower or its Subsidiaries maintains any account,
agreement or safe deposit arrangement in excess of $250,000 in any one account,
and the amounts maintained in any accounts that are not listed on Schedule
7.1(y) do not exceed $2,000,000 in the aggregate.
(z) Disclosure. No report or other information furnished in
writing or on behalf of the Borrower or any of its Subsidiaries to the
Administrative Agent or any Lender in connection with the negotiation or
administration of this Agreement contains any material misstatement of fact or
omits to state any material fact or any fact necessary to make the statements
contained therein not misleading when made or deemed made. Neither this
Agreement, the Notes, the other Loan Documents, the Confidential Information
Memorandum dated April, 2002, the other documents executed or to be executed in
connection herewith nor any other document, certificate, or report or statement
or other information furnished to the Administrative Agent and the Lenders by or
on behalf of the Borrower or any of its Subsidiaries in connection with the
transactions contemplated hereby or thereby contains any untrue statement of a
material fact or omits to state a material fact in order to make the statements
contained herein and therein not misleading when made or deemed made. There is
no fact known to the Borrower or any Subsidiary which presently has resulted in
a Material Adverse Effect, or which in the future could reasonably be expected
to have a Material Adverse Effect, which has not been set forth in this
Agreement or in the other documents, certificates, statements, reports and other
information furnished in writing to the Administrative Agent and the Lenders by
or on behalf of the Borrower or any of its Subsidiaries in connection with the
transactions contemplated hereby.
SECTION 7.2 Survival of Representations and Warranties, Etc. All
representations and warranties set forth in this Article VII and all
representations and warranties contained in any certificate, or any of the Loan
Documents (including but not limited to any such representation or warranty made
in or in connection with any amendment thereto) shall constitute representations
and warranties made under this Agreement. All representations and warranties
made under this Agreement shall be made or deemed to be made at and as of the
Closing Date (except those that are expressly made as of a specific date), shall
survive the Closing Date and shall not be waived by the execution and delivery
of this Agreement, any investigation made by or on behalf of the Lenders or any
borrowing hereunder.
ARTICLE VIII
FINANCIAL INFORMATION AND NOTICES
Until all the Obligations have been paid and satisfied in full and the
Commitments terminated, unless consent has been obtained in the manner set forth
in Section 14.11, the Borrower will furnish or cause to be furnished to the
Administrative Agent at the Administrative Agent's Office at the address set
forth in Section 14.1 and to the Lenders at their respective addresses as set
forth on Schedule 1, or such other office as may be designated by the
Administrative Agent and Lenders from time to time:
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SECTION 8.1 Financial Statements and Projections.
(a) Quarterly Financial Statements. As soon as practicable and in
any event within forty-five (45) days after the end of each fiscal quarter
(other than the last fiscal quarter of a Fiscal Year), an unaudited Consolidated
and consolidating balance sheet of the Borrower and its Subsidiaries as of the
close of such fiscal quarter and unaudited Consolidated and consolidating
statements of income, retained earnings and cash flows for the fiscal quarter
then ended and that portion of the Fiscal Year then ended, including the notes
thereto, all in reasonable detail setting forth in comparative form the
corresponding figures as of the end of and for the corresponding period in the
preceding Fiscal Year and prepared by the Borrower in accordance with GAAP and,
if applicable, containing disclosure of the effect on the financial position or
results of operations of any change in the application of accounting principles
and practices during the period, and certified by the chief financial officer of
the Borrower to present fairly in all material respects the financial condition
of the Borrower and its Subsidiaries on a Consolidated and consolidating basis
as of their respective dates and the results of operations of the Borrower and
its Subsidiaries for the respective periods then ended, subject to normal year
end adjustments. The financial statements delivered pursuant to this Section
8.1(a) shall be accompanied by (i) a schedule providing, in form and substance
satisfactory to the Administrative Agent, a consolidating break-out of the
Borrower and the Subsidiaries taken as a whole, (ii) an updated Schedule 1A to
the financial condition certificate of the Borrower provided pursuant to Section
6.2(e)(ii), showing (X) Approved EBITDA Adjustments and (Y) Permitted
Acquisition EBITDA (including a separate listing of Permitted Acquisition EBITDA
Adjustments), in each case of the Borrower and its Subsidiaries for the last
twelve months then ended, in form and substance satisfactory to the
Administrative Agent, and (iii) a supplement to Schedule 1B to the financial
condition certificate of the Borrower provided pursuant to Section 6.2(e)(ii),
showing all Veritect Discontinued Operations Charges accruing from the Closing
Date through the most recent fiscal quarter end, in form and substance
satisfactory to the Administrative Agent.
(b) Annual Financial Statements. As soon as practicable and in any
event within ninety (90) days after the end of each Fiscal Year, an audited
Consolidated balance sheet of the Borrower and its Subsidiaries as of the close
of such Fiscal Year and audited Consolidated statements of income, retained
earnings and cash flows for the Fiscal Year then ended, including the notes
thereto, all in reasonable detail setting forth in comparative form the
corresponding figures as of the end of and for the preceding Fiscal Year and
prepared by an independent certified public accounting firm acceptable to the
Administrative Agent in accordance with GAAP and, if applicable, containing
disclosure of the effect on the financial condition or results of operations of
any change in the application of accounting principles and practices during the
year, and accompanied by a report thereon by such certified public accountants
that is not qualified with respect to scope limitations imposed by the Borrower
or any of its Subsidiaries or with respect to accounting principles followed by
the Borrower or any of its Subsidiaries not in accordance with GAAP and does not
have any other material qualification or exception. The financial statements
delivered pursuant to this Section 8.1(b) shall be accompanied by a schedule
reviewed by such accountants providing, in form and substance reasonably
satisfactory to the Administrative Agent, a consolidating break-out of the
Borrower and the Subsidiaries.
(c) Annual Business Plan and Financial Projections. As soon as
practicable and in any event no later than the beginning of each Fiscal Year, a
business plan of the Borrower and its
55
Subsidiaries for the ensuing four (4) fiscal quarters, such plan to be prepared
in accordance with GAAP and to include, on a quarterly basis, the following: a
quarterly operating and capital budget, a projected income statement, statement
of cash flows and balance sheet and a report containing management's discussion
and analysis of such projections, accompanied by a certificate from the chief
financial officer of the Borrower to the effect that, to the best of such
officer's knowledge, such projections are good faith estimates (utilizing
reasonable assumptions) of the financial condition and operations of the
Borrower and its Subsidiaries for such period.
(d) Securities and Exchange Commission Reports. Promptly after
sending or filing thereof, copies of all reports, proxy statements, registration
statements, prospectuses and financial statements which the Borrower or any of
its Subsidiaries sends to or files with any of their respective security holders
or any securities exchange or the Securities and Exchange Commission or any
successor agency thereto.
SECTION 8.2 Officer's Compliance Certificate. Commencing with the
fiscal quarter ending September 30, 2002, at each time financial statements are
delivered pursuant to Sections 8.1 (a) or (b) and at such other times as the
Administrative Agent shall reasonably request, a certificate of the chief
financial officer or the treasurer of the Borrower in the form of Exhibit F
attached hereto (an "Officer's Compliance Certificate").
SECTION 8.3 Accountants' Certificate. At each time financial
statements are delivered pursuant to Section 8.1(b), a certificate of the
independent public accountants certifying such financial statements addressed to
the Administrative Agent for the benefit of the Lenders stating that in making
the examination necessary for the certification of such financial statements,
they obtained no knowledge of any Default or Event of Default in respect of
Articles X or XI hereof or, if such is not the case, specifying such Default or
Event of Default and its nature and period of existence.
SECTION 8.4 Other Reports.
(a) Within thirty (30) days of the receipt thereof, copies of all
reports, if any, submitted to the Borrower or its Board of Directors by its
independent public accountants in connection with their auditing function,
including, without limitation, any management report and any management
responses thereto;
(b) As soon as available, but no event later than thirty (30) days
after the end of each calendar month, a report calculating and showing
compliance with Section 10.5 hereof, including such additional information as is
reasonably requested by the Administrative Agent in connection with such
calculation with respect to accounts receivable; and
(c) Such other information regarding the operations, business
affairs and financial condition of the Borrower or any of its Subsidiaries as
the Administrative Agent or any Lender may reasonably request.
SECTION 8.5 Notice of Litigation and Other Matters. Promptly
provide (but in no event later than ten (10) days after an officer of the
Borrower obtains knowledge thereof) telephonic and written notice of:
56
(a) the commencement of all proceedings and investigations by or
before any Governmental Authority and all actions and proceedings in any court
or before any arbitrator against or involving the Borrower or any Subsidiary
thereof or any of their respective properties, assets or businesses, in each
case, which could reasonably be expected to have a Material Adverse Effect;
(b) any notice of any violation received by the Borrower or any
Subsidiary thereof from any Governmental Authority including, without
limitation, any notice of violation of Environmental Laws which in any such case
could reasonably be expected to have a Material Adverse Effect;
(c) any labor controversy that has resulted in, or, in
management's judgment, is reasonably likely to result in, a strike or other work
action against the Borrower or any Subsidiary thereof;
(d) any attachment, judgment, lien, levy or order exceeding
$250,000 that may be assessed against or to the Borrower's knowledge, threatened
against the Borrower or any Subsidiary thereof;
(e) (i) any Default or Event of Default, or (ii) any event which
constitutes or which with the passage of time or giving of notice or both would
constitute a default or event of default under any contract to which the
Borrower or any of its Subsidiaries is a party or by which the Borrower or any
Subsidiary thereof or any of their respective properties may be bound, which
event could reasonably be expected to have a Material Adverse Effect;
(f) (i) any unfavorable determination letter from the Internal
Revenue Service regarding the qualification of an Employee Benefit Plan under
Section 401(a) of the Code (along with a copy thereof), (ii) all notices
received by the Borrower or any ERISA Affiliate of the PBGC's intent to
terminate any Pension Plan or to have a trustee appointed to administer any
Pension Plan, (iii) all notices received by the Borrower or any ERISA Affiliate
from a Multiemployer Plan sponsor concerning the imposition or amount of
withdrawal liability pursuant to Section 4202 of ERISA and (iv) the Borrower
obtaining knowledge or reason to know that the Borrower or any ERISA Affiliate
has filed or intends to file a notice of intent to terminate any Pension Plan
under a distress termination within the meaning of Section 4041(c) of ERISA; and
(g) any event which makes any of the representations set forth in
Section 7.1 inaccurate in any material respect.
SECTION 8.6 Accuracy of Information. All written information,
reports, statements and other papers and data furnished by or on behalf of the
Borrower to the Administrative Agent or any Lender whether pursuant to this
Article VIII or any other provision of this Agreement, or any of the Security
Documents, shall be, at the time the same is so furnished, comply with the
representations and warranties set forth in Section 7.1(z).
57
ARTICLE IX
AFFIRMATIVE COVENANTS
Until all of the Obligations have been paid and satisfied in full and
the Commitments terminated, unless consent has been obtained in the manner
provided for in Section 14.11, the Borrower will, and will cause each of its
Subsidiaries to:
SECTION 9.1 Preservation of Legal Existence and Related Matters.
Except as permitted by Section 11.4, preserve and maintain its separate legal
existence and all rights, franchises, licenses and privileges necessary to the
conduct of its business, and qualify and remain qualified as a foreign business
entity and authorized to do business in each jurisdiction where the nature and
scope of its activities require it to so qualify under Applicable Law, except
where the failure to maintain such rights, franchises, licenses and privileges
as to be so qualified or authorized could not reasonably be expected to have a
Material Adverse Effect.
SECTION 9.2 Maintenance of Property. In addition to the
requirements of any of the Security Documents, protect and preserve all
properties useful in and material to its business, including copyrights,
patents, trade names, service marks and trademarks; maintain in good working
order and condition all buildings, equipment and other tangible real and
personal property; and from time to time make or cause to be made all renewals,
replacements and additions to such property necessary for the conduct of its
business, so that the business carried on in connection therewith may be
properly and advantageously conducted at all times.
