1
CREDIT AGREEMENT
Dated as of August 11, 1998
among
MICRODYNE CORPORATION
as Borrower
and
NATIONSBANK, N.A.
as Banks
and
NATIONSBANK, N.A.
as Agent
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TABLE OF CONTENTS
PAGE
----
ARTICLE 1. DEFINITIONS AND ACCOUNTING TERMS....................................1
ARTICLE 2 AMOUNTS AND TERMS OF THE ADVANCES...................................23
ARTICLE 3 YIELD PROTECTION, ETC...............................................30
ARTICLE 4 PAYMENTS, COMPUTATIONS AND CERTAIN NOTICES..........................36
ARTICLE 5 SECURITY............................................................40
ARTICLE 6 CONDITIONS OF LENDING...............................................41
ARTICLE 7 REPRESENTATIONS AND WARRANTIES......................................45
ARTICLE 8 COVENANTS OF THE BORROWER...........................................50
ARTICLE 9 SUBSIDIARIES BECOMING LOAN PARTIES..................................60
ARTICLE 10 EVENTS OF DEFAULT...................................................62
ARTICLE 11 THE AGENT...........................................................65
ARTICLE 12 MISCELLANEOUS.......................................................67
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LIST OF SCHEDULES AND EXHIBITS
Schedule 7.1(f) Pending Litigation
Schedule 7.1(n) Material Contracts
Schedule 7.1(o) Intellectual Property
Schedule 8.2(a) Outstanding Liens
Schedule 8.2(b) Outstanding Debt
Schedule 8.2(g) Investments
Exhibit A Acceptable Foreign Customers
Exhibit B Form of Acquisition Note
Exhibit C Form of Assignment and Acceptance Agreement
Exhibit D Form of Borrowing Base Certificate
Exhibit E Form of Revolving Note
Exhibit F Form of Security Agreement
Exhibit G Form of Intellectual Property Assignment
Exhibit H Form of Subsidiary Guaranty
Exhibit I Solvency Certificate
Exhibit J Form of Compliance Certificate
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CREDIT AGREEMENT
Dated as of August 11, 1998
This CREDIT AGREEMENT among MICRODYNE CORPORATION, a Maryland
corporation (the "Borrower"), each of the lenders that is a signatory hereto
under the caption of "BANKS" on the signature pages hereto or that, pursuant
to Section 12.19 hereof, shall become a "Bank" hereunder (individually, a
"Bank" and collectively, the "Banks") and NATIONSBANK, N.A., as agent (the
"Agent"), for the Banks hereunder, recites and provides as follows:
RECITALS
The Banks desire to make available to the Borrower a $10,000,000
revolving credit facility and a $16,500,000 acquisition loan facility on the
terms and conditions set forth herein. Accordingly, for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged
by the parties hereto, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1. Certain Defined Terms. As used in this Agreement,
the following terms shall have the following meanings:
"Acceptable Foreign Customers" means the Foreign Customers listed
on Exhibit A to this Agreement and any future Foreign Customer approved in
writing by the Agent in its sole discretion.
"Accounts Receivable" with respect to any Loan Party shall have
the meaning given to such term in the Security Agreement executed by such
Loan Party.
"Acquired Assets" means the assets, stock or other ownership
interests Acquired or to be Acquired by an Acquisition Company pursuant to
the terms of an Acquisition Agreement.
"Acquisition" means any transaction, or any series of related
transactions, consummated after the date of this Agreement, by which the
Borrower or any of its Subsidiaries (a) acquires any going business or all or
substantially all of the assets of any Person, whether through the purchase
of assets, merger or otherwise, (b) directly or indirectly acquires control
of at least a majority (in number of votes) of the securities of a
corporation which have ordinary voting power for the election of directors,
or (c) directly or indirectly acquires control of a majority ownership
interest in any Person that is not a corporation. The terms "Acquire" ,
"Acquired" and "Acquiring" used as verbs shall have correlative meanings.
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"Acquisition Agreement" means the agreement between an
Acquisition Company and a Target or the seller or sellers of a Target,
pursuant to which such Acquisition Company agrees to Acquire substantially
all of the assets, stock or other ownership interests of a Target, or merge
with a Target, together with all amendments to such agreement.
"Acquisition Analysis" means, with respect to any proposed
Acquisition, an analysis, prepared by the chief financial officer of the
Borrower, of the structure and financial impact of the Acquisition in
question, including the Target's audited financial statements (or other
financial statements acceptable to the Agent) for the last three fiscal years
(two fiscal years, in the case of the Oasis Acquisition) and a summary of the
material tax and accounting consequences related to the Acquisition, which
analysis shall be in form and substance satisfactory to the Agent.
"Acquisition Company" means the Borrower or any Subsidiary of the
Borrower Acquiring a Target.
"Adjusted LIBOR" means, with respect to each Interest Period for
any LIBOR Loan, the rate obtained by dividing (a) LIBOR for such Interest
Period by (b) a percentage equal to one minus the stated maximum rate
(expressed as a decimal) of all reserves, if any, required to be maintained
against "Eurocurrency liabilities" as specified in Regulation D of the Board
of Governors of the Federal Reserve System (or against any other category of
liabilities by reference to which the interest rate for LIBOR Loans is
determined or any category of extensions of credit or other assets which
includes loans made by an office of any Bank outside of the United States of
America to residents of the United States of America).
"Advances" means advances made to the Borrower by the Banks
pursuant to the provisions of Section 2.1 of this Agreement.
"Advance Commitment" shall mean, for each Bank, the commitment of
such Bank to make Advances, expressed as an amount representing the maximum
aggregate principal amount of such Bank's Advances hereunder, as such
commitment may be (a) reduced from time to time pursuant to Section 2.8, and
(b) reduced or increased from time to time pursuant to assignments by or to
such Bank in accordance with Section 12.19. The initial amount of each
Bank's Advance Commitment is set forth below the name of such Bank on the
signature pages hereto under the caption "Advance Commitment," or in the
Assignment and Acceptance Agreement pursuant to which such Bank shall have
assumed its Advance Commitment, as applicable. The original aggregate
principal amount of the Advance Commitment is $10,000,000.
"Advance Termination Date" means October 31, 2000.
"Affiliate" means, with respect to any specified Person, any
other Person that, directly or indirectly, through one or more
intermediaries, controls or is controlled by, or is under common control
with, such specified Person, and if such Person is an individual, any member of
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the immediate family (including parent, spouse, children and siblings) of
such individual and any trust whose principal beneficiary is such individual
or one or more members of such immediate family and any Person who is
controlled by any such member or trust. The term "control" (including, with
its correlative meanings, "controlled by" and "under common control with")
means the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of a Person, whether through
ownership of securities or other ownership interests, by contract or
otherwise; provided that, in any event, any Person that owns directly or
indirectly securities having 10% or more of the voting power for the election
of the directors or other governing body of a corporation or 10% or more of
the other ownership interests of any other Person (other than as a limited
partner of such other Person) will be deemed to control such corporation or
other Person, and any Person that is a general partner or controls a general
partner of a partnership or joint venture will be deemed to control such
partnership. Notwithstanding the foregoing, no individual shall be an
Affiliate of the Borrower or any of its Subsidiaries solely by reason of his
or her being a director, officer or employee of the Borrower or any of its
Subsidiaries.
"Aging" means a schedule of all outstanding Receivables of the
Loan Parties showing the initial invoice date of each Receivable of the Loan
Parties and the age of such Receivables in intervals of 30 days.
"Agreement" means this Credit Agreement, as the same may be
further amended, modified or supplemented from time to time.
"Applicable Base Rate Margin" shall mean, for any date of
calculation, the rate per annum opposite the Funded Debt Ratio (calculated as
of the end of the Borrower's immediately preceding fiscal quarter) set forth
below under the caption "Applicable Base Rate Margin." On the date hereof,
the Applicable Base Rate Margin is .25%. The Applicable Base Rate Margin
will be adjusted on a quarterly basis in accordance with the table set forth
below:
Applicable Base
Funded Debt Ratio Rate Margin
----------------- -----------
Less than or equal to 1.50 to 1 0.00%
Greater than 1.50 to 1 but less 0.25%
than or equal to 2.50 to 1
Greater than 2.50 to 1 0.375%
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The Applicable Base Rate Margin will be adjusted to the amount
corresponding to the applicable Funded Debt Ratio in effect as of the last
day of each fiscal quarter of the Borrower. The adjustment will become
effective as of the first day of the calendar month next succeeding the last
day of the 45-day period within which the Borrower must deliver its quarterly
financial statements to the Banks. No decrease in the Applicable Base Rate
Margin shall become effective if, at such time, any Default or Event of
Default has occurred and is continuing. If the Borrower's financial
statements are not delivered to the Banks within the specified time periods,
the Applicable Base Rate Margin may be increased, at the option of the Agent,
to the highest applicable amount from the date on which the statements were
due through the next adjustment date.
"Applicable Lending Office" means, with respect to each Bank for
each Type of Loan, the "Lending Office" of such Bank specified on the
signature page hereto for such Bank under the caption "Applicable Lending
Office," or in the Assignment and Acceptance Agreement pursuant to which such
Bank shall have assumed its Commitments, or such other office of such Bank as
such Bank may from time to time specify to the Borrower and the Agent as the
office by which its Loans of such Type are to be made and maintained.
"Applicable LIBOR Margin" shall mean, for any date of
calculation, the rate per annum opposite the Funded Debt Ratio (calculated as
of the end of the Borrower's immediately preceding fiscal quarter) set forth
below under the caption "Applicable LIBOR Margin." On the date hereof, the
Applicable LIBOR Margin is 1.35 % for Advances and 1.50% for the Oasis
Acquisition Loan. The Applicable LIBOR Margin will be adjusted on a
quarterly basis in accordance with the table set forth below, for Advances
and for the Oasis Acquisition Loan:
Applicable LIBOR
----------------
Margin (Oasis
Applicable LIBOR -------------
Funded Debt Ratio Margin (Advances) Acquisition Loan)
----------------- ----------------- -----------------
Less than or equal to 1.50 to 1 1.00% 1.00%
Greater than 1.50 to 1 but less 1.35% 1.50%
than or equal to 2.50 to 1
Greater than 2.50 to 1 but less 1.85% 2.00%
than or equal to 3.0 to 1
Greater than 3.0 to 1 2.35% 2.50%
The Applicable LIBOR Margin will be adjusted to the amount corresponding to
the applicable Funded Debt Ratio in effect as of the last day of each fiscal
quarter of the Borrower. The adjustment will become effective as of the
first day of the calendar month next succeeding the
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last day of the 45-day period within which the Borrower must deliver its
quarterly financial statements to the Banks. No decrease in the Applicable LIBOR
Margin shall become effective if, at such time, any Default or Event of Default
has occurred and is continuing. If the Borrower's financial statements are not
delivered to the Banks within the specified time periods, the Applicable LIBOR
Margin may be increased, at the option of the Agent, to the highest applicable
amount from the date on which the statements were due through the next
adjustment date.
"Applicable Unused Fee Percentage" shall mean, for any date of
calculation, the rate per annum set forth opposite the Funded Debt Ratio
(calculated as of the end of the Borrower's immediately preceding fiscal
quarter) set forth under the caption "Applicable Unused Fee Percentage." On
the date hereof, the Applicable Unused Fee Percentage is .135%. The
Applicable Unused Fee Percentage will be adjusted on a quarterly basis, in
accordance with the table set forth below:
Applicable Unused
Funded Debt Ratio Fee Percentage
----------------- --------------
Less than or equal to 1.50 to 1 0.100%
Greater than 1.50 to 1 but less 0.135%
than or equal to 2.50 to 1
Greater than 2.50 to 1 but less 0.175%
than or equal to 3.0 to 1
Greater than 3.0 to 1 0.200%
The Applicable Unused Fee Percentage will be adjusted to the amount
corresponding to the applicable Funded Debt Ratio in effect as of the last
day of each fiscal quarter of the Borrower. The adjustment will become
effective as of the first day of the calendar month next succeeding the last
day of the 45-day period within which the Borrower must deliver its quarterly
financial statements to the Banks. No decrease in the Applicable Unused Fee
Percentage shall become effective if, at such time, any Default or Event of
Default has occurred and is continuing. If the Borrower's financial
statements are not delivered to the Banks within the specified time periods,
the Applicable Unused Fee Percentage may be increased, at the option of the
Agent, to the highest applicable amount from the date on which the statements
were due through the next adjustment date.
"Assignee" shall have the meaning set forth in Section 12.19.
"Assignment and Acceptance Agreement" means an Assignment and
Acceptance Agreement among a Bank, an Assignee and the Agent, substantially
in the form of Exhibit C
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attached to this Agreement or such other form as may be agreed to by such Bank,
such Assignee and the Agent.
"Assignment of Claims Act" means, collectively, the Assignment of
Claims Act of 1940, as amended, 31 U.S.C. Section 3727, 41 U.S.C. Section 15,
any applicable rules, regulations and interpretations issued pursuant thereto,
and any amendments to any of the foregoing.
"Base Rate" means, for any day, the interest rate per annum equal
to the higher of (a) the Federal Funds Rate for such day plus 0.50% and
(b) the rate for such day established from time to time by NationsBank, N.A.
as its prime rate, whether or not such rate is otherwise published, it being
understood and agreed that such prime rate is established by NationsBank,
N.A. as an index and is not necessarily the lowest or most favorable rate of
interest charged by NationsBank, N.A. or any other Bank on such loans. Each
change in any interest rate provided for herein based upon the Base Rate
resulting from a change in the Base Rate shall take effect at the time of
such change in the Base Rate.
"Base Rate Acquisition Loan" means the Oasis Acquisition Loan or
portion thereof with respect to which the interest rate is calculated by
reference to the Base Rate.
"Base Rate Advance" means any Advance or portion thereof with
respect to which the interest rate is calculated by reference to the Base
Rate.
"Base Rate Loans" means the Base Rate Advances and the Base Rate
Acquisition Loan.
"Borrowing Base" means, at the time in question, the sum of the
following, without duplication: (a) 80% of the book value of Eligible Billed
MOI Receivables; plus (b) 85% of the book value of Eligible Billed MCTI
Receivables; plus (c) 90% of Eligible Guaranteed Foreign Receivables; plus
(d) 60% of the book value of (i) Eligible Unbilled MOI Receivables and (ii)
Eligible Unbilled MCTI Receivables, provided that the Borrowing Base
attributable to the total of subclauses (i) and (ii) of this clause (d) shall
not exceed $4,000,000; plus (e) 35% of the book value of Eligible Inventory.
"Borrowing Base Certificate" means a certificate of the Borrower
containing a computation of the Borrowing Base and certifying that no Default
or Event of Default has occurred and is continuing, in substantially the form
of Exhibit D attached to this Agreement.
"Borrowing Base Credit Extensions" means, at any time, the
aggregate amount of Advances and Letters of Credit then outstanding.
"Business Day" means (a) any day other than a Saturday, Sunday
or other day on which banks in Richmond, Virginia and Bethesda, Md., are
authorized or required to close and (b) with reference to a LIBOR Loan or
Floating LIBOR Loan, any such day that is also a day on which dealings in
U.S. dollar deposits are carried out in the London interbank market.
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"Capital Expenditures" shall mean, for any Person for any period,
expenditures made by such Person or any of its Subsidiaries to acquire or
construct fixed assets, plant and equipment (including renewals, improvements
and replacements, but excluding repairs) during such period, computed in
accordance with GAAP.
"Capital Lease" means any lease that has been or should be
capitalized on the books of the lessee in accordance with GAAP.
"Capital Lease Obligations" shall mean, for any Person, all
obligations of such Person to pay rent under a Capital Lease, and, for
purposes of this Agreement the amount of such obligations shall be the
capitalized amount thereof, determined in accordance with GAAP.
"Closing Date" means the later of the date of this Agreement and
the date on which the conditions precedent set forth in Section 6.1 have been
fulfilled.
"Code" means the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral" means, collectively, all Accounts Receivable,
Equipment, General Intangibles, Intellectual Property, Inventory, Investment
Property, Real Estate, all stock and other ownership interests in
Subsidiaries and all other property of a Loan Party in which a Lien is
granted to the Agent for the ratable benefit of the Banks pursuant to a
Security Agreement, an Intellectual Property Assignment, a Mortgage or any
other Loan Document.
"Commitment Percentage" means, as to any Bank at any time, the
percentage of the aggregate Advance Commitment and Oasis Acquisition Loan
Commitment then constituted by such Bank's Advance Commitment and Oasis
Acquisition Loan Commitment.
"Compliance Certificate" shall have the meaning assigned in
Section 8.1(b)(8).
"Continue," "Continuation" and "Continued" shall refer to the
continuation pursuant to Section 2.6 hereof of a LIBOR Loan from one Interest
Period to the next Interest Period.
"Convert," "Conversion" and "Converted" shall refer to a
conversion pursuant to Section 2.6 hereof of one Type of Loans into another
Type of Loans.
"Customer" means any Person obligated on a Receivable.
"Date Affected Information Technology" means a system comprised
of one or more components including computer hardware, computer software or
equipment with computerized functions, which reads, produces or processes
date data by input, output or otherwise.
"Debt" means, collectively, and includes, with respect to any
specified Person (a) indebtedness or liability for borrowed money whether by
loan, the issuance and sale of debt
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securities or the sale of assets to another Person subject to an understanding
or agreement, contingent or otherwise, to repurchase such assets from such
Person, or for the deferred purchase price of property or services; (b) Capital
Lease Obligations; (c) obligations to reimburse the issuer of letters of credit
or acceptances; (d) Debt of others Guaranteed by such Person; (e) obligations
under interest rate swap, cap or collar agreements or other similar agreements
or arrangements designed to protect that Person against fluctuations in interest
rates; (f) obligations under any foreign exchange contract, currency swap
agreements or other similar agreements or arrangements designed to protect that
Person against fluctuations in currency values; (g) obligations secured by any
Lien on property owned by the specified Person, whether or not the obligations
have been assumed; (h) the purchasers's obligations under seller-take-back
transactions; and (i) accrued and unpaid Earnout.
"Debt Coverage Ratio" means, at any time, the ratio of (a) EBITDA
of the Borrower and its Subsidiaries for the period of 12 months ended on the
last day of the most recently ended fiscal quarter of the Borrower, minus
Non-Financed Capital Expenditures of the Borrower and its Subsidiaries for
such period, to (b) Debt Service of the Borrower and its Subsidiaries for
such period; provided that if the Borrower or any of its Subsidiaries shall
have Acquired a business (or any part thereof) during such period, and if,
pursuant to the definition thereof, EBITDA is computed as if such business
(or part thereof) had been owned by such Borrower or Subsidiary for the whole
of such period, then Debt Service and Non-Financed Capital Expenditures shall
be computed as if such business (or part thereof) had been owned by the
Borrower or such Subsidiary for the whole of such period.
"Debt Service" means, for any period, the sum for the Borrower
and its Subsidiaries (determined on a consolidated basis without duplication
in accordance with GAAP) of (a) all payments of principal of long term Debt
(including the principal component of any payments in respect of Capital
Lease Obligations) scheduled to be made during such period plus (b) all
Interest Expense for such period.
"Default" means any event that, with the giving of notice, the
lapse of time, or both, would constitute an Event of Default.
"Disposition" shall mean any sale, assignment, transfer or other
disposition of any assets (whether now owned or hereafter acquired) by the
Borrower or any of its Subsidiaries to any other Person, excluding any sale,
assignment, transfer or other disposition of any assets sold or disposed of
in the ordinary course of business and on ordinary business terms. The terms
"Dispose" and "Disposed" shall have correlative meanings.
"Earnout" shall mean any obligation of the Borrower or any
Subsidiary to pay compensation or consideration in connection with an
Acquisition in addition to the purchase price paid at the closing under an
Acquisition Agreement.
"EBITDA" shall mean, for any period, the sum for the Borrower and
its Subsidiaries (determined on a consolidated basis without duplication in
accordance with GAAP)
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of (a) Net Income for such period, plus (b) taxes, Interest Expense,
depreciation, amortization and other non-cash charges (to the extent deducted to
determine Net Income) for such period; provided that (1) if the Borrower or any
of its Subsidiaries shall have Disposed of a business (or any part thereof)
during such period, EBITDA shall be computed as if such business (or part
thereof) had been Disposed of prior to the first day of such period, and (2) if
the Borrower or any of its Subsidiaries shall have Acquired a business (or any
part thereof) during such period, and if the Borrower has provided the Agent
with audited financial statements (prepared in accordance with GAAP by an
accounting firm acceptable to the Agent) of such business, or (if such
statements are unavailable) other due diligence as to the financial position of
such business acceptable to the Agent, for that portion of such period preceding
the Acquisition, EBITDA shall be computed as if such business (or part thereof)
had been owned by the Borrower or such Subsidiary for the whole of such period.
EBITDA may be increased by the amount (not to exceed $500,000 for any
Acquisition) of projected reductions in compensation of executive officers of a
Target which are substantiated by employment contracts or other documentation
acceptable to the Agent. If a Target has been generating a negative EBITDA, the
adjusted amount shall be deducted for purposes of calculating compliance with
Section 8.3.
"Eligible Assignee" means any Person who is: (a) currently a
Bank; (b) a commercial bank, trust company, insurance company, investment
bank or pension fund organized under the laws of the United States of
America, or any state thereof, and having total assets in excess of
$5,000,000,000; (c) a savings and loan association or savings bank organized
under the laws of the United States of America, or any state thereof, and
having a tangible net worth of at least $500,000,000; or (d) a commercial
bank organized under the laws of any other country which is a member of the
Organization for Economic Cooperation and Development ("OECD"), or organized
under the laws of a political subdivision of any such country, and having
total assets in excess of $10,000,000,000, provided that such bank is acting
through a branch or agency located in the United States of America. If such
Person is not currently a Bank, such Person's senior unsecured long term
indebtedness must be rated BBB or higher by S&P, Baa2 or higher by Xxxxx'x,
or the equivalent or higher of either such rating by another Rating Agency
acceptable to the Agent. Notwithstanding the foregoing, if an Event of
Default shall have occurred and be continuing, the term "Eligible Assignee"
shall mean any Person that is not an individual.
"Eligible Billed MCTI Receivables" means Eligible Billed
Receivables due to MCTI, or any Subsidiary of MCTI that is a Subsidiary
Guarantor, from its Customers.
"Eligible Billed MOI Receivables" means Eligible Billed
Receivables due to MOI, or any Subsidiary of MOI that is a Subsidiary
Guarantor, from its Customers.
"Eligible Billed Receivables" means Eligible Receivables that
have been billed to the appropriate Customer and are aged not more than 90
days from the date of the initial invoice. For the purposes of this
Agreement, the term "initial invoice" shall mean the first invoice relating
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to the applicable software or goods sold or installed or services rendered,
and not any subsequent invoice relating thereto.
"Eligible Guaranteed Foreign Receivables" means Eligible Billed
Receivables, due from Acceptable Foreign Customers, payable in United States
Dollars, the payment of which is guaranteed by (a) an insurance policy issued
by the Foreign Credit Insurance Association, or (b) a trade letter of credit
(not a standby or performance letter of credit) issued by a bank acceptable
to the Agent in its sole discretion, and the terms of which insurance policy
or letter of credit are acceptable to the Agent in its sole discretion.
"Eligible Inventory" shall mean Inventory, valued at the lower of
cost or market values, that the Agent in its sole discretion determines to
meet all of the following requirements: (a) such Inventory is owned by a
Loan Party, is subject to the security interest created by a Security
Agreement, which is perfected as to such Inventory, is subject to no other
Lien whatsoever other than a Lien permitted by this Agreement and is not
being sold, installed or provided under a contract secured by a surety bond,
(b) such Inventory consists of either raw materials, work in process or
finished goods (but does not include supplies and packaging used or consumed
in packaging, packing, shipping, advertising, selling or leasing such raw
materials or finished goods), (c) such Inventory is in good condition and
meets all standards imposed by any governmental agency, or department or
division thereof, having regulatory authority over such goods, their use or
sale, (d) such Inventory is currently either usable or salable, at prices
approximating at least cost, in the normal course of the Loan Party's
business, (e) such Inventory is located at one of the locations set forth in
Schedule 1 to the Security Agreement of such Loan Party and, if such location
is premises leased by such Loan Party, the landlord at such location has
agreed in writing, in form and substance satisfactory to the Agent, to waive
any Lien such landlord may have on the Inventory, and (f) such Inventory is
not determined by the Agent to be ineligible for any other reason based upon
such credit and collateral considerations as the Agent may establish from
time to time in its reasonable discretion.