SECTION 9.3 Insurance. Maintain insurance with financially sound
and reputable insurance companies against such risks and in such amounts as are
customarily maintained by similar businesses and as may be required by
Applicable Law and as are required by any Security Documents, and on the Closing
Date and from time to time thereafter deliver to the Administrative Agent upon
its request a detailed list of the insurance then in effect, stating the names
of the insurance companies, the amounts and rates of the insurance, the dates of
the expiration thereof and the properties and risks covered thereby.
SECTION 9.4 Accounting Methods and Financial Records. Maintain a
system of accounting, and keep such books, records and accounts (which shall be
true and complete in all material respects) as may be required or as may be
necessary to permit the preparation of financial statements in accordance with
GAAP and in compliance with the regulations of any Governmental Authority having
jurisdiction over it or any of its properties.
SECTION 9.5 Payment and Performance of Obligations. Pay and
perform all Obligations under this Agreement and the other Loan Documents, and
pay or perform (a) all taxes, assessments and other governmental charges that
may be levied or assessed upon it or any of its property, and (b) all other
indebtedness, obligations and liabilities in accordance with customary trade
practices; provided, that the Borrower or such Subsidiary may contest any item
described in clauses (a) or (b) of this Section 9.5 in good faith so long as
adequate reserves are maintained with respect thereto in accordance with GAAP.
58
SECTION 9.6 Compliance With Laws and Approvals. Observe and
remain in compliance in all material respects with all Applicable Laws and
maintain in full force and effect all Governmental Approvals, in each case
applicable to the conduct of its business.
SECTION 9.7 Environmental Laws. In addition to and without
limiting the generality of Section 9.6, (a) comply with, and ensure such
compliance by all tenants and subtenants with all applicable Environmental Laws
and obtain and comply with and maintain, and ensure that all tenants and
subtenants, if any, obtain and comply with and maintain, any and all licenses,
approvals, notifications, registrations or permits required by applicable
Environmental Laws, (b) conduct and complete all investigations, studies,
sampling and testing, and all remedial, removal and other actions required under
Environmental Laws, and promptly comply with all lawful orders and directives of
any Governmental Authority regarding Environmental Laws, and (c) defend,
indemnify and hold harmless the Administrative Agent and the Lenders, and their
respective parents, Subsidiaries, Affiliates, employees, agents, officers and
directors, from and against any claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or nature known or
unknown, contingent or otherwise, arising out of, or in any way relating to the
presence of Hazardous Materials, or the violation of, noncompliance with or
liability under any Environmental Laws applicable to the operations of the
Borrower or any such Subsidiary, or any orders, requirements or demands of
Governmental Authorities related thereto, including, without limitation,
reasonable attorney's and consultant's fees, investigation and laboratory fees,
response costs, court costs and litigation expenses, except to the extent that
any of the foregoing directly result from the gross negligence or willful
misconduct of the party seeking indemnification therefor.
SECTION 9.8 Compliance with ERISA. In addition to and without
limiting the generality of Section 9.6, (a) comply with all applicable
provisions of ERISA and the regulations and published interpretations thereunder
with respect to all Employee Benefit Plans in all material respects, (b) not
take any action or fail to take action the result of which could be (i) a
liability to the PBGC or (ii) a past due liability to any Multiemployer Plan,
(c) not participate in any prohibited transaction that could result in any civil
penalty under ERISA or tax under the Code, (d) operate each Employee Benefit
Plan in such a manner that will not incur any tax liability under Section 4980B
of the Code or any liability to any qualified beneficiary as defined in Section
4980B of the Code except to the extent such failure to comply could not
reasonably be expected to have a Material Adverse Effect and (e) furnish to the
Administrative Agent upon the Administrative Agent's request such additional
information about any Employee Benefit Plan as may be reasonably requested by
the Administrative Agent.
SECTION 9.9 Compliance With Agreements. Comply in all respects
with each material term, condition and provision of all leases, agreements and
other instruments entered into in the conduct of its business including, without
limitation, any Material Contract; provided, that the Borrower or any such
Subsidiary may contest any such lease, agreement or other instrument in good
faith through applicable proceedings so long as adequate reserves are maintained
in accordance with GAAP.
59
SECTION 9.10 Visits and Inspections. Except to the extent that
Borrower is advised by the U.S. Government that the following would result in a
breach of any national security requirements under agreements with the U.S.
Government, at reasonable times and upon reasonable notice (provided that no
such notice shall be required if a Default or Event of Default shall have
occurred and be continuing), permit representatives of the Administrative Agent
or any Lender, from time to time, to visit and inspect its properties; inspect,
audit and make extracts from its books, records and files, including, but not
limited to, management letters prepared by independent accountants; and discuss
with its principal officers, and its independent accountants, its business,
assets, liabilities, financial condition, results of operations and business
prospects.
SECTION 9.11 Additional Subsidiaries. Within thirty (30) Business
Days after any Subsidiary of the Borrower, which is created or acquired after
the Closing Date, engages in any business operations or owns assets with a fair
market value in excess of $50,000, cause to be executed and delivered to the
Administrative Agent (i) duly executed Collateral Agreements and Guaranty
Agreements (or joinders thereto), (ii) such other instruments and documents and
other items of the type required to be delivered pursuant to Section 6.2(c), all
in form and substance reasonably satisfactory to the Administrative Agent, as
may be required by the Administrative Agent to obtain a first priority perfected
security interest in all personal property of such Subsidiary (subject to
Permitted Liens); provided that if such Subsidiary is a Foreign Subsidiary of
the Borrower, (a) such Foreign Subsidiary shall not be required to execute or
join the Collateral Agreement or the Guaranty Agreement, or to otherwise
guaranty the Obligations hereunder, and (b) the Borrower shall pledge to the
Administrative Agent no more than sixty-five percent (65%) (or such greater
percentage which would not result in material adverse tax consequences to the
Borrower) of the capital stock or other equity interests of such Foreign
Subsidiary; and (iii) favorable legal opinions addressed to the Administrative
Agent and Lenders in form and substance reasonably satisfactory thereto with
respect to such Collateral Agreements and Guaranty Agreements (or joinders
thereto) and such other documents and closing certificates as may be requested
by the Administrative Agent. The Borrower shall notify the Administrative Agent,
within ten (10) Business Days after the occurrence thereof, of the acquisition
of any property by the Borrower or any Subsidiary that is of the same type and
character of the Collateral subject to any Security Document, but that is not
subject to the existing Security Documents (including pursuant to any
after-acquired property provisions thereof), any Person's becoming a Subsidiary
and any other event or condition that may require additional action of any
nature in order to preserve the effectiveness and perfected status of the liens
and security interests of the Lenders and the Administrative Agent with respect
to such property pursuant to the Security Documents.
SECTION 9.12 Use of Proceeds. The Borrower shall use the proceeds
of the Advances (a) to finance the acquisition of Capital Assets by the Borrower
and its Subsidiaries in the ordinary course of business, (b) to refinance all
Debt outstanding under the Existing Credit Agreement, as contemplated by Section
6.2 and any other Debt outstanding immediately prior to the Closing Date, and
(c) for working capital and general corporate requirements of the Borrower and
its Subsidiaries, including Permitted Acquisitions, and the payment of certain
fees and expenses incurred in connection with the transactions contemplated by
this Agreement and the other Loan Documents.
SECTION 9.13 Intercompany Loans; Dividends by Pacific Sierra.
60
(a) Intercompany Loans. In the event that the Borrower or any of
the Subsidiaries incurs any Debt for borrowed money to any other Subsidiary or
to the Borrower and such Debt is evidenced by one or more promissory notes, the
Borrower or such Subsidiary, as the case may be, shall execute and deliver a
subordination agreement in favor of the Administrative Agent and the Lenders,
subordinating such Debt to the Debt of the Borrower and the Subsidiaries to the
Administrative Agent and the Lenders under this Agreement, in substantially the
form of Exhibit K, and shall deliver the originals of such promissory notes to
the Administrative Agent as additional security under the Security Documents.
(b) Dividends by Pacific Sierra. As soon as practicable and in any
event within forty-five (45) days following the receipt by Pacific Sierra of any
revenue, cause Pacific Sierra to declare and make a dividend or distribution in
an amount equal to the sum of (a) the amount of such revenue less (b) the amount
or all ordinary course corporate overhead and operating expenses of Pacific
Sierra.
SECTION 9.14 Assignment of Federal Claims. At the request of the
Administrative Agent or the Required Lenders at any time and from time to time
after the occurrence and during the continuation of a Default or an Event of
Default, the Borrower shall deliver to the Administrative Agent the Assignments
of Federal Claims with respect to any contract with or account receivable
payable by the U.S. Government.
SECTION 9.15 Maintenance of Debt Rating. Maintain the rating of
senior secured Debt of the Borrower from each of Standard & Poor's Ratings
Service, a division of The XxXxxx-Xxxx Companies, Inc. and Xxxxx'x Investors
Service, Inc. that is in existence on the Closing Date.
SECTION 9.16 Further Assurances. Make, execute and deliver all
such additional and further acts, things, deeds and instruments as the
Administrative Agent or any Lender may reasonably require to document and
consummate the transactions contemplated hereby and to vest completely in and
insure the Administrative Agent and the Lenders their respective rights under
this Agreement, the Notes, the Letters of Credit and the other Loan Documents.
ARTICLE X
FINANCIAL COVENANTS
Until all of the Obligations have been paid and satisfied in full and
the Commitments terminated, unless consent has been obtained in the manner set
forth in Section 14.11, the Borrower and its Subsidiaries on a Consolidated
basis will not:
SECTION 10.1 Total Leverage Ratio. As of the fiscal quarter ending
on September 30, 2002 and thereafter as of any fiscal quarter end during any
period set forth below, permit the ratio (the "Total Leverage Ratio") of (a) the
sum of (i) Total Debt as of such date less (ii) an amount, not to exceed
$2,000,000, of cash and Cash Equivalents of the Borrower and its Subsidiaries
which is available for immediate application to repay Obligations without any
restrictions as of such date to (b) Adjusted EBITDA for the period of four (4)
consecutive fiscal quarters ending on such date to be greater than the
corresponding ratio set forth below:
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Period Ratio
------ -----
September 30, 2002 through December 31, 2002 3.00 to 1.00
January 1, 2003 through September 30, 2003 2.75 to 1.00
Thereafter 2.50 to 1.00
SECTION 10.2 Fixed Charge Coverage Ratio. As of the fiscal quarter
ending on September 30, 2002 and thereafter as of any fiscal quarter end during
any period set forth below, permit the ratio of (a) Adjusted EBITDA for the
period of four (4) consecutive fiscal quarters ending on such date to (b) the
sum of (i) Interest Expense paid in cash, (ii) cash taxes, (iii) actual
scheduled principal payments with respect to Debt made after the Closing Date,
and (iv) Capital Expenditures, in each case for the period of four (4)
consecutive fiscal quarters ending on such date to be less than the
corresponding ratio set forth below:
Period Ratio
------ -----
September 30, 2002 1.20 to 1.00
October 1, 2002 through December 31, 2003 1.25 to 1.00
January 1, 2004 through December 31, 2004 1.30 to 1.00
January 1, 2005 through December 31, 2006 1.35 to 1.00
Thereafter 1.25 to 1.00
provided that, for the purposes of this Section 10.2 only, Interest Expense
(including Interest Expense used in the calculation of Adjusted EBITDA) shall be
calculated as follows: (i) for the one fiscal quarter period ending September
30, 2002, Interest Expense shall be calculated by multiplying the actual amount
of Interest Expense for such fiscal quarter by four (4), (ii) for the two fiscal
quarter period ending December 31, 2002, Interest Expense shall be calculated by
multiplying the actual amount of Interest Expense for such two (2) fiscal
quarters by two (2) and (iii) for the three fiscal quarter period ending March
31, 2003, Interest Expense shall be calculated by multiplying the actual amount
of Interest Expense for such three (3) fiscal quarters by four-thirds (4/3).