"Eligible Receivables" means Accounts Receivable of a Loan Party
(a) that represent valid obligations incurred by a Customer for goods shipped
or delivered, software sold, installed or licensed, or services completed
under valid contracts of sale, license or service that have been formally
awarded to such Loan Party and for which all required contract documents have
been executed by the Customer and such Loan Party and, in the case of
Accounts Receivable owed by the Government, for which funds have been
appropriated and allocated; (b) that are due and payable not more than 60
days from the original invoice date for Foreign Customers and not more than
30 days from the original invoice date for all other Customers; (c) on which
the Customer is not an Affiliate or Subsidiary of such Loan Party; (d) with
respect to which such Loan Party has no knowledge or notice of any inability
of the Customer to make full payment; (e) from the face amounts of which have
been deducted all payments, setoffs, amounts subject to adverse claims,
contractual allowances, bad debt reserves and other credits applicable
thereto; (f) that are subject to no Liens other than those permitted by this
Agreement; (g) that continue to be in full conformity with the
representations and warranties made by such
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Loan Party to the Banks in this Agreement and the other Loan Documents; (h) with
respect to which the Agent is and continues to be satisfied with the credit
standing of the Customer; (i) on which the Customer is not a creditor of such
Loan Party, provided, however, that if the Account Receivable due from such
Customer exceeds the liability of the Loan Party to such Customer, and if such
Account Receivable otherwise qualifies as an Eligible Receivable, then such
Account Receivable may be included in the Borrowing Base as an Eligible
Receivable in an amount equal to the amount by which such Account Receivable
exceeds the liability of a Loan Party to such Customer, but in no event shall
the aggregate amount included in the Borrowing Base pursuant to this clause (j)
exceed $250,000 at any time outstanding; (k) on which, unless an Acceptable
Foreign Customer, the Customer is not a Foreign Customer; (l) that are not
subject to any dispute; (m) with respect to which the applicable goods, software
or services have been delivered or provided to and accepted by the applicable
Customer on an absolute sale basis and not on a xxxx and hold sale basis, a
consignment sale basis, a guaranteed sale basis, a sale or return basis or on
the basis of any other similar understanding pursuant to which the Loan Party
would repurchase or accept a return of, or give a credit for, any such goods or
services; (n) that are not subject to any contingencies; and (o) that do not
arise out of any discontinued operations or business line of a Loan Party
provided, however, and without limiting any other provisions of this Agreement
with respect to the exclusion of Accounts Receivable from the category of
Eligible Receivables and the Borrowing Base, that (1) if the Agent reasonably
determines that the collectibility of any Account Receivable makes it
unacceptable for inclusion as an Eligible Receivable and the Agent gives written
notice to the Borrower indicating the reasons for such determination, then such
Account Receivable shall thereafter be excluded from the category of Eligible
Receivables, (2) if more than 50% of the aggregate face amount of Accounts
Receivable owed by a Customer other than the Government are aged more than 90
days from the dates of the initial invoices, then all Accounts Receivable owed
by such Customer, shall be excluded from the category of Eligible Receivables,
(3) in no case shall Eligible Receivables include any Account Receivable
representing or arising out of retainages, holdbacks, revenues recognized or
costs incurred in excess of approved or allowed reimbursement rates, cost
overruns, unauthorized work or work beyond the scope of a contract, progress
xxxxxxxx, rebillings or contracts secured by surety bonds, (4) an Account
Receivable arising out of the sale, licensing or other disposition of
Intellectual Property subject to United States copyright, patent or trademark
protection shall not be an Eligible Receivable unless such Intellectual
Property, and an appropriately completed Intellectual Property Assignment with
respect thereto, shall be duly registered and filed with the United States
Registry of Copyrights and the United Sates Patent and Trademark Office, as
applicable, and (5) an Account Receivable may not be included in more than three
month-end Borrowing Base calculations.
"Eligible Unbilled MCTI Receivables" means amounts carried on the
books of MCTI, or any Subsidiary of MCTI that is a Subsidiary Guarantor, as
unbilled accounts receivable, in accordance with GAAP, arising out of the
recognition of revenue to be derived from the sale of finished goods or the
provision of services by MCTI or such Subsidiary, provided that (a) with
respect to finished goods, (i) such finished goods are Eligible Inventory,
(ii) such finished goods have been completed and are ready for delivery under
a valid purchase
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order or contract, (iii) such goods have been identified, tagged and segregated
from the Inventory of MCTI or such Subsidiary, (iv) the obligation of the
Customer under the applicable contract or purchase order with respect to such
goods satisfies all criteria for Eligible Receivables other than delivery of
such goods and the rendering of an invoice, and (v) such unbilled account
receivable may not be included in more than three month-end Borrowing Base
calculations; and (b) with respect to services, (i) such services have been
performed, (ii) such services have not been billed to a Customer solely as a
result of timing differences between the date the revenue is recognized on the
Borrower's or such Subsidiary's books and the date the invoice is actually
rendered, (iii) the obligation of the Customer under the applicable contract
with respect to such services satisfies all criteria for Eligible Receivables
other than the rendering of an invoice, and (iv) such unbilled account
receivable may not be included in more than three month-end Borrowing Base
calculations.
"Eligible Unbilled MOI Receivables" means amounts carried on the
books of MOI, or any Subsidiary of MCTI that is a Subsidiary Guarantor, as
unbilled accounts receivable, in accordance with GAAP, arising out of the
recognition of revenue to be derived from the provision of services by MOI or
such Subsidiary, provided that (a) such services have been performed, (b)
such services have not been billed to a Customer solely as a result of timing
differences between the date the revenue is recognized on the Borrower's or
such Subsidiary's books and the date the invoice is actually rendered, (c)
the obligation of the Customer under the applicable contract with respect to
such services satisfies all criteria for Eligible Receivables other than the
rendering of an invoice, and (d) such unbilled account receivable may not be
included in more than one month-end Borrowing Base calculation.
"Environmental Laws" means any applicable law, rule or regulation
relating to environmental protection or the manufacture, storage, disposal or
clean-up of Hazardous Materials, including, without limitation, the
following: Clean Air Act, 42 U.S.C. 7401 et seq.; Federal Water Pollution
Control Act, 33 U.S.C. 1251 et seq.; Solid Waste Disposal Act, 42 U.S.C. 6901
et seq.; Comprehensive Environmental Response, Compensation and Liability
Act, 42 U.S.C. 9601 et seq.; National Environmental Policy Act, 42 U.S.C.
4321 et seq.; regulations of the Environmental Protection Agency and any
applicable rule of common law and any judicial interpretation thereof
relating primarily to the environment or Hazardous Materials.
"Epson" means Epson America, Inc.
"Epson Contract" means that certain Support Services Agreement
dated March 20, 1996 between the Borrower and Epson, as amended.
"Equipment" with respect to any Loan Party shall have the meaning
given to such term in the Security Agreement executed by such Loan Party.
"Equity Issuance" means any issuance or sale by a Person of its
capital stock or other similar equity security, or any warrants, options or
similar rights to acquire, or securities convertible into or exchangeable
for, such capital stock or other similar equity security.
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"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder.
"Events of Default" has the meaning specified in Section 10.1.
"Federal Funds Rate" means, for any day, the simple interest rate
per annum (rounded upward, if necessary, to the nearest 1/100th of 1%) equal
to the weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds brokers
on such day, as published by the Federal Reserve Bank of New York on the
business day next succeeding such day in the daily statistical release
designated as the composite 3:30 P.M. Quotations for U.S. Government
Securities, or any successor publication, under the caption Federal Funds
Effective Rate, provided that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on
the next succeeding Business Day and (b) if no such rate is so published on
such next succeeding Business Day, the Federal Funds Rate for such day shall
be the average rate quoted to Agent on such day on such transactions as
determined by Agent.
"Floating LIBOR Loan" means means any Loan with respect to which
the interest rate is calculated by reference to the Floating LIBOR Rate, as
set forth in Section 2.6.
"Floating LIBOR Rate" means the fluctuating rate of interest
(rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on
Telerate Page 3750 (or any successor page) as the one-month London interbank
offered rate for deposits in Dollars at approximately 11:00 a.m. (London
time) on the second preceding Business Day as adjusted from time to time in
the Agent's sole discretion for then-applicable reserve requirements, deposit
insurance assessment rates and other regulatory costs. If, for any reason,
such rate is not available, the term "Floating LIBOR Rate" shall mean the
fluctuating rate of interest equal to the one-month rate of interest (rounded
upwards, if necessary, to the nearest 1/100 of 1%) appearing on Reuters
Screen LIBO Page as the one month London interbank offered rate for deposits
in Dollars at approximately 11:00 a.m. (London time) on the second preceding
Business Day as adjusted from time to time in the Agent's sole discretion for
then-applicable reserve requirements, deposit insurance assessment rates and
other regulatory costs; provided, however, if more than one rate is specified
on Reuters Screen LIBO Page, the applicable rate shall be the arithmetic mean
of all such rates.
"Foreign Customer" means any Customer that is a foreign
government or an entity organized and existing under the laws of a country
other than the United States.
"Fully Date Capable" means the ability to process date data
correctly (including, but not limited to, reading, producing, calculating,
comparing, and sequencing date data) from, into, and between the twentieth
and twenty-first centuries) without material degradation in performance and
without unusual intervention, including correct and continuous processing
during the transition between 1999 and 2000, and correct processing if leap
years.
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"Funded Debt Ratio" means, at any time, the ratio of (a) Debt of
the Borrower and its Subsidiaries outstanding on the last day of the most
recently ended fiscal quarter of the Borrower, to (b) EBITDA of the Borrower
and its Subsidiaries for the period of 12 months then ended.
"GAAP" shall mean generally accepted accounting principles
applied on a basis consistent with those that, in accordance with the last
sentence of Section 1.3 hereof, are to be used in making the calculations for
purposes of determining compliance with this Agreement.
"General Intangibles" with respect to any Loan Party shall have
the meaning given to such term in the Security Agreement executed by such
Loan Party.
"Government" means the United States of America or any agency or
instrumentality thereof.
"Guarantee" shall mean a guarantee, an endorsement, a contingent
agreement to purchase or to furnish funds for the payment or maintenance of,
or otherwise to be or become contingently liable (including, without
limitation, as a general partner or joint venturer by operation of law or
pursuant to a partnership or joint venture agreement) under or with respect
to, the Debt, other obligations, net worth, working capital or earnings of
any other Person, or a guarantee of the payment of dividends or other
distributions upon the stock or equity interests of any Person, or an
agreement to purchase, sell or lease (as lessor or lessee) assets, products,
materials, supplies or services primarily for the purpose of enabling a
debtor to make payment of such debtor's obligations or an agreement to assure
a creditor against loss, and including causing a bank or other financial
institution to issue a letter of credit or other similar instrument for the
benefit of another Person, but excluding endorsements for collection or
deposit in the ordinary course of business. The terms "Guarantee" and
"Guaranteed" used as verbs shall have correlative meanings.
"Hazardous Materials" means all or any of the following:
(a) substances that are defined or listed in, or otherwise classified
pursuant to, any applicable Environmental Laws as "hazardous substances,"
"hazardous materials," "hazardous wastes," "toxic substances" or any other
formulation intended to define, list or classify substances by reason of
deleterious properties such as ignitability, corrosivity, reactivity,
carcinogenicity, reproductive toxicity, "TLCP" toxicity, or "EP toxicity";
(b) oil, petroleum or petroleum derived substances, natural gas, natural gas
liquids or synthetic gas and drilling fluids, produced waters and other
wastes associated with the exploration, development or production of crude
oil, natural gas or geothermal resources; (c) any flammable substances or
explosives or any radioactive materials; (d) asbestos in any form; or
(e) electrical equipment which contains any oil or dielectric fluid
containing levels of polychlorinated biphenyls in excess of fifty parts per
million.
"Intellectual Property" with respect to any Loan Party shall mean
the "Collateral", as such term is defined in the Intellectual Property
Assignment executed by such Loan Party.
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"Intellectual Property Assignment" shall have the meaning
assigned in Section 5.1.
"Interest Expense" means, for any period, the sum for the
Borrower and its Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP) of the following: (a) all interest in
respect of Debt (including the interest component of any payments in respect
of Capital Lease Obligations) accrued or capitalized during such period plus
(b) the net amount payable (or minus the net amount receivable) under
interest rate protection agreements during such period.
"Interest Payment Date" means the first day of each calendar
month.
"Interest Period" means, with respect to any LIBOR Loan, each
period commencing on the date such LIBOR Loan is made or Converted from a
Base Rate Loan or Floating LIBOR Loan or the last day of the next preceding
Interest Period for a LIBOR Loan being Continued, and ending on the
numerically corresponding day in the first, second, third or fourth calendar
month thereafter, as the Borrower may designate pursuant to Section 4.6
hereof, except that each Interest Period for a LIBOR Loan that commences on
the last Business Day of a calendar month (or on any day for which there is
no numerically corresponding day in the appropriate subsequent calendar
month) shall end on the last Business Day of the appropriate subsequent
calendar month. Notwithstanding the foregoing: (a) if any Interest Period
for a LIBOR Advance would otherwise end after the Advance Termination Date or
for the LIBOR Acquisition Loan would otherwise end after the maturity date of
the LIBOR Acquisition Loan, such Interest Period shall end on such Advance
Termination Date or such maturity date, as applicable; (b) each Interest
Period that would otherwise end on a day which is not a Business Day shall
end on the next succeeding Business Day (or, if such next succeeding Business
Day falls in the next succeeding calendar month, on the next preceding
Business Day); (c) notwithstanding the preceding clause (a), no Interest
Period for any LIBOR Loan shall have a duration of less than one month and,
if the Interest Period for any LIBOR Loan would otherwise be a shorter
period, such LIBOR Loan shall not be available hereunder for such period; and
(d) no Interest Period for any LIBOR Acquisition Loan may commence before and
end after any Oasis Acquisition Loan Payment Date.
"Inventory" with respect to any Loan Party shall have the meaning
given to such term in the Security Agreement executed by such Loan Party.
"Investment" means, for any Person (a) the acquisition (whether
for cash, property, services, securities or otherwise) of capital stock,
bonds, notes, debentures, partnership, membership or other ownership
interests or other securities of any other Person or any agreement to make
any such acquisition (including any "short sale" or any sale of securities at
a time when such securities are not owned by the Person entering into such
sale); (b) the making of any deposit with, or advance, loan or other
extension of credit to, any other Person (including the purchase of assets
from another Person subject to an understanding or agreement, contingent or
otherwise, to resell such assets to such Person); (c) the entering into of
any Guarantee of, or other
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contingent obligation with respect to, the Debt or any other liability of any
other Person and (without duplications) any amount committed to be advanced,
lent or extended to such Person; or (d) the entering into any agreement of the
types described in clauses (e) and (f) of the definition of Debt.
"Investment Property" with respect to any Loan Party shall have
the meaning given to such term in the Security Agreement executed by such
Loan Party.
"LC Agreement" means, collectively and individually, each
standard form of Application and Agreement for Standby Letter of Credit to be
executed and delivered by the Borrower to the Agent in connection with each
Letter of Credit, as required by Section 2.2 of this Agreement, as any of the
same may be amended, modified or supplemented from time to time.
"Letter of Credit" means, individually and collectively, any
letter of credit issued by the Agent for the account of the Borrower pursuant
to Section 2.2 of this Agreement, as any of the same may be amended, modified
or supplemented, renewed or extended from time to time.
"Letter of Credit Obligations" means the Obligations of the
Borrower, contingent or matured, to reimburse the Agent for amounts paid by
it under a Letter of Credit.
"LIBOR" means for any LIBOR Loan for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) appearing on the Dow Xxxxx Markets Service (formerly known as
Telerate) display page 3750 (or any successor page) as the London interbank
offered rate for deposits in U.S. dollars (for a period of time corresponding
to such Interest Period and commencing on the first day of such Interest
Period) at approximately 11:00 a.m. (London time) two Business Days prior to
the first day of such Interest Period. If for any reason such rate is not
available, the term "LIBOR" shall mean, for any LIBOR Loan for any Interest
Period therefor, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the London
interbank offered rate for deposits in U.S. dollars (for a period of time
corresponding to such Interest Period and commencing on the first day of such
Interest Period) at approximately 11:00 a.m. (London time) two Business Days
prior to the first day of such Interest Period for a term comparable to such
Interest Period, provided, however, if more than one rate is specified on
Reuters Screen LIBO Page, the applicable rate shall be the arithmetic mean of
such rates.
"LIBOR Acquisition Loan" means the Oasis Acquisition Loan or
portion thereof with respect to which the interest rate is calculated by
reference to Adjusted LIBOR.
"LIBOR Advance" means any Advance or portion thereof with respect
to which the interest rate is calculated by reference to Adjusted LIBOR.
"LIBOR Loans" means LIBOR Advances and the LIBOR Acquisition Loan.
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"Lien" means, with respect to any asset, (a) any mortgage, deed
of trust, pledge, security interest, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), or preference, priority
or other security agreement, or preferential arrangement, charge or
encumbrance of any kind or nature whatsoever, in, on or of such asset,
(b) the interest of any vendor or lessor under any conditional sale or other
title retention agreement, any Capital Lease (or any financing lease having
substantially the same economic effect as any of the foregoing), and (c) in
the case of securities, any purchase option, call or similar right of a third
party with respect to such securities.
"Loan Documents" means this Agreement, the Notes, each Security
Agreement, each LC Agreement, each Letter of Credit, each Intellectual
Property Assignment, each Mortgage, each Subsidiary Guaranty and any other
document now or hereafter executed or delivered in connection with the
Obligations, in evidence thereof or as security therefor, as any of the same
may be amended, modified or supplemented from time to time.
"Loan Party" means the Borrower and each Subsidiary Guarantor.
"Loans" means the Advances and the Oasis Acquisition Loan to be
made to the Borrower pursuant to this Agreement, and "Loan" means any of the
foregoing.
"MCTI" means Microdyne Communication Technologies Incorporated, a
Maryland corporation.
"MOI" means Microdyne Outsourcing Incorporated, a Maryland
corporation.
"Majority Banks" shall mean (a) if there are not more than two
Banks, all Banks, (b) if there are three Banks, two of the Banks, and (c) if
there are more than three Banks, those Banks having more than 50% of the
aggregate amount of the Advance Commitment or, if the Advance Commitment
shall have terminated, Banks holding more than 50% of the sum of (1) the
aggregate unpaid principal amount of the Advances plus (2) the aggregate
amount of all Letter of Credit Obligations.
"Material Adverse Effect" means a material adverse effect on
(a) the business, assets, operations, prospects or condition, financial or
otherwise, of the Borrower and the Subsidiaries taken as a whole, (b) the
ability of any Loan Party to perform its material obligations under any Loan
Document or (c) the material rights of or benefits available to the Lenders
under any Loan Document.
"Material Contract" means any contract or other arrangement
(other than the Loan Documents), whether written or oral, to which the
Borrower or any Subsidiary is a party (a) requiring payments of more than
$5,000,000 per year by any party thereto, or (b) as to which the breach,
nonperformance, cancellation or failure to renew by any party thereto could
have a Material Adverse Effect.
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"Maximum Amount" means $10,000,000.
"Minimum Compliance Level" means $12,700,000, (a) reduced,
effective as of August 11, 1998, by an amount (not to exceed $11,000,000) of
the write-off as a result of the purchase accounting for the Permitted
Acquisition of Oasis; and (b) adjusted upward, effective as of June 30, 1998,
and as of the end of each fiscal quarter thereafter, by an amount equal to
the sum of (i) 75% of the consolidated Net Income of the Borrower and its
Subsidiaries for such fiscal quarter, with each of the foregoing increases
being fully cumulative, and with no reduction being made on account of any
negative consolidated Net Income of the Borrower and its Subsidiaries for any
fiscal quarter, plus (ii) 100% of the aggregate amount of all cash and other
consideration received by the Borrower or any Subsidiary in respect of any
Equity Issuance during such fiscal quarter.
"Moody's" means Xxxxx'x Investors Services, Inc.
"Mortgage" means a deed of trust or mortgage, in form and
substance acceptable to the Agent, creating a lien on any Real Estate owned
by a Loan Party.
"Net Income" means, for any Person for any period, the
consolidated net income (or deficit) of such Person and its Subsidiaries for
such period determined on a consolidated basis in accordance with GAAP;
provided that there shall be excluded from the calculation thereof any
extraordinary, unusual or non-recurring gains or losses during such period in
accordance with GAAP (which shall include non-recurring gains and
discontinued losses of the Network Products Division of the Borrower).
"Net Worth" means, at any date, all amounts that, in accordance
with GAAP, would be included under stockholders' equity on the consolidated
balance sheet of the Borrower and its Subsidiaries at such time.
"Non-Financed Capital Expenditures" means, for any Person,
Capital Expenditures that are not financed contemporaneously with the
incurrence of such Capital Expenditure or within 60 days thereafter, with
long-term Debt incurred by such Person other than any Advances, or pursuant
to a sale and lease-back transaction approved by the Majority Banks.
"Notes" means each Revolving Note and the Oasis Acquisition Note.
"Oasis Acquisition" means the Acquisition by an Acquisition
Company of Apcom, Inc., a Maryland corporation, Celerity Systems, Inc., a
California corporation, Acceleration Systems, Inc., a Maryland corporation,
and Digital Telcom, Inc., a Maryland corporation.
"Oasis Acquisition Loan" means, individually and collectively,
each loan to be made to the Borrower by the Banks pursuant to Section 2.4 of
this Agreement.
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"Oasis Acquisition Loan Payment Date" means October 31, 1999 and
the last day of each consecutive month thereafter.
"Oasis Acquisition Loan Commitment" shall mean, individually and
collectively, the commitment of each Bank to make the Oasis Acquisition Loan,
expressed as an amount representing the maximum aggregate principal amount of
such Bank's Oasis Acquisition Loan hereunder, as such amount may be
(a) reduced from time to time pursuant to Section 2.8, and (b) reduced or
increased from time to time pursuant to assignments by or to such Bank in
accordance with Section 12.19. The initial amount of each Bank's Oasis
Acquisition Loan Commitment is set forth below the name of such Bank on the
signature pages hereto under the caption "Oasis Acquisition Loan Commitment,"
or in the Assignment and Acceptance Agreement pursuant to which such Bank
shall have assumed its Oasis Acquisition Loan Commitment, as applicable. The
original aggregate principal amount of the Oasis Acquisition Loan Commitment
is $16,500,000.
"Oasis Acquisition Note" means each promissory note, in
substantially the form of Exhibit B attached to this Agreement, evidencing
the obligation of the Borrower to repay the Oasis Acquisition Loan, together
with interest thereon, and all extensions, renewals, modifications and
amendments thereof.
"Obligations" shall have the meaning given to such term in the
Security Agreement.
"Participant" has the meaning assigned in Section 12.19(c).
"PBGC" means the Pension Benefit Guaranty Corporation established
under ERISA.
"Permitted Acquisition" means an Acquisition by an Acquisition
Company pursuant to an Acquisition Agreement provided that (a) the Pro Forma
Financials reflect that, after giving effect to such Acquisition, the
Borrower and the Subsidiaries will be in compliance with all of the financial
covenants set forth in Section 8.3 of this Agreement, (b) the Net Income
(before any non-cash write-offs associated with purchase accounting) of the
Target for the most recent 12-month period is not less than $1, (c) the
Target is in substantially the same line of business as the Borrower or any
of its Subsidiaries, (d) such Acquisition was not preceded by an unsolicited
tender offer for the capital stock or other ownership interests of the Target
that was not recommended or approved by the Target's board of directors or
similar governing body, (e) no Default or Event of Default has occurred and
is continuing or shall occur after giving effect to such Acquisition, (f) the
Borrower has given the Agent at least 15 Business Days' prior written notice
of the closing, and (g) such Acquisition is in compliance with Section 8.2(g).
"Permitted Encumbrances" means: (a) Liens imposed by law for
taxes that are not yet due or are being contested in compliance with
Section 8.1(); (b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's and other like Liens imposed by law,
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arising in the ordinary course of business and securing obligations that are not
overdue by more than 45 days; (c) pledges and deposits made in the ordinary
course of business in compliance with workers' compensation, unemployment
insurance and other social security laws or regulations; (d) deposits to secure
the performance of bids, trade contracts, leases, statutory obligations, surety
and appeal bonds, performance bonds and other obligations of a like nature, in
each case in the ordinary course of business; (e) easements, zoning
restrictions, rights-of-way and similar encumbrances on Real Estate imposed by
law or arising in the ordinary course of business that do not secure any
monetary obligations and do not materially detract from the value of the
affected property or interfere with the ordinary conduct of business of the
Borrower or any Subsidiary; provided that the term "Permitted Encumbrances"
shall not include any Lien securing Debt.
"Permitted Investments" means: (a) direct obligations of, or
obligations the principal of and interest on which are unconditionally
guaranteed by, the United States of America (or by any agency thereof to the
extent such obligations are backed by the full faith and credit of the United
States of America), in each case maturing within one year from the date of
acquisition thereof; (b) investments in commercial paper maturing within
270 days from the date of acquisition thereof and having, at such date of
acquisition, the highest credit rating obtainable from S&P or from Moody's;
(c) investments in certificates of deposit, banker's acceptances and time
deposits maturing within 180 days from the date of acquisition thereof issued
or guaranteed by or placed with, and money market deposit accounts issued or
offered by, any Bank or any domestic office of any commercial bank organized
under the laws of the United States of America or any State thereof which has
a combined capital and surplus and undivided profits of not less than
$500,000,000; and (d) fully collateralized repurchase agreements with a term
of not more than 30 days for securities described in clause (a) above and
entered into with a financial institution satisfying the criteria described
in clause (c) above.
"Person" means an individual, partnership, limited liability
company, corporation (including a business trust), joint stock company,
trust, unincorporated association, joint venture or other entity, or a
government or any political subdivision or agency thereof.
"Pro Forma Financials" means, with respect to any Target or
Acquisition Company, consolidated and consolidating balance sheets and income
statements of the Borrower and Target or Acquisition Company, as applicable,
as of the closing of the applicable Acquisition, setting forth projections
for the two-year period following the Acquisition after giving effect to the
closing of the related Acquisition Agreement and (with respect to the Oasis
Acquisition) the Oasis Acquisition Loan, and setting forth in reasonable
detail the assumptions underlying such projections, which assumptions are
acceptable to the Agent in its sole discretion.
"Quarterly Payment Dates" means the last day of each January,
April, July and October in each year.
"Rating Agency" means S&P, Xxxxx'x or any other nationally
recognized securities rating agency selected by the Borrower and acceptable
to the Agent.
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"Real Estate" means all real estate assets now owned or hereafter
acquired by a Loan Party, other than occupancy leases.
"Receivables" means the Accounts Receivable and General
Intangibles, including, but not limited to, any right of a Loan Party to
payment for software licensed, sold or installed, goods sold or leased or for
services rendered, whether or not earned by performance.
"Regulatory Change" shall mean, with respect to any Bank, any
change after the date of this Agreement in federal, state or foreign law
(including, without limitation, Regulation D of the Board of Governors of the
Federal Reserve System) or the adoption or making after such date of any
interpretation, directive or request applying to a class of banks including
such Bank of or under any federal, state or foreign law or regulations
(whether or not having the force of law and whether or not failure to comply
therewith would be unlawful) by any court or governmental or monetary
authority charged with the interpretation or administration thereof.
"Related Acquisition Documents" means the documents described in
any Acquisition Agreement and related in any manner to the acquisition of any
Acquired Assets, including, but not limited to, the buy/sell agreement,
historical financial statements of the Target and a detailed description of
the Acquired Assets, and every other document, instrument or certificate
executed in connection with such Acquisition Agreement.
"Revolving Note" means a promissory note of the Borrower in
substantially the form of Exhibit E hereto.
"Security Agreement" has the meaning assigned in Section 5.1(c).
"S&P" means Standard & Poor's Rating Group, a division of
XxXxxx-Xxxx Companies, Inc.
"Solvency Certificate" has the meaning assigned in Section 6.3(e).
"Subsidiary" means, with respect to any Person (the "Parent") at
any date, any corporation, limited liability company, partnership,
association or other entity the accounts of which would be consolidated with
those of the Parent in the Parent's consolidated financial statements if such
financial statements were prepared in accordance with GAAP as of such date,
as well as any other corporation, limited liability company, partnership,
association or other entity (a) of which securities or other ownership
interests representing more than 50% of the equity or more than 50% of the
ordinary voting power or, in the case of a partnership, more than 50% of the
general partnership interests are, as of such date, owned, Controlled or
held, directly or indirectly by the Parent, or (b) that is, as of such date,
otherwise Controlled by the Parent or one or more Subsidiaries of the Parent
or by the Parent and one of more Subsidiaries of the Parent. Unless the
context otherwise requires, the term "Subsidiary" shall mean a Subsidiary of
the Borrower.
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"Subsidiary Guarantor" means MOI, MCTI, the Targets of the Oasis
Acquisition which become Subsidiaries of the Borrower, and each Acquisition
Company, Target or other Subsidiary of any of the foregoing that becomes a
Loan Party pursuant to Section 9.1.
"Subsidiary Guaranty" has the meaning assigned in Section 5.3.
"Target" means any Person, a majority of the stock (or
comparable ownership interests) of which, a division or similar business unit
of which, or all or substantially all of the assets and business of any of
the foregoing of which, are to be Acquired by an Acquisition Company,
pursuant to the terms of an Acquisition Agreement.
"Type," when used in reference to any Loan, refers to whether the
rate of interest on such Loan is determined by reference to Adjusted LIBOR,
Floating LIBOR Rate, or the Base Rate.
"UCC" means the Uniform Commercial Code as adopted in the
Commonwealth of Virginia, and all amendments thereto.
SECTION 1.2. Computation of Time Periods. In this Agreement in
the computation of periods of time from a specified date to a later specified
date, the word "from" means "from and including" and the words "to" and
"until" each means "to but excluding."
SECTION 1.3. Accounting Terms.
(a) Except as otherwise expressly provided herein, all
accounting terms used herein shall be interpreted, and all financial
statements and certificates and reports as to financial matters required to
be delivered to the Banks hereunder shall (unless otherwise disclosed to the
Banks in writing at the time of delivery thereof in the manner described in
subsection (b) below) be prepared, in accordance with generally accepted
accounting principles applied on a basis consistent with those used in the
preparation of the latest financial statements furnished to the Banks
hereunder (which, prior to the delivery of the first financial statements
under Section 8.1() hereof, shall mean the financial statements as of June
30, 1998). All calculations made for the purposes of determining compliance
with this Agreement shall (except as otherwise expressly provided herein) be
made by application of generally accepted accounting principles applied on a
basis consistent with those used in the preparation of the latest annual or
quarterly financial statements furnished to the Banks pursuant to
Section 8.1() hereof (or, prior to the delivery of the first financial
statements under Section 8.1() hereof, used in the preparation of the
financial statements as at June 30, 1998) unless (i) the Borrower shall have
objected to determining such compliance on such basis at the time of delivery
of such financial statements or (ii) the Agent shall so object in writing
within 30 days after delivery of such financial statements, in either of
which events such calculations shall be made on a basis consistent with those
used in the preparation of the latest financial statements as to which such
objection shall not have been made (which, if objection is made in respect of
the first financial statements delivered under Section 8.1(b) hereof, shall
mean the financial statements as at June 30, 1998).
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(b) The Borrower shall deliver to the Banks at the same time as
the delivery of any annual or quarterly financial statement under
Section 8.1() hereof (1) a description in reasonable detail of any material
variation between the application of accounting principles employed in the
preparation of such statement and the application of accounting principles
employed in the preparation of the next preceding annual or quarterly
financial statements as to which no objection has been made in accordance
with the last sentence of subsection (a) above and (2) reasonable estimates
of the difference between such statements arising as a consequence thereof.
(c) To enable the ready and consistent determination of
compliance with the covenants set forth in Article 8 hereof, unless the
Borrower shall have given the Agent 90 days' prior written notice, the
Borrower will not change the last day of its fiscal year from September 30 of
each year, or the last days of the first three fiscal quarters in each of its
fiscal years from December 31, March 31, and June 30 of each year,
respectively.
SECTION 1.4. Terms Generally. The definitions of terms herein
shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include," "includes" and
"including" shall be deemed to be followed by the phrase "without
limitation." The word "will" shall be construed to have the same meaning and
effect as the word "shall." Unless the context requires otherwise, (a) any
definition of or reference to any agreement, instrument or other document
herein shall be construed as referring to such agreement, instrument or other
document as from time to time amended, supplemented or otherwise modified
(subject to any restrictions on such amendments, supplements or modifications
set forth herein), (b) any reference herein to any Person shall be deemed to
include such Person's successors and assigns, (c) the words "herein,"
"hereof" and "hereunder," and words of similar import, shall be construed to
refer to this Agreement in its entirety and not to any particular provision
hereof, (d) the word "or" shall not be exclusive, (e) all references herein
to Articles, Sections, Exhibits and Schedules shall be construed to refer to
Articles and Sections of, and Exhibits and Schedules to, this Agreement, and
(f) the words "asset" and "property" shall be construed to have the same
meaning and effect and to refer to any and all tangible and intangible assets
and properties, including cash, securities, accounts and contract rights.
ARTICLE 2
AMOUNTS AND TERMS OF THE LOANS AND LETTERS OF CREDIT
SECTION 2.1. The Advances.
(a) Each Bank severally agrees, subject to the terms and
conditions of this Agreement, to make Advances to the Borrower from time to
time on any Business Day during the period from the date hereof until the
Advance Termination Date, in an aggregate amount not to exceed at any time
outstanding the amount of such Bank's Advance Commitment. Within the
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limits of the aggregate principal amount of the Advance Commitment, the Borrower
may borrow, prepay pursuant to Section 2.7 and reborrow the Advances; provided,
however, that no Advance will be disbursed by any Bank if, after such
disbursement, (1) a prepayment would be required under Section 2.7(d) or (2) the
aggregate amount of outstanding Advances and Letters of Credit would exceed the
Maximum Amount.
(b) The proceeds of the Advances shall be used (1) to refinance
existing loans made by Crestar Bank to the Borrower, (2) for short-term
working capital purposes, (3) for Capital Expenditures, (4) to pay such Debt
of the Targets of the Oasis Acquisition as shall be requested to be paid in
writing prior to such Advance and approved by the Agent, or (5) for other
ordinary and customary corporate purposes, and no other purpose.
(c) The Borrower shall submit to the Agent a written request
for Advances in accordance with Section 4.6 hereof. The Agent may also
accept telephonic or oral requests for Advances which are otherwise in
accordance with Section 4.6 hereof, and in so doing, may act upon such
request from anyone believed by the Agent to have the authority to make such
request. Each Bank shall, before 1:00 p.m. (Bethesda, Md., time) on the date
of the borrowing of such Advances as specified in the Borrower's written
request therefor, make available for the account of its Applicable Lending
Office to the Agent at its address referred to in Section 12.2, in same day
funds, such Bank's ratable portion of such Advances. After the Agent's
receipt of such funds and upon fulfillment of the applicable conditions set
forth in Article 6, the Agent shall deposit such funds to such account as the
Borrower may direct.
(d) The obligation of the Borrower to repay the Advances made
by each Bank, together with interest thereon, shall be evidenced by a
Revolving Note issued to such Bank in a principal amount equal to such Bank's
Advance Commitment. The unpaid principal balance of each Revolving Note
shall be payable to the applicable Bank on the Advance Termination Date.
SECTION 2.2. Letters of Credit.
(a) Subject to the terms and conditions of this Agreement, the
Agent, in reliance on the agreements of the Banks set forth in Section 2.2()
below, may from time to time at the request of the Borrower issue Letters of
Credit for the account of the Borrower from time to time until the Advance
Termination Date; provided, however, that no Letter of Credit shall be issued
if, after such issuance, (1) a prepayment would be required under
Section 2.7(d), or (2) the aggregate amount of outstanding Advances and
Letters of Credit would exceed the Maximum Amount. The form of each such
Letter of Credit shall be approved by the Agent. The Advance Commitment of
each Bank shall be reduced by each Bank's Commitment Percentage of the
Letters of Credit. In no event shall (i) the aggregate amount of outstanding
Letters of Credit exceed $3,000,000 at any time; or (ii) the expiration of
any Letter of Credit extend beyond the earlier of the Advance Termination
Date and the date that is 12 months following the issuance of such Letter of
Credit.
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(b) Prior to the issuance of any Letter of Credit, the Agent
must receive an appropriately completed LC Agreement, executed by the
Borrower, not less than five Business Days prior to the date on which the
Letter of Credit is to be issued, and a written notice describing in
reasonable detail the proposed terms of such Letter of Credit and the nature
of the transactions or obligations to be supported thereby. In the event of
a conflict between the terms of any LC Agreement and the terms of this
Agreement, this Agreement shall control. The Borrower agrees to reimburse
the Agent on demand for any drawing paid by the Agent under a Letter of
Credit, together with interest thereon from the date of such demand at the
rate applicable to Base Rate Advances.
(c) (1) As consideration for the issuance of any Letters of
Credit, the Borrower agrees to pay to the Agent, for the ratable benefit of
the Banks, a letter of credit fee equal to the Applicable LIBOR Margin per
annum on the daily aggregate face amount of all Letters of Credit outstanding
and undrawn. The fee provided for in this Section 2.2()(1) shall be payable
quarterly in arrears on each Quarterly Payment Date, commencing with the
first such date to occur after the Closing Date on which any Letter of Credit
shall be outstanding, and on the Advance Termination Date.
(2) As additional consideration for the issuance of any
Letters of Credit, in addition to the fee payable under Section 2.2()(1)
hereof, the Borrower agrees to pay to the Agent, for its own account, an
opening fee of $200 per Letter of Credit and a fronting fee, in addition to
the processing, administrative, and similar fees of the Agent in connection
with the Letters of Credit, equal to 0.10% per annum on the daily aggregate
face amount of all Letters of Credit outstanding and undrawn; provided,
however, that the minimum fronting fee shall be $500 per Letter of Credit
issued and outstanding. The opening fee shall be paid on the date of
issuance of each Letter of Credit and the fronting fee provided for in this
Section 2.2()(2) shall be payable quarterly in arrears on each Quarterly
Payment Date, commencing with the first such date to occur after the Closing
Date on which any Letter of Credit shall be outstanding, and on the Advance
Termination Date.
(d) The Agent shall irrevocably grant to each Bank, and, to
induce the Agent to issue Letters of Credit hereunder, each Bank irrevocably
agrees to accept and purchase from the Agent, on the terms and conditions
hereinafter stated, for such Bank's own account and risk, an undivided
participation interest equal to such Bank's Advance Commitment Percentage in
the Agent's obligations and rights under each Letter of Credit issued
hereunder and any amounts paid by the Agent thereunder. Each Bank
unconditionally and irrevocably agrees with the Agent that, if any amounts
are paid under any such Letter of Credit for which the Agent is not
reimbursed in full by the Borrower in accordance with the terms of this
Agreement, such Bank shall pay to the Agent, upon demand, at the Agent's
address for notices specified in Section 12.2 below, such Bank's Advance
Commitment Percentage of such amounts paid by the Agent that are not so
reimbursed. Each Bank acknowledges and agrees that its obligation to make
such payment to the Agent is absolute and unconditional and shall not be
affected by any circumstance whatsoever, regardless of whether the conditions
precedent in Article 6 are then
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satisfied, the Advance Commitments are then in effect, a Default or an Event of
Default then exists or all of the Loans have been accelerated.
(e) If any amount required to be paid by any Bank to the Agent
pursuant to Section 2.2() in respect of any unreimbursed portion of any
payment made by the Agent under any Letter of Credit is not paid to the Agent
within three Business Days after the date such payment is due, such Bank
shall pay to the Agent, on demand, an amount equal to the product of (1) such
amount, times (2) the daily average Federal Funds Rate, as quoted by the
Agent, during the period from and including the date such payment is required
to the date on which such payment is immediately available to the Agent,
times (3) a fraction, the numerator of which is the number of days that
elapse during such period and the denominator of which is 360. If any such
amount required to be paid by any Bank pursuant to Section 2.2() is not in
fact made available to the Agent by such Bank within three Business Days
after the date such payment is due, the Agent shall be entitled to recover
from such Bank, on demand, such amount with interest thereon calculated from
such due date at the rate per annum then applicable to Base Rate Advances
hereunder. Further, such Bank shall be deemed to have assigned any and all
payments made of principal and interest on its Loans, and any other amounts
due to it hereunder to the Agent to fund its participation in the Letter of
Credit Obligations that such Bank failed to purchase under this Section until
such amount has been purchased (as a result of assignment or otherwise). A
certificate of the Agent submitted to any Bank with respect to any amounts
owing under this Section shall be conclusive in the absence of manifest error.
(f) Whenever, at any time after the Agent has made payment
under any Letter of Credit and has received from any Bank its pro rata share
of such payment in accordance with Section 2.2(), the Agent receives any
payment related to such Letter of Credit (whether directly from the Borrower
or otherwise, including proceeds of Collateral applied thereto by the Agent),
or any payment of interest on account thereof, the Agent will pay to such
Bank its pro rata share thereof; provided, however, that in the event that
any such payment received by the Agent shall be required to be returned by
the Agent, such Bank shall return to the Agent, for the account of the Agent,
the portion thereof previously distributed by the Agent to it.
(g) The Borrower's obligations under this Section 2.2 shall be
absolute and unconditional under any and all circumstances, irrespective of
any set-off, counterclaim or defense to payment that the Borrower may have or
have had against the Agent or any beneficiary of a Letter of Credit;
provided, however, that nothing in this Section 2.2(g) shall constitute a
waiver of any claim that the Borrower may have against the Agent in
connection with a Letter of Credit under applicable law, including a claim
for wrongful payment. The Borrower also agrees with the Agent that the Agent
shall not be responsible for, and the Borrower's Letter of Credit Obligations
shall not be affected by, among other things, the validity or genuineness of
any documents or of any endorsements thereon, even though such documents
shall prove in fact 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
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such transferee, except for errors or omissions caused by the Agent's gross
negligence or willful misconduct. The Agent 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 Agent's gross negligence or willful
misconduct. The Borrower agrees that any action taken or omitted by the Agent
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 and
in accordance with the standards of care specified in the Uniform Customs and
Practice for Documentary Credits (1994 Revision), International Chamber of
Commerce Publication No. 500, and, to the extent not inconsistent therewith, the
UCC, shall be binding on the Borrower and shall not result in any liability of
the Agent to the Borrower.
(h) The issuance by the Agent of any modification, renewal or
supplement to any Letter of Credit hereunder shall be subject to the same
conditions under this Section 2.2 to the issuance of new Letters of Credit,
and no such modification, renewal or supplement shall be issued hereunder
unless either (1) the respective Letter of Credit would have complied with
such conditions had it originally been issued hereunder in such modified or
supplemented form or (2) each Bank shall have consented thereto.
SECTION 2.3. [INTENTIONALLY DELETED]
SECTION 2.4. Oasis Acquisition Loan.
(a) Each Bank severally agrees, subject to the terms and
conditions of this Agreement, to make an Acquisition Loan to the Borrower on
the Closing Date in an aggregate principal amount not to exceed the amount of
such Bank's Oasis Acquisition Loan Commitment.
(b) The proceeds of the Oasis Acquisition Loan shall be used to
(1) finance the Oasis Acquisition by an Acquisition Company pursuant to the
terms of an Acquisition Agreement, which terms shall be satisfactory to the
Agent, and (2) to pay closing fees (which may include those expenses that are
reasonably likely to be incurred within 90 days after the closing of such
Acquisition Loan and are paid within six months of such closing) and no other
purpose.
(c) The Borrower shall submit to the Agent a written request
for the Oasis Acquisition Loan in accordance with Section 4.6 hereof. Each
Bank shall, before 1:00 p.m. (Bethesda, Md., time) on the date of the
borrowing of such Loan as specified in the Borrower's written request
therefor, make available for the account of its Applicable Lending Office to
the Agent at its address referred to in Section 12.2 in same day funds, such
Bank's ratable portion of such Loan. After the Agent's receipt of such funds
and upon fulfillment of the applicable conditions set forth in Article 6, the
Agent shall deposit such funds to such account as the Borrower may direct.
(d) [INTENTIONALLY DELETED]
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(e) The obligations of the Borrower to repay the Oasis
Acquisition Loan, together with interest thereon, shall be evidenced by an
Oasis Acquisition Note issued to each Bank in a principal amount equal to the
Oasis Acquisition Loan made by such Bank. The principal amount of the Oasis
Acquisition Note shall be payable in 60 equal consecutive monthly
installments of principal, payable on each Oasis Acquisition Loan Payment
Date, beginning on the first Oasis Acquisition Loan Payment Date. The amount
of each principal installment shall be equal to the original principal
balance of the Oasis Acquisition Loan divided by 60. If not sooner paid, the
entire unpaid principal balance of the Oasis Acquisition Note and all accrued
and unpaid interest thereon shall be due and payable in full on the date on
which the last scheduled principal installment under the Oasis Acquisition
Note is due.
(f) The disbursement of the Oasis Acquisition Loan shall occur
simultaneously with the closing of the transaction contemplated by the
applicable Acquisition Agreement. The Acquisition Company shall be the owner
of all of the Acquired Assets free and clear of all Liens, except Liens
permitted by this Agreement. The Acquisition Company shall have performed
all of its obligations to the sellers of the Targets of the Oasis Acquisition
under such Acquisition Agreement required to be performed on or before the
closing thereof, which shall be on the Closing Date. Each of the Acquisition
Company and any Target which, upon consummation of the Oasis Acquisition,
becomes a Subsidiary of the Borrower, shall become a Loan Party pursuant to
the provisions of Section 9.1.
SECTION 2.5. Interest. The Borrower shall pay interest on the
unpaid principal amount of each Loan from the date of such Loan until such
principal amount shall be paid in full, on each Interest Payment Date, and on
the Advance Termination Date and the maturity date of the Oasis Acquisition
Loan, as applicable, at the following rates per annum:
(a) Base Rate Loans. During such periods as such Loan is a
Base Rate Loan, a rate per annum equal at all times to the Base Rate plus the
Applicable Base Rate Margin in effect from time to time.
(b) Other Loans. During such periods as such Loan is a LIBOR
Loan or a Floating LIBOR Loan, at a rate per annum equal to, as applicable,
the Floating LIBOR Rate or the Adjusted LIBOR for the applicable Interest
Period, plus the Applicable LIBOR Margin in effect from time to time.
SECTION 2.6. Designation, Conversion or Continuation of LIBOR
Loans. The Borrower shall have the right (a) to designate any portion of an
Advance or the Oasis Acquisition Loan to be a LIBOR Loan, (b) to Continue any
LIBOR Loan or portion thereof into a subsequent Interest Period, and (c) to
Convert any Base Rate Loan or Floating LIBOR Loan into a LIBOR Loan, subject
in each case to the selection of Interest Periods in accordance with the
definition thereof, and the provisions set forth below. Each such
designation, Conversion or Continuation shall be made upon prior irrevocable
written or telephonic notice to the Agent. Each designation, Continuation
and Conversion shall be subject to the following:
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(1) in the case of a designation, Continuation or
Conversion of less than all Advances and the Oasis Acquisition Loan, the
aggregate principal amount of Loans designated, Continued or Converted shall
not be less than $500,000 or an integral multiple of $100,000 above $500,000;
(2) if a Loan is being Continued as a LIBOR Loan, the
first Interest Period with respect thereto shall commence on the date of such
Continuation;
(3) if a Loan or a portion thereof is being designated as
or Converted to a LIBOR Loan, the first Interest Period with respect thereto
shall commence on the second Business Day following the Agent's receipt of
the notice required above;
(4) a LIBOR Loan may be Converted to a Base Rate Loan or
Floating LIBOR Loan only on the last day of an Interest Period;
(5) each request for a LIBOR Loan or a Continuation
thereof which shall fail to state an applicable Interest Period, shall be
deemed to be a request for an Interest Period of a one month duration; and
(6) subject to Section 4.6, a Base Rate Loan may be
Converted to a Floating LIBOR Loan, and vice versa, at any time.
In the event that the Borrower shall not give the required notice to
designate a Loan as a LIBOR Loan, continue a Loan as a LIBOR Loan into a
subsequent Interest Period, or Convert any Loan into a LIBOR Loan, such Loan
(unless repaid) shall be made as a Floating LIBOR Loan or shall automatically
be or become a Floating LIBOR Loan at the expiration of the then-current
Interest Period, as applicable.
SECTION 2.7. Prepayments.
(a) Subject to Section 4.5, the Borrower shall have the right
at any time and from time to time to prepay any Base Rate Loan or Floating
LIBOR Loan, in whole or in part, without premium or penalty.