SECTION 10.3 Capital Expenditures. Permit Capital Expenditures to
exceed during the periods set forth below the corresponding number set forth
below:
Fiscal Year Maximum Capital Expenditure
----------- ---------------------------
2002 $18,500,000
2003 $20,000,000
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2004 $21,000,000
2005 $24,000,000
2006 $26,000,000
2007 $26,000,000
SECTION 10.4 Minimum Adjusted EBITDA. As of the fiscal quarter
ending on September 30, 2002 and thereafter as of any fiscal quarter end during
any period set forth below, permit Adjusted EBITDA for the four (4) consecutive
fiscal quarters ending on such date to be less than the sum of (a) the
corresponding amount set forth below plus (b) an amount equal to eighty-five
percent (85%) of the aggregate amount of all Permitted Acquisition EBITDA
(determined with respect to any Permitted Acquisition on the closing date of
such Permitted Acquisition for the immediately preceding four (4) fiscal quarter
period) for such corresponding period and all periods subsequent thereto:
Period Minimum Adjusted EBITDA
------ -----------------------
September 30, 2002 $54,000,000
October 1, 2002 through December 31, 2002 $56,000,000
January 1, 2003 through June 30, 2003 $57,000,000
July 1, 2003 through December 31, 2003 $58,000,000
January 1, 2004 through December 31, 2004 $60,000,000
Thereafter $65,000,000
Following any Permitted Acquisition, this table shall be revised to reflect the
adjustment of the Minimum Adjusted EBITDA amounts in accordance with clause (b)
above.
SECTION 10.5 Asset Coverage Ratio. As of the end of each calendar
month during any period set forth below, permit the ratio (the "Asset Coverage
Ratio") of (a) the net book value of Accounts Receivable (determined in
accordance with GAAP) to (b) Senior Debt to be less than the corresponding ratio
set forth below for such date of calculation:
Period Ratio
------ -----
Closing Date through September 30, 2002 1.00 to 1.00
October 1, 2002 through March 31, 2003 1.05 to 1.00
April 1, 2003 through June 30, 2003 1.10 to 1.00
July 1, 2003 through December 31, 2003 1.15 to 1.00
January 1, 2004 through December 31, 2004 1.20 to 1.00
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Thereafter 1.25 to 1.00
ARTICLE XI
NEGATIVE COVENANTS
Until all of the Obligations have been paid and satisfied in full and
the Commitments terminated, unless consent has been obtained in the manner set
forth in Section 14.11, the Borrower has not and will not permit any of its
Subsidiaries to:
SECTION 11.1 Limitations on Debt. Create, incur, assume or suffer
to exist any Debt except:
(a) the Obligations (excluding Hedging Agreements permitted
pursuant to Section 11.1(c));
(b) Subordinated Debt of the Borrower approved in writing by the
Required Lenders prior to issuance thereof;
(c) Debt incurred in connection with a Hedging Agreement with a
counterparty and upon terms and conditions (including interest rate) reasonably
satisfactory to the Administrative Agent; provided, that any counterparty that
is a Lender shall be deemed satisfactory to the Administrative Agent;
(d) Debt existing on the Closing Date and not otherwise permitted
under this Section 11.1, as set forth on Schedule 7.1(t) or shown on the
financial statements for the period ended March 31, 2002 delivered to the
Administrative Agent pursuant to Section 7.1(o), and the renewal and refinancing
(but not the increase in the aggregate principal amount) thereof;
(e) Debt of the Borrower and its Subsidiaries (excluding Pacific
Sierra) incurred in connection with Capital Leases in an aggregate amount not to
exceed $10,000,000 at any time;
(f) purchase money Debt of the Borrower and its Subsidiaries
(excluding Pacific Sierra) in an aggregate amount not to exceed $5,000,000 at
any time;
(g) Guaranty Obligations in favor of the Administrative Agent for
the benefit of the Administrative Agent and the Lenders;
(h) Guaranty Obligations with respect to Debt permitted pursuant
to subsections (a) through (e) of this Section 11.1; and
(i) Indebtedness of the Borrower or any Subsidiary of the Borrower
owing to the Borrower or to any Subsidiary(excluding Pacific Sierra); provided
that both the creditor and the debtor in such transaction have executed a
subordination agreement substantially in the form of Exhibit K hereto;
64
provided, that no agreement or instrument with respect to Debt permitted to be
incurred by this Section shall restrict, limit or otherwise encumber (by
covenant or otherwise) the ability of any Subsidiary of the Borrower to make any
payment to the Borrower or any of its Subsidiaries (in the form of dividends,
intercompany advances or otherwise) for the purpose of enabling the Borrower to
pay the Obligations.
SECTION 11.2 Limitations on Liens. Create, incur, assume or suffer
to exist, any Lien on or with respect to any of its assets or properties
(including without limitation shares of capital stock or other ownership
interests), real or personal, whether now owned or hereafter acquired, except
the following (collectively, "Permitted Liens"):
(a) Liens for taxes, assessments and other governmental charges or
levies (excluding any Lien imposed pursuant to any of the provisions of ERISA or
Environmental Laws) (i) not yet due or (ii) as to which the period of grace (not
to exceed thirty (30) days), if any, related thereto has not expired or (iii)
which are being contested in good faith by appropriate proceedings and for which
adequate reserves have been established in accordance with GAAP;
(b) Liens (other than any Lien imposed by ERISA or any
Environmental Law) created and maintained in the ordinary course of business
which would not reasonably be expected to have a Material Adverse Effect on the
business or operations of the Borrower and its Subsidiaries, taken as a whole,
and which constitute (A) pledges or deposits under worker's compensation laws,
unemployment insurance laws or similar legislation, (B) good faith deposits in
connection with bids, tenders, contracts or leases to which the Borrower or any
of its Subsidiaries is a party for a purpose other than borrowing money or
obtaining credit, including rent security deposits, (C) Liens imposed by law,
such as those of carriers, warehousemen and mechanics, if payment of the
obligation secured thereby is not yet due, (D) Liens securing taxes, assessments
or other governmental charges or levies not yet subject to penalties for
nonpayment, and (E) pledges or deposits to secure public or statutory
obligations of the Borrower or any of its Subsidiaries;
(c) Liens affecting real property which constitute minor survey
exceptions or defects or irregularities in title, minor encumbrances, easements
or reservations of, or rights of others for, rights-of-way, sewers, electric
lines, telephone lines and other similar purposes, or zoning or other
restrictions as to the use of such real property, provided that all of the
foregoing, in the aggregate, do not at any time materially detract from the
value of said properties or materially impair their use in the operation of the
businesses of the Borrower or any of its Subsidiaries;
(d) Liens of the Administrative Agent for the benefit of the
Administrative Agent and the Lenders;
(e) Liens not otherwise permitted by this Section 11.2 and in
existence on the Closing Date and described on Schedule 11.2; provided that each
Lien described in Section 11.2 hereto may be suffered to exist upon the same
terms as those existing on the date hereof, but no extension or renewal thereof
which would result in a Default or an Event of Default hereunder shall be
permitted; and
65
(f) Liens not affecting real property securing Debt permitted
under Sections 11.1(e) and (f); provided that (i) such Liens shall be created
within six (6) months of the acquisition or lease of the related asset, (ii)
such Liens do not at any time encumber any property other than the property
financed by such Debt, (iii) the amount of Debt secured thereby is not increased
and (iv) the principal amount of Debt secured by any such Lien shall at no time
exceed one hundred percent (100%) of the original purchase price or lease
payment amount of such property at the time it was acquired.
SECTION 11.3 Limitations on Loans, Advances, Investments and
Acquisitions. Purchase, own, invest in or otherwise acquire, directly or
indirectly, any capital stock, interests in any partnership or joint venture
(including without limitation the creation or capitalization of any Subsidiary),
evidence of Debt or other obligation or security, substantially all or a portion
of the business or assets of any other Person or any other investment or
interest whatsoever in any other Person, or make or permit to exist, directly or
indirectly, any loans, advances or Advances to, or any investment in cash or by
delivery of property in, any Person except:
(a) investments, loans and advances (i) in Subsidiaries which such
Subsidiaries are in existence on the Closing Date, and which comply with the
terms of Section 11.1, if applicable; provided that neither the Borrower, nor
any Subsidiary thereof, shall make any new investments, loans or advances in or
to Pacific Sierra after the Closing Date, (ii) in Subsidiaries formed or
acquired after the Closing Date so long as the Borrower and its Subsidiaries
comply with the applicable provisions of Section 9.11 and Section 11.3(e), as
applicable, and (iii) the other loans, advances and investments described on
Schedule 11.3 existing on the Closing Date;
(b) investments in promissory notes from officers or employees of
the Borrower or a Subsidiary for stock issued to such officers or employees
pursuant to the Stock Incentive Plan;
(c) investments in (i) marketable direct obligations issued or
unconditionally guaranteed by the United States of America or any agency thereof
maturing within one hundred twenty (120) days from the date of acquisition
thereof, (ii) commercial paper maturing no more than one hundred twenty (120)
days from the date of creation thereof and currently having the highest rating
obtainable from either Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc. or Xxxxx'x Investors Service, Inc., (iii)
certificates of deposit maturing no more than one hundred twenty (120) days from
the date of creation thereof issued by commercial banks incorporated under the
laws of the United States, each having combined capital, surplus and undivided
profits of not less than $500,000,000 and having a rating of "A" or better by a
nationally recognized rating agency; provided, that the aggregate amount
invested in such certificates of deposit shall not at any time exceed $5,000,000
for any one such certificate of deposit and $10,000,000 for any one such bank,
or (iv) time deposits maturing no more than thirty (30) days from the date of
creation thereof with commercial banks or savings banks or savings and loan
associations each having membership either in the FDIC or the deposits of which
are insured by the FDIC and in amounts not exceeding the maximum amounts of
insurance thereunder, all of the foregoing investments, "Cash Equivalents";
(d) loans and advances to officers and employees not otherwise
permitted pursuant to Section 11.3(c) in the ordinary course of business as part
of a compensation package or for business
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expenses (excluding travel and related expenses) in an aggregate outstanding
amount not to exceed (i) $100,000 per person or (ii) $1,000,000, at any time;
and
(e) investments by the Borrower or any of its Subsidiaries in the
form of acquisitions of all or substantially all of the business or a line of
business (whether by the acquisition of capital stock, assets or any combination
thereof) of any other Person if the Borrower and its Subsidiaries promptly
comply with Section 9.11 hereof (each, a "Permitted Acquisition"); provided
that:
(i) the Person to be acquired shall be a going concern,
engaged in a business, or the assets to be acquired shall be used in a
business, similar or complimentary to the line of business of the
Borrower and its Subsidiaries, and such acquisition shall have been
approved by the board of directors or equivalent governing body (or the
shareholders) of the seller and/or the Person to be acquired;
(ii) the Borrower or its Subsidiary, as applicable, shall
be the surviving Person and no Change in Control shall have been
effected thereby;
(iii) the Borrower or its Subsidiary, as applicable, is in
compliance with the covenants contained in Article X after giving
effect to such acquisition;
(iv) no Default or Event of Default shall have occurred
and be continuing both before and after giving effect to the
acquisition;
(v) the Borrower shall demonstrate, to the reasonable
satisfaction of the Administrative Agent (A) pro forma compliance with
the covenants contained in Sections 10.1, 10.2, 10.4 and 10.5 after
giving effect to the proposed acquisition, and (B) the sum of (I) Total
Leverage Ratio, after giving effect to the acquisition on a pro forma
basis plus (II) an additional margin ratio of 0.25 to 1.0 does not
exceed the maximum Total Leverage Ratio then permitted pursuant to
Section 10.1;
(vi) the Borrower shall have delivered written notice of
such proposed acquisition to the Administrative Agent, which notice
shall include the proposed closing date of the acquisition, not less
than thirty (30) calendar days prior to such proposed closing date;
(vii) to the extent requested by the Administrative Agent,
the Borrower shall have delivered to the Administrative Agent copies of
(A) the Permitted Acquisition Documents, which shall be in form and
substance reasonably satisfactory to the Administrative Agent and shall
be delivered to the Administrative Agent promptly upon the finalization
thereof and (B) the Permitted Acquisition Diligence Information, which
shall be in form and substance reasonably satisfactory to the
Administrative Agent, not less than fifteen (15) calendar days prior to
the proposed closing date of such acquisition;
(viii) the Borrower shall have obtained the prior written
consent of the Required Lenders prior to the consummation of any
acquisition, or series of related acquisitions, if (A) the aggregate
cash consideration to be paid in connection with such proposed
acquisition or series of related acquisitions would exceed $25,000,000
in the aggregate
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during the term of the Credit Facility, or (B) if the aggregate total
consideration to be paid in connection with such proposed acquisition
or series of related acquisitions would exceed $50,000,000 during the
term of the Credit Facility;
(ix) the Borrower shall have at least $15,000,000 in
availability under the Revolving Credit Facility after giving effect to
the proposed acquisition;
(x) the Person to be acquired shall demonstrate positive
EBITDA for the most recent two (2) year period then ended, both prior
to the acquisition and after giving effect thereto, by providing the
Administrative Agent and Lenders copies of the most recent financial
statements and projections, all in form and substance reasonably
satisfactory to the Administrative Agent and Lenders; and
(xi) prior to the closing of the proposed acquisition, the
Borrower shall have identified all requested Permitted Acquisition
EBITDA Adjustments to the Administrative Agent in writing, and the
Administrative Agent shall have approved, in its sole discretion, any
such requested Permitted Acquisition EBITDA Adjustments, in connection
with such Permitted Acquisition; provided that such Permitted
Acquisition EBITDA Adjustments must not exceed twenty percent (20%) of
the acquisition target's actual EBITDA for the twelve (12) months prior
to the acquisition.
(f) Hedging Agreements permitted pursuant to Section 11.1.
SECTION 11.4 Limitations on Mergers and Liquidation. Merge,
consolidate or enter into any similar combination with any other Person or
liquidate, wind-up or dissolve itself (or suffer any liquidation or dissolution)
except:
(a) any Subsidiary of the Borrower may merge into the Borrower or
into any Wholly-Owned Subsidiary (excluding Pacific Sierra and Veritect) of the
Borrower; provided that in any merger involving the Borrower, the Borrower shall
be the surviving entity;
(b) any Wholly-Owned Subsidiary of the Borrower may merge with or
into another Person in connection with an acquisition permitted by Section
11.3(e); provided that if such Person is the surviving entity of such merger,
such Person shall become a Wholly-Owned Subsidiary and the Borrower and such
Person comply with Section 9.11; and
(c) any Subsidiary of the Borrower may wind-up into the Borrower
or any Wholly-Owned Subsidiary (excluding Pacific Sierra and Veritect) of the
Borrower.
SECTION 11.5 Limitations on Sale of Assets. Convey, sell, lease,
assign, transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, the sale of any receivables and leasehold
interests and any sale-leaseback or similar transaction), whether now owned or
hereafter acquired except:
(a) the sale of inventory in the ordinary course of business;
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(b) the sale of obsolete assets no longer used or usable in the
business of the Borrower or any of its Subsidiaries;
(c) the transfer of assets to the Borrower or any Subsidiary
(excluding Pacific Sierra and Veritect) of the Borrower in the ordinary course
of business or pursuant to Section 11.4(c);
(d) the sale or discount without recourse of Accounts Receivable
arising in the ordinary course of business in connection with the compromise or
collection thereof;
(e) the Permitted Veritect Divestiture;
(f) so long as no Default or Event of Default has occurred and is
continuing or would result therefrom, the sale of other assets in an aggregate
amount not to exceed $5,000,000 in any Fiscal Year; and
(g) the disposition of any Hedging Agreement.
SECTION 11.6 Limitations on Dividends and Distributions. Declare
or pay any dividends upon any of its capital stock; purchase, redeem, retire or
otherwise acquire, directly or indirectly, any shares of its capital stock, or
make any distribution of cash, property or assets among the holders of shares of
its capital stock, or make any change in its capital structure; provided that:
(a) the Borrower or any Subsidiary may pay dividends in shares of
its own capital stock;
(b) any Subsidiary may pay cash dividends to the Borrower; and
(c) the Borrower may repurchase or redeem any shares of its
capital stock (i) issued pursuant to the Stock Incentive Plan in accordance with
the terms thereof as in effect on the date hereof and (ii) as otherwise may be
permitted pursuant to a share repurchase plan duly adopted by the Borrower's
board of directors; provided that the aggregate amount of all shares repurchased
pursuant to this clause (ii) shall not exceed $2,500,000 in any Fiscal Year and
$5,000,000 in the aggregate during the term hereof.
SECTION 11.7 Limitations on Exchange and Issuance of Capital
Stock. Issue, sell or otherwise dispose of any class or series of capital stock
that, by its terms or by the terms of any security into which it is convertible
or exchangeable, is, or upon the happening of an event or passage of time would
be, (a) convertible or exchangeable into Debt or (b) required to be redeemed or
repurchased, including at the option of the holder, in whole or in part, or has,
or upon the happening of an event or passage of time would have, a redemption or
similar payment due.
SECTION 11.8 Transactions with Affiliates. Except for transactions
permitted by Sections 11.3, 11.6 and 11.7, and those transactions existing on
the Closing Date and identified on Schedule 11.8, directly or indirectly (a)
make any loan or advance to, or purchase or assume any note or other obligation
to or from, any of its officers, directors, shareholders or other Affiliates, or
to or from any member of the immediate family of any of its officers, directors,
shareholders or other Affiliates, or subcontract any operations to any of its
Affiliates or (b) enter into, or be a party to, any other transaction not
described in clause (a) above with any of its Affiliates, except (i)
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pursuant to the Stock Incentive Plan, (ii) loans and advances permitted under
Section 11.3(d), (iii) so long as no Default or Event of Default shall have
occurred and be continuing, payment of a management, consulting or other similar
fee to any Affiliates of the Borrower in an amount not to exceed $500,000 in any
Fiscal Year, and (iv) pursuant to the reasonable requirements of its business
and upon fair and reasonable terms that are fully disclosed to the Lenders prior
to the consummation thereof and are no less favorable to it than it would obtain
in a comparable arm's length transaction with a Person not its Affiliate.
SECTION 11.9 Certain Accounting Changes; Organizational Documents.
(a) Change its Fiscal Year end, or make any change in its accounting treatment
and reporting practices except as required or permitted by GAAP or (b) amend,
modify or change its articles of incorporation (or corporate charter or other
similar organizational documents) or amend, modify or change its bylaws (or
other similar documents), in each case, in any manner adverse in any respect to
the rights or interests of the Lenders.
SECTION 11.10 Amendments; Payments and Prepayments of Subordinated
Debt. Amend or modify (or permit the modification or amendment of) any of the
terms or provisions of any documents or agreements evidencing any Subordinated
Debt in any manner which would result in any such terms or provisions being more
restrictive to the Borrower or any Subsidiary, as determined by the
Administrative Agent in its reasonable judgment, or cancel or forgive, make any
required or voluntary or optional payment or prepayment on, or redeem or acquire
for value (including without limitation by way of depositing with any trustee
with respect thereto money or securities before due for the purpose of paying
when due) any Subordinated Debt.
SECTION 11.11 Restrictive Agreements.
(a) Enter into any Debt which (i) contains any negative pledge on
assets, (ii) contains any covenants more restrictive than the provisions of
Articles IX, X and XI hereof, or (iii) restricts, limits or otherwise encumbers
its ability to incur Liens on or with respect to any of its assets or properties
other than, in each case, in respect of the assets or properties securing such
Debt.
(b) Enter into or permit to exist any agreement which impairs or
limits the ability of any Subsidiary of the Borrower to pay dividends to the
Borrower.
SECTION 11.12 Nature of Business. Alter in any material respect the
character or conduct of the business conducted by the Borrower and its
Subsidiaries, taken as a whole, as of the Closing Date.
SECTION 11.13 Impairment of Security Interests. Take or omit to
take any action, which might or would have the result of materially impairing
the security interests in favor of the Administrative Agent with respect to the
Collateral or grant to any Person (other than the Administrative Agent for the
benefit of itself and the Lenders pursuant to the Security Documents) any
interest whatsoever in the Collateral, except for Liens permitted under Section
11.2 and asset sales permitted under Section 11.5.
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ARTICLE XII
DEFAULT AND REMEDIES
SECTION 12.1 Events of Default. Each of the following shall
constitute an Event of Default, whatever the reason for such event and whether
it shall be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment or order of any court or any order, rule or regulation
of any Governmental Authority or otherwise:
(a) Default in Payment of Principal of Loans and Reimbursement
Obligations. The Borrower shall default in any payment of principal of any Loan,
Note or Reimbursement Obligation when and as due (whether at maturity, by reason
of acceleration or otherwise).
(b) Other Payment Default. The Borrower shall default in the
payment when and as due (whether at maturity, by reason of acceleration or
otherwise) of interest on any Loan, Note or Reimbursement Obligation or the
payment of any other Obligation and such default shall continue for a period of
three (3) Business Days.
(c) Misrepresentation. Any representation or warranty made or
deemed to be made by the Borrower or any of its Subsidiaries under this
Agreement, any other Loan Document or any amendment hereto or thereto, shall at
any time prove to have been incorrect or misleading in any material respect when
made or deemed made.
(d) Default in Performance of Certain Covenants. The Borrower or
any Subsidiary shall default in the performance or observance of (i) any
covenant or agreement contained in Section 8.5(e)(i) or Articles X or XI of this
Agreement or (ii) any covenant or agreement contained in Sections 8.1 or 8.2 of
this Agreement and, in the case of this clause (ii) only, such default shall
continue for a period of fifteen (15) days.
(e) Default in Performance of Other Covenants and Conditions. The
Borrower or any Subsidiary thereof shall default in the performance or
observance of any term, covenant, condition or agreement contained in this
Agreement (other than those specifically provided for otherwise in this Section
12.1) or any other Loan Document and such default shall continue for a period of
thirty (30) days after the earlier to occur of (i) the date on which a
Responsible Officer of the Borrower first obtains knowledge of such default or
(ii) the date on which written notice thereof has been given to the Borrower by
the Administrative Agent.
(f) Hedging Agreement. The Borrower shall default in the
performance or observance of any terms, covenant, condition or agreement (after
giving effect to any applicable grace or cure period) under any Hedging
Agreement and such default causes the termination of such Hedging Agreement or
permits any counterparty to such Hedging Agreement to terminate any such Hedging
Agreement.
(g) Debt Cross-Default. The Borrower or any of its Subsidiaries
shall (i) default in the payment of any Debt (other than the Notes or any
Reimbursement Obligation) the aggregate outstanding amount of which Debt is in
excess of $1,000,000 beyond the period of grace, if any, provided in the
instrument or agreement under which such Debt was created, or (ii) default in
the
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observance or performance of any other agreement or condition relating to any
Debt (other than the Notes or any Reimbursement Obligation) the aggregate
outstanding amount of which Debt is in excess of $1,000,000 or contained in any
instrument or agreement evidencing, securing or relating thereto or any other
event shall occur or condition exist, the effect of which default or other event
or condition is to cause, or to permit the holder or holders of such Debt (or a
trustee or agent on behalf of such holder or holders) to cause, with the giving
of notice if required, any such Debt to become due prior to its stated maturity
(any applicable grace period having expired).