(b) Subject to Section 4.5, the Borrower shall have the right
to prepay any LIBOR Loan, in whole or in part, on the last day of the
then-current Interest Period in effect for such LIBOR Loan. The Borrower
shall not prepay any LIBOR Loan except at the end of the Interest Period in
effect for such Loan.
(c) Partial prepayments of the Oasis Acquisition Loan shall be
applied to installments due thereunder in the inverse order of their
maturities. Prepayments of the Oasis Acquisition Loan may not be reborrowed
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(d) The Borrower immediately shall, first prepay the Advances
and, second, provide cover for the Letters of Credit as specified below, to
the extent that the Borrowing Base is less than 100% of Borrowing Base Credit
Extensions. In the event the Borrower shall be required to provide cover for
the Letters of Credit, the Borrower shall effect the same by paying to the
Agent immediately available funds in an amount equal to the required amount,
which funds shall be retained by the Agent in a cash collateral account (as
collateral security in the first instance for the Letter of Credit
Obligations) until such time as the Letters of Credit shall have been
terminated and all of such Letter of Credit Obligations are paid in full.
SECTION 2.8. Reduction of Commitments.
(a) The Oasis Acquisition Loan Commitment shall be
automatically reduced on the date of the disbursement of the Oasis
Acquisition Loan to Zero Dollars ($0.00).
(b) The Borrower shall have the right at any time and from time
to time (1) so long as no Loans, Letters of Credit or Obligations are
outstanding, to terminate the Advance Commitments, and (2) to reduce the
aggregate unused amount of the Advance Commitments (for which purpose use of
the Advance Commitment shall be deemed to include the aggregate amount of
outstanding Letters of Credit); provided that (i) the Borrower shall give
notice of each such termination or reduction as provided in Section 4.5
hereof, and (ii) each partial reduction shall be in an aggregate amount equal
to at least $1,000,000 (or a larger integral multiple of $500,000).
(c) Any Advance Commitment once terminated or reduced may not
be reinstated.
ARTICLE 3
YIELD PROTECTION, ETC.
SECTION 3.1. Suspension of LIBOR Loans.
(a) If the Agent is unable to determine LIBOR for any LIBOR
Loan for any reason, (1) the Agent shall forthwith notify the Borrower and
the Banks of such determination, (2) any request for LIBOR Loans shall be
withdrawn or changed to a request for Base Rate Loans, at the discretion of
the Borrower, (3) each LIBOR Loan will automatically, on the last day of the
then-existing Interest Period therefor, Convert into a Base Rate Loan, and
(4) the obligation of the Banks to make, or Continue Loans as, or to Convert
Loans into, LIBOR Loans shall be suspended until the Agent shall notify the
Borrower and the Banks that the circumstances causing such suspension no
longer exist.
(b) If, with respect to any LIBOR Loan, any Bank notifies the
Agent that LIBOR for any Interest Period will not adequately reflect the cost
to such Bank of making, funding or maintaining its respective LIBOR Loans for
such Interest Period, the Agent shall
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forthwith so notify the Borrower and the Banks, whereupon (1) each LIBOR Loan
will automatically, on the last day of the then-existing Interest Period
therefor, Convert into a Base Rate Loan, (2) any request for LIBOR Loans shall
be withdrawn or changed to a request for Base Rate Loans, at the discretion of
the Borrower, and (3) the obligation of the Banks to make, or Continue Loans as,
or to Convert Loans into, LIBOR Loans shall be suspended until the Agent shall
notify the Borrower and the Banks that the circumstances causing such suspension
no longer exist.
SECTION 3.2. Additional Costs.
(a) The Borrower shall pay directly to each Bank from time to
time such amounts as such Bank may determine to be necessary to compensate
such Bank for any costs that such Bank determines are attributable to its
making or maintaining of any LIBOR Loans or its obligation to make any LIBOR
Loans hereunder, or any reduction in any amount receivable by such Bank
hereunder in respect of any of such Loans or such obligation (such increases
in costs and reductions in amounts receivable being herein called "Additional
Costs"), resulting from any Regulatory Change that:
(1) shall subject any Bank (or its Applicable Lending
Office for any of such Loans) to any tax, duty or other charge in respect of
such Loans or its Notes or changes the basis of taxation of any amounts
payable to such Bank under this Agreement or its Notes in respect of any such
Loans (excluding changes in the rate of tax on the overall net income of such
Bank or of such Applicable Lending Office by the jurisdiction in which such
Bank has its principal office or such Applicable Lending Office); or
(2) imposes or modifies any reserve, special deposit or
similar requirements (other than the reserve requirement utilized in the
determination of the Adjusted LIBOR for such Loan) relating to any extensions
of credit or other assets of, or any deposits with or other liabilities of,
such Bank (including, without limitation, any of such Loans or any deposits
referred to in the definition of "LIBOR" in Section 1.1 hereof), or any
commitment of such Bank (including, without limitation, the Advance
Commitments of such Bank hereunder); or
(3) imposes any other condition affecting this Agreement
or its Notes (or any of such extensions of credit or liabilities) or its
Advance Commitments.
(b) Without limiting the effect of the provisions of
paragraph (a) of this Section 3.2, in the event that, by reason of any
Regulatory Change, any Bank either (1) incurs Additional Costs based on or
measured by the excess above a specified level of the amount of a category of
deposits or other liabilities of such Bank that includes deposits by
reference to which the interest rate on LIBOR Loans is determined as provided
in this Agreement or a category of extensions of credit or other assets of
such Bank that includes LIBOR Loans, or (2) becomes subject to restrictions
on the amount of such a category of liabilities or assets that it may hold,
then, if such Bank so elects by notice to the Borrower (with a copy to the
Agent), the obligation
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of such Bank to make or Continue, or to Convert Base Rate Loans into, LIBOR
Loans hereunder shall be suspended until such Regulatory Change ceases to be in
effect (in which case the provisions of Section 3.1 hereof shall be applicable).
(c) Without limiting the effect of the foregoing provisions of
this Section 3.2 (but without duplication), the Borrower shall pay directly
to each Bank from time to time on request such amounts as such Bank may
determine to be necessary to compensate such Bank (or, without duplication,
the bank holding company of which such Bank is a subsidiary) for any costs
that it determines are attributable to the maintenance by such Bank (or any
Applicable Lending Office or such bank holding company), pursuant to any law
or regulation or any interpretation, directive or request (whether or not
having the force of law and whether or not failure to comply therewith would
be unlawful) of any court or governmental or monetary authority (1) following
any Regulatory Change or (2) implementing any risk-based capital guideline or
other requirement (whether or not having the force of law and whether or not
the failure to comply therewith would be unlawful) heretofore or hereafter
issued by any government or governmental or supervisory authority
implementing at the national level the Basle Accord (including, without
limitation, the Final Risk-Based Capital Guidelines of the Board of Governors
of the Federal Reserve System (12 C.F.R. Part 208, Appendix A; 00 X.X.X. Xxxx
000, Xxxxxxxx X) and the Final Risk-Based Capital Guidelines of the Office of
the Comptroller of the Currency (12 C.F.R. Part 3, Appendix A)), of capital
in respect of its Advance Commitments or Loans (such compensation to include,
without limitation, an amount equal to any reduction of the rate or return on
assets or equity of such Bank (or any Applicable Lending Office or such bank
holding company) to a level below that which such Bank (or any Applicable
Lending Office or such bank holding company) could have achieved but for such
law, regulation, interpretation, directive or request). For purposes of this
Section 3.2 and Section 3.4 hereof, "Basle Accord" shall mean the proposals
for risk-based capital framework described by the Basle Committee on Banking
Regulations and Supervisory Practices in its paper entitled "International
Convergence of Capital Measurement and Capital Standards" dated July 1988, as
amended, modified and supplemented and in effect from time to time or any
replacement thereof.
(d) Each Bank shall notify the Borrower of any event occurring
after the date of this Agreement entitling such Bank to compensation under
paragraph (a) or (c) of this Section 3.2 as promptly as practicable, but in
any event within 45 days, after such Bank obtains actual knowledge thereof;
provided that (1) if any Bank fails to give such notice within 45 days after
it obtains actual knowledge of such an event, such Bank shall, with respect
to compensation payable pursuant to this Section 3.2 in respect of any costs
resulting from such event, only be entitled to payment under this Section 3.2
for costs incurred from and after the date 45 days prior to the date that
such Bank does give such notice and (2) each Bank will designate a different
Applicable Lending Office for the Loans of such Bank affected by such event
if such designation will avoid the need for, or reduce the amount of, such
compensation and will not, in the sole opinion of such Bank, be
disadvantageous to such Bank, except that such Bank shall have no obligation
to designate an Applicable Lending Office located in the United States of
America. Each Bank will furnish to the Borrower a certificate for
compensation under paragraph (a) or (c)
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of this Section 3.2. Determinations and allocations by any Bank for purposes of
this Section 3.2 of the effect of any Regulatory Change pursuant to paragraph
(a) or (b) of this Section 3.2, or of the effect of capital maintained pursuant
to paragraph (c) of this Section 3.2, on its costs or rate of return of
maintaining Loans or its obligation to make Loans, or on amounts receivable by
it in respect of Loans, and of the amounts required to compensate such Bank
under this Section 3.2, shall be conclusive, provided that such determinations
and allocations are made on a reasonable basis.
SECTION 3.3. Compensation. The Borrower shall pay to the Agent for
account of each Bank, upon the request of such Bank through the Agent, such
amount or amounts as shall be sufficient (in the reasonable opinion of such
Bank) to compensate it for any loss, cost or expense that such Bank determines
is attributable to:
(a) any payment, mandatory or optional prepayment or Conversion
of a LIBOR Loan made by such Bank for any reason (including, without
limitation, a mandatory prepayment of the Loans pursuant to Section 2.7(d) or
3.6 hereof or the acceleration of the loans pursuant to Section 10.1 hereof)
on a date other than the last day of the Interest Period for such Loan; or
(b) any failure by the Borrower for any reason (including,
without limitation, the failure of any of the conditions precedent specified
in Article 6 hereof to be satisfied) to borrow a LIBOR Loan from such Bank on
the date for such borrowing specified in the relevant request for borrowing
given pursuant to Section 4.6 hereof.
Without limiting the effect of the preceding sentence, such compensation
shall include an amount equal to the excess, if any, of (i) the amount of
interest that otherwise would have accrued on the principal amount so paid,
prepaid, Converted or not borrowed for the period from the date of such
payment, prepayment, Conversion or failure to borrow to the last day of the
then current Interest Period for such Loan (or, in the case of a failure to
borrow, the Interest Period for such Loan that would have commenced on the
date specified for such borrowing) at the applicable rate of interest for
such Loan provided for herein over (ii) the amount of interest that otherwise
would have accrued on such principal amount at a rate per annum equal to the
interest component of the amount such Bank would have bid in the London
interbank market for Dollar deposits of leading banks in amounts comparable
to such principal amount and with maturities comparable to such period (as
reasonably determined by such Bank).
SECTION 3.4. Additional Costs in Respect of Letters of Credit.
(a) Without limiting the obligations of the Borrower under
Section 3.2 hereof (but without duplication), if as a result of any
Regulatory Change or any risk-based capital guideline or other requirement
heretofore or hereafter issued by any government or governmental or
supervisory authority implementing at the national level the Basle Accord
there shall be imposed, modified or deemed applicable any tax, reserve,
special deposit, capital adequacy or similar requirement against or with
respect to or measured by reference to Letters of Credit
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issued or to be issued hereunder and the result shall be to increase the cost to
any Bank or Banks of issuing (or purchasing participations in) or maintaining
its obligation hereunder to issue (or purchase participations in) any Letter of
Credit hereunder or reduce any amount receivable by any Bank hereunder in
respect of any Letter of Credit (which increases in cost, or reductions in
amount receivable, shall be the result of such Bank's or Banks' reasonable
allocation of the aggregate of such increases or reductions resulting from such
event), then, upon demand by such Bank or Banks (through the Agent), the
Borrower shall pay immediately to the Agent for account of such Bank or Banks,
from time to time as specified by such Bank or Banks (through the Agent), such
additional amounts as shall be sufficient to compensate such Bank or Banks
(through the Agent) for such increased costs or reductions in amount. A
statement as to such increased costs or reductions in amount incurred by any
such Bank or Banks, submitted by such Bank or Banks to the Borrower shall be
conclusive in the absence of manifest error as to the amount thereof.
(b) Each Bank shall notify the Borrower of any event occurring
after the date of this Agreement entitling such Bank to compensation under
paragraph (a) of this Section 3.4 as promptly as practicable, but in any
event within 45 days, after such Bank obtains actual knowledge thereof;
provided that (1) if any Bank fails to give such notice within 45 days after
it obtains actual knowledge of such an event, such Bank shall, with respect
to compensation payable pursuant to this Section 3.4 in respect of any costs
resulting from such event, only be entitled to payment under this Section 3.4
for costs incurred from and after the date 45 days prior to the date that
such Bank does give such notice and (2) each Bank will designate a different
Applicable Lending Office for the Letters of Credit participations of such
Bank affected by such event if such designation will avoid the need for, or
reduce the amount of, such compensation and will not, in the sole opinion of
such Bank, be disadvantageous to such Bank, except that such Bank shall have
no obligation to designate an Applicable Lending Office located in the United
States of America. Each Bank will furnish to the Borrower a certificate for
compensation under paragraph (a) of this Section 3.4. Determinations and
allocations by any Bank for purposes of this Section 3.4 of the effect of any
Regulatory Change pursuant to paragraph (a) of this Section 3.4, or of the
effect of capital maintained pursuant to paragraph (c) of Section 3.4, on its
costs or rate of return of issuing or participating in, or maintaining
Letters of Credit or its obligation to issue or participate in Letters of
Credit, or on amounts receivable by it in respect of Letters of Credit, and
of the amounts required to compensate such Bank under this Section 3.4, shall
be conclusive, provided that such determinations and allocations are made on
a reasonable basis.
SECTION 3.5. U.S. Taxes. The Borrower agrees to pay to each Bank
that is not a U.S. Person such additional amounts as are necessary in order
that the net payment of any amount due to any Bank that is a non-U.S. Person
hereunder after deduction for or withholding in respect of any U.S. Tax
imposed with respect to such payment (or in lieu thereof, payment of such
U.S. Tax by such non-U.S. Person), will not be less than the amount stated
herein to be then due and payable, provided that the foregoing obligation to
pay such additional amounts shall not apply:
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(a) to any payment to a Bank hereunder unless such Bank is, on
the date hereof (or on the date it becomes a Bank as provided in Section
12.19 hereof) and on the date of any change in the Applicable Lending Office
of such Bank, either entitled to submit a Form 1001 (relating to such Bank
and entitling it to a complete exemption from withholding on all interest to
be received by it hereunder in respect of the Loans) or Form 4224 (relating
to all interest to be received by such Bank hereunder in respect of the
Loans), or
(b) to any U.S. Tax imposed solely by reason of the failure by
such non-U.S. Person to comply with applicable certification, information,
documentation or other reporting requirements concerning the nationality,
residence, identity or connections with the United States of America of such
non-U.S. Person if such compliance is required by statute or regulation of
the United States of America as a precondition to relief or exemption from
such U.S. Tax.
For the purposes of this Section 3.5, "Form 1001" shall mean Form 1001
(Ownership, Exemption, or Reduced Rate Certificate) of the Department of the
Treasury of the United States of America, "Form 4224" shall mean Form 4224
(Exemption from Withholding of Tax on Income Effectively Connected with the
Conduct of a Trade or Business in the United States) of the Department of the
Treasury of the United States of America (or in relation to either such Form
such successor and related forms as may from time to time be adopted by the
relevant taxing authorities of the United States of America to document a
claim to which such Form relates), "U.S. Person" shall mean a citizen,
national or resident of the United States of America, a corporation,
partnership or other entity created or organized in or under any laws of the
United States of America, or any estate or trust that is subject to Federal
income taxation regardless of the source of its income and "U.S. Taxes" shall
mean any present or future tax, assessment or other charge or levy imposed by
or on behalf of the United States of America or any taxing authority thereof
or therein. Within 30 days after paying any amount to the Agent or any Bank
from which it is required by law to make any deduction or withholding, and
within 30 days after it is required by law to remit such deduction or
withholding to any relevant taxing or other authority, the Borrower shall
deliver to the Agent for delivery to such non-U.S. Person evidence
satisfactory to such Person of such deduction, withholding or payment (as the
case may be). A certificate as to the amount of such increased cost or
additional tax, submitted to the Borrower and the Agent by such Bank, shall
be conclusive and binding for all purposes, absent manifest error.
SECTION 3.6. Illegality. Notwithstanding any other provision of
this Agreement, if any Bank shall notify the Agent that the introduction of
or any change in or in the interpretation of any law or regulation makes it
unlawful, or any central bank or other governmental authority asserts that it
is unlawful, for any Bank to perform its obligations hereunder to make LIBOR
Loans or to fund or maintain LIBOR Loans hereunder, (1) the obligation of the
Banks to make, to Continue Loans as or to Convert Loans or portions thereof
into LIBOR Loans, shall be suspended until the Agent shall notify the
Borrower and the Banks that the circumstances causing such suspension no
longer exist, and (2) the Borrower shall forthwith prepay in full all
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LIBOR Loans of all Banks then outstanding, together with interest accrued
thereon and any amount payable pursuant to Section 3.3.
ARTICLE 4
PAYMENTS, COMPUTATIONS AND CERTAIN NOTICES
SECTION 4.1. Payments.
(a) The Borrower shall make each payment hereunder and under
the Notes and the LC Agreements without setoff, deduction or counterclaim of
any kind not later than 11:00 a.m. (Bethesda, Md. time) on the day when due
in U.S. dollars to the Agent at its address referred to in Section 12.2 in
same day funds. Except to the extent otherwise provided herein, the Agent
will promptly thereafter cause to be distributed like funds relating to the
payment of principal or interest on the Advances, the Acquisition Loans or
fees ratably to the Banks for the account of their respective Applicable
Lending Offices, and like funds relating to the payment of any other amount
payable to any Bank to such Bank for the account of its Applicable Lending
Office, in each case to be applied in accordance with the terms of this
Agreement.
(b) If any payment of principal, interest or fees is not made
within ten days of its due date, the Borrower agrees to pay to the Agent, for
the ratable benefit of the Banks, a late charge equal to 5% of the amount of
the payment, provided that the foregoing shall not constitute a waiver of the
right of the Agent or the Majority Banks to declare an Event of Default under
Section 10.1(a). Upon the occurrence of an Event of Default and during the
continuation of such Event of Default, interest shall accrue on the Loans and
the Letter of Credit Obligations representing amounts paid by the Agent under
a Letter of Credit for which it has not been reimbursed, and the fee on the
undrawn Letters of Credit shall accrue, at a per annum rate of 2% above the
rate otherwise in effect.
(c) Whenever any payment hereunder or under the Notes shall be
stated to be due on a day other than a Business Day, such payment shall be
made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of payment of interest or fee, as
the case may be; provided, however, if such extension would cause payment of
interest on or principal of LIBOR Loans to be made in the next following
calendar month, such payment shall be made on the next preceding Business Day.
SECTION 4.2. Commitment Fees. In consideration of the Loans to be made by
the Banks, the Borrower agrees to pay to the Agent for the ratable benefit of
each Bank a commitment fee equal to the Applicable Unused Fee Percentage per
annum on the daily aggregate unused amount of the Advance Commitment (for which
purpose the use of the Advance Commitment shall include the outstanding amount
of Advances and Letters of Credit). The fees provided for in this Section 4.2
shall be calculated and shall be payable quarterly in arrears on each Quarterly
Payment Date, commencing with the first such date to occur after the Closing
Date and on the Advance Termination Date.
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SECTION 4.3. Agent's Fee. [INTENTIONALLY DELETED]
SECTION 4.4. Computations. All computations of interest, fees and other
charges hereunder and under any Loan Document shall be made by the Agent on the
basis of a year of 360 days, in each case for the actual number of days
(including the first day but excluding the last day) occurring in the period
for which such interest or other amounts are payable. Each determination by
the Agent of an interest rate or fees hereunder shall be conclusive and binding
for all purposes, absent manifest error.
SECTION 4.5. Minimum Amounts. Except for mandatory prepayments
made pursuant to Section 2.7(d) hereof and Conversions or prepayments made
pursuant to Sections 3.1, 3.2 and 3.6 hereof, each borrowing, Conversion and
partial prepayment of principal of Loans shall be in an aggregate amount at
least equal to $500,000 or a larger multiple of $100,000 (borrowings,
Conversions or prepayments of or into Loans of different Types or, in the
case of LIBOR Loans, having different Interest Periods at the same time
hereunder to be deemed separate borrowings, Conversions and prepayments for
purposes of the foregoing, one for each Type or Interest Period), provided
that the aggregate principal amount of LIBOR Loans having the same Interest
Period shall be in an amount at least equal to $500,000 or a larger multiple
of $100,000 and, if any LIBOR Loans would otherwise be in a lesser principal
amount for any period, such Loans shall be Floating LIBOR Loans during such
period.
SECTION 4.6. Certain Notices. In addition to written request for
the Oasis Acquisition Loan required by Section 2.4, notices by the Borrower
to the Agent of terminations or reductions of the Advance Commitments, of
borrowings, Conversions, Continuations and optional prepayments of Loans and
of Types of Loans and of the duration of Interest Periods shall be in
writing, shall be irrevocable and shall be effective only if received by the
Agent not later than 10:00 a.m. Bethesda, Md., time on the number of Business
Days prior to the date of the relevant termination, reduction, borrowing,
Conversion, Continuation or prepayment or the first day of such Interest
Period specified below:
Notice Number of Business Days Prior
------ -----------------------------
Termination or reduction of Advance 3
Commitments
Borrowing or prepayment of, or
Conversions into, Base Rate Loans or 1
Floating LIBOR Loans
Borrowing or prepayment of, Conversions
into, Continuations as, or duration of 3
Interest Period for, LIBOR Loans
Each such notice of termination or reduction shall specify the amount by
which the Advance Commitment is to be terminated or reduced. Each such
notice of borrowing, Conversion, Continuation or optional prepayment shall
specify the Loans to be borrowed, Converted,
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Continued or prepaid and the amount (subject to Section 4.5 hereof) and Type of
each Loan to be borrowed, Converted, Continued or prepaid and the date of
borrowing, Conversion, Continuation or optional prepayment (which shall be a
Business Day). Each such notice of the duration of an Interest Period shall
specify the Loans to which such Interest Period is to relate. The Agent shall
promptly notify the Banks of the contents of each such notice. In the event that
the Borrower fails to select the Type of Loan, or the duration of any Interest
Period for any LIBOR Loan, within the time period and otherwise as provided in
this Section 4.6, such Loan (if outstanding as a LIBOR Loan) will be
automatically Converted into a Floating LIBOR Loan on the last day of the then
current Interest Period for such Loan or (if outstanding as a Floating LIBOR
Loan) will remain as, or (if not then outstanding) will be made as, a Floating
LIBOR Loan.
SECTION 4.7. Non-Receipt of Funds by the Agent. Unless the Agent
shall have been notified by a Bank or the Borrower (the "Payor") prior to the
date on which the Payor is to make payment to the Agent of (in case of a
Bank) the proceeds of a Loan to be made by such Bank hereunder or (in the
case of the Borrower) a payment to the Agent for account of one or more of
the Banks hereunder (such payment being herein called the "Required
Payment"), which notice shall be effective upon receipt, that the Payor does
not intend to make the Required Payment to the Agent, the Agent may assume
that the Required Payment has been made and may, in reliance upon such
assumption (but shall not be required to), make the amount thereof available
to the intended recipient(s) on such date; and, if the Payor has not in fact
made payment, the recipient shall, on demand, repay to the Agent the amount
so made available together with interest thereon in respect of each day
during the period commencing on the date (the "Advance Date") such amount was
so made available by the Agent until the date the Agent recovers such amount
at a rate per annum equal to the Federal Funds Rate for such day and, if such
recipient(s) shall fail promptly to make such payment, the Agent shall be
entitled to recover such amount, on demand, from the Payor, together with
interest as aforesaid, provided that if neither the recipient(s) nor the
Payor shall return the Required Payment to the Agent within five Business
Days of the Advance Date, the Payor and the recipient(s) shall each be
obligated to pay interest on the Required Payment from and after such fifth
Business Day as follows:
(a) if the Required Payment shall represent a payment to be
made by the Borrower to the Banks, the Borrower and the recipient(s) shall
each be obligated to pay interest in respect of the Required Payment at a
rate per annum equal to the Base Rate in effect from time to time plus 2%
(and, in case the recipient(s) shall return the Required Payment to the
Agent, without limiting the obligation of the Borrower under Section 4.1(b)
hereof to pay interest to such recipient(s) at the default rate in respect of
the Required Payment); and
(b) if the Required Payment shall represent proceeds of a Loan
to be made by the Banks to the Borrower, the Payor and the Borrower shall
each be obligated to pay interest in respect of the Required Payment at a
rate per annum equal to the Base Rate in effect from time to time plus 2%
(and, in case the Borrower shall return the Required Payment to the Agent,
without limiting any claim the Borrower may have against the Payor in respect
of the Required Payment).
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SECTION 4.8. Sharing of Payments, etc. Except to the extent
otherwise expressly provided herein, (a) Advances and the Oasis Acquisition
Loan shall be made by the Banks pro rata in accordance with their respective
Commitment Percentages, (b) each reduction in the Advance Commitment shall be
made pro rata in accordance with the respective amounts thereof, (c) each
payment or prepayment of the principal of or interest on the Advances and the
Oasis Acquisition Loan or of fees shall be made for the account of the Banks
pro rata in accordance with the respective amounts thereof then due and
payable and held by them, provided that if immediately prior to giving effect
to any such payment the outstanding principal amount of Advances and the
Oasis Acquisition Loan shall not be held by the Banks pro rata in accordance
with their respective Commitment Percentage, then such payment shall be
applied to such Loans in such manner as shall result, as nearly as
practicable, in the outstanding principal amount of such Loans being held pro
rata in accordance with their respective Commitment Percentage, (d) the
making, Conversion and Continuation of Advances and the Oasis Acquisition
Loan of a particular Type (other than Conversions provided for in
Sections 3.1, 3.2 and 3.6) shall be made pro rata among the Banks in
accordance with their respective Commitment Percentage and the then current
Interest Period for each Bank's portion of each Loan of such Type shall be
conterminous; and (e) the Bank's participations in, and payment obligations
in respect of, Letters of Credit shall be pro rata in accordance with their
respective Commitment Percentage. If any Bank shall obtain any payment
(whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) on account of the Advances made by it or on account of
its share of the Oasis Acquisition Loan (other than pursuant to Sections 3.2,
3.3, 3.4 and 3.5) in excess of its ratable share of payments on account of
the Advances or the Oasis Acquisition Loan obtained by all the Banks, such
Bank shall forthwith purchase from the other Banks such participations in the
Advances made by them or in the Oasis Acquisition Loan as shall be necessary
to cause such purchasing Bank to share the excess payment ratably with each
of them; provided, however, that if all or any portion of such excess payment
is thereafter recovered from such purchasing Bank, such purchase from each
Bank shall be rescinded and such Bank shall repay to the purchasing Bank the
purchase price to the extent of such recovery together with an amount equal
to such Bank's ratable share (according to the proportion of (1) the amount
of such Bank's required repayment to (2) the total amount so recovered from
the purchasing Bank) of any interest or other amount paid or payable by the
purchasing Bank in respect of the total amount so recovered. The Borrower
agrees that any Bank so purchasing a participation from another Bank pursuant
to this Section 4.8 may, to the fullest extent permitted by law, exercise all
of its rights of payment (including the right of set-off) with respect to
such participation as fully as if such Bank were the direct creditor of the
Borrower in the amount of such participation.
SECTION 4.9. Several Obligations. No Bank shall be responsible
for the failure of any other Bank to make a Loan or to perform any other
obligation to be made or performed by such other Bank hereunder, and the
failure of any Bank to make a Loan or to perform any other obligation to be
made or performed by it hereunder shall not relieve the obligation of any
other Bank to make any Loan or to perform any other obligation to be made or
performed by such other Bank.
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SECTION 4.10. Evidence of Obligations. The Agent shall maintain
accounts, in which it shall record (a) the date, amount, Type, interest rate
and duration of Interest Period ( if applicable) of each Loan and Letter of
Credit Obligation, (b) the amount of any principal, interest and fee due and
payable or to become due and payable hereunder, and (c) the amount of any sum
received by the Agent hereunder. The entries maintained in such accounts
shall be prima facie evidence of the existence of the amounts recorded
therein, provided that the failure of the Agent to maintain such accounts or
any error therein shall not in any manner affect the obligation of the
Borrower to repay all amounts owed by it in accordance with the terms of this
Agreement and the other Loan Documents.
SECTION 4.11. 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 10.1, all payments
received by the Banks 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, then to all
indemnity obligations then due and payable by the Borrower hereunder, then to
all Agent's fees then due and payable, then to all other fees and commissions
then due and payable, then to accrued and unpaid interest on the Revolving
Notes, the Oasis Acquisition Note and the Letter of Credit Obligations (pro
rata in accordance with all such amounts due), then to the principal amount
of the Revolving Notes, the Oasis Acquisition Note and the Letter of Credit
Obligations, and then to the cash collateral account described in Section
10.l to the extent of any Letters of Credit then outstanding, in that order.
ARTICLE 5
SECURITY
--------
SECTION 5.1. Collateral. The Obligations shall be secured by a
first Lien on all of the Collateral of each Loan Party, granted to the Agent
for the ratable benefit of the Banks. Each such Lien will be created by and
subject to the provisions of (a) a Security Agreement, in substantially the
form of Exhibit F attached hereto (each, a "Security Agreement"), (b) an
Intellectual Property Assignment, in substantially the form of Exhibit G
attached hereto (each, an "Intellectual Property Assignment"),and (c) with
respect to any Real Estate, a Mortgage.
SECTION 5.2. Assignments. Each Loan Party shall execute all
agreements, instruments and documents and shall perform all acts that the
Agent may require with respect to Receivables owing by the Government to
ensure compliance with the Assignment of Claims Act.
SECTION 5.3. Subsidiary Guaranty. The Obligations shall be
guaranteed by each Subsidiary that is formed or Acquired on or subsequent to
the date of this Agreement in accordance with the provisions of a Guaranty
Agreement in substantially the form of Exhibit H attached hereto (each, a
"Subsidiary Guaranty").
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ARTICLE 6
CONDITIONS OF LENDING
---------------------
SECTION 6.1. Condition Precedent to Initial Disbursement. The
obligation of any Bank to make an initial Advance or the Oasis Acquisition
Loan, as applicable, or of the Agent to issue a Letter of Credit, is subject
to the condition precedent that the Agent shall have received on or before
the day of the initial Loan or the issuance of the initial Letter of Credit
the following, each in form and substance satisfactory to the Agent:
(a) This Agreement, executed by all of the parties hereto.
(b) The Revolving Notes payable to the order of the Banks.
(c) A Security Agreement and an Intellectual Property
Assignment, duly executed by the Loan Parties, together with:
(1) Sufficient signed original financing statements to be
filed under the Uniform Commercial Code of all jurisdictions that the Agent
may deem necessary or desirable in order to perfect the security interests in
the Collateral,
(2) Evidence that all filings have been made in the U.S.
Copyright Office and the U.S. Patent and Trademark Office necessary to
perfect the assignments created by the Intellectual Property Assignment,
(3) Completed lien search requests from all jurisdictions
referred to in Section 6.1((c))((1)) above and for all Intellectual Property
filings in the U.S. Copyright Office and the U.S. Patent and Trademark Office,
(4) UCC-3 termination statements for all financing
statement filings, and releases of assignments under the Assignment of Claims
Act, that cover any portion of the Collateral except as otherwise permitted
hereby,
(5) Such landlord and mortgagee waivers as the Agent
shall request with respect to any landlord or mortgagee that may claim an
interest in any of the Collateral,
(6) Evidence of the insurance required by the terms of
the Security Agreement, and
(7) Evidence that all other actions necessary or, in the
opinion of the Agent, desirable to perfect and protect the priority of the
security interests in the Collateral of the Loan Parties created by the
Security Agreements and the Intellectual Property Assignments have been taken.
(d) All of the documents and instruments required by Section
8.1(m) with respect to Real Estate owned by the Loan Parties on the Closing
Date.
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(e) Certified copies of the resolutions of the Board of
Directors of each of the Loan Parties approving each Loan Document to which
it is a party, and of all documents evidencing other necessary corporate
action and governmental approvals, if any, with respect to each such Loan
Document.
(f) A certificate of the Secretary or an Assistant Secretary of
each of the Loan Parties certifying the names and true signatures of the
officers thereof authorized to sign each Loan Document to which it is a party
and the other documents to be delivered hereunder.
(g) Certified copies of the articles of incorporation and
bylaws of each of the Loan Parties, together with a good standing or
qualification certificate, dated not more than 30 days prior to the date
hereof, from the appropriate state official of any state in which the
Borrower is incorporated or qualified to do business.
(h) A Borrowing Base Certificate, an Aging and an Inventory
schedule, all of which shall be as of June 30, 1998, and shall be in form and
substance satisfactory to the Agent.
(i) A Compliance Certificate for the period ended on June 30,
1998.
(j) A favorable opinion of McGuire, Woods, Battle & Xxxxxx,
counsel for the Loan Parties, in form and substance acceptable to the Agent.
(k) The .75% non-refundable loan origination fees set forth in
the commitment letter between the Borrower and the Agent dated July 23, 1998.
(l) Payment of all fees, costs and expenses related to the
Loans and the Loan Documents, including, but not limited to, the reasonable
fees and expenses of counsel to the Agent.
(m) [Intentionally Deleted].
(n) A satisfactory reference from Epson related to the
Borrower's performance under the Epson Contract as of the Closing Date.
(o) A satisfactory review by the Agent's counsel of all
transaction documents related to the Oasis Acquisition.
SECTION 6.2. Conditions Precedent to Each Borrowing. The
obligation of each Bank to make a Loan, and the obligation of the Agent to
issue any Letter of Credit, shall be subject to the further conditions
precedent that on the date of such Loan or the issuance of any Letter of
Credit:
(a) The following statements shall be true:
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(1) The representations and warranties contained in each
Loan Document are correct on and as of the date of disbursement of such Loan
or issuance of such Letter of Credit, before and after giving effect to such
Loan and the application of the proceeds therefrom and to the issuance of
such Letter of Credit, as though made on and as of such date (or if such
representation or warranty is expressly stated to have been made as of a
specific date, as of such specific date), and
(2) No Default or Event of Default has occurred and is
continuing, or would result from such Loan or from the application of the
proceeds therefrom or from the issuance of such Letter of Credit;
(b) With respect to each Letter of Credit, the Borrower shall
have complied with the provisions of Section 2.2;
(c) If required by the Agent for any Advance or Letter of
Credit, the Borrower shall have delivered to the Agent, a current (as of a
date no more than 15 days prior to the date of said Loan) Borrowing Base
Certificate, duly executed by the chief financial officer of the Borrower and
appropriately completed, and a current (as of a date no more than 30 days
prior to the date of said Loan) Aging and valuation of Inventory;
(d) For the Oasis Acquisition Loan, the Agent shall receive the
Oasis Acquisition Note, appropriately completed, and payable to each Bank; and
(e) The Agent shall have received such other approvals,
opinions or documents as the Agent or any Bank through the Agent may
reasonably request, and all legal matters incident to the Loans and the
Letter of Credit shall be satisfactory to counsel for the Agent.
Each borrowing by the Borrower and each request for a Loan or the
issuance of a Letter of Credit by the Borrower hereunder shall constitute a
representation by the Borrower to the effect set forth in this Section 6.2(a)
(both as of the date of such request and as of the date of such borrowing or
issuance).
SECTION 6.3. Additional Conditions Precedent to the Oasis
Acquisition Loan. In addition to the conditions precedent stated in
Section 6.2, the disbursement of the Oasis Acquisition Loan shall be subject
to the following conditions precedent:
(a) True and complete copies of the applicable Acquisition
Agreement, any Related Acquisition Documents, a pro forma Compliance
Certificate and supporting Pro Forma Financials and an Acquisition Analysis
shall be delivered to the Agent at least five days prior to the disbursement
of such Loan, including Oasis' financial statements for the last two years
and its EBITDA for the last year.
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(b) The Acquisition Company shall deliver to the Agent a
certificate, dated as of the date of disbursement of the Oasis Acquisition
Loan, pursuant to which the Acquisition Company shall warrant and represent
to the Banks that (1) to the best of its knowledge, each of the
representations and warranties made by the sellers of the Targets of the
Oasis Acquisition to the Acquisition Company under such Acquisition Agreement
is true and correct; (2) no broker or finder brought about the making or
closing of such Loan made with respect to such Acquisition Agreement, and
neither the Borrower nor the Banks have any obligation to any Person in
respect of any finder's or brokerage fees in connection with such Loan;
(3) the parties to the Acquisition Agreement have complied with all
requirements of every bulk sales or transfer law that may be applicable to
the sale of the Acquired Assets to the Acquisition Company, or the
Acquisition Company has obtained indemnification against any and all
liability arising from the failure to so comply; (4) the Acquisition
Agreement and the Related Acquisition Documents have not been amended,
(5) the applicable Acquisition Analysis and Pro Forma Financials remain
accurate and complete in all material respects; and (6) as of the date
immediately after the consummation of all the agreements and transactions
under and pursuant to such Acquisition Agreement, the Borrower and its
Subsidiaries will not have any material amount of liabilities, contingent or
otherwise, not reflected in the Pro Forma Financials.
(c) Termination statements or releases shall have been filed
with respect to any financing statements or Liens covering all or any portion
of the Acquired Assets, except for financing statements perfecting Liens
permitted by this Agreement.
(d) Each of the Acquisition Company and any Target which
becomes, upon consummation of the Oasis Acquisition, a Subsidiary of the
Borrower, shall become Loan Parties pursuant to the provisions of Section 9.1.
(e) Each Bank shall have received evidence satisfactory to it
that, after giving effect to the Oasis Acquisition Loan, no Loan Party is or
will be rendered insolvent within the meaning of Section 548 of the Federal
Bankruptcy Code and any applicable state fraudulent conveyance laws. This
condition may be satisfied by delivering to the Agent a Solvency Certificate,
in substantially the form of Exhibit I attached to this Agreement (a
"Solvency Certificate"), dated as of the disbursement date of the Oasis
Acquisition Loan.
(f) The Acquisition complies with clauses (a) through (e) of
the definition of "Permitted Acquisition" in Section 1.1.
(g) All of the shares of capital stock or other ownership
interests of Oasis (except directors' qualifying shares) shall, as a result
of said Acquisition, be directly or indirectly owned by the Borrower.
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ARTICLE 7
REPRESENTATIONS AND WARRANTIES
------------------------------
SECTION 7.1. Representations and Warranties of the Borrower. The
Borrower represents and warrants as follows:
(a) Incorporation, Good Standing. The Borrower and each of its
Subsidiaries (1) is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation,
(2) has all requisite corporate power, and has all material licenses,
governmental authorizations, consents and approvals necessary to own its
assets and carry on its business as now being or as proposed to be conducted,
and (3) is duly qualified to transact business in each jurisdiction in which
such qualification is required. As of the date of this Agreement, the
Borrower has no Subsidiaries other than MCTI, MOI, Microdyne UK, Inc.,
Microdyne, Ltd. and MCTI Acquisition Corporation, a Maryland corporation.
Upon consummation of the Oasis Acquisition, APCOM, Inc., a Maryland
corporation ("Apcom"), and Celerity Systems, Inc., a California corporaiton
("Celerity"), will be Subsidiaries of the Borrower, and as of such date,
MCTI, MOI, Apcom and Celerity will own assets with an aggregate book value of
30%, 13%, 20% and 21%, respectively, of the book value of the consolidated
assets of the Borrower and its Subsidiaries.
(b) Corporate Power and Authority. The execution, delivery and
performance by the Borrower and its Subsidiaries of each Loan Document are
within the powers of the Borrower and its Subsidiaries, have been duly
authorized by all necessary corporate action, and do not contravene, conflict
with, result in a breach of or require any consent under (1) the charter,
bylaws, or other organizational documents of the Borrower or any Subsidiary,
or (2) any law or regulation, or any order, writ injunction or decree of any
court or governmental authority or agency, or any contractual restriction
binding on or affecting the Borrower or any of its Subsidiaries, and do not
result in or require the creation of any lien, security interest or other
charge or encumbrance (other than pursuant hereto) upon or with respect to
any properties of the Borrower or any Subsidiary.
(c) No Authorizations. No authorization, approval or consent
of, or other action by, and no notice to or filing with, any governmental
authority or regulatory body, any securities exchange or stockholders is
required for the due execution, delivery and performance by the Borrower or
any Subsidiary of any Loan Document or for the legality, validity or
enforceability thereof, except for filings in respect of the Liens created in
the Loan Documents.
(d) Legally Enforceable Agreement. This Agreement is, and each
other Loan Document to which the Borrower or any Subsidiary will be a party
when delivered hereunder will be, legal, valid and binding obligations of the
Borrower or such Subsidiary, as applicable, enforceable against the Borrower
or such Subsidiary, as applicable, in accordance with their respective terms.
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(e) Financial Statements. The audited balance sheet of the
Borrower as of September 28, 1997, and the related statements of income, cash
flows and stockholders equity of the Borrower for the fiscal year then ended,
with the opinion thereon of Xxxxx Xxxxxxxx LLP, and the unaudited balance
sheet of the Borrower as of June 30, 1998, and the related statements of
income, cash flows and stockholders equity for the three-month period then
ended, copies of which have been furnished to each Bank, are complete and
correct and fairly present the financial condition of the Borrower as of such
dates and the results of the operations of the Borrower for the periods ended
on such dates, all in accordance with GAAP. The Borrower does not have any
material contingent liabilities, liabilities for taxes, unusual forward or
long-term commitments or unrealized or anticipated losses from any
unfavorable commitments, except as referred to or reflected or provided for
in such financial statements as of such dates. The Pro Forma Financials,
when and as delivered to the Agent, will represent the Borrower's best
estimate of the future operations of the applicable Acquisition Company and
Target and will be based on the assumptions stated therein, all of which will
be believed by the Borrower to be reasonable assumptions.
(f) Litigation. Other than the actions or proceedings listed
on Schedule 7.1(f) attached to this Agreement, there is no pending or, to the
best of the Borrower's knowledge, threatened action or proceeding affecting
the Borrower or any Subsidiary before any court, governmental agency or
arbitrator, that, if adversely determined could, either individually or in
the aggregate, have a Materially Adverse Effect.
(g) Use of Proceeds. No proceeds of any Loan will be used to
acquire any equity security of a class which is registered pursuant to
Section 12 of the Securities Exchange Act of 1934.
(h) Regulation U. Neither the Borrower nor any Subsidiary is
engaged in the business of extending credit for the purpose of purchasing or
carrying margin stock (within the meaning of Regulation U issued by the Board
of Governors of the Federal Reserve System), and no proceeds of any Loan
shall be used to purchase or carry any margin stock or to extend credit to
others for the purpose of purchasing or carrying any margin stock.
(i) Ownership and Liens. The Borrower and each Subsidiary has
title to all of its assets, including the Collateral, and none of the
Collateral or such assets is subject to any Lien, except such Liens as are
permitted by this Agreement.
(j) ERISA. Neither the Borrower nor any Subsidiary has incurred
any material "accumulated funding deficiency" within the meaning of Section 302
of ERISA or Section 412 of the Code, nor has the Borrower or any Subsidiary
incurred any material liability to the PBGC in connection with any "employee
pension benefit plan" (as defined in Section 3(2) of ERISA) established or
maintained by the Borrower or any Subsidiary. None of the employee pension
benefit plans (as defined above) of the Borrower or any Subsidiary, nor any
trusts created thereunder, nor any trustee or administrator thereof, has engaged
in a "prohibited transaction," as such term is defined in Section 406 of ERISA
or Section 4975 of the Code, that could subject such plans or
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any of them, any such trust, or any trustee or administrator thereof, or any
party dealing with such plans or any such trust to any material liability or tax
or penalty on prohibited transactions imposed by such Sections 406 or 4975.
Neither the Borrower nor any Affiliate or Subsidiary of the Borrower is now, or
at any time in the past has been, obligated to make contributions to a
"multiemployer plan," as such term is defined in Section 4001(a)(3) of ERISA.
(k) Taxes. The Borrower and each Subsidiary has filed all tax
returns (federal, state and local) required to be filed and have paid all
taxes, assessments and governmental charges and levies shown thereon to be
due, including interest and penalties, and the charges, accruals and reserves
on the books of the Borrower in respect thereof are, in the opinion of the
Borrower, adequate. Neither the Borrower nor any Subsidiary has given or
been requested to give a waiver of the statute of limitations relating to the
payment of any taxes.
(l) Debt. The Borrower and its Subsidiaries are not in any
manner directly or contingently obligated with respect to any Debt that is
not permitted by this Agreement. Neither the Borrower nor any Subsidiary is
in default with respect to any Debt.
(m) Debarment and Suspension. No event has occurred and no
condition exists that is likely to result in the debarment or suspension of
the Borrower or any Subsidiary from any contracting with the Government, and
the Borrower has not, nor has any Affiliate or Subsidiary of the Borrower,
been subject to any such debarment or suspension prior to the date of this
Agreement.
(n) Material Contracts. Attached hereto as Schedule 7.1(n) is
a correct and complete list, as of the date of this Agreement, of each
Material Contract. Neither the Borrower, any Subsidiary nor any other party
thereto is in material default under any Material Contract.
(o) Intellectual Property. The Borrower and its Subsidiaries
do not own or hold any Intellectual Property subject to United States
copyright, patent or trademark protection, other than as listed on
Schedule 7.1(o) attached hereto, and all of such Intellectual Property has
been registered with the United States Patent and Trademark Office and the
Register of Copyrights. The Borrower and each Subsidiary owns or has the
right to use under valid license agreements or otherwise all Intellectual
Property that is required or necessary for the conduct of the business of the
Borrower and its Subsidiaries as now conducted or proposed to be conducted
without any conflict with any rights of any other Person.
(p) Compliance with Laws. The Borrower and each Subsidiary are
in compliance in all material respects with all applicable laws and
regulations.
(q) True and Complete Information. All factual and financial
information (taken as a whole) previously furnished to the Banks in
connection with this Agreement by the Borrower and each Subsidiary is, and
all factual and financial information (taken as a whole) furnished to the
Banks by the Borrower and each Subsidiary after the date of this Agreement
will be, true and accurate in all material respects on the date on which such
information is dated,
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certified or furnished, and is not, and will not be, incomplete by omitting to
state any fact necessary to make such information (taken as a whole) not
misleading at such time in light of the circumstances under which such
information was provided.
(r) Integrated Business. The Borrower and its Subsidiaries
will be engaged as an integrated group in providing services and goods to
their respective Customers. The integrated operation will require financing
on such a basis that credit supplied to the Borrower be made available from
time to time to Subsidiaries of the Borrower, as required for the successful
operation of the Borrower and its Subsidiaries separately, and the integrated
operation as a whole. In that connection, the Borrower and its Subsidiaries
will request that the Agent and the Banks provide the Loans to, and issue the
Letters of Credit for the account of, the Borrower (to be made available as
needed to the Subsidiaries) to finance such operation. To induce the Agent
and the Banks to extend credit, each Subsidiary will execute and deliver to
the Agent a Security Agreement, a Subsidiary Guaranty, an Intellectual
Property Assignment, and, if applicable, Mortgages for all Real Estate
Assets. Each Subsidiary will derive benefit, directly and indirectly, from
the credit so extended to the Borrower, both in its separate capacity and as
a member of the integrated group.
(s) Environmental Laws. The Borrower and its Subsidiaries have
obtained all governmental approvals which are required under Environmental
Laws, and are in compliance with all terms and conditions of such
governmental approvals, which the failure to obtain or to comply with could
reasonably be expected to have a Material Adverse Effect. Each of the
Borrower and its Subsidiaries is also in compliance with all other
limitations, restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules, and timetables contained in the Environmental Laws
the failure with which to comply could have a Material Adverse Effect.