(h) Veritect. The aggregate amount of all Veritect Discontinued
Operations Charges accrued after the Closing Date exceeds $4,000,000.
(i) Change in Control. Any person or group of persons (within the
meaning of Section 13(d) of the Exchange Act, as amended) shall obtain ownership
or control in one or more series of transactions of more than thirty percent
(30%) of the common stock or thirty percent (30%) of the voting power of the
Borrower entitled to vote in the election of members of the board of directors
of the Borrower or there shall have occurred under any indenture or other
instrument evidencing any Debt in excess of $1,000,000 any "change in control"
(as defined in such indenture or other evidence of Debt) obligating the Borrower
to repurchase, redeem or repay all or any part of the Debt or capital stock
provided for therein (any such event, a "Change in Control").
(j) Voluntary Bankruptcy Proceeding. The Borrower or any
Subsidiary thereof shall (i) commence a voluntary case under the federal
bankruptcy laws (as now or hereafter in effect), (ii) file a petition seeking to
take advantage of any other laws, domestic or foreign, relating to bankruptcy,
insolvency, reorganization, winding up or composition for adjustment of debts,
(iii) consent to or fail to contest in a timely and appropriate manner any
petition filed against it in an involuntary case under such bankruptcy laws or
other laws, (iv) apply for or consent to, or fail to contest in a timely and
appropriate manner, the appointment of, or the taking of possession by, a
receiver, custodian, trustee, or liquidator of itself or of a substantial part
of its property, domestic or foreign, (v) admit in writing its inability to pay
its debts as they become due, (vi) make a general assignment for the benefit of
creditors, or (vii) take any corporate action for the purpose of authorizing any
of the foregoing.
(k) Involuntary Bankruptcy Proceeding. A case or other proceeding
shall be commenced against the Borrower or any Subsidiary thereof in any court
of competent jurisdiction seeking (i) relief under the federal bankruptcy laws
(as now or hereafter in effect) or under any other laws, domestic or foreign,
relating to bankruptcy, insolvency, reorganization, winding up or adjustment of
debts, or (ii) the appointment of a trustee, receiver, custodian, liquidator or
the like for the Borrower or any Subsidiary thereof or for all or any
substantial part of their respective assets, domestic or foreign, and such case
or proceeding shall continue without dismissal or stay for a period of sixty
(60) consecutive days, or an order granting the relief requested in such case or
proceeding (including, but not limited to, an order for relief under such
federal bankruptcy laws) shall be entered.
(l) Failure of Agreements. Any provision of this Agreement or any
provision of any other Loan Document shall for any reason cease to be valid and
binding on the Borrower or Subsidiary party thereto or any such Person shall so
state in writing, or any Loan Document shall
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for any reason cease to create a valid and perfected first priority Lien on, or
security interest in, any of the collateral purported to be covered thereby, in
each case other than in accordance with the express terms hereof or thereof.
(m) Termination Event. The occurrence of any of the following
events: (i) the Borrower or any ERISA Affiliate fails to make full payment when
due of all amounts which, under the provisions of any Pension Plan or Section
412 of the Code, the Borrower or any ERISA Affiliate is required to pay as
contributions thereto, (ii) an accumulated funding deficiency in excess of
$500,000 occurs or exists, whether or not waived, with respect to any Pension
Plan, (iii) a Termination Event or (iv) the Borrower or any ERISA Affiliate as
employers under one or more Multiemployer Plans makes a complete or partial
withdrawal from any such Multiemployer Plan and the plan sponsor of such
Multiemployer Plans notifies such withdrawing employer that such employer has
incurred a withdrawal liability requiring payments in an amount exceeding
$1,000,000.
(n) Judgment. A judgment or order for the payment of money in an
amount of $500,000 for a single occurrence, or $1,000,000 in the aggregate in
any Fiscal Year shall be entered against the Borrower or any of its Subsidiaries
by any court and such judgment or order shall continue without discharge or stay
for a period of thirty (30) days.
(o) Environmental. Any one or more Environmental Claims shall have
been asserted against the Borrower or any of its Subsidiaries; the Borrower and
its Subsidiaries would be reasonable likely to incur liability as a result
thereof; and such liability would be reasonably likely, individually or in the
aggregate, to have a Material Adverse Effect.
(p) Government Contracts. (i) A notice of debarment, notice of
suspension or notice of termination for default shall have been issued under any
contract with the U.S. Government which individually or in the aggregate could
reasonably be expected to have a Material Adverse Effect; (ii) the Borrower or
any Subsidiary is barred or suspended from contracting with any part of the U.S.
Government; (iii) a U.S. Government investigation shall have been commenced in
connection with any contract of the Borrower or of any Subsidiary with the U.S.
Government which could reasonably result in criminal or civil liability,
suspension, debarment or any other adverse administrative action arising by
reason of alleged fraud, willful misconduct, neglect, default or other
wrongdoing which individually or in the aggregate could reasonably be expected
to have a Material Adverse Effect; (iv) the actual termination of any contract
with the U.S. Government due to alleged fraud, willful misconduct, neglect,
default or any other wrongdoing which individually or in the aggregate could
reasonably be expected to have a Material Adverse Effect; or (v) a cure notice
issued under any contract with the U.S. Government shall remain uncured beyond
(A) the expiration of the time period available to the Borrower or any
Subsidiary pursuant to such contract with the U.S. Government and/or such cure
notice, to cure the noticed default, or (B) the date on which the other
contracting party is entitled to exercise its rights and remedies under the
contract with the U.S. Government as a consequence of such default which
individually or in the aggregate could reasonably be expected to have a Material
Adverse Effect.
(q) Permitted Activities of Pacific-Sierra. Pacific-Sierra shall
engage in any business or other activity or possess any material assets or
liabilities other than such activities engaged in or
73
assets and liabilities possessed on the Closing Date and consistent with the
prior business practice of Pacific-Sierra as of the Closing Date.
SECTION 12.2 Remedies. Upon the occurrence of an Event of Default,
with the consent of the Required Lenders, the Administrative Agent may, or upon
the request of the Required Lenders, the Administrative Agent shall, by notice
to the Borrower:
(a) Acceleration; Termination of Facilities. Declare the principal
of and interest on the Loans, the Notes and the Reimbursement Obligations at the
time outstanding, and all other amounts owed to the Lenders and to the
Administrative Agent under this Agreement or any of the other Loan Documents
(including, without limitation, all L/C Obligations, whether or not the
beneficiaries of the then outstanding Letters of Credit shall have presented or
shall be entitled to present the documents required thereunder) and all other
Obligations (other than Hedging Obligations), to be forthwith due and payable,
whereupon the same shall immediately become due and payable without presentment,
demand, protest or other notice of any kind, all of which are expressly waived,
anything in this Agreement or the other Loan Documents to the contrary
notwithstanding, and terminate the Credit Facility and any right of the Borrower
to request borrowings or Letters of Credit thereunder; provided, that upon the
occurrence of an Event of Default specified in Section 12.1(j) or (k), the
Credit Facility shall be automatically terminated and all Obligations (other
than Hedging Obligations) shall automatically become due and payable without
presentment, demand, protest or other notice of any kind, all of which are
expressly waived, anything in this Agreement or in any other Loan Document to
the contrary notwithstanding.
(b) Letters of Credit. With respect to all Letters of Credit with
respect to which presentment for honor shall not have occurred at the time of an
acceleration pursuant to the preceding paragraph, the Borrower shall at such
time deposit in a cash collateral account opened by the Administrative Agent an
amount equal to the aggregate then undrawn and unexpired amount of such Letters
of Credit. Amounts held in such cash collateral account shall be applied by the
Administrative Agent to the payment of drafts drawn under such Letters of
Credit, and the unused portion thereof after all such Letters of Credit shall
have expired or been fully drawn upon, if any, shall be applied to repay the
other Obligations on a pro rata basis. After all such Letters of Credit shall
have expired or been fully drawn upon, the Reimbursement Obligation shall have
been satisfied and all other Obligations shall have been paid in full, the
balance, if any, in such cash collateral account shall be returned to the
Borrower.
(c) Rights of Collection. Exercise on behalf of the Lenders all of
its other rights and remedies under this Agreement, the other Loan Documents and
Applicable Law, in order to satisfy all of the Borrower's Obligations.
SECTION 12.3 Rights and Remedies Cumulative; Non-Waiver; etc. The
enumeration of the rights and remedies of the Administrative Agent and the
Lenders set forth in this Agreement is not intended to be exhaustive and the
exercise by the Administrative Agent and the Lenders of any right or remedy
shall not preclude the exercise of any other rights or remedies, all of which
shall be cumulative, and shall be in addition to any other right or remedy given
hereunder or under the other Loan Documents or that may now or hereafter exist
at law or in equity or by suit or otherwise. No delay or failure to take action
on the part of the Administrative Agent or any Lender in exercising any right,
power or privilege shall operate as a waiver thereof, nor shall any single or
74
partial exercise of any such right, power or privilege preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
or shall be construed to be a waiver of any Event of Default. No course of
dealing between the Borrower, the Administrative Agent and the Lenders or their
respective agents or employees shall be effective to change, modify or discharge
any provision of this Agreement or any of the other Loan Documents or to
constitute a waiver of any Event of Default.
ARTICLE XIII
THE ADMINISTRATIVE AGENT
SECTION 13.1 Appointment. Each of the Lenders hereby irrevocably
designates and appoints Wachovia as Administrative Agent of such Lender under
this Agreement and the other Loan Documents for the term hereof and each such
Lender irrevocably authorizes Wachovia, as Administrative Agent for such Lender,
to take such action on its behalf under the provisions of this Agreement and the
other Loan Documents and to exercise such powers and perform such duties as are
expressly delegated to the Administrative Agent by the terms of this Agreement
and such other Loan Documents, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary elsewhere in
this Agreement or such other Loan Documents, the Administrative Agent shall not
have any duties or responsibilities, except those expressly set forth herein and
therein, or any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or the other Loan Documents or otherwise exist
against the Administrative Agent. Any reference to the Administrative Agent in
this Article XIII shall be deemed to refer to the Administrative Agent solely in
its capacity as Administrative Agent and not in its capacity as a Lender.
SECTION 13.2 Delegation of Duties. The Administrative Agent may
execute any of its respective duties under this Agreement and the other Loan
Documents by or through agents or attorneys-in-fact and shall be entitled to
advice of counsel concerning all matters pertaining to such duties. The
Administrative Agent shall not be responsible for the negligence or misconduct
of any agents or attorneys-in-fact selected by the Administrative Agent with
reasonable care.
SECTION 13.3 Exculpatory Provisions. Neither the Administrative
Agent nor any of its officers, directors, employees, agents, attorneys-in-fact,
Subsidiaries or Affiliates shall be (a) liable for any action lawfully taken or
omitted to be taken by it or such Person under or in connection with this
Agreement or the other Loan Documents (except for actions occasioned solely by
its or such Person's own gross negligence or willful misconduct), or (b)
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by the Borrower or any of its Subsidiaries or
any officer thereof contained in this Agreement or the other Loan Documents or
in any certificate, report, statement or other document referred to or provided
for in, or received by the Administrative Agent under or in connection with,
this Agreement or the other Loan Documents or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
the other Loan Documents or for any failure of the Borrower or any of its
Subsidiaries to perform its obligations hereunder or thereunder. The
Administrative Agent shall not be under any obligation to any Lender to
ascertain or to inquire as to the observance
75
or performance of any of the agreements contained in, or conditions of, this
Agreement, or to inspect the properties, books or records of the Borrower or any
of its Subsidiaries.