Neither the Borrower nor any Subsidiary is aware of, or has received notice
of, any past, present, or future events, conditions, circumstances,
activities, practices, incidents, actions, or plans which, with respect to
the Borrower or any of its Subsidiaries may interfere with or prevent
compliance or continued compliance with Environmental Laws, or may give rise
to any common-law or legal liability, or otherwise form the basis of any
claim, action, demand, suit, proceeding, hearing, study, or investigation,
based on or related to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling or the emission,
discharge, release or threatened release into the environment, of any
pollutant, contaminant, chemical, or industrial, toxic, or other Hazardous
Material that could be reasonably expected to have a Material Adverse Effect;
and there is no civil, criminal, or administrative action, suit, demand,
claim, hearing, notice, or demand letter, notice of violation, investigation,
or proceeding pending or, to the knowledge of the Borrower or any Subsidiary,
after due inquiry, threatened, against the Borrower or any of its
Subsidiaries relating in any way to Environmental Laws that could be
reasonably expected to have a Material Adverse Effect.
(t) Investment Company; Public Utility Holding Company.
Neither the Borrower nor any Subsidiary is an "investment company" within the
meaning of the Investment Company Act of 1940. Neither the Borrower nor any
Subsidiary is (i) a "holding company" or a
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"subsidiary company" of a "holding company," or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company," within the meaning
of the Public Utility Holding Company Act of 1935, as amended, or (ii) subject
to any other Applicable Law which purports to regulate or restrict its ability
to borrow money or to consummate the transactions contemplated by this Agreement
or to perform its obligations under any Loan Document to which it is a party.
(u) Year 2000. The Borrower and its Subsidiaries have
undertaken reasonable efforts to determine whether all material Date Affected
Information Technology used in the business operations of the Borrower and
its Subsidiaries is Fully Date Capable, and, to the extent necessary, the
Borrower and its Subsidiaries have initiated efforts to make Date Affected
Information Technology Fully Date Capable prior to the date that the failure
to be Fully Date Capable would adversely affect the operation thereof. For
purposes of this Agreement, Date Affected Information Technology is
"material" if the failure or degradation in performance of such Date Affected
Information Technology would result in a Material Adverse Effect.
(v) Employee Relations. As of the Closing Date, neither the
Borrower nor any of its Subsidiaries is a 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(v). The Borrower knows of
no pending, threatened or contemplated strikes, work stoppage or other
collective labor disputes involving its employees or those of any of its
Subsidiaries, except for those which are not reasonably likely to have a
materially adverse effect on the operations of the Borrower or any Subsidiary.
(w) Burdensome Provisions. Neither the Borrower nor any
Subsidiary is a party to any indenture, agreement, lease or other instrument,
or subject to any corporate or partnership restriction, governmental approval
or applicable law which is so unusual or burdensome as in the foreseeable
future could be reasonably expected to have a Material Adverse Effect. The
Borrower and its Subsidiaries do not presently anticipate that future
expenditures needed to meet the provisions of any statutes, orders, rules or
regulations of a governmental authority will be so burdensome as to have a
Material Adverse Effect.
(x) No Material Adverse Change. Since March 31, 1998, there
has been no material adverse change in the business or financial condition of
the Borrower or any Subsidiary, and no event has occurred or condition arisen
that could reasonably be expected to have a Material Adverse Effect.
(y) Absence of Defaults. No event has occurred and is
continuing which constitutes a Default or an Event of Default. No event has
occurred and is continuing 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 under any Material Contract or
judgment, decree or order to which the Borrower or one or more of its
Subsidiaries is a party or by which the Borrower or one or more of its
Subsidiaries or any of their respective properties may be bound or which
would require the Borrower or one or more of its Subsidiaries to make any
payment thereunder prior to the scheduled maturity date therefor.
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SECTION 7.2. Survival of Representations and Warranties, Etc.
All statements contained in any certificate, financial statement or other
instrument delivered by or on behalf of the Borrower or any Subsidiary to an
Agent or any Bank pursuant to or in connection with this Agreement or any of
the other Loan Documents (including, but not limited to, any such statement
made in or in connection with any amendment thereto or any statement
contained in any certificate, financial statement or other instrument
delivered by or on behalf of the Borrower or any Subsidiary prior to the date
hereof and delivered to an Agent or any Bank in connection with closing the
transactions contemplated hereby) shall constitute representations and
warranties made by the Borrower under this Agreement. All representations
and warranties made under this Agreement and the other Loan Documents shall
be deemed to be made at and as of the date hereof, the Closing Date and at
and as of the date of the disbursement of any Loan or the issuance of any
Letter of Credit, except to the extent that such representations and
warranties expressly relate solely to an earlier date (in which case such
representations and warranties shall have been true and accurate on and as of
such earlier date) and except for changes in factual circumstances
specifically permitted hereunder. All such representations and warranties
shall survive the effectiveness of this Agreement, the execution and delivery
of the Loan Documents, the making of the Loans and the issuance of each
Letter of Credit.
ARTICLE 8
COVENANTS OF THE BORROWER
-------------------------
SECTION 8.1. Affirmative Covenants. So long as any Note shall
remain unpaid, any Letter of Credit is outstanding, or any Bank shall have
any Advance Commitment hereunder, the Loan Parties shall, unless the Banks
shall otherwise consent in writing:
(a) Compliance with Laws, etc. Comply and cause each
Subsidiary to comply in all material respects with all applicable laws,
rules, regulations and orders.
(b) Reporting Requirements. Furnish to the Banks:
(1) As soon as available and, in any event, within
45 days after the end of each of the first three quarters of each fiscal year
of the Borrower, unaudited financial statements consisting of consolidated
and consolidating balance sheets of the Borrower and its Subsidiaries as of
the end of such quarter, and consolidated and consolidating statements of
operations, cash flows and stockholders' equity of the Borrower and its
Subsidiaries for the period commencing at the end of the previous fiscal year
and ending with the last day of the preceding quarter, all in reasonable
detail and stating in comparative form the respective consolidated figures
for the corresponding date and period in the previous fiscal year and all
prepared in accordance with GAAP. Such statements shall be accompanied by
reports itemizing raw materials, work in process and finished goods Inventory
by division and revenues and gross profits by division. Such financial
statements and reports shall be certified to be accurate by the chief
financial officer of the Borrower;
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(2) As soon as available and, in any event, (A) within
120 days after the end of each fiscal year of the Borrower, audited financial
statements consisting of consolidated and consolidating balance sheets of the
Borrower and its Subsidiaries as of the end of such fiscal year, and
consolidated and consolidating statements of operation, cash flows and
stockholders' equity of the Borrower and its Subsidiaries for such fiscal
year, all in reasonable detail and stating in comparative form the respective
consolidated figures for the corresponding date and period in the prior
fiscal year and all prepared in accordance with GAAP; and (B) within 45 days
after the beginning of each fiscal year, a copy of the Borrower's formally
adopted annual budget or other form of Borrower's consolidated financial
projections (but in any event to include, without limitation, pro forma
income and cash flow) for the following fiscal year. The consolidated
statements shall be accompanied by an unqualified opinion thereon acceptable
to the Banks of an independent certified public accounting firm selected by
the Borrower and acceptable to the Agent;
(3) Promptly upon receipt thereof, copies of any reports
submitted to the directors of the Borrower or any Subsidiary by independent
certified public accountants in connection with examination of the financial
statements of the Borrower or any Subsidiary made by such accountants;
(4) Promptly after the commencement thereof, notice of
all actions, suits and proceedings before any court or governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, affecting the Borrower or any Subsidiary, that, if determined
adversely to the Borrower or any such Subsidiary, could have a Material
Adverse Effect;
(5) As soon as possible and, in any event, within three
Business Days after the occurrence of each Default and Event of Default, a
written notice setting forth the details of such Default or Event of Default
and the action that is proposed to be taken by the Borrower with respect
thereto;
(6) Promptly after the sending or filing thereof, copies
of all proxy statements, financial statements and reports that the Borrower
or any Subsidiary sends to its stockholders, and copies of all regular,
periodic and special reports, and all registration statements that the
Borrower or any Subsidiary files with the Securities and Exchange Commission
or any governmental authority that may be substituted therefor, or with any
national securities exchange;
(7) On or before the 15th day of each calendar month,
(i) an Aging as of the last day of the previous calendar month, (ii) reports
identifying, in sufficient detail for the Banks, all Inventory on hand as of
the end of the previous calendar month and all unbilled Accounts Receivable
as of the end of the previous calendar month, (iii) a Borrowing Base
Certificate signed by the chief financial officer of the Borrower, (iv) a
schedule of all outstanding accounts payable of the Loan Parties and the age
of such payables in intervals of 30 days, as of the last day of the previous
calendar month, (v) such other supporting documents to the schedules
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as the Agent from time to time reasonably may request, and (v) such invoices,
instruments, chattel paper and other evidence of indebtedness representing any
Accounts Receivable, duly endorsed in blank or to the Banks, as the Banks may
request;
(8) Within 45 days after the end of each fiscal quarter,
a certificate of the chief financial officer of the Borrower, in
substantially the form of Exhibit J attached to this Agreement (a "Compliance
Certificate"), to the effect that no Default or Event of Default occurred
during the prior quarter and containing calculations of the financial
covenants set forth in Section 8.3;
(9) As soon as possible and in any event within two
Business Days after the issuance thereof, a copy of each letter of intent,
proposal, term sheet or similar instrument issued by the Borrower or any
Subsidiary with respect to an Acquisition;
(10) Not less than 15 Business Days prior to the closing
of an Acquisition, Pro Forma Financials and an Acquisition Analysis
reflecting the consummation of such Acquisition and the transactions incident
thereto. The Pro Forma Financials shall be materially correct and complete,
and shall present fairly the consolidated financial condition of the Borrower
as of the date immediately after consummation of such Acquisition Agreement
and the transactions incident thereto;
(11) Prompt notice of any change in the business, assets,
liabilities, financial condition, results of operations or business prospects
of the Borrower or any Subsidiary which has had or may have a Material
Adverse Effect;
(12) Within 30 days after entering into any Material
Contract, a copy of such Material Contract;
(13) Written notice of the modification, termination or
breach by any Person of a Material Contract;
(14) Such other information respecting the condition or
operations, financial or otherwise, of the Borrower or any Subsidiary as the
Banks from time to time reasonably may request in writing; and
(15) On the Closing Date and on the last day of every
consecutive six month period thereafter, a written list of each Customer and
the current telephone number or address for such Customer.
(c) Maintenance of Existence. Preserve and maintain and cause
each Subsidiary to preserve and maintain its corporate or other legal
existence and good standing in the jurisdiction of its incorporation, and
qualify and remain qualified as a foreign corporation in each jurisdiction in
which such qualification is required.
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(d) Maintenance of Records. Keep, and cause each Subsidiary to
keep, adequate records and books of account, in which complete entries will
be made in accordance with GAAP, reflecting all financial transactions of the
Borrower and the Subsidiaries. The principal records and books of account,
including those concerning the Collateral of the Borrower and its
Subsidiaries, shall be kept at the chief executive office of the Borrower
described in the Security Agreement. The Borrower will not move such
records and books of account or change its chief executive office or the name
under which it does business without (1) giving the Agent at least 90 days'
prior written notice, and (2) executing and delivering financing statements
satisfactory to the Banks prior to such move or change.
(e) Maintenance of Properties. Maintain, keep and preserve,
and cause each Subsidiary to maintain, keep and preserve, all of its
franchises, licenses and other properties (tangible and intangible) necessary
or useful in the proper conduct of its business in good working order and
condition, ordinary wear and tear excepted.
(f) Maintenance of Insurance. Maintain, and cause each
Subsidiary to maintain, insurance with financially sound and reputable
insurance companies or associations in such amounts and covering such risks
as are usually carried by companies engaged in the same or a similar business
and similarly situated, including the insurance required by the Security
Agreement.
(g) Right of Inspection. (i) At any reasonable time and from
time to time, permit the Agent, any Bank or any agent or representative of
the Agent or any Bank to audit and verify the Collateral, examine and make
copies of and abstracts from the records and books of account of, and visit
the properties of, the Borrower and any Subsidiary, and to discuss the
affairs, finances and accounts of the Borrower and any Subsidiary with any of
their respective officers and directors and the Borrower's independent
accountants; and (ii) no later than 90 days after the Closing Date, a
business credit diagnostic examination of the books, records, and systems of
the Borrower and its Subsidiaries to be performed by the Agent's Business
Credit division at the expense of the Agent.
(h) Business Line. Remain, and cause each Subsidiary to
remain, in substantially the same lines of business as those conducted by the
Borrower on the date of this Agreement.
(i) Primary Operating Account. Maintain the Borrower's primary
operating accounts with the Agent.
(j) Material Contracts. Comply, and cause each Subsidiary to
comply, in all material respects, with all terms and conditions of all
Material Contracts to which it is a party.
(k) Payment of Taxes and Claims. Pay or discharge, and cause
each Subsidiary to pay and discharge, when due (1) all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits
or upon any properties belonging to it,
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and (2) all lawful claims of materialmen, mechanics, carriers, warehousemen and
landlords for labor, materials, supplies and rentals which, if unpaid, might
become a Lien on any properties of such Person; provided, however, that this
Section shall not require the payment or discharge of any such tax, assessment,
charge, levy or claim which is being contested in good faith by appropriate
proceedings which operate to suspend the collection thereof and for which
adequate reserves have been established on the books of the Borrower or such
Subsidiary, as applicable, in accordance with GAAP.
(l) Environmental Matters. Comply, and cause all of its
Subsidiaries to comply, with all Environmental Laws, the failure with which
to comply could have a Material Adverse Effect. If a Borrower or any
Subsidiary shall (1) receive notice that any violation of any Environmental
Law may have been committed or is about to be committed by such Person,
(2) receive notice that any administrative or judicial complaint or order has
been filed or is about to be filed against a Borrower or any Subsidiary
alleging violations of any Environmental Law or requiring the Borrower or any
Subsidiary to take any action in connection with the release of Hazardous
Materials, or (3) receive any notice from a governmental authority or private
party alleging that a Borrower or any Subsidiary may be liable or responsible
for costs associated with a response to or cleanup of a release of Hazardous
Materials or any damages caused thereby, and such notices, individually or in
the aggregate, could have a Material Adverse Effect, such Borrower shall
provide the Agent with a copy of such notice within 10 days after the receipt
thereof by such Borrower or any of the Subsidiaries. The Borrower and the
Subsidiaries shall promptly take all actions necessary to prevent the
imposition of any Liens on any of their respective properties arising out of
or related to any Environmental Laws.
(m) Mortgages. Not later than 30 days after the date the Agent
gives notice (the "Mortgage Notice") to the Borrower requesting the granting
of Mortgages on Real Estate of the Borrower and its Subsidiaries , the
Borrower (1) will and will cause each of the applicable Subsidiaries to duly
execute, acknowledge and deliver Mortgages to the Agent in form and substance
satisfactory to the Agent, in recordable form (including full legal
descriptions of the Real Estate) and in such number of copies as the Agent
shall have requested and (2) will furnish or cause to be furnished to the
Agent:
(i) one or more policies of mortgagee title
insurance on a 1970 (as revised to October 17, 1984) ALTA form of
policy or, if unavailable, such other form of policy as shall be
acceptable to the Agent (the "Title Policies") issued to the Agent by
such title insurance company as the Agent shall approve (the "Title
Insurer"), in form and substance and in such amounts satisfactory to
the Agent, insuring the perfection, enforceability and first priority
of the Lien of each of the Mortgages subject only to such title
exceptions as the Agent in the exercise of its reasonable discretion
shall approve and including such affirmative coverage and endorsements
as the Agent shall require, together with copies of (A) all instruments
of record and (B) all other documents specified in the Title Policies
encumbering or otherwise affecting the Real Estate;
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(ii) if so requested by the Agent, as-built surveys
of the Real Estate dated not more than 90 days prior to the date of the
Mortgage Notice showing such matters as may be reasonably required by
the Agent, in form and content reasonably acceptable to the Agent,
certified to the Agent, the Banks and the Title Insurer and prepared by
a registered surveyor acceptable to the Agent;
(iii) written opinions of counsel ("Local Counsel")
issued to the Agent and in form and substance satisfactory to special
counsel to the Agent, that (A) the Mortgages have been duly authorized,
executed and delivered by the respective Mortgagors and, if
appropriate, by the trustee designated therein (such trustee to be
specified by the Borrower with the approval of the Agent), and that
such trustee has full power and authority to serve in such capacity and
to exercise all rights and powers under such Mortgages and (B) the
Mortgages are legal, valid and binding obligations enforceable in
accordance with their respective terms except as may be limited by
(x) bankruptcy, insolvency, reorganization, moratorium or similar laws
of general applicability affecting the enforcement of creditor's rights
and (y) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law) and
opining as to such other matters with respect to the Mortgages as such
special counsel to the Agent may require;
(iv) evidence satisfactory to the Agent of (A) the
due recordation of the Mortgages and filing of financing statements
reasonably satisfactory to the Agent in connection therewith in the
appropriate recording and filing offices and (B) the payment of all
filing and recording fees and expenses, of any mortgage, mortgage
recording, intangibles or other tax payable in connection with the
Mortgages or the obligations secured thereby, and of the premiums for
the Title Policies and all other charges in connection therewith;
(v) any consents required to grant any Mortgage and
such affidavits, releases, indemnities, undertakings or other documents
as the Title Insurer may require in order to issue the Title Policies
as provided above;
(vi) such direct access reinsurance agreements with
such other title insurance companies and in such amounts, all as the
Agent shall reasonably require;
(vii) if so requested by the Agent, an appraisal of
the Real Estate, in form and substance satisfactory to the Agent,
complying with the Appraisal Policies and Review Procedures of the
Board of Governors of the Federal Reserve System (12 CFR Part 323);
(viii) if so requested by the Agent, an environmental
survey and assessment with respect to the sites and facilities
comprising the Real Estate prepared by a firm of licensed engineers in
form and substance satisfactory to the Agent;
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(ix) the hazard, flood and other insurance policies
required by the Mortgages; and
(x) evidence that all expenses and fees of the
Title Insurer in connection with the issuance of the Title Policies
with respect to the Mortgages have been paid and that all recording and
filing fees and all mortgage recording, documentary, intangibles, stamp
and similar taxes payable in connection with the recording of each
Mortgage in the appropriate county land office have been paid.
(n) Year 2000 Compliance. (1) Initiate and maintain a program
to identify any Date Affected Information Technology used in the business
operations of the Borrower and its Subsidiaries that is not Fully Date
Capable, and, in connection therewith, undertake in good faith to make all
material Date Affected Information Technology used in such business
operations Fully Date Capable prior to the date that the failure to be Fully
Date Capable would adversely affect the operation thereof, (2) advise the
Agent in the event that it has reason to believe that any material Date
Affected Information Technology will not be Fully Date Capable prior to the
date that the failure to be Fully Date Capable would adversely affect the
operation thereof, (3) advise the Agent in the event that the Borrower has
reason to believe that it will be adversely affected by the failure of any
affiliated or nonaffiliated entity to have its Date Affected Information
Technology Fully Date Capable, (4) provide the Agent, upon request, access to
and copies of information necessary to permit the Agent to determine whether
the Borrower's Date Affected Information Technology is, or will be, Fully
Date Capable, including, without limitation, (i) minutes, resolutions and
reports to and from Borrower's Board of Directors or committee thereof;
(ii) internally generated reports, consultant reports or auditor's report
regarding the status of the Borrower's Date Affected Information Technology,
(iii) all documents relating to a "Year 2000" program, and (iv) officer
certificates or other statements requested by the Agent regarding status of
Date Affected Information Technology. The Borrower acknowledges that the
Agent's right to receive, or the Agent's receipt of, the foregoing
information does not impose any obligation on the Agent or any Bank to assess
the accuracy or effect of such information, or to recommend or require
remedial action of any kind. The Borrower further acknowledges that the
actual or potential failure or degradation of any material Date Affected
Information Technology due to its failure to be Fully Date Capable may
constitute a material adverse change in the Borrower's business or financial
condition.
(o) Novell Debt. Use its best efforts to deliver to the Agent,
not later than October 31, 1998, written confirmation of Novell, Inc. that
the Obligations constitute Senior Debt, as such term is defined in the
promissory notes of the Borrower held by Novell, Inc.
SECTION 8.2. Negative Covenants. So long as any Note shall
remain unpaid, any Letter of Credit shall remain outstanding, or any Bank
shall have any Advance Commitment hereunder, no Loan Party shall, without the
written consent of the Majority Banks:
(a) Liens, etc. Create, incur, assume or permit to exist, or
permit any Subsidiary to create, incur, assume or permit to exist, any Lien
upon or with respect to any of its
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assets, now owned or hereafter acquired, except: (1) Liens in favor of the Agent
for the ratable benefit of the Banks; (2) Permitted Encumbrances; (3) Liens on
fixed assets in existence on the date of this Agreement and described on
Schedule 8.2(a) attached to this Agreement; and (4) purchase-money Liens,
whether now existing or hereafter arising (including those arising out of a
Capital Lease) on any fixed assets provided that (i) any property subject to a
purchase-money Lien is acquired by the Borrower or any Subsidiary in the
ordinary course of its respective business and the Lien on any such property is
created contemporaneously with such acquisition, (ii) each such Lien shall
attach only to the property so acquired, and (iii) the Debt secured by all such
Liens shall be included in the amount permitted by Section 8.2(b).
(b) Debt. Create, incur, assume or permit to exist, or permit
any Subsidiary to create, incur, assume or permit to exist, any Debt which
would at any time cause the aggregate of all Debt of the Borrower and its
Subsidiaries taken as a whole, to exceed $5,000,000, except: (1) the
Obligations; (2) Debt in existence on the date of this Agreement and
described on Schedule 8.2(b) attached to this Agreement; (3) Debt of the
Borrower subordinated to the Obligations on terms satisfactory to the Banks;
and (4) Debt of a Loan Party to another Loan Party. All such Debt (other
than that described in clauses (1) and (2) of this subsection (b)) shall be
repayable in full in no less than 36 months.
(c) Dividends, etc. Declare or pay any dividends; or purchase,
redeem, retire or otherwise acquire for value any of its capital stock now or
hereafter outstanding; or make any distribution of assets to its stockholders
as such whether in cash, assets or obligations of the Borrower; or make any
payment on account of the purchase, redemption, retirement or acquisition of
any option, warrant or other right to acquire shares of the Borrower's or
Subsidiary's capital stock; or allocate or otherwise set apart any sum for
the payment of any dividend or distribution on, or for the purchase,
redemption or retirement of, any shares of its capital stock; or make any
other distribution by reduction of capital or otherwise in respect of any
shares of its capital stock; or permit any of its Subsidiaries to purchase or
otherwise acquire for value any stock of the Borrower or another Subsidiary,
except that, subject to the compliance by the Borrower with the provisions of
Section 8.3 below, (1) the Borrower may declare and deliver dividends and
make distributions payable in common stock of the Borrower, (2) the Borrower
may purchase or otherwise acquire shares of its capital stock by exchange for
or out of the proceeds received from a substantially concurrent issue of new
shares of its capital stock, and (3) any Subsidiary may pay dividends to the
Borrower or to another Subsidiary.
(d) Mergers, etc. Merge or consolidate with any Person, or
permit any Subsidiary to do so, except (1) for Permitted Acquisitions,
(2) that any Loan Party may merge into or transfer assets to the Borrower,
(3) that any Loan Party may merge into or consolidate with or transfer assets
to any other Loan Party, and (4) an Acquisition Company or a Target may merge
with the Borrower or any Loan Party provided that (i) the surviving entity
becomes a Loan Party pursuant to the provisions of Article 9 of this
Agreement, and (ii) after giving effect thereto, no Default or Event of
Default shall occur.
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(e) Sale and Leaseback. Sell, transfer or otherwise dispose
of, or permit any Subsidiary to sell, transfer or otherwise dispose of, any
real or personal property to any Person and thereafter, directly or
indirectly, lease back the same or similar property.
(f) Dispositions. Dispose of, or permit any Subsidiary to
Dispose of, any of its now owned or hereafter acquired assets (including,
without limitation, shares of stock and indebtedness of Subsidiaries,
Receivables and leasehold interests), except: (1) for Inventory sold or
leased in the ordinary course of business; (2) assets no longer used or
useful in the conduct of its business; and (3) that any Loan Party may sell,
lease, assign or otherwise transfer its assets to another Loan Party.
(g) Investments, Loans, Advances, Guarantees and Acquisitions.