SECTION 13.4 Reliance by the Administrative Agent. The
Administrative Agent shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Borrower), independent accountants and other experts
selected by the Administrative Agent. The Administrative Agent may deem and
treat the payee of any Note as the owner thereof for all purposes unless such
Note shall have been transferred in accordance with Section 14.10. The
Administrative Agent shall be fully justified in failing or refusing to take any
action under this Agreement and the other Loan Documents unless it shall first
receive such advice or concurrence of the Required Lenders (or, when expressly
required hereby or by the relevant other Loan Documents, all the Lenders) as it
deems appropriate or it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action except for its own gross
negligence or willful misconduct. The Administrative Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement
and the Notes in accordance with a request of the Required Lenders (or, when
expressly required hereby, all the Lenders), and such request and any action
taken or failure to act pursuant thereto shall be binding upon all the Lenders
and all future holders of the Notes.
SECTION 13.5 Notice of Default. The Administrative Agent shall not
be deemed to have knowledge or notice of the occurrence of any Default or Event
of Default unless it has received notice from a Lender or the Borrower referring
to this Agreement, describing such Default or Event of Default and stating that
such notice is a "notice of default". In the event that the Administrative Agent
receives such a notice, it shall promptly give notice thereof to the Lenders.
The Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Required Lenders (or,
when expressly required hereby, all the Lenders); provided that unless and until
the Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders, except to the extent that
other provisions of this Agreement expressly require that any such action be
taken or not be taken only with the consent and authorization or the request of
the Lenders or Required Lenders, as applicable.
SECTION 13.6 Non-Reliance on the Administrative Agent and Other
Lenders. Each Lender expressly acknowledges that neither the Administrative
Agent nor any of its respective officers, directors, employees, agents,
attorneys-in-fact, Subsidiaries or Affiliates has made any representations or
warranties to it and that no act by the Administrative Agent hereafter taken,
including any review of the affairs of the Borrower or any of its Subsidiaries,
shall be deemed to constitute any representation or warranty by the
Administrative Agent to any Lender. Each Lender represents to the Administrative
Agent that it has, independently and without reliance upon the Administrative
Agent or any other Lender, and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, operations, property, financial and other condition and
creditworthiness of the Borrower and its Subsidiaries
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and made its own decision to make its Loans and issue or participate in Letters
of Credit hereunder and enter into this Agreement. Each Lender also represents
that it will, independently and without reliance upon the Administrative Agent
or any other Lender, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigation as it deems necessary
to inform itself as to the business, operations, property, financial and other
condition and creditworthiness of the Borrower and its Subsidiaries. Except for
notices, reports and other documents expressly required to be furnished to the
Lenders by the Administrative Agent hereunder or by the other Loan Documents,
the Administrative Agent shall not have any duty or responsibility to provide
any Lender with any credit or other information concerning the business,
operations, property, financial and other condition or creditworthiness of the
Borrower or any of its Subsidiaries which may come into the possession of the
Administrative Agent or any of its respective officers, directors, employees,
agents, attorneys-in-fact, Subsidiaries or Affiliates.
SECTION 13.7 Indemnification. The Lenders agree to indemnify the
Administrative Agent in its capacity as such and (to the extent not reimbursed
by the Borrower and without limiting the obligation of the Borrower to do so),
ratably according to the respective amounts of their Revolving Credit Commitment
Percentages or Term Loan Percentages, as applicable, from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever which may at any
time (including, without limitation, at any time following the payment of the
Notes or any Reimbursement Obligation) be imposed on, incurred by or asserted
against the Administrative Agent in any way relating to or arising out of this
Agreement or the other Loan Documents, or any documents, reports or other
information provided to the Administrative Agent or any Lender contemplated by
or referred to herein or therein or the transactions contemplated hereby or
thereby or any action taken or omitted by the Administrative Agent under or in
connection with any of the foregoing; provided that no Lender shall be liable
for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting solely from the Administrative Agent's bad faith, gross negligence or
willful misconduct. The agreements in this Section 13.7 shall survive the
payment of the Notes, any Reimbursement Obligation and all other amounts payable
hereunder and the termination of this Agreement.
SECTION 13.8 The Administrative Agent in Its Individual Capacity.
The Administrative Agent and its respective Subsidiaries and Affiliates may make
loans to, accept deposits from and generally engage in any kind of business with
the Borrower as though the Administrative Agent were not the Administrative
Agent hereunder. With respect to any Loans made or renewed by it and any Note
issued to it and with respect to any Letter of Credit issued by it or
participated in by it, the Administrative Agent shall have the same rights and
powers under this Agreement and the other Loan Documents as any Lender and may
exercise the same as though it were not the Administrative Agent, and the terms
"Lender" and "Lenders" shall include the Administrative Agent in its individual
capacity.
SECTION 13.9 Resignation of the Administrative Agent; Successor
Administrative Agent. Subject to the appointment and acceptance of a successor
as provided below, the Administrative Agent may resign at any time by giving
notice thereof to the Lenders and the Borrower. Upon any such resignation, the
Required Lenders shall have the right to appoint a
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successor Administrative Agent with the consent of the Borrower if such
successor is not a Lender hereunder (provided that such consent shall not be
unreasonably withheld and provided, further, that no such consent shall be
required if a Default or Event of Default shall have occurred and be
continuing), which successor shall have minimum capital and surplus of at least
$500,000,000. If no successor Administrative Agent shall have been so appointed
by the Required Lenders and shall have accepted such appointment within thirty
(30) days after the Administrative Agent's giving of notice of resignation, then
the Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent, which successor shall have minimum capital and surplus of
at least $500,000,000. Upon the acceptance of any appointment as Administrative
Agent hereunder by a successor Administrative Agent, such successor
Administrative Agent shall thereupon succeed to and become vested with all
rights, powers, privileges and duties of the retiring Administrative Agent, and
the retiring Administrative Agent shall be discharged from its duties and
obligations hereunder. After any retiring Administrative Agent's resignation
hereunder as Administrative Agent, the provisions of this Section 13.9 shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as Administrative Agent.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices.
(a) Method of Communication. Except as otherwise provided in this
Agreement, all notices and communications hereunder shall be in writing (for
purposes hereof, the term "writing" shall include information such as electronic
mail), or by telephone subsequently confirmed in writing. Any notice shall be
effective if: (i) delivered by hand delivery (ii) sent via electronic mail,
provided that the party sending such electronic mail does not receive notice
that such electronic mail has failed to reach the Person or Persons to whom such
notice is to be given, (iii) telecopy, (iv) recognized overnight courier service
or (v) certified mail, return receipt requested, and shall be presumed to be
received by a party hereto (a) on the date of delivery if delivered by hand,
sent by electronic mail as provided in (ii) above or telecopy, (b) on the next
Business Day if sent by recognized overnight courier service and (c) on the
third Business Day following the date sent by certified mail, return receipt
requested. A telephonic notice to the Administrative Agent as understood by the
Administrative Agent will be deemed to be the controlling and proper notice in
the event of a discrepancy with or failure to receive a confirming written
notice.
(b) Addresses for Notices. Notices to any party shall be sent to
it at the following addresses, or any other address as to which all the other
parties are notified in writing.
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If to the Borrower: Veridian Corporation
0000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxx X. Xxxxx
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
If to Wachovia as Wachovia Bank, National Association
Administrative Agent: Charlotte Plaza, CP-8
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Syndication Agency Services
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
with a copy to: Portfolio Management
One Wachovia Center, 5th Floor
000 Xxxxx Xxxxxxx Xxxxxx
Mail Code NC 0760
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Xx. Xxxxx Santa Xxxx
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
(c) Administrative Agent's Office. The Administrative Agent hereby
designates its office located at the address set forth above, or any subsequent
office which shall have been specified for such purpose by written notice to the
Borrower and Lenders, as the Administrative Agent's Office referred to herein,
to which payments due are to be made and at which Loans will be disbursed and
Letters of Credit issued.
SECTION 14.2 Expenses; Indemnity. The Borrower will (a) pay all
out-of-pocket expenses (including, without limitation, all costs of electronic
or internet distribution of any information hereunder) of the Administrative
Agent in connection with (i) the preparation, execution and delivery of this
Agreement and each other Loan Document, whenever the same shall be executed and
delivered, including, without limitation, all out-of-pocket syndication and due
diligence expenses and reasonable fees and disbursements of counsel for the
Administrative Agent and (ii) the preparation, execution and delivery of any
waiver, amendment or consent by the Administrative Agent or the Lenders relating
to this Agreement or any other Loan Document, including, without limitation,
reasonable fees and disbursements of counsel for the Administrative Agent, (b)
pay all reasonable out-of-pocket expenses of the Administrative Agent and each
Lender actually incurred in connection with the administration and enforcement
of any rights and remedies of the Administrative Agent and Lenders under the
Credit Facility, including consulting with appraisers, accountants, engineers,
attorneys and other Persons concerning the nature, scope or value of any right
or remedy of the Administrative Agent or any Lender hereunder or under any other
Loan Document or any factual matters in connection therewith, which expenses
shall include without limitation the reasonable fees and disbursements of such
Persons, and (c) defend, indemnify and hold harmless the Administrative Agent
and the Lenders, and their respective parents,
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Subsidiaries, Affiliates, employees, agents, officers and directors, from and
against any losses, penalties, fines, liabilities, settlements, damages, costs
and expenses, suffered by any such Person in connection with any claim,
investigation, litigation or other proceeding (whether or not the Administrative
Agent or any Lender is a party thereto) and the prosecution and defense thereof,
arising out of or in any way connected with the Agreement, any other Loan
Document or the Loans, including, without limitation, reasonable attorney's and
consultant's fees, except to the extent that any of the foregoing directly
result from the gross negligence or willful misconduct of the party seeking
indemnification therefor.
SECTION 14.3 Set-off. In addition to any rights now or hereafter
granted under Applicable Law and not by way of limitation of any such rights,
upon and after the occurrence of any Event of Default and during the continuance
thereof, the Lenders and any assignee or participant of a Lender in accordance
with Section 14.10 are hereby authorized by the Borrower at any time or from
time to time, without notice to the Borrower or to any other Person, any such
notice being hereby expressly waived, to set off and to appropriate and to apply
any and all deposits (general or special, time or demand, including, but not
limited to, indebtedness evidenced by certificates of deposit, whether matured
or unmatured) and any other indebtedness at any time held or owing by the
Lenders, or any such assignee or participant to or for the credit or the account
of the Borrower against and on account of the Obligations irrespective of
whether or not (a) the Lenders shall have made any demand under this Agreement
or any of the other Loan Documents or (b) the Administrative Agent shall have
declared any or all of the Obligations to be due and payable as permitted by
Section 12.2 and although such Obligations shall be contingent or unmatured.
Notwithstanding the preceding sentence, each Lender agrees to notify the
Borrower and the Administrative Agent after any such set-off and application,
provided that the failure to give such notice shall not affect the validity of
such set-off and application.
SECTION 14.4 Governing Law. This Agreement, the Notes and the other
Loan Documents, unless otherwise expressly set forth therein, shall be governed
by, construed and enforced in accordance with the laws of the State of North
Carolina, without reference to the conflicts or choice of law principles
thereof.
SECTION 14.5 Jurisdiction and Venue.
(a) Jurisdiction. The Borrower hereby irrevocably consents to the
non-exclusive personal jurisdiction of the state and federal courts located in
Mecklenburg County, North Carolina (and any courts from which an appeal from any
of such courts must or may be taken), in any action, claim or other proceeding
arising out of any dispute in connection with this Agreement, the Notes and the
other Loan Documents, any rights or obligations hereunder or thereunder, or the
performance of such rights and obligations. The Borrower hereby irrevocably
consents to the service of a summons and complaint and other process in any
action, claim or proceeding brought by the Administrative Agent or any Lender in
connection with this Agreement, the Notes or the other Loan Documents, any
rights or obligations hereunder or thereunder, or the performance of such rights
and obligations, on behalf of itself or its property, in the manner specified in
Section 14.1. Nothing in this Section 14.5 shall affect the right of the
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Administrative Agent or any Lender to serve legal process in any other manner
permitted by Applicable Law or affect the right of the Administrative Agent or
any Lender to bring any action or proceeding against the Borrower or its
properties in the courts of any other jurisdictions.