Purchase, hold or acquire, or permit any Subsidiary to purchase, hold or
acquire, any Investment (including any option, warrant or other right to
acquire any Investment) of, make or permit to exist any loans or advances to,
Guarantee any obligations of, any other Person, or purchase or otherwise
acquire (in one transaction or a series of transactions) any assets of any
other Person constituting a business unit, in excess of $4,000,000 in the
aggregate at any time with respect to the Borrower and its Subsidiaries,
taken as a whole, except:
(1) Permitted Investments;
(2) Investments existing on the date hereof and set forth
on Schedule 8.2(g), to the extent such Investments would not be permitted
under any other clause of this Section;
(3) Investments by the Borrower and its Subsidiaries in
the capital stock or other ownership interests of their Subsidiaries;
provided that any such shares of capital stock or ownership interests held by
a Loan Party shall remain held by such Loan Party, and such Loan Party shall
at no time sell, lease, grant options with respect to, pledge, hypothecate,
mortgage, or otherwise transfer or encumber in any way whatsoever, said
shares or interests and provided further that neither the Borrower nor any
Subsidiary shall make Investments in Subsidiaries that are not Loan Parties,
other than the existing Investments of the Borrower in the Subsidiaries
described in Section 7.1(a) above;
(4) Loans or advances made by a Loan Party to any other
Loan Party;
(5) Investments received in connection with the
bankruptcy or reorganization of, or settlement of delinquent accounts and
disputes with, Customers, in each case in the ordinary course of business;
(6) Travel advances made to employees in the ordinary
course of business;
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(7) Loans made by the Borrower or any Subsidiary to its
employees; provided that all such loans shall not exceed $1,000,000 in the
aggregate at any time outstanding; and
(8) Receivables acquired in connection with the sale of
goods or services in the ordinary course of business.
Within the above limitations, the Borrower or any Subsidiary may make any
Permitted Acquisition; provided that the Borrower shall have delivered to the
Agent a certificate signed by the Chief Financial Officer of the Borrower
certifying that at the time of and immediately after giving effect to such
Permitted Acquisition, (i) no Event of Default or Default shall have occurred
and be continuing, and (ii) the Borrower shall be in compliance on a pro
forma basis with the covenants set forth in Section 8.3, in each case as of
the last day of the most recent fiscal quarter adjusted to give effect (as if
such event had occurred on the first day of the four fiscal quarter period
ended on such last day) to such Permitted Acquisition and the financing
therefor, and the adjustments and calculations set forth in such certificate
shall be based on assumptions and otherwise in form and substance reasonably
satisfactory to the Agent.
(h) ERISA. With respect to any employee benefit plan or plans
covered by Title IV of ERISA, permit (1) any prohibited transaction or
transactions under ERISA or the Code that results, or may result, in
liability to the Borrower or any Subsidiary exceeding in the aggregate
$500,000, or (2) any reportable event under ERISA if, upon termination of the
plan or plans with respect to which one or more such reportable events shall
have occurred, there is or would be any liability of the Borrower or any
Subsidiary to the PBGC exceeding in the aggregate $500,000. Neither the
Borrower nor any Subsidiary or Affiliate of the Borrower shall adopt,
establish or become a party to any multiemployer plan.
(i) Transactions with Affiliates. Enter into any transaction,
including, without limitation, the purchase, sale or exchange of property or
the rendering of any service, with any Affiliate, or permit any Subsidiary to
enter into any such transaction, with any Affiliate, except in the ordinary
course of and pursuant to the reasonable requirements of the Borrower's or
such Subsidiary's business and upon fair and reasonable terms no less
favorable to the Borrower or such Subsidiary than would be applicable in a
comparable arm's-length transaction with a Person not an Affiliate.
SECTION 8.3. Financial Covenants. So long as any Note shall
remain unpaid, any Letter of Credit remains outstanding, or any Bank shall
have any Advance Commitment hereunder, the Borrower shall maintain, unless
the Majority Banks shall otherwise consent in writing:
(a) Net Worth. As of the end of each fiscal quarter of the
Borrower, Net Worth of not less than the Minimum Compliance Level; provided,
that upon notice to the Agent of the termination of the Epson Contract, Net
Worth shall thereafter be measured monthly rather than quarterly.
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(b) Debt Coverage Ratio. For each 12-month period ending on
the last day of each fiscal quarter of the Borrower, a Debt Coverage Ratio of
not less than (1) 1.2 to 1 for the fiscal quarter ending on June 30, 1998,
and for each fiscal quarter thereafter through and including September 30,
1999, (2) 1.35 to 1 for the fiscal quarter ending on December 31, 1999, and
for each fiscal quarter thereafter through and including September 30, 2000,
and (3) 1.5 to 1 for each fiscal quarter thereafter; provided, that upon
notice to the Agent of the termination of the Epson Contract, the Debt
Coverage Ratio shall thereafter be measured monthly rather than quarterly.
(c) Funded Debt Ratio. For each 12-month period ending on the
last day of each fiscal quarter of the Borrower, a Funded Debt Ratio of not
greater than (1) 3.5 to 1 for the fiscal quarter ending on June 30, 1998, and
for each fiscal quarter thereafter through and including September 30, 1999,
(2) 3.25 to 1 for the fiscal quarter ending on December 31, 1999, and for
each fiscal quarter thereafter through and including September 30, 2000, and
(3) 3 to 1 for each fiscal quarter thereafter; provided, that upon notice to
the Agent of the termination of the Epson Contract, the Funded Debt Ratio
shall thereafter be measured monthly rather than quarterly.
ARTICLE 9
SUBSIDIARIES BECOMING LOAN PARTIES
----------------------------------
SECTION 9.1. Conditions. Each Subsidiary that is formed or
Acquired on or after the date of this Agreement, and each Acquisition Company
and Target that is not a Loan Party, shall become jointly and severally
liable with the other Subsidiaries, Acquisition Companies and Targets under
this Agreement and the other Loan Documents (provided that only the Borrower
may borrow hereunder), and the Borrower shall cause each such Subsidiary,
Acquisition Company and Target to satisfy each of the following conditions on
or before the date on which such Subsidiary, Acquisition Company or Target is
formed or Acquired:
(a) The Acquisition Company, Target or Subsidiary shall execute
and deliver to the Agent a Subsidiary Guaranty, a Security Agreement and an
Intellectual Property Assignment.
(b) No Default or Event of Default shall have occurred and be
continuing.
(c) All legal matters incident to such Acquisition Company,
Target or Subsidiary becoming a Loan Party shall be satisfactory to counsel
for the Agent, and the Acquisition Company, Target or Subsidiary shall
execute and deliver to the Agent such additional documents and certificates
relating to the Loans as the Agent reasonably may request.
(d) The Agent shall have received an opinion of counsel to the
Acquisition Company, Target or Subsidiary, addressed to the Agent, for the
benefit of the Banks, covering such matters as the Agent may request, in form
and substance satisfactory to the Agent.
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(e) Financing statements in form and substance satisfactory to
the Agent shall have been properly filed in each office where necessary to
perfect the security interest of the Banks in the Collateral of the
Acquisition Company, Target or Subsidiary, termination statements shall have
been filed with respect to any other financing statements covering all or any
portion of such Collateral (except with respect to Liens permitted by this
Agreement), all taxes and fees with respect to such recording and filing
shall have been paid by the Acquisition Company, Target or Subsidiary and the
Agent shall have received such lien searches or reports as it shall require
confirming that the foregoing filings and recordings have been completed.
(f) The Acquisition Company, Target or Subsidiary shall have
delivered the following documents to the Agent, each of which shall be
certified as of the date on which the Acquisition Company, Target or
Subsidiary is to become a Loan Party, by its secretary or representative
performing similar functions: (1) copies of evidence of all actions taken by
the Acquisition Company, Target or Subsidiary to authorize the execution and
delivery of the applicable Loan Documents; (2) copies of the articles or
certificate of incorporation and bylaws (or the organizational documents for
a Loan Party that is not a corporation) of the Acquisition Company, Target or
Subsidiary; and (3) a certificate as to the incumbency and signatures of the
officers of the Acquisition Company, Target or Subsidiary executing the Loan
Documents.
(g) The Agent shall have received current certificates of good
standing and qualification issued by the appropriate state official of the
state of formation of the Acquisition Company, Target or Subsidiary and in
each jurisdiction in which it is qualified to do business.
(h) The Agent shall have received an Aging, Borrowing Base
Certificate and Inventory schedule of the Acquisition Company, Target or
Subsidiary, together with any other information and documents the Agent may
reasonably request with respect to the Collateral of the Acquisition Company,
Target or Subsidiary.
(i) If required by the Agent, the Agent shall have received a
satisfactory field examination of the Collateral and internal control systems
of the Acquisition Company, Target or Subsidiary performed by a consultant
selected by the Agent, and the Borrower shall have reimbursed the Agent for
the cost of such consultant.
(j) If required by the Agent, it shall have received a landlord
waiver from each landlord of the Acquisition Company, Target or Subsidiary,
which shall be in form and substance acceptable to the Agent.
(k) Each Loan Party with an ownership interest in the
Acquisition Company, Target or Subsidiary shall have executed and delivered
to the Agent a Security Agreement, financing statements in form and substance
satisfactory to the Agent shall have been properly filed in each office where
necessary to perfect the security interest of the Banks in the applicable
Collateral, termination statements shall have been filed with respect to any
other financing statements covering all or any portion of such Collateral,
all taxes and fees with respect to such recording and filing shall have been
paid by such Acquisition Company, Target or Subsidiary,
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the Agent shall have received such lien searches or reports as it shall require
confirming that the foregoing filings and recordings have been completed, and
the Agent shall have received all instruments and certificated securities that
evidence such Collateral, endorsed in blank.
(l) All Intellectual Property of such Loan Party that is
subject to United States copyright, patent or trademark protection shall have
been duly registered with the Register of Copyrights or the United States
Patent and Trademark Office, as applicable, an Intellectual Property
Assignment shall have been recorded in such office, and the Agent shall have
received evidence that it has a first priority perfected Lien with respect
thereto.
SECTION 9.2. Contributions to Borrowing Base. The Borrower agrees no
Receivable or Inventory of an Acquisition Company, Target or Subsidiary shall
be included in the Borrowing Base prior to the date on which all of the
foregoing conditions are satisfied.
ARTICLE 10
EVENTS OF DEFAULT
-----------------
SECTION 10.1. Events of Default. If any of the following events
("Events of Default") shall occur, the Agent and the Banks shall have the
rights set forth in Section 10.2 below:
(a) Failure of the Borrower to pay (1) the principal amount of
any Loan, as applicable, including, without limitation, the principal
payments due under the Notes or the LC Agreements or any of the Loans, when
the same shall become due and payable, whether at maturity, as a result of
the Agent's demand for payment or otherwise, or (2) any interest or fee
payable under the Loan Documents when the same shall become due and payable,
and such failure shall continue unremedied for a period of five Business
Days; or
(b) If the Borrower refuses to permit any Bank to inspect,
examine, verify or audit the Collateral in accordance with the provisions of
this Agreement; or
(c) Failure of the Borrower to perform, observe or comply with
any term, condition, covenant, warranty, agreement or other provision
contained in Section 8.1 or 8.2 of this Agreement, and such failure remains
uncured to the satisfaction of the Majority Banks for 15 days after the
earlier to occur of (1) notice from the Agent specifying such failure or (2)
the date notice of such failure should have been given under Section
8.1(b)(5); or
(d) Failure of the Borrower or any other Loan Party to perform,
observe or comply with any other term, condition, covenant, warranty,
agreement or provision contained in this Agreement or any other Loan Document
(except any such failure resulting in the occurrence of another Event of
Default described in this Section), and such failure remains uncured to the
satisfaction of the Majority Banks for 30 days after the earlier to occur of
(1) notice from the Agent specifying such failure or (2) the date notice of
such failure should have been given under Section 8.1(b)(5); or
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(e) Discovery that any representation or warranty made or
deemed made by the Borrower or any Loan Party in this Agreement or any
statement or representation made in any certificate, report or opinion
delivered pursuant to this Agreement (including any Borrowing Base
Certificate) or in connection with any borrowing under this Agreement was
materially untrue or is breached in any material respect; or
(f) If the Borrower or any Subsidiary fails to make any payment
when due with respect to any Debt in excess of $500,000, or if any event or
condition occurs that results in such Debt becoming due and payable prior to
the expressed maturity thereof or that enables or permits the holder or
holders of such Debt to cause such Debt to become due, or to require the
prepayment, repurchase, redemption or defeasance thereof, prior to the
expressed maturity thereof; or
(g) The Borrower or any Subsidiary makes an assignment for the
benefit of creditors, files a petition in bankruptcy, petitions or applies to
any tribunal for any receiver or any trustee of the Borrower or any
Subsidiary or any substantial part of its property, or commences any
proceeding relating to the Borrower or any Subsidiary under any
reorganization, arrangement, readjustments of debt, dissolution or
liquidation law or statute of any jurisdiction, whether now or hereafter in
effect; or
(h) If, within 60 days after the filing of a bankruptcy
petition or the commencement of any proceeding against the Borrower or any
Subsidiary seeking any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any present or
future statute, law or regulation, the proceeding shall not have been
dismissed, or, if, within 60 days after the appointment, without the consent
or acquiescence of the Borrower or a Subsidiary, of any trustee, receiver or
liquidator of the Borrower or such Subsidiary or of all or any substantial
part of the properties of the Borrower, the appointment shall not have been
vacated; or
(i) If any judgment is entered against the Borrower or any
Subsidiary in excess of $500,000 or any attachment in excess of $500,000
against any property of the Borrower or any Subsidiary and the same remains
unpaid, undischarged, unbonded or undismissed for a period of 30 days; or
(j) A material adverse change occurs in the financial or
business condition of the Borrower and its Subsidiaries; or
(k) If the Borrower fails to give the Agent or the Banks any
notice required by this Agreement within ten days after the date on which it
is required to give such notice, provided that such failure to give notice
shall not constitute an Event of Default if the applicable Event of Default
or breach is cured within any grace period that otherwise would have been
applicable had the notice been timely given; or
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(l) If any of the following events shall occur or exist with
respect to the Borrower or any employee benefit or other plan established,
maintained or to which contributions have been made by the Borrower, any
Affiliate of the Borrower or any other Person that, together with the
Borrower, would be treated as a single employer under Section 4001 of ERISA, and
the Majority Banks determine that the same would have a Material Adverse
Effect: (1) any prohibited transaction (as defined in Section 406 of ERISA or
Section 4975 of the Code), (2) any reportable event (as defined in Section 4043
of ERISA and the regulations issued thereunder), (3) the filing under
Section 4041 of ERISA of a notice of intent to terminate any such plan or the
termination of such plan, or (4) the institution of proceedings by the PBGC
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any such plan; or
(m) The occurrence of a default or an event of default under
any other Loan Document and the expiration of all grace periods, if any,
applicable thereto; or
(n) If the Borrower, any Subsidiary or any Affiliate of the
Borrower or Subsidiary shall be debarred or suspended from any contracting
with the Government; or
(o) The Loan Documents shall for any reason cease to create a
valid and perfected first priority security interest in any of the Collateral
purported to be covered thereby or if any Loan Document ceases to be in full
force and effect; or
(p) If:
(1) Any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act")), but excluding Xxxxxx X. Xxxxxxxxxx, is or becomes the
"beneficial owner" (as defined in Rules 13d- 3 and 13d-5 under the Exchange
Act, except that a Person will be deemed to have "beneficial ownership" of
all securities that such Person has the right to acquire, whether such right
is exercisable immediately or only after the passage of time), directly or
indirectly, of more than 25% of the total voting power of the then
outstanding voting stock of the Borrower (provided, however, the Agent shall
not unreasonably withhold its consent to the sale or other disposition of
voting stock by Xxxxxx Xxxxxxxxxx to any Person if, after such sale or other
disposition, such Person would be the beneficial owner of more than 25% of
the total voting power of the then outstanding voting stock of the Borrower);
or
(2) During any twelve-month period (commencing on or
after the Agreement Date), a majority of the Board of Directors of the
Borrower shall no longer be composed of individuals (A) who were members of
such Board of Directors on the first date of such period, (B) whose election
or nomination to such Board of Directors was approved by individuals referred
to in clause (A) above constituting at the time of such election or
nomination at least a majority of such Board of Directors or (C) whose
election or nomination to such Board of Directors was approved by individuals
referred to in clauses (A) and (B) above constituting at the time of such
election or nomination at least a majority of such Board of Directors; or
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(q) Any indorsement or guaranty of the payment of the Loans
shall cease for any reason to be in full force and effect, or any indorser or
guarantor shall contest the validity or enforceability of the indorsement or
guaranty or deny that it has any further liability or obligation under the
indorsement or guaranty; or
(r) The failure of the Borrower to give notice of the
termination of the Epson Contract within 5 days after notice to or from Epson
of said termination.
SECTION 10.2. Remedies. Upon the occurrence of any Event of Default, the
Agent (a) shall at the request of the Majority Banks, by notice to the
Borrower, terminate the Commitments, whereupon the same shall forthwith
terminate, and (b) shall at the request of the Majority Banks, by notice to the
Borrower, declare the Notes, the Loans, the Letter of Credit Obligations and
all other Obligations, all interest thereon and all other amounts payable under
this Agreement, to be forthwith due and payable, whereupon the Obligations, all
such interest and all such amounts shall become and be forthwith due and
payable, without presentment, demand, protest or further notice of any kind,
all of which are hereby expressly waived by the Borrower; provided, however,
that if an Event of Default occurs under Sections 10.1() or 10.1() above, (1)
Commitments shall automatically be terminated, and (2) the Obligations, all
such interest and all such amounts shall automatically become and be due and
payable, without presentment, demand, protest or any notice of any kind, all of
which are hereby expressly waived by the Borrower. After the occurrence of an
Event of Default, the Agent may require the Borrower to pay, and the Borrower
agrees to pay, to the Agent an amount of cash equal to the aggregate amount of
the Letters of Credit then outstanding, and any amounts paid by the Borrower
shall be held by the Agent in a cash collateral account for the benefit of the
Banks, over which the Agent shall have the exclusive power of withdrawal, as
security for the Letter of Credit Obligations.
ARTICLE 11
THE AGENT
----------
SECTION 11.1. Authorization and Action. Each Bank hereby
appoints and authorizes the Agent to take such action as agent on its behalf
and to exercise such powers under this Agreement as are delegated to the
Agent by the terms hereof, together with such powers as are reasonably
incidental thereto. The Agent shall not have any fiduciary duty to any Bank
or Loan Party. As to any matters not expressly provided for by this
Agreement (including, without limitation, enforcement or collection of the
Notes), the Agent shall not be required to exercise any discretion or take
any action, but shall be required to act or to refrain from acting (and shall
be fully protected in so acting or refraining from acting) upon the
instructions of the Majority Banks, and such instructions shall be binding
upon all Banks and all holders of Notes; provided, however, that the Agent
shall not be required to take any action that exposes the Agent to personal
liability or that is contrary to this Agreement, any other Loan Document or
applicable
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law. The Agent agrees to give to each Bank prompt notice of each notice given to
it by the Borrower pursuant to the terms of this Agreement.
SECTION 11.2. Agent's Reliance. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable for any action taken
or omitted to be taken by it or them under or in connection with this
Agreement, except for its or their own gross negligence or willful
misconduct. Without limitation of the generality of the foregoing, the
Agent: (1) may treat the payee of any Note as the holder thereof; (2) may
consult with legal counsel (including counsel for the Borrower), independent
public accountants and other experts selected by it and shall not be liable
for any action taken or omitted to be taken in good faith by it in accordance
with the advice of such counsel, accountants or experts; (3) makes no
warranty or representation to any Bank and shall not be responsible to any
Bank for any statements, warranties or representations (whether written or
oral) made in or in connection with this Agreement or any other Loan
Document; (4) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of
this Agreement or any other Loan Document on the part of the Borrower or any
other Loan Party or to inspect the property (including the books and records)
of the Borrower or any other Loan Party; (5) shall not be responsible to any
Bank for the due execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement, any other Loan Document or any other
instrument or document furnished pursuant hereto; and (6) shall incur no
liability under or in respect of this Agreement by acting upon any notice,
consent, certificate or other instrument or writing (which may be by
telecopier, telegram, cable or telex) reasonably believed by it to be genuine
and signed or sent by the proper party or parties.
SECTION 11.3. NationsBank and Affiliates. With respect to its
Advance Commitment and Oasis Acquisition Loan Commitment, the Advances and
Oasis Acquisition Loan made by it, the Notes issued to it and the Obligations
due to it, NationsBank, N.A. shall have the same rights and powers under this
Agreement as any other Bank and may exercise the same as though it were not
the Agent, and the term "Bank" or "Banks" shall, unless otherwise expressly
indicated, include NationsBank, N.A. in its individual capacity.
NationsBank, N.A.and its affiliates may accept deposits from, lend money to,
act as trustee under indentures of, and generally engage in any kind of
business with, the Borrower and any Person who may do business with or own
common stock of the Borrower, all as if NationsBank, N.A. were not the Agent
and without any duty to account therefor to the Banks.
SECTION 11.4. Bank Credit Decision. Each Bank acknowledges that
it has, independently and without reliance upon the Agent or any other Bank
and based on the financial statements referred to in Section 7.1(e) and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Bank also
acknowledges that it will, independently and without reliance upon the Agent
or any other Bank and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement.
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SECTION 11.5. Indemnification. The Banks agree to indemnify the
Agent (to the extent not reimbursed by the Borrower), ratably according to
the respective principal amounts of the Notes then held by each of them (or
if no Notes are at the time outstanding or if any Notes are held by Persons
that are not Banks, ratably according to the respective amounts of their
Advance Commitment or Oasis Acquisition Loan Commitment), from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever that may be imposed on, incurred by, or asserted against the Agent
in any way relating to or arising out of this Agreement or any action taken
or omitted by the Agent under this Agreement, provided that no Bank shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Agent's gross negligence or willful misconduct. Without
limitation of the foregoing, each Bank agrees to reimburse the Agent promptly
upon demand for its ratable share of any out-of-pocket expenses (including
counsel fees) incurred by the Agent in connection with the preparation,
execution, delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of rights or responsibilities under, this Agreement, to the
extent that the Agent is not reimbursed for such expenses by the Borrower.
SECTION 11.6. Successor Agent. The Agent may resign at any time
by giving written notice thereof to the Banks and the Borrower. Upon any
such resignation, the Majority Banks shall have the right to appoint a
successor Agent. If no Event of Default has occurred and is continuing, the
Borrower shall have the right to approve a successor Agent, which approval
shall not be unreasonably withheld. If no successor Agent shall have been so
appointed by the Majority Banks, and shall have accepted such appointment,
within 30 days after the retiring Agent's giving of notice of resignation,
then the retiring Agent, on behalf of the Banks, may appoint a successor
Agent, which shall be a commercial bank organized under the laws of the
United States of America or of any State thereof and having a combined
capital and surplus of at least $50,000,000. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations under this Agreement. After any
retiring Agent's resignation hereunder as Agent, the provisions of this
Article 11 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Agent under this Agreement.
ARTICLE 12
MISCELLANEOUS
-------------
SECTION 12.1. Amendments, Etc.. Except as otherwise expressly provided in
this Agreement, any consent or approval required or permitted by this Agreement
or in any Loan Document to be given by the Banks may be given, and any term of
this Agreement or of any other Loan Document may be amended, and the
performance or observance by the Borrower or any Subsidiary of any terms of
this Agreement or such other Loan Document or the continuance
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of any Default or Event of Default may be waived (either generally or in a
particular instance and either retroactively or prospectively) with, but only
with, the written consent of the Majority Banks (and, in the case of an
amendment to any Loan Document, the written consent of the Borrower).
Notwithstanding the foregoing, no amendment, waiver or consent shall, unless in
writing, and signed by all of the Banks (or the Agent at the written direction
of all of the Banks), do any of the following: (a) increase the Commitments of
the Banks or subject the Banks to any additional obligations; (b) reduce the
principal of, or interest rates that have accrued or that will be charged on the
outstanding principal amount of, any Loans or other Obligations; (c) reduce the
amount of any fees payable hereunder; (d) postpone any date fixed for any
payment of any principal of, interest on, or fees with respect to, any Loans or
any other Obligations; (e) change the Commitment Percentages; (f) amend this
Section or amend the definitions of the terms used in this Agreement or the
other Loan Documents insofar as such definitions affect the substance of this
Section; (g) release any Subsidiary from its obligations under a Subsidiary
Guaranty; (h) modify the definition of the term "Majority Banks" or modify in
any other manner the number or percentage of the Banks required to make any
determinations or waive any rights hereunder or to modify any provision hereof;
(i) release any Collateral; or (j) amend the definitions of "Borrowing Base" or
"Eligible Receivables." Further, no amendment, waiver or consent unless in
writing and signed by the Agent, or by NationsBank, N.A. in its capacity as the
issuer of the Letters of Credit, in addition to the Banks required above to take
such action, shall affect the rights or duties of the Agent, or NationsBank,
N.A. as such issuer under this Agreement or any of the other Loan Documents. No
waiver shall extend to or affect any obligation not expressly waived or impair
any right consequent thereon and any amendment, waiver or consent shall be
effective only in the specific instance and for the specific purpose set forth
therein. No course of dealing or delay or omission on the part of the Agent or
any Bank in exercising any right shall operate as a waiver thereof or otherwise
be prejudicial thereto. Except as otherwise explicitly provided for herein or in
any other Loan Document, no notice to or demand upon a Borrower shall entitle
such Borrower to other or further notice or demand in similar or other
circumstances.
SECTION 12.2. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telecopier,
telegraphic, telex or cable communication) and mailed, telecopied,
telegraphed, telexed, cabled or delivered by hand or sent, prepaid, by
Federal Express (or a comparable overnight delivery service), if to the
Borrower, at its address at 0000 Xxxxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx
00000, Attention: Chief Financial Officer, if to any Bank or to the Agent,
at its Applicable Lending Office specified below its name on the signature
page hereto or in the Assignment and Assumption Agreement pursuant to which
such Bank becomes a party hereto; or, as to each party, at such other address
as shall be designated by such party in a written notice to the other
parties. Any such notice or other communication, when mailed, telecopied,
telegraphed, telexed, cabled, delivered by hand or sent overnight, shall be
effective on the earliest of (a) the date it is actually received or
telecopied, telexed (confirmed by telex answerback), or delivered by hand,
(b) the Business Day after the day on which it is properly delivered to a
telegraph or cable company or to Federal Express (or a comparable
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overnight delivery service), as applicable, or (c) the third Business Day after
the day on which it is deposited in the United States mail.
SECTION 12.3. No Waiver; Remedies. No failure on the part of any
Bank or the Agent to exercise, and no delay in exercising, any right under
any Loan Document shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
SECTION 12.4. Captions. The captions of the various sections and
paragraphs of this Agreement have been inserted only for the purposes of
convenience; such captions are not a part of this Agreement and shall not be
deemed in any manner to modify, explain, enlarge or restrict any of the
provisions of this Agreement.
SECTION 12.5. Survival of Agreements. All agreements,
representations and warranties made herein shall survive the delivery of this
Agreement, the making of the Loans and the issuance of the Letters of Credit
hereunder.
SECTION 12.6. Cost, Expenses and Taxes. The Borrower agrees
(a) to pay or reimburse the Agent on demand for all its costs and expenses
incurred in connection with the preparation, execution and delivery of, and
any amendment, supplement or modification to, the Loan Documents and any
other documents prepared in connection herewith or therewith, and the
consummation of the transactions contemplated hereby and thereby, including,
without limitation, the reasonable fees and disbursements of counsel to the
Agent; (b) to pay or reimburse the Agent and each Bank for all of their
respective costs and expenses incurred in connection with the enforcement or
preservation of any rights under the Loan Documents and any such other
documents, including, without limitation, reasonable fees and disbursements
of counsel to the Agent and each Bank; and (c) to pay, indemnify and hold
each Bank and the Agent harmless from any and all recording and filing fees
and any and all liabilities with respect to, or resulting from any delay in
paying, stamp, excise and other taxes, if any, that may be payable or
determined to be payable in connection with the execution and delivery or
consummation of any of the transactions contemplated by, or any amendment,
supplement or modification to, or any waiver or consent under or in respect
of, the Loan Documents and any such other documents.
SECTION 12.7. Indemnification.
(a) The Borrower shall and hereby agrees to indemnify, defend
and hold harmless each Agent, any affiliate of each Agent and each of the
Banks and their respective directors, officers, shareholders, agents,
employees and counsel (each referred to herein as an "Indemnified Party")
from and against any and all losses, costs, claims, damages, liabilities,
deficiencies, judgments or expenses of every kind and nature (including,
without limitation, amounts paid in settlement, court costs and the fees and
disbursements of counsel incurred in connection with any litigation,
investigation, claim or proceeding or any advice rendered in connection
therewith) (the foregoing items referred to herein as "Claims and Expenses")
incurred
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by an Indemnified Party in connection with, arising out of, or by reason of, any
suit, cause of action, claim, arbitration, investigation or settlement, consent
decree or other proceeding (the foregoing referred to herein as an "Indemnity
Proceeding") arising out of: (i) this Agreement or any other Loan Document or
the transactions contemplated thereby, (ii) the making of any Loans hereunder;
(iii) any actual or proposed use by the Borrower of the proceeds of the Loans;
(iv) an Agent's or any Lender's entering into this Agreement; (v) the fact that
the Agent and the Banks have established the credit facilities evidenced hereby
in favor of the Borrower; (vi) the fact that the Agents and the Banks are
creditors of the Borrower and have or are alleged to have information regarding
the financial condition, strategic plans or business operations of the Borrower
and its Subsidiaries; (vii) the fact that the Agent and the Banks are material
creditors of the Borrower and are alleged to influence directly or indirectly
the business decisions or affairs of the Borrower and its Subsidiaries or their
financial condition; (viii) the exercise of any right or remedy the Agent or the
Banks may have under this Agreement or the other Loan Documents; (ix) any
violation or non-compliance by the Borrower or any Subsidiary of any applicable
law (including any Environmental Law) including, but not limited to, any
Indemnity Proceeding commenced by (A) the Internal Revenue Service or state
taxing authority or (B) any governmental authority or other Person under any
Environmental Law, including any Indemnity Proceeding commenced by a
governmental authority or other Person seeking remedial or other action to cause
the Borrower or its Subsidiaries (or its respective properties) (or the Agent or
the Banks as successors to the Borrower) to be in compliance with such
Environmental Laws; or (x) an Indemnified Party's reliance on telephonic or oral
requests, as described in Section 2.1(c); provided, however, that the Borrower
shall not be obligated to indemnify any Indemnified Party for any acts or
omissions of such Indemnified Party in connection with matters described in this
Section 12.7(a) that constitute gross negligence or willful misconduct.
(b) The Borrower's indemnification obligations under this
Section shall apply to all Indemnity Proceedings arising out of, or related
to, the foregoing whether or not an Indemnified Party is a named party in
such Indemnity Proceeding. In this connection, this indemnification shall
cover all costs and expenses of any Indemnified Party in connection with any
deposition of any Indemnified Party or compliance with any subpoena
(including any subpoena requesting the production of documents). This
indemnification shall, among other things, apply to any Indemnity Proceeding
commenced by other creditors of the Borrower or any Subsidiary, any
shareholder of the Borrower or any Subsidiary (whether such shareholder(s)
are prosecuting such Indemnity Proceeding in their individual capacity or
derivatively on behalf of the Borrower), any account debtor of the Borrower
or any Subsidiary or by any governmental authority. This indemnification
shall apply to any Indemnity Proceeding arising during the pendency of any
bankruptcy proceeding filed by or against the Borrower or any Subsidiary.
(c) An Indemnified Party may conduct its own investigation and
defense of, and may formulate its own strategy with respect to, any
Indemnified Proceeding covered by this Section and, as provided above, all
costs and expenses incurred by the Indemnified Party shall be reimbursed by
the Borrower. No action taken by legal counsel chosen by an Indemnified
Party in investigating or defending against any such Indemnified Proceeding
shall vitiate or in any way
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impair the obligations and duties of the Borrower hereunder to indemnify and
hold harmless each such Indemnified Party, provided, however, that (i) if the
Borrower is required to indemnify an Indemnified Party pursuant hereto and (ii)
the Borrower has provided evidence reasonably satisfactory to such Indemnified
Party that the Borrower has the financial wherewithal to reimburse such
Indemnified Party for any amount paid by such Indemnified Party with respect to
such Indemnified Proceeding, such Indemnified Party shall not settle or
compromise any such Indemnified Proceeding without the prior written consent of
the Borrower (which consent shall not be unreasonably withheld or delayed).
(d) If and to the extent that the obligations of the Borrower
hereunder are unenforceable for any reason, the Borrower hereby agrees to
make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law. The Borrower's
obligations hereunder shall survive any termination of this Agreement and the
other Loan Documents and the payment in full of the Obligations, and are in
addition to, and not in substitution of, any other of their obligations set
forth in this Agreement or any other Loan Document to which it is a party.
SECTION 12.8. Termination; Survival. At such time as (a) all of
the Advance Commitments have been terminated, (b) none of the Banks is
obligated any longer under this Agreement to make any Loans and (c) all
Obligations (other than obligations which survive as provided in the
following sentence) have been paid and satisfied in full, this Agreement
shall terminate. Notwithstanding any termination of this Agreement, or of
the other Loan Documents, the indemnities to which the Agent and the Banks
are entitled under the provisions of this Agreement and the other Loan
Documents, and the waivers of jury trial and submission to jurisdiction
contained in Sections 12.12 and 12.17, shall continue in full force and
effect and shall protect the Agent and the Bank against events arising after
such termination as well as before.
SECTION 12.9. Limitation of Liability. The Borrower hereby
waives, releases, and agrees not to xxx the Agent or any Bank or any of the
Agent's or any Bank's affiliates, officers, directors, employees, attorneys,
or agents for punitive damages in respect of any claim in connection with,
arising out of, or in any way related to, this Agreement or any of the other
Loan Documents, or any of the transactions contemplated by this Agreement or
financed hereby.
SECTION 12.10. Construction. The Agent, the Borrower and each
Bank acknowledge that each of them has had the benefit of legal counsel of
its own choice and has been afforded an opportunity to review this Agreement
and the other Loan Documents with its legal counsel and that this Agreement
and the other Loan Documents shall be construed as if jointly drafted by the
Agent, the Borrower and each Bank.
SECTION 12.11. Right of Set-off. Upon (a) the failure of the
Borrower to make any payment owed to the Banks when due (after any applicable
cure period) under any Loan Document or (b) the occurrence and during the
continuance of any Event of Default and the making of the request or the
granting of the consent specified by Section 10.1 to authorize the
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Agent to declare the Obligations due and payable pursuant to the provisions of
Section 10.1, each Bank and each Participant is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by such Bank or
Participant to or for the credit or the account of the Borrower against any and
all of the obligations of the Borrower now or hereafter existing under any Loan
Document, whether or not such Bank or Participant shall have made any demand
under this Agreement or any such Loan Document and although such obligations may
be unmatured. Each Bank and Participant agrees promptly to notify the Borrower
after any such set-off and application made by such Bank, provided that the
failure to give such notice shall not affect the validity of such set-off and
application. The rights of each Bank and Participant under this Section are in
addition to other rights and remedies (including, without limitation, other
rights of set-off) that such Bank or Participant may have.
SECTION 12.12. Waiver. THE BORROWER EXPRESSLY WAIVES ITS RIGHT TO A TRIAL
BY JURY WITH RESPECT TO ANY LITIGATION OR OTHER DISPUTE RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT.
SECTION 12.13. Severability. If any provision of any Loan Document is
held to be illegal, invalid or unenforceable under present or future laws
during the term of this Agreement, such provision shall be fully severable,
such Loan Document shall be construed and enforced as if such illegal, invalid
or unenforceable provision had never comprised a part of such Loan Document,
and the remaining provisions of such Loan Document shall remain in full force
and effect and shall not be affected by the illegal, invalid or unenforceable
provision or by its severance from such Loan Document.
SECTION 12.14. Entire Agreement. Except for the other Loan Documents
expressly referred to herein, this Agreement represents the entire agreement
between the Banks, the Agent and the Borrower, supersedes all prior commitments
and may be modified only by an agreement in writing.
SECTION 12.15. Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the Borrower, the Agent and each Bank and their
respective successors and assigns, except that no party shall have the right to
assign its rights hereunder or any interest herein without the prior written
consent of the other parties.
SECTION 12.16. Governing Law. This Agreement, the Notes and each Loan
Document shall be governed by, and construed in accordance with, the laws of
the Commonwealth of Virginia, without reference to conflict of laws principles.
SECTION 12.17. Consent to Jurisdiction. Each party to this Agreement
hereby irrevocably submits generally and unconditionally for itself and in
respect of its property to the jurisdiction of the Circuit Court for Fairfax
County, Virginia, or the United States District Court for the Eastern District
of Virginia, Alexandria Division, over any suit, action or proceeding
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arising out of or relating to this Agreement, any Loan Document or the
Obligations. Each party to this Agreement hereby irrevocably waives, to the
fullest extent permitted by law, any objection that it may now or hereafter have
to the laying of venue in any such court and any claim that any such court is an
inconvenient forum. The Borrower hereby agrees and consents that, in addition to
any methods of service of process provided for under applicable law, all service
of process in any such suit, action or proceeding in the courts designated above
may be made by certified or registered mail, return receipt requested, directed
to the Borrower at its address for notice stated in Section 12.2 above, or at a
subsequent address of which the Agent received actual notice from the Borrower
in accordance with the terms hereof, and service so made shall be complete five
days after the same shall have been so mailed. The foregoing provisions shall
not limit the right of any Bank, the Agent or any other party hereto to serve
process in any other manner permitted by law or limit the right of any Bank or
the Agent or other party hereto to bring any suit, action or proceeding or to
obtain execution on any judgment rendered in any suit, action or proceeding in
any other appropriate jurisdiction or in any other manner.
SECTION 12.18. Execution in 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 all of which taken together shall constitute one and the same agreement.
SECTION 12.19. Assignments.
(a) The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors
and assigns, except that the Borrower may neither assign nor otherwise
transfer any of its rights under this Agreement without the prior written
consent of the Banks.
(b) Any Bank may make, carry or transfer Loans or Letters of
Credit at, to or for the account of, any of its branch offices or the office
of an affiliate of such Bank except to the extent such transfer would result
in increased costs to the Borrower.
(c) Any Bank may at any time grant to one or more banks or
other financial institutions (each such bank or financial institution, a
"Participant") participating interests in the Advance Commitment, the Oasis
Acquisition Note, or the Obligations owing to such Bank; provided however,
(1) any such participating interest must be for a constant and not a varying
percentage interest, (2) no Bank may grant a participating interest in the
Advance Commitment, or if any part of the Advance Commitment has been
terminated, the aggregate outstanding principal balance of Revolving Notes
held by it, in an amount less than $5,000,000, and (3) after giving effect to
any such participation by a Bank, the amount of the Advance Commitment, or if
any of the Advance Commitment has been terminated, the aggregate outstanding
principal balance of Revolving Notes held by it, in which it has not granted
any participating interests must be at least $5,000,000. No Participant
shall have any rights or benefits under this Agreement or any other Loan
Document, except (i) as provided in Section 12.11, and (ii) a
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Participant shall be entitled to the benefits of the cost protection provisions
contained in Article 3 to the same extent as if it were a Bank but not in excess
of the cost protections to which the Bank from which it purchased its
participation would be entitled. In the event of any such grant by a Bank of a
participating interest to a Participant, such Bank shall remain responsible for
the performance of its obligations hereunder, and the Borrower and the Agent
shall continue to deal solely and directly with such Bank in connection with
such Bank's rights and obligations under this Agreement. Any agreement pursuant
to which any Bank may grant such a participating interest shall provide that
such Bank shall retain the sole right and responsibility to enforce the
obligations of the Borrower hereunder including, without limitation, the right
to approve any amendment, modification or waiver of any provision of this
Agreement; provided, however, such Bank may agree with the Participant that it
will not, without the consent of the Participant, agree to (A) increase, or
extend the term or extend the time or waive any requirement for the reduction or
termination of, the Advance Commitment, (B) extend the date fixed for the
payment of principal of or interest on the Loans or Letter of Credit Obligations
or portions thereof owing to such Bank, (C) reduce the amount of any such
payment of principal, or (D) reduce the rate at which interest is payable
thereon. An assignment or other transfer which is not permitted by subsection
(d) or (e) below shall be given effect for purposes of this Agreement only to
the extent of a participating interest granted in accordance with this
subsection (c). The selling Bank shall notify the Agent and the Borrower of the
sale of any participation hereunder and the terms thereof.
(d) Any Bank may with the prior written consent of the Agent
and, so long as no Default or Event of Default shall have occurred and be
continuing, the Borrower (which consent, in the case of the Agent and the
Borrower, shall not be unreasonably withheld) assign to one or more Eligible
Assignees (each an "Assignee") all or a portion of the Advance Commitment and
its other rights and obligations under this Agreement and the Revolving
Notes; provided, however, (1) no such consent by the Borrower or the Agent
shall be required in the case of any assignment to another Bank or any
affiliate of such Bank or another Bank; (2) any partial assignment shall be
in an amount at least equal to $5,000,000 and after giving effect to such
assignment the assigning Bank retains part of the Advance Commitment, or if
the Advance Commitment has been terminated, holds Revolving Notes having an
aggregate outstanding principal balance, of at least $5,000,000; and (3) each
such assignment shall be effected by means of an Assignment and Acceptance
Agreement. Upon execution and delivery of such instrument and payment by
such Assignee to such transferor Bank of an amount equal to the purchase
price agreed between such transferor Bank and such Assignee, such Assignee
shall be deemed to be a Bank party to this Agreement as of the effective date
of the Assignment and Acceptance Agreement and shall have all the rights and
obligations of a Bank with the Advance Commitment as set forth in such
Assignment and Acceptance Agreement, and the transferor Bank shall be
released from its obligations hereunder to a corresponding extent, and no
further consent or action by any party shall be required. Upon the
consummation of any assignment pursuant to this subsection (d), the
transferor Bank, the Agent and the Borrower shall make appropriate
arrangements so that new Revolving Notes are issued to the Assignee and such
transferor Bank, as appropriate. In connection with any such assignment, the
transferor Bank
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shall pay to the Agent an administrative fee for processing such assignment in
the amount of $2,500; provided, however, such fee shall not be payable in
connection with the first assignment of all or any portion of the Advance
Commitment of any Bank initially a party to this Agreement to an affiliate of
such Bank.
(e) The Agent shall maintain at its office specified in
Section 12.2 a copy of each Assignment and Acceptance Agreement delivered to
and accepted by it and a register for the recordation of the names and
addresses of the Banks and the Advance Commitment of each Bank from time to
time (the "Register"). The Agent shall give each Bank and the Borrower
notice of the assignment by any Bank of its rights as contemplated by this
Section. The Borrower, the Agent and the Banks may treat each Person whose
name is recorded in the Register as a Bank hereunder for all purposes of this
Agreement. The Register and copies of each Assignment and Acceptance
Agreement shall be available for inspection by the Borrower or any Bank at
any reasonable time and from time to time upon reasonable prior notice to the
Agent. Upon its receipt of an Assignment and Acceptance Agreement executed
by an assigning Bank, together with each Revolving Note subject to such
assignment (the "Surrendered Note"), the Agent shall, if such Assignment and
Acceptance Agreement has been completed and if the Agent receives the
processing and recording fee described in subsection (d) above, (1) accept
such Assignment and Acceptance Agreement, (2) record the information
contained therein in the Register, and (3) give prompt notice thereof to the
Borrower.
(f) In addition to the assignments and participations permitted
under the foregoing provisions of this Section, any Bank may assign and
pledge all or any portion of its Loans and its Notes to any Federal Reserve
Bank as collateral security pursuant to Regulation A and any Operating
Circular issued by such Federal Reserve Bank, and such Loans and Notes shall
be fully transferable as provided therein. No such assignment shall release
the assigning Bank from its obligations hereunder.
(g) Anything in this Section to the contrary notwithstanding,
no Bank may assign or participate any interest in any Loan held by it
hereunder to the Borrower or any Subsidiary or Affiliate of the Borrower.
(h) Each Bank agrees that, without the prior written consent of
the Borrower and the Agent, it will not make any assignment hereunder in any
manner or under any circumstances that would require registration or
qualification of, or filings in respect of, any Loan or Note under the
Securities Act or any other securities laws United States of America or of
any other jurisdiction.
SECTION 12.20. Confidential Information. The Agent and the Banks
agree to keep confidential (and to cause their respective affiliates,
officers, directors, employees, agents and representatives to keep
confidential) all information, materials and documents furnished to the Agent
or any such Bank by or on behalf of the Borrower (whether before or after the
Closing Date) which relates to the Borrower or any of its Subsidiaries (the
"Information"). Notwithstanding the foregoing, the Agent and each Bank shall
be permitted to disclose
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Information (a) to its affiliates, officers, directors, employees, agents and
representatives in connection with its participation in any of the transactions
evidenced by this Agreement or any other Loan Documents or other administration
of this Agreement or any other Loan Documents; (b) to the extent required by
applicable laws and regulations or by any subpoena or similar legal process, or
requested by any governmental authority; (c) to the extent such Information (1)
becomes publicly available other than as a result of a breach of this Agreement
or any agreement entered into pursuant to clause (d) below, (2) becomes
available to the Agent or such Bank on a non-confidential basis from a source
other than the Borrower or any of its Subsidiaries or (3) was available to the
Agent or such Bank on a non-confidential basis prior to its disclosure to the
Agent or such Bank by the Borrower; (d) to any Assignee or Participant (or
prospective Assignee or Participant) so long as such Assignee or Participant (or
prospective Assignee or Participant) first specifically agrees in a writing
furnished to and for the benefit of the Borrower to be bound by the terms of
this Section 12.20; or (e) to the extent that the Borrower shall have consented
in writing to such disclosure.
[SIGNATURES ON FOLLOWING PAGES]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the
date first above written.
BORROWER:
--------
MICRODYNE CORPORATION,
a Maryland corporation
By: /s/ Xxxxxxx Xxxxxx
---------------------------
Name: Xxxxxxx Xxxxxx
Title: Chief Financial Officer
AGENT:
-----
NATIONSBANK, N.A.
By: /s/ Xxxxx Xxxxx
---------------------------
Xxxxx Xxxxx
Senior Vice President
81
[Signature Page to Credit Agreement,
dated as of August 11, 1998, with Microdyne Corporation]
BANK:
----
NATIONSBANK, N.A.
By: /s/ Xxxxx Xxxxx
--------------------
Name: Xxxxx Xxxxx
--------------------
Title: Senior Vice President
---------------------
Advance Commitment:
$10,000,000.00
Oasis Acquisition Loan Commitment:
$16,500,000.00
Lending Office (all Types of Loans):
0000 Xxxxxxxxx Xxxxx, Xxxxx Xxxxx
---------------------------------
Xxxxxxxx, Xxxxxxxx 00000
---------------------------------
Attention: Xx. Xxxxx Xxxxx
----------------------
Telecopier: (000) 000-0000
----------------------
Telephone: (000) 000-0000
----------------------
82
CREDIT AGREEMENT
Dated as of August 11, 1998
among
MICRODYNE CORPORATION
as Borrower
and
NATIONSBANK, N.A.
as Banks
and
NATIONSBANK, N.A.
as Agent
83
TABLE OF CONTENTS
PAGE
ARTICLE 1. DEFINITIONS AND ACCOUNTING TERMS................................1
ARTICLE 2 AMOUNTS AND TERMS OF THE ADVANCES................................23
ARTICLE 3 YIELD PROTECTION, ETC............................................30
ARTICLE 4 PAYMENTS, COMPUTATIONS AND CERTAIN NOTICES.......................36
ARTICLE 5 SECURITY.........................................................40
ARTICLE 6 CONDITIONS OF LENDING............................................41
ARTICLE 7 REPRESENTATIONS AND WARRANTIES...................................45
ARTICLE 8 COVENANTS OF THE BORROWER........................................50
ARTICLE 9 SUBSIDIARIES BECOMING LOAN PARTIES...............................60
ARTICLE 10 EVENTS OF DEFAULT...............................................62
ARTICLE 11 THE AGENT.......................................................65
ARTICLE 12 MISCELLANEOUS...................................................67
i
84
LIST OF SCHEDULES AND EXHIBITS
Schedule 7.1(f) Pending Litigation
Schedule 7.1(n) Material Contracts
Schedule 7.1(o) Intellectual Property
Schedule 8.2(a) Outstanding Liens
Schedule 8.2(b) Outstanding Debt
Schedule 8.2(g) Investments
Exhibit A Acceptable Foreign Customers
Exhibit B Form of Acquisition Note
Exhibit C Form of Assignment and Acceptance Agreement
Exhibit D Form of Borrowing Base Certificate
Exhibit E Form of Revolving Note
Exhibit F Form of Security Agreement
Exhibit G Form of Intellectual Property Assignment
Exhibit H Form of Subsidiary Guaranty
Exhibit I Solvency Certificate
Exhibit J Form of Compliance Certificate
ii
85