(b) Venue. The Borrower hereby irrevocably waives any objection it
may have now or in the future to the laying of venue in the aforesaid
jurisdiction in any action, claim or other proceeding arising out of or in
connection with this Agreement, any other Loan Document or the rights and
obligations of the parties hereunder or thereunder. The Borrower irrevocably
waives, in connection with such action, claim or proceeding, any plea or claim
that the action, claim or other proceeding has been brought in an inconvenient
forum.
SECTION 14.6 Binding Arbitration; Waiver of Jury Trial.
(a) Binding Arbitration. Upon demand of any party, whether made
before or after institution of any judicial proceeding, any dispute, claim or
controversy arising out of, connected with or relating to this Agreement or any
other Loan Document ("Disputes"), between or among parties hereto and to the
other Loan Documents shall be resolved by binding arbitration as provided
herein. Institution of a judicial proceeding by a party does not waive the right
of that party to demand arbitration hereunder. Disputes may include, without
limitation, tort claims, counterclaims, claims brought as class actions, claims
arising from Loan Documents executed in the future, disputes as to whether a
matter is subject to arbitration, or claims concerning any aspect of the past,
present or future relationships arising out of or connected with the Loan
Documents. Arbitration shall be conducted under and governed by the Commercial
Arbitration Rules (the "Arbitration Rules") of the American Arbitration
Association (the "AAA") and the Federal Arbitration Act. All arbitration
hearings shall be conducted in Charlotte, North Carolina. The expedited
procedures set forth in the Arbitration Rules shall be applicable to claims of
less than $1,000,000. All applicable statutes of limitations shall apply to any
Dispute. A judgment upon the award may be entered in any court having
jurisdiction. Notwithstanding anything foregoing to the contrary, any
arbitration proceeding demanded hereunder shall begin within ninety (90) days
after such demand thereof and shall be concluded within one hundred twenty (120)
days after such demand. These time limitations may not be extended unless a
party hereto shows cause for extension and then such extension shall not exceed
a total of sixty (60) days. The panel from which all arbitrators are selected
shall be comprised of licensed attorneys selected from the National Panel of
Commercial Arbitrators of the AAA. The single arbitrator selected for expedited
procedure shall be a retired judge from the highest court of general
jurisdiction, state or federal, of the state where the hearing will be
conducted. The parties hereto do not waive any applicable Federal or state
substantive law except as provided herein. Notwithstanding the foregoing, this
paragraph shall not apply to any Hedging Agreement.
(b) Jury Trial. THE ADMINISTRATIVE AGENT, EACH LENDER AND THE
BORROWER HEREBY ACKNOWLEDGE THAT BY AGREEING TO BINDING ARBITRATION THEY HAVE
IRREVOCABLY WAIVED THEIR RESPECTIVE RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY
ACTION, CLAIM OR OTHER PROCEEDING ARISING OUT OF ANY DISPUTE IN CONNECTION WITH
THIS AGREEMENT, THE NOTES OR THE OTHER LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS
HEREUNDER OR THEREUNDER, OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS.
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(c) Preservation of Certain Remedies. Notwithstanding the preceding
binding arbitration provisions, the parties hereto and the other Loan Documents
preserve, without diminution, certain remedies that such Persons may employ or
exercise freely, either alone, in conjunction with or during a Dispute. Each
such Person shall have and hereby reserves the right to proceed in any court of
proper jurisdiction or by self help to exercise or prosecute the following
remedies, as applicable: (i) all rights to foreclose against any real or
personal property or other security by exercising a power of sale granted in the
Loan Documents or under Applicable Law or by judicial foreclosure and sale,
including a proceeding to confirm the sale, (ii) all rights of self help
including peaceful occupation of property and collection of rents, set off, and
peaceful possession of property, (iii) obtaining provisional or ancillary
remedies including injunctive relief, sequestration, garnishment, attachment,
appointment of receiver and in filing an involuntary bankruptcy proceeding, and
(iv) when applicable, a judgment by confession of judgment. Preservation of
these remedies does not limit the power of an arbitrator to grant similar
remedies that may be requested by a party in a Dispute.
SECTION 14.7 Reversal of Payments. To the extent the Borrower makes a
payment or payments to the Administrative Agent for the ratable benefit of the
Lenders or the Administrative Agent receives any payment or proceeds of the
Collateral which payments or proceeds or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside and/or
required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, state or federal law, common law or equitable cause, then, to
the extent of such payment or proceeds repaid, the Obligations or part thereof
intended to be satisfied shall be revived and continued in full force and effect
as if such payment or proceeds had not been received by the Administrative
Agent.
SECTION 14.8 Injunctive Relief; Punitive Damages.
(a) The Borrower recognizes that, in the event the Borrower fails to
perform, observe or discharge any of its obligations or liabilities under this
Agreement, any remedy of law may prove to be inadequate relief to the Lenders.
Therefore, the Borrower agrees that the Lenders, at the Lenders' option, shall
be entitled to temporary and permanent injunctive relief in any such case
without the necessity of proving actual damages.
(b) The Administrative Agent, the Lenders and the Borrower (on
behalf of itself and its Restrictive Subsidiaries) hereby agree that no such
Person shall have a remedy of punitive or exemplary damages against any other
party to a Loan Document and each such Person hereby waives any right or claim
to punitive or exemplary damages that they may now have or may arise in the
future in connection with any Dispute, whether such Dispute is resolved through
arbitration or judicially.
SECTION 14.9 Accounting Matters. All financial and accounting
calculations, measurements and computations made for any purpose relating to
this Agreement, including, without limitation, all computations utilized by the
Borrower or any Subsidiary thereof to determine compliance with any covenant
contained herein, shall, except as otherwise expressly contemplated hereby or
unless there is an express written direction by the Administrative Agent to the
contrary agreed to by the Borrower, be performed in accordance with GAAP as in
effect on the Closing Date. In the event that changes in GAAP shall be mandated
or permitted by the Financial Accounting Standards Board, or any similar
accounting body of comparable standing,
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or shall be recommended by the Borrower's certified public accountants, to the
extent that such changes would modify such accounting terms or the
interpretation or computation thereof, such changes shall be followed in
defining such accounting terms only from and after the date the Borrower and the
Required Lenders shall have amended this Agreement to the extent necessary to
reflect any such changes in the financial covenants and other terms and
conditions of this Agreement.
SECTION 14.10 Successors and Assigns; Participations.
(a) Benefit of Agreement. This Agreement shall be binding upon and
inure to the benefit of the Borrower, the Administrative Agent and the Lenders,
all future holders of the Notes, and their respective successors and assigns,
except that the Borrower shall not assign or transfer any of its rights or
obligations under this Agreement without the prior written consent of each
Lender.
(b) Assignment by Lenders. Each Lender may, in the ordinary course
of its business and in accordance with Applicable Law, sell or assign to any
Lender, any Affiliate of a Lender or in the case of the Term Loans any Approved
Fund and with the consent of the Borrower (so long as no Default or Event of
Default has occurred and is continuing) and the consent of the Administrative
Agent, which consents shall not be unreasonably withheld or delayed, assign to
one or more other Eligible Assignees (any of the forgoing assignees or
purchasers, a "Purchasing Lender") all or a portion of its interests, rights and
obligations under this Agreement and the other Loan Documents (including,
without limitation, all or a portion of the Advances at the time owing to it and
the Notes held by it); provided that:
(i) each such assignment shall be of a constant, and not a
varying, percentage of the Revolving Credit Commitment and/or the Term
Loan Commitment, as applicable, of the assigning Lender's rights and
obligations under this Agreement;
(ii) if less than all of the assigning Lender's Revolving
Credit Commitment or Term Loan Commitment, as applicable, is to be
assigned, the Commitment so assigned shall not be less than $1,000,000
with respect to the Revolving Credit Facility and $1,000,000 (or
otherwise agreed by the Administrative Agent and Borrower) with respect
to the Term Loan Facility, unless (i) such sale or assignment is made to
an existing Lender, to an Affiliate thereof, or (with respect to any
Term Loan) to an Approved Fund, in which case no minimum amount shall
apply or (ii) the Administrative Agent consents in writing to a lesser
amount;
(iii) the Purchasing Lender shall have delivered to the
Administrative Agent all United States Internal Revenue Service Forms
required pursuant to Section 5.11(e) and all of the parties to each such
assignment shall execute and deliver to the Administrative Agent, for
its acceptance and recording in the Register, an Assignment and
Acceptance substantially in the form of Exhibit G attached hereto (an
"Assignment and Acceptance"), together with (to the extent requested by
any Purchasing Lender) any Note or Notes subject to such assignment;
83
(iv) no assignment of a Revolving Credit Commitment, or
participation in L/C Obligations or Swingline Loans shall be made
without the prior written consent of the Administrative Agent, the
Swingline Lender, the Issuing Lender and (so long as no Default or Event
of Default has occurred and is continuing) the Borrower (which consents
shall not be unreasonably withheld);
(v) where consent of the Borrower to an assignment to a
Purchasing Lender is required hereunder (including consent to an
assignment to an Approved Fund), the Borrower shall be deemed to have
given its consent five (5) Business Days after the date written notice
thereof has been delivered by the assigning Lender (through the
Administrative Agent) unless such consent is expressly refused by the
Borrower prior to such fifth (5th) Business Day;
(vi) such assignment shall not, without the consent of the
Borrower, require the Borrower to file a registration statement with the
Securities and Exchange Commission or apply to or qualify the Loans or
the Notes under the blue sky laws of any state; and
(vii) the assigning Lender shall pay to the Administrative
Agent an assignment fee of $3,000 upon the execution by such Lender of
the Assignment and Acceptance; provided that no such fee shall be
payable upon any assignment by a Lender to an Affiliate thereof; and
provided further that, in any case of contemporaneous assignments by a
Lender (including a group of affiliated Lenders that are funds managed
by the same investment advisor) to a single assignee or more than one
fund managed by the same investment advisor (which funds are not then
Lenders hereunder), only a single $3,000 fee shall be payable for all
such contemporaneous assignments.
Upon such execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment and Acceptance, which effective date
shall be at least five (5) Business Days after the execution thereof (unless
otherwise agreed to by the Administrative Agent), (A) the Purchasing Lender
thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender hereby
and (B) the Lender thereunder shall, to the extent provided in such assignment,
be released from its obligations under this Agreement.
(c) Rights and Duties Upon Assignment. By executing and delivering
an Assignment and Acceptance, the assigning Lender thereunder and the Purchasing
Lender thereunder confirm to and agree with each other and the other parties
hereto as set forth in such Assignment and Acceptance.
(d) Register. The Administrative Agent shall maintain a copy of each
Assignment and Acceptance and each Lender Addition and Acknowledgment delivered
to it and a register for the recordation of the names and addresses of the
Lenders and the amount of the Advances with respect to each Lender from time to
time (the "Register"). The entries in the Register shall be conclusive, in the
absence of manifest error, and the Borrower, the Administrative Agent and the
Lenders may treat each Person whose name is recorded in the Register as a Lender
hereunder for
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all purposes of this Agreement. The Register shall be available for inspection
by the Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
(e) Issuance of New Notes. Upon its receipt of an Assignment and
Acceptance executed by an assigning Lender and a Purchasing Lender together with
any Note or Notes (if applicable) subject to such assignment and (if applicable)
the written consent to such assignment, the Administrative Agent shall, if such
Assignment and Acceptance has been completed and is substantially in the form of
Exhibit G:
(i) accept such Assignment and Acceptance;
(ii) record the information contained therein in the
Register;
(iii) give prompt notice thereof to the Lenders and the
Borrower; and
(iv) promptly deliver a copy of such Assignment and
Acceptance to the Borrower.
Within five (5) Business Days after receipt of notice, the Borrower shall
execute and deliver to the Administrative Agent, in exchange for the surrendered
Note or Notes, a new Note or Notes to the order of such Purchasing Lender (to
the extent requested thereby) in amounts equal to the Revolving Credit
Commitment and/or Term Loan Commitment assumed by it pursuant to such Assignment
and Acceptance and a new Note or Notes to the order of the assigning Lender (to
the extent requested thereby) in an amount equal to the Revolving Credit
Commitment and/or Term Loan Commitment retained by it hereunder. Such new Note
or Notes shall be in an aggregate principal amount equal to the aggregate
principal amount of such surrendered Note or Notes, shall be dated the effective
date of such Assignment and Acceptance and shall otherwise be in substantially
the form of the assigned Notes delivered to the assigning Lender. Each
surrendered Note or Notes shall be canceled and returned to the Borrower.
Notwithstanding anything in this Agreement to the contrary, any Lender which has
not been issued a Note or Notes hereunder may at any time deliver a written
request for a Note or Notes to the Administrative Agent and Borrower. Within
five (5) Business Days after receipt of notice, the Borrower shall execute and
deliver to the Administrative Agent, a Note or Notes (as applicable) to the
order of such Lender in amounts equal to the Revolving Credit Commitment and/or
Term Loan Commitment of such Lender. Upon receipt thereby, the Administrative
Agent shall promptly deliver such Note or Notes to such Lender.
(f) Participations. Each Lender may, without notice to or the
consent of the Borrower or the Administrative Agent, in the ordinary course of
its commercial banking business and in accordance with Applicable Law, sell
participations to one or more banks or other entities (any such bank or other
entity, a "Participant") in all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of its Advances
and the Notes held by it); provided that:
(i) each such participation shall be in an amount not less
than $1,000,000;
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(ii) such Lender's obligations under this Agreement
(including, without limitation, its Revolving Credit Commitment and/or Term Loan
Commitment, as applicable) shall remain unchanged;
(iii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations;
(iv) such Lender shall remain the holder of the Notes held
by it for all purposes of this Agreement;
(v) the Borrower, the Administrative Agent and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement;
(vi) such Lender shall not permit such Participant the right
to approve any waivers, amendments or other modifications to this Agreement or
any other Loan Document other than waivers, amendments or modifications which
would reduce the principal of or the interest rate on any Loan or Reimbursement
Obligation, extend the term or increase the amount of the Revolving Credit
Commitment and/or Term Loan Commitment of such Lender, reduce the amount of any
fees to which such Participant is entitled, extend any scheduled payment date
for principal of any Loan or, except as expressly contemplated hereby or
thereby, release substantially all of the Collateral; and
(vii) any such disposition shall not, without the consent of
the Borrower, require the Borrower to file a registration statement with
the Securities and Exchange Commission or apply to qualify the Loans or
the Notes under the blue sky law of any state.
The Borrower agrees that each Participant shall be entitled to the
benefits of Section 5.8, Section 5.9, Section 5.10, Section 5.11 and Section
14.3 to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (b) of this Section 14.10; provided that a
Participant shall not be entitled to receive any greater payment under Section
5.8, Section 5.9, Section 5.10, and Section 5.11 than the applicable Lender
would have been entitled to receive with respect to the participation sold to
such Participant, unless the sale of the participation to such Participant is
made with the Borrower's prior written consent and such Participant shall have
delivered to the Administrative Agent all United States Internal Revenue Service
Forms required pursuant to Section 5.11(e).
(g) Disclosure of Information; Confidentiality. The Administrative
Agent and the Lenders shall hold all non-public information with respect to the
Borrower obtained pursuant to the Loan Documents (or any Hedging Agreement with
a Lender or the Administrative Agent) in accordance with their customary
procedures for handling confidential information; provided, that the
Administrative Agent may disclose information relating to this Agreement to Gold
Sheets and other similar bank trade publications, such information to consist of
deal terms and other information customarily found in such publications and
provided further, that the Administrative Agent or any Lender may disclose any
such information to the extent such disclosure is (i) required by law or
requested or required pursuant to any legal process, (ii) requested by, or
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required to be disclosed to, any rating agency, or regulatory or similar
authority (including, without limitation, the National Association of Insurance
Commissioners) or (iii) used in any suit, action or proceeding for the purpose
of defending itself, reducing its liability or protecting any of its claims,
rights, remedies or interests under or in connection with the Loan Documents (or
any Hedging Agreement with a Lender or the Administrative Agent). Any Lender
may, in connection with any assignment, proposed assignment, participation or
proposed participation pursuant to this Section 14.10, disclose to the
Purchasing Lender, proposed Purchasing Lender, Participant, proposed
Participant, or to any direct or indirect contractual counterparty in swap
agreements or such contractual counterparty's professional advisor any
information relating to the Borrower furnished to such Lender by or on behalf of
the Borrower; provided, that prior to any such disclosure, each such Purchasing
Lender, proposed Purchasing Lender, Participant, proposed Participant,
contractual counterparty or professional advisor shall agree to be bound by the
provisions of this Section 14.10(g).
(h) Certain Pledges or Assignments. Any Lender may at any time
pledge or assign a security interest in all or any portion of its rights under
this Agreement or any other Loan Document to secure obligations of such Lender,
including without limitation any pledge or assignment to secure obligations to a
Federal Reserve Bank; provided that no such pledge or assignment of a security
interest shall release a Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.
SECTION 14.11 Amendments, Waivers and Consents. Except as set forth
below or as specifically provided in any Loan Document, any term, covenant,
agreement or condition of this Agreement or any of the other Loan Documents may
be amended or waived by the Lenders, and any consent given by the Lenders, if,
but only if, such amendment, waiver or consent is in writing signed by the
Required Lenders (or by the Administrative Agent with the consent of the
Required Lenders) and delivered to the Administrative Agent and, in the case of
an amendment, signed by the Borrower; provided, that no amendment, waiver or
consent shall (a) increase the Revolving Credit Commitment or Term Loan
Commitment of any Lender, (b) reduce the rate of interest or fees payable on any
Loan or Reimbursement Obligation, (c) reduce or forgive the principal amount of
any Loan or Reimbursement Obligation, (d) extend the originally scheduled time
or times of payment of the principal of any Loan or Reimbursement Obligation or
the time or times of payment of interest on any Loan or Reimbursement Obligation
or any fee or commission with respect thereto or the duration of any Interest
Period beyond six (6) months, (e) permit any subordination of the principal or
interest on any Loan or Reimbursement Obligation, (f) release the Borrower from
the Obligations (other than Hedging Obligations) hereunder, (g) permit any
assignment (other than as specifically permitted or contemplated in this
Agreement) of any of the Borrower's rights and obligations hereunder, (h)
release any material portion of the Collateral or release any Security Document
(other than asset sales permitted pursuant to Section 11.5 and as otherwise
specifically permitted or contemplated in this Agreement or the applicable
Security Document), or (i) amend the provisions of this Section 14.11 or the
definition of Required Lenders, or (j) extend the time of the obligation of the
Lenders holding Revolving Credit Commitments to make or issue or participate in
Letters of Credit, in the case of clauses (a)-(i), without the written consent
of each Lender and in the case of clause (j) without the written consent of each
Lender holding Revolving Credit Loans or a Revolving Credit Commitment.
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In addition, no amendment, waiver or consent to the provisions of (a) Article
XIII shall be made without the written consent of the Administrative Agent and
(b) Article III without the written consent of the Issuing Lender.
SECTION 14.12 Performance of Duties. The Borrower's obligations under
this Agreement and each of the other Loan Documents shall be performed by the
Borrower at its sole cost and expense.
SECTION 14.13 [Reserved].
SECTION 14.14 All Powers Coupled with Interest. All powers of attorney
and other authorizations granted to the Lenders, the Administrative Agent and
any Persons designated by the Administrative Agent or any Lender pursuant to any
provisions of this Agreement or any of the other Loan Documents shall be deemed
coupled with an interest and shall be irrevocable so long as any of the
Obligations remain unpaid or unsatisfied, any of the Commitments remain in
effect or the Credit Facility has not been terminated.
SECTION 14.15 Survival of Indemnities. Notwithstanding any termination
of this Agreement, the indemnities to which the Administrative Agent and the
Lenders are entitled under the provisions of this Article XIV and any other
provision of this Agreement and the other Loan Documents shall continue in full
force and effect and shall protect the Administrative Agent and the Lenders
against events arising after such termination as well as before.
SECTION 14.16 Titles and Captions. Titles and captions of Articles,
Sections and subsections in, and the table of contents of, this Agreement are
for convenience only, and neither limit nor amplify the provisions of this
Agreement.
SECTION 14.17 Severability of Provisions. Any provision of this
Agreement or any other Loan Document which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective only to the extent
of such prohibition or unenforceability without invalidating the remainder of
such provision or the remaining provisions hereof or thereof or affecting the
validity or enforceability of such provision in any other jurisdiction.
SECTION 14.18 Counterparts. This 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 shall be
binding upon all parties, their successors and assigns, and all of which taken
together shall constitute one and the same agreement.
SECTION 14.19 Term of Agreement. This Agreement shall remain in effect
from the Closing Date through and including the date upon which all Obligations
arising hereunder or under any other Loan Document shall have been indefeasibly
and irrevocably paid and satisfied in full and all Commitments have been
terminated. The Administrative Agent is hereby permitted to release all Liens on
the Collateral in favor of the Administrative Agent, for the ratable benefit of
itself and the Lenders, upon repayment of the outstanding principal of and all
accrued interest on the Loans, payment of all outstanding fees and expenses
hereunder and the termination of the Lender's Commitments. No termination of
this Agreement shall affect the rights and obligations of the
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parties hereto arising prior to such termination or in respect of any provision
of this Agreement which survives such termination.
SECTION 14.20 Advice of Counsel. Each of the parties represents to
each other party hereto that it has discussed this Agreement with its counsel.
SECTION 14.21 No Strict Construction. The parties hereto have
participated jointly in the negotiation and drafting of this Agreement. In the
event an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties hereto and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provisions of this Agreement.
SECTION 14.22 Inconsistencies with Other Documents; Independent Effect
of Covenants.
(a) In the event there is a conflict or inconsistency between this
Agreement and any other Loan Document, the terms of this Agreement shall
control; provided, that any provision of the Security Documents which imposes
additional burdens on the Borrower or its Subsidiaries or further restricts the
rights of the Borrower or its Subsidiaries or gives the Administrative Agent or
Lenders additional rights shall not be deemed to be in conflict or inconsistent
with this Agreement and shall be given full force and effect.
(b) The Borrower expressly acknowledges and agrees that each
covenant contained in Articles IX, X, or XI hereof shall be given independent
effect. Accordingly, the Borrower shall not engage in any transaction or other
act otherwise permitted under any covenant contained in Articles IX, X, or XI
if, before or after giving effect to such transaction or act, the Borrower shall
or would be in breach of any other covenant contained in Articles IX, X, or XI.
SECTION 14.23 Sole Lead Arranger and Book Manager. First Union
Securities, Inc. d/b/a Wachovia Securities acted as Sole Lead Arranger and Book
Manager with respect to the Credit Facility. Wachovia Securities is the trade
name under which Wachovia Corporation conducts its investment banking, capital
markets and institutional securities business through First Union Securities,
Inc., Member NYSE, NASD, SIPC, and through other bank and non-bank and
broker-dealer subsidiaries of Wachovia Corporation.
[Signature pages to follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed under seal by their duly authorized officers, all as of the day and
year first written above.
[CORPORATE SEAL] VERIDIAN CORPORATION, as Borrower
By:
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Name:
---------------------------------
Title:
--------------------------------
[Signature Pages Continue]
WACHOVIA BANK, NATIONAL
ASSOCIATION, as Administrative Agent and
Lender
By:
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Name:
--------------------------------
Title:
-------------------------------
[Signature Pages Continue]
[ADDITIONAL LENDERS], as Lender
By:
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Name:
------------------------------------
Title:
-----------------------------------
